CORPORATE ‘FLU AND OTHER BUSINESS AILMENTS
[EDIT/BIZ: London, December 30] Which management fads positively damage the company? TQM, ISO9000, investors in people and many others have their advocates. Evidence shows that none of these initiatives really work or justify the investment – and some of them are downright damaging. Why do so many companies jump onto the latest bandwagons? ‘Management fads are like corporate flu’ says Associate Professor Vermeulen. ‘Rarely do they kill but they will make you seriously under perform until you shake them off.’ What should companies be doing in a downturn? Why do some companies hire ‘identi-kit’ employees and board members who all act the same and think the same? And what are the risks and lost opportunities of this? When do you need homogeneous or diverse teams? Homogeneous teams can be useful – but only in very specific circumstances. Often they will damage a firm’s performance. How do you encourage managers to speak out and go against the prevailing view when necessary, and what are the risks? Why are we so obsessed with numbers and measuring everything? What really motivates your workers? Do long term incentive plans really work and what sort of behavior do they encourage? What impact would ‘family friendly’ policies have on workers’ satisfaction and on the bottom line? What really happens to performance when you differentiate pay within a team? What should CEOs be paid? Professor Vermeulen brings fresh thinking to these questions and much more, and clearly presents the evidence from the world’s leading business researchers to support his insights. In many cases, the reality is not as you would expect, and he exposes the misguided assumptions that underpin many of our daily business decisions. Business Exposed is not a sensationalist tirade against the tenets of management theory, but a carefully researched and well-argued book which re-examines a number of core management ideas and practices, and demonstrates how new research presents a different picture –often radically so. ‘This is something of a wake-up call for those of us in business’ says Associate Professor Vermeulen. ‘Much of our daily thinking in the workplace is highly influenced by well-established theory from some of the giants of management thinking from past generations. How we formulate strategy, how we shape HR plans, how we pursue mergers or acquisitions, how we raise funds and deal with the city, whether we innovate, how we respond to competitors’ strategies. Many of the decisions we take and the debates we have in the office are fundamentally shaped by this research that has largely remained unchallenged for years. I thought it was time to look dispassionately at some of these theories to see if they really do still hold water, or if new advances in management research could cast fresh light on what we thought we knew. And the answer is yes. There has been a great deal of valuable recent research - much of it overlooked - which challenges, contradicts or undermines some of the key tenets of management thinking. It’s time to set the record straight so companies can start to be much more effective in their decision making, and have a clearer understanding of what we really know about business – and what is just simply misleading and potentially damaging.’ Professor Freek Vermeulen is a highly respected academic from London Business School. He writes in a clear-sighted and very accessible way, to set out what is wrong with aspects of our business thinking, and why it is wrong. He reveals the scandals, quirks, counter-intuitive behavior and downright silliness that characterize much of business, grounding his comments in sound academic research. In 2009, the Financial Times said: ‘The London Business School associate professor is a rising star and his pithy observations are both accessible and authoritative.’ The views presented in the book are likely to be a major talking point in boardrooms and among senior management teams this Autumn. About the Book Business Exposed: The Naked Truth About What Really Goes on in the World of Business was published on November 1, 2010. About the Author Freek Vermeulen is Associate Professor of Strategic & International Management at London Business School, teaching courses to executives and executive MBA students. He is the recipient of several teaching and various research-related awards, including the first-ever LBS ‘Excellence in Teaching’ award and the prestigious Academy of Management Journal Best Paper Award. Freek is an active consultant for companies such as KPMG, and a key-note speaker on various topics. In addition to academic articles, Freek has written for publications such as HBR, Sloan Management Review, and the Wall St Journal. He wrote a popular business blog for HBR (called ‘Strategy Freek’) which was covered in Business Week, The Washington Post and the FT among others. For details of Freek’s recent media work, his blog and for photos, please see
For all those senior managers and directors who sometimes feel they are the only ones talking sense around the meeting table, support is at hand. In an outspoken new book [published in November], Associate Professor Freek Vermeulen of London Business School, turns the spotlight on a number of key current business issues to expose the misunderstandings, fallacies and misrepresentations which are holding back senior management teams and damaging corporate performance. He cuts through conventional views of how business works and what we should be doing, to offer clear guidance on what really works – and what doesn’t – no matter what the consultants say.
Diversifying or narrowing their focus? Innovating or copying the competition? Downsizing or investing in thyeir people? Professor Vermeulen points out exactly what action the evidence indicates.
Focusing on the numbers can be damaging if it encourages us to concentrate on the wrong things (only those things that can be easily measured) and neglect the more intangible aspects of business that can often be the real source of our competitive advantage.
How should the decision be taken and what influences the Board, legitimately or otherwise? How closely is CEO pay tied to corporate performance, and how closely should it be? How can you use remuneration strategies to manage CEO behavior such as restricting overly risky decision-making?
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