An over-emphasis by companies on delivering shareholder value encourages an "heroic management style" which can be detrimental in the longer term, according to Prof Henry Mintzberg, professor of management at McGill University in Canada, writes John McManus
Heroic managers are defined by Prof Mintzberg - who addressed the IMI management conference last weekend - as people who see themselves as "important people quite apart from the other employees who develop products and deliver services".
He contrasts them with what he calls "engaged managers" who are defined as important to the extent that they help others to be important.
Heroic managers see their job as making decisions and allocating resources - including human resources - while the engaged manager's objective is to bring out the energy that exists naturally within people, he said.
The current obsession with shareholder value as a measure of company performance has lead to a system in which the remuneration of the chief executive is linked to share-price performance via options. This model actively discourages engaged management, says Prof Mintzberg.
"How many chief executives do you think have told the board: 'you should not be singling me out for stock options when this is a team effort'," he said.
One of the other characteristics of the heroic manager is that the higher up the company they go, the more important they become. "At the top, the heroic CEO is the corporation," he said.
The problem with this concept is that organisations are, in reality, interacting networks of people and not vertical hierarchies. "Effective leaders work throughout the organisation, they do not sit on top," he said.
"Managers who are at the top are out of things. To be on top of a network is to be outside it," according to Prof Mintzberg.
Companies with heroic management cultures are also more resistant to change, he believes. Under the heroic management model, strategy comes down the hierarchy. "It has to be clear, deliberate and bold, emanating from the chief who takes the dramatic acts. Everyone else implements," he said. And implementation is the problem, because, while the chief executive embraces the changes, the others resist them because they are not engaged with them.
By contrast, under the engaged management model, strategies emerge as people solve little problems that grow into big initiatives. "Maybe really good leaders are boring," he said.
