People are important in organizational life. Whether it is the initiative of a single entrepreneur or the combined energy of thousands of employees, it is people who get things done. However, that energy and initiative would count for little without managers to foster it. The creation, implementation, and management of organizational processes is what molds individual energies into a coherent whole and as a company evolves, it is the experience of management that is essential in redefining those processes.
While management experience can liberate a business, it can also enslave it. Experience quickly gives way to the comfort of habit, and in ever dynamic markets habit can too easily lead to stasis and stagnation. The danger for management is that, as US investor Warren Buffet warned, “chains of habit are too light to be felt until they are too heavy to be broken.”
Middle management
The importance of middle management was described by business historian Alfred Chandler in his 1977 text, The Visible Hand, a play on economist Adam Smith’s “invisible hand” metaphor, which explains the self regulating forces of the market. Chandler noted that before 1850, family firms dominated business in the USA. These firms had poor communication networks and limited access to educated staff, so rarely grew beyond groups of family and friends who could be educated, trained, and trusted to manage the business.
However, with the growth of national railroad networks in the 1850s, the management landscape began to change. Improvements in transportation and communication allowed firms to grow beyond the immediate gaze of friends or family, and beyond the immediate locale. But to prosper in this new environment, companies needed more rigorous processes and structures. The increasing geographic scope and size of businesses required new levels of coordination and communication. Businesses had grown too unwieldy for one person to manage; they required the oversight of a team of people. This marked the emergence and rise of the professional manager As standardization and mass production emerged in the early 20th century, the role of management grew. Business was taking place on an increasingly global scale. Even before mechanization, coordination from managers enabled mass production. Standardization turned management into a science, and managers into a vital cog in the organizational machine.
At the Japanese brewer Asahi, for example, it was a team of middle managers who developed Super Dry Beer, starting a craze in Japan for dry beer and allowing the company to capture more market share. Similarly, a group of Motorola middle managers was lauded for successfully developing a new wireless digital system for a client in under one year (the process usually takes two to three years).
Sitting between senior leaders and operational staff, middle managers are the communications conduit through which executives remain attuned to day to day business and personnel issues. Middle managers, as the Asahi and Motorola examples show, are often at the heart of corporate inspiration and perspiration they generate ideas and they work to realize ideas in practice. Middle management is also the driver of functional efficiency : improvements in cost, quality, speed, and reliability are delivered by middle management and the processes it introduces.
Growing the business
As a business evolves, so must the management processes that enable it. Whereas initial stages of growth rely on individual initiative and entrepreneurial spirit, evolving ad hoc practices into sustainable growth needs to be based on lessons learned through business experience. The true science of management is the conversion of experience into repeatable and reliable process today’s problems become tomorrow’s processes and next year’s capabilities.
Process is the “stuff” of management. Business processes are essential to maintaining order; like a country’s rail system and the rules that accompany it, processes are the infrastructure around which a company organizes. Business practice must evolve as the business grows from a single outlet to a chain, from one staff member to many, and from national to multinational.
The development of infrastructure and the strength of a new layer of middle management were key factors in the evolution of UK retailer Cath Kidston from a single store in 1993 to more than 120 global branches and concessions by 2013, with stores throughout Europe and Asia, and plans to expand into North America. Widely renowned for its vintage fabrics, wallpapers, and brightly painted junk furniture, Kidston’s initial growth, as is common with many single founder start ups, was slow. In the early days, monthly accounts took six weeks to prepare and clashes between IT systems caused issues with cash flow projections and supply chain management. It took nine years to open a second branch, and another two before the third.
Following a buy out in 2010, Cath Kidston became partly owned by a US private equity group, with Kidston herself retaining about 20 percent of stock. As expansion took hold, the company started to move from ad hoc processes to a more planned approach. Specialized managers and consultants were brought in to help build capacity for growth. New departments were added, including design, buying, and merchandising, and systems were introduced. Most importantly, middle management gained experience of what it takes to open and run a new store. The lessons from earlier mistakes were integrated into procedures and policies by building on experience, every new store opening became easier than the last.
Excess and habit
