The case of the missing management model.

• Author: Grace, H. Stephen

Instead of just latching onto the latest management fad and hoping it will improve your company's performance, shouldn't you start questioning what's really best? Join a group of Joe Fridays in search of the perfect management process.

This is the city. New York, New York. Home to some of the largest, most sophisticated corporations in the world - and the people who run them. It's here that a small group of senior financial officers - known as the Downtown Committee of Financial Executives Institute's New York City Chapter - meets in several sessions throughout 1995.

The charge: to examine numerous management tools that have come and gone over the last two decades. The purpose: to determine why many of these concepts have been ineffective and whether there's a common frame. work, or management model, in which they should be used to make them more useful going forward. The goal: to improve corporate performance by identifying a basic management model.

The main question? What's the missing link that can ensure a management tool's success?

The group goes to work.

JANUARY 11, 1995

The first meeting. The focus: the participants' views of - and experiences with - a wide variety of management tools. Stephen Grace, co-chairman of the group, questions whether senior management overlooks certain fundamentals when it employs such management tools as re-engineering, restructuring, bench-marking, zero-based budgeting and quality initiatives.

Using management information systems as an example, he points out that no system will work unless management performs certain critical steps: "Management can't just push a problem out to some systems analyst or consultant and claim the issue's been solved."

Grace opens the floor for a wide-ranging discussion on how and when management tools have been most efficiently used. John Haupert, also a group co-chairman, states that the Port Authority tried many of the tools they're considering here. Too often, the tool became the "end all and be all" of the process. "Generally, the tools weren't used within a framework of what was done before and what was best for the organization. Instead, the company viewed them as a panacea that should be tried because some management guru proposed them."

Haupert notes that when employees sense this deficiency, they just "play the game," seeing nothing in the effort for themselves or their company. They never get energized to make the tool succeed. "To be effective there must be a framework that makes sense for the entire organization - a total understanding and statement of the final goal," Haupert claims.

Next up is Joe Barkley. Barkley reviewed the serious difficulties Chase Manhattan Bank faced in the late 1980s. Total quality management was one of the tools the bank employed in its initial effort to regain profitability. Chase also brought in consultants who specialized in changing attitudes. But Chase's chairman and vice chairman drove the program, and their belief rippled down. The basic guideline: Either you're in the game, or you're gone.

Barkley notes that not everything in Chase's TQM program worked. But the basic objectives of customer focus, respect for each other, recognition of core values and the return to core businesses have all been successful. "I'm less of a cynic than I used to be," he says. His belief: Assess the tools and figure out what is and isn't useful to you.

Battery Park City Authority's Bob Serpico sees the tools as a system to "discipline" management. "They can keep everyone working in the same direction. And they can help get management back on track, particularly in companies having problems." Serpico further notes how some companies don't seem to need these tools - the disciplines and basics are inherent in the way they do business.

Grace asks, somewhat rhetorically, why this is true. What are these companies doing differently that others are failing to do?

AIG's Chuck Torielli takes the floor, discussing issues associated with re-engineering. "Often re-engineering efforts have created considerable tension," he says. "Instead of bringing people together, I've seen friction caused by the stress put on everyone to cut costs, particularly if it...