This chapter is based on a paper which Igor Ansoff wrote with Dick Brandenburg in 1967. In the paper, they predicted the qualifications which general managers would have to bring to their jobs during the last quarter of the twentieth century. Their principal predictions about complexities and diversity of demands on the general managers are currently observable in practice.
Management as a Problem-Solving Cycle
- 1.
Setting objectives for a given area of business activity.
- 2.
Perception of problems and opportunities both inside and outside the activity. (This includes perception of present or future deviation from objectives, as well as of present or future prospects for raising the objectives.)
- 3.
Diagnosis of problems and opportunities and their effect on the firm.
- 4.
Generation of responses to the problems and opportunities.
- 5.
Analysis of the probable consequences of the courses of action.
- 6.
Selection of the preferred alternative.
- 7.
Programming and budgeting the selected alternative.
- 8.
Leadership in implementation including communication and motivation.
- 9.
Measurement of performance in relation to the objectives.
- 10.
Observation of significant trends and possible discontinuities both inside and outside the firm.
- 11.
Recycling of some or all of the preceding steps.
Taken together, the eleven steps describe a complex and time-consuming process. In accordance with the strategic success hypothesis, all of these steps become necessary at turbulence levels 4 and above.
Management cycle
Implementation cycle
Control cycle
Extrapolative cycle
The cycle
Manager Archetypes
Managerial archetypes
Manager Archetype | Custodian | Controller | Planner | Entrepreneur/Intrapreneur | Creator | |
|---|---|---|---|---|---|---|
Motivation | Vision | Status quo | Minimize costs | Optimize profit | Optimal profit potential | Creation of new needs |
Mentality | Stability | Least price | Respond to customer | Strategic positioning | Creative innovation | |
Aspirations | Prefers past | Present | Extrapolate for future | Predictable futures | Possible futures | |
Aggressiveness | Stable | Reactive | Anticipatory | Entrepreneur | Creative | |
Risk propensity | Suppress | Control | Comfortable with familiar | Seeks new risks | Prefers new risks | |
Competence | Power base | Command | Hold & maintain | Directives | Inclusive | Collaborative |
Problem solving | Control Change | Seeks efficiency | Optimizing processes | Opportunity finding | Opportunity Creating | |
Leadership | Political | Rational | Inspirational | Charismatic | Visionary | |
Knowledge | Internal politics | Internal operations | Historical markets | Global environment | Open to emerging possibilities | |
Environmental turbulence level | 1 | 2 | 3 | 4 | 5 | |
Level 1—The Custodian—The custodian fills the implementation role that puts a premium on stability of the organization. The custodian rejects change and is comfortable living in the past using extrapolative data to base current and future decisions. Leadership is viewed as being centralized and political without which, decisions cannot be successfully put into action.
Level 2—The Controller —This archetype requires a thorough understanding of the variables that are critical to the firm’s success, a skill in pinpointing the sources of trouble, and an ability to develop corrective courses of action. While aware of the human element, the controller does not allow personal loyalties and influences to obscure the substantive problems.
Level 3—The Planner— The Planner is gregarious and an inspiration to men to do their best, objective with a preference for facts and logic making this archetype methodical, analytical, and future oriented through extrapolation.
Level 4—The Entrepreneur— although future oriented, this archetype is somewhat different from the planner. Where the planner is concerned with extrapolating the historical dynamics of the firm into the future, the entrepreneur is concerned with changing the dynamic. Where the planner optimizes the future of the firm’s present businesses, the entrepreneur seeks to enter new businesses and to diversify the firm. Where the planner projects the past into the future, the entrepreneur is an imaginative creator of new futures. Where the former archetypes are tough-minder and seeks to control risks, the entrepreneur is a willing risk-taker. A planner extrapolates the firm’s goals. An entrepreneur sets new and challenging objectives .
The planner is a convergent problem solver who chooses among the available opportunities. The entrepreneur is a divergent problem solver who creates new opportunities.
Level 5—The Creator —The creator is the evolution of the multimanager requiring a different set of skills and techniques than our previous managers. The creator will need to be part statesman and part system architect. When confronted with major decisions he is an expert in using experts for advice often times engaging them in a dialectic confrontation of opinions. As such, this will necessitate the creator manager to acquiring sufficient expertise about the respective fields in order to be able to judge whether the expert is using a method of analysis that is applicable to the real-world problem he is asked to solve.
The creator manager emphasizes continuous planning and establishes a formal system for anticipatory, external environmental information gathering and rational analysis to create opportunities for the firm.
General Manager as the Man of the Moment
When all of the archetypal skills and talents are found in a single individual, we have a rare management genius who discharges each distinctive task with equal ease and excellence. However, as in other occupations, geniuses are rare. In high turbulence environments, when all of the archetypal abilities must be present, how is the managerial work to be handled?
One answer is provided by history. During the first industrial era of business, different roles were critical to the firm’s success at different times. When industries were founded, the entrepreneurial role was critical. During the early growth stage, the administrator was critical to ensuring minimal cost, and hence market shares. During the late growth stage, the planner became essential, and maturity called for a return of the administrator controller to run a ‘tight ship’ and maximize the cash flow.
Historical evidence suggests a ‘man of the moment ’ explanation for the way the needs for general managers were met. A combination of outstanding entrepreneurs, administrators , planners , or leaders has seldom been found simultaneously in a firm. Instead, a process of natural selection has brought to the top the archetype that was the most critical to a particular phase in the firm’s life.
At the time, the original version of this chapter was written in 1967, it was possible to predict two things: (1) that the ‘man of the moment ’ solution would become inadequate in the 1990s and (2) that new archetypes will be needed in the firm of the 1990s and beyond. In order to substantiate this prediction and outline solutions, Igor Ansoff and Dick Brandenburg used an earlier article which they wrote together to describe the shape of the future. From these characteristics, they derived the attributes of the contemporary and future manager.
The Firm of the Future
The shape of the firm of the future has been the subject of much speculation. From this speculation, we select four primary categories of change which will have an important impact on managers.
- 1.
The growing importance of business as a social force on the one hand and expanding governmental concern with social welfare on the other are forcing greater interaction between the firm and society. Increasingly, society will pose problems and assign priorities to the allocation of resources which will put the firm in competition and cooperation with other types of organizations, including government agencies, universities, nonprofit institutions, and foundations. New combinations of organizations will emerge to carry out the work of society, in which firms will be essential, though not always dominant, participants. New societal pressures, demands, and constraints on the firm will force general management to include societal variables in virtually every important decision. Objectives and value systems of the firm will be of active concern for tomorrow’s management.
It is also evident that firms will operate within a greatly expanded geographic and political perspective, encompassing different sovereignties, cultures , and stages of economic development. Thus, the decision-making perspective will be further broadened to include cultural and political variables.
This transition to a broader perspective is by no means natural for general managers. Recent events have provided evidence of considerable faltering and confusion on the part of today’s management when confronted with strong reactions from society.
None of the previously discussed management archetypes is equipped to deal with these new complexities. It appears that a new archetype is in the making: A statesman general manager who has a sense of history, knowledge of politics and understanding of cultures, and who is skilled in relating the firm to its sociopolitical environment and in making business decisions within an economic-social-political-cultural perspective. He must also be skilled in the use of political influence, negotiation and bargaining.
- 2.
A second major trend -toward the firm of the future is the information explosion.
The information explosion is coming in part from technology, in part from the diversity and global scope of the firm, in part from the expansion of the relevant decision variables and the consequent complexity of managerial decisions. The explosion is in both volume and in the substantive content of information needed by general management .
The complex communication and decision patterns require a new level of organizational and system design skills. Not only will the processes be complex, but acquisition and management of this extensive and complex information process will require different skills and aptitudes and, therefore, a new general manager archetype. We will call him the systems architect.
- 3.
A third related trend is the growing complexity of the firm as a behavioral system.
Growing numbers of scientists and engineers, and the firm’s growing dependence on research and development, will necessitate closing the gap between technologists and general managers . The growing reliance on complex decision support systems will necessitate greater rapport between staff management analysts and line managers. The size, complexity , and diversity of the firm will lead to further decentralization of decision making. Thus, as the firm becomes a more complex information system, it also becomes a complex behavioral system with diverse aspirations, values, norms, and cultures .
This view of the future firm reverses earlier predictions that the age of technology will dehumanize management, centralize decision making, and reduce the number of managers through automation. It is true that the number of managers engaged in data processing tasks will decline . But these managers will be replaced by increasing numbers of decision makers, informational, management science, and technological experts.
The firm of the future will be people-intensive and will depend more than ever on human imagination, creativity, and initiative. What is lost to automation in the blue-collar population will be offset by creative contributions of general managers, scientists, technologists, and management scientists.
This trend suggests that the systems architect will need to be skilled, not only in information system design, but also in designing the behavioral environment of the firm.
- 4.
The fourth major trend is the growing discontinuity of environmental challenges.
On the one hand, intense competition, faster global communication, and transportation will require more rapid responses to shifts in demand, competitive actions, product, and technology. On the other hand, novel products, new technologies, and novel marketing challenges will make changes more discontinuous from the past. Shrinking technology and demand life cycles will make strategic management a common, rather than an exceptional, method of assuring the firm’s future profitability.
One consequence will be to increase the importance of the entrepreneur . Fewer decisions will be based on extrapolation of past experience. An increasing number will be novel, poorly structured decisions involving problems and opportunities new to the firm, requiring imaginative analysis and judgment, rather than decision rules based on historical experience. The flair, imagination, creativity, and risk propensity of the entrepreneur will become as essential as they were in the days of the Industrial Revolution.
However, the complexity of the challenges will make the entrepreneur increasingly dependent on contributions from a wide range of experts in areas in which he has limited personal expertise. Thus, in addition to being an imaginative risk-taker, the entrepreneur will have to become an expert in using experts.
Additionally, unlike the entrepreneur of the Industrial Revolution, the entrepreneur of the last quarter of the twentieth century has to effect departures from the historical path of the firm through an organization which is resistant to discontinuous change and the bolder and more imaginative the change, the greater is the resistance. Thus, in addition to creativity, risk propensity, and expertise in using experts , the entrepreneur will have to exhibit the skill of a charismatic discontinuous change manager .
The Work of General Managers
The preceding discussion includes a description of the work of general managers during the second half of the twentieth century and compares this work to the challenges of the first half of the twentieth century. Note that two new archetypes have been added: statesman and system architect.
- 1.As the plusses in the figure show, the general management work in the firm of the 1980/1990s is not a replacement but an enlargement of the volume of managerial work of the 1950s. As a result, the volume of work of a general manager is approaching a point at which he does not have enough hours in the day to attend to it. A partial solution is decentralization, but after the general manager has delegated all the responsibility he can legitimately pass to others, there is still more critical workload than he can handle effectively and expeditiously.
The resulting management overload has already been felt at the chief executives’ level, where the solution which has been emerging during the past several decades has been the creation of a corporate office .
- 2.
Rapidly growing complexity of the executive decisions has meant increasing reliance on supporting staffs and on technologists who contribute a wide range of specialized knowledge and skills not possessed by the executive. The result is a knowledge/skill gap between line executives and the staffs. We shall discuss this problem in the following Section.
- 3.
A single ‘man of the moment ’ management archetype can no longer cope with the many interconnected complexities of the general management job. It is increasingly necessary, particularly in diversified firms, to assure the knowledge, skills, and talents of ail six archetypes.
Developing Expertise in Using Experts
As the preceding discussion suggests, key strategic decisions are increasingly dependent on contributions from a wide range of experts. The principal reasons are described below.
Firms are becoming more and more technologically intensive. This applies not only to the high-tech industries, but also to many others in which technology is becoming both a major investment and a critical success variable. This is supported by two business indices: the investment in plant and equipment, and investment in research and development. Both investment decisions present a curious paradox. As the size of the investment grows, so does its technical content and complexity . As the complexity grows, general management is less and less able to keep abreast of the full breadth of technical knowledge which underlies the investment decisions.
Thus, as general management risks increasing amounts of money, its understanding of the nature and consequences of the investment is decreasing. As a result, it must rely more and more on the knowledge and advice of many different technologists whose work is usually far removed from contact with top management and who traditionally have not been treated as a part of management. Thus, top management decision making on some of the most important issues is increasingly becoming a group decision process.
Another element of complexity is found in changing decision-making technology which translates technological and other inputs into the profit consequence. During the early part of this century, as firms grew in size and complexity, a layer of management called ‘staff also grew in both size and importance’. Originally the role of the staff was to handle decision preparation through gathering, sorting, analyzing, and reporting information needed in decisions. Staff’s role was to provide inputs, but not to participate in decisions. Staff managers generally possessed no unique decision-making skills which were not possessed by line managers. They represented an extension of general management , a set of sensory organs, rather than a unique capability.
This situation changed rapidly in the second part of the last century. A new kind of staff came into the firm who have knowledge not possessed by general managers. These are the data processing specialists and the scientific problem solvers, known as management scientists. The data processing specialists control the information inputs into decisions, and management scientists affect the analysis of decision consequences by the models they choose. Thus, in return for better inputs and analysis, the general manager has to relinquish control of important parts of the decision process.
One possible consequence is general management abdication of control over decisions. Some writers, for example Galbraith (Galbraith 1968-G), argue that in large, complex firms such abdication is inevitable and that, in fact, it has taken place. If abdication is to be avoided, general management will have to adopt and perfect a skill exhibited by some great managers: an expertise in using experts . Attaining such expertise by developing knowledge and skills equal to those of the numerous experts is obviously out of the question. Even if a general manager did nothing but attend school all of his lifetime, he could not begin to approach the scope of the required knowledge. Hence, the answer must lie in developing skills in evaluating the contribution of an expert without being able to understand the contribution in detail. At present, the understanding of what these skills are, and how they are to be acquired, is imperfect.
- 1.
Experienced managers who work with technologists and scientists, frequently calibrate the experts who work with them. They do this by keeping track of the outcomes predicted by the experts and learn to bias their predictions toward higher or lower expectations. They may even assign special tasks to experts with a major purpose of verifying the reliability of the experts’ predictions. The desire to surround oneself with reliable experts is one of the reasons why a general manager who is transferred to a new assignment usually prefers to take with them a core team of people with whom he had worked in the past.
- 2.
Development of a skill in cross-ideological communication is very helpful in dealing with experts. As discussed earlier, managers and experts have norms and aspirations which they bring to their work. Understanding of these norms and of their influence on the behavior of experts is helpful in evaluating the proposals. One example, commonly found in high technology industries, is the fact that engineers trained in designing military hardware acquire the habit of designing to very high reliability standards with little regard for the cost of the product. When assigned the task of designing an industrial product, they typically follow this habit which produces designs which are noncompetitive commercially. Courses for developing cross-ideological communication skills have been developed and used successfully.
- 3.
Experienced managers confronted with major decisions will frequently use the advice of several experts and may engage them in a dialectic confrontation of opinions.
- 4.
Managers who must habitually rely on experts should acquire sufficient knowledge about the respective fields of expertise in order to be able to judge whether the expert is using a method of analysis which is applicable to the real-world problem he is asked to solve.
The Trend Toward Multiple General Managers
Once the manager makes sure that he or she is adequately supported by staff experts, they must bring to bear their own line of expertise to making the decision and its effective implementation. In an earlier section, we have concluded that turbulent environments require a simultaneous presence of all of the six-archetypal knowledge, skills, and talents, and that the historical, single-archetype ‘man of the moment ’ solution will not work.
It is interesting to note, that in the original version of this chapter, Ansoff predicted that this problem would arise in the 1980s. And it did. An article in Business Week entitled ‘A manager for each strategy’ reported that numerous firms have recognized a shortage of entrepreneurs.
One distinguished manager, Walter Wriston, previous Chairman of the Board and CEO of the Citicorp banking firm (1967–1984), remedied the deficiency by recruiting entrepreneurs from nonbanking industries. The General Electric Company went further. It diagnosed its future need for the three types of general manager: entrepreneur, growth manager, and conservator, and proceeded to develop programs to identify and train each class of managers, and to design different career paths for each. This recognition of different general manager archetypes is a break with tradition which had been pioneered in the 1940s by leaders like Ralph Cordiner, chairman and chief executive officer of the General Electric Company from 1958 to 1963. This tradition holds that while, on the one hand, a general manager possesses a special knowledge which is over and above the knowledge of the firm’s functions, on the other hand, this knowledge is universally applicable for handling all challenges encountered by the firm. Indeed, the tradition goes further and asserts that general management knowledge is fully transferable among industries.
Our earlier prediction of the breakdown of the traditions comes from the recognition that the range of knowledge, skills, and talents embraced by the six archetypes is found only in exceptional geniuses, and that the repertoire of a majority of managers is limited to one or two archetypal roles.
After recounting the recognition of the needs for different general managers, Business Week also recorded the fact that several senior managers who were interviewed felt that the multimanager problem did not exist, and an all-round general manager of the past will remain adequate for the future. Thus, the issue has been joined but not yet resolved.
One problem is that most management schools which claim to be different from one another do, in fact, develop the archetype we called the planner (and General Electric calls the growth manager). Given the very slow historical response of management schools to the needs of business (Ansoff 1973b-E), it is safe to predict that the initial task of developing differentiated managers will fall on leading firms, such as Apple, Google, Amazon.
The evolution of the multimanager will require development of selection techniques, differentiated career paths, and different reward/incentive systems for the respective archetypes.
The historical preference of many large firms for promotion from within may give way to the already observable practice of bringing in at the top some of the archetypes (such as the statesman ), which are not easily developed by upward progression within the firm.
The concept of a single chief executive will further give way to the concept of the corporate office , and the concept of unity of authority/responsibility to the concept of shared authority /responsibility.
Summary
Management is a complex problem-solving process which can be described in terms of ten modules: observation of trends, setting objectives, perception of threats/opportunities, diagnosis, generation of alternatives, selection of alternatives, programming and budgeting, guiding implementation, and measuring performance.
Over the years management developed sub-cycles composed of several of the modules, each addressed to a particular turbulence level in the environment. The implementation sub-cycle is the simplest, followed by control, extrapolative planning and entrepreneurial planning.
Managing each sub-cycle requires a distinct combination of knowledge, skills, talents, and personality. We have labeled types of general manager who possess the respective combinations as manager archetypes.
During the first half century, environmental challenges were such that one archetype at a time was adequate to assure the firm’s success. Thus, entrepreneurs were succeeded by growth managers and were later replaced by controllers.
The challenges of the second half century require two new archetypes: statesman and system architect, as well as the entrepreneur , who has pretty much disappeared from medium and large firms. The need for these archetypes is no longer sequential. A reasonably diversified firm requires all of them simultaneously.
As a result of problem complexity and increasing technological intensity, each archetype is increasingly dependent on special knowledge of a variety of experts. Furthermore, the total volume of general management work has increased substantially as a result of the multiplicity and complexity of challenges, on the one hand, and increased size of the firm on the other.
The problem is, how will the general manager of the last quarter of the twentieth century handle the full diversity of the challenges. The problem of work overload has led, in many instances, to a replacement of the single chief executive by a multi-senior executive corporate office . The reliance on experts can be made more effective by developing in the general manager an expertise in using experts . The demand for a wide range of skills and talents, which is seldom found in a single person, has started a trend toward specialization of general managers in one or more archetypal roles.
Exercises
- 1.Prepare an archetype identification chart, under the heading of six archetypes (see Table 15.2) list the following characteristics for each: (1) leadership style; (2) problem-solving skills; (3) education background (‘knowledge base’); (4) talents; and (5) personality traits.Table 15.2
The changing work of general managers
Firm of 1900–1960
Firm of 1960–2020
Archetype requirement
Leader
Administrator
Planner
Custodian
Controller
Planner
Entrepreneur
Statesman
System architect
Sequential
Archetype needs
> Simultaneous
Content of decisions
Operating issues, corportate policies
+ Strategy formulation, design of systems for strategy implementation
Exploitation of firm’s current position
+ Innovation in patterns of firm’s products, markets, and technology
Economic, technological, national, intraindustry perspective
> Economic, social-political, technological, multinational, multi-industry perspective
Decision process
Emphasis on historical experience, judgment, past programs for solving familiar problems
> Emphasis on anticipation, rational analysis, pervasivie use of specialist experts, techniques for coping with novel decision situations
Personnel-intensive process
+ Technology-intensive process
Information for decisions
Formal information systems for internal performance history
+ Formal systems for anticipatory, external environment information
One-way, top-down, flow of information
> Interactive, two-way communication channels linking managers and other professionals with knowledge workers
Computer systems emphasizing volume and fast response information for general management
+ Computer systems emphasizing richness, flexibility, and accessibility of information for general management
Emphasis on periodic operations plans, capital and operating expenditures budgets
+ Emphasis on continuous planning covering operations, projects, systems resource development. Control based on cost benefit forecasts
Organizational design criteria
Continuous emphasis on efficiency, productivity in utilizing current resources and organization. Periodic emphasis on innovation in product-market patterns, technology
> Simultaneous, continuous emphasis on efficiency, productivity, and innovation
Emphasis on economies of scale
+ Emphasis on flexibility, adaptive response
Emphasis on best assignment of task within given organizational structure
+ Emphasis on best design of ad hoc organization to perform a given task
- 2.
Which archetype combinations are most likely to be found in a single person?
- 3.
What variables should be taken into account in deciding what archetypes of general managers should be developed in a firm? Prepare an archetype selection chart. Under the name of each archetype, list the conditions under which the archetype is necessary in a firm.
- 4.
Your firm is very large and widely diversified, it has been decided to start a multi-general management development program. Your assignment is to design the program.
- 5.Should the firm try to develop each archetype separately or should archetype combinations (types) be sought? What are these combinations?
- a.
How should each type of manager be selected?
- b.
How should they be trained?
- c.
How should they be promoted?
- d.
How should they be rewarded?
- e.
What will be the problems of cooperation among the types? How should they be solved?
- a.