Almost all the current multilayered emergencies, crises, opportunities and threats that we face lead back sooner or later to a single word: management. As strikes, shortages and service failures fill the news, the feeling that no one knows what they are doing has never been stronger, in politics as in business. Like Brexit, the Truss-Kwarteng mini-budget was an epic management fail, a rudimentary plan perpetrated with zero regard for context or likely effects in the real world.

If that was what happens when the governing principle is ‘move fast and break things’, the slow-motion equivalent – what we might call ‘stasis and let things crumble’ – was perpetrated on our collapsing public services (NHS, transport, justice, energy, social care, water) by the preceding decade of austerity. Take the UK courts as perhaps the most dismal example: they were recently described (listen from 16:00) as suffering not only from a case backlog of years, but also shortages of prosecution barristers, judges and court officials, hapless IT, non-existent information about demand and outcomes and zero understanding of the entity as a system. This is the opposite of organisation: anti-management.

Similarly culpable neglect is evident in the cultural decay of once-respected rescue services – police and fire – into their opposite, sinks of prejudice that irredeemably corrupts their work and its ethic, to the point where the London’s coppers don’t care enough even to record whole categories of crimes, let alone try to solve them.

Even in areas where the term ‘world-leading’ can be uttered without causing a cynical roll of the eyes, genuine achievement is carelessly thrown away. Kate Bingham, former head of the vaccine task force, recently blasted the government for ignoring the lessons of the first roll-out: against advice appointing a non-epidemiologist as her successor, vacillating over a list of vaccine trial volunteers, and worst of all selling a £230m vaccine manufacturing and innovation plant to a US company that subsequently closed it down. ‘Europe is now thinking about pandemic preparedness in a systematic, professional, effective way’, Bingham sighed. ‘And the UK is going in the opposite direction.’

But this is just a microcosm of a global, even planetary crisis of management legitimacy. As Michigan’s Jerry Davis has noted, nearly all our current social pathologies were exacerbated or caused by corporate actions. The US and UK’s obesity epidemic, the US’s ‘deaths of despair’ and opioid addiction, unsustainable income and wealth inequalities, social media as addictive and toxic as opioids, the Great Crash of 2008, ‘fossil fuel companies aggressively hurtl[ing] our species towards climate extinction while funding deceptive research that denies their culpability’ – all these are in whole or in part the product of decisions signed off in corporate boardrooms.

Companies are the core institution of capitalism. When economists talk of the supply side, they mean companies, and it is idle to think that any of the world’s major problems can be tamed without their active involvement. In consequence, as the FT’s Martin Wolf once put it, ‘Almost nothing in economics is more important than thinking through how companies should be managed and for what ends’.

But you wouldn’t think it from the subject’s almost total absence from the preoccupations of governments, political parties, think-tanks, and, especially, the media and even business schools. 

Instead, whether through self-censorship, self-interest, ignorance, or a tacit agreement to file them under ‘boring’ and ‘too difficult’, they are largely off the radar. As a result, we meekly accept a situation where, endorsed by governance codes, the interests of our most powerful commercial institutions are aligned with those of shareholders even when they are incompatible with those of the society that they operate in. Today, only as a last resort do companies create the full-time jobs that people really want; top managers are short-term mercenaries rather than stewards of society’s resources; and their surveillance-based business model has become both a danger to democracy and a swamp of fraud costing advertisers billions and profiting criminals correspondingly. 

‘Management innovation is as important to economic progress as is technological innovation,’ says Prof David Teece of Haas School of Business. Yet challenges to the status quo are vanishingly rare. Most of the mainstream press treats management as a given rather than a subject for serious interrogation, let alone radical change. Even the FT has dispensed with its regular management columnist. Nor is the specialist media much more feisty. Harvard Business Review celebrates its centenary this year – a achievement in its own right, and over that time it has published many influential pieces by outstanding thinkers such as Peter Drucker, Clay Christensen, Roger Martin, among others. 

Yet even in the current crisis, most of its content is about modest improvements to the fundamentally flawed model inherited from the industrial age rather than how to rethink it. When it commissioned eight younger academics and practitioners to ponder how management might look in the next 100 years, only one ventured beyond subjects such as empathy, decentralisation and diversity to question the current governance framework and put forward ways ‘to truly align the interests and incentives of all stakeholders’ – surely the starting point for a management that is part of the solution, rather than the societal wrecking ball it has become. 

As for the business schools, finance still rules; and as LBS’ Julian Birkinshaw noted this month, their teaching both unhelpfully reproduces traditional functional silos and continues to impart ‘the fundamentals’ through the normative lens of shareholder primacy. Lulled by swelling student numbers, business schools lag in addressing sustainability issues and making ‘purpose’ meaningful. While the MBA degree has been resoundingly successful in raising graduate salaries (which is what international rankings major on), the jury is out on the overall effects on business: it’s suggested that firms run by MBAs pay less well than comparators, may be less worried about ethical trade-offs, and favour efficiency over creativity (the unfortunate exception here being Enron). (Rishi Sunak is the UK’s first MBA prime minister – just saying.)

So what should we want to see – no, what should we demand – in a management fit for the 21st century?

First, starting from a systems view: we need a managerial management model, not an abstract economic one. That is, one based on a realistic view of human nature and what works for real humans rather than the discredited and self-fulfilling homo economicus – in other words, based on intrinsic rather than deadly extrinsic motivation. That means we can throw out the toxic agency theory that is the basis of today’s governance and rethink the latter around some obvious but long ignored truths: companies are too socially important to be the monopoly of one constituency; thriving companies are essential for thriving societies and vice versa; and their role is to prosper by solving society’s problems, not profiting from new ones.

In the 1930s Peter Drucker observed that failing institutions left societies easy prey for strongmen and populists, and it was this that led him to his belief in the critical social and political importance of good management as a bulwark of democracy and against creeping totalitarianism. When disillusionment, pessimism and the yearning for someone, anyone, to fix things have never been stronger, now if ever is the time to prove it. 

Happy Christmas.