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Enterprise Systems: Centralized control or Let genuine expertise flourish

November 16th, 2007

Despite the evidence to the contrary, some people still believe that leadership means giving direction rather than putting in place the processes which encourage above average performance by staff.

Centralized control is based on the proposition that people generally can’t be trusted and that only those at the top of the hierarchy have the knowledge and experience to make the right decisions. However, those at the top frequently do not have the most up-to-date information and what information they do have may not be relevant to the local situation at all. It turns out that co-ordination is most successfully achieved, not by managers enforcing rules and regulations, but by managers attending to building the organization’s culture, by emphasizing trust and seeking above average performance. Increasingly, flexible teams are recognized as necessary, indeed as the only workable proposition The standards in such groups are set by the members of the group themselves on the basis of what they understand to be best practice from their own observations. Remember the exhortation from James Collins and Gerry Porras that successful organizations build strong cultures.

In recent discussions I had with museum people in Australia about relations between museums and indigenous peoples the issue of centralized control – the unreasonable expectations of politicians and senior bureaucrats – was brought to the fore. Government representatives expect that once material like human remains is returned, the job has been completed and the responsibility of the museum has been met but indigenous people consider this to be the start of a relationship which stretches into the future. Governments obsessed about control rather than values will never succeed!

These issues are dealt with by Simon Head, Senior Fellow at the Rothermere American Institute at Oxford University. His most recent book is The New Ruthless Economy: Work and Power in the Digital Age. (August 2003).

(The audio of an interview on the Brian Lehrer Show on New York Public Radio with Simon Head can be heard here.)

In the New York Review of Books for August 16, 2007 (“They’re Micromanaging Your Every Move”) Head reviews three books, The Social Life of Information by John Seely Brown and Paul Duguid (Harvard Business School), Bait and Switch: The (Futile) Pursuit of the American Dream by Barbara Ehrenreich (Owl Books) and The Culture of the New Capitalism by Richard Sennett (Yale University Press).

Head reminds us of issues dealt with in his book which centres on the use of what are called “Enterprise Systems” or ES to control the work even of professionals such as computer specialists and doctors. ES is the method used to run call centres and retail stores like Walmart. (There are numerous articles about Walmart and its management practices.) Continue to essay.

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