forbes.com
Managerial Obsolescence: Systemic Issues and the Rise of Value-Creating Enterprises
Outdated business models focusing on cost-cutting rather than value creation are causing the obsolescence of millions of managers, impacting profitability and employee morale; however, some firms are evolving, using digital technology and AI to create exponentially more value.
- How do the interconnected issues of outdated management practices contribute to declining long-term returns and decreased employee satisfaction?
- The interconnected issues of wrong mindset, goals, and processes within firms create systemic problems. These include hierarchical structures, ineffective problem-solving, and misaligned HR and budgeting practices, all hindering value creation and long-term growth.
- What are the primary systemic factors contributing to the obsolescence of millions of managers, and what are the immediate consequences for businesses?
- Millions of managers are becoming obsolete due to organizational obsolescence, not individual shortcomings. Outdated business models, focusing on cost-cutting instead of value creation, are the root cause, impacting profitability and employee morale.
- What are the key changes needed in management education, economic models, and business practices to address the obsolescence of traditional management and foster the growth of value-creating enterprises?
- The future requires a shift from traditional management to value-creation enterprises. This involves embracing new technologies like AI for value addition, not cost reduction, and fostering self-driven teams. Business schools and economic models must adapt to reflect this change.
Cognitive Concepts
Framing Bias
The framing consistently emphasizes the negative aspects of traditional management, portraying it as inherently flawed and obsolete. The headline and introduction set a negative tone, predisposing the reader to accept the author's conclusions. Positive examples of traditional management practices or successful firms are largely absent, reinforcing a biased perspective.
Language Bias
The author uses charged language such as "obsolete," "wrong," and "failing" repeatedly to describe traditional management practices. These terms are not neutral and contribute to a negative framing. More neutral alternatives could include "inefficient," "outdated," or "requiring improvement.
Bias by Omission
The analysis focuses heavily on the problems with current management structures and offers solutions, but it lacks examples of specific organizations or industries where these problems are most prevalent. It also doesn't address potential counterarguments or alternative perspectives on the obsolescence of managers. While acknowledging limitations of space, more concrete examples would strengthen the analysis.
False Dichotomy
The article presents a false dichotomy by suggesting that firms are either focused on profit or on creating value. In reality, many firms strive to balance both. The presentation of 'wrong' and 'right' approaches oversimplifies complex business strategies.
Sustainable Development Goals
The article highlights the obsolescence of millions of managers due to outdated organizational structures and practices. This negatively impacts decent work and economic growth by hindering innovation, reducing long-term returns, and perpetuating inequitable compensation policies. The wrong mindset of profit maximization over value creation, wrong firm structures, and wrong HR practices all contribute to this negative impact.