Our managers must look beyond America…

Stefan Stern at the FT ::

“[The American Business Model] remains the working hypothesis of most business people and consultants,” [John] Kay writes. But, he argues, it is mistaken in its core belief that greed can be a benign and sustainable force. He cites the economists Ken Arrow and Frank Hahn, who asked in 1971: “What will an economy motivated by greed and controlled by a very large number of different agents look like?” The economists answered their own question: “There will be chaos.”

Read on…

The good times are over. Glutton is gone. Lean is back in vogue.

If there is one thing that will be our ultimate undoing, it will be our ignorance and our arrogance. Our business leaders love nothing more than criticising our governments, yet in reality, many of them are unaware of their own inadequacies and shortcomings (even if they do work incredibly hard).

We do have professional bodies that work to propagate best-practice, but they also enforce age-old Anglo-Saxon business techniques that in many cases have become outdated. If we are to return to a level of effectiveness that will equip us to compete in a tight global market, we have to open our eyes to techniques from other cultures.

The top-down, greed is always good ethos has been vanquished. Markets have not failed, we have failed them. And the fallout – the toxicity of American economic calamity – is poisoning global industry. We need to become more than what we have been.

It’s time for British managers to visit the world. Not as travelling titans, but as humble students. To share and learn.

We have some excellent companies and some brilliant managers, no doubt. But in the main, we suffer institutional stagnation in many of our businesses, a culture of unjustified remuneration for executives, and a chronic lack of appreciation for investing in training.

I have worked in industry for over a decade, within the much-derided manufacturing sector in fact. Contemporary management theory, in many cases, is non-existant and formal training is viewed as a waste of time and money (not only by senior managers, but by the junior-level managers themselves).

In a new post-crash global economy, skills and education will become more and more necessary as fat is trimmed – only the smartest businesses will survive. We need to start with our children, but we must not forget education when people leave formal education.

Blair once made a commitment to “Education. Education. Education.” Yet, despite over a decade in power, and “improving” exam results, our economy is still strangled by a lack of basic numeracy, literacy and the capacity of our young people to adapt to industry.

The reinvention of Labour – if it is to reinvent itself in this parliament – must be a commitment to lead the country in a national project to reform education and skills. We need not only investment, but a leadership with the charisma to inspire change.

If not, we must be prepared to rot on the vine, and say good-bye to any ideas of global economic leadership.