Sweat Rewards


We've been through the valley of re-engineering, and the mountains of Total Quality Management still loom in the rearview mirror. What's over the next hill? The overall management trend for 2002 is "Back to Basics," according to management fad trackers. "There will be a focus on things that directly improve cost and performance," says Matthew Meacham, managing director of the Dallas office of management consulting firm Bain & Co. "It might be called Web enablement, supply chain integration or outsourcing. All those are different names for a renewed focus on cost and process."

Meacham bases his forecast on Bain's "Management Tools 2001," the latest in a series of seven annual studies. In this edition, researchers interviewed managers at 245 firms and found businesses were placing renewed emphasis on strategic planning, mission and vision statements, and benchmarking.

EXPERTS SAY... "I see a reaffirmation of two things. One is a return to the basics, with the understanding that the primary base is having the right people. Stuff doesn't bubble up from the bottom and get oxygen unless you have the right people at the top. The other is people will realize that a company's strategy is more and more determined by its information technology. The IT function sets the capabilities of the organization and, on the flip side, dictates the things the organization can't do."
-Eileen Shapiro, president of the Hillcrest Group in Cambridge, Massachusetts, and author of Fad Surfing in the Boardroom (Perseus)

On the other hand, management themes built around core competencies, strategic alliances and customer retention saw decreased usage in 2001. Fads in customer relationship management, scenario planning and cycle time reduction are also expected to wane next year, according to Meacham.

The cost focus found in the survey may be explained by answers to questions about the economy and company goals. Sixty-one percent of respondents were concerned about the 2001 slowdown, and 64 percent said financial performance was their top priority.

Cost-cutters' top priority will be reducing head counts, predicts Charles Wendel, president of New York City management consulting firm Financial Institutions Consulting and co-author of Business Buzzwords (Amacom), a guide to 1990s management trends. This strategy resembles that used in previous downturns, but one difference is in nomenclature. "Last time there were cost reductions, it was called 're-engineering,'" notes Wendel.

Wendel expects companies will cut superfluous personnel more quickly than in the last recession. But by 2003, he believes, many will return to expansion. "The ups and downs are faster than they used to be," he says. "So unless we're in [a downturn like] we've never been in before, by next year management will be dealing with growth and how to get employees again."

There's one thing Meacham doesn't expect to change. "I don't think any of these tools will dig you out of a fundamentally flawed strategic position," he says, cautioning against over-reliance on the latest thing. Instead, focus on a handful of tried-and-true techniques. "Pick a few," he says. "Don't try to do 12 different things."

-Mark Henricks
  • Bain & Co.: Offers detailed online data from its Management Tools 2001 study
  • MeansBusiness: Has an online database of indexed business book concepts that provide information about thousands of management tools and business ideas.

What Do You Think?
Are our picks for what's hot in 2002 on target or way off base? Tell us what you think.

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This article was originally published in the December 2001 print edition of Entrepreneur with the headline: Sweat Rewards.

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