Four Secondary Management Practices

The study found that it was not important to go beyond 2 of the 4 secondary practices, because there was no particular financial gain after achieving 2

1 Talent (hold on to talented employees and find more)

One of the best tests for talent in an organisation is the ease with which a senior executive, who leaves, is replaced from within. Furthermore, it is much cheaper to develop a star than it is to go out and buy one. Also, it is more reliable, because the organisation is getting a known quantity, and in the post-Internet boom, worker continuity and organisational loyalty is important.

Talented staff are just as valuable and hard to replace as loyal customers

Fill mid- and high-level jobs with outstanding internal talent whenever possible. Successful organisations have a distinct preference for developing and promoting their own stars and an ability to retain their top performers

Create and maintain top-of-the-line training and development programs that can prepare staff for new jobs in the organisation and create conditions that encourage, rather than penalise, them for taking time away from their jobs for development.

Upwardly mobile staff are not solely responsible for preparing themselves for higher level positions; the organisation has a responsibility as well

Design jobs that will intrigue and challenge your best performers.

Keep senior management actively involved in the selection and development of people, ie succession planning.

Talent-rich organisations tend to attract able people from outside an organisation

2 Innovation (industry-transforming innovations)

Innovation is difficult.

An agile organisation turns out innovative products/services and anticipates disruptive events in an industry, rather than reacting when it may already be too late. This needs to be more than a marginal improvement to existing products.

Relentlessly pursue disruptive technologies to develop innovative new products and services that have the potential to transform your industry.

Seek innovative ideas from all sources both inside and outside the organisation/industry

Don't hesitate to cannibalize existing products and do resist the temptation to wring every last cent out of an existing product/service before introducing another to take its place.

Apply new technologies to enhance all operating processes, not just those dedicated to designing new products and services.

3 Leadership (find leaders who are committed to the business and its people)

Choosing great chief executives can raise performance significantly, ie CEOs can influence 15% of the total variance in an organisation's performance. Furthermore, the choice of CEO is just as important as whether the organisation stays in the same industry or enters a new one

Some common attitudes to leadership that are not important include the type of decision-making (whether independently or in collaboration with senior management; whether or not management relies on quantitative or qualitative assessment; personal characteristics such as being visionary or detail-oriented, secure or insecure, patient or impatient, charismatic or quiet, etc)

Skills and qualities that do matter include ability to build relationships at all levels in the organisation and to inspire the rest of the management team to do the same. In fact, senior management personnel who see themselves as fellow employees rather than masters can foster a more positive attitude. Furthermore, encourage management to strengthen its connections with people at all levels of the organisation.

Closely link the leadership team's pay to its performance.

Inspire management to hone its capacity to spot opportunities (before competitors do) and problems (before they become troublesome nightmares).

Appoint a Board of Directors whose members have a substantial stake in the organisation's success. They need to understand the business and be passionately committed to its success. These are more important than governance

4 Mergers and Partnerships (seek growth through mergers and partnerships)

Internally-generated growth (by innovation, etc) is essential, but organisations that can master mergers and acquisitions can also be winners. Many relatively small deals are more successful than a few, big deals

Enter new businesses (whether cross-selling opportunities, economies of scale, market shares, etc) that leverage and/or complement existing supplier and/or customer relationships and enhance core strengths. Do not enter deals to diversify into areas far removed from the core business.

When partnering, move into new businesses that make the best use of both partners' talents.

Invest substantial resources into the merger/partnership's establishment and development, including developing a system for identifying, screening and closing deals

(source: Nitin Nohria et al, 2003)


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