Fad Company?

Late last week, Stephen Bainbridge, a law professor at UCLA, transmitted a behavioral explanation of management fads. Remarking on the proliferation of books about participatory management, TQM, quality circles, lean manufacturing, and the like a decade ago, Bainbridge addresses why management fads are so widespread — and why rational managers will fall prey to herd mentality.

Like the fashion industry, the management consultant industry always has to have something new to sell. There must be continuous churning of ideas if the consultants are going to have continuous work. After all, you don’t become a management guru with lucrative consultancies, huge speaking fees, a bestseller if all you can say is “everything’s great.” But whence comes the demand for these new fashions?

The faddish aspects of participatory management suggest the possibility that herd behavior is relevant to the demand side of the equation. An American Society for Training and Development report, for example, observed that many companies adopt team-based management structures, inter alia, “in response to success stories from other companies. Another study reported: “In a number of cases we studied, the CEO of the company had seen a TV program or read a magazine article praising quality circles and decided to give them a try.”

Perhaps an article in Fast Company? Of course, there are dangers to such herd mentality. And not just on the practitioners’ side — as Bainbridge offers, “even a good agent can make decisions resulting in a bad outcome.” The people proposing new practices and processes can come under fire, as well.

Take Thomas Davenport, one of the creators of reengineering. In our very first issue, he explains how what started as a modest idea became a destructive fad — and how leaders can avoid the next one.