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Writer's pictureDel Chatterson

Henry Mintzberg is worth listening to


I had the pleasure yesterday of hearing a presentation by Henry Mintzberg, McGill professor and management guru. One attendee described him as the "Tiger Woods of management science".

I know him as the Strategy professor during my McGill MBA program from 35 years ago. (Yikes, neither of us seem to have aged that much! OK, maybe less hair.)

He is a widely respected academic and the acclaimed author of "The Nature of Managerial Work ", "The Rise and Fall of Strategic Planning", "Managers not MBAs" and many other books and articles that argue against the conventional wisdom and provoke thoughtful reflection on management and business. He is also the co-founder of the International Masters Program in Practicing Management (IMPM), a unique approach to learning that is designed to flow from the experience of the participants.

His presentation yesterday was originally advertised to be on the dilemma of corporate compensation, but that turned out be only part of his critique of the modern CEO focus on shareholder value that is leading to the great depression of 2008.

Some of his points to consider:

  1. Productivity is a euphemism for cutting costs, mostly by firing employees, while maintaining short-term revenues.

  2. The theoretical corporate objective of maximizing long-term shareholder value has been hijacked to mean pushing short-term earnings to inflate current market share prices.

  3. How can employees be motivated to work for shareholders they have never met? Many of whom have no interest in the company except for the short-term ability to make a profit on their investment - they are day traders or hedge funds.

  4. Shareholder value is not a worthy objective of the corporate institution as it specifically ignores (or exploits) other stakeholders, especially employees.

  5. Mercenary corporate leadership is stealing from shareholders with absurd compensation and severance packages that are not tied to performance. The "robber barons are back!"

  6. The old corporate silos have been replaced by horizontal slabs of concrete separating executives from their employees and the real operating issues.

  7. "Human resources" is a term that dehumanizes human beings. It makes it easier to treat people like other "resources" to buy, sell, use and dispose of them. It's like describing airline passengers as "self-loading cargo"!

  8. Corporations need to remember that customers are people too. They are not just another asset to be exploited.

Professor Mintzberg also suggested some remedies to avoid the great depression of 2008:

  1. Stop being misled by the apparent productivity gains and profitability of large American corporations.

  2. Get the mercenaries out of the executive suite and add employee voices in the boardroom.

  3. Stop running businesses to satisfy financial analysts or investors with no interest in anything except short-term results.

  4. Install real corporate leadership that is concerned, engaged, and modest. (Interestingly close to Jim Collins description of Level 5 Leadership from "Good to Great".)

  5. Ignore the obsession with measurable factors and reconsider the immeasurable - values, benefits and impacts of economic activity.

  6. In the larger context, get back to a better balance of the three sectors in society - public, private and social.

His full commentary is available at How Productivity Killed American Enterprise.

Lots to think about and to influence if we can.

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