Why blurring the boundaries between the managerial and theatrical lies behind many of the problems businesses are facing today.

The media have invaded the boardroom and brought with them many of the characteristics of melodrama: the continual sense of crisis, the stereotyped behaviors, the tendency to hype and overstatement, and the tricks that turn illusions into reality. It’s not just programs like The Apprentice that are to blame for this; nor the media and its thirst for continual confrontation and cliff-hanging dramas. When CEOs are treated like rock stars, the temptation is strong to play up to all the publicity and come to believe in your own hype. But losing a sense of the dull reality of most business situations is precisely what leads people into reckless and irrational decisions.

The theater, whether on stage or in movies, is a world based on make-believe; a world in which illusion is everywhere and the actors speak lines prescribed for them by someone else. In theater, a stage in downtown Chicago can become, for a while, a city in medieval Tuscany or the Australian outback. A back-lot in Burbank can be transformed — at least on screen — into Moscow, Manhattan, or Mars. Thanks to computer technology, people can fly, animals can talk, and huge battles can be fought without a single drop of real blood.

That’s the power of illusion to create a world as we want it to be. And that’s the power that has been allowing leaders to believe huge returns can be made without risk, costs can be cut indefinitely, and profits can rise to whatever figure they care to dream up to excite Wall Street.

Illusion is only a grand name for trickery

When a magician presents an act in which things disappear, people are sawn in half alive, and heavy objects levitate, you know that none of it is true; that what you are seeing is trickery, pure and simple. You stand amazed and applaud the skill by which it is done, but know it is still an illusion — an honest illusion, since there is no claim that it is anything else.

When a management team makes profits appear out of thin air, levitates dull performance in defiance of the circumstances, and starts claiming that they have altogether changed the laws of the business universe as we know it, trickery is at work too. The “dot com” boom was supposed to have re-shaped the face of accepted market behavior for ever. The housing bubble was supposed to have allowed loans to be so structured that risk became negligible, however marginal the credit-worthiness of the borrower. We now know, of course, that both of these were illusions every bit as clever and technically advanced as the illusions produced by the greatest stage magicians.

Were they honest illusions? Was it always made clear that we were watching a piece of theater? Sadly, no. These were illusions presented as truths — at least for as long as they lasted. These were the tricks of the huckster, not the stage illusionist.

Management has learned too many of the tricks of the theater

The paraphernalia of PR people and spin-doctors has become commonplace in executive suites. So have many of the skills used by actors and performers to delight us and cause us to suspend our disbelief for the duration of their time on stage:

• Tricks of sleight-of-hand to make risks seem to evaporate and money appear from nowhere.
• Ways to create the appearance of competence and ability where little or none truly exists.
• Stories and statistics to dazzle regulatory bodies, while manipulating the hopes and fears of consumers through the trickery of misleading advertising.
• The technology to make things look bigger, more solid, stronger, and more real than they are, whether that applies to profits or assets; all the while, of course, making “nasty” things — problems, risks, doubtful data, or inconvenient truths — shrink until they disappear.

Individual managers become actors, playing pre-set parts

It’s not just the large things that are changed from real into make-believe and enhanced with computer-generated graphics. Individual behavior has to be shifted too, to preserve the illusion.

• Managers become actors playing roles written for them by others; not independent, skilled agents coping with real situations.
• Many — perhaps a majority — of those roles become stereotypes: the tough-guy manager, the heroic leader, the financial wizard, the salesperson able to sell snow at the South Pole. Most links with reality are lost in the process.
• Over-acting is everywhere. Tough-guys strive to “out-tough” John Wayne and heroes perform death-defying feats of combat on a hourly basis.
• Everything becomes simplified and emotionally over-charged. In the small, brief world of a theatrical performance, you have to strip to essentials and heighten the drama. No audience will endure to sit through anything as boring and slow as real life.
• Whatever is complex is reduced to the simplest patterns: good versus evil, love versus hate, and victory versus defeat. There can be no room for anyone but winners and losers — no shades of gray — since no stage is big enough, or performance long enough, to cope with the compromises and ambiguities of actual life.

It’s time we got back to reality, especially as managers and leaders. In stories, you can write the ending to the script in the way that you want it to turn out. In life, the Seventh Cavalry may well not come over the hill in the nick of time to save you from being scalped.

We cannot survive on make-believe, however skillfully performed. Business is not theater. The hurt suffer real pain and the dead die for good; they don’t get up and take a break before the next performance. And life includes all the delays, diversions, and dull bits left out of plays and stories. Winning in the theater is often a matter of heroics and grand gestures. Winning in life is more likely to depend on patience, a capacity for boredom — and sheer, dumb luck.

Technorati Tags: business performance, management myths, management stereotypes, illusion, financial trickery, boom and bust, financial sleight-of-hand, smoke and mirrors, CEOs as stars, playing to Wall Street, PR tricks, creating business illusions, manipulating markets, fooling the customer, business trickery