Improving Management Performance

by SIR PETER PARKER

Quality of management is the prime mover of success in enterprise. It does not in my belief, matter whether the management's accent is Japanese orAmerican, or German, or French, or British, or whatever good management is good management. High-performing world winners come from all over the globe. Of course, there are national influences that condition the people's attitude to enterprise,cultural, historical, geographical-these explain agreat deal but do not explain the fact that goodmanagers everywhere overcome these to produceresults, and often seem to have more in common withone another than the contrast between the countrieswould suggest.

No wonder, therefore, that we have become obsessed with anatomising excellence. What are the common denominators of success? We lust after its secrets.We make out checklists of the desirable features ofthe competition some successful companies even drewup checklists of themselves a sort of laundry listof clean linen to be washed in public.

Management is currently heavily-breathing, heavily engaged in either checking-up on such lists ordrawing-up lists of their own. I find these lists fascinating in three ways. First, we expect too much of them. Such lists are not always useless, but, at best, they are always only sign-posts. They do not go anywhere. Something else must move management to act.

And, anyway, what list can cover the 360 variety ofbusiness situations: for instance the once-sound, mature business in need of a shake up, or even arescuing turn-round is different from the(embryonic) start-up of a venture; the organizationof a competitive public enterprise or, an essentialpublic service is different from a multinationalcorporation which can decide to change the formulaof a cosmically competitive drink- just like that. It was Solon, the constitution maker in ancient Greece, who when asked to draft a constitution,would nail the question by asking specifically, "Aconstitution for what?"

The second fascination of checklists for me is that they are always a bit of a shock. Their obviousnessis mildly shocking. And there is nothing wrong withobviousness: a litany of home-truths is arguably what we managers need. Actually, managers know wellenough what makes for quality and for money's worth,for success and for failure. Good management is not a bag of tricks, or of secrets, or of surprises . Good management in enterprise is such stuff asplatitudes are made of. Certainly, the litanies are what the manager is getting these days, and, if the market speaks truth, it seems to be what he and she likes.

For example,"In Search of Excellence", by Peters and Waterman,is a record breaking best seller. It explores agalaxy of international business and bringsmanagement back to earth with good, old home-truths.Belief is what makes things happen, belief in thebusiness, and that springs from keeping faith withthe customer. "In Search of Excellence" is born-again Samuel Smiles, racier and wittier, morefun but basically the one same clear message; thesecret of success is professional skill committed toa belief in the job and in the mission of theenterprise. This emphasises the third and most significantaspect of the best of current checklist; their recognition of management being as much a test ofcharacter as it is of professional technique.

This welcome emphasis emerges most clearly in anothercurrent and readable best-seller; "The Art of Japanese Management", by Pascale and Athos, who werein fact close with the ex- McKinsey team of Petersand Waterman. Pascale and Athos set off on their ownsuper-star-trek of international success inmanagement (not only Japanese, incidentally). Their formula is presented brilliantly as well. Their anatomy of success fairly hisses with S's, somehard, some soft. The hard S's are strategy, structure, and systems of management: the soft S'sare specified skills, style, staff, andsuperordinate goals. ("We chose alliteration", they say, "on the theory a little vulgarity enhancesmemory." Vulgarity-surely not. Blimey, I can't believe any well-brought up manager will dare dropany S in the blinding future) Athos and Pascale,like Peters and Waterman, are downright about management being an art, the title of their bookmakes that clear enough.

Outstanding organisations must be strong in strategy, structure and systems,but to rely on these is illusion; "the bestcompanies also have great sophistication on the foursoft S's." Academics and journalists traditionallyconcentrate on the mechanistic parts of managementfor some the soft S's are just froth. "That froth",this splendid Harvard team tells us, "has the powerof the Pacific". And, I would add, the Atlantic. Weon this side of the world are also witness to atransformation in the way management is seeingitself and is set on improving itself. Thesignificance in the best of the checklists is theirshift towards widening its scope and role of themanager. Recession and relentless competition havetaught British management more about the crucialcomponents that the hard S's stand for; they havealso taught us hard lessons about values of the soft S's.

Put another way, the shift is from the mechanics ofmanagement to entrepreneurial qualities. Improvingmanagement means developing the principle andpractice of entrepreneurial change and innovation.Naturally, the process is bound to vary in businesssituations, but in principle its relevance appliesto management in private and public enterprise, tomature industries as well as those aglow in thesunrise sectors, to large and small organizations,and also the public administration. Its applicationis now a central purpose to what we are about in theBIM. It is relevant, too, to the individual manager. Forhim and her, I suggest it involves a five point,self-demanding programme: 1. The continuing improvement of the individual'sprofessional capability - this means more than theessential mastery of functions, it calls forunderstanding of the technical and human values atstake in leading change at every level ofmanagement. On this first point, the other pointsdepend. 2. The personal commitment as a manager to close thegap between the world of work and the world ofeducation - it is not a question of "beinginterested in education and training as well as myjob." It is a vitalising part of the job, within theenterprise and in its external relations. 3. The widening awareness of the internationalhorizons of management, I have said before, nomanagement is an island; of course no manager iseither. International standards are vital tocompetitiveness. International markets andinternational organizations set the pace. 4. The ceaseless practice of communication - themanager is a communicator or nothing. There is noleadership without communication. In a modernworking community, constantly changing, this realityis more than ever a mark of a successful enterprise.What matters more than words are the qualities ofthe relationships expressed what a manager means isconveyed by amenities, by design and style, byaccessibility of authority, by example. In thehigh-tech, information future, flatter smallercommand structures are going to be possible.Communication will be what is expected ofmanagement; and a manager will communicate withmembers of any working community, not because theyare employees or trade unionist only, but becausethey are citizens at work and have the citizensright to information. This relates to the lastpoint. 5. The need to define the social policy ofenterprise this a manager has hitherto not seen withthe clarity and urgency that the priority nowcarries. For example, 200 leading companies arecommitted to the organization of Business in theCommunity BIC has special aims in enterprise andemployment but it is an outstanding illustration ofthe new realism in management. The agenda of socialpolicy is growing; priorities of the socialconsequence of change, of the environment, of equalopportunities of charity and sponsorship, ofestablishing flexible patterns of work-these aregiven increasing attention by the successfulenterprises Inevitably the individual manager has ajob to do in defining his or her role in this socialdimension. Improving management performance calls for aresponse from the individual manager as aprofessional of international standards, as aneducator, as a citizen- not only in the localcommunity, but as a competitive citizen of theworld.

PS - "A management not concentrated on improving itself is not worthy of the name: better call itbureaucracy, damn it, leave it and competition willclean up the mess."

PPS - "A manager who has not experienced the forcethat being changed can give is no manager: he's notup to his job which is changing andleading-moreover, he's in for a big surprise."

Survival and the CEO

Long ago Peter Drucker, the father of business consulting, made a very profound observation that has been lost in the sands of time:
"Because the purpose of business is to create a customer, the business enterprise has two--and only two--basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business."
Today, when top management is surveyed, their priorities in order are: finance, sales, production, management, legal and people. Missing from the list: marketing and innovation. When one considers the trouble that many of our icons have run into in recent years, it is not easy to surmise that Drucker's advice would have perhaps helped management to avoid the problems they face today.

Ironically, David Packard of Hewlett-Packard fame once observed that "marketing is too important to be left to the marketing people." But as the years rolled on, rather than learn about marketing and innovation, executives started to search for role models instead of marketing models.

Tom Peters probably gave this trend a giant boost with the very successful book he co-authored, In Search of Excellence. Excellence, as defined in that book, didn't equal longevity, however, as many of the role models offered there have since foundered. In retrospect, a better title for the book might have been In Search of Strategy.

More recently, the popular method-by-example book has been Built to Last by James Collins and Jerry Porras. In it, they write glowingly about "Big Hairy Audacious Goals" that turned the likes of Boeing, Wal-Mart Stores, General Electric, IBM and others into the successful giants they have become.

The companies that the authors of Built to Last suggest for emulation were founded from 1812 (Citicorp) to 1945 (Wal-Mart). These firms didn't have to deal with the intense competition in today's global economy. While there is much you can learn from their success, they had the luxury of growing up when business life was a lot simpler. As a result, these role models are not very useful for companies today.

There is a growing legion of competitors coming at new businesses from every corner of the globe. Technologies are ever changing. The pace of change is faster. It is increasingly difficult for CEOs to digest the flood of information out there and make the right choices.
But a CEO can have a future.

The trick to surviving out there is not to stare at the balance sheet but simply to know where you must go to find success in a market. That's because no one can follow you (the board, your managers, your employees) if you don't know where you're headed.

How do you find the proper direction? To become a great strategist, you have to put your mind in the mud of the marketplace. You have to find your inspiration down at the front, in the ebb and flow of the great marketing battles taking place in the mind of the prospect. Here is a four-step process to pursue:
Step 1: Make Sense In The Context
Arguments are never made in a vacuum. There are always surrounding competitors trying to make arguments of their own. Your message has to make sense in the context of the category. It has to start with what the marketplace has heard and registered from your competition.
What you really want to get is a quick snapshot of the perceptions that exist in the mind, not deep thoughts.
What you're after are the perceptual strengths and weaknesses of you and your competitors as they exist in the minds of the target group of customers.
Step 2: Find The Differentiating Idea
To be different is to be not the same. To be unique is to be one of its kind.
So you're looking for something that separates you from your competitors. The secret to this is understanding that your differentness does not have to be product related.
Consider a horse. Yes, horses are quickly differentiated by their type. There are racehorses, jumpers, ranch horses, wild horses and on and on. But racehorses can be differentiated by breeding, by performance, by stable, by trainer and so forth.
Step 3: Have The Credentials
There are many ways to set your company or product apart. Let's just say the trick is to find that difference and then use it to set up a benefit for your customer.
To build a logical argument for your difference, you must have the credentials to support your differentiating idea, to make it real and believable.
If you have a product difference, then you should be able to demonstrate that difference. The demonstration, in turn, becomes your credentials. If you have a leak-proof valve, then you should be able to have a direct comparison with valves that can leak.
Claims of difference without proof are really just claims. For example, a “wide-track” Pontiac must be wider than other cars. British Air as the “world’s favorite airline” should fly more people than any other airline. Coca-Cola as the “real thing” has to have invented colas.
You can’t differentiate with smoke and mirrors. Consumers are skeptical. They’re thinking, “Oh yeah, Mr. Advertiser? Prove it!” You must be able to support your argument.
It's not exactly like being in a court of law. It’s more like being in the court of public opinion.
Step 4: Communicate Your Difference
Just as you can’t keep your light under a basket, you can't keep your difference under wraps.
If you build a differentiated product, the world will not automatically beat a path to your door. Better products don't win. Better perceptions tend to be the winners. Truth will not win out unless it has some help along the way.
Every aspect of your communications should reflect your difference. Your advertising. Your brochures. Your Web site. Your sales presentations.
There's a lot of hogwash in corporate America about employee motivation. Brought to you by the "peak performance" crowd, along with their expensive pep rallies.
The folks who report to you don't need mystical answers on "How do I unlock my true potential?" The question they need answered is, "What makes this company different?"
That answer gives them something to latch on to, and run with.

Aiming for excellence

10/29/2007 Daily Journal


When Tom Peters wrote "In Search of Excellence" with Robert Waterman 25 years ago, "excellence" became a mantra in much of the business world.The book's litany of characteristics of successful companies - close to the customer, a bias for action, autonomy and entrepreneurship, to name a few - were repeated, studied and emulated in companies large, small and in between and became a part of the common business lexicon.National Public Radio named "In Search of Excellence" one of the three most influential business books of the 20th century, and it opened the market to a whole new business literature that took the focus off strategy, budgets and numbers and put it on people -employees and customers. It really was a harbinger of a shift in American business.Peters, who has spent the quarter century since its publication writing and consulting, was in Tupelo last week, still preaching his message that successful businesses are essentially about one thing: Releasing the creative talents and energy of people in the service of others.He appeared at the kickoff of the corporate fundraising campaign for HealthWorks!, a children's interactive health education center under development at the old Kroger building in Gloster Creek Village. The center, scheduled to open in fall 2008, is patterned after the original in South Bend, Ind., which was featured for its highly creative and innovative approach in a 2004 television production by Peters.Long-term plansPeters urged the Tupelo audience not to settle for making incremental progress in childhood obesity, which he described as the most serious problem facing the country. Why not think big - make this a model for the country by turning around not just Northeast Mississippi's obesity problem, but the entire state's.Don't settle for small progress or comparing yourself only to the rest of the state, he said. Aim higher. Tupelo's past achievements suggest it should be thinking in those terms, he said.It was more than inspirational rhetoric. Peters has a point - not just for HealthWorks!, but for any community or regional undertaking.Whether in health care, public education, economic development, neighborhood revitalization, downtown rejuvenation or any of a myriad of other common undertakings, Tupelo and Northeast Mississippi shouldn't settle for good enough, or even better than most in the state. World-class is the vision that will produce results that will be remembered.This community and region have been best when they aimed highest - the Wellspring site, for example. Peters points out that risk-taking and big thinking brings the criticism and debunking of the naysayers, as that project surely did. Yet had the region's leaders not thought big and taken risks, there would have been no Toyota.Communities, like businesses, need to be constantly reinventing themselves. And, like businesses, the best communities are those that unleash their people to stretch the limits of their imaginations.Pie in the sky? Only to those who haven't seen it work because they've never tried it.