Managing By Wire
   HOME

TheInfoList



OR:

Managing by wire is a
management Management (or managing) is the administration of organizations, whether businesses, nonprofit organizations, or a Government agency, government bodies through business administration, Nonprofit studies, nonprofit management, or the political s ...
strategy in which managers rely on their company's "information representation" generated by computers such as databases and software instead of on detailed commands. It was presented by Stephan H. Haeckel and
Richard L. Nolan Richard L. Nolan (born c. 1940) is an American business theorist, and Emeritus Professor of Business Administration at the Harvard Business School. Biography Nolan received his BA Production and Operations Research in various positions, including ...
in a 1993 ''
Harvard Business Review ''Harvard Business Review'' (''HBR'') is a general management magazine published by Harvard Business Publishing, a not-for-profit, independent corporation that is an affiliate of Harvard Business School. ''HBR'' is published six times a year ...
'' article. The authors chose the term "managing by wire" as an analogue to the
fly-by-wire Fly-by-wire (FBW) is a system that replaces the conventional aircraft flight control system#Hydro-mechanical, manual flight controls of an aircraft with an electronic interface. The movements of flight controls are converted to electronic sig ...
concept for jets.
SAP SE Sap is a fluid transported in the xylem cells (vessel elements or tracheids) or phloem sieve tube elements of a plant. These cells transport water and nutrients throughout the plant. Sap is distinct from latex, resin, or cell sap; it is a s ...
,
Aetna Aetna Inc. ( ) is an American managed health care company that sells traditional and consumer directed health care insurance and related services, such as medical, pharmaceutical, dental, behavioral health, long-term care, and disability plans, ...
, Mrs. Fields Cookies, and
Brooklyn Union Gas KeySpan Corporation was the fifth largest distributor of natural gas in the United States. KeySpan was formed in 1998 as a result of the merger of Brooklyn Union Gas Company (founded 1895 by merging several smaller companies) and Long Island Light ...
have done "managing by wire".


History

The concept was presented in an article titled "Managing by Wire" in the September–October 1993 issue of ''
Harvard Business Review ''Harvard Business Review'' (''HBR'') is a general management magazine published by Harvard Business Publishing, a not-for-profit, independent corporation that is an affiliate of Harvard Business School. ''HBR'' is published six times a year ...
'' by Stephan H. Haeckel and
Richard L. Nolan Richard L. Nolan (born c. 1940) is an American business theorist, and Emeritus Professor of Business Administration at the Harvard Business School. Biography Nolan received his BA Production and Operations Research in various positions, including ...
. When they wrote the article, Haeckel was the director of strategic studies at
IBM International Business Machines Corporation (using the trademark IBM), nicknamed Big Blue, is an American Multinational corporation, multinational technology company headquartered in Armonk, New York, and present in over 175 countries. It is ...
's Advanced Business Institute and Nolan was a professor at the
Harvard Business School Harvard Business School (HBS) is the graduate school, graduate business school of Harvard University, a Private university, private Ivy League research university. Located in Allston, Massachusetts, HBS owns Harvard Business Publishing, which p ...
. In his 2003 book ''The New Ruthless Economy'', Simon Head called the article "an important milestone in the intellectual gestation of the corporate panopticon".


Concept

The authors selected "Managing by Wire" as the title because readers would relate to the comforting, modern scene in the
cockpit A cockpit or flight deck is the area, on the front part of an aircraft, spacecraft, or submersible, from which a pilot controls the vehicle. The cockpit of an aircraft contains flight instruments on an instrument panel, and the controls th ...
of an
aviator An aircraft pilot or aviator is a person who controls the flight of an aircraft by operating its directional flight controls. Some other aircrew members, such as navigators or flight engineers, are also considered aviators because they a ...
carefully flying the jet to its destination. So as an analogue to "managing by wire", the authors presented a
fly-by-wire Fly-by-wire (FBW) is a system that replaces the conventional aircraft flight control system#Hydro-mechanical, manual flight controls of an aircraft with an electronic interface. The movements of flight controls are converted to electronic sig ...
concept for jets. According to fly-by-wire, a pilot must focus on general flight parameters while information technologies control the plane and reacts to changing environment. Instead of depending on their senses as they did in the past, pilots now are "flying by wire" by depending on the plane's "informational representation" generated by a computer. Likewise, when managers are "managing by wire", they are relying on their company's "informational representation", which includes "expert systems, databases, software objects, and other technical components". Rather than specifying step-by-step commands, managers would oversee their group through telling the software what their objectives are. The ability of a firm to "manage by wire" is based on how large and complicated its operations are.


Industry applications

In their 2004 book, ''Managing Customer Relationships'', Don Peppers and Martha Rogers cited several companies and organizations as having successfully used the "managing by wire" strategy in a limited fashion. For example, Mrs. Fields Cookies is using a tiny number of employees in rural Utah to manage 800 stores, some of which are owned by the company and some of which are franchised. They have the ability to do this through the use of computer systems that reproduce how founder Debbi Fields oversaw her flagship
Palo Alto, California Palo Alto ( ; Spanish language, Spanish for ) is a charter city in northwestern Santa Clara County, California, United States, in the San Francisco Bay Area, named after a Sequoia sempervirens, coastal redwood tree known as El Palo Alto. Th ...
, store. In another example, to be able to resolve inquiries from their large number of customers in a speedy and efficient fashion,
Brooklyn Union Gas KeySpan Corporation was the fifth largest distributor of natural gas in the United States. KeySpan was formed in 1998 as a result of the merger of Brooklyn Union Gas Company (founded 1895 by merging several smaller companies) and Long Island Light ...
"codified" a significant part of its
customer service Customer service is the assistance and advice provided by a company to those who buy or use its products or services, either in person or remotely. Customer service is often practiced in a way that reflects the strategies and values of a firm, and ...
work such as the reading of meters and the collecting of due payments.
Aetna Aetna Inc. ( ) is an American managed health care company that sells traditional and consumer directed health care insurance and related services, such as medical, pharmaceutical, dental, behavioral health, long-term care, and disability plans, ...
, an insurance company, made related changes in the hopes of enabling their
account executive Account executive is a role in advertising, marketing, sales, and finance involving intimate understanding of a client company's objectives and products and a professional capability to provide effective advice toward creation of successful pro ...
s to field client inquiries about novel services and products. In a 2007 article in
Defense Acquisition University The Defense Acquisition University (DAU) is a corporate university of the United States Department of Defense offering "acquisition, technology, and logistics" (AT&L) training to military and Federal civilian staff and Federal contractors. DAU ...
's ''Defense Acquisition Review Journal'', Russell A. Vacante suggested using "managing by wire" in the military. He said that logistics resources "can be better exploited" if they were to completely combine "logistics with operations and intelligence assets". Vacante noted that this will "reduce risk and uncertainty of delivery and support as the redundant iron mountains of equipment and supplies give way to precisely tailored packages distributed by a transportation network that can transverse the full spectrum of the battle space". According to Simon Head's 2003 book ''The New Ruthless Economy'', the "Managing by Wire" article "clearly had a strong influence" on
SAP SE Sap is a fluid transported in the xylem cells (vessel elements or tracheids) or phloem sieve tube elements of a plant. These cells transport water and nutrients throughout the plant. Sap is distinct from latex, resin, or cell sap; it is a s ...
, which created "its own real-life version of the 'management cockpit'" represented by a conference room. The room's four walls are papered in charts that give an overview of how the company is doing. The walls each have six rectangles, and each rectangle has six charts. In total, each wall has 36 charts which means the room has 144 charts. The charts display data about the "minute-by-minute activities of plants, offices, machines, assembly lines, managers, groups of employees, and even single employees". Each wall has a different color: a black wall displays the "main success factors and financial indicators", a red wall shows "market performance", a blue wall shows "the performance of internal processes and employees", and a white wall shows "the status of strategic projects". This allows the CEO and upper-level management to review the
key performance indicator A performance indicator or key performance indicator (KPI) is a type of performance measurement. KPIs evaluate the success of an organization or of a particular activity (such as projects, programs, products and other initiatives) in which it e ...
s for the entire company, after which they can look into more precise information from
enterprise resource planning Enterprise resource planning (ERP) is the integrated management of main business processes, often in real time and mediated by software and technology. ERP is usually referred to as a category of business management software—typically a suit ...
software such as how well their employees are doing their work.


References


Further reading

* {{cite news , url=https://hbr.org/1993/09/managing-by-wire, title=Managing by Wire , last1=Haeckel , first1=Stephan H. , authorlink1=Stephan H. Haeckel , last2=Nolan , first2=Stephan H. , authorlink2=Richard L. Nolan , date=1993-10-13 , journal=
Harvard Business Review ''Harvard Business Review'' (''HBR'') is a general management magazine published by Harvard Business Publishing, a not-for-profit, independent corporation that is an affiliate of Harvard Business School. ''HBR'' is published six times a year ...
, accessdate=2018-12-25 Management 1993 neologisms