Are Managers Obsolete?

The theory of complexity, which began as a way to understand complicated natural phenomena, has attracted growing attention in business circles interested in the new economy. In Open Boundaries, Howard Sherman and Ron Schultz of the Santa Fe Center for Emerging Strategies see many parallels between complex natural systems and markets. Both involve so many intricate interactions that outcomes cannot be predicted. The authors advise managers to stop trying to plan and prepare for change and instead build companies into self-organizing teams ready to adapt to whatever opportunities emerge. Thomas Hout of the Boston Consulting Group finds much that is useful in complexity theory, particularly for turbulent industries. But there are limits to the pursuit of flexibility and self-organization, he argues. Flexible, information-driven companies may be too quick to jump at superficially attractive market opportunities that their seasoned rivals wisely shun. And teams, for all their virtues, can't entirely manage themselves. The combination of fast-growing entrepreneurial companies and smart, mobile, ambitious workers creates a workplace that may actually be more fragile than its industrial predecessors. Solutions to workplace problems are more likely to come from good managers than from the teams themselves. Hout also points out that most businesses do not move so fast that foresight, commitment, preemption, deterrence, and other traditional strategic elements no longer build business value. Even in the fastest industries, good managers can still add value by creating the right working conditions to spur creativity. In other words, management still matters a lot, Hout says, even in the new economy.

• Corporate strategy
• Managing employees
• Leadership
• Change management
• Economics