Kraft, Cadbury and the Antiques Roadshow

Jan 18 2010 by Philip Whiteley Print This Article

The phrase that most puzzles me in management circles is 'we are dealing with an ever-increasing pace of change', and variants thereof. Why? Because I have never come across a field more resistant to change, more stubbornly clinging to ancient habits, repeating their mistakes over and over again, than corporate management.

Strategic decisions are based almost exclusively on measurement by accountancy Ė a 500-year-old technique, pioneered by the Venetian mathematician Luca Pacioli in the 1490s. Any approach to valuing or understanding the business that isn't based on the 'bottom line' is viewed with suspicion.

Most months the Harvard Business Review publishes 'new' findings on leadership that are at least 50 years old, and can probably be traced back to Plato. If the world of publishing had developed at the same pace as management, we would just about be phasing out the quill and parchment and be introducing this innovation called 'the printing press'.

Such conservatism is never more evident than in the discussions on mega-mergers. The most depressing aspect of the Kraft-Cadbury saga is that neither side refers - even in passing - to the actual strengths, weaknesses or skills of the two companies, or the formidable task of combining two enormous organisations.

They restrict themselves the discussion of bid prices, proportions of cash and shares in the mix; a passing reference to culture might be the nearest you will get to a discussion on the actual organisations and the task of managing them.

Even the defiant Cadbury team talks mostly in terms of 'the right price'. Flogging off a huge, complex, highly performing human organisation is treated as if it were a question of determining a price for an inanimate object (which is what accountancy pretends the organisation is). This is corporate management as if it were the Antiques Roadshow. Antique; like the methods they use.

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