Traditional management theories are fundamentally flawed, according to a growing body of evidence. These theories, which prioritise efficiency and cost-cutting, often lead to short-term gains but long-term failure. The evidence shows that a focus on delighting customers, rather than maximising shareholder value, is the key to sustainable success.
The traditional management mindset, which views employees as costs to be minimised, is also problematic. This approach fails to recognise that an organisation’s most valuable assets are its employees. When employees are engaged and empowered, they can generate more value for the company than any cost-cutting measures.
A further flaw in traditional management theories is the belief that firms exist to earn profits. This is a misconception; firms exist to create customers. Profits are the result, not the purpose, of a firm’s activities.
The shift from traditional to radical management requires a complete transformation in mindset and culture. It involves placing customers at the centre of the firm’s universe, viewing employees as the firm’s most valuable assets, and recognising that the firm’s purpose is to create customers. This radical approach is not only more effective but also more compatible with the realities of the 21st-century marketplace.
Go to source article: http://www.forbes.com/sites/stevedenning/2014/01/29/why-most-of-what-we-know-about-management-is-plain-flat-dead-wrong/