Cognitive thinking, emotional intelligence and spiritual intelligence

Current managers need to focus on 4 elements

- financial assets (bricks and mortar, etc)

- intellectual capital (databases, business processes, etc)

- emotional capital (energy, enthusiasm, commitment, etc)

- spiritual intelligence (social responsibility, etc)

As a manager climbs the organisational hierarchy, emotional intelligence (EI or EQ) becomes more important than IQ (cognitive thinking). There are 4 elements to EQ: self-awareness, self-management, social awareness and relationship management

i) self-awareness involves emotional self-awareness, accurate self-assessment, complete self-reliance and self-belief, achieving self actualisation and self-confidence. It is the ability to read our own emotions. It allows us to know our strengths and limitations and feel confident about our self-worth. If used effectively, self-awareness helps us accurately gauge our own moods and how we are affecting others

ii) self-management involves self-control, trustworthiness, conscientiousness, adaptability, achievement orientation and initiative. It is the ability to control our emotions with honesty and integrity in reliable and adaptive ways. When this element is operating effectively, we know where our own emotions are coming from and how long a bad mood might last

iii) social awareness involves empathy, organisational awareness and service orientation. It comprises the key capabilities of empathy and organisational intuition, so that we demonstrate awareness of other people's emotions and understand how the organisation works. Socially-aware executives show that they care about other people's emotions; they are experts at reading the currents of office politics; they understand how their words and actions make others feel, and are sensitive enough to change them when the impact is negative

iv) relationship management or social skill involvesvisionary leadership, influence, developing others, communications, being a change catalyst, conflict management, building bonds, and teamwork and collaboration. It is the ability to communicate clearly and convincingly, disarm conflict and build strong personal relationships with others in the organisation. These skills are used to spread enthusiasm and settle disagreements, often with humour and kindness

It has been ascertained that, in management positions, emotional competencies are twice as important as technical skills and purely cognitive abilities combined. While an IQ score can help predict what profession or type of job an individual should hold, EQ is a more powerful predictor of who will succeed and who will not.

"...in general, the higher a position in an organisation, the more EI mattered; for individuals in leadership positions, 85 percent of their competencies were in the EI domain..."

Daniel Goleman as quoted by Tim Wallace, 2004

Furthermore,

"...about 15% of one's financial success is due to one's technical knowledge and about 85% is due to skills in human engineering - personality and the ability to lead people......The person who has the technical knowledge plus the ability to express ideas, to assume leadership, and to arouse enthusiasm amongst people - that person is headed for higher earning power..."

Dale Carnegie, 2003

"...research shows convincingly that EQ is more important than IQ in almost every role and many times more important in leadership roles. This finding is accentuated as we moved from the control philosophy of the industrial age to an empowering release philosophy of the knowledge worker age..."

Stephen Covey as quoted by Martyn Newman, 2007

"...a leader's intelligence has to have a strong emotional component..."

Jack Welch has quoted by Martyn Newman, 2007

It has been suggested that people with a high EQ exhibit the following characteristics:

"- more realistic in assessing their strengths and weaknesses

- take ownership of their own problems

- create stronger interpersonal relationships

- are better in motivating themselves and others

- are more proactive, innovative and creative

- function better under pressure

- cope better with change

- are superior leaders

- will have better results"

Manfred Kets de Vries, (2006)

On the other hand, until recently there has been scepticism about EQ, owing to the lack of empirical evidence to prove the link between EQ and performance. Recent evidence (Stephane Cote et al, 2006) points to EQ as an important predictor of task performance and shows that it can relate to cognitive intelligence in a compensatory way, ie individuals with low cognitive intelligence can perform acceptably if they have high emotional intelligence, such as passion and self-belief.

Furthermore, research (Fiona Smith, 2009) has shown conscientiousness is a better indicator than IQ of success at work. On the other hand, there is a dark side to conscientiousness, ie perfectionism, workaholism and compulsiveness plus being risk averse and poor at delegating. Really conscientious people are not good at collaboration as they prefer to do everything themselves.

The brain's pathways are important in emotional intelligence. Messages start at the base the brain and the limbic system where emotions are experienced; then travel to the front of the brain before you can think rationally about your experiences. Emotional intelligence requires effective communication between the rational and emotional centers of the brain so that we can form judgments and make choices.

Furthermore, there are 3 basic ideas involved

i) effective leadership is the byproduct of emotions, such as self-confidence, optimism, independence and enthusiasm

ii) emotions are valuable to forming the basis of strong relationships between different stakeholders so that you can create real competitive advantage

iii) emotions and associated behaviours can be used to solve problems, create products, deliver superior service, etc

Comparing IQ and EQ

IQ (cognitive)

EQ (emotional)

Analytical

Intuitive & impressionistic

Logically affective (what is sensible)

Pleasure/pain barrier (what feels good)

Use of abstract symbols, words, narrative & numbers

Use of metaphors & images

Slower processing of information

More rapid processing of information

More specific statements

Sweeping statements

(source: Manfred Kets de Vries, 2006)

Martyn Newman (2007) has claimed that EQ improves with age

Linked with EQ is intuition. It is claimed that Einstein stated that intuition is more important than IQ and he never discovered anything with his rational mind!!!!!!!! In fact,

"...He was famous for his "gedanken" (thought) experiments, experiments based on his remarkable imaginative capabilities. His basic insights leading to relativity theory, he said, had been discovered imagining himself "travelling on a light beam..."

Peter Senge et al, 2005

Sometimes intuition is called business feel and is linked with the term 'street smart'. Intuition is an important practice of management, ie

For "...Intel's CEO Andy Grove......the primary form of business feel that underpins his technical expertise in a number of areas......maverick investor George Soros......talks of the central role of anxiety in his management style; the Body Shop's Anita Roddick says she has the passion of an obsessive person; management"guru Ricardo Semler has written of the role of stress in transforming his understanding of organisations; Mort Meyerson, former CEO of Perot Systems Corp, analyses the role of uncertainty and despair in leading him to rethink leadership; and Lou Gerstner, in his time at IBM, came to recognise the role of emotions in leadership......business feel that cannot be learnt in a cognitive way. It relies on a feeling for the situation, only able to make instinctive or intuitive judgments in which we feel we are doing the correct thing without necessarily being able to justify our decision in abstract terms or according to the rules. If we try to follow the principles of business feel in a conscious and rational way, we lose the very thing that is its most vital element..."

Steven Segal, 2005

Furthermore,

"...Intuition is not some paranormal ability to see the future, but that technique of learning what to look for in a given environment, and of doing so without a conscious brain getting in the way......intuition - the ability to direct a behaviour according to some unconscious cues..."

Robert Winston, 2003

In addition to IQ (cognitive intelligence) and EQ (emotional intelligence), spiritual intelligence (SQ) is becoming important in management. SQ is described as being

"...about the depth and quality of moral and ethical choices, our sense of what is right, and applying it to our workplace. We use spiritual intelligence to work in awareness of our inner being, to apply workplace values, and build connections in the workplace so that people belong and can feel those values..."

Robyn Henderson, 2006

Spirituality can be defined as things

"...of significance that give meaning and direction to a person's life and helps them deal with adversity. It is broader than religion but may be inclusive of religion. It includes the quest for meaning, purpose, meaningful relationships and love and commitment. Spirituality is shaped and directed by the experience of individuals and of communities in which they live out their lives..."

Sharon Bicknell, 2009

Furthermore,

"...success is a function of persistence and doggedness and the willingness to work hard for 21 minutes to make sense of something that most people would give up on after 30 seconds..."

Alan Schoenfeld as quoted by Malcolm Gladwell, 2008

Need to be an opportunist, and have the strength and presence of mind to seize opportunities as they present themselves

Executive's role

According to Rob Goffee (2008), those who made into the top levels of management have the following characteristics:

- first child or first son (usually this person is made to feel special in the family)

- high achievers

- high energy levels

- think long-term

- goal focused

- politically active

- loners (even though they may preach teamwork)

- value independence

Furthermore,

- capacity to develop strategy

- able to work with a variety of people

- take early responsibility for important tasks

- strong achievement goals

- have early leadership experience in a variety of situations

- experience in several business functions

- integrity, trust and concern for people

The executive toolkit has the following elements

"...1. Leadership: establishing direction, aligning people with that direction and then motivating and inspiring them

2. Teamwork: can work in a team, assemble a team, recognize what's needed to make a team work well

3. Energy: high energy levels, to sustain pace at the top. Work-life balance is all very well, but probably unrealistic for most senior execs

4. Interpersonal skills: building and maintaining effective and productive relationships

5. Self-confidence: confidence is contagious in most organisations

6. Listening: being able to recognize and act on good advice

7. Business nous: an understanding of how money is made in a business and entrepreneurial flair

8. Innovation: the ability to change course, be flexible and take intelligent risks

9. Focus: the ability to review priorities and act on them

10. "As the mantra goes "transform yourself. Transform business. Transform the world..."

Luke Slattery, 2006

As Peter Drucker (2004) says, effective executives cannot be stereotyped, ie some are extroverts while others are introverts, some are easy going while others are control freaks, etc. On the other hand, there are 9 general principles that they follow:

i) they ask "What needs to be done?"

This involves selecting priorities and sticking to them. Ideally, this involves concentrating on the top priority task, and upon its completion, reviewing all priorities. For example, Jack Welch used to review his priority list every 5 years. Once he had selected the top task, he would delegate the other tasks

ii) they ask "What is right for the enterprise?"

This involves understanding all stakeholders' interests, etc

iii) they develop action plans

Executives are doers - they execute. Knowledge is useless until it is translated into deeds. To do this, they need to plan - which involves thinking about desired results, problem restraints, future revisions, check-in points and the ramifications. This involves the following questions

"...What contributions should the enterprise expect from me over the next 18 months to 2 years' What results will I commit to? With what deadlines? Is this course of action ethical? Is it acceptable within the organisation? Is it legal? Is it compatible with the mission, values and policies of the organisation? Affirmative answers don't guarantee that the action will be effective. But violating these restraints is certain to make it both wrong and ineffective..."

Peter Drucker, 2004

Remember: the action plan is flexible. It is a commitment that can be revised as required, ie as new opportunities arise. Furthermore, the action plan allows for checking results against expectations. Usually there are 2 checks, with the first check coming around halfway through, and a second at the end of the period

Aligned with an action plan is the executive's time management strategy

"...without an action plan, the executive becomes a prisoner of events. And without check-ins to re-examine the plan as events unfold, the executive has no way of knowing which events really matter and which are only noise..."

Peter Drucker, 2004

It is important that all the above bases are covered. Furthermore, decisions need to be reviewed regularly and systematically so that if a decision needs to be changed, it can be. These reviews can cover anything from results to the assumptions underlying the decision. For example, studies on hiring or promoting decisions have shown that only 1/3 is likely to be successful. Allocating the best people to the right positions is crucial.

If the wrong decision was made, it needs to be rectified. Furthermore, decision-making should be delegated to the most appropriate level of the organisation. This is most important in knowledge-based organisations.

v) they take responsibility for communicating

"...when they translate plans into action, executives need to pay particular attention to decision-making, communications, opportunities (as opposed to problems), and meetings...... a decision has not been made until people know:

- the name of the person accountable for carrying it out;

- the deadline;

- the names of people who will be affected by the decision and who therefore have to know about it, understand, and approve it - or at least not be strongly opposed to it;

- the names of the people who have to be informed of the decision, even if they are not directly affected by it..."

Peter Drucker, 2004

It is important that all the above bases are covered. Furthermore, decisions need to be reviewed regularly and systematically so that if a decision needs to be changed, it can be. These reviews can cover anything from results to the assumptions underlying the decision. For example, studies on hiring or promoting decisions have shown that only 1/3 is likely to be successful. Allocating the best people to the right positions is crucial.

v) they take responsibility for communicating

"...effective executives make sure that both their action plans and their information needs are understood..." by all stakeholders

Peter Drucker, 2004

Remember: organisation are held together by information rather than by ownership or command. Each executive needs to identify the information he/she needs, ask for it and keep requesting it until it arrives

vi) they focus on opportunities rather than problems

Remember:

"...problem solving......does not necessarily produce results. It prevents damage. Exploiting opportunities produces results..."

Peter Drucker, 2004

According to Drucker, there are 7 different types of opportunities that need to be scanned for:

a) an unexpected organisational success or failure caused by a competitor and/or within the industry

b) a gap between "what is" and "what could be" in a market process, product or service

c) innovation in a process/product/service inside or outside the organisation or its industry

d) changes in industry structure and market structure

e) demographic changes

f) changes in mindset, values, perception, mood or meaning

g) new knowledge or new technology

Need to ensure that problems do not overwhelm the opportunities. Ideally, allocate the best staff to opportunities rather than problems

vii) they run productive meetings

According to Drucker, there a several different meetings types, such as

- a meeting to prepare a statement, an announcement or a press release. Ideally a draft is prepared before the meeting

- a meeting in which one member reports. Ideally nothing else but the report is discussed

- a meeting in which several members report. Ideally, discussion is limited to issues for clarification, within a firm time limit. Furthermore, the reports and/or summaries are distributed to participants before the meeting

- a meeting to inform the convening executive. Executives should listen, ask questions and summarize

- a meeting whose only function is to allow the participants to be in the executive's presence. Usually these are a penalty of rank and should be confined to the least productive parts of the day, such as the end of the working day

To make meetings productive, self-discipline is required so that the format is adhered to and the meeting is terminated once the specific purpose has been accomplished

"...good executives don't raise another matter for discussion. They sum up and adjourn..."

Peter Drucker, 2004

Furthermore, good follow-up is important.

viii) they think and say "we" rather than "I"

"...this means that they think of the needs and the opportunities of the organisation before they think of their own needs and opportunities..."

Peter Drucker, 2004

ix) they listen first, speak last

NB The first 2 practices (asking what needs doing and what is right for the enterprise) give effective executives the knowledge they need; the next 4 (developing action plans, assuming decision responsibility, taking responsibility for communications and focusing on opportunities rather than problems) help them convert this knowledge into effective action. Practices 7 and 8 (conducting productive meetings and thinking/saying we rather than I) ensure that the whole organisation is held responsible and accountable. The last (listen first, speak last) is more a rule than a practice.

Good managers are people who believe

"...engaged employees lead to engaged customers, who in turn drive the company's growth, long-term profitability and stock price..."

Paul Michelman, 2004

There are 4 areas in which good managers excel in managing people

i) selection of staff

ii) expectation setting

iii) motivation

iv) development

These 4 are linked with 3 others

i) delegation

ii) role modelling

iii) succession planning

In selection, great managers select people for their talent rather than skills. Talent is defined as recurrent pattern of thought, feelings or behaviour that accounts for the different results produced by those with the same skills and training. Rather than selecting people whose skills match what is required, seek those whose talent will redefine how the job is done.

In expectation setting, great managers define the outcomes they seek and let each person utilize his/her individual talent to achieve them.

To effectively motivate people, good managers focus on developing the unique strengths, rather than correcting weaknesses, of each staff member. Thus they focus is on how to take advantage of what people already do well.

In development, great managers rate performance and develop the person. They realise that every person is different and should be treated as such.

Remember: success in one role is no guarantee for success in another as it could require different talent and skills

"...great managers seek the right fit for a person's talent, they work to see that he is rewarded for his performance, and they endeavour to ensure that is talent developed through progressively more challenging and meaningful assignments..."

Paul Michelman, 2005

The characteristics of the development of the manager is summarized, ie

"...Rookie managers typically exhibit

- small chunks of knowledge with weak links

- decisions and actions that are disconnected from facts and long-term considerations

After some experience, managers demonstrate

- large chunks of knowledge and well-organized, strong links

- the ability to recognize patterns and produce small sets of high-quality options

- the ability to make decisions linked to facts and the "big picture"

- good anticipation of system effects and unexpected outcomes

Fully developed leaders have

- analytical knowledge that underpins all judgments, decisions and actions

- good interpersonal behaviour and language to execute effectively..."

Rose-Anne Manns, 2006b

Effective managers discover what is unique about each staff member and capitalize on it. They know and value unique abilities (including idiosyncrasies) of the employees and they have learned how to best integrate them into the organisation and turn a particular talent into positive performance. This means they can identify and deploy the differences among people, challenging each staff member to excel. Each person's strengths and weaknesses need to be identified. Use the following question to identify a person's strengths, "Recently what was the most enjoyable thing you did at work and why did you enjoy it?" To find a person's weaknesses, invert the question: "Recently what was the least enjoyable thing you did at work and why was this so?" Managers need to build on the strengths and find other staff to compensate for somebody's weaknesses

Remember: it is self-assurance, not self-awareness, that is the strongest predictor of a person's ability to set and achieve high goals, to persist in the face of obstacles and to bounce back when reversals occur. In fact, self-awareness can be a negative. Furthermore, the most powerful trigger for performance is recognition, not money. Remember: pay for performance will not necessarily improve managerial or organisational performance. On the other hand, not having a suitable scheme for rewarding performance will not attract a right talent

It has been suggested that in the Western culture, high performers are motivated by achievement, affiliation and power. Of these social motivators, the primary one is achievement (meeting or exceeding a standard of excellence or improving personal performance); affiliation (maintaining close personal relationships) and power (being strong and influencing or having an impact on others). There are 2 forms of power motive, ie

"...personalised, where the leader draws strength from controlling others and making them feel weak; and socialised, where the leader's strength comes from empowering people......personalised is often associated with the exploitation of subordinates..."

David McClelland as quoted by Scott Speirer et al, 2006

There is a downside to achievement - it is the tendency to cheat and cut corners, and leave people out of the loop.

"...the most effective leaders were primarily motivated by socialized power: they channel their efforts into helping others be successful..."

David McClelland as quoted by Scott Speirer et al, 2006

Some examples of the different types of social motives

- people with high achievement drives tend to like challenging projects that allow them to accomplish something new. They are very competitive and like to outperform others who are successful. They tend to be utilitarian in their communications - often brief and to the point

- people with high affiliation are energized by personal relationships. They like group activities, especially with family and friends, as a basis to build friendships. They are heavy users of phone and Emails; just to stay connected

- people mainly motivated by personalised power need to feel strong and to be seen as important. They are very conscious of status and image as shown by status symbols (right car, right neighbourhood, right clothes, etc) and engage in prestigious activities (membership of the right club and having the right circle of friends)

- people mainly driven by socialised power enjoy making a positive impact. They get satisfaction from empowering people; they are energized by team activities. They like to advise and assist, whether or not the advice is wanted or needed.

In general, a CEO has to have the

"...ability to juggle"constantly dealing with myriad functions such as industrial relations, shareholder relations, government relations, competitors"He is variously required to be a commander, a negotiator, a lobbyist, a facilitator, a diplomat, a conciliator, an advocate, a counsellor and a statesman..."

Alan Jury, 2005

"...to have a pretty healthy disrespect for history. We respect performance, respect integrity but everyone was trained to have a "look forward" attitude instead of looking backwards..."

Geoff Immelt as quoted by Geoff Colvin, 2006c

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 bring responsibility 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

Furthermore, if the CEO is in a global organization, there are additional complexities, ie

"...difficulties of regulation, culture, ethics, reporting, risk management"all completely different from where everyone has a common culture, a common way of doing things, a common stock market, a common regulatory environment, a common value set. As soon as you have different cultures, different contract forms, different legal structures, different taxation environment..."

Greg Clarke (Lend Lease) as quoted by Alan Jury, 2006

Ideally a CEO should focus on no more than 6 things that the organisation needs to get right and which will have a major impact, in both the short and long term.

Based on US statistics, Dan Ciampa (2005) states that around 40% of new CEOs fail in the first 18 months, while Andrew Cornell (2005) claims that in Australia, the average tenure of a CEO is 4.5 years. Mike Hanley, (2006c) observed that some reasons for this are

- many CEOs come from a strong operations background and thus lack the expertise in the financial area required for making complex decisions on major investments, acquisitions, entering new markets, etc.. As a result, they appoint investment advisers whose task is to get the deal done rather than look after the interests of the shareholders;

- too much delegation and consequent loss of focus on the important details;

- avoidance of difficult people decisions in selection and removal;

- development of a corporate formula that does not create a value proposition for the customer;

- great strategies that do not deliver, ie lack an effective implementation or execution approach;

- the wrong balance between short-term profit and long-term growth;

- not focusing on a few pivotal, key things that the organization needs to get right;

- not treating the past with respect;

- not facing reality with markets, staff, competitors, products/services, etc

- failing to learn from mistakes, ie wrong (timing and/or technically and/or strategically, etc)

Research conducted by Boris Groysberg et al (2006) found that bringing an outsider in as CEO works best if the CEO comes from the same industry and/or brings a management team with him/her from his/her previous organisation. Some general management skills, such as setting a vision, motivating staff, organising, budgeting and monitoring performance are easy to transfer from one organisation to another. On the other hand, other management skills that are specific to the organisation, such as knowledge of idiosyncratic processes and management systems are harder to transfer. It takes a while for a new manager to develop the new skills. These skills can be defined as

- strategic human capital (the strategic expertise in cost-cutting, growth, or handling cyclic markets)

- industry human capital (technical and regulatory knowledge unique to an industry)

- relationship human capital (the extent to which an individual manager's effectiveness can be attributed to his/her experience working with colleagues as part of team)

- organisational-specific human capital (tactical knowledge about unique routines and procedures, corporate culture and informal norms, and experience of the specific management systems and processes).

The organisational-specific human capital skills are not as transferable as the others

Some potential CEOs fail to recognize that the qualities they must demonstrate to make them good managers are different from those required to be a good CEO. In addition to excelling at running businesses, CEOs must master the art of forming coalitions and winning the support of people who are competitors. Sometimes this is called the shadow organisation, ie the political side of an organisation which is characterized by the unspoken relationships, alliances and influences exerted by coalitions. Generally, once a manager becomes a designated CEO, he/she receives little actionable feedback. They must sharpen their self-awareness, and sensitivity to the wants and needs of influential stakeholders. Furthermore, they must conduct themselves with a level of maturity and wisdom. The table below shows the difference between a good and an elite candidate based on management savvy, political intelligence and personal style.

Type of candidate

Good

Elite

Management savvy

Knows what is required operationally for short-term results

Motivates others to do it

Uses time well

Prioritises issues on importance

Frequently delegates tasks

Has a history of developing staff and exporting talents

Organizes and mobilizes talent toward most significant problems

Pushes people to achieve more than they think they can

Avoids jumping in personally

Makes the right judgments about what to expend energy on

Maintains control of the key decisions and a full pipeline of talented people

Makes people feel appreciated and thus loyal

Political intelligence

Accurately reads the political trends

Understands patterns of relationships quickly in an unfamiliar environment

Builds relationships with peers and staff

Makes sure the CEO and Board know what he or she is capable of doing

Isn't labeled "political"

Recognizes how relationships are likely to affect early success

Gets peers and staff to go out of their way to help

Doesn't seem self-serving

Personal style

Is a star performer

Is tense and driven to excel

Is hard-working, readily putting in more time and effort than peers

Enthusiastically backs initiatives that will help the business succeed

Is a leader among peers

Understands new ways of doing things and makes important connections

Makes success look effortless

Allows others' performance to be recognized

Manages energy to stay on the "rested edge" and to avoid the "ragged edge"

Knows when to hold back and when to let go

Enables peers to improve their performance

Stays grounded and makes sure basic needs are met while mastering new concepts

"...quality people care about others, are excited about change and understand the need to bring people with them..."
Steve Vamos as quoted by Joanna Gray, 2015d
Authenticity = people who really know who they are
Network capability, ie how they fit into the industry, how they fit into the external elements, the customer base and within their organisation. The quality of decision-making can be determined by the focus on the network, ie how they get things done through people. With the emphasis on social media, the 1-for-1 skills involved in coaching and developing people plus performance discussions are not as well developed

The role of the CEO is unique

"...No one in the organisation is so starved for unbiased information. While CEOs understand in principle that everyone who seeks their attention has an agenda, they don't always know a bias when they see one. No one else so needs to hear hard truths. Yet in the CEO's presence, people are guarded, unwilling to raise difficult topics. No one else is such a lightning rod for criticism of the business, with all the anger, and occasionally outright humiliation, that such a role entails. No one else is the final arbiter in so many vital business decisions, and consequently, so vulnerable to self-doubt......A CEO's most important decisions fall into two categories: big bets on people and big bets on strategy.The people decisions are more important, because they heavily influence strategy decisions. They also have an enormous impact on individual careers. CEOs understand the gravity of people issues, which are scrutinised by both insiders and outsiders. They also recognise how hard it is to get the full story, particularly about the top reports..."

David Nadler, 2005

"...The more senior you are, the more the organisation watches you; they watch your every move and take their cue from you. My culture and behaviour will have more impact on this team and organisation than anything..."

Steve Vamos (Managing Director, Microsoft Australia) as quoted by Janne Ryan, 2005

"...as a chief executive you are a role model, whether you like it or not. That means how you react, how you act, very much sets the standard of the organisation. So it's not a case of do as I say and not as I do. It is a case of having complete alignment between what you are saying and what you are doing. That's very important in creating trust and respect in the organisation..."

Ralph Norris as quoted by Andrew Cornell et al, 2006

Furthermore, new senior managers (especially CEOs) need to realise that they are in for a few surprises. Once promoted to the top position, they feel that they finally have the power to set strategy, the authority to make things happen and full access to the finer points of the business. Even though they have full responsibility for the organisation's well-being, they are a few steps removed from many of the factors that drive performance. Furthermore, as they have more formal power than anyone else in the organisation, they need to use it very carefully. As Michael Porter et al (2004) states, there are 7 surprises for new CEOs:

a) they don't run the organisation

Warning signs:

i) attending too many meetings and involved in too many tactical discussions

ii) too many days when you feel as though you have lost control of your time

b) giving orders is very costly

Warning signs:

i) you become the bottleneck

ii) staff prefer to consult you before they act

iii) staff start using your name to endorse things

c) it is hard to know what is "really going on"

Warning signs:

i) things you hear surprise you

ii) you learn about events after the fact

iii) you hear concerns and dissenting views through the grapevine, rather than directly

d) they are always sending messages

Warning signs

i) stories circulate about your behaviour that magnify or distort reality

ii) staff tend to act in ways that indicate that they trying to anticipate your likes and dislikes

e) they are not the boss

Warning signs

i) you don't know where you stand with Board members

ii) roles and responsibilities of Board members and management are not clear

iii) Board room discussions concentrate on management results and decisions

f) pleasing shareholders is not the main goal

Warning signs

i) executives and Board members judge their actions by impact on stock prices and/or political masters

ii) analysts or bureaucrats/politicians who don't understand the business push for decisions that risk the health of the organisation

iii) management incentives are disproportionately tied to stock prices and/or political criteria

g) they are only human

Warning signs

i) your interviews are about you rather than the organisation

ii) your lifestyle is more lavish or privileged than that of other top executives in the organisation

iii) you have few, if any, activities not connected to the organisation

This means the new CEOs must learn to manage organisational context rather than focus on daily operations. They must realise that the position does not confer the right to lead, nor does it guarantee the loyalty of staff in the organisation. Furthermore, they are subject to a host of limitations, ie legal, administrative, stakeholders, etc

Furthermore, these surprises compound the problems facing the CEO, ie

"...loneliness of life at the top, lack of personal and family life time, and the demands of keeping up with corporate governance requirements..."

Andrew Reitzer as quoted by Sue Mitchell, 2006

Another way to look at these surprises is that once a new manager is appointed, usually they need help to overcome their misconceptions or myths about your position in management. According to Linda Hill (2007), the myths v. reality are

Details

Myth

Reality

Defining characteristics of the new role

authority - have the freedom and autonomy to implement ideas; focus on the rights and privileges of being boss

interdependency - become enmeshed in a web of relationships (importance of networks

Source of power

formal authority - can get things done; autocratic approach (staff will follow orders); don't delegate

credibilty, trust, competence and influence - need to develop credibility and trust as staff were wary and you really have to earn their respect and trust (no blind loyalty to following orders); need to demonstrate competence as a manager (knowing how to do the right things; more listening than talking; don't micro manager) and influence (ability to deliver and executive the right thing through a strong web of interdependent relationships)

Desired outcome

control - must get compliance from staff (compliance does not mean commitment); too much reliance on formal authority whose effectiveness is questionable; staff do not take initiative nor delegate

commitment - empower staff so they take initiative with managers delegate effectively and direct reports take calculated risks

Managerial focus

managing one-on-one - role is to build relationships with individual staff and as a flow-on with the team; primarily focus is individual performance, identifying and solving problems

team building responsibilities - need to create a culture that will allow the team to fulfill its potential and harnessing the collective power of the group to improve individual performance and commitment; supervising each individual is not the same as laeding a team. This involves managing interdependencies and exercising informal authority derived from personal credibility requires new managers to build trust, influence, and mutual expectations with a wide group of people; establishing productive personal relationships

Key challenge

keeping the operations in working order - job is to make sure all that the operations runs smoothly; maintaining status quo thinking; see responsibilities very narrowly; blame flawed system and others for problems

making changes that will make the team perform better - responsible for initiating changes to enhance the group's performance; acting as a change agent by challenging status quo; work through both formal and informal structure

Usually managers find a new role is

- a stretch assignment - it is considerably more demanding than anticipated; expertise to handle their previous position is different that required for the new position, ie

"...as managers, they are responsible for setting and implementing an agenda for a whole group, something for which their careers and individual performance haven't prepared them..."

Linda Hill, 2007

- learning to lead in a process of learning by doing - it is a craft best acquired through on-the-job experiences, including adverse experiences when working beyond your current capabilities, and proceeding by trial and error, ie

"...Most star individual performers haven't made many mistakes, so this is you for them. Furthermore, few managers are aware, in the stressful, mistake-making moments, they are learning. The learning that says incrementally and gradually. As this process slowly the progresses - as the new manager unlearns a mindset and habits that served him of over a highly successful early career - a new professional identity emerges. He internalizes new ways of thinking and being and discovers new ways of measuring success and deriving satisfaction from work......this kind of psychological adjustment is taxing. As one new manager notes, I never knew a promotion could be so painful..."

Linda Hill, 2007

- need to create the conditions for success - this includes asking for help (remember no ones has all the answers)

Jim Collins (2005) believes that senior managers need to be able to say "I don't know."

"...great decisions begin with really great people and a simple statement: I don't know. Research evidence on this is very clear - that the leaders who ended up setting things in place that produced extraordinary results over time, and a series of great decisions over time, really were very comfortable saying "I don't know"......but I know we have to get it right..."

Jim Collins, 2005

The CEO's behaviour can have a significant impact on strategic directions and organisational morale; sometimes this can range from good to disastrous. Powerful CEOs are perceived as strong leaders; even physical appearance plays a part:

"...in the US population, about 14.5 % of all men are six feet or over. Among CEOs of Fortune, that number is 58 percent..."

Malcolm Gladwell as quoted by Catherine Fox, 2006h

At one extreme are the alpha males who are the dominant high achiever who

"...want to take charge; are charismatic, aggressive, competitive, bold, creative, persistent and tenacious. They also have a strong appetite for change, are far-sighted and spot problems..."

Catherine Fox, 2006h

Sometimes they can be a disaster

An interesting development has been the change in emphasis in the advice that senior management is seeking. The focus is more on management style and behaviour, and less on strategies and key business issues, ie

"...What's fascinating about the emergence of the 'CEO shadows' is that so many of our senior people still feel they need help with the people issues. It's a mark of just how crucial people are to the success of business in a knowledge economy..."

Helen Trinca, 2006a

On the other hand, a dysfunctional executive would show some of the following characteristics:

- abrasive behaviour

- poor role model, ie not setting a good personal example

- hoards information

- micromanages

- doesn't take responsibility for actions

- takes all the credit for successful activities

- not willing to engage in self-evaluation

- handles feedback poorly

- not planning for succession, etc

Some mistakes that senior managers make (Rose-Anne Manns, 2008b)

- letting their egos dominate

- becoming arrogant and self-opinionated

- not willing to listen and learn as the past achievements are history and not necessarily relevant now

- not willing to delegate, ie not willing to relinquish control over tasks that they were previously successful at

- not realizing the loneliness of being a senior manager and the need to find trusted people outside the organisation to bounce ideas off, such as an executive coach.

- moving to slowly, ie become paralysed by analysis

- not identifying some early wins to get momentum going and stakeholders on side

- not managing upwards effectively

- not communicating enough to all stakeholders, including staff, customers, etc

- over-promising and under-delivering

 

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