Background to Management

As Peter Drucker (2006)observed, management is a practice, not a science nor an art as it is what actually happens, ie real world. Furthermore,

"...There are plenty of examples of modern management pioneers and not a single one of them came out of business school..."

Gary Hamel as quoted by Catherine Fox, 2007l

As management is a practice, it can be taught.

Management 'science' supports the manager by providing tools to achieve results. On the other hand, management is the use, and implementation, of tools into practice. Furthermore, management is not a profession as professions need to have at least 4 key elements, ie

"...an acceptable body of knowledge; a system for certifying that individuals have mastered that knowledge before they are allowed to practise; a commitment to public good; and an enforceable code of ethics..."

Rakesh Khurana as quoted by Warren G Bennis et al, 2005

Management exists for the sake of an organisation; not the other way round. Management is the servant of the organisation and any management that forgets that is mismanagement.

Management is about balancing, ie results (short-term vs. long-term), innovation, different stakeholder (customer, shareholder, staff, etc) expectations

According to Peter Drucker (Robert Spillane, 2008), management has been seen as having 3 jobs with 5 essential functions:

- the 3 jobs include

i) entrepreneurial work - to make economic resources productive

ii) administrative work - to make staff productive

iii) political work - to make public resources productive

- 5 functions

i) setting objectives

ii) integrating tasks and people

iii) motivating and communicating

iii) measuring performance

iv) developing people via continuous learning

Furthermore Drucker realised that managers were creators (as they had to create the future), not controllers; intrapreneurs, not supervisors and that leadership was not about seducing people or appealing to their personality. He claimed that the one of the main tasks of management was to think through and define the purpose of the organisation.

He supported management by objectives which included self-control and understanding your community responsibilities.

Drucker suggested that there were 3 forces of mis-management

i) the specialized work of managers which encouraged them to pursue specialised training rather than general, humanistic education which is essential for community leadership

ii) the existence of hierarchy in which managers define themselves as supervisors rather than leaders

iii) confusion about the organisation's mission

Each task of a manager should be related to the overarching goals of the business so that there develops a cohesive management group with the appropriate moral framework.

Drucker stressed the need for participative management with creative tension (being prepared to arge and defend their case) plus staff taking responsibility and accountability for their setting goals and performance.

More recently management has enlarged to include to 5 different perspectives, ie

"...- managing self (the reflective mindset)

- managing organisations (the analytic mindset)

- managing context (the worldly mindset)

- managing relationships (the collaborative mindset)

- managing change (the action mindset)..."

Jonathan Gosling et al, 2003

Most managers need to learn to work more on the business and less in the business. Too often managers get into micro-management, thus missing the big picture challenges that a manager needs to stay focused on. In other words

"...training for executives focuses on learning about the business rather than learning about one's effectiveness in relationship with others on behalf of the business..."

Peter Senge et al, 2005

Furthermore,

"...if you become incredibly detailed, the organisation becomes dictatorial and inflexible and everyone is looking to see what the boss is thinking and I don't believe everyone should be doing that. No one has a patent on intelligence; collective efforts will win every time over dictatorial..."

Wal King as quoted by Catherine Fox, 2006

As Henry Mintzberg (2004) stated good management is a blend of craft (experience), art (insight) and science (analysis). Unfortunately, much of management education focuses on analysis which leads to calculating technocrats!!!!!!!!! Yet

"most issues facing business leaders are questions of judgment"

Warren G Bennis et al, 2005

In additional to strong technical skills to handle what needs to be done,

"managers also need skills to execute a plan, to communicate clearly to others what is expected, to provide constructive and honest feedback, to coach people and help them address weaknesses, and be flexible to handle the unexpected...

Patrick Coleman as quoted by Luke Slattery, 2007

In fact,

"...executives of today must learn to succeed in a complex shifting and increasingly uncertain business environment, to work at the edge of flux and disorder......who are thoughtful, aware, sensitive, flexible and adaptive managers capable of being moulded and developed into global executives......who have the ability to consistently and confidently get things done in an environment of uncertainty and ambiguity, think beyond their own interests in delivering results, and take the social contexts into account when making business decisions. This requires a range of leadership competencies, including communication; problem solving; thinking in creative, critical and analytical ways; personal effectiveness; self management; teamwork; people management; strategic thinking; ethical decision-making and innovation..."

Alec Cameron as quoted by Luke Slattery, 2007

This also involves good interpersonal skills, ie

"...an innate ability to quickly assess people and extract the best from them, a motivation to achieve, greater self-confidence and high energy levels to work at high consistently......skills in dealing with different cultures, skills in managing across borders......skills which are really business model innovation.....increasing demand for lifelong learning..."

Mike Riddiford as quoted by Luke Slattery, 2007

NB What appear to be straightforward financial decisions, such as cutting costs, are hard to measure as there are intangibles such as the human impact on these decisions!!!!

As Peter Drucker stated (Robert Spillane, 2008), the ultimate test of management is performance of work. Any distraction from this is dangerous.

A manager is most likely to fail at 1 of 3 key transitional points:

i) first managerial post

ii) first general management role

iii) first time as the most senior executive, such as CEO or MD.

The skills required at each transitional point are different. As there is a broadening and wider perception required at each level of management, activities, such as mentoring, coaching, etc can help make these transitions successful.

- the skills and methods that lead to individual success as a specialist (sales, technologist, clerk, etc) are completely different from those needed to lead a team at a management level. Most new managers incorrectly assume that the new title will give them significant authority and control. They believe that they can manage their staff individually but find the main challenge is getting the team to work together. Furthermore, they incorrectly assume that their main job is to keep the operations on track, rather than conceive of and drive improvements. Many young managers make the problem worse as they are fearful of asking their bosses for help; they feel that their bosses may perceive them as weak or incompetent.

- before becoming general managers, most managers run functional departments, such as sales, marketing, R & D, operations, finance, etc. The subsequent role of a general manager has additional responsibilities associated with developing business strategy, ensuring that all functional departments work together and delivering bottom-line profitability for all functional departments.

- once you become the senior executive, the role expands to include understanding what goes on in the organisation plus in the industry and elsewhere. This role requires being an ability to see the "big picture" and view things in the long-term (see the section on becoming an agile organisation, etc for more details on CEO's role).

As the senior executive

"...you have to manage a Board, you have to manage analysts, you have to manage the market, you have to manage regulators, you have to manage the legislature, you have to manage the media. Your whole notion of decision-making changes and rather than being responsible for all the decisions, you need to set up the processes by which those decisions are made and the people who take them..."

David Morgan as quoted by Andrew Cornell, 2008

Warren Buffett (William Thorndike, 2013) describes a concept named "institutional imperative", ie when CEOs mindlessly imitate the actions of their peers; if a CEO is doing something, other CEOs, especially in the same industry, feel they have to do the same. It is the equivalent to teenage peer pressure.

Furthermore,

"...the worker who has just been appointed to a managerial position attempts to retain earlier friendships as if nothing has changed; she does not understand that her new job requires that she listen, be listened to, and be respected, rather than that she win a contest of popularity or continue to exchange gossip or intimacies with former peers. The new board member fails to understand that she must now behave in a disinterested manner vis-a-vis the very CEO or president who courted for months and then invited her to join a select, prestigious group..."

Howard Gardner, 2006a

Any new manager is well advised to do

"...lots of listening, watching, studying and conferring......needs a starting point - the best understanding available of what has happened in the company and viable options..."

Howard Gardner, 2006a

It is important to do this before making decisions and to avoid badmouthing your predecessor and/or new colleagues

Activities such as mentoring, coaching, etc can help make these role transitions successful.

The main challenges in becoming a general manager are

- the change from being a specialist to a generalist, ie

"...instead of knowing more and more about less and less, the manager now shifts to knowing less and less about more and more..."

Hugo Uyterhoeven as quoted by Andrew Spicer, 2007

As a result of this most new general managers feel completely out of control.

- the nature of interaction with staff, ie

"...general managers typically deal in seemingly chaotic interactions, many of which last only a few minutes and include lots of topics..."

John Kotter as quoted by Andrew Spicer, 2007

- must learn enough about all functions of the business to be able to manage them. Gaps in skills needed to be addressed, ie the sales manager who struggles with financial numbers; the technical person who dislikes selling; the financial people who treat staff as balance sheet items

- the challenge of building and motivating a diverse team of people, such as research scientists in research and development; hard-nosed production superintendent's; detail-loving accountants, etc

- leadership becomes paramount, ie

"...Leaders must outline a direction they want to take the business, align people with that direction, and motivate them to achieve it. Leadership is much more about people than the science of management..."

Andrew Spicer, 2007

- need to develop an exit strategy,. This includes predicting possible downsides. Tthe most extreme case to think about is what would happen if the business fails and/or does not perform as well as expected.

Seven management habits needed for success

According to David Thomson (2007), there are 7 important management habits required for an organization to grow successfully

i) encourage your best customers to become extensions of the sales force (using your customers as advocates for your business will be more successful than your sales staff's spin. It is suggested this will cut the

"...sales cycle in half and the cost of sales and marketing by two-thirds..."

David Thomson has quoted by Mark Fenton-Jones, 2008

NB Of all the habits this is the most important one

ii) create and sustain a breakthrough proposition that is of value and benefit to the customer (this must deliver a superior value or benefit to the customers than provided by competitors. For example, Starbucks is not selling just a product or a commodity like a grocery store; it is selling a coffee experience which involves people socializing over coffee. This creates higher demand and allows them to charge higher prices than their competitors.)

NB To their disadvantage. most entrepreneurs are more product than customer focused.

iii) exploit a high-growth market segment, and not necessarily seek completely new markets. Some examples

- Starbucks redefined the market within retail

- Seek redefined a segment in advertising between recruiting and the newspaper industry

- Google redefined advertising research

iv) use "big brother" alliances to break into new markets (big organisations provide credibility, while small organisations help with innovation)

v) need to be cash flow positive and reinvest cash into the business

vi) an experienced management team that looks inside and outside (some people focus outwardly on markets, customers, alliances and community; other people focus intimately on operations. The management team members need to have complete trust and respect for each other. This derives partly from selecting the right people)

vii) board members need to be experienced in operating successful organisations

NB Passion is a 2 edge sword as it can dominate thinking and destroy an organisation by neglecting other important habits!!!!

managers need to learn to
- hold judgement
- don't have firm answer straight away
- listen
- empathise
- co-create
Other attributes include
- great executive coaches
- courage to try different roles
- resilience, ie bounce back from adversity
- luck in timing

 

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