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Idea  35 - Organizational excellence Many esoteric works on management never make it past the campus gates. Others can influence the way companies are organized and run, though they usually have to filter their way through the consultancy profession first. A limited number of management books deliver an idea that's gripping enough to be read by senior management itself, drinking directly from the source. But only one has single-handedly created a whole new industry - In Search of Excellence, by McKinsey consultants Tom Peters and Robert Waterman. You could say that the book created two new industries: the mass business book industry and the Tom Peters industry. It appeared like a torch of hope to a benighted corporate America that felt it had lost its way in the dark. Battered by competition from the most unlikely source, in markets they had dominated proudly only a few years before, American managers reached for Peters and Waterman like a cartoon man-en-knees-in-desert

Idea 34  -  Mergers and acquisitions The hostile takeover is about as exhilarating as it gets up at head office. It's the chief executive suite as campaign tent, complete with hurrying advisers, councils-of-war and swift- changing tactics. For leaders who favor the military style, this is as close as it gets to being a real general - the plan, the strike, the capitulation and the prize. Sadly for them, the hostile bid is becoming less fashionable, but acquisition remains a perfectly reasonable, if usually less dramatic, strategic option for companies of all kinds. Mergers and acquisitions - 'M&A' in investment-banker speak - attract more public attention than anything a big company does except, perhaps, firing half the workforce or going bust. Typically, they happen when one company acquires all the assets and liabilities of another. Is there a difference between a merger and an acquisition? Not very often. A true merger is a marriage of equals in which sh

Idea 33  -  Market segmentation There's much blog-talk of the death of the mass market these days. In which case, it has been a long time a-dying. The mass media, cardiograms of the mass market, have been losing viewers and readers since the 1970s - at least in the US, where the mass market was invented. It's true, none the less, that a proliferation of new media has forced the pace of its decline in recent years. And the zoom factor of market segmentation, the opposite of mass marketing, has been closing in on individual consumers with the persistence of a spy satellite. The mass market was created by American companies like Sears Roebuck, DuPont and General Electric, hand in hand with the march of the railroads and the telegraph. It grew rapidly between the 1880s and the 1920s. Mass marketing, on the other hand, only got into its stride from 1920 onwards with the spread of 'sound-receiving devices' - the radio. Television arrived shortly before the Second!

Idea 32  -  Management by objectives Management by objectives is such a classic principle that many who couldn't care less about business will still recognize the phrase. It was introduced to the language by that most enduring of classic business thinkers, Peter Drucker, in his milestone 1954 work, The Practice of Management. Management by objectives (MBO) is about making sure that you can see the wood for the trees. Drucker noticed that managers could get stuck in what he called an 'activity trap', getting so wrapped up in their daily tasks that they overlooked the reasons why they were doing them. MBO calls for a focus, not on activities, but on results. Which is why it's sometimes called management by results. Drucker tells us that setting objectives is the first of the five essential operations for managers. (The others are to organize, to motivate and communicate, to measure and, finally, to develop people - including themselves.) One of the keys to MB

Idea 31  -  Loyalty Management consultants devote many long hours, days and months hunting the snark - hoping for a better management idea, an undiscovered causal link between how businesses do what they do and the size of the bottom line. Frederick F. Reichheld and his colleagues at Bain &: Company came up with a winner when they identified close connections between customer retention, growth and profits. They called it 'loyalty' and discovered that, in the best-performing companies, it was intertwined with employee and investor loyalty. Each one reinforced the others. All those loyalty and rewards cards you don't know where to keep, from shops you can't remember visiting? Blame Reichheld. Loyalty programmes are nothing new, but his 1996 book, The Loyalty Effect, made them a competitive must-have as companies scrambled to put his ideas to work and retain their best customers. For those who thought that loyalty had died along with chastity and good manners,

Idea 30  -  The long tail The Internet changes everything, they used to say in the 1990s. That was just before they discovered that it didn't. But it changes quite a lot of things and one of them - according to the long tail theory - is the ability, over time, to make money out of very small niches. There was a time when the profitable niche was commonplace, but the age of mass production and mass marketing has crowded it out, most notably in consumer markets. Consolidation has produced powerful retailers. They choose to stock only those items that sell in large numbers, and have reduced the variety of their ranges accordingly. Many small producers have fallen by the wayside in the process. This phenomenon has been especially visible in the media and entertainment industries - in book and music publishing and in film production. We live in the world of the bestseller, the blockbuster, the hit. The argument of the long tail is that, in an Internet world, niche product

Idea 29  -  The learning organization The world is speeding up, as it gets more wired and as people get more demanding - I want exactly what I want, and I want it now. But I might want something different tomorrow. As markets fragment and change accelerates, business has to keep up or die. That's why the continuous improvement that started on the factory floor is now reflected in the notion of continuous change, company wide. The ability to rethink, continually, your purpose and methods is the most important single source of competitive advantage, says Dutch writer and ex-corporate planner Arie de Geus. But individuals can only change through learning, which makes learning the capital of the future. Hence the evolution of the 'learning organization', which is not entirely the same as one that trains its people well - though it does that too. The organization itself learns and keeps learning, over and above its individuals. MIT lecturer Peter Senge has made much o

Idea 28  -  Lean Manufacturing It may trade under a rather prosaic title, but 'lean manufacturing' inspires a zeal that is positively revivalist in its fervor. It is Japanese by birth, and utterly Japanese in nature, managing to be complex, relentlessly demanding and, at the same time, elegantly simple. Doing it is not at all easy, but it does boil down to one imperious principle - 'eliminate waste'. Lean, as its adherents call it, is about speed and efficiency, though they would say it was far more complicated than that. While it was formulated in the Japanese automobile industry in the 1930s and 1940s, its acknowledged influences go back at least as far as Henry Ford. It was Ford who first integrated the production process, using interchangeable parts, standardized working and a moving production line. Some say he was the first practitioner of lean. One thing Ford wouldn't do was variety, as it would have slowed down his process. Quite apart from 'a

Idea 27  -  Leadership There are many intangibles in business, particularly once you leave the production department, but nothing quite as intangible -as leadership. What is that follow-me-through-fire magic that leads the way and lights up the troops? Consultants and academics would love to isolate it, distil it and sell it in bottles, but no one has done that just yet. It hasn't stopped them from trying and some believe that leadership is the next big frontier in management studies. If there is a market in leadership, its price fluctuates. As the 1990s ended, the most admired CEOs had achieved rock star status and their companies' share prices (and their own pay) soared accordingly. The stock market soared too - these were the runaway 1990s - but a contemporary ten-year study showed that the stock of companies seen to have great leaders rose 12 times faster than those thought to lack them. Then stock markets fell, followed by the thudding, shameful collapse of Enro

Idea 26  -  The knowledge economy As usual, Peter Drucker was on the case before anyone else. In the late 1960s he coined the term 'knowledge economy', predicting that the spread of information would cause major changes in society. What management had to do, he said, was to boost the productivity of 'knowledge work' and the 'knowledge worker'. Academics and statisticians - who want to measure it - have yet to agree on exactly what the knowledge economy is. Some say it is a group of specific industries, such as high-tech manufacturing, computing and telecommunications. Others argue that knowledge permeates all industries. The Organisation for Economic Cooperation and Development (OECD) takes the middle road with a definition that includes high- and medium-tech manufacturing, knowledge-intensive service industries such as finance, insurance and telecoms, followed by business services, education and health. The layperson could do worse than the followi