Thursday, June 23, 2016

Management - a lesson from BHS

No sooner have I said I’m closing off my management mini-series than things come to light that need saying! Arrh well, I did say it wasn’t my last word on software management, i just didn’t to be revisiting the subject to soon.

The reason for this rapid revisit is the news from BHS, formerly known as British Home Stores, for those who don’t know it, BHS was for about 100 years a standard part of the UK high-street. Growing up we bought as much there as the better known, and more expensive, Marks & Spencer.

For those who don’t know the story (the BBC has lots) a sort introduction to the key points: Entrepreneur retail billionaire Philip Green owned BHS for over a decade (directly and indirectly) before selling it to a completely new venture, Retail Acquisitions Ltd. for £1. Well, BHS was in trouble (it missed e-retailing) and had big debts (largely in the pension plan.) Surprise surprise, the company collapsed leaving angry pensioners and politicians set about investigating.

The executives and owner of BHS were called in to answer questions. This is where my point really begins…

The BHS CEO told that inquiry that a few days before the collapse the new owner told him to transfer £1,500,000 to a Swedish company. The CEO complained saying the UK company needed the money. The Owner then threatened him, told him to stop making trouble and just do it.

To those outside of management discussions it can look really simple. The money is either needed in the UK or not. Managers and Owners are supposed to think alike, indeed all managers are supposed to speak with one voice. Management, and owners, are supposed to act both rationally and consistently.

It may come as a surprise to find that managers are flawed, managers, disagree and sometimes the managers and the owners have conflicts. Indeed, whole volumes of business literature is devoted to the “agency problem”: how to make sure managers do what is in the best interest of the owners and not what is in their own best interest.

Engineers often dismiss all this as “politics.” They assume there is a rational cause of action and if only all parties could work through a rational process everything would be alright.

But this just isn’t so.

Management is fuzzy

There are few, if any, solid rules in management. Even those that have the force of law can and do get broken - think Enron and Anderson Consulting.

Unlike programming there is no machine to pull you up short when you make a syntax error.

And the feedback looks can be long, real long. Decades.

So often management decisions come down to opinion. Sometimes it is the opinion of someone in authority, sometimes its the opinion of someone interpreting authority or someone trying (successfully) to influence authority.

To an engineer all this is ripe for re-engineering, replace these broken systems. However: just because you want management to always be rational it isn’t going to be so, no rational system can operate in such a fuzzy world.

Imposing rules isn’t going to help, they will just get broken.

Systems will get gamed.

This is not a problem with management, these are the problems management exists to address. Removing management does not remove all the problems - it might remove a few, it may also make them worse. If we remove all the management and give all the power to engineers they will wrestle with the same problems.