Professionalizing management: the grand challenge of the 21st century

A more extensive version of this article was published as: Romme, G. (2017), "Management as a science-based profession: a grand societal challenge", Management Research Review, vol. 40 (1), pp. 5-9. DOI: 10.1108/MRR-10-2016-0225

Introduction

Mary Parker Follet, Peter Drucker and other pioneers in the management discipline conceived of management as a science-based professional activity that would serve the ‘greater good’. More recently, however, most management scholars have abandoned the quest for professionalism, due to what Khurana and Spender have labeled the ‘intellectual stasis’ of management scholarship and its incapacity to inform management practice. This intellectual stasis is alarming because, in the beginning of the 21st century, the nature and level of professionalism of management is under close public scrutiny as a result of a large number of corporate failures. Examples are the mismanagement of risks and a one-dimensional focus on short-term profitability observed at several Wall Street banks (in turn triggering the global financial crisis, as of 2008), Berlin Brandenburg airport, Volkswagen’s diesel scandal, Toshiba’s accounting scandal, and ING's and ABN Amro's failure to combat money laundering and other criminal activities. A global survey conducted by Bloom, Sadun and Van Reenen suggests these examples are by no means exceptions to the rule: according to Bloom and coauthors, the vast majority of firms appear to be very badly managed.

In this essay, I explore how the quest for professionalizing the management discipline can be renewed as a grand societal challenge. I start with questioning some of the key assumptions made by many management scholars, especially those that undermine the capacity of these scholars to inform management practice. Subsequently, I'll explore how the future of the management discipline may largely depend on the rise of new forms of management drawing on distributed intelligence and circularity of power and authority. Management scholars would thus need to shift their attention from a focus on managerial intentions and behaviors to the (development and use of) management technologies, similar to how aviation technology involves modern airplanes that only to a limited extent require intervention and control by a single pilot.

Challenging Key Assumptions

Our understanding of management as a (nascent) profession has become confined to the idea that management is done by a few people at the top of the organization. For most people, therefore, words like ‘management’ and ‘managing’ automatically evoke the image of someone in a leadership position. This image may be false, however. In this respect, professional management is as much about the evidence, tools and systems used, as it is about the human agents themselves. The widespread belief that management should be the responsibility of a few people at the top is also a major barrier in professionalizing the management discipline, because opportunism and arbitrariness are then likely to take central stage in any management practice.

The future of the management discipline may therefore depend on the rise of new forms of management that explicitly draw on principles of distributed intelligence. These are the principles that make aviation technology so highly reliable, compared to most other ways to transport people and goods. A modern aircraft includes many thousands of sensors and signalling systems that allow the (automatic) pilot to anticipate, analyze and solve problems. The principles of distributed intelligence are almost entirely ignored by management scholars as well as practitioners, which leads to highly unprofessional management practices in the vast majority of organizations.

More on the Analogy between Management and Aviation

As any analogy, the aviation example is appealing but also potentially misleading. It is appealing because it helps us to think about our profession in a novel manner. In this respect, the management discipline is often compared with established professions such as law and medicine, which have largely been created and institutionalized in the 18th and 19th century. Here, the analogy between management and aviation makes much more sense, because both disciplines have largely been emerging and developing in the 20th century.

The analogy with aviation as well as information systems and other “20th century” professional disciplines is also helpful because all these disciplines operate on a pragmatist understanding of the synergy between Aristotle’s ‘episteme’, ‘techne’ and ‘phronesis’. That is, these professions thrive on the interaction between scientific, instrumental and reflective knowledge. By contrast, management scholars have been sequestering themselves in “closed loops of scholarship” resulting in separate academic communities that never talk to each other, let alone communicate and work with management practitioners. Thus, management scholars can learn from aviation that one needs to embrace a pragmatist, inclusive mindset in order to build a truly professional discipline. Such a mindset is pivotal in growing the capacity of management scholars to guide and inform (future) management practices.

The aviation analogy is also potentially misleading, because the current state of the art of management technology is more similar to the aircrafts developed and tried out by the Wright brothers (in the period 1903-1905) than to modern Airbuses. Moreover, whereas the wiring of an aircraft is largely tangible, the wiring of an organization is largely human and social in nature. The (automatic) pilot of an aircraft can therefore monitor what is going on in the aircraft as well as its surroundings by means of thousands of sensors and measuring devices. But in the case of managing, each individual in the organization can (potentially) act as a sensor and measuring device—so to speak.

The Rise of Circular Management

The aviation analogy is not entirely a futurist dream. The existence of what I call "circular management" illustrates how principles of distributed intelligence and circularity can be applied to management. The Dutch engineer and entrepreneur Gerard Endenburg has pioneered the so-called sociocratic approach to circular management since the 1970s. More recently, the American software engineer Brian Robertson repackaged the sociocratic approach in terms of holacracy. These circular forms of management appear to ease top managers’ stranglehold on their organizations and, by extension, their performance and resilience.

Circular management implies power and leadership is distributed throughout the organization, while maintaining an unambiguous hierarchy, conceived as a sequence of accountability rather than authority levels. This type of management practice implies people take on roles as needed, rather than anyone becoming exclusively and (almost) permanently assigned to a managerial or any other role. Detailed blueprints of the sociocratic and holacratic approaches to circular management are given elsewhere.

A few hundred organizations are now using circular management, in either its sociocratic or its holacratic version. Almost all these companies and other organizations are small or medium sized. Examples are the Dutch design agency Fabrique and the Brazilian agribusiness company Terra Viva. Large, publicly owned corporations are thusfar not applying circular management—for obvious reasons explained earlier. An exception is Zappos (a division of Amazon), in which there is an ongoing effort to implement holacracy. Especially those companies that have been applying circular management for a decade or longer illustrate its long-term impact: all these organizations are leaders in their (local or regional) industries, and moreover, demonstrate how principles of circularity of power enhance organizational resilience and performance.

Elsewhere, I have outlined some of the key challenges arising from implementing circular management. In this respect, the following misconceptions may arise: (a) implementing one of these approaches means abandoning the corporate hierarchy; (b) once the blueprint of holacracy or sociocracy has been adopted, any implementation strategy will do to get the organization there; and (c) these new forms of management do not affect the executive and supervisory boards. Notably, these challenges can be addressed by redefining hierarchy as an unambiguous sequence of abstraction (rather than authority/command) levels and reshaping corporate ownership by separating legal and economic ownership.

Grand Challenge

The quest for management as a science-based profession may be one of the biggest grand societal challenges of our time. Ferraro and coauthors argue that a grand societal challenge involves many interactions and nonlinear dynamics, has highly uncertain dimensions and consequences, and cuts across jurisdictional boundaries implying multiple evaluation criteria. Accordingly, grand challenges such as climate change and professionalizing management require collective responses that allow diverse actors to interact constructively over prolonged time spans, and moreover, sustain different interpretations among various audiences with different interests and backgrounds.

Any grand challenge has many potential solutions, and therefore “there is no way of knowing in advance how best to proceed”, which calls for multiple experiments. Circular management can be conceived as an ongoing experiment in the quest for professionalism. The challenges arising from the quest for management as a profession are huge, which also calls for experiments with many other approaches addressing this grand challenge.

This article, orginally published in Management Research Review, was awarded as MRR's most outstanding article in the 2018 Literati Awards for Excellence.