MANY, PERHAPS most, management books sell success recipes – short cuts claiming to make the job simpler and easier. The twin originality of The Exceptional Manager (Oxford University Press) is that it starts from the other end, by identifying what is problematic about managing, and then fitting its advice to the context of the UK today. What is managing in Britain in the 21st century all about? And how will it change in the future?

Actually, there’s a third originality too. The book (having helped edit it, I declare an interest here) is a collaborative effort by, and the first major output of, a multidisciplinary group of scholars belonging to the Advanced Institute of Management (AIM). AIM is a publicly funded body whose objective is to bridge the gap between management theory (or theories) and practice, and harness research to improving company performance. So the book is itself both a working model of practice-led enquiry and a step towards an evidence base for UK management.

As the double-edged title hints, there are no easy answers. The exceptional manager is just that – an exception. For while exceptional managers collectively do ‘make a difference’ – witness the outperformance of companies such as RBS, Tesco and BP – the fact is that most don’t. BP’s recent local difficulties just go to show how hard it is for companies to keep performing at the highest level: where it has fallen down is in routine operations, possibly the least difficult part of management’s job.

In every management discipline, the pattern is the same: making a difference is not business as usual only better it is something different. Thus, deciding on a viable strategy is one thing. It is quite another to do it in the long term, when adapting to changing conditions will almost certainly mean changing the business model. As with many other management areas, managers have not one but two strategic imperatives: one steering the present strategic course, while the other judges the moment not only to change direction but to jump ship and start up an aeroplane instead.

Ironically, as the authors point out, many of the dramatic turnaround stories that fuel the management ‘success’ literature are in fact from a strategy angle the opposite: ‘from the point of view of market position, shareholder wealth, and jobs…’ transformational change is unmistakeable testimony to previous strategic failure.

This two-way stretch – doing the existing thing efficiently while looking for the opportunity to do something different and better – is particularly contradictory for innovators. Doing everyday things better is all about measurement, groove and routine – but these are anathema to innovation, which by its nature is unpredictable and thrives on flexibility and freedom from routine.

And the problem is magnified again for the UK, for which innovation is viewed as the great management challenge. It’s something of a commonplace that, economically, UK plc needs to move up the value chain, competing with higher-value, innovative goods and services rather than on price, as in the past. It’s much less of a commonplace that innovation, always difficult, is likely to be harder still for UK managers because of their past.

In brief, say the AIM authors, the market-oriented policy reforms pursued by UK governments since the 1980s have actively encouraged managers to centre their competitive proposition on low input costs and prices (cynics would add that City short-termism has reinforced the trend). Today’s corporate weaknesses, charted in the book, of meagre R&D spending, unimaginative people management and reluctance to take up promising new practices, faithfully reflect this institutional framework.

This means that the challenge for managers of progressive British companies – and material for a new phase of AIM’s mission – will be not just to innovate in products and services. Equally as important will be wrenching their attitude from head-on market competition to co-operation: creating the institutional infrastructures (superior education, flexible supply chains, collaborative R&D links with universities and research institutes, for instance) that will underpin innovation as a self-reinforcing cycle rather than a fraught one-off event. Indeed, this ‘may turn out to be as critical to evolving competitiveness as the more familiar managerial role of performance improvement’.

‘Business as usual,’ warn the authors, will lead inevitably to relative decline. At the heart of a new approach – ‘the levers that switch the trajectory of the company from the low road to the high road’ – are the beliefs and actions of the exceptional manager. This is not a macho management superhero rather, these are reflective men and women who can break out of the cage of their own assumptions and act on the basis of what works (or doesn’t) in their particular context, not on what they think. Another way of being an exceptional manager, then, is focusing on the exception rather than the rule: still a challenge, but they don’t have to be a mathematical minority.

The Observer, 17 September 2006