Subba’s Serendipitous moments

June 4, 2007

Mckinsey overstates the value of scientific management

Filed under: Business,Leadership,Strategy,Winning — Subbaraman Iyer @ 12:05 am
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Mckinsey recently released its annual report on Ten trends shaping the future corporate landscape, and most of it was well known. Yet, one trend (trend #9) seemed to imply that scientific management would triumph over gut instinct and intuition, to imply that companies can be run on a technology auto-pilot. I completely disagree.

Roger Martin who served as Dean of the School of Management at the University of Toronto gives his opinion here.

I am intrigued at how Mckinsey reached this conclusion (perhaps they must be watching the trend of increased use of Enterprise software and BI), I can’t help but disagree with Mckinsey’s assessment.

Whenever any business activity is caused or is a result of human activity, a complete rational approach never solves any business problem. While a scientific approach helps in solving operational problems and improving operational efficiency, growth and innovation comes about differently. It requires instinct, insight and an intelligence of a rare kind to discover opportunities.

I have seen companies deploying elaborate Business intelligence applications, and do sophisticated data mining. Yet asking the right question, or framing the right context is often the trigger to get more out of data warehouses, even for operational decision making. Strategic decisions often rely on data only to the extent of making projections, but assessment of capabilities, risk etc. are clearly areas where the gut instinct plays a dominant part.

Business problems are indeed getting complex, and often throwing more data at the problem and hoping that somehow sophisticated data analysis will simplify the problem is indeed a seductive thought. Worse people adopt the SCATE approach, without fully realizing that they could be misled. In all my consulting approaches, I tend to use data and a rational approach, but never ignore my own gut instinct.

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