Managerial literature

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Dedicated to all the people at Motiv

to have inspired me since 1996.

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František Hroník

MANAgerial INTEGRITy

Chief Editor: Martin Moravec

Translation and language revision: Alfa CZ

Technical editor, typesetting and cover: Jiří Mičkal

Published by Motiv Press s. r. o.

Řehořova 14, Brno 618 00 Czech Republic

e-mail: info@motivpress.cz

Tel.: +420 777 668 472

www.motivpress.cz

Number of pages: 152

First English edition

Brno, 2014

© František Hroník, 2014

© MotivPress, 2014

ISBN epub 978-80-87981-10-8

ISBN mobi 978-80-87981-11-5

Praise for Managerial Integrity

I was fascinated by the book. To me, it is a truly absorbing read about business and HR, one of the best I have ever read. Theory and practice are combined well, it is easy to read and hard to put down. This book has my utmost respect and praise.

Dušan Gábor, Director of Human Resources at a leading Business Service Company

Managerial Integrity is a thought-provoking book on how to manage successfully in today's complex work environment. Each chapter contains valuable insights and I particularly identified with the lessons on trust and trustworthiness – essential elements that are too often missing in corporate life.

David Lambert, author of Smarter Selling: How to Grow Sales by Building Trusted Relationships

Dr. Hronik has masterfully integrated and synthesized scientific research, stories full of wisdom, and his vast experience to create a guidebook for managers in how to lead ethically and create a culture of integrity within their organization.

Dr. Paul Marciano, Author: Carrots and Sticks Don’t Work.

The business world today places considerable demands on performance, results, and profit. Managers must resist the pressures that come while finding a way to succeed. Maintaining our integrity is challenging and when we lose our integrity, we lose our trustworthiness. This outstanding and unique book is a practical tool to help the reader maintain moral integrity while producing excellent results!

John G. Miller, author of QBQ! The Question Behind the Question and Outstanding! 47 Ways to Make Your Organization Exceptional

No book can make a manager. This one, however, will move you far forward in your quest to become a true leader. It will help you realise the importance of acting in accord with yourself, with others and with your company’s long-term benefits. If you long for your staff to say, “It was an honour to work for him/her”, then František Hroník’s book Managerial Integrity is the one for you.

Radovan Musil, Senior Director, Software Engineering, Red Hat Czech

As has been the case with František Hroník many times before, I was astonished. I was astonished by the view from above with which the issue of integrity can be understood. How contemporary integrity is. The way in which integrity is connected to other “managerial terms”, such as performance, motivation, corporate culture. None of the chapters were simply dry theoretical views. Instead they were captivating reading, illustrated by up-to-date, “in” examples from the world today, from contemporary life, reading in which the author brings together that which would seem incompatible in a very compact whole. And so it is that you find Welch alongside Kipling, the film Braveheart, footballer Patrik Berger and much more.

Ondřej Slabý, HR Director at Coca-Cola HBC

I say what I think. I do what I say. This has perhaps always been the way I work. The modern manager comes face-to-face with many situations every day, situations in which it is hard to find your way and when you need an imaginary North star to point you in the right direction and help you decide. For me, this has always been integrity, the chiming of my values and conscience with my actions. František Hroník’s book describes connections that were entirely new to me very understandably, using plenty of examples and analogies, helping me better understand many aspects, and within a wider context. Stories, intelligent and understandable graphs and even a poem explain how important it is never to deviate from your North star. I would recommend the book to all those who believe that work is not just a duty, that trust accelerates relations and that values are the foundation of a company.

David Vrba, CEE, 3M

The book of Fr. Hronik, Managerial Integrity, is listing and explaining a portfolio of managerial competencies, ranging goals, values, emotions and communication, to commitment, conflict, control, performance, decision making and moral integrity, among others. The text is higly motivational, interspersed with illustrating stories, compiled from a number of well-known authors and books from different cultures and circumstances. The book is especially useful for top managers who wish to motivate their employees with well-selected statements requiring not only their brains but also emotions, heart and empathy.

Prof. Milan Zeleny

Foreword

The integrity question mark

I never really thought about integrity in its own right. It always seemed something of a matter of course. Another reason I did not think about it was that I never had the feeling that something had changed in me or that I was doing something I did not myself believe in or that would not be important and good for those around me.

I began having questions about integrity when I became part of a work mechanism that wanted to and had to work in a particular way. By this I mean the team I work within and the management role I decided to take responsibility for. I always see integrity within the context of how much I believe in what I am doing, whether I am being myself and whether I act accordingly; whether others too believe in what I believe and whether it moves things forwards, towards the expected results we want to achieve as a team.

I always notice integrity when deciding between what I think it is right to want to achieve and what others think. I have found myself in various situations that are “on the edge”. When taking a decision, it has always been important to me to find a common intersection of principles. If you are leading a team (is there any other way of working these days than as a team?), there are times when you all have to identify with a particular decision. Such identification can come about for a variety of reasons, whether individual or shared. Only in this way can the whole team work towards the same objective, achieve something together and individually at the same time. I find it encouraging that the longer I work in my profession, the more I am aware that integrity is important to me and that it is just as important to most people around me. It is not simple, however. When you are overly convinced of being right, it is harder to find those common points of intersection – they are, of course, all the more reliable for it; you attend to them and appreciate them more.

The old adage of “practice what you preach”, of not drinking wine when you preach water, would seem to sum up the essence of it all.

However, does this mean that if you drink wine, you are lacking integrity? I am not sure if it is a contradiction, but if it is a way to make sure everyone is pulling in the same direction to achieve a common objective and you are still able to drink a glass of pure water, you have a chance. I am certain that František’s book will answer this question for many of us.

Anetta Gergeľová, Head of HR Department, Novartis s.r.o.

Foreword to English edition

I was honoured to be given the opportunity to write a few words about František Hroník’s book about managerial integrity. Before I opened the book and began reading, I thought to myself for a moment.

What is integrity? Do I understand what it means? How many forms can integrity take in practical life, in working and personal life? What makes managerial integrity specific? Things from my life began coming back to me and I reflected on how I am when it comes to integrity myself. I remembered situations from my own managerial experience and my private life in which I was not sure at all that I was acting with a sense of integrity.

I brought my rumination to a close by asking the question of how engagingly and convincingly a book about integrity can be written in this day and age. At a time that is dynamically fast, when morals are pushed to one side all too easily for the needs of short-term goals objectified in material packages, perhaps in the shape of annual bonuses.

Then I opened the book and began to read. And as has been the case with František Hroník many times before, I was astonished. I was astonished by the view from above with which the issue of integrity can be understood. How contemporary integrity is. The way in which integrity is connected to other “managerial terms”, such as performance, motivation, corporate culture.

After getting an initial feel for the book as a whole, I went back to look at individual chapters. None of them were simply dry theoretical views. Instead they were captivating reading, illustrated by up-to-date, “in” examples from the world today, from contemporary life, reading in which the author brings together that which would seem incompatible in a very compact whole. And so it is that you find Welch alongside Kipling, the film Braveheart, footballer Patrik Berger and much more.

My many years of experience at several multinational companies mean that I have come across various approaches to corporate codes of morals and ethics. František’s consideration of examples of the ethical principles of major corporations (General Electric, ČEZ) and other organisations (Motiv P) provides this area with a bit of humanity and reduces the formality and unreadability of documents themselves.

If I had to conclude with one idea or response that I take from reading the book, it would be the issue of “managerial maturity”, an issue that is seldom touched on. We often ask in our managerial work if this or that candidate is mature enough, senior enough, ready for such or such a task or role. Thanks to Managerial Integrity, I get the feeling that the word “maturity” has found deeper content and clearer connection to values, trust, morals and authority; meaning integrity.

Enjoy reading …

Ondřej Slabý, HR Director at Coca-Cola HBC

About the Author

František Hroník, PhD

You have in your hands the most celebrated work of one of the most prominent personages in the field of the psychology of work in the Czech Republic and Slovakia. Dr. Hroník has twice been nominated for manager of the year (2008 and 2012), and in both cases was a competition finalist.

He is a qualified and practising psychologist, who has been operating within a company environment since 1996, when he founded his own educational company, known for its e-learning products (virtual courses, psychology tests, e-360° feedback, etc) and innovative approach to creating systems for education and the creation of tailor-made developmental programmes. He works primarily as a consultant and coach for top management and a lecturer in tailor-made programmes for management for large multinational companies, including AHOLD, BAYER, Commerzbank, ENEL, GE Money Bank, GlaxoSmithKline, Novartis, Philip Morris, Red Hat Czech, Siemens Czech Republic and UniCredit Bank.

He is the author of 11 publications for management and human resources, and lectures on the subject of Managing People on MBA courses. He lectures at professional conferences, and publishes in professional journals. He holds inspirational educational events for managers, at which he presents innovations from various fields (primarily HR and management). Dr. Hroník also successfully creates programmes for conferences, featuring presentations by eminent managers, and the conferences are renowned for their connection with themes “from outside” – from the fields of sport, medicine and art.

Introduction

My colleague Michael Chytrý often teased me after the publication of my book Tales of Management that it was the first of my books that you could read – the others you had to study. He mentioned this once and it was mentioned, just by the way, by Mrs. Hana Krbcová, a true lady among personnel officers, that she had no books about managerial integrity that you could read. Could I not, perhaps, write one? So the very next day I began writing down everything such a book should include. This came at a time when I was involved in some inspiring discussion of integrity in practice with Milana Hrubá, a lady of clear and precise insight into a wide range of managerial situations. I met her at a company that had integrity defined as a competency and that was also the workplace of Anetta Gergeľová, whose will, application, and conscientiousness simply embodied managerial integrity in my eyes. I was also able to discuss values in business and in politics, where interests often win at the expense of values, with David Mack, an incredibly learned man, who introduced me to Lubomír Mlčoch, author of The Economics of Trust (original title: Ekonomie důvěry). There were, of course, other inspiring people that I was able to get to know better. I apologize for not naming them all. Among them are colleagues from Motiv that were my inspiration in a host of ideas. This book I dedicate to them. It is a book to be read and one that offers an understanding of my view of management. There is one other member of the Motiv team that I should mention, a person I have worked with for many years now. We began, in fact, before Motiv even existed. That person is Jana Dorazilová, who has the ability to read other people’s integrity with incredible speed.

I am delighted that I could again write a book that is not about methods. That in itself, though, would not be enough. I am aware that many people – managers being no exception – long for manuals, instructions that will work. We live at a time when the method is sometimes given more importance that the purpose or principle. One example here is the ever-developing concept of individual coaching. One authority urges us to check a company or person that offers individual coaching to find out whether some element of management is not concealed beneath their coaching. A person having completed a certified coaching course will say that a coach need not actually know anything about the business of the company where his charge works. This is confusion of language and thought. The method is placed above the purpose. There are many ways (methods) of reaching the destination and I will choose the most appropriate.

We are now faced with the most diverse range of situations and there is no universal guideline to deal with them, no single, correct method. We are, however, capable of understanding what is going on, what has always been here and what is simply a mark of the times. We can grasp principles and use these to find or create an approach, a way, a method to take us towards the objective. The need to find a stable point within ourselves is even greater in the world today, when all around us there is speed and uncertainty, when we move around an environment that is unstable. Managerial integrity is essential kit for a managerial environment that is particularly notable for its turbulence.

My hope is that Managerial Integrity is an inspiration and puts us in mind of the supporting principles of management. The book is not a story, so I am unsure of whether it will require study. It is not written for the reader to devour in one gulp – it will hopefully provoke some thought.

I will close here on a personal note. I thank my family, Jana and the children, for the patience they show when I am writing and cannot be with them.

Let’s begin with a word about principles.

“It is impossible for us to break the law. We can only break ourselves against the law.”

Cecil B. DeMille on his film The Ten Commandments.

Stephen R. Covey differentiates between principles and values.

He contends that principles are the territory or the compass and values are the map: “… the map provides description, but the compass provides more vision and direction.”

(Covey, S.R.: Principle Centered Leadership)

I have created a slightly different image of principles for myself. Different routes can be found to different destinations on the interactive map. Obstacles, places of danger and places where you can recharge the batteries all appear along the way. You can also change the destination. Perhaps you will not change the meaning and sense you attribute to the path. Nor will you change the principles.

The principle is that when you go uphill, your center of gravity is in front of you, whereas it is slightly behind you when you go downhill – otherwise you risk taking a tumble, even though you might move forward more quickly.

This change of your center of gravity might be a principle.

I also talk in the book of the thoughts of people I have unfortunately not met or spoken to face to face. All the writers quoted and presented in the Literature section were of inspiration to me.

I would, however, like to mention a few in particular: W. Bennis, S. R. Covey, P. F. Drucker, F. Fukuyama, C. Handy, J. F. Kennedy, J. Kotter, G. Lipovetsky, J. Magretta, K. Nordstrom, C. K. Prahalad, J. Ridderstrale, P. Senge, J. Sokol, R. Sprenger, H. and A. Toffler and J. Welch.

All these writers make you reflect on things and think them through. Each of them has a strong opinion.

Each is a “king” or a “lion” and I will talk about The Lion King in the chapter about Courage. I had to learn about them all, but how did it work out? Judge for yourself

The fundamental role of management

There have been managers since time immemorial. Just as there have been sawbones, doctors if you like. Not much has changed in those years, centuries, and millennia. In terms of objectives, that is. For the sawbones, the objective was to cure the patient. The tools of the job might have changed, but the objectives remain the same.

Managers transform the expertise and abilities of others into the effectiveness of the whole. The word “transform” sounds almost spiritual. For it to be such, we need to go further. A simple chart is not enough. We must ask the question,

“How do managers transform the expertise and abilities of others?”

They mainly use locomotive forces and cohesion. These are the two forces without which transformation cannot occur. This complicates the original chart a little, although it remains technically correct.

Other variables have a crucial influence on effectiveness in addition to the competency of experts and the two strengths of managers: principally mindsets and shared values. Their inclusion changes a relatively static diagram into one that is dynamic.

We will consider mindsets and shared values later.

Effectiveness and efficiency

Many authors distinguish between effectiveness and efficiency, claiming that effectiveness itself is not enough. Charles Handy sketches out this difference quite clearly, saying that our passion for effectiveness itself leads to deformation. If we cannot look at effectiveness from the right angle, it might happen that we find ourselves in a position in which we work so hard on effectiveness that we forget the original sense of our actions. Effectiveness is not always synonymous with efficiency. Electronic and voice mail are excellent additions to business life, incredibly effective in terms of fast personal communication. They are so effective, in fact, that the manageress of one large consultancy group once complained to Handy that her staff spent so much time listening to and answering the messages they receive that they had completely stopped thinking. Is this effective? Yes. Is it efficient? Handy is not so sure.(Adapted from Handy, C.: The Hungry Spirit)

The three types of effectiveness

Robert Kuttner (in Charles Handy, The Hungry Spirit) defines three different types of effectiveness. Each of these is named after the economist that corresponds to that effectiveness:

> Smith effectiveness

> Keynes effectiveness

> Schumpeter effectiveness

SMITH EFFECTIVENESS

Smith effectiveness makes sure that products are made in the right place at the right cost and are sold at the right price (a competitive price). Having Smith effectiveness means keeping nothing in reserve. That is why it is accompanied by a cost strategy and, where appropriate, a strategy for expansion or expansive retention of market share. Smith effectiveness ceases to be effective when there are “too many dogs fighting over the one bone”. To be effective, you need to have a finished product, to improve processes, and to respect the rules of the game.

KEYNES EFFECTIVENESS

If an organization, or an entire economy, is “operating” at a level below its possibilities, the opportunity exists to launch its turnaround by stimulating demand. Workers, for example, are “kept in supply”, “stockpiled”, are supported in different ways so that they are available when required. This leads to debts that are then paid off by later results.

SCHUMPETER EFFECTIVENESS

Schumpeter effectiveness is the most commonly stressed these days because it requires more than a sprint along a marked-out track (Smith effectiveness); it requires the search for new paths. Here there is time to think about how to do things differently. Only in this way can an advantage be maintained in the long term. Schumpeter effectiveness is accentuated in books such as Blue Ocean Strategy by W. Chan Kim and Renée Mauborgne. It is linked to the strategy of differentiation and the culture of friendly experiments. To apply Schumpeter effectiveness, you need to have sufficient resources.

We expect the manager that works at an organization that practices Smith effectiveness to behave differently to one at a company that applies Schumpeter effectiveness. Different types of effectiveness are more or less effective with regard to the situation. Individual cases of effectiveness are not contrasting in principle and so the manager should look at a situation through different glasses, always using the right tools and methods.

Increasing the effectiveness of an organization

Regardless of whether our organization is more Smith or Schumpeter, the following two areas exist for us to apply our approach:

> the effectiveness of processes;

> the effectiveness of people.

The x and y axes are not dependent on each other. It is impossible to maintain the effectiveness and sophistication of processes if you have ineffective (unmotivated) people. And vice versa: you will not keep highly effective and motivated people in routine work.

A manager is expected to be able to manage the effectiveness of people and processes to the maximum possible extent and with balance.

We have thus far concentrated mainly on the effectiveness of people and this is how we aim to continue. I mentioned the effectiveness of processes for the sake of completeness and to provide an understanding of contexts.

To see the whole picture and capture the entire area in which a manager must operate, I use a diagram with four different fields, marked out by the axes of processes – people and strategy – ad hoc routine operations.

All managers, including managers in the front line, operate in all four quadrants. It is highly likely that the focal point of activity of the general manager will fall within the 1st quadrant (strategy and processes), whereas a foreman will mainly operate in the 4th quadrant. What is more, what quadrant 1 actually involves, the content, will differ for the general manager and the foreman. To the foreman, for example, it might involve, “What do I want to improve in the running of the whole cycle I am in charge of?”

I should add a short comment in explanation of the diagram: The 1st quadrant mainly signifies a notion, a system. The 2nd quadrant involves transferring notions into the heads of other people so that they take them on as their own. Quadrant 4 (if we go clockwise) means the everyday application of the shared notion. Quadrant 3 focuses on appraisal, feedback, and specifying or adjusting the whole procedure. We get things moving (locomotive force) by passing clockwise through the quadrants.

The performance-oriented culture

It might seem inconceivable that a commercial organization could have any culture other than one that focuses on performance. We even expect managers at non-commercial organizations to put in a performance that has a recipient at the end in the shape of an internal or external customer.

A movement sometimes appears to protest against the culture of performance and conformity. The last such movement of any note was that of the Hippies in the 1960s. It was an outpouring of the views of the generation, of people not wanting to live the same way as those before them. The thing was, though, that Lennon, the Beatles, the Rolling Stones, and other bands became factories, out-and-out companies. We have been living in a culture that focuses on performance for centuries now, with only a few periods of interlude. A culture that is fully focused on performance asserts the management of excellence. Do you know who won the gold medal in the men’s 100-metres at the Olympics in 2008? It was a few years ago, but many people know that it was Usain Bolt. Few have any idea who came second. Similarly, we can all name the first man on the Moon, but might have problems remembering the second. One motto at General Electric says “today’s record, tomorrow’s standard”. This places pressure on performance. However, our outlook cannot end with performance, even in a performance-oriented culture. We need to ask questions about the sense of our business so as not to fall into a trap, like a mouse that runs itself to death on its wheel.

So, is making profit the sense of it all?

I have a provocative response to questions of this sort: the sense of doing business is not to generate profit. Profit is required and without it we would be hard pushed to fulfill the basic task of any organization; meaning to effectively serve the people it should serve. These people come from outside the organization and so the sense of an organization cannot be within – it does not exist for itself alone.

All organizations exist for their customers, to whom they bring value or use. To be able to provide this value or use, they must create profit and relationships of trust. Profit and trust, however, are a means within an organization as opposed to the objective. Trust, by contrast, is an objective in a natural group like the family.

We have simplified the world of cultures and strategies to provide a certain level of clarity. We can now add various concepts of effectiveness to this world.

The tough guy culture is an individualistic culture in which everyone competes with everyone else and there is nothing older than yesterday’s success. This was what it was like at Welch’s GE. In contrast to this is the culture of friendly experiments, a team culture, an innovative culture (adapted from Deal, T. E. and Kennedy, A. A.: Corporate Cultures: The Rites and Rituals of Corporate Life). NOKIA, whose market share significantly outstrips the competition, is one company with such a culture. The play-it-safe culture might look different depending on the strategy. The main points in both forms are not to make mistakes and to have good quality “brakes”. Most companies in the automotive industry (suppliers to the motor industry) have a culture that involves the strategies of safety and cost.

The typology of corporate culture according to T. E. Deal and A. A. Kennedy is based on how the external surroundings create the internal environment in which the manager and his staff operate. Strategies act in the same way. Why, though, am I talking about this in a book about managerial integrity?

A manager needs to know how to read the environment he operates in. To understand it. To respect it. He can then forecast what will happen, adjust accordingly and change.

What, then, is the fundamental role of management, of the manager?

We have come up with the following so far:

Managers transform the expertise and abilities of others into the effectiveness of the whole.

I illustrated this sentence with several examples, in most of which the function of locomotive force is evident. Managers understandably put things in motion. This is not enough, though – they need to bring people together and create cohesion.

When applying locomotive force, the role of the manager is often a differentiating one; in the case of appraisal and reward, for example. However, it is an integrating role when creating cohesion.

We can now expand somewhat on the fundamental role:

We will return to commitment later in the book. For now, though, it is enough to say that commitment is an unwritten psychological contract. It is not about fervent solidarity or zealous identification with an organization.

How else could we begin defining the basic role of management than with Drucker, who wrote that:

the task of management is to productively use human capabilities. The move toward workers with knowledge and the continual improvement of the ability of the labor force mean increasing the potential of human capabilities in advanced countries in a way that is massive and practically unprecedented. In fact, it is the situation that makes them “advanced” countries. In spite of this, however, we can say in general that management in advanced countries has not taken the initiative and is not trying to transform this potential into actual responsibility and civil consciousness.

Specifically, we must make sure that employees at all levels – from the lowest to the highest – are entrusted with genuine responsibility for the community matters of their business and responsibility for the elaboration and administrative provision of non-salary benefits. They must take responsibility for setting objectives for their own work and for targeted self-management and self-control.

They must take responsibility for the continual improvement of the running of the whole business, what the Japanese term “continuous learning”. They must be responsibly involved in thinking through and setting out corporate objectives and plans and in taking corporate decisions.

(Adapted from Drucker, P.F.: Managing in Turbulent Times)

A man of many firsts was American president W. H. Harrison, a highly effective man from a certain point of view. He gave what is to this day the longest inauguration speech of any incoming president. It lasted two hours and was given in freezing cold weather on 4th March 1841. The president took ill and died of pneumonia exactly one month later, on 4th April. This meant another two “firsts”: he was the first president to die in office and to date the president with the shortest term. The efficiency of his term, however, is not open to question.

Effort and results

Effort and results are subsets of the terms effectiveness and efficiency. As a manager, I quite often hear people offer a defense based on how much effort has been invested in this or that. A report is sometimes a presentation of everything a person has been working on, but it is rare for us to find any specific results. Those are on the horizon. Results are the natural desire of every true manager. They are, however, not enough. The results we achieve must be of value to someone (the customer).

Production and production capability

S. R. Covey distinguishes between production and production capability.

This distinction he explains using the example of the goose that lays the golden egg, the goose from Aesop’s fables that the impatient peasant cuts open and guts so he can get as many golden eggs as possible at the same time. The golden egg in this fable is production and the goose is the symbol of production capability.

According to Covey, effectiveness is based on the balance between P (production) and PC (production capability). Unfortunately, most people see effectiveness from the perspective of the paradigm of the ‘golden egg’: the more you produce, the more you do, the more effective you are. The fable, however, shows that genuine effectiveness is a function of two factors: what you produce (golden eggs) and the sources of production, meaning the capability to produce (the goose). If you adopt a way of life that focuses on golden eggs and do not care for the goose, you will soon lose the source of production that creates the golden eggs. On the other hand, if you only look after the goose without the objective of getting golden eggs, you will soon be faced with the problem of whether you should feed yourself or feed the goose.

(Covey, S.R.: The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change)

The difference between the role of manager and expert, or “How to get a square peg into a round hole”.

The movie Apollo 13 provides us with an illustrative example of the difference between how managers and experts think. Experts converge on the leader of the rescue operation and hit him with the news:

“Jean, it looks like we’ve got oxygen trouble.”

“We’ve got CO_2 problems.”

“There are five filters.” “Enough for two men and a day and a half.

I told the doctor …”“They’re at eight units already.

If they go over fifteen, we’re talking about disrupted perception, vision and so on.”

The commander enters the discussion, full of limits as it is, and says, “What about the filters in the command module?”

The expert replies, “Those are square …”, “but round in the lunar module,” adds another.

Commander: “Don’t tell me we can’t sort it out.”

“We didn’t count on this sort of situation,” replies one of the experts, again talking in terms of limits.

Another adds, “The CO_2 is becoming poisonous...”

The commander does not let the expert finish: “We have to work out how to get a square peg into a round hole. And fast.”

The experts are thinking in terms of limits. The manager in terms of opportunities. Thinking in terms of opportunities is something that takes the limits and overcomes them. It is not detached from them. The manager needs experts and they need the manager.

Managers and experts were poles apart before the launch of the Challenger space shuttle. In fact, the managers did not take the experts seriously. They considered their limiting approach to be a complication to be circumvented. Engineers had warned of the risks involved in the coupling rings some 6 months before the disaster. An in-house meeting was even held at Morton-Thiokol (manufacturer of auxiliary rocket engines) just a few hours before the fateful launch. Two engineers were vehement in their claims that the launch had to be stopped because of unfavorable weather conditions, which increased the risk even further. The meeting was memorable for one utterance, something in the vein of, “Take off your engineer’s hat and put a manager’s hat on.” And that was the beginning of the end for Challenger. It became clear during the investigation just how differently experts and managers viewed risk. Engineers on the ground claimed the likelihood of an accident was 1:100, whereas the managers thought it to be 1:100,000. This was nonsense, because if true, a disaster was not likely for at least another 300 years, even if a space shuttle was launched every day.

There is a lot of talk of corporate social responsibility. In a famous article from 1970 (The Social Responsibility of Business is to Increase its Profits), in which he follows up his book Capitalism and Freedom, Milton Friedman stresses that it is not companies that have social responsibility, but managers or owners, meaning specific people. He infers in the article that the manager’s social responsibility is to generate profit whilst respecting open and free competition without fraudulence or deception. Other authors stress that success and social responsibility are bound to each other.

Charles Handy offers the example of the co-founder and spiritual father of Hewlett Packard. Handy writes that just before he died, David Packard asked himself, “Why are we here?” It was Packard’s view that many people mistakenly had the idea a business exists solely to make money. Of course, money is an important part of the existence of a company, if it is a company worth its salt. Results, however, are not the sense of its existence. We must go deeper to find the real reason for its being. During this search, we unavoidably reach the conclusion that a group of people get together and co-exist as the institution we now know as a company so that they are able to collectively achieve something they would not manage on their own, to bring something to society. It might seem a well-worn phrase, but it is of fundamental significance.

(Adapted from Handy, C: The Hungry Spirit)

Organizational culture, business strategy, accentuated effectiveness, a changeable market, and the distinctive notions held by customers all generate the conditions for an individual reaction. The fact that a manager did well at one company is no guarantee he will be as successful at another company where the shared expectations are different.

I have seen many managerial transfers “from one quadrant to another” that have failed. This was not caused by personal qualities or a motivational deficit, but by the incompatible action of the person and the organization.The action of the manager aimed to repeat a successful template without taking the change of situation into account.

Prahalad and Ramaswamy write in their The Future of Competition that it is very important to realize that managers are as varied as customers. You will not find two managers reacting in the same way to the same event.

(Prahalad, C. K., Ramaswamy, V.: The Future of Competition. Co-creating Unique Value with Customers)

The degree of uniqueness increases on all sides.

Joan Magretta writes that the actual contribution of management resides in its ability to transform complexity and specialization into effectiveness. Given that the global economy is based more and more on the use of specialized knowledge and is becoming more and more interconnected, work will become more – and not less – specialized and complex. Meaning that management will play a greater – and not lesser – role in our lives. This also creates a paradox at the very heart of modern economics: the more educated and specialized we become, the more we need others to be able to put in performance.

(Magretta, J.: What Management Is. How It Works and Why It's Everyone's Business)

The two tasks of a manager

A manager, whose fundamental role is to use the ability and expertise of others to achieve results as a team, needs to fulfill two tasks: to define the situation and delegate responsibility. This is true for all organizations, regardless of whether they emphasize productivity according to Smith, Keynes or Schumpeter.

“The only way to make sense of the future, whether in organizations, society or in your personal life, is to take that future into your own hands, and not just react to it.”

(Handy, C.; in Gibson, R. (ed.): Rethinking the Future)

DEFINE THE SITUATION

Defining the situation means assessing the current situation and the target outcome and, above all, being the one who has the situation under control, the one who defines it. The manager who defines a situation is not being pulled in its wake, is not just reacting. Quite the opposite, in fact: the manager is the one shaping the situation. Managers do not allow subordinates to shape the situation, even though they take their initiatives seriously and allow themselves to be inspired by them.

DELEGATE RESPONSIBILITIES

Simply defining the situation is not enough. We need to involve others in the solution. This is best achieved by giving people responsibility, without giving up our own share of that responsibility. At the same time, we need to guard against upward delegation.

SELF-REFLECTION

Write down the significant decision-making situations you have encountered in the last month. State at least 3 situations. For each situation ask the following questions:

> Did I drive these situations or was I just reacting and accepting the definitions of others?

> Who walked away with what tasks? Did I prevent any upward delegation?

> Did I choose a partnership approach when the other side accepted my definition of the situation?

When reviewing events and how I have acted, I have to concede time and again that I am far from the ideal manager. I am frequently guilty of allowing upward delegation. It happened, then, in 2007, that I was the director of a consulting and training company and the most productive of its 60 employees. This is wrong! I failed in one of the two tasks of management – delegating responsibility.

About methods and principles

I mentioned in the introduction that I am happy to be writing about principles again rather than methods. Perhaps I should explain this remark. It is obvious that the two go hand-in-hand. I can adapt and even create methods based on principles. And if I come across a method which looks interesting, I can set about framing it within a set of principles. The result is that I am a consistent manager - not a mosaic manager, meaning someone who arbitrarily uses whichever method is popular at the time. If I did that, I would become, to use Abraham Maslow’s phrase, a man who has learnt to use a hammer and sees everything around him as a nail.

Defining the situation and delegating responsibilities are principles and to these principles we can assign a whole range of methods from a variety of management manuals.

The movie “The Horse Whisperer” offers an excellent illustration of good managerial behavior. One scene, lasting for about six and a half minutes, is able to show in this short space of time everything important about how to lead. The scene starts with the first meeting of Tom and Grace.

If you have not seen the film or cannot remember the scene, here is a short summary:

Annie is a manager in Manhattan whose daughter Grace is seriously injured in an accident and loses a leg. Grace’s friend dies in the accident and her horse, Pilgrim, very nearly dies too. The accident leaves both Grace and Pilgrim scared and bitter. Annie does not want to accept this and packs her daughter and horse “into the car” and drives them three-quarters of the way across the United States. Not one to hesitate when it comes to piling pressure on her subordinates or family, she tries to deal with Tom, the horse whisperer, in the same way. The others involved - Grace, Pilgrim and Lester – also try to define the situation for Tom. But Tom does not give an inch. Instead, he is the one to define the situation. He does not allow Grace to discourage him and does not force the issue. Neither does he follow Lester's advice not to get too close to Pilgrim. Pilgrim warns Tom off by breaking a few planks, but Tom continues regardless.

Neither does he let himself be hemmed in or maneuvered into a dependent position when Annie tells him that nobody has ever got as close to Pilgrim. He does not allow himself to be drawn into discussions on whether Grace will find riding again difficult because of her amputated leg. He answers, “It’s all the same to me whichever way you look at it, because she’s gonna ride him.”

When Grace tries to talk about the problem, he answers her unambiguously, “you either want to or you don’t.”

Grace agrees that she will try, but her words imply that she is shirking responsibility: “There is nothing else to do here anyway”. This does not satisfy Tom, and he walks away, saying that he can’t help her.

The scene finishes with Grace calling out, “So what do I have to do?” She has finally accepted her responsibility. She has accepted that it is her responsibility to work on herself.

(Incidentally, the scene begins with Grace defining boundaries by telling Tom not to count on her at all.)

When showing this scene, I tell managers that they can learn everything important about managing their staff, or at least about their two fundamental tasks, during these six and half minutes.

The new management paradigm

In his inauguration address, J. F. Kennedy said that, “The world is very different now,” going on to suggest that the future is therefore less and less like the past.

Managers today have the same role (the achievement of results) and tasks (to define situations and charge with responsibilities) as a thousand years ago, but they operate in a different environment. This is neither disjointed nor unnatural. The family unit finds itself in the same situation. It too has the same role, but the environment in which it carries out this role has changed significantly. This role, then, must be carried out in a different way.

People change during life, but at the same time remain themselves. The world around them changes too and they must accept new methods to be able to survive. What once worked no longer does. The motivational methods used by those that built the pyramids would probably not be received well by a modern building company.

Each generation wants to live in a brave new or otherwise exceptional age. That is why it claims everything is different to that which came before it. Let’s look at some of the evidence that points to the fact that this generation, or rather the current generation of thirty-somethings, is truly living in an age of discontinuity and great advancement.

Let’s look at what standard office equipment was like in 1988 and in 1968, meaning another twenty years previously. Then let’s return to nearer the present: 2008. This will allow us to see what offices looked like at intervals of twenty years.

Offices in 1988 worked with an electric typewriter, perhaps having a memory of a few lines or even a whole page. There was also an electric calculator the size of a shoebox. Telephones were a matter of course, but it was sometimes a problem to call one city from another within the same country. The situation was similar some twenty years earlier, in 1968. The difference between 1988 and 1968 is relatively small. A few minor improvements. The difference between 1988 and 2008, however, is enormous. In came the Internet, mobile communication, photocopiers, scanners, and so on. Communicating with cities at home or abroad is a matter of the few seconds or minutes it takes for someone to reply to an e-mail.

Ninety percent of all scientists to have ever lived are alive right now. The new technology, which among other things shortens our response time, has changed how we behave and demands a different management approach.

John Naisbitt (in Gibson’s Rethinking the Future) presented the trends in contemporary business. In order to stress the step nature of the age, he raised common trends to the status of megatrends. A publication of the same name came out in 1982. And it is in using his example that I have also chosen the term “megatrends”, although mine are mainly different in content. Let’s look at some of them.

Megatrends in the modern business environment

There truly are many ways of expressing what moves through the world these days. Among those to do this were the authors of Rethinking the Future and the Tofflers, whose book The Third Wave (published in 1980) predicted many things quite accurately.

Customers have never been as demanding as they are now. Perhaps we brought this on ourselves by trying to get ahead of one another. We had to come up with something extra, something different. We continually had to think up something new. Brand-name manufacturers get involved in activities that they would previously have considered an affront to the name (for example, Mercedes, BMW, and Volvo making small cars; even Maserati is planning a more affordable vehicle). The turbulence this creates makes development harder to forecast. There are many types of DVD format, but only one or two predominate; the problem is, how to predict which ones at the start? The old rules no longer apply in this unpredictable environment. There are many companies, for example, that by combining several previously incompatible strategies successfully go against the principle that a company must choose whether to adopt a cost strategy or a differentiation strategy. Pressure on effectiveness and results can no longer be increased using traditional management tools. We need people to be capable of greater application so as to rediscover the value of work and for this reason procedures that are more emotive have come to the fore: facilitation and coaching, for example. These procedures do not arise because they are “nicer” or more human, but because they are the only way of increasing effectiveness in the given situation. The natural consequence of this is that in the modern world, idea, thought and knowledge are appreciated more than ever. The share of material costs in products is falling. The share of intangible costs, however, meaning design, brand name, user value, etc., is on the rise.

For companies to be able to respond to these trends or accommodate them and stay one step ahead, they need to properly think about how they respond.

Megatrends in the modern business environment

Such a considered response primarily means creating a barrier-free society. Meaning a company that places as few obstacles as possible between itself and its customers, whether external or internal. An organization needs to be aware that it is the customer that brings its sense of existence. A barrier-free company creates the conditions for very fast, precise response. This can be supported by adapting the structure of the organization. It is no longer enough to consider an organization to be an imaginary machine in which there cannot be even a single cog more or less, in which everything must fit perfectly with everything else because adaptability to change is considerably lower for a machine than for a living organism. This is why we look more and more for inspiration in biology and in nature. If we have an organic organization, we come to learn that the highest organisms have several layers of management and feedback. For us to be able to accurately and, most importantly, quickly react to what is happening on the market, we need to reduce the focal point of decision-making. People previously accepted assignments and in the best-case scenario were able to carry them out fully and quickly. Now, in an unclear situation which requires a fast response, it is not possible for information to “make its way” through the entire hierarchy to the very top and from there back to the people “on the ground” in the form of an assignment. Decisions must be made as close as possible to the situation, the problem. This leads to different demands being placed on people that have until now worked to order. This also leads to the flattening of the organization, not so we can reduce costs, but instead so that we are able to more effectively serve our customers. It would perhaps be of little use to us if we were to reduce costs as part of reorganization at the expense of the quality provided to customers.

This brings us to one of the most significant changes to face most organizations: responsibility for communication. At many organizations you will still hear the excuse, “nobody told me, so don’t be surprised if it’s not ready”. An organization that needs to react quickly and precisely needs to make sure that workers are responsible for getting hold of the information required for their work. Workers have objectives, know and share the values and vision of the company or section and are able to set tasks themselves. The need for people that can create their own tasks is greater and greater. This brings us to the rising need for self-managing teams. Of course, having self-managing teams does not mean having a few loose cannons at the organization. Synergy is again ensured by having a shared vision and shared values. The more sophisticated the processes an organization uses and the more people that are prepared to perform well, the greater the need to create relative autonomy – a self-managing team.

Why, when considering managerial integrity, is it important to deal with the development of management?

And what should they know of England who only England know?

(Rudyard Kipling)

The career path of managers was once such that they started from the bottom. This sort of manager knew the field very well and came into management as an expert.

In these times of increasing turbulence, though, there is no time for this process. People arrive in management positions that have not gone the path of the expert, but who must understand the age and the market.

P. F. Drucker adds that nowadays, most bosses have never worked in the position their subordinates have, as was the case a few decades ago and as has been generally assumed until now. He also claims that not even in the modern army has the commander of the regiment been through all commanding positions in the regiment and provides an example from the business environment: even the vice-president for marketing, he says, might be a product of the sales department. He might be incredibly skilled in sales techniques. He knows nothing, however, of market research, price creation, packaging, service, or sales forecasts. Such a vice-president for marketing cannot therefore tell experts from the marketing department what to do and how to do it. Nonetheless, these experts are considered his subordinates and the vice-president is undoubtedly responsible for their effectiveness and for their contribution to the company’s marketing efforts.

(Adapted from Drucker, P.F.: Management Challenges
for the 21st Century)

If, in a discussion, one manager claimed that the influence of the human factor is minimal, that almost the only decisive factor is the quality of set processes that must be invariable, this was a sign of seeing the here and now or the past, of harking back to the time of F. Taylor. A manager needs to know how to read and manage “today” and have integrity with regard for the future.

What exactly does the new paradigm mean for the work of the manager today?

Given that the integrity of a manager into the future is not something that comes out of the blue, this is where we ought to begin. The management of effectiveness accentuates the following areas:

> Orientation on people that are capable of creating tasks for themselves

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