ARE YOU READY TO MANAGE IN AN IRRATIONAL WORLD

ARE YOU READY TO MANAGE IN AN IRRATIONAL WORLD

Jim Heskett


HAVE you noticed that we are being bombarded by a flood of work by neuroscientists and behavioural economists , aided by such things as clever research design, the use of improved technologies for measuring brain activity, and the admission by Alan Greenspan that markets acted in ways he had not anticipated...
Consider two examples that came to my attention this past week. One is a book by Charles Jacobs, Management Rewired, which concludes that many conventional beliefs about management run counter to the findings of neuroscientists . The other is an article in this months Harvard Business Review, The End of Rational Economics, by Dan Ariely. It argues that theories, strategies , and actions based on assumptions of irrational behaviour on the part of employees, customers and competitors are likely to be more effective than those that assume rationality . In his book, Jacobs begins by asserting that, because each of us harbours our own perceptions of reality, it turns out that most of what we thought we knew about management is probably wrong. Reactions to our efforts as managers reflect what each individual receives in relation to what he or she perceives and expects.... Instead of a management philosophy centred around the manager as the play-caller , we are told by the neuroscientists that the new management job is one of facilitating more of a customised, do-it-yourself process centred around each newly-energised employee, one centred on questions (often leading) rather than direction.