Managing by wire is a

management Management (or managing) is the administration of an organization, whether it is a business, a nonprofit organization, or a government body. It is the art and science of managing resources of the business. Management includes the activities o ...

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 wholly owned subsidiary of Harvard University. ''HBR'' is published six times a year and is headquartered in Brighton, Massach ...

'' 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 manual flight controls of an aircraft with an electronic interface. The movements of flight controls are converted to electronic signals transmitted by wires, and flight control co ...

concept for jets.

SAP SE Sap is a fluid transported in 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 sepa ...

, Aetna, Mrs. Fields Cookies, and Brooklyn Union Gas have done "managing by wire".

History

The concept was presented in an article titled "Managing by Wire" in the September–October 1993 issue of ''

'' by Stephan H. Haeckel and

. When they wrote the article, Haeckel was the director of strategic studies at IBM's Advanced Business Institute and Nolan was a professor at the

Harvard Business School Harvard Business School (HBS) is the graduate business school of Harvard University, a private research university in Boston, Massachusetts. It is consistently ranked among the top business schools in the world and offers a large full-time MBA 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, usually near the front of an aircraft or spacecraft, from which a Pilot in command, pilot controls the aircraft. The cockpit of an aircraft contains flight instruments on an instrument panel, and the ...

of an

aviator An aircraft pilot or aviator is a person who controls the flight of an aircraft by operating its Aircraft flight control system, directional flight controls. Some other aircrew, aircrew members, such as navigators or flight engineers, are al ...

carefully flying the jet to its destination. So as an analogue to "managing by wire", the authors presented a

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 Debbi Fields (born September 18, 1956) is the founder and spokesperson of Mrs. Fields Bakeries. She has written several cookbooks and makes cookies. A resident of Memphis, Tennessee for over 16 years since she remarried in 1997, she moved to N ...

oversaw her flagship

Palo Alto, California Palo Alto (; Spanish language, Spanish for "tall stick") is a charter city in the northwestern corner of Santa Clara County, California, United States, in the San Francisco Bay Area, named after a Sequoia sempervirens, coastal redwood tree kno ...

, 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 "codified" a significant part of its

customer service Customer service is the assistance and advice provided by a company to those people who buy or use its products or services. Each industry requires different levels of customer service, but in the end, the idea of a well-performed service is that ...

work such as the reading of meters and the collecting of due payments. Aetna, an insurance company, made related changes in the hopes of enabling their

account executive Account executive is a role in sales, advertising, marketing, 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 promot ...

s to field client inquiries about novel services and products. In a 2007 article in Defense Acquisition University'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

, 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 indicators for the entire company, after which they can look into more precise information from enterprise resource planning software such as how well their employees are doing their work.

History

Concept

Industry applications

References

Further reading