Managers Also Get Caught Up in Fads

MOST corporate executives enjoy above-average intelligence. But that hasn't always saved them from faddishness.

Too often, holds Prof. William Jenkins, American leaders lack ``good, solid, common horse sense.'' Just like teenagers, they get carried away by the trendy thing. In the 1960s, the merger game was popular. Acquisitions, it was argued, would result in ``synergy'' -

greater results than if the companies remained separate. In the 1970s, many of the resulting ``conglomerates'' were broken up. The divisions would be worth more apart, Wall Street's dealmakers claimed. The pattern reversed itself again in the 1980s, as executives piled on the merger-and-acquisition bandwagon to build corporate empires under the benign eye of President Reagan's defanged antitrust officials.

Some of today's popular management terms are ``management by objective,'' ``total quality management,'' ``reengineering,'' and ``restructuring.'' These terms embrace management theories and techniques that often include useful elements, but also can become faddish.

``People get sick and tired of these fads that come and go,'' says Professor Jenkins, who teaches a course on leadership at Vanderbilt University's business school in Nashville, Tenn. Together with Terrence Deal, a professor of organizational development at Vanderbilt, Jenkins has written a book, ``Managing the Hidden Organization: Strategies for Empowering Your Behind-the-Scenes Employees'' (Warner Books), that hits the book stores this week. It deals with how to manage those with ``backstage'' jobs - the employees who aren't bosses and probably are not contacting customers directly. In companies with 1,000 employees or more, they usually amount to more than 75 percent of the total.

``Most people in backstage roles ... know that often managers seize on solutions and then try to find a corresponding problem to solve,'' the two authors write. ``Today's solution quickly becomes tomorrow's castaway in favor of what's currently in vogue. Most have learned to wait and lay low until today's hot management initiative fades away. Their caution also has its costs. If they lay low, it is very obvious that they won't work hard.'' That means low volume output, often of poor quality.

For bigger companies, the ``in'' management goal at present is ``restructuring,'' involving massive layoffs. Challenger Gray & Christmas, a Chicago outplacement firm, counted 108,000 in announced layoffs in the United States in January alone.

Jenkins suspects that in some of these cases, the announcements exaggerate the number actually fired. The big numbers are partially meant to please stock market investors and corporate directors demanding more efficiency and bigger profits. Some employees laid off in one division may be shuffled to another division. Normal attrition may account for other ``layoffs.''

Although shareholders may feel good, the remaining employees nonetheless often become ``disconnected, disengaged,'' Jenkins says. Morale can be severely damaged. After ``downsizing or rightsizing,'' the remaining employees become even more important. They can't be treated as ``a piece of equipment.''

Jenkins figures that the firing of employees after mergers or restructurings over the past decade has been so widespread that it has deeply hurt corporate loyalty in the nation. Many younger people have no compunction about switching from one company to another if it seems to their personal advantage.

So, Jenkins says, the company that can win back some loyalty by better managing the ``hidden'' organization of backstage employees has a ``strategic advantage.'' A typical mid-sized company with 1,000 employees might save $2.5 million a year by boosting the productivity of these workers by 10 percent and reducing turnover, he estimates.

But managers ``must care about people,'' he says. They can't treat employees like errant children, shouting at them. ``That is `old world' management,'' he says, using a phrase that autoworkers at Saturn employ in speaking of the division's parent, General Motors. Managers must realize that every employee can make a contribution and must seek to tap that potential, Jenkins says. ``Not many people in this world get up and say, `I want to do a bad job.' But old-world managers assume that.''