I’m a business professor. When I see an article in a leading business journal entitled “Are Our Management Theories Outdated?” I pay attention. Dr Gianpiero Petriglieri, the author of the article and a management professor at INSEAD, points to an existential crisis of management.
Here are some of the main arguments. Dr Petriglieri suggests that regardless whether you personally are a manager or not, you are caught up in a mid-life crisis of management:
The signs of that crisis transpire in many an everyday experience. Perhaps you feel uneasy and restless, sensing that we will not be going back to “normal” in the workplace, if we even still have one. Or you feel stuck and swing between frustration and despair, wondering who is in charge and what is yet to come. You feel anger at the system, not to mention mistrust; you feel loneliness and dearth of meaning. Those aren’t just signs of grief at the way life has forced us to change in the past few months and weeks — our unease and despair have been brewing since long before that.
The theories and tools that help answer instrumental questions of management – that is, how to solve practical problems such as How do I make decisions? How can I be heard? How can I stay productive? – suffice in most circumstances. But there are inadequate when it comes to existential questions – Do we matter? Are we in charge? How long will we be around? There are some glimpses of a human view of management already, in the way CEOs talk about purpose as much as about profit.
Dr. Petriglieri concludes that management per se is the problem. Our old worldview of capitalism has to die. We do not need new theories of management, we need a broader purpose for it. To change our worldview, Dr Petriglieri suggests that management needs more psychoanalysis, especially the sort of psychoanalysis concerned with systems of organization and people’s experience in organisations. We also need to question organisations’ dysfunctional culture and people’s fascination with neurotic leaders.
Dr Petriglieri raises important questions, and I have two comments to make. Firstly, it is not clear to me why we want capitalism “dead”. I noted previously (link to my post on capitalism) that we lack a deep understanding of the capitalistic economic system, because the current narrative – a growth economy and a path-independent nature of economic systems – do not hold. So it is not clear to me why we would want capitalism “dead” in the absence of a sound understanding of the phenomenon.
Secondly, I’m directionally in agreement with Dr Petriglieri that management requires more introspection. To understand, as Ludwig Wittgenstein once said, is to know what to do. To be sure, we need introspection, but I wonder whether psychoanalysis alone is sufficient. Looking inside must also be guided by first principles thinking, which I see happening only in a minute number of organisations, big and small. I personally don't know anyone who teaches these principles in business, although of course such educators do exist. A first principle – a basic, foundational, self-evident proposition that cannot be deduced from any other proposition - is the building block of human knowledge. First principles thinking is so powerful in business and daily life because it’s moving us away from past analogies, conventions, cultural conditioning, proxies and incremental improvements into the realm of possibility.
Elon Musk describes first principles as “a physics way of looking at the world”:
You boil things down to the most fundamental truths and say, ‘What are we sure is true?’ … and then reason up from there…I think it is important to reason from first principles rather than by analogy. The normal way we conduct our lives is we reason by analogy. We are doing this because it’s like something else that was done or it is like what other people are doing… it’s like slight iterations on a theme.”
Do we need new management theories? The world of management is so caught up in instrumentalism and incrementalism that there is no space for novel ideas. Changing the status quo will only come if businesses start to work off first principles, from the basic level of truth about the nature of the world. Becoming more like curious children, with their endless why? questions.