Comments on: Herding cats: a new model for management

By: kamra gaddy

kamra gaddy — Tue, 22 Mar 2005 16:16:44 +0000

i have a cat who is very beautiful and i would love for her to be a model

By: Grant

Grant — Thu, 06 Jan 2005 13:14:26 +0000

Steve, great response, and I like this idea very much, make the unit of intelligence and action maximally mobile and let the play of the market decide the matter. The trouble is the world is so changeable and so multiassumptional. No, that isn’t a word, what I’m trying to say is that at any given moment many markets turn on a dime, advantage goes not just to the party with the tightest fit to demand, but the one that put its money on the right assumptions. This means you can have a great product but you bet on the right assumptions. It also means that the party who wins one day, can lose big time the next. Surely, this gives advantage to firms that cultivate within themselves a variety of ideas, assumptions and approaches. I mean, consider the alternative. If you are Sony and you discover that Beta is not going to go, you dont want to have to start from zero in the development of something else. You want that up and running.

This reminds me of consulting for advertising firms. Once I got inside these firms I was surprised to discover how little like the academic world they were. The executives of the firms were not pressing for better and clearer and fewer ideas of what advertising was. They did not want to tie there future to any single star. If a client walked in the door with a Freudian notion of what advertising was, the ad firm wanted someone who could walk this walk and talk this talk. Jungian? Sure we’ve got one of those too. There was adaptive advantage to variety. (I mean this example mostly metaphorically.) Thanks, Grant

By: steve

steve — Mon, 03 Jan 2005 17:35:44 +0000

I am going to say this in a much stronger way than I actually believe, just for clarity’s sake: Herding cats is the job of the market. The corporation’s job is to be an effective cat.

Absent the “Enlightenment” idea of a coherent and focused organization, the corporation’s management structure is an overhead that cannot justify its cost. I always get itchy when management pundits start ragging on the Enlightenment, or “Newtonian thinking” or “Taylorism.” Beyond intellectual prejudice, I believe this itch comes from recognizing that the value added by management is largely the improvement of complementarities across activities.

Dealing with multifarious, changing, fragmented customer needs and opportunities requires lots of trial and error, with resources diverted quickly and ruthlessly out of losers and into winners. Competitive markets are very good at this. No management structure is ever likely to be able to match, let alone surpass, the speed and precision of the market in this role.

Where management justifies giving up some of that cat-herding efficiency is where it can exploit scale economies, shared resources, mutual adjustment of marketing and design and manufacturing, or the like. Markets often (not always) have trouble exploiting these kinds of complementarities, especially when they must first be established.

Real-world organizations such as Unilever of course face more ambiguites and gray areas than this brief argument accommodates, but the basic logic applies: Can the supervisory layer of the corporation perform useful enough coordination activities to justify its costs? Without some “enlightened” concept of how restrictions on the freedom of local units can add value, the answer will surely be “No.”