Golden Rules Top management strategies of the past 20 years and what still works.

If this were 1977, Seth Godin might be sitting down with one ofhis 40 employees to coalign their goals according to the conceptsof management by objective. He might be rounding up YoyodyneEntertainment Inc.'s workers into quality circles. He might beusing lateral thinking to spur the creativity that drives theIrvington, New York, online game show production company.

Today, however, Yoyodyne's founder and president tells hispeople to "ready, fire, aim," as management guru TomPeters advised in 1994 in The Pursuit of Wow! (VintageBooks). He urges them to develop one-to-one relationships withcustomers, as Don Peppers and Martha Rogers suggested in The Oneto One Future (Doubleday) in 1993. And he asks them to beguerrillas, in the approach popularized by Jay Conrad Levinson in1984's Guerrilla Marketing (Houghton Mifflin).

"We run our business based on those three books," saysGodin. "Every single person who works here has read some orall of them. It's fundamentally changed the way we run ourbusiness."

Godin isn't alone in basing his management style on popularnew ideas presented in bestselling business books. The past twodecades have seen the almost complete discrediting of thelong-standard MBO, or management by objective, as well as the riseand fall of countless shorter-lived fads, each accompanied by aflurry of books, articles, videos and seminars. There are buzzwordsfor every letter of the alphabet and every function of management,from activity-based costing to intrapreneurship, from just-in-timeinventory to zero-defects manufacturing.

All this ferment can be confusing as well as helpful, sayexperts. "A lot of managers waste their time chasing thelatest idea," says Richard Hamermesh, founder of managementconsulting firm The Center for Executive Development in Cambridge,Massachusetts, and author of Fad-Free Management (KnowledgeExchange). Hamermesh blames managerial insecurity--"If otherpeople are doing it and it's on magazine covers, then I'dbetter do it"--for what he sees as harmful trend-chasing.

Consultants are also due a share of the blame for thebewildering explosion of odd acronyms, newly invented terms andsupposedly unique advice. "Every consulting firm will come upwith a focus to differentiate itself from competitors,"explains Charles B. Wendel, president of Financial InstitutionsConsulting in New York City and co-author of BusinessBuzzwords (Amacom).

But wherever they come from and whatever their failings,there's no doubt that some of these management ideas haveproved to have lasting merit. Somewhere between adventure-basedlearning and Theory Z management lies a style and practice to fitalmost any entrepreneur's personal inclinations. But before youdive in, here is a road map to four of the trends that have mostinfluenced business in the recent past and are likely to carry itinto the future.

1. TQM: King of the Hill

Total quality management, together with its associated concepts,such as continuous improvement, zero defects and statisticalprocess control, make up what is easily the most talked-aboutbusiness idea of recent years. TQM, as it's almost alwaysreferred to, is especially remarkable for its long tenure atop theheap.

Some of TQM's basics came out of Bell Telephone's labsas early as the 1920s. The ideas were refined in
Japan not long after World War II, then gained wide attention fromU.S. businesses about the time Entrepreneur was founded 20years ago.

TQM can affect almost every area of a firm's operations, butit rests on one principal idea: It calls for continually improvingquality by using statistical measures to track both problems andthe results of efforts to fix those problems. It helps manybusinesses greatly cut costs by, among other things, reducing wasteand scrap while boosting customer satisfaction.

The TQM approach is a marked contrast to the traditional methodof using post-production inspection to catch errors. Propelled bythe impressive quality of Japanese goods produced using TQM methodsand led by the vision of gurus such as Joseph M. Juran, W. EdwardsDeming and Philip Crosby, millions of businesses have dropped theold ways and adopted TQM in one form or another.

Indeed, many credit TQM with virtually saving American businessfrom high-quality, low-cost foreign competitors. But partly as aresult, today TQM is the closest thing to a religion in theordinarily secular American business scene. And overzealous TQMadvocates who insist on strict adherence to its principles are thereason, say many, that TQM may be on the decline as a high-profilebusiness strategy.

That doesn't mean quality management will go away or peoplewill stop doing the things it teaches. It's just that yearsfrom now, say experts, it will no longer be talked about.

"It won't be a buzzword anymore," explains MichaelHitt, a management professor at Texas A & M University inCollege Station and co-author of Strategic Management (WestPublishing Co.), "because firms will have to compete onquality or they won't stay in existence."

2. Reengineering

Business process reengineering hit the business world in 1994with the publication of Reengineering the Corporation(Harper Collins) by consultants James Champy and Michael Hammer.Though just 3 years old, business process reengineering, or BPR,has already had such a major impact that most experts consider it aleading idea of the past two decades.

Reengineering calls for making major changes to a business'sfundamental operations, with cost reduction as the primary goal.Because these changes often call for reducing the number ofworkers, it's closely associated with ideas like downsizing andrightsizing.

Reengineering's main appeal rests in its ability to providecompanies with a quick way to control costs, says Dipak Jain,professor of entrepreneurial studies at Northwestern University inEvanston, Illinois. While it violates one of TQM's rules byoften concluding that workers should be laid off, BPR shares manyof the same goals. "Quality [management] and reengineering arenot mutually exclusive," Jain says. "They need to be donejointly."

Recently, BPR has been widely criticized as a short-term way toboost profits by gutting a company's work force."Corporate anorexia" and "hollow-shellcorporation" are two newly coined terms referring to companiesthat have trimmed so many workers, they have lost essentialfunctions.

Yet BPR has also produced some remarkable success stories. Theability to coexist with TQM may explain much of BPR's rapidrise in influence and popularity, and suggests it will remaininfluential for some time.

3. Empowerment

Handing employees the power to make decisions and rewarding themfor making the right ones has proved one of the toughest pills formanagers to swallow in recent years. Perhaps that is what has savedthe idea of empowering employees from the kind of overexposure thatcharacterizes other trends and kept it, after more than a decade ofconsiderable prominence, still on a growth trajectory.

Empowerment and related ideas such as participative managementhave the dual goals of reducing costs and improving quality. Thisis done by placing responsibility for many decisions in the handsof production workers, customer service personnel, and others whoformerly took orders from managers. The result is less need foroverhead-gobbling middle managers and more relevant decisions.

Not surprisingly, empowerment is popular with employees. Amongother things, it is said to boost job satisfaction, reduceabsenteeism, lower turnover and even improve workplace safety.These advantages alone may drive the concept for years to come.

"What's important about empowerment is thatorganizations are made up of people," explains Eileen Shapiro,president of Cambridge, Massachusetts, management consulting firmThe Hillcrest Group Inc. and author of Fad Surfing in theBoardroom (Addison-Wesley). "To the extent you can getthem to do their jobs more effectively and enjoy it, that's gotto be a competitive advantage."

4. Teams

Today, people who supervise the work of others are as likely tobe called team leaders or project heads as managers or executives.It's all due to the phenomenal popularity of self-directedteams, teamwork, cross-
functional teams and other ideas associated with the practice oforganizing groups of workers to achieve a common objective.

Teamwork is central to other major trends, such as qualitymanagement and empowerment, because it aids communication, improvescooperation, reduces internal competition and duplication ofeffort, and maximizes the talents of all employees on a project.But it's only in the last decade or so that attention has beenfocused on the team itself as a vital management tool.

Like most major trends, the teams movement has lately beencriticized for positioning itself as a panacea. In fact, teamworkrequires a good deal of back-and-forth communication, which canslow down decision-
making to what is, in some instances, an unacceptable speed. SaysHamermesh, "I'm all for teams, but not when someone ontheir own can make the decision a lot faster and better."

Tomorrows Trends

While management is undoubtedly evolving and new ideas oftenhave merit, too many new ideas introduced too quickly can beharmful. When you go from one idea to another, your work forcequickly becomes jaded, says Hamermesh. Workers may not take yourideas seriously if every month you introduce something new.

Unfortunately for trend busters, the past two decades ofmanagement trend-setting are likely to pale in comparison to thetrend output of the next two decades. The reason: You're goingto need them.

"I believe there's increased management complexitytoday," says Donald J. Dailey, partner in charge ofentrepreneurial advisory services in accounting and consulting firmCoopers & Lybrand's Detroit office. "Business ownersare faced with increasing amounts of technical information.Expansion overseas, external partnering relationships,outsourcing--all that combines to make managing a business morecomplex."

That complexity, in turn, breeds a desire for simplicity. Andthat happens to be just what management trends offer: a solutionthat promises to be easier and more effective than simply trying towork harder, be smarter and go with the flow.

The irony is, the more the marketplace demands simplicity, themore ideas consultants, authors and professors spew out, and themore confusing it all becomes. Says Dailey, "There'sgrowing concern among many of the entrepreneurs I [deal] with thatthey're not prepared for the challenge [of sifting throughtrends]."

Of course, just because you're burning the midnight oil tokeep up on the next big thing doesn't mean you have to followit. Godin, for instance, stays abreast of mentoring, missionstatements and any other trend that comes along. But he never stopsbeing a one-to-one guerrilla in pursuit of wow. "I probablyread a hundred management books a year," he says, "and Ihaven't found anything to replace these three."

Required Reading

The consensus among management experts is that no one can keepup with the outpouring of ideas about how to run businesses better.You can, however, get a good idea of management trends' generaldirection by reading some of the following publications:

Business Buzzwords: Everything You Need to Know to Speak theLingo of the '90s (Amacom), by Elaine Svensson and CharlesB. Wendel. The best overall look at business trends, this bookincludes a great deal of background on overall trends and specificmanagement gurus, plus extensive definitions, etymologies, relatedconcepts and synonyms for more than 100 trendy terms.

Fad Surfing in the Boardroom (Addison-Wesley), by EileenShapiro. This book is worth owning for its brief "Expanded FadSurfer's Dictionary of Business Basics," a glossary ofmanagement trends written in the "Devil's Dictionary"style of Ambrose Bierce.

Fad-Free Management (Knowledge Exchange), by RichardHamermesh. More an indictment of management trends than anexplanation, this book provides helpful tools for identifyingwhat's new and worthy and what's just recycled commonsense.

Guide to the Management Gurus: Shortcuts to the Ideas ofLeading Management Thinkers (Random House), by Carol Kennedy.Due out in August 1997, this book is written by one of the mostprolific writers on management trends.

Harvard Business Review. An impressive number ofimportant management ideas get their first exposure in thisauthoritative and widely read journal. A year's worth of tablesof contents reads like a catalog of business books to be publishedin the next few years.

Master Minds

You can't have management trends without gurus. Here are thetop management minds of the past 20 years:

Philip B. Crosby: His 1979 book Quality Is Free(McGraw-Hill), along with the extensive training done by his firmPhilip Crosby & Associates, is credited with bringing TQM tothe management masses.

W. Edwards Deming: The éminence grise of TQMis credited with teaching the concept to the Japanese and, muchlater, spreading his dogmatic "14 Points" of qualitymanagement to American businesspeople.

Peter Drucker: Since the 1950s, this leading managementguru, though not closely associated with any particular trend, haswritten numerous books on various aspects of management.

Michael Hammer & James Champy: Their 2.5 million-copybestseller Reengineering the Corporation (Harper Collins)kicked off what is so far the leading management craze of the1990s.

Tom Peters: In Search of Excellence (Harper & Row),written with Robert H. Waterman Jr. and published in 1982, openedthe floodgates to countless would-be celebritymanagement-gurus-turned-writers. "Chaos" and"uncertainty" are Peters' new watchwords now thattime has proved many of his ideas about excellence incorrect, buthe is still regarded as a gifted management analyst.

Contact Sources

The Center for Executive Development, (617) 576-7713;

The Hillcrest Group Inc., 20 University Rd., Cambridge,MA 02138-5756, (617) 495-0020;

Michael Hitt, c/o Academy of Management, (409) 845-5577,fax: (409) 845-3420;

Yoyodyne Entertainment Inc., 1 Bridge St., Irvington, NY10533, (http://www.yoyo.com).