Incompetence Compensation Competence: How Managers Really Tick. Stories

By Ralf Lisch

The Management Humbug
Authentic stories ironically debunk management myths

Since the broadcast of the British sitcom "The Office" and such counterparts as France's "Le Bureau", Canada's "La Job" or Germany's "Stromberg", even the man in the street suspects that the world of management is not quite as illustrious as it may appear at first glance. While management gurus praise their unerring success strategies, management in real life looks rather different. Where managers refer to reason and rational decision-making citing business economics, the reality of management actually follows the rules of psychology and sociology.
Typically, what managers like to sell as competence is essentially a myth distracting from the driving forces behind management: status, careerism, vanity … you name it. Looking at business from this angle can make management narratives wonderfully entertaining.
In this book, the ex-manager and sociologist Dr. Ralf Lisch has recorded some of the best scenarios. He condenses his comprehensive practical management experience into ten paradigmatic stories from the wondrous world of international management.
The result is an ironic broadside against arrogance and snootiness in management - proving that managers are no different from common folk.
Target group: managers, future managers as well as everybody who wants to better understand how things really are in management.

• Language: English
• Publisher: Solibro Verlag
• Release date: Sep 5, 2017
• ISBN: 9783960790440

Book preview

preface:

Executive Summary

Erich Sixt, successful business economics dropout and chairman of the executive board of Sixt SE, a global car rental provider, once put it in a nutshell:

Business economics is based on a single axiom; that human beings act rationally. But they don’t. Which is why you can forget that approach.

Considering that customers don’t follow the concept of the homo economicus, one would expect that at least those who are trained to deal with customers, and are well-paid, act in a rational manner. But observing the management of companies, it actually does not look much better. Managers preach reason but if things don’t develop as expected they blame others for being unreasonable. They refer to factual decisions and point to business economics or even logic. But in reality, management follows the principles of psychology and sociology. In fact, concepts like status, power, career, vanity and other absolutely human motives and characteristics are much more appropriate for the description and prediction of management processes.

No doubt, managers act in a rational manner. However, the underlying reason is often different from what one would expect, taking business economics and the company’s interests into consideration. It is all about the elementary competence required to compensate one’s incompetence.

Incompetence compensation competence – this monster word was coined by the German philosopher Odo Marquard as part of a critical review of the current state of philosophy.¹ In German, this word sounds even more light-footed: „Inkompetenzkompensationskompetenz". Furthermore, it does not only describe the state of philosophy, it is also a perfect description of the situation in management.

Incompetence compensation competence is the natural heir to the Peter Principle suggesting that „in a hierarchy every employee tends to rise to his level of incompetence."² Only those who comply with the rules of management will reach and survive at that level and have the necessary competence to compensate their own as well as their colleagues’ incompetence.

Once you realize that much of what managers prefer to sell as competence is hardly more than a myth, stories from the world of management can be both entertaining and amusing. They bring back memories of The Office – a British sitcom about daily life in business – and its subsequent adaptations in other countries, which prove that the peculiarities of management are an international phenomenon.

It’s no wonder the following stories may sometimes sound familiar to readers who have management experience – even if only admitted in a whisper. And those who don’t recognize themselves in the stories will probably be reminded of their colleagues or bosses. Only readers who do not (yet) belong to the chosen few who made it to the ranks of management may doubt if the stories in this book really do reflect reality. They may be too different from the impression of management that they had received so far.

A manager who wants to create a monument to himself, a quality management with measurable but rather questionable results, a quite inspiring management training, a strategy discussion with a surprising outcome, a controversial reorganization, a budgeting process that contributes little to establish the truth – what the following stories report sounds as familiar as it is bizarre.

That makes it important to state that all stories reflect reality – and are nonetheless fictitious. Any resemblance to real events or companies, or to individuals living or dead is not intended and would be entirely coincidental. However, similarities with management reality are highly likely and prove the relevance of the stories.

Nobody should try to change the peculiarities of life in management. It would be futile and could only result in disappointment and disillusionment. The mechanisms that the following stories reveal are an inherent part of the system. Knowing and understanding this system opens up a perspective that allows one to laugh at it. It is this very laughter that makes life and survival in management substantially easier.

1 Odo Marquard: „Inkompetenzkompensationskompetenz? Über Kompetenz und Inkompetenz der Philosophie [Incompetence compensation competence? About competence and incompetence of philosophy]. Talk at the colloquium „Philosophie – Gesellschaft – Planung [Philosophy – Society – Planning], on the occasion of Hermann Krings’ 60th birthday on 28.9.1973 in Munich. http://geb.uni-giessen.de/geb/volltexte/2013/9769/

2 Laurence J. Peter, Raymond Hull: The Peter Principle: Why things always go wrong. New York 1969

Focus

Once a year, Labora Limited sent its managers for management training. This annual training was generally considered a big success that offered all stakeholders major advantages. It was owing to these events that over the years, Labora had made a name for itself as a success-oriented, forward-looking and progressive company that always kept abreast of the latest developments in management theories.

While it was compulsory for all managers to attend these trainings, Labora top management only ever sent one member who left shortly after a welcome address and a cup of coffee – clearly underlining that top management does not require such training. The message was received. After all, these ladies and gentlemen had already reached the top level, which would not have been possible if they had still had need of training.

It was exactly this realization that encouraged all participating managers in their conviction that whatever they learned at the training session would be of vital assistance for their future careers. Hence, it was only too understandable that an invitation to these management seminars was considered a mark of distinction. It would never have occurred to anybody to decline such an invitation. But this was anyway no option.

The human resources department in general, and Ms. Nice as responsible senior vice president in particular, considered the management training a welcome opportunity to prove that her department was not only responsible for pay slips, personnel statistics and leave applications. Oh no, not at all. What was commonly and – as Ms. Nice noticed with regret – in most cases rather disrespectfully referred to as the personnel department was on closer examination the driving force behind the great success of the annual management seminars. In this respect, Ms. Nice was well aware of her contribution to the success of the company and her opinion was strongly supported by all the management trainers who over the years developed close relations with Labora. They were grateful for Ms. Nice’s openness and sincere interest in the latest management developments and related seminars in particular. These seminars may have been rather expensive but Ms. Nice was convinced that they provided value for money.

It was owing to all of these contributing factors that the annual management seminars of Labora Limited had become a popular tradition. One could even describe it as a perfect win-win situation if there had not been those employees who regularly suffered from severe disorientation whenever the managers returned from their training, and immediately started to put their freshly gained management knowledge into action. It unfortunately added to the recurring challenges that the seminars’ topics changed every year.

Two years ago, the topic was: „It all depends on the helicopter view. In order to make the helicopter view more understandable, a subtitle had been added: „Managers deal with the big picture. Without any doubt, it had been an absolutely successful training. Hardly back in the office, the managers had put their new knowledge into action, boarded their helicopters and henceforth strictly refused to deal with details. They had got the message and described all the little things disdainfully as small potatoes. Yes, they had not only understood but also internalized that management deals with the big picture. And nothing but the big picture. Dealing with peanuts can only distract from what is really important. Staff who were ignorant enough to nevertheless approach their managers with petty details were immediately called to order: managers deal with the big picture!

One must add that over the following months, some unexpected and, unfortunately, unwanted developments were recognized, which the Labora management initially dismissed as collateral damage of the new management philosophy. Some decisive details had been overlooked. Well, that can happen. After all, you cannot see every detail while sitting in your helicopter high above the daily nitty-gritty. In any case, the eyes were on the general trend and that pointed in the right direction. At least, initially. But the number of critical cases continued to increase and eventually, the distortions of the big picture could not be missed any longer even from the highflying perspective of the top management. Some action had to be taken. Ms. Nice was asked to please take this unpleasant situation into consideration when selecting the topic for the next management seminar. Ideally, it should include some appropriate countermeasures.

The following year, the Labora managers met for a seminar under the inspiring title: „Don’t lose touch with the details. For a better understanding, Ms. Nice had added a subtitle this time, too: „Managers have an eye for detail. No doubt, another interesting seminar was lying ahead. The top management could count on Ms. Nice. For sure, this seminar would also be a great success. Nothing less than a paradigm shift was foreseeable. After two days of comprehensive presentations, role-play and other exercises, every participant realized that managers must have an eye for detail if they don’t want to experience unpleasant surprises. But of course, a manager must not get swamped in detail. That’s why managers should only deal with important details. Unfortunately, an answer to the question of how a manager recognizes which details are important and which ones are unimportant was not included in the price of the seminar and remained unanswered. This had an impact on the final assessment of the seminar and caused some points’ deduction for practical value, which slightly reduced its total score from excellent to very good, as Ms. Nice noted with regret.

After the managers returned to the office, the Labora staff was thoroughly impressed although some irritation was unavoidable when they recognized that their managers were suddenly interested in details, which not long ago they would simply have brushed off. Actually, most of these details were nothing but little things that the staff had well in hand. Now, these details were exposed to unexpected management influence even if there was no call for action. Those who were employed with Labora for many years were well aware of the effects of management seminars and took it easy when managers not only wanted to understand details but felt called upon to interfere and make decisions. After all, they were managers. „Don’t lose touch with the details" was the title of the seminar and now they wanted to have a say. Under these circumstances, the staff did not want to be in their way. From now on, they left decisions on details to their managers.

In order to make up for lack of detailed knowledge, the managers recalled their powers of self-assertion. Some of their decisions were rather questionable but for a long time, the impact was hardly recognized because nobody was seriously interested in the big picture. The management was simply too busy with too many details. Only when Labora was already reeling and the situation had become critical, did the top management ask Ms. Nice to organize the next management seminar. ASAP, they added with an exclamation mark – as soon as possible. This time, one would not wait until another year had passed. The issue was urgent.

It was a pleasant coincidence that Ms. Nice had just received a matching proposal from Dr. Dome. „Focus was the title of the seminar and the subtitle read: „An eye for the essentials. This seminar would neither deal with the big picture nor would it get lost in detail. Instead, it would focus on the essentials, said Dr. Dome who recommended this seminar to Ms. Nice. Of all the seminars that he could offer, this one would fit the requirements of Labora best. Of course, he could also offer a two-day training under the title „Managers deal with the big picture". Or perhaps a seminar about detailed competence? If required, he could combine these three seminars and make it a series of events – of course, at a special discount, he added. Ms. Nice regretted that she had not come across this tailor-made package earlier. Now, it was neither about the big picture nor about any details; the focus was now on nothing but the essentials. Dr. Dome himself would conduct the seminar.

Dr. Dome was a graduate of business economics. After many years and contrary to all predictions, he had done his doctorate at last. Only just, as some disrespectful onlookers commented. In consideration of his performance, his professor had once given him the well-meaning advice to stay away from practical management. So immediately after his doctorate, Dr. Dome applied for a position as consultant at a well-known management consultancy. Despite some concern regarding his management experience, he was hired because it could not be denied that a doctorate justifies higher consultancy fees. After some initial experience with Dr. Dome’s consultancy, however, his clients encouraged him in his idea of establishing his own consultancy firm. Dr. Dome appreciated all the support and founded his own business. It was just a little disappointing that he could not win over the former clients who had supported his idea of self-employment. Nevertheless, this could not spoil his newly established consultancy. His professionally positive attitude and his always optimistic and cheerful character quickly attracted new clients and eventually gained Ms. Nice’s interest in his seminars as well.

Confidently and with an optimistic smile, Dr. Dome was standing in the training room of his fledgling but promising Dr. Dome Management Academy. Before Dr. Dome was the Labora management looking at him full of expectation. Mr. Stern, representative of the top management, had already delivered his welcome address highlighting the significance and