Working with a large multi-national computer company in the 1980s, we realised for the first time that there were two quite distinct systems: A system where the work was done, customers were served and money was made, and a system that lived a completely different life – a system that was entirely devoted to surviving in the hierarchy.

The way to get on in the hierarchy was to create reports, make presentations and, in essence, work to serve the hierarchy.

Of course from time to time the hierarchy would have a direct influence on the operational system, by, for example, making changes to the structure or driving a ‘change’ programme; but after coming down to do its thing the hierarchy would disappear to its own place, leaving the recipients of the changes to sort things out.

We began to describe this phenomenon as a ‘management factory’. Tom Johnson calls it an ‘information factory’; but it does more than create information.

The management factory is a natural consequence of the mistake we made when we first invented modern management: the separation of decision-making from work. As we learn to integrate decision-making with work management factories and their dysfunctions disappear.