Samuel Greengard

Author / Journalist / Speaker

Guru Nation

Management gurus, including Stephen Covey, Tom Peters and Gary Hamel, are making millions by promising companies that their techniques and insights can improve productivity and make the most of human capital. Whether they really deliver on those promises is another issue.

By Samuel Greengard

If you want to know where you’re going, it’s a good idea to have a sense of direction. On this foggy March morning, business-management guru Stephen Covey is attempting to serve as a human compass. He’s standing before an admiring throng of more than 600 devotees at his firm’s annual conference aboard the Queen Mary in Long Beach, California, and he’s working the crowd like a seasoned pro.

    He asks members of the audience to close their eyes and point north. Fingers fly in every direction--up, down and sideways. "This is just like when an organization asks everyone to state what the highest-priority goal is," he says with a folksy chuckle. "You wind up with a lot of different ideas."

    Covey, a man who has made millions spotting the problems and breakdowns within companies, is just getting ramped up. "Now," he says, "let’s have all the experts stand up--only those who are absolutely sure--and point north." Again, fingers point at every possible angle. The participants, a cross section of corporate America, openly laugh at themselves.

    "This is one sick group," Covey says in a droll tone. "These are our so-called leaders."

    He pulls up his shirtsleeve to reveal a compass strapped across his forearm and points in the correct direction. The gesture is an unmistakable metaphor for a man whose adult life has been spent rescuing the lost souls of the business world. By the time the 72-year-old consultant and author of the 1989 best seller The 7 Habits of Highly Effective People utters his closing words, the audience, who have each plunked down $400 to $600 to attend the corporate knowledge fest, are ready to set sail for a series of workshops and executive sessions about organizational change. As one participant rushes off to knowledge nirvana, he gushes to a colleague, "This is truly awesome."

Ego and Economics
    Nobody tracks the specific niche of management gurus. But in the last decade the field has blossomed into a multibillion-dollar business. In an era when there’s enormous emphasis on productivity and maximizing human capital, gurus provide answers to the nagging business problems of the day. There is still too little known about what makes an organization succeed, let alone tick, and amid the chaos and confusion, many human resources executives are searching for anything that can give them an edge. If a rousing speech motivates the troops, who’s to say that it isn’t money well spent?

    Management gurus have become the rock stars of the business world, complete with entourages of support staff and private jets. They command fees as high as $100,000 for a single appearance. They are endlessly quoted in magazines like Fortune and Business 2.0. Book editors duke it out for the rights to their best-selling tomes on leadership, creativity and performance.

    "There are only about 25, maybe 50 management gurus in the world. They are the heavyweight thinkers that mold the business ideas of the day," says James Hoopes, a professor of business at Babson College in Wellesley, Massachusetts. "Today, senior executives are confused and looking for answers, and business gurus promise, though they don’t always deliver, a recipe for success." Some, like Tom Peters, have prospered by writing books on a dizzying array of topics ranging from ineptitude to excellence. Others, such as Covey and Gary Hamel, have made a killing building consulting firms, cottage industries that promise to solve business problems. Still others, including Warren Bennis, Jim Collins, James Champy and Rosabeth Moss Kanter, have blazed their own paths to fame and fortune.

    Companies are willing to shell out huge sums for their employees to listen to the anointed experts without ever really considering the return on their investment. Do organizations that sponsor business gurus, such as Pfizer, Sprint, Wells Fargo and the U.S. Navy, ever really expect to put all these ideas into action? Sprint has surveyed employees over time and benchmarked itself, says Phil Bowman, vice president of integrated solutions for Sprint Business Solutions. "We’re able to measure the positive effect of the sessions. People feel more connected to their goals."

Knowledge rules
    It was in the 1920s that Frederick Taylor conducted his now famed time and motion studies, designed to take productivity to new heights. A few decades later, Peter Drucker emerged, transforming management theory into a highly respected discipline. His 1964 book, Managing for Results, forwarded the radical idea that quality and quantity were not mutually exclusive concepts. At 94, Drucker continues to be on the A-list, and his ideas continue to command enormous respect.

    But the man who elevated the selling of business ideas to an art form is Tom Peters, a Vietnam War veteran and former drug enforcement agency employee with a Stanford MBA who once worked as a consultant at McKinsey & Company. His 1982 book In Search of Excellence became a white-hot best seller, and the brash and irreverent speaker parlayed the publicity into near cult status. Even now, a couple of decades and several best sellers later, Peters continues to circle the globe, serving as a sort of anti-guru guru--ranting, raving and giving speeches on corporate myopia and mindlessness. "It’s not ironic that many senior executives sit atop a high-rise building, the ultimate phallic symbol, to manage a command and control corporate structure," he says. "This occurs in a day and age when a horizontal management structure is essential."

    Peters, a 62-year-old dynamo who pulls in $65,000 or more for a speaking engagement, takes a no-nonsense approach to the business of addressing the business world. He buys 100 or so books each month in search of a few new ideas he can use at the podium. He’s eminently quotable and wildly popular with the press, often setting aside a day each week purely for interviews. And while some critics say that his message shifts with the wind and his thoughts are hit-and-miss ("Some of his ideas are really just laughable," Hoopes comments. "The idea that everyone should be his own brand is nonsense."), his popularity has never waned. "If everybody loves what I do, then I know something is wrong," Peters says. "There are almost certainly other people with far more intriguing ideas than I have, but they aren’t as noisy as I am and they don’t fulfill a need the way I do. The fact that they don’t make it onto the radar screen might be sad, but that’s life."

    Like other management gurus, he understands the realities of the workplace. Too often, managers and line employees have thoroughly tuned out the relentless droning of the CEO--who takes on the role of a nagging mom or dad. Ultimately, it’s cheaper to bring in a celebrity who can wow employees than to fork over several hundred thousand dollars for motivational events such as lavish off-site meetings and retreats. Managers are under pressure to get results. Anything--an idea, a tool, a word--that can keep them ahead of the pack is fair game," says Stuart Crainer, author of The Ultimate Book of Business Gurus. "Gurus provide neatly packaged solutions or responses to managerial problems. The gurus who succeed are adept at packaging and presentation. They virtually all have an overdeveloped eye for publicity. They are a media dream--intelligent, successful, influential, opinionated and always available for an interview."

    Not all management gurus are created equal. Some, like Gary Hamel and Stephen Covey, have built empires designed to cater to the ongoing needs of organizations. Hamel’s Strategos, for example, now has 20 consultants traveling the world with this message: executives should think of their companies as "a portfolio of competencies" and understand the fundamental preconditions for developing complex strategies. Too often, Hamel says, the business world can identify a successful approach only when it sees it. The random odds of success or failure are as significant as their strategies. It’s not unusual for a company to hire bright 29-year-old McKinsey consultants and ignore the knowledge and expertise of its own 29-year-old employees, he says.

    Hamel rakes in $50,000 for delivering keynote speeches at events such as the Microsoft CEO Summit, the World Economic Forum and the Fortune 500 CEO Roundtable. At 49, he clearly has established himself as a thought leader. A former hospital administrator who went on to earn a doctorate in international business from the University of Michigan, he is now a visiting professor in strategic and international management at London Business School, a distinguished research fellow at Harvard Business School and chairman of Strategos. He has received acclaim for his articles in the Harvard Business Review, and his seminal book, Competing for the Future, has become a business-school classic.

    "There are all sorts of consultants who come into a company and essentially duplicate what everyone else is doing," Hamel says. "It’s my thinking that if you want to emerge from the pack, it’s essential to have your own point of view and be a bit of a contrarian. It’s also important to be deeply empathetic and concerned about the frustration and challenges that people face within an organization. You can’t be successful in this role--whether you want to call it a ‘management guru’ or something else--if you’re the least bit mercenary. People sniff that out right away."

    Hamel has taken a few hits along the way, especially as an ardent public supporter of Enron. During the dot-com boom, he once said: "Enron isn’t in the business of eking the last penny out of a dying business but of continuously creating radical new business concepts with huge upside." After the company collapsed, he remarked: "Do I feel like an idiot? No, but if I misread this company in some way, I was one of a hell of a lot of people."

    His unapologetic comments may not have won him many fans, but apparently they haven’t hurt him all that much either. "The fact that he’s still wearing egg on his face has not diminished the validity of his ideas or his popularity," Hoopes observes.

    But perhaps no one’s machine is as well oiled as Stephen Covey’s. His firm, FranklinCovey, the result of a merger of Franklin Quest and the Covey Leadership Center in 1997, had grown into a $307 million behemoth by 2003, with more than 6,000 clients worldwide, including 90 of the Fortune 100. The company also operates 143 retail stores, as well as e-commerce and mail-order operations. It sells audiotapes and videotapes, binders, books and planning and productivity software. Altogether, FranklinCovey operates in 50 countries and has 2,000 employees. "All the products support the central philosophy of the company," says Bob Whitman, the firm’s hard-driving president and CEO.

    That central philosophy comes directly out of Covey’s 7 Habits, which has sold more than 10 million copies. Conferences, workshops, coaching and special sessions for licensing client trainers all focus on using basic principles of life ("Habit 2: Begin with the end in mind."). "The idea is to get people out of their comfort zone," Covey says. "Unfortunately, nothing fails like success. The world is constantly changing, and too many people and companies are stuck in the ways of the past. They’re using industrial-age thinking in an information-age economy."

    Those who sense a strong conviction in his words may not be surprised to learn that he is a Mormon whose background serves as the spiritual foundation of his work. Covey, who earned an MBA from Harvard and a Ph.D. from Brigham Young University, strives to transform the workplace into a more spiritual and grounded place where good values beget success. "I was raised on the basis that life is a mission, not a career, and we should be governed by principles that are universal," he says.

    Catching the Wave or the 600 participants at FranklinCovey’s annual conference aboard the Queen Mary, listening to heavyweights such as Stephen Covey, consultant Ram Charan and company cofounder Hyrum Smith is a journey to heaven. "It’s a way to hear new ideas and become re-energized," says Cyndi L. Sparks, manager of learning and development and quality assurance at ScriptSave, a firm in Tucson that offers prescription savings plans. ScriptSave has used FranklinCovey’s training methods since 1999 to help its 130 employees improve their interpersonal customer skills, she says.

    Another firm that sings Covey’s praises is Redstone Companies, which operates The Houstonian in Houston. The hotel, spa and athletic club employs 1,000 workers and has an affluent clientele who expect flawless service. "We needed to eliminate all the internal nonsense that goes on within a company, including political games, turf fighting and aggravating circumstances that affect employees and customers," says Herb Lipsman, vice president of business development for Redstone. After attending a Covey course in 1996, he shepherded a group of key managers to Covey’s institute in Salt Lake City, and they came back feeling as though they had found the path to enlightenment. "It is an approach that teaches interpersonal skills and helps everyone focus on common goals," Lipsman says.

    One Houstonian employee is a certified Covey facilitator who offers workshops on communication and goal-setting. The company spends hundreds of thousands of dollars a year on the employee training, typically at off-site events. The cost can run as high as $800 per participant per class, but general manager Greg Nielson praises the program. The Houstonian has posted improved customer-satisfaction rates and better financial performance every year since adopting the Covey approach. A performance-management system built on metrics and measures uses Covey principles as the foundation. "We have institutionalized it to the point where people get compensated based on how well they perform on key factors," Nielson says.

    It isn’t surprising that these high-profile gurus elicit both praise and disdain. Some companies claim that they help generate a superior return on investment. Others accuse them of selling style over substance. "The ideas always sound good, but making them work requires ongoing consulting fees and a boatload of products," says one Fortune 500 executive. "Getting people to buy in and follow through over the long term is a hit-or-miss proposition."

    Hamel bristles at the notion that management gurus are charlatans in search of money and power. "We’re all different people with different approaches, but I think we want to make a difference in the world," he says.

    Crainer, who ranks top management gurus at a Web site called Thinkers 50, believes that their popularity is unlikely to fade anytime soon. "Practical application of most business ideas is a rarity," he says. "Management is a magpie science, picking up pieces of wisdom from all over the place, and managers are natural magpies, picking up pearls of wisdom where they find them." Perhaps The Economist magazine best summed up the guru game in a 1994 article. It noted: "The only thing worse than slavishly following management theory is ignoring it completely."

    Today’s management gurus are certainly not going to let that happen. "A CEO doesn’t expect to pay $50,000 and have 10,000 people walk out as if they have just attended a service with Billy Graham and have converted to the cause," Peters says. "The idea is to stir things up and get people to think. If only a few key people make significant changes, then it has been a hell of a good day."