MANAGEMENT TOOLS THAT WORK



by



Jacqueline M. Graves

Reprinted from Fortune magazine, May 30, 1994, p. 15. 
 



     	Benchmarking, TQM, reengineering. So many management tools,

so little time. What's a manager to do? A new survey by con-

sulting firm Bain & Co. and the Planning Forum, a management

association, separates the fads from systems that really pay off. 

     After surveying 463 companies, Bain found that of 25 com-

monly used management tools, the two most popular were mission

statements ("We will be the best toothpick maker this side of

Saturn), with a whopping 94% usage rate, followed closely by

customer surveys, at 90%. Total Quality Management, or TQM, came

in third with 76%. Benchmarking and reengineering placed sixth

and seventh respectively, but were rising fast. Bottoming the

list were dynamic simulations and technology S-curves.

     Ironically, the study showed no correlation between a tool's

popularity and the user's financial performance. Mission

statements, the most widely embraced management aid, yielded

below-average financial results. Customer surveys, the second

most common tool, provided the most financial benefit. Go figure. 

     What matters most is applying the right tool to the right

job. For highflying companies, performance pay, horizontal

organizations, and core competencies all received high satis-

faction scores. If, for example, a company is already doing well,

juicy performance bonuses will attract and keep good people. If

a corporation is faring poorly, performance pay becomes

meaningless, and your best people may walk. Instead, corporate

dogs got better results with activity-based costing and group-

ware, tools that work on basic problems, such as sloppy cost

accounting and poor communications.