Second, the Last Two Decades Have Seen a Huge

Summary

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SECOND, the last two decades have seen a huge emphasis on the science rather than the art of management, fuelled by ever more powerful information technology. Even in good times, this leads to "analysis paralysis". The occurrence of a problem generates huge amounts of data and reports that look at the issue in a dozen different ways but conspire to encourage inertia rather than action. The data obscures the key issues, and no one will make up their minds about what should be done and get on with it.

The third culprit is the cult of shareholder value. In public companies in particular, we have encouraged a breed of chief executive incentivised to measure success in terms of getting the share price up, not in terms of building a sustainable business. Highly leveraged private equity was the epitome of this, but for the past 20 years across swathes of quoted companies executives have learned that they are better rewarded for financial engineering than real management, so they steeped themselves in the former and never really mastered the latter. This has brought the additional downside that much of what they had relied upon to boost the share price in good times has turned out to be toxic for the business as a whole now the cycle has turned.

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Second, the Last Two Decades Have Seen a Huge

The fourth and associated issu...

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