Maybe managers should just let their staff get on with it and see what happens.

The Mad Hatter’s Tea Party
Closer to reality than most command-and-control management

There’s been some discussion on this blog and others recently about the perils of micro-management and the obsession with measurable objectives. It’s accepted that this style of management sows distrust, and diverts attention towards things that are not necessarily important. I’m not going into all that again here, but rather I’m going to take a comparative example from the ways in which armies have historically been commanded, where there is a great deal of hard evidence about what works and what doesn’t, and where the consequences of organizational failure are usually fairly obvious.

Now this has nothing to do with facile comparisons of business to war, or attempts to apply the ideas of Sun Tzu to modern management. We had enough of that a decade or two ago. But Armies are extreme cases of organizations which have to deal with the unexpected all the time. This is what the great military thinker Clausewitz called ‘friction’ — conflicting information and not enough of it, inadequate time for making decisions, problems of communication, an opponent who always does the last thing you expect. Armies have historically tried to deal with this problem in one of two ways.

‘Anti-friction’ systems

One will be familiar. It involves producing detailed instructions that try to cover every possibility, giving little or no discretion to subordinates and demanding constant reports on how things are going. It is fundamentally risk-averse, and it tends to be obsessed with rules and procedures. The Prussians — the military superpower of the late 19th century — called this Befehlstaktik, from the word Befehl meaning “order”. We’ll call it ‘Type B’, after Befehlstaktik.

They contrasted it with Auftragstaktik, ‘mission orders’ as it’s sometimes translated, in which the commander gives overall objectives — “Occupy that town!” — and lets his subordinates get on with it as they see best. Initiative was encouraged and commanders trusted their subordinates to do the right thing. Indeed, the great Prussian general Von Moltke said that he wanted officers who were sufficiently intelligent to disobey orders if it was obvious the orders were no longer relevant. Can you imagine a senior manager in a contemporary organization saying that? We’ll refer to this approach as ‘Type A’ for Auftragstaktik.

In military history, Type A organizations are generally much more successful, because they deal intelligently with the unknown by creating a cadre of people who can cope with it. As far as we can tell, the same is true of commercial and government organizations as well. Yet most of our organizations today are Type B, and becoming more so.

Contrasting these approaches

Why is this approach less common? One reason is that Type A organizations are difficult and expensive to create. They require training and investment, they require trust and the willingness of senior management to take responsibility for the judgements and even the mistakes by their subordinates. Type B organizations, by contrast, are cheap and easy to create; and, by establishing endless targets and micro-managing everything, always enable someone to be blamed if things go wrong. It’s no wonder they are popular today.

Type A organizations also require fine judgments — the approach doesn’t mean giving total freedom to subordinates all the time, but carefully delegating authority to people you know well enough, then trusting them to behave as you would. “Do what you think I would do in the same situation” is the basic commandment of a Type A organization. To work effectively it requires a group of people who know each other well and trust each other. Few organizations today are like that, which is why so many of them collapse catastrophically when faced with a situation for which they have not been prepared.

The flip side of a Type B organization is that you can never be blamed if you follow instructions, stupid though they may be. So today’s financial sector managers and traders who take more and more insane risks because they are incapable of understanding when instructions no longer apply are, in a sense, not really to blame. They were never encouraged to evaluate their organization’s objectives critically; and they faithfully reflect the type B model of organizational behavior — keep doing what you have always done until it obviously isn’t working . . . then panic.

The heart of the matter

Von Moltke famously said that no plan survives contact with the enemy. There doesn’t need to be a literal enemy for this to be true of other sectors also. The real challenge for an organization is how it deals with the unexpected, bearing in mind that the unexpected is the one thing that always happens. These days, most organizations, with their cultures of central command and micro-management, don’t deal with it very well. They could cope better with the unexpected if they were prepared just to trust their staffs and let them get on with it. But do today’s Type-B managers really have the courage to do that?

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