Posts Tagged ‘Murdoch’

‘The Great Leader’ theory of Management?

Wednesday, July 13th, 2011

Illustration: Truth and Lie

When very able, driven entrepreneurs succeed in establishing businesses, a management structure develops over time that supports their strengths and covers their weaknesses.   The employed individuals who succeed in these unusual management structures are, by definition, comfortable within the culture, however autocratic it may be.  Employees who challenge will be eased out more or less subtly, or leave.  

Given market stability, an autocratic structure often works very well – organisational success shows that it is adaptive for the particular market.  Command and control has the virtue of a defined hierarchy which enables quick decisions, and the ability to apply resources quickly.  However, in changing markets it is less suited.  The weaknesses are that same hierarchical decision tree, the lack of internal challenge and loss of touch with reality, and the consequent stifling of innovation.  Most entrepreneurial organisations reach their ‘natural’ limit when they are successful enough to require formal capital.  This usually occasions the provision of more ‘professional’ management by the funders, with skill sets suited to growing a larger organisation, with the founder retained on some form of earn out.

What happens when an organisation manages to grow beyond this ‘natural’ limit with the founder and team intact? Without innovation and consequent long term competitive advantage it is difficult to see how it could avoid a crisis. 

News Corps’ problems seem both significant and multiplying at an alarming rate.  A management culture is being exposed where competitive advantage seems to have been based on short term (criminal?) ruthless  behaviour.  Was the nadir of this in the UK the exposure of Fraser Brown’s illness?  Compare this with the treatment of Ivan Cameron.  Or are there still more depths to plumb?

The Fourth Estate now takes delight in exposing stories long held back by fear of retribution.  And as New Corps are discovering, thanks to the internet, what would in the recent past have stayed as a regional issue is impacting their global business.  In the US shareholders are reacting to the evident weaknesses in management and worry about the delivery of promised benefits from the promised takeover of BSkyB.  Whilst this story appears to have resonance with Maxwell and even Trollop’s Melmotte,  there is little doubt that the ‘The Great Leader’ theory of management is being cruelly exposed.

Talk to us, in confidence and without obligation about helping your managers develop the competence and confidence to manage effectively.  Solutions that engage, motivate and fit around, rather than disrupt the business.

                                                                                                                                                                    

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