Becoming a Manager
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Becoming a Manager
Perry McIntosh Richard Luecke
Chapter 4, Managing Without Authority, contains a section on influence adapted from Chapter 2 of Becoming More Influential at Work, by McIntosh and Luecke. Used by permission of the publisher, American Management Association, New York, New York. All rights reserved. www.amacombooks.org Chapter 4, Managing Without Authority, contains a section on persuasion adapted from Chapter 9 of Interpersonal Communication Skills in the Workplace, Second Edition, by McIntosh and Luecke. Used by permission of the publisher, American Management Association, New York, New York. All rights reserved. www.amacombooks.org Chapter 8, Performance Appraisal, contains a section on feedback adapted from Interpersonal Communication Skills in the Workplace, by McIntosh and Luecke. Used by permission of the publisher, American Management Association, New York, New York. All rights reserved. www.amacombooks.org Chapter 9, Making Sound Decisions, contains a section on brainstorming adapted from Interpersonal Communication Skills in the Workplace, by McIntosh and Luecke. Used by permission of the publisher, American Management Association, New York, New York. All rights reserved. www.amacombooks.org Neither the writers nor the American Management Association guarantees the results of the information, guidelines, and techniques presented in this work. Copyright © 2011 American Management Association. All rights reserved. This material may not be reproduced, stored in a retrieval system, or transmitted in whole or in part, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. ISBN-10: 0-7612-1481-X ISBN-13: 978-0-7612-1481-6 Printed in the United States of America. AMACOM Self Study Program http://www.amaselfstudy.org/ AMERICAN MANAGEMENT ASSOCIATION http://www.amanet.org 10
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Contents About This Course How to Take This Course Introduction Pre-Test
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Part One: Making the Transition
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1 Getting on Top of Your New Role
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From Individual Contributor to Manager Relationships with Subordinates Dealing with Former Peers Breaking the Ice
Relationships with Peers Your 90-Day Plan Listen Learn Lead
Recap Review Questions
2 Working with Your Boss
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Identify and Support Your Boss’s Goals and Priorities Talking About Priorities
Understand What Your Boss Expects from You Talk About Your Goals and Priorities Your Work Performance Your Independence of Action
Learn How Your Boss Wants to Relate Information Information Format Bad News © American Management Association. All rights reserved. http://www.amanet.org/
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Time Demands
Develop a Career Plan with Your Boss Recap Review Questions
3 Making the Most of Your Time
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How Are You Spending Your Time? Prioritize Your Work Be Organized and Efficient Eliminate Common Time Traps Procrastination Cannot Say No Meeting Mayhem
Delegate Effectively Train Your Replacement A Step-by-Step Process for Delegating Correctly
Recap Review Questions
Part Two: Developing Your Management Skills
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4 Managing Without Authority
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Dependencies Influence Increasing Influence
Persuasion The Foundations of Persuasion Trust Understanding A Credible Case Persuasive Language
Recap Review Questions
5 Developing Your Leadership Style Evolving Theories of Leadership Flexible Leadership No Single Best Way Followers Matter
Leading Change Key Change Management Steps Correctly Identify the Problem and Its Solution Communicate the Need for Change Enlist Support Create a Workable Plan AMACOM Self Study Program http://www.amaselfstudy.org/
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Implement the Plan
Recap Review Questions
6 Planning and Setting Goals
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Strategic Planning Low Cost Leadership Solid Customer Relationships Product/Service Uniqueness or Quality Geographic Expansion
Operational Planning Control Plans Goals The Characteristics of Effective Goals Alignment with Higher Goals
Recap Review Questions
7 Work Processes and Continuous Improvement 93 What We Mean by Business Processes Continuous Process Improvement Define the Beginning and Ending Look for Improvement Opportunities Involve the Right People Look for Root Causes of Problems Measure the Process Understand the Sequence of Activities and Their Dependencies Empower People
Process Innovation Seeking Process Innovation
Recap Review Questions
Part Three: Managing Others
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8 Managing Performance
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Performance Management Performance Appraisal A Six-Step Process
Feedback Giving Effective Performance Feedback Receiving Feedback Closing the Feedback Loop
Coaching The Coaching Process
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Recap Review Questions
9 Making Sound Decisions
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A Rational Decision-Making Process Involve the Right People
Step 1: Define the Problem or Decision Correctly Step 2: Consider the Context of the Decision Step 3: Create and Evaluate Feasible Alternatives Brainstorming as a Method Evaluation Risk
Step 4: Make the Decision Step 5: Implement the Decision Recap Review Questions
10 Handling Difficult People and Situations
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Workplace Conflict Not Always Bad Dealing with Conflict Look for Win-Win Opportunities
Difficult People A Two-Step Process
Difficult People: Special Cases What’s the Customer Worth? Your Boss You
Recap Review Questions Afterword Bibliography Online Resources Glossary Post-Test Index
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About This Course
Most people rise to the ranks of management on their success as individual contributors or supervisors. In those roles they developed important skills, did excellent work, and proved their worth as reliable members of their departments or work teams. Once these people become managers, however, they must learn a new skill: how to achieve organizational goals through people and other resources—not through individual effort alone. Becoming a Manager helps them learn the key elements of that skill and navigate the transition to management with confidence. The role of the new manager demands a new mindset, new activities, and new relationships with people throughout the organization. Becoming a Manager guides the first-time manager through these and other challenges. Part One, Making the Transition, explores how to make the critical shift from individual contributor to manager; what it takes to build a successful partnership with your boss; and the key elements of managing time, which is every manager’s scarcest commodity. Part Two, Developing Your Management Skills, examines how to use influence and persuasion to manage without formal authority; how to develop a leadership style; the elements of planning and setting goals; and the critical roles of work processes and continuous improvement. In Part Three, Managing Others, readers learn how to master the performance management process; adopt a process for making sound decisions; and handle difficult people and situations, including high-value customers or a difficult boss. Throughout the course, examples, exercises, Think About It sections, and topical sidebars provide readers opportunities for practice, feedback, and application. Perry McIntosh has over twenty-five years of experience in corporate office environments. Much of that experience was gained in the publishing industry, where she began as an entry-level copyeditor and worked her way up to senior managerial and directorship positions, including leadership positions on cross-functional teams. She currently runs her own book production service. Ms. McIntosh has an AB degree from Smith College and a certificate from the Center for Creative Leadership.
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Richard Luecke has been a freelance business writer since 1992. His books have been published by Oxford University Press, John Wiley & Sons, and Harvard Business School Press. He has also developed many teaching cases for MBA and executive education courses. Most of his work, however, involves collaborations with business school faculty, management consultants, and corporate executives. His recent clients include Harvard Business School Publishing, Massachusetts Institute of Technology, Mercer Human Resources Consulting, Northeastern University, and Babson College. Mr. Luecke earned an MBA from the University of St. Thomas and a BA in History from Shimer College.
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How to Take This Course
This course consists of text material for you to read and three types of activities (the pre- and post-test, in-text exercises, and end-of-chapter review questions) for you to complete. These activities are designed to reinforce the concepts introduced in the text portion of the course and to enable you to evaluate your progress.
PRE- AND POST-TESTS Both a pre-test and post-test are included in this course. Take the pre-test before you study any of the course material to determine your existing knowledge of the subject matter. Submit one of the scannable answer forms enclosed with this course for grading. On return of the graded pre-test, complete the course material. Take the post-test after you have completed all the course material. By comparing results of the pre-test and the post-test, you can measure how effective the course has been for you. To have your pre-test and post-test graded, please mail your answer forms to: Educational Services American Management Association P.O. Box 133 Florida, NY 10921 All tests are reviewed thoroughly by our instructors and will be returned to you promptly. If you are viewing the course digitally, the scannable forms enclosed in the hard copy of AMA Self-Study titles are not available digitally. If you would like to take the course for credit, you will need to either purchase a hard copy of the course from www.amaselfstudy.org or you can purchase an online version of the course from www.flexstudy.com.
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THE TEXT The most important component of this course is the text, where the concepts and methods are presented. Reading each chapter twice will increase the likelihood of your understanding the text fully. We recommend that you work on this course in a systematic way. Reading the text and working through the exercises at a regular and steady pace will help ensure that you get the most out of this course and retain what you have learned. In your first reading, concentrate on getting an overview of the chapter content. Read the learning objectives at the beginning of the chapter first. They will act as guidelines to the major topics of the chapter and identify the skills you should master as you study the text. As you read the chapter, pay attention to the headings and subheadings. Find the general theme of each section and see how that theme relates to others. Don’t let yourself get bogged down with details during the first reading; simply concentrate on understanding and remembering the major themes. In your second reading, look for the details that underlie the themes. Read the entire chapter carefully and methodically, underlining key points, working out the details of examples, and making marginal notes as you go. Complete the activities.
ACTIVITIES Interspersed with the text of each chapter you will find a series of activities. These can take a variety of forms, including essays, short-answer quizzes, or charts and questionnaires. Completing the activities will enable you to try out new ideas, practice and improve new skills, and test your understanding of the course content.
THE REVIEW QUESTIONS After reading a chapter and before going on to the next chapter, work through the Review Questions. Answering the questions and comparing your answers to those given will help you grasp the major ideas of that chapter. If you perform these self-check exercises consistently, you will develop a framework in which to place material presented in later chapters.
GRADING POLICY The American Management Association will continue to grade examinations and tests for one year after the course’s out-of-print date. If you have questions regarding the tests, the grading, or the course itself, call Educational Services at 1-800-225-3215 or send an e-mail to
[email protected].
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Introduction
Welcome to the AMA Self-Study course Becoming a Manager. Some readers may be currently working toward a future management position. Others may have been recently promoted to their first managerial job. No matter what your current level of training or experience, this course will help you be more effective. Managers play an essential role in organizational life. For that reason it is important that they understand their responsibilities and goals, and learn how to be effective in getting things done through the people and the other resources available to them. Many people assume that effective managers are born with special talents. “She has a knack for dealing with people.” “He’s a natural leader.” “She’s one of those naturally organized people who never wastes a minute.” True, some people come to their jobs with backgrounds and experiences that make them good managers—that make them look like “naturals.” However, management is a human activity of many parts—interpersonal communications, planning, coaching, leadership, persuasion, and others. Each can be learned through study and developed through practice. The subject of management is often taught through its “classical” functions: planning, organizing, motivating, staffing, and controlling. Most college textbooks on the subject are organized around those functions and the abundant academic research that has investigated them over many decades. There is much to be said for that approach. However, those books are often detached from the day-to-day challenges that most new managers confront. Reading about ten different (and sometimes conflicting) theories of workplace motivation, for instance, does not do the new manager much good when she’s confronted with her first problem subordinate. This course takes a different, more practical approach. It focuses on workplace issues that will make or break you as a new manager: making the difficult transition from individual contributor to boss; building an effective working relationship with your superior; managing time (every manager’s scarcest commodity), knowing how to manage without formal authority, making good decisions, and so forth. You’ll learn about these issues and how to © American Management Association. All rights reserved. http://www.amanet.org/
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deal with them effectively in the chapters that follow. Many are based on common sense. For example, you’ll learn in Chapter 2 that a key to building a good relationship with your boss is to understand your boss’s priorities and align your priorities with hers. That’s common sense, not rocket science. Unfortunately, common sense ideas and solutions are routinely overlooked by managers who have more to do than they can possibly handle. So, we draw attention to them in the text. The course offers numerous practice opportunities through the exercises and “Think About It” sections. These are designed to reinforce concepts as you learn them. However, to improve, there is no substitute for applying what you learn in this course to your on-the-job activities. So, as you learn new concepts, apply them in your workplace. Before you know it, you will have advanced from the rank of apprentice to journeyman to master. Here’s what you’ll learn in the chapters that follow: Chapter
Key Learnings
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This chapter will help you understand your new role. It explains the mental transition you must make from that of an individual contributor to that of a manager. It will help you build productive relationships with two key constituencies: your subordinates and your managerial peers. Finally, it explains three things you should do during the critical first 90 days on the job: listen, learn, and lead. Leading should take the form of accomplishing a manageable number of goals. Success with these will establish your reputation as a “doer” and give you the confidence you need to address larger, long-term problems and opportunities.
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The most important relationship you have in the workplace is the one between you and your boss. This chapter focuses on steps you should take to make it a mutually beneficial one. First identify your boss’s goals and priorities and figure out how your work will support them. Then, learn what your boss expects of you and how your performance will be measured. Ask your boss how she prefers to communicate with her subordinates: how much information does she want, and when and how should you deliver it? Finally, work with your boss to create a plan for your professional development through training, mentoring, or challenging assignments.
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This chapter covers two concepts that will help you maximize the time available to you. First, employ the principles of time management by first understanding how you use your time. Then look at your goals and prioritize your activities. Focus on becoming more organized and efficient in all you do, and eliminate time traps such as procrastination and unnecessary meetings. Delegation is the key to gaining more time in your day. The chapter provides a five-step plan to delegate effectively.
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INTRODUCTION
Chapter
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Key Learnings
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Because managers often find themselves in situations where they must produce results through other people over whom they have no power or authority, this chapter focuses on using influence and persuasion to get things done. The chapter offers ways a manager can increase his or her influence in the organization, then explores persuasion as a communication process through which we can affect the attitudes, beliefs, or actions of others. The four building blocks of persuasion are trust, understanding, a credible case, and persuasive language.
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Managers ensure that people are doing things right; leaders ensure they are doing the right things. This chapter defines four classic leadership styles, authoritarian, democratic, delegating, and charismatic. A flexible leadership style that is responsive to the context, the situation, and the employees involved will prove most useful. This chapter outlines five steps in a successful change management process: identifying the problem and its solution, communicating the need for change, enlisting support, creating a workable plan, and implementing the plan.
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In this chapter you learn how organizations develop a strategic plan. Most strategies fall into one of four categories: low cost leadership, solid customer relationships, product/service uniqueness or quality, or geographic expansion. Operational planning defines what will be done, by whom, and how, to reach the company goals. Control plans are created to monitor progress. The chapter explains how to align goals throughout the organization, so that individual goals support department goals, which in turn support divisional and finally company-wide goals.
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The surest way to make substantial and permanent gains in quality, speed, and cost reductions is through work process improvement. This chapter explains the key steps to process improvement and introduces the concept of continuous process improvement. Process innovation is a wholesale alteration of a process that results in a major, immediate improvement. This chapter explains how this differs from and can combine with continuous process improvement, and provides examples of where to look for process innovation opportunities.
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Chapter
Key Learnings
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This chapter explores activities that managers use to measure and improve the effectiveness of their subordinates: performance appraisal, feedback, and coaching. Performance appraisal is used to assess how well individual employees measure up to unit standards and/or their assigned goals. Formal appraisals follow a process that includes preparation, the appraisal meeting, the identification of performance gaps and their causes, planning to close performance gaps, and periodic follow-up. Feedback is communication that provides information about how well a person is performing against expectations. Workplace feedback is most effective when it is descriptive, not judgmental; focused on modifiable behaviors; based on specific, not general, observations, and well-timed. Managers must be prepared to receive feedback as well. Coaching is a process through which managers help their subordinates develop skills, prepare for new responsibilities, or eliminate performance problems. Good managers look for opportunities where coaching can improve performance. Formal coaching, like formal appraisal, follows a multistep process that includes discussion, agreement and commitment, active coaching, and follow-up.
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This chapter introduces a five-step rational decision-making process that begins with defining the problem or decision correctly. Managers are advised to consider the context of the decision, then create and evaluate feasible alternatives. Step 4 is making the decision, and the final step is implementation. Along the way, the chapter offers coaching on generating alternatives and reducing risk, which are important components of an effective decision-making process.
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Conflict is a state in which the ideas, interests, plans, goals, egos, and agendas of individuals clash. Workplace conflict can be destructive, but conflict can also be valuable, bringing new ideas to the table and improving discussion. This chapter addresses how to deal with destructive conflict and foster valuable conflict. Difficult people take up a lot of most managers’ time. When the difficult person is a customer, analyzing his value to your organization will help you determine how best to handle him. The chapter offers special tips for occasions when the difficult person is your boss. Avoiding the behaviors of bad bosses—poor communication, lack of respect for others, not developing staff, being a bottleneck, micromanaging, and acting politically—will help managers improve their management skills and become better bosses.
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Pre-Test
Becoming a Manager
Course Code 96023 INSTRUCTIONS: Record your answers on one of the scannable forms enclosed. Please follow the directions on the form carefully. Be sure to keep a copy of the completed answer form for your records. No photocopies will be graded. When completed, mail your answer form to: Educational Services American Management Association P.O. Box 133 Florida, NY 10921
If you are viewing the course digitally, the scannable forms enclosed in the hard copy of AMA Self-Study titles are not available digitally. If you would like to take the course for credit, you will need to either purchase a hard copy of the course from www.amaselfstudy.org or you can purchase an online version of the course from www.flexstudy.com.
1. To make a good decision, begin by: (a) correctly defining the issue or problem. (b) identifying sources of support. (c) narrowing the focus to a single alternative. (d) analyzing the data.
Do you have questions? Comments? Need clarification? Call Educational Services at 1-800-225-3215 or e-mail at
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2. Which process do managers use to assign formal authority, responsibility, and accountability for work activities to subordinates? (a) Promotion (b) Process improvement (c) Delegation (d) Teamwork
3. A key function of management is: (a) financing. (b) persuading. (c) influencing. (d) planning.
4. _______________________ are the starting point for effective time management. (a) Promotion opportunities (b) Time motion studies (c) Delegated tasks (d) Goals
5. Decisions on big, complex, and important issues require: (a) top-down control. (b) the knowledge and insights of many people. (c) a plan for allocating outcome responsibility. (d) an enlarged role for legal and accounting specialists.
6. Which is a managerial tool for providing feedback to subordinates? (a) Brainstorming session (b) Quarterly report (c) Balanced scorecard (d) Annual performance review
7. Which is a management approach that seeks to improve output and reduce errors and cost through many incremental steps? (a) Continuous process improvement (b) Command-and-control (c) Process innovation (d) Kaizen
8. In resolving conflict, one should look beyond people’s stated positions to their: (a) attitudes. (b) interests. (c) organizational skills. (d) educational background.
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9. Communication through which we alter or affect the attitudes, beliefs, or actions of others is called: (a) dialogue. (b) debate. (c) contingency planning. (d) persuasion.
10. In the workplace and in other settings, our dependence on others (subordinates, peers, and bosses) gives them some measure of: (a) authority. (b) freedom of action. (c) influence. (d) responsibility.
11. Repeatable activities, or steps, that transform workplace inputs into outputs that customers value is called a(n): (a) chain of causation. (b) operational framework. (c) matrix operation. (d) business process.
12. A state in which the ideas, interests, plans, goals, egos, and agendas of individuals clash is: (a) equilibrium. (b) insolvency. (c) conflict. (d) quiescence.
13. Difficult bosses may: (a) praise performance too publicly. (b) take credit for the accomplishments of others. (c) delegate challenging tasks. (d) insist that employees take training classes.
14. A manager should give feedback to a subordinate: (a) in public whenever possible. (b) only during the annual performance review. (c) always in writing. (d) soon after the incident of interest has occurred.
15. A person responsible for getting things done through people and other resources is called a(n): (a) individual contributor. (b) manager. (c) subordinate. (d) freelancer.
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16. A person who aims to give effective feedback should focus on: (a) positives and negatives equally. (b) only those things that the other person is prepared to hear. (c) negative behaviors that reduce team performance. (d) modifiable behaviors, not unchangeable ones.
17. Which of the following become(s) less important as one rises through the ranks of management? (a) Interpersonal skills (b) Ability to communicate (c) Technical skills (d) Peer networks
18. Which provides a means of altering the behavior of others without recourse to the power to command? (a) Groupthink (b) Attitude alignment (c) Control (d) Influence
19. The assignment of work, and responsibility for that work, by one person to another is called: (a) expanding the span of control. (b) downloading. (c) delegating. (d) multitasking.
20. You may find that the most important thing you can do as the manager of former coworkers is to: (a) celebrate your promotion. (b) maintain the same relationships you previously had. (c) demand full compliance with company policies. (d) recognize that your relationship has changed.
21. ______________ defines how the organization aims to achieve its highest goals. (a) Alignment (b) Strategic planning (c) Matrix management (d) Optimization
22. Which of the following should a new manager seek as a workplace mentor? (a) His or her current boss (b) An executive coach (c) A human resources specialist (d) A former boss or other respected executive
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23. A personal quality that sets leaders apart from ordinary people and makes them appear endowed with exceptional powers or qualities is: (a) charisma. (b) self-confidence. (c) intelligence. (d) communication skill.
24. Which is an element of performance management that assesses how well an individual measures up to unit standards and/or his or her assigned goals, and is used for pay and promotion purposes, as well as employee development? (a) Feedback (b) Employee development (c) Career counseling (d) Performance appraisal
25. Which activity do managers use to help their subordinates develop skills, prepare for new responsibilities, or eliminate performance problems? (a) Formal performance appraisal (b) Coaching (c) Behavior modification (d) Motivation
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Part One: Making the Transition
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1 Getting on Top of Your New Role Learning Objectives By the end of this chapter you should be able to:
• Discuss the issues involved in the transition • • •
from individual contributor to manager. Build productive relationships with subordinates. Build productive relationships with peers. Create a plan for the first 90 days in your new job.
It’s Monday morning, day 1 of your new job as a first-time manager. You looked the same in the mirror. Perhaps you dressed a bit more formally this morning, but not dramatically so. If you’re working for the same company that you worked for yesterday, you probably rubbed shoulders with the same people in the elevator, greeted people in the same way as you walked through the corridors, and poured yourself a cup of coffee like everyone else. Everything appears the same on the surface, but you feel different. The difference becomes more tangible as you approach your new work space. People with whom you’ve worked for the past two years say “Good morning,” but there’s something unusual in the way they do it—as if they are sizing you up, as if they are looking for something different in you. They all congratulated you two weeks ago when your promotion was announced, but they did so as your workplace pals. “Are they my pals today?” you wonder. Your new reality becomes more tangible when you enter your new work area. Yes, it’s still small, but this one is all yours—no cube-mate. And there’s a window and a small conference table with two chairs over on one side, which gets you to thinking about how you’ll use that table. You form a mental image of yourself and a subordinate sitting at that table talking about some problem for which your help is needed. You visualize yourself sitting at that table, skim-
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ming a résumé while a job candidate in a new suit waits and watches nervously. “I’ve never hired anyone before,” you say to yourself. You’re probably experiencing some anxiety at this point. Like a runner waiting for the starting gun before a 10 kilometer race, you may feel an odd blend of nervousness (“Now what do I do?”) and anticipation (“I finally have a chance to try some of the new things I’ve wanted to do”). Day 1 for a newly minted manager marks an important work-life passage, ushering in new responsibilities and accountabilities. The new manager is also cast in a new role within the organization. Organizations are, above all else, mini-societies shaped by a bewildering mix of leadership, formal authority, individual influence and ambition, internal politics, interpersonal dependencies, sub-group interests, collaborative networks, and informal coalitions. The new manager must identify where he or she fits into this social enterprise and figure out how best to accomplish his or her goals. This chapter will help you understand the transition from individual contributor to manager, and your new role as a manager with respect to two important groups: subordinates and peers.
FROM INDIVIDUAL CONTRIBUTOR TO MANAGER Most new supervisors and managers are plucked from a set of employees who have no other responsibility than to complete assigned tasks. Even when they must collaborate with others in completing those tasks, they are not responsible for the work or behavior of others—only for themselves. They are individual contributors. A manager, in contrast, is responsible for getting things done through people and other resources—not through his or her individual handiwork alone. Thus, the manager isn’t simply accountable for his or her own output and actions, but for those of subordinates as well. This added responsibility for the work and behavior or others creates a dramatic difference between the lives of managers and individual contributors. That difference was captured not long ago by the student newspaper at Harvard Business School in an interview it conducted with a U.S. Army captain—the military equivalent of a corporate middle manager—who was nearing the end of his two-year program as an MBA student. When asked how his life as a student differed from his life as an active duty officer, he said this (paraphrased): The biggest difference I notice as a student is that I don’t have to worry about anyone but myself, which makes my life much easier and less complicated. I have my assignments to do, and I collaborate periodically with other students on case presentations. But in the end, I have no responsibilities for anything but my own work. As a company commander in the Army, it was very different. I had over a hundred people to worry about all day, every day. If someone wasn’t pulling his weight or was having a problem, it wasn’t just his problem. It was my problem and my responsibility.
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GETTING ON TOP OF YOUR NEW ROLE
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That young officer’s observation nicely captures a key role difference between the individual contributor and the manager, and that difference is one of the first attitudinal hurdles that the new manager must overcome. While the individual contributor focuses on managing assigned tasks, the manager must focus on a far broader set of concerns that involve planning and assigning work to others, monitoring their performance, coaching, problem-solving, resolving disputes, and on and on. One of the most common stumbling blocks for new managers is a failure to appreciate how their role has changed. They continue thinking and acting as individual contributors, focusing on tasks while overlooking the management of their subordinates, planning, coordinating effort, and so forth. They have trouble letting go of their old tasks and moving on to their new responsibilities. This is a partly the fault of the system through which people are selected for managerial work. Most new managers are promoted because of their high performance as individual contributors. They had mastered important task-related skills and were very good at applying them. Those skills earned them praise and recognition—and promotions! As managers, however, those skills are less important. As they rise through the managerial ranks, they must shift their attention. Exhibit 1-1 describes how technical, task-oriented skills become less important as a person moves from the individual contributor role through the ranks of management. Interpersonal and decision-making skills rise in importance during these transitions.
xhibit 1-1 Technical Skills Are Less Important
Decision-making and people skills
Technical, taskoriented skills
Individual contibutor
Supervisor
Manager
Executive
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Now consider the case of Amelia, who is making the transition to management, and confronting its challenges. Like most people promoted into management, Amelia had been very successful in her old job. “After eight years working the phones, I was the go-to gal for problem calls. If a customer wanted something a little out of the ordinary, I would figure out how to make the system work for him. After I was promoted to supervisor, I had to really hold myself back from solving everybody’s problems like I used to. Hey, I had enjoyed personally helping customers and being a hero! But once I became the supervisor, I needed to help my subordinates solve those problems themselves.” One way Amelia found to change from being the hero to being a manager was to talk with her friend Ellen, who had been promoted in another department a year before. The transition was fresh in Ellen’s memory, and she shared some of the lessons she had learned. If you are a new manager, or anticipate becoming one in the near future, you can learn a lot by talking with people who have already made the transition to that role.
Think About It . . . What technical, task-oriented skills had you developed as an individual contributor?
What recognition did you receive from your boss and from peers for mastery of those skills?
As a manager, are you experiencing difficulty in letting go of your role as a skillful individual contributor? If the answer is yes, describe that difficulty.
How comfortable are you dealing with people at all levels of your organization?
“Think About It” continues on next page.
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Think About It continued from previous page. Are you more comfortable implementing decisions than making them?
Familiar technical skills will remain important to some degrees in your managerial role. They will help as you coach your subordinates and manage their performance. But they can no longer occupy your full attention or be your main source of workplace self-satisfaction.
Exercise 1-1 Learn from Other Managers Identify a manager who is willing to speak with you about his or her transition experience. Ideally, this will be a person who has been a manager for less than two years. Then ask for a half-hour or more of their time. What were this manager’s most difficult transition challenges?
How did the manager deal with them?
What issues does he or she still struggle with as a manager?
In terms of your own managerial career, what is the most important thing you’ve learned from your interview with this manager?
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RELATIONSHIPS WITH SUBORDINATES Getting on top of your new role requires that you establish a business-like and productive relationship with the people who report to you. You and they depend on each other. You depend on them for quality performance of your unit’s work, and they depend on you for resources and rewards. If you all understand this mutual dependence, you’ll be off to a good start.
Dealing with Former Peers If you are like many new managers, you were promoted from the ranks and are now managing former peers. This has its advantages and disadvantages: Advantages • You know these people, their strengths and weaknesses, their interpersonal relationships and ability to work together; personal problems that affect their work performance. • You are familiar with the work that must be done. • You have a good idea about problems faced by the unit (dysfunctional work processes or individual slackers). • You understand the politics of the organization—who exerts formal and informal influence, who can be trusted or not trusted, who is allied with whom on key issues, and so forth.
Disadvantages • Former peers know your weaknesses; they may know details about your personal or work life that you wish they did not. • Some former peers may secretly resent your success—after all, you’ve moved up to a higher-level, higher-paying job while they’ve stayed behind. • Some former peers may expect that you will remain their personal friend, and that you will side with them when their interests and the interests of the unit or company are in conflict. • Former peers will watch you carefully, looking for evidence that you have changed in how you relate to them—pulling rank on them or acting as through you’re “too good” to associate with them on a personal level.
You may find that the most important thing you can do as the manager of former coworkers is for both you and them to recognize that your relationship has changed. You can be friends and trust each other, but you cannot be “pals” in the sense that you once were. You can continue having lunch together, but not as an occasion to grouse about the company and its “stupid” policies. And if you have lunch with subordinates, you must spread yourself around; you cannot always go with Bill or Helen without giving the appearance of favoritism. Your relationships have to become more businesslike and somewhat more formal. AMACOM Self Study Program http://www.amaselfstudy.org/
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It is possible to make this change to a more professional relationship without seeming like your promotion has “gone straight to your head.” Your new activities may even help. For example, if your calendar is full of meetings and other duties, it will not seem unreasonable to suggest that your former coworkers set up a time to talk with you rather than always catching you on the fly. If you are courteous and fair in your dealings with all staff, your employees will also notice that you do not favor old friends. Even those who would have liked to take advantage of your friendship will respect you for this.
Think About It . . . Have you ever had to work for a person who had formerly been your peer or coworker? If you have, think back about that time and answer these questions. How did your relationship and interactions with this person change?
What, if anything, became uncomfortable or unclear in that relationship?
How did your former peer, now your boss, handle his or her new role in terms of your working together? Did this boss become standoffish? Act superior? Become “bossy”?
What can you learn from that new boss’s experience in establishing a new role for yourself?
“Think About It” continues on next page. © American Management Association. All rights reserved. http://www.amanet.org/
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Think About It continued from previous page. What is one thing that this new boss did that you will avoid doing?
Stepping in as a manager of people with whom you had no previous relationship (as peer or coworker) is simpler. However, whether you’re promoted from the ranks or hired in from the outside, you should recognize that your new subordinates will have certain expectations of you. They will expect you to:
• • • • • • • • •
Eliminate task-related impediments that are outside their own spheres of authority and action—problems that only management can solve. Provide the resources they need to accomplish their assigned tasks. Listen when they have grievances or improvement suggestions. Be fair in how you assign work and reward effort. Keep them informed about matters that affect their work and careers. Be a champion for their work unit with upper management. Make decisions. Advocate for their training and career development. Work harder than they do.
Some subordinate expectations will put you a difficult position. Many new managers, for example, find that their people demand more of their time than they have time to give. They also discover that subordinates want to drag them into the middle of conflicts and workplace problems that subordinates should settle on their own. As a manager, you must exercise good judgment in determining which conflicts you want to wade into, and which problems you want to take on. Subordinates may also try to “delegate up” problems or tasks they prefer not to deal with. Given the many demands on your time, you cannot allow your staff to push every problem onto your shoulders—especially if you have capable workers who are expected to deal with problems as part of their normal duties.
Breaking the Ice Any lack of clarity about your role will cause speculation and gossip among subordinates. They need to know very soon how you intend to manage and what your expectations are of them. The best way deal with this situation is to meet individually with each of your direct reports. Naturally, you will talk informally with your staff from your first day, but it’s best to schedule these one-on-one meetings after you’ve been on the job for a few weeks. This will give you a chance to form some impressions about your new environment and AMACOM Self Study Program http://www.amaselfstudy.org/
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role. Prepare for these meetings by reviewing each person’s personnel file, which should be available from the human resources department. Those files will describe each person’s job, compensation, employment background, and will contain past performance data. Make your meeting with each subordinate friendly but businesslike. Share the unit’s broader goals and indicate your commitment to them. But encourage the subordinate to do most of the talking—about themselves, their personal goals, their work, what they see as impediments to their success and the unit’s success, and so forth. This is your chance to demonstrate your accessibility and your willingness to listen: two traits that workers respect in a manager. If anyone tries to go off on a rant about how bad the company is or how unfairly he’s been treated, redirect the conversation to goals and to the positive steps that can be taken toward them. These initial meetings with individual subordinates may not be the time for you to communicate your plans and your expectations of them. Especially if you are new to the company or the department, you may not yet know what you expect of each employee. You may need time to listen, analyze, and think about those matters. Instead, use these meetings to clarify your role in the minds of your people. You want them to understand that you are:
• • • • • • • •
Committed to working with them toward the unit’s goals. A person who stands up for his interests while respecting those of others Fair-minded but intolerant of chronic whiners and slackers. Open to positive suggestions. Friendly but serious about your work and responsibilities. Results-oriented. Confident—not someone who needs to be liked. An initiator of action, not a passive bystander.
If you can frame yourself in terms of those characteristics, you will earn respect and succeed in communicating your role to subordinates.
RELATIONSHIPS WITH PEERS New managers often think that their subordinates, formal organizational authority, and annual budget are the only resources they need to achieve their assigned goals. In reality, they seldom have anywhere near what they need. Budgets are lean and there always seem to be too few hands to do all the work. New managers also find that they are dependent to a greater or lesser degree on the cooperation and assistance of people in other parts of the company (more on this in Chapter 4). You’d never realize this by looking at the organization chart, like the one shown in Exhibit 1-2, which describes a company in tidy little boxes. Those lines and boxes, however, simply indicate reporting relationships, not how work is actually done and how company goals are achieved. Much of that happens within the “white space” between the boxes on the chart.
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xhibit 1-2 A Typical Organization Chart
CEO
COO
Human Resources
Information Technology
Marketing
VP Manufacturing
CFO
New Product Development
Controller
Telecom
Eastern Sales Manager
System Support
Western Sales Manager
Example 1: The Eastern Sales Manager has an important account whose purchases are not being shipped because of a credit problem. The Sales Manager knows the CFO’s assistant and calls her up to explain the problem and how it’s being cleared up. “I know that our policy is not to ship new orders if any outstanding purchase payments are past due by more than 30 days, but here’s the situation . . .” He makes a case for shipping now and making this good customer happy while the payment problem is being sorted out. The CFO’s office approves the deal, and the problem is solved. Example 2: The Inventory Control manager, who works for the Vice President of Manufacturing, has just returned from the annual Inventory Control Association annual conference. While there, he attended a workshop at which a new, cost-saving application of IT tools was described. Hopeful that he could use the same tools to advantage, the manager called up an acquaintance in his own company’s IT department. After discussing the situation, the two agree to meet for lunch in the company cafeteria to discuss the possibilities.
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Example 3: A manager in New Product Development is being pressed by her boss, the Vice President of Manufacturing, to provide specifications for a new line of flat-bed scanners for which she is responsible. She cannot provide those specs until the Marketing department completes its research on customer requirements for the new scanners. She and the marketing research manager have collaborated successfully on several other projects, so she has no reluctance in contacting him and pressing him to complete his research as quickly as possible. “We have all the data already,” he tells her, “but we haven’t been able to tabulate it all because so many people are on vacation this month.” To solve the problem, they agree to jointly contact the head of human resources and prevail on him to hire a temp to handle the tabulation work. Notice in each of these examples how solutions were created by peers working across organizational boundaries. No subordinates were involved, nor did these managers receive any support from their bosses. Each case underscores the importance of developing good working relationships with people in other parts of the enterprise, even when no formal connection is present. These are people who have or are experiencing problems similar to yours. If you are like most new managers, you will find former and current peers to be your most valuable source of support—both technical and emotional. Unlike your boss, peers have no judgmental role to play in your work life, which makes them easier to approach. Here are some things you can do as a new manager to build a peer network that will help you achieve your goals:
•
•
• •
Get to know as many “achievers” as you can within the company: managers, non-managers, and technical professionals. Once a week, for example, call a different one of these people on the telephone and say, “Hi, I’m so-and-so, a new manager in the XYZ department. I’d like to make your acquaintance and learn about what you do and how we might help each other. Would you have time for coffee anytime soon?” You’ll be amazed by how much you’ll learn if you follow this technique. Join cross-functional teams when you can. Cross-functional teams bring people with different skills and experiences together to solve problems and exploit opportunities. Being a member of one or more of these teams will bring you into close contact with key members of the organization. By working with them, you’ll quickly learn which of them are effective and reliable. You’ll also develop working relationships that are likely to pay off in the future. Remember that to get you must give. Reciprocity is the currency of collaboration in workplace networks. If someone does you a favor, look for an opportunity to repay it. Develop a reputation for action. Talk is cheap. The workplace is full of people who will say, “We ought to do . . .” or “Somebody ought to do . . .” Few of these people deliver. If you develop the opposite reputation, people in your peer network will want you on their teams.
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YOUR 90-DAY PLAN In his book, The First 90 Days: Critical Success Strategies for New Leaders at All Levels, Harvard Business School professor Michael Watkins makes the point that leaders, from the CEO level down, are highly vulnerable during the first few months in their new jobs. While these new leaders are trying to orient themselves and figure out what to do and how to deal with their new situations and subordinates, everyone around them is forming opinions about their competence. (Watkins, 2003). It may be tempting to make a big splash right away, but successful managers take their time to assess the situation. Use your first 90 days on the job to listen, learn, and lead.
Listen Rather than springing into action on Day 1, listen to what your subordinates, peers, and boss have to say about the situation you’re in, the roadblocks to change, company priorities, and so forth. We’ve already suggested that you get to know your subordinates through one-on-one informal meetings in which you spend most of your time listening. Extend those one-on-ones to staff meetings in the weeks that follow. Get your people engaged in dialogue about workplace problems and opportunities. Some good ideas are bound to emerge. Invite participation from other departments by individuals who have useful information and insights. Again, let other people do most of the talking.
Learn Use the first few weeks to learn as much as possible about your unit’s resources, its constraints, its customers, and its performance. As a new manager, you probably never had budget responsibilities before, so use this time to study your budget and learn where your unit stands on a year-to-date basis. If your unit has direct contact with customers, get out of the office and spend some time with important customers. Accompanying your company’s sales or service reps on their calls one day each week will teach you a great deal about the competitive situation, customer expectations, and what people think of your company and its products. What you learn in the first few weeks will help you develop action plans.
Lead Listening and learning are important, even if you have ideas of what needs to be done. But sometime within the first 90 days, you must “brand” yourself as a doer, a problem-solver, an action-oriented manager who gets results. Too many new managers feel that if they just keep the machinery turning and don’t make any mistakes, their job is done. Their focus is on activities, not results. “I may take on some initiatives next year,” they say, “but not until I’ve settled into the job.” Don’t take this approach. The company and your boss shouldn’t have to wait until you’re totally comfortable in your new role. Instead, plan to put some points on the scoreboard by the end of the first 90 days. Solve a problem, launch an initiative, introduce an innovation—do something that will make people say “Wow. It looks like we finally got the AMACOM Self Study Program http://www.amaselfstudy.org/
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right manager in that position.” Otherwise your boss, peers, and subordinates will mark you down as a mediocre, risk-averse manager. What should you do? The answer will be determined by the situation. However, do not attempt to do too much at once. That will likely lead to failure, and failure at this stage will darken everyone’s mood and dampen their spirits. If you fail on this first venture, you may not be able to rally people for another venture. So, consider what you’ve learned about the situation and identify two or three things that:
• • •
Are clearly achievable. Are viewed as important by your boss, your people, and the organization. Can be achieved within 90 days.
Call these the “low-hanging fruit” or “quick wins” if you like. Success with these will please your boss and create forward momentum, which will inspire confidence in your people, making it easier to rally them around future initiatives. More important, it will give you the personal confidence you need to confront larger, more challenging problems and opportunities.
Exercise 1-2 Your 90-Day Plan Identify four important problems or opportunities you should address in your role as manager. 1. __________________________________________________________________________ 2. __________________________________________________________________________ 3. __________________________________________________________________________ 4. __________________________________________________________________________ Now, consider which of these meet the criteria for “quick wins.” That is, which are clearly achievable; considered important by your boss, your people, and the organization; and achievable within 90 days?
Exercise 1-2 continues on next page.
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Exercise 1-2 continued from previous page. Pick the one that seems most easily achieved and briefly describe how you would organize people around dealing with it.
This chapter has identified actions you must take in stepping into your new role as manager. It has suggested how you can relate to two important constituencies: subordinates and peers. Your most important constituent, however, is your boss. What should you do about him or her? That question is addressed in the next chapter.
The first task of a new manager is to develop a new mindset: that of a manager instead of an individual contributor. One issue involved in this transition includes understanding how your role in the organization has changed, how you now fit into the social enterprise of the workplace, and how you can best accomplish your goals. Another challenge is to shift the emphasis from the technical and task-oriented skills critical to your past success as an individual contributor to the decision-making and people skills at the core of your new role as manager. Whereas in the past you were accountable only for your own success or failure, as a manager you are now responsible for the work and performance of others. In this new role, you must forge new relationships with your subordinates and peers. If you were promoted into your new position and are managing former peers, you’ll have several advantages: knowledge of their strengths and weaknesses, familiarity with the work and ongoing problems and issues, and an understanding of organizational politics. Disadvantages of managing former peers can include their knowledge of your weaknesses, possible resentment of your promotion, and unrealistic expectations that you will show favoritism or pull rank. All new subordinates will have expectations that you can remove impediments, provide resources, listen to grievances, demonstrate fairness, communicate openly, champion the unit, make decisions, advocate for them professionally, and work harder than they do. Individual meetings
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with your subordinates will give you the opportunity to communicate how you intend to manage and what your expectations are of them. Your new peers may include colleagues who outranked you in the past. Most new managers find former and current peers to be their most valuable source of support. You can build a strong peer network by getting to know as many “achievers” as you can within the company, joining cross-functional teams when you can, remembering that to get you must give, and developing a reputation for action. To assure a successful transition, create a 90-day plan that focuses on listening, learning, and leading. Listen to what your subordinates, peers, and boss have to say about a range of issues. Engage people in dialogue at staff meetings and invite participation from other departments by individuals with useful information and insights. Learn as much as you can about your unit’s resources, constraints, customers, and performance. This information will help you develop action plans. Lead by identifying yourself as an action-oriented manager and delivering on two or three goals that are clearly achievable; viewed as important by your boss, subordinates, and the organization; and can be accomplished within 90 days.
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Review Questions INSTRUCTIONS: Here is the first set of review questions in this course. Answering the questions following each chapter will give you a chance to check your comprehension of the concepts as they are presented and will reinforce your understanding of them. As you can see below, the answer to each numbered question is printed to the side of the question. Before beginning, you should conceal the answers by placing a sheet of paper over the answers as you work down the page. Then read and answer each question. Compare your answers with those given. For any questions you answer incorrectly, make an effort to understand why the answer given is the correct one. You may find it helpful to turn back to the appropriate section of the chapter and review the material of which you were unsure. At any rate, be sure you understand all the review questions before going on to the next chapter.
1. What should you do in the first 90 days in your new managerial position? 1. (d) (a) Concentrate on technical tasks. (b) Exercise formal authority whenever possible so that people will know that you are in charge. (c) Encourage dissent. (d) Listen, learn, and lead.
2. One way of building a peer network within the larger company is to:
2. (a)
(a) join cross-functional teams. (b) become more specialized. (c) delegate more work to subordinates. (d) plot your own path.
3. Identify one disadvantage for the person who must now manage
3. (b)
former peers. (a) Former peers believe that they can trust their new manager. (b) Former peers know the new manager’s weaknesses. (c) The new manager doesn’t know how to communicate. (d) Former peers expect the new manager to be successful.
4. Which of the following becomes more important as one rises higher
4. (a)
and higher in the ranks of management? (a) Decision-making and people skills (b) Task-oriented skills (c) Technical know-how (d) Daily routines
5. As described in this chapter, one of the most common stumbling blocks for new managers is a failure to: (a) master budgeting concepts. (b) use their new organizational power to its full advantage. (c) appreciate how their role has changed. (d) enforce behavioral discipline. Do you have questions? Comments? Need clarification? Call Educational Services at 1-800-225-3215 or e-mail at
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5. (c)
2 Working with Your Boss
Learning Objectives By the end of this chapter you should be able to:
• Align your priorities with your boss’s key • • •
goals. Identify what your boss expects from you. Describe how your boss wants to relate to you. Talk with your boss about career development.
Subordinates and peers are important people in your work life. But your relationship with your boss is most important because that person is both an evaluator of your performance and a gatekeeper to the resources and career development you need. To develop a good working relationship with this individual, you need to understand your boss’s priorities, his or her expectations of you, and how the two of you can work effectively together.
IDENTIFY AND SUPPORT YOUR BOSS’S GOALS AND PRIORITIES As a manager, your job is to get results through your assigned subordinates. Guess what? Your boss is in the same boat—accountable for results—and you are one of the subordinates through whom he or she will produce them. Thus, your boss looks to you as a facilitator of his or her own success, just as you look to your subordinates to help you reach your goals. Once you understand this mutual dependency, you will be in a much better position to work out a good relationship between the two of you. The starting point for relationship building is your boss’s goals. Do you © American Management Association. All rights reserved. http://www.amanet.org/
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know what they are? If she is the national sales manager, her primary goal is very likely a numerical sales revenue figure—say, $120 million. She may have secondary goals as well, such as preventing defection by the company’s bestproducing sales representatives; developing the management capabilities of her five regional sales managers; reducing travel, entertainment, and other selling expenses by a certain amount; and so forth. Once you’ve identified these goals, you’ll recognize things that you can do—by yourself and through your subordinates—to make your boss successful. For instance, returning to our example, you might meet with your subordinates and brainstorm expensereducing options. “I’d like your ideas on how our group can reduce travel, entertainment, and other selling expenses without jeopardizing sales revenues. No idea is out of bounds at this point.” Like you, your boss has many goals, and some will have higher priorities than others. Do you understand those priorities? It’s important that you do. Because you have limited time and resources, you must focus on the things that matter most to your boss.
Talk About Priorities It’s possible to identify your boss’s priorities through day-to-day communications: during one-on-one meetings, staff meetings that include your boss’s other direct reports, lunches, and so forth. Like everyone else, bosses like to talk about the things that weigh most heavily on their minds—the things that keep them awake at night. All they need is an opportunity. Once you’ve identified those priorities, find out how you can address them. Don’t assume that there is only one way or that you will know the one best way. Your boss may have other ideas. So talk with your boss one-on-one about:
• His priorities • Which ones he wants you to address now • How best to address them (there may be many feasible alternatives) By demonstrating your interest in your boss’s priorities, and helping him attain his key goals, you will establish yourself in his mind as a reliable and indispensable ally, which will enhance your working relationship with this important person.
UNDERSTAND WHAT YOUR BOSS EXPECTS FROM YOU Your boss has expectations of you. These include:
• Your goals and priorities—they should be aligned with hers • Your work performance • Your independence of action You need to understand and respond to these expectations. Let’s consider each. AMACOM Self Study Program http://www.amaselfstudy.org/
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Talk About Your Goals and Priorities Clear goals are like a compass. Whenever we are unsure if we’re working on the right things or headed in the right direction, all we have to do is revisit our goals. In the absence of goals, we have no assurance that we’re doing the right things or that our performance is meeting expectations. As an individual contributor, your goals were spelled out for you, often in very specific form: for example, increase sales in your territory by 10 percent this year; open three new accounts each month. As a manager, you too should have goals, though you may be able to negotiate these to some extent with your supervisor. If your goals aren’t clear, talk to your boss about them. Keep talking until you get some clarity. Once you understand your goals, you can begin prioritizing your activities. As a new manager, you may have a checklist of things you want to accomplish, especially if you have been working in the same unit for a while. You will have had plenty of time to observe operations and develop plans for improving them, but take the advice given in the previous chapter: listen and learn before firming up those plans. Take advantage of the only grace period you are likely to get to gather information you may not have had access to in your former role. Whether you create your plans soon or later, don’t plan and act in a vacuum: seek input from your subordinates and, more importantly, from your boss. As much as you may think you understand what needs to be done, and as much as you may think you understand your boss’s priorities, share your ideas with your boss before taking them too far down the road. Your boss has a larger view of the organization and of inter-unit relationships that may be affected by your plan. Consider this example: Iris is a newly hired manager in the human resources department of a 900-employee company. She was recruited to that position from another firm. During the course of her interviews with her current boss, the Vice President of Human Resources, other managers, and staff members of the HR department, she observed a great many opportunities for improving the existing employee development program. During her first few weeks on the job, Iris followed up on one of her initial ideas. “This company has no clear roadmaps for career development and advancement,” she told herself. “We need those roadmaps and related training programs if this company expects to retain the best and brightest people.” Every day on the job confirmed Iris’s conviction that her idea was sound. Not wanting to burden her busy boss with a half-baked idea, she spent a great deal of time developing her plans and estimating a budget for it. She then developed a written document and PowerPoint™ presentation to explain it all. Iris then scheduled a meeting with her boss. She was nervous going into the meeting but also energized by the positive response she anticipated. “This plan makes sense,” she
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told herself. “I think he’ll be impressed by its scope and the level of detail I’ve put into it.” The new manager was crestfallen by her boss’s dismissive response to her plan and all the work she had put into it. “That was a nice presentation, Iris,” he told her, “but your predecessor suggested something very similar a few years ago and senior management was dead set against it.” He went on to explain that senior management was viscerally opposed to structured programmatic solutions like hers. “They believe that smart, competent people will work out their own advancements through the ranks. We don’t need an elaborate and expensive program for that.” Her boss was also visibly disappointed that she had invested so much time in this ill-fated plan when so many other things needed her attention. “Next time you get an idea like this,” he counseled, “check in with me before you take it this far.” Iris had demonstrated initiative in creating a plan for solving an observable problem. However, she had wasted substantial time by failing to obtain her boss’s early response to her idea. She discovered too late that her priority did not align with his. Experiences like this one can be avoided through regular communication. Your boss wants to know how you plan to spend your time. Communication is the best way to assure alignment between his priorities and yours.
Your Work Performance Every boss has performance expectations of subordinates, and your boss is no different. It is important that you understand those expectations and how your boss defines them. More specifically, you should determine which aspects of your work will be measured and how. Modern organizations use various “metrics” to determine how well or how poorly their operations are performing. Production facilities use output per machine-hour or per labor-hour, scrap rates, and other quantitative measures. Product development departments consider cycle time to keep tabs on how long it takes to move a new product concept from the idea stage to a market launch. The shorter the time, the better. Sales organizations measure performance by revenues per salesperson, by new accounts opened, and by customer retention rates. An online commerce company studied by one of the authors measured the effectiveness of its site engineering team by, among other things, the speed with which a website search returned product results. It tracked marketing effectiveness both by ad revenues and by the number of site visitors who “clicked through” to its advertisers’ sites. These were among twelve “key performance indicators” (KPIs) checked daily by executives. They used these to monitor the performance of the company and its operating units (and their managers). Chapter 8 of this course provides a more complete discussion of performance measurement and the characteristics of effective measures. Suffice
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it to say here that you should understand clearly how your boss will measure your job performance. What will be measured? How will measurement be made? Get straight answers to both of these questions. Then ask for periodic feedback from your boss on how well you are doing. As you discuss performance metrics with your boss, also discuss the resources you will need to perform to your boss’s standard. Have you been given sufficient time, people, financial backing, and other resources to do the job? If you have doubts, air them with your boss. If she agrees that your resources are insufficient, she must either provide more resources or make an adjustment to her performance standard.
Exercise 2-1 Your Goals and Performance Metrics In this exercise, make a list of your top three goals. Next to each goal, describe the metric your boss will use to judge your performance. Goals
Performance Metrics
1. 2. 3.
Do you know how to say “no” to your boss? Some bosses love to pile on extra work without giving a thought to the time and resources needed to complete it. “I have to make a presentation to the board next Tuesday on the progress we’re making in breaking into the Korean market. I want you to pull together all the data and organize it into a written script with a dozen or so slides. Have it ready by Monday morning.” Some people find it impossible to say no to requests like this one, even though they lack the time and resources to complete the work on time or up to standard. After all, it’s the boss who calls the shots, right? If you are one of those people, think back to your priorities. Your boss many not recognize how additional work will disrupt work toward things he considers important. By citing priorities, you can put the ball back in his court, and force him to make the hard choice about how you should spend your time. In this way, you can avoid saying “no” while keeping your work life on an even keel. For example, you might say: “Yes, my people can have it ready by Monday morning, but only if we put the Chicago report on hold for three days. I don’t have the resources to
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complete both projects by Monday. We can handle one or the other. Which is your preference?” You might also offer alternatives such as, “We could complete both reports if you will authorize some weekend overtime pay for two of my staff people.”
Think About It . . . Have you experienced a situation like the one we’ve just described? If you have, describe it briefly, then indicate how you might have handled it without explicitly saying “no” to your boss.
Your Independence of Action Making decisions is an essential element of managerial life. As a manager you must choose between competing alternatives, decide what action to take, determine who should do it, and so forth. Your subordinates look to you for dozens of decisions in the course of every week. The questions you must answer are: “Which decisions can I delegate to subordinates?” “Which decisions are for me to make?” “Which decisions should I make only after consultation with my boss?” “Which decisions should be made by my boss alone?” Your independence of action is at the heart of these questions. Some bosses give their managers substantial independence of action, allowing them to act and to make decisions within broad boundaries. They don’t want their subordinates running to them with every decision. Others enforce tighter control. They want to control even low-level decisions and activities. If you are a new manager, or new to your department, it is not unnatural or unreasonable for your boss to limit your independence of action. After all, the boss is probably unsure of your ability to make sound decisions and handle difficult situations on your own. Your skills are still untested and unproven. Assuming good performance on your part, that control should gradually be relaxed. If it remains rigid, you may have a problem boss. (See Chapter 10 on micro-managing bosses and how to deal with them). Whether tight or loose control is the best way for your boss to operate is AMACOM Self Study Program http://www.amaselfstudy.org/
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for him or her to decide. From your perspective, the important thing is to understand the ground rules: when can you act on your own and when should you consult with your boss and obtain approval? This is one of the first things that you and your new boss should talk about. In some cases, the limits of your independence can be clearly defined: “You can make any decision or sign any invoice involving less than $5,000. Anything above that requires my approval.” Or your boss may reserve issues that require moving up the chain of command for herself: “Please discuss problems that cross department lines with me first.” Most actions and decisions, however, cannot be quantified. Consequently, you must develop a sense of your boss’s comfort level. You can do that through direct communication and through experience. However, when in doubt, ask!
Example Errol is repeatedly late for work. I’ve talked to him about this problem at least four times in the past three months, but with little effect. I have explained how his tardiness affects the department, and I have followed up our conversations with written documentation. He doesn’t have a legitimate reason for our cutting him some slack— he just drifts in late. At this point, I think it’d be a good idea to bring HR into the picture, but I know he’s a long-time employee and I’d like to know your thoughts on this. Let your boss know the issue, what you have done, and what you think the next step should be. Checking in with your boss like this will, over time, will increase his or her confidence in your decision-making skills and help you understand the boundaries of your independence that cannot be quantified.
Exercise 2-2 Your Boss’s Preferred Control Levels Take a look at the continuum in the graphic image below. Think of it as your boss’s preferred level of control over your actions and decisions in the different areas described, with 1 (on the extreme left) representing the lowest level of control and 5 representing the highest. Circle the number representing your boss’s preferred level of control over your actions and decisions. In each case, think about why your boss is most comfortable with that level of control, then answer the questions below. Department budget issues: establishing revenue and expense goals 1
2
3
4
Lower Control
5
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Exercise 2-2 continued from previous page. 1. Given your current experience as a manager, where on the continuum do you think you boss’s comfort level should be? (State the number.)
2. Is there a discrepancy between your boss’s current level of control and where you think that level should be? If there is, explain why you believe the difference exists. (Example: “My boss doesn’t trust me yet.”)
Employee issues: hiring, firing, and increasing salaries 1. Given your current experience as a manager, where on the continuum do you think you boss’s comfort level should be? (State the number.)
2. Is there a discrepancy between your boss’s current level of control and where you think that level should be? If there is, explain why you believe the difference exists. (Example: “My boss wants complete control in this area.”)
Exercise 2-2 continues on next page. AMACOM Self Study Program http://www.amaselfstudy.org/
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Exercise 2-2 continued from previous page. Working with groups outside your department 1
2
3
4
Lower Control
5
Highest Control
1. Given your current experience as a manager, where on the continuum do you think your boss’s comfort level should be? (State the number.)
2. Is there a discrepancy between your boss’s current level of control and where you think that level should be? If there is, explain why you believe the difference exists. (Example: “My boss enjoys managing these relationships and wants to get a better sense of my political skills.”)
LEARN HOW YOUR BOSS WANTS TO RELATE You probably have a preferred style of relating to your subordinates. If you’re like most managers, you want them to let you know when they are experiencing problems or are undecided about what to do. On the other hand, you don’t want your subordinates in your office every two minutes, wringing their hands the instant they hit a bump in the road. You also want people to keep you informed of important developments for which you are ultimately responsible.
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Your boss also has a preferred style for dealing with you and other direct reports. Do you know what that style is? You should learn your boss’s preferences in each of these areas: information; information format; bad news; and time demands.
Information Most bosses want to know about progress against deadlines; problems with important customers; expenditures that may affect budget projections; and so forth. Talk to your superior about the specific matters on which he or she wants to be kept posted. You want to provide what is needed but not overload your boss with more than is useful. Ask also about email. Email causes information overload when people automatically copy their boss on just about every electronic message they send or receive. Ask: “On which matters do you want to be copied?” Information is a two-way street; you need information and feedback from your boss as much as she needs it from you. A weekly meeting is often the best opportunity for information sharing and feedback.
Information Format People have different format preferences with respect to information. Some prefer a short, verbal report: “In a nutshell, tell me the current status of the Meyers project.” Others want written reports with plenty of supporting data. As an example of preferences, consider this true story, told to one of the authors by a university professor who, during World War II, served as a lowly clerk in General Dwight Eisenhower’s command following the Normandy landing. “One day, my Colonel asked me to prepare a logistical report for the General,” recalled the professor, who had been a corporal at the time. “Two days later I gave the Colonel the report—all thirty-five pages of it—which he took to General Eisenhower. He brought the report back to me and said, ‘The General wants a condensed version. It’s too long.’ “By the next morning I had a five-page version of my original report, which the Colonel took back to Eisenhower. Fifteen minutes later a runner came to fetch me. ‘The Colonel wants you to join him in General Eisenhower’s office—pronto!’ ‘Wow,’ I thought to myself. ‘What could the top General in the U.S. Army in Europe want from me?’ “Well, I was ushered in to the General’s office, nervous as could be. The Colonel and some other high-ranking officers were standing by. Eisenhower was sitting at his desk with my five-page report in his hands. He looked up at me and asked, ‘Corporal. Did you write this report?’ ‘Yes sir,’ I answered. ‘In that case,’ said the General, ‘tell me the key points.’” General Eisenhower had a war to win. He didn’t have time to study long reports, even five-page condensations. He wanted the key points and nothing else. If your boss is action-oriented, he may want his information served up the same way: just the key points. A reflective, analytical sort of boss on the other hand may want all the details—down to the footnotes! AMACOM Self Study Program http://www.amaselfstudy.org/
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Bad News We all like to share good news when we have it, but there’s a strong temptation to keep bad news to ourselves, particularly when it reflects on the job we’re doing. We like to think that bad news will blow over, or that we’ll be able to remedy the situation. On the one hand, you shouldn’t be an alarmist, constantly running to your boss about things that might go wrong or small things that you can fix. Failing to inform about bad news might make you guilty of “covering up.” Any time your boss has to ask, “Why didn’t you tell me sooner about this?” your reliability and truthfulness in her eyes will take a beating. Try to find the murky dividing line between being an alarmist and covering up. When in doubt, report bad news sooner than later; your boss may be able to help with the problem. And never let your boss learn your bad news from someone else!
Time Demands Most people will tell you that they don’t want their supervisors getting into their hair. They despise micro-management. On the other hand, there is evidence that they want more time with their bosses than they’re getting. You too probably want more of your boss’s time than you’re receiving right now. Should you go for it? Perhaps, but before you do, try to answer these questions:
• •
Is my boss open to giving me more time? The answer is wrapped up in your boss’s preferred style of dealing with subordinates. Is my boss able to give me more time? Perhaps his or her schedule is too packed already.
What you’re after here is a proper balance between your need for face-time with the boss versus his or her ability or inclination to provide it. In any case, you should make the most of the time given to you. That means sticking to important business, not trivial matters. Plan what you need to cover in your meetings together, and let your boss know your agenda. “I want to bring you up to date on the KitchenQuik sale and learn what you may need from me to prepare for next month’s board meeting.”
DEVELOP A CAREER PLAN WITH YOUR BOSS As a new manager, you will have your hands full of work. Your calendar will be packed. Even with a calendar, your day may feel out of control, with people calling you on the telephone, sending email queries, and walking into your office with news and problems. With all this on your plate, your next career move would seem to be the last thing you should think about. However, if you want to get ahead in your work life, what you’re doing now should be nothing more than one rung on a career ladder. Career ladders are essential for organizations: they create a pipeline of capable, ambitious people prepared to fill vacancies created by growth, retirements, transfers, and defections. Recognizing the importance of the © American Management Association. All rights reserved. http://www.amanet.org/
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human capital pipeline, most forward-thinking companies make managers responsible for the career development of their promotable subordinates. Is this the policy at your company? If it is, then your career development should be part of the relationship you have with your boss, just as your subordinates’ career paths are part of your relationship with them. Of course, you must first plant your foot firmly on your current rung of the career ladder if you want to ascend higher! Remember the 90-day plan we suggested in Chapter 1? Add a self-development component that will help you excel in your new role. Spend time determining the skills you need to acquire or perfect; figure out what you need to learn in the short and long term. This will put you on the path to success in your new role. Over time, assuming that your performance is good and that you are “promotable” material, your boss should take various actions to help you move up the career ladder. These include:
• • •
Providing you with career-enhancing experiences—projects and assignments that broaden your understanding of the business Coaching and training designed to improve your technical and managerial skills Networking opportunities—assigning you to cross-functional teams whose members include managers and technical professionals from other departments
Discussing career development with your boss may be premature if you are new at your job. But once you’ve gotten a handle on your work and demonstrated good performance, make it part of your ongoing conversation. Find a Mentor The word mentor comes from Homer’s Iliad and refers to the role of trusted advisor that Mentor played to Telemachus while his father, Ulysses, was off fighting the Trojan War. In the organizational world, a mentor is someone who volunteers to help someone else, usually a younger person, master his trade, develop his career, and negotiate the politics of the enterprise. A good mentor acts as a role model, offers advice, provides introductions to the right people, and, in some cases, provides political protection for his or her protégé. Do you have a mentor? If you don’t, start looking for one. But don’t look to your boss for this role. He or she is in a judgmental position over you and has the power to reward or punish. Look instead to a former boss or other high-placed executive with whom you have a good relationship to fill this role. That person should be successful and respected within the organization. The right mentor can help you navigate in your organization or industry and help you avoid missteps that would reflect badly on you. Many people feel more comfortable exposing areas of weakness or ignorance to their mentors than their bosses. It can be very useful to get the perspective of a senior person who is not your boss, who is not invested in your short-term results.
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As a new manager, your most important workplace relationship is with your boss. To ensure that this relationship gets off on the right foot, first identify your boss’s goals and priorities, then figure out how your work will support them. Once you’ve identified your boss’s goals, focus on those that have top priority. Talk with your boss about these priorities, which goals he or she wants to address first, and how you can best address them. Learn what your boss expects of you by discussing your goals with him or her. Keep talking until you have clarity about what your boss sees as most important. Share your ideas with your boss and get feedback on what’s important. Communication is the best way to assure alignment between your boss’s priorities and yours. It is also important to know which aspects of your performance will be measured and how this will be done. Get straight answers to these questions and ask for periodic feedback on how well you are doing. Your boss will have a preferred style of control—tight or loose. You should understand when you can act on your own and when you should obtain approval before acting. Checking in periodically will increase your boss’s confidence in your decision-making skills. Ask your boss how she prefers to communicate with her subordinates: how much information does she want, and when and how should you deliver it? Be sure to communicate bad news as well as good news. If you feel you need more time with your boss, first determine if she is open to giving you more time and able to do so. Seek to make the most of whatever time you have with your boss by planning that time carefully and communicating your agenda in advance. Finally, work with your boss to create a plan for your professional development through training opportunities or challenging assignments. Add a selfdevelopment component to your 90-day plan to solidify the skills you need in your current position. Actions that will help you advance in your career include taking on projects that broaden your understanding of the business, coaching and training to improve your technical and managerial skills, and networking opportunities.
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Review Questions
1. What is one way your boss can help you develop your management
1. (c)
career? (a) Reduce your day-to-day responsibilities (b) Encourage you to become more specialized (c) Give you assignments that broaden your understanding of the business (d) Act as your personal mentor
2. Determine how much and in what form your boss prefers to receive:
2. (d)
(a) workplace gossip. (b) the complaints of your subordinates. (c) industry updates. (d) information.
3. A new manager must get a realistic sense of the __________________
3. (a)
his or her superior will allow. (a) independence of action (b) operating leverage (c) interpersonal conflict (d) number of failures
4. In terms of building a boss-subordinate relationship, it’s important to
4. (c)
understand how your performance will be: (a) compensated. (b) criticized. (c) measured. (d) recorded in your personnel file.
5. The starting point for building a good working relationship with your boss is to: (a) demonstrate tough-mindedness. (b) spend as much time with your boss as possible. (c) understand your boss’s goals and priorities. (d) keep your distance.
Do you have questions? Comments? Need clarification? Call Educational Services at 1-800-225-3215 or e-mail at
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5. (c)
3 Making the Most of Your Time Learning Objectives By the end of the chapter you should be able to:
• Document how you currently allocate your • • • •
time. Prioritize your work in terms of key goals. Be organized and efficient. Identify and eliminate time-wasters in your workday. Delegate effectively.
So much to do. So little time. Time may be the manager’s most critical yet beleaguered asset. As scholar Henry Mintzberg has told us (Mintzberg, 1990), managers work at an unrelenting pace. Their activities are characterized by brevity, variety, and discontinuity. They are, indeed, pulled from one direction to another, distracted by unanticipated emergencies, and scheduled to the hilt. They find that they have more to do than they have time. In many cases, time pressure leads to stress and burnout. Consequently, managers must learn to use the time they have to their best advantage; they must learn to spend it as wisely as cash. This chapter describes two ways in which new managers can make the most of their limited time: time management and delegation. Though they are two very different activities and draw on different skills, they address the same problem: having much to do and too little time. Managers are expected to allocate the human, physical (plant and equipment), and financial resources under their control to their highest and best uses. Since time—like capital— is a constraint on output potential, it makes sense to treat it in a similar way. This leads to our definition of time management as the allocation of a limited resource—available time—to its highest use.
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HOW ARE YOU SPENDING YOUR TIME? A good way to begin time management is to take a close look at how you are currently allocating your time. How much time do you spend in meetings, talking on the telephone, coaching subordinates, and planning your work? How many hours do you dedicate each day to paperwork and email communications? Most time management experts recommend that you answer these questions by creating what they call an activity log. An activity log, like the partial one shown in Exhibit 3-1, is a detailed record of how you spent your time over the past week or several days. Notice how this log lumps activities into general categories: email; planning; paperwork; meetings; and so forth. This approach creates a record of the number of minutes expended in each activity. (The “Activity Priority” column at the far right in the exhibit will be explained later.) Accounting for every minute of the working day over a period of many days may seem an onerous and time-wasting chore, but it is the only way to get an accurate picture of how much time you are spending on particular activities. Once you understand where your time is being spent, you’ll be in a much better position to get control of it—that is, to allocate time to the things that matter most to your managerial effectiveness, and to waste as little as possible. Time Management Tip When you create an activity log, record activities as they happen. Don’t wait until the end of the day to write down what you did and how much time you spent on each activity. You may remember the scheduled meetings, and you may remember a two-hour lunch with a prospective customer, but you’ll probably forget half of the phone calls, interruptions, and impromptu conversations that happened in the course of the day. So keep your activity log handy, and add to it as you end each activity.
There are many approaches to time management, and many commercially available tools, such as daily planning systems and training seminars. For our limited purposes here, we offer a simple and practical three-step method: prioritize, organize, and eliminate time traps.
PRIORITIZE YOUR WORK To be effective, time management must be aligned with your goals. Chances are that your boss has given you several goals to work toward—either when you were hired or during your most recent performance appraisal. Some of those goals are surely more important than others. Some are end goals (for example, increase sales in your district by 15 percent this year) while others are “enablers” that serve the end goals (for example, hire one new salesperson for the district team). Other goals, such as “help employees create better workAMACOM Self Study Program http://www.amaselfstudy.org/
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xhibit 3-1 Activity Log Example
Time
Activity Category
Minutes Consumed
8:15
Email
12
8:27
Planning the day’s activities
20
8:47
Informal meeting with boss: bonus plan
18
9:15
Formal meeting: w Shelly and Rob
30
9:45
Phone calls
8
9:53
Informal meeting: w Harvey
11
10:04
Paperwork: sales report
32
Activity Priority
life balance,” may be nice to have, but they are not essential to the achievement of your main goals—at least in the short term. But don’t be tempted to let them slip entirely—they can escalate to critical importance. What would you do if your top salesperson threatened to quit because she has no time with her family? In managing your time, you must prioritize your activities, making sure that those that are aligned with your most important goals have first call on your time. You don’t want second- and third-tier goals to eat up time that should be spent on higher-priority matters. Most people use an A-B-C system (with A being the most important) to prioritize their work. If you have several top-priority things to accomplish within each category, go a step further by prioritizing the As and Bs (for example, A1, A2, etc.).
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Exercise 3-1 Prioritize Your Work Use the space below to prioritize your goals and related activities as either A, B, or C. If you have several goals within each category, prioritize these. “A” Goals: Critical to my success. • • • “B” Goals: Secondary in importance or enablers of my “A” goals. • • • “C” Goals: Nice to have, but the least important of the things I must accomplish. • • •
Once you’ve prioritized your goals, allocate your time accordingly. This does not necessarily mean that you should assign the majority of your time to one or more A-level goals; that might not be necessary or wise. It simply means that as you make tradeoffs, you shouldn’t allow lower-level goals to crowd out the time you need to accomplish your A-level goals. Use a paper or software day-planner when you allocate time among your specific goals and activities. Begin with the A-level items. Once you’ve assigned them the time they require, move on to B- and C-level items in that order until you’ve filled most of your calendar. We say “most” because every manager needs a certain amount of slack time in the schedule to deal with problems and opportunities that cannot be predicted. Only you can be the judge of how much slack time is appropriate. Treat each day in your planner as a “to do” list. As you go through the day, make every effort to complete every A-level item on the list. Avoid spending time on B- and C-level matters if doing so will result in your failing to complete your A-level chores. Follow the wisdom of Benjamin Franklin, who urged his readers to “Lose no time; be always employed in something useful; cut off all unnecessary actions.” AMACOM Self Study Program http://www.amaselfstudy.org/
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Now that you understand the importance of priorities in time management, revisit your activity log sheet. By filling in the “Activity Priority” column, you can easily calculate the percentage of time you are dedicating to A, B, and C level goals. Create one of these sheets over the next few days and then determine if you’re spending your time on the things that are most important. What About Urgent B- and C-Level Matters? Don’t be surprised to see your days filling up with urgent B- and C-level matters. Your administrative assistant’s mother has passed away; you should attend the wake. A new employee hasn’t been paid because of a glitch in the HR department; you need to fix this problem right away. Another manager calls to say, “We have a job candidate coming in today for a second round of interviews. Could you spend half an hour with her and give us an assessment? Say at 2 o’clock?” Each of these matters is urgent, but none has a high priority in terms of your business. Strict adherence to time management principles would move you to say, “Sorry, I must work on more important things.” The facts of organizational life and good judgment, however, dictate that you compromise between that principle and those urgent issues. Slack time can help you do this.
BE ORGANIZED AND EFFICIENT Many of the things that managers do are routine and repetitive: responding to phone messages; emailing the agenda for the weekly staff meeting; applying for travel and entertainment expense reimbursements; submitting monthly reports to your boss; drafting annual employee performance appraisals, and so forth. Most of these recurring activities are necessary and contribute to your success. But they eat up a substantial portion of your limited time. Because they’re recurring, you can leverage time savings by being more organized and efficient in how you deal with these chores. Here are a few ways to do that.
•
• •
Eliminate routine and repetitive chores that add little value. For example, if you’re spending too much time reading unnecessary emails that your subordinates copy to you each day as a matter of course, tell your people which communications you want to see and which you do not. Doing that can cut your incoming email traffic in half ! Also, if you’re holding weekly staff meetings, try to determine whether biweekly meetings would be just as effective. Automate wherever possible. Develop word processing or spreadsheet templates for the recurring reports you must develop and submit to others. Once you have templates, you can simply fill in the empty sections—saving substantial time each month. Handle it once. Get into the habit of disposing of incoming paperwork quickly. If a quick scan indicates that it’s unimportant, toss it. If it’s important but © American Management Association. All rights reserved. http://www.amanet.org/
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not urgent, put it into a “to do later” file (that is, do it when and if all your A-level chores are complete). If it’s important, add it to your schedule.
ELIMINATE COMMON TIME TRAPS Many of the time problems people experience are of their own making, the result of personal habits. Some managers procrastinate; others cannot say no to requests; and just about everyone wastes time in meetings.
Procrastination Everyone procrastinates to one degree or another. What about you? If you take our advice and assign A, B, and C priorities to your work, and then find from your activity log that you are taking care of the Bs and Cs at the expense of A-level tasks, then you are procrastinating. If you are, ask why. Do you lack confidence? Are those A-level tasks boring or unpleasant? Do they involve working with difficult people? Whatever the reason, you must find it and overcome it. Otherwise, you will not be an effective manager.
Cannot Say No Other managers take on more than they can handle, often from their bosses. “How can I say no to my boss?” they complain. In other instances they observe things that should be done and, in the absence of other volunteers, they step forward. “Okay, I’ll take care of it.” Managers who behave in these ways are quickly overscheduled, and their work output is either late or haphazard. High priority tasks are pushed back on their calendars. People like this risk being busy rather than effective. Tip for Saying No to Your Boss Before you instinctively accede to every request made by your boss, take a look at your schedule. Unless you have slack in your schedule, anything you add to your list of obligations will be at the expense of something else—probably things that your boss thinks are very important. So, give a little push-back when the boss is piling it on. Say something like this: “Yes, I can take that off your hands. But if I do, either X or Y will have to go onto the back burner for the next week. So, how would you like me to prioritize these jobs?” This response will move important decisions about priorities onto your boss’s plate and help him or her understand that your time is not elastic.
Meeting Mayhem Depending on which research you believe, U.S. managers spend somewhere between one-third and two-thirds of their working hours in meetings. That’s a huge block of time. Unfortunately, many meetings are time-wasters. AMACOM Self Study Program http://www.amaselfstudy.org/
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A full treatment of meeting management is beyond the scope of this chapter; however, you can save tremendous amounts of time for yourself and your subordinates if you do the following:
• • • •
Hold meetings only when they are necessary: when people need to (1) share ideas and information that cannot be shared in other ways; (2) brainstorm a problem or opportunity; (3) solve a problem; (4) make a decision; or (5) take collective action. Invite only individuals who have something to contribute or gain. Keep meetings as short as possible by sticking to an agenda. End each meeting with an action plan with assigned responsibilities.
Meetings should always move the ball measurably forward and produce value to the organization greater than their costs. (Go to the “Online Resources” section at the back of the course to find an online tool for roughly calculating the cost of a meeting.) Does Your Boss Sometimes Disrespect Your Time? Bosses are not always respectful of their subordinates’ time. In some cases they ask people to attend meetings that could be avoided. In others they divert subordinates from A-level to C-level tasks. They sometimes fail to give clear instructions, resulting in work that must be redone. And then there’s the boss who impedes your ability to get things done by making himself the pinch-point through which all your progress must pass. For example, you can’t go to stage two of a project until he’s approved your work on stage one. But he’s too busy to review what you’ve done in stage one, or he’s traveling for the next two weeks. So you wait and wait. As a subordinate, it’s not your job to second-guess your boss, but it is possible to avoid some time-wasters if you respond tactfully to his or her requests. Consider these examples: “How would you expect me to contribute to that meeting?” “If I put the sales report on the back burner and shift over to the project you’ve suggested, I won’t be able to finish the report until next Thursday. Is that okay with you?” “Before I tackle that assignment, let me first check my understanding of what you want done.” “My report on stage one of the project will be ready for you on Friday morning. Will you be able to read it and give us feedback? Will that work with your schedule?” Responses such as these are not insubordinate. They do not challenge the boss’s judgment. They are, however, subtle reminders that your time is valuable and that you have work priorities that, in the end, are your boss’s priorities. They give your boss an opportunity to rethink his or her requests.
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Exercise 3-2 Practice Fielding Requests What might you say to your boss in the following situations to help you manage your own time most effectively? 1. Your boss asks you to sit in on a meeting with another department to discuss a project you are only slightly familiar with.
2. Your boss’s signature is required for a large software purchase for a time-sensitive project, but he “hasn’t gotten around to” reviewing the proposal.
DELEGATE EFFECTIVELY One of the authors still recalls his first experience as an extremely low-level manager. It happened during the second week of Army basic training. The platoon drill sergeant had picked him to be his assistant—the platoon guide— and his first assignment seemed simple enough. “Listen up,” the sergeant barked. “There’s some white paint down in the supply room. Get two cans of it up here on the double!” The platoon guide ran down to the supply room, grabbed two buckets of paint and raced back to the sergeant’s small office taking two stairs at a time. “Two cans of white paint, sergeant!” The drill sergeant assumed an expression of mocking bemusement. “Private,” he began calmly, “You disappoint me. I said ‘Get that paint up here on the double,’ didn’t I?” “Yes, sergeant.” “But I didn’t tell you to get it.” His face reddened as he shouted, “You were supposed to get one of those other guys to fetch the damn paint!” AMACOM Self Study Program http://www.amaselfstudy.org/
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The savvy sergeant taught a valuable lesson, which takes us back to the purpose of management: to get results through people and other resources. Effective delegation will help you get those results and free up the time you need to attend to tasks that only you as a manager can do. Delegation is the process by which managers assign formal authority, responsibility, and accountability for work activities to subordinates. The importance of effective delegation was underscored many years ago by Lyndall Urwick (1944, 51), who observed that, “Without delegation, no organization can function effectively.” He also stressed that the inability of managers to delegate well is a general cause of failure in organizations. This observation is, if anything, even more relevant in today’s flatter organizations, where managers have more demands on them than ever before. Assigning tasks to the appropriate staff member has never been more important. Delegation does not benefit managers alone. Subordinates also benefit. When you tell a subordinate, “I’d like you to handle this for me,” you are demonstrating trust, which motivates most people. Delegating also provides subordinates with opportunities to learn and to do new things, both of which motivate good employees. Subordinates might not always welcome the idea of having more work put on their shoulders—especially when the delegated tasks are boring, undesirable, or more than their schedules can handle. Their concerns over delegated work can be overcome, however, when managers are thoughtful about what and how often they delegate tasks to individual employees.
Think About It . . . If you were promoted to a new position tomorrow, which of your subordinates would be prepared to fill your shoes? Does any one of them have the know-how and experience to fill the job you’re doing right now?
Train Your Replacement Some managers feel more secure knowing that none of their subordinates have the qualifications to challenge them for their jobs. But that attitude often traps managers in their jobs, with few promotion prospects. In these cases, top management says, “We’d like to promote Jones, but his department couldn’t function without him. It would take us 10 months to train someone or find a replacement on the outside.”
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It is much wiser to use delegation as a tool to develop your staff. If you always set the agenda and lead the staff meeting, ask a promising employee to take a crack at it once a month. If you always review the raw materials order, teach a staff member to check its accuracy and discuss what to do in case of an error. Let subordinates know when you want to have input, and try to make your involvement the exception rather than the rule. Delegating effectively will not only increase your staff ’s capabilities: it may free a pathway for your own promotion.
A Step-by-Step Process for Delegating Correctly What’s the best way to delegate tasks? Most experts suggest the following fivestep process. Step 1: Determine the appropriateness of delegating the task. You’re pressed for time and you’d like to delegate a part of your work to others. But first ask yourself, should I delegate this task? Generally, you should consider delegating anything that your subordinates are capable of handling. Examples of tasks you can delegate include:
• • •
Managing routine purchases and contact with suppliers; approving routine payments. Preparing reports of a non-sensitive nature. Deciding how to handle routine problems in the employee’s daily job and implementing the decisions.
However, a few essential managerial activities should stay with you. These include:
• • • •
Hiring, firing, and disciplining your direct reports. Appraising the performance of people who report directly to you. Tasks that have been delegated to you by someone else (by your boss, for example) with the understanding that your unique skills are required to handle them correctly. Decisions for which you have the ultimate responsibility.
Step 2: Identify the right person for the job. As a general statement, the right person is whoever has the know-how and sense of responsibility to do the job right—a person in whom you have confidence. And though you may find that several subordinates meet that description, you can narrow the list by asking these questions:
•
Who has the time to do the job? You should avoid the “burnout” that comes from overloading a subordinate. You should also avoid the temptation to repeatedly turn to the one or two reliable people who do good work and don’t push back when you ask them to help you out. They will soon notice that they are working extra hard while their peers are putting the minimum effort. When that happens, their enthusiasm and respect for you will diminish. So try to spread the work around as best you can.
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Who would benefit from the job? If you’re grooming someone for a promotion, delegating progressively more challenging tasks is a good way to bring that person to a higher level. The best way to learn new skills is to take on new assignments. Who cares about the job? It’s always smart to delegate a job to someone who has a stake in its successful completion.
Exercise 3-3 Delegating Within Your Unit If you are a manager or supervisor, take a look at your current workload. Which tasks could reasonably be delegated to a subordinate? Or turn the question on its head: What kinds of tasks are your various subordinates capable of taking on? In the table below, list up to four of your subordinates, then indicate the tasks you could reasonably delegate to each one. Also indicate any special guidance you’d need to provide to assure their success. In the final row of the table, estimate the total time these several delegations would save you. Then set a target date for assigning the biggest time saver you discover.
Subordinate Silvia
Task(s) I Could Delegate to This Person Organize the biweekly staff meeting
Special Guidance I Should Provide Help her create a meeting checklist
Total time saved during the first week: _______________ Target date to delegate (task) _____________ to (person) _______________: ___________
Step 3: Explain the task and set goals. Once you decide what and to whom to delegate, talk to that person about the task. Explain what needs to be done and when. Indicate the resources available to help with the task, and describe how you will measure success. Then ask, “Do you have any questions about this?” “Do you foresee having any problems © American Management Association. All rights reserved. http://www.amanet.org/
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with this assignment?” If the task is brand new to the employee, you may need to coach him or her in procedures. But true delegation usually allows the employee to figure out how to accomplish the task. Once all the issues are cleared up, arrange a time when you can meet to review progress or final results. Finally, explain why the task is important in terms of unit goals. Consider this example: “Silvia, I think you should take a bigger role in coordinating the different project teams, so I have a small job I’d like you to take over—running our biweekly staff meetings.” “What would that involve?” she asked. “Well, let’s think about that. You will need to prepare an agenda in advance. What will you need to do that?” “Hmmm. We always have reports or agenda items from the team leaders. I could poll them all a couple of days before the meeting.” “That sounds like a good plan. And then you use the facilitation skills you learned in that workshop last month to lead the session. And there’s the logistical stuff.” “Oh yeah. The agenda needs to be sent out the day before. And we need to reserve a conference room. And snacks! Will we continue to hold these meetings at 9AM on the first and third Tuesdays of the month?” Silvia asked. “Exactly,” said the boss. “And the minutes should be circulated by the following Monday. Once you’ve done it once or twice it will be a snap. Just remember, your goal will be create the agenda, reserve the room, remind everyone of the meeting, manage the meeting, and take and distribute meeting notes.” The manager then asked if Silvia understood and if she anticipated any problems with the assignment. “I can’t think of any,” she replied, “but I’ll let you know if I run into any.” “How about your own schedule?” he asked. “This chore will probably take three hours of your time every other week. Can you handle that?” “I’ll squeeze it in,” she responded. “Fair enough,” said her boss. “I appreciate your taking this on and I know that you’ll do a great job, Silvia. These meetings are important. It’s one of the few occasions we have to get everyone together to share information and ideas and to discuss problems. And I think this job will give you more opportunities to interact with our team leaders. You can learn a lot from them. But just remember, Silvia, in taking on this job, you’ll own it. Agreed?” “Agreed.” Silvia and her boss then planned a time to talk about the assignment as well as topics for the next bi-weekly meeting. Step 4: Monitor progress. As a manager, you routinely monitor employee performance, and the same applies to delegated tasks, especially those that are newly assigned or unfaAMACOM Self Study Program http://www.amaselfstudy.org/
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miliar to your subordinates. If they are stuck or going off the tracks, it’s best to find out right away. The earlier you catch a problem, the more quickly you can intervene and apply coaching or other corrective actions. For example, when Silvia and her boss reviewed how the first meetings had gone, the boss noted that Ralph had added new discussion items during the middle of the meeting. Silvia said, “You know how Ralph is. He just can’t be bothered to tell me his agenda items in advance.” Her boss replied, “You work hard allocating time for discussion of the agenda items in these meetings. You can’t let Ralph hijack the session by not cooperating. How do you plan to handle this for the next meeting?” “I think I’ll remind Ralph that I have been charged with setting the agenda in advance so that the group can prepare their thoughts and bring any data necessary for each agenda item. And I’ll let him know that I hold the gavel and the group will not discuss unplanned topics.” Step 5: Evaluate performance. Once the delegated task is complete, step back and evaluate the person’s performance. Was it up to your expectations or did it fall short? Were the goals you communicated met, and did the staff member meet the metrics of success you agreed on? If not, why not? How well the person performed should influence your future delegating decisions. Naturally, good performance should be recognized in some way. Depending on the size, importance, and duration of the task, recognition can range from a simple “Well done!” and the assignment of even more interesting and challenging tasks, to an eventual promotion.
Time is the manager’s most valuable resource, so it’s important to use it wisely. The first step to managing your time is to look closely at how you are currently allocating it. Creating an activity log over the course of a day or a week will give you an accurate picture of how much time you spend on particular activities (meetings, phone calls, email, paperwork) and put you in a better position to control it. Prioritizing, organizing, and eliminating time traps is an effective three-step time management system. Prioritize your activities so that those that are aligned with your most important goals have first call on your time. Organize by eliminating routine chores that add little value, automating wherever possible, and handling paperwork once. Eliminate common time traps by becoming aware of how much time you spend procrastinating, taking on more than you can handle by failing to say no, and attending meetings that add little value to the organization. Delegation is the key to gaining more time in your day. The five steps to effective delegation are: determine the appropriateness of delegating the task, identify the right person for the job, explain the task and set goals, monitor progress, and evaluate performance.
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Review Questions
1. Besides saving time for you, delegation can be used to:
1. (b)
(a) punish slackers by giving them unpleasant assignments. (b) give subordinates opportunities to gain experience and develop new skills. (c) overload schedules. (d) shift unpleasant tasks from manager to subordinates.
2. Which of the following tasks should not be delegated a subordinate?
2. (d)
(a) Meeting planning (b) Writing a report (c) Showing a new employee how to get onto the company intranet (d) Appraising the performance of people who report directly to you
3. Which tool helps you understand how you currently allocate your
3. (d)
management time? (a) A sign-in sheet (b) A time-motion study (c) An appraisal review form (d) An activity log
4. A manager should not allow ____________________ to crowd out the
4. (b)
time needed to accomplished A-level goals. (a) procrastination (b) lower-level goals (c) valuable meetings (d) negative thinking
5. A common time trap at many companies is: (a) meetings. (b) activity logs. (c) prioritization. (d) goal alignment.
Do you have questions? Comments? Need clarification? Call Educational Services at 1-800-225-3215 or e-mail at
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5. (a)
Part Two: Developing Your Management Skills
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4 Managing Without Authority Learning Objectives By the end of this chapter you should be able to:
• Identify your dependence on those around • • •
you, and their dependence on you. Describe how you can increase your influence in the organization. Describe the importance of persuasion as a management tool. Describe the four elements that are the foundation of persuasion.
Many new managers believe that organizational authority is all they need to get things done. This is far from true. In the contemporary workplace, authority usually counts for far less than the ability to influence and to persuade others. Even people with tremendous organizational power discover that their power does not give them a free hand in getting things done; they find that they are dependent on the good will, support, and collaboration of others— including their subordinates. Today’s managers frequently find themselves in situations in which they have no organizational authority, but must get things done. Consider the following real-life situation: Sal is a mid-level manager in the marketing department of Quasartech, Inc., a young, fast-growing Internet company. Its “product” is its website search engine, which makes it possible for users to locate and gather information on small businesses throughout the United States that happen to be for sale. Its goal is to build and operate a site that will help anyone interested in purchasing an existing small business to (1) locate businesses for sale and (2) find informa-
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tion that will help them determine if they want to investigate further. The company makes money by selling ad space on the site. Sal’s boss has asked him to be the leader of a cross-functional team of employees whose goal would be to develop one aspect of the company’s website. “We need to get more for-sale listings on the site,” he explained. “The more listings we have, the more people will be drawn to our site—and to the advertising that pays the bills around here.” Sal accepted the assignment, and after some thought and discussion with others, drew up a list of people whose skills and experiences would contribute to the success of his venture—the manager of the client relations group, one of his peers in marketing, two people from the software engineering group, and one salesperson. He determined that each person would spend two hours in meetings and five hours in assigned tasks each week. He then went to the managers of those individuals and asked if they could spare those people for the equivalent of a day each week for the next two months. With their consent, Sal recruited the people he needed. Unlike his direct subordinates, Sal had no authority over the people on the team. They didn’t report to him, and Sal wasn’t in a position to provide them with promotions, salary increases, or bonuses. He could not fire or even discipline them. If he ordered anyone to do anything, that person could correctly reply, “I don’t work for you, Sal.” One team member, the client relations manager, actually enjoyed higher organizational rank than Sal. In order to succeed in the situation just described, Sal had to motivate people to work together toward a common goal, and give it their best effort. If Sal relied exclusively on his organizational authority as a manager, he would never be successful in getting his team members to satisfactorily complete their task. In today’s team-oriented business culture, situations like Sal’s are common, and managers must learn to accomplish their goals without benefit of formal authority. But these are not the only situations in which managing without authority is necessary. People like Sal—and like you—must enlist the support and collaboration of peers and of people who outrank them. They must also deal with subordinates who respect and respond to qualities other than formal authority. But what can a manager do in these situations? This chapter will explain two concepts for managing when formal authority is absent or not effective: influence and persuasion. But first, let’s consider organizational dependency, a concept that explains why the power of formal authority is so limited. The Matrix Organization Some companies adopt a structure with centralized “operations” departments supporting separate product development and sales departments. Advocates say that these so-called matrix organizations allow organizations to act quickly and effectively. The matrix structure depends more on intracompany collaboration and the ability of people to manage without formal authority than does the traditional hierarchical structure. AMACOM Self Study Program http://www.amaselfstudy.org/
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Corporate Officers Gizmos
Widgets
Knick-Knacks
Marketing
Manufacturing
When Flora from the Gizmos division approached Peter in Marketing for extra help on her upcoming S’mores Griller launch, Peter replied, “I’d love to help you, but we are up to our eyeballs working on the holiday figurines. Knick-Knacks budgeted this as a $30 million item this year.” Because Peter reports to the VP of Marketing, not to the Gizmos division, Flora cannot rely on her organizational authority to change his mind.
DEPENDENCIES Most employees depend on their bosses for all kinds of important things: pay raises, protection from other powerful managers—even their jobs. This sense of dependence is based on long-established notions about people with authority being in a dominant position relative to their employees, who are in subservient, dependent positions. The dominance-dependence relationship can be found throughout human history. The feudal system of the European Middle Ages, for example, was characterized by a dominant ruling class and a subservient peasantry that worked the land owned by the masters. However, even in this situation, dependency was a two-way street. The serfs depended on their feudal masters for military protection from invaders, for justice, and for order; the masters, in turn, depended on their serfs to produce the crops on which their wealth and privileges depended and to serve as foot soldiers in war. Though the scales were tipped in favor of the ruling class, masters and serfs nevertheless depended on each other. We observe a similar two-way street in organizational life: employees are dependent on their bosses, but those bosses—despite their authority—depend on the energy, efforts, and know-how of their subordinates. And, just as in the feudal system where the barons depended on one another for trade and mutual defense, managers participate in a complex network of interdependencies with their peers in other departments, people of higher or lower rank throughout the organization, and outside contacts such as vendors and customers. Managers who recognize their dependence on others are less inclined to command, to order, or to threaten those who work for them, or to pull rank in © American Management Association. All rights reserved. http://www.amanet.org/
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cross-departmental disagreements. They understand the limited utility of their formal authority and seek out other ways of getting things done through people. They value the greater power of influence and persuasion, and they work to develop these skills.
Exercise 4-1 What Are Your Dependencies? Who do you depend on to accomplish your assigned goals? Name two people in a different department whom you rely on. Why do you think these individuals are willing to assist you? I depend on Relationship (Peter, for example) (Peer, for example)
For (Doing extra market research, for example)
Why? (I provide advance mock-ups for his focus groups)
1. 2.
Now, switch gears and list people who depend on you. Again, list your work relationships with those individuals, and the nature of their dependency on you. Why are you willing to help these people? Depends on me Sales team
Relationship Peer
For Super rush product delivery
Why? They say good things about me to upper management
1. 2.
INFLUENCE Recognition of one’s dependencies is a first step in managing without authority. That recognition clarifies the need to enlist the collaboration of others in achieving organizational goals. Successful managers enlist collaboration through the application of personal influence, which we define as a person’s ability to alter the behavior of others without recourse to the power to command. If we think about it, each of us can trace some aspects of our behavior to the influence of others. We may work late on some days, not because we were ordered to do so, but because our work team expects a task to be comAMACOM Self Study Program http://www.amaselfstudy.org/
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pleted by the next morning. We may take up some civic cause because of the influence of a neighbor whom we admire. Influence is present in many situations, from the settlement of disputes to the assignment of a plum project. We see many similar situations in the workplace. Consider this example: Helen, a powerful executive, is pushing to establish a branch office in Winnipeg, Canada. Mike, the VP of Sales, thinks the numbers supporting the proposal are a little weak, but he has decided not to oppose the plan. “Helen’s intuition has been right before—the Manitoba office has been a big success. And Helen has the CEO’s ear on a lot of issues that affect me and the sales force,” Mike tells himself. “I can live with the Winnipeg office, and I need Helen as a partner, not an adversary.” Power often lurks in the background of influence. As President Theodore Roosevelt famously said, “Speak softly, but carry a big stick.” The power hidden behind softly spoken words can influence others to take a particular course of action. For example, you may use influencing tactics to get an employee to take on a new assignment—by explaining how it will benefit her career development, or by appealing to her team spirit—but the fact remains that you are her boss and could conceivably order her to take the assignment. Use Power Only When You Must Even when a manager has the power to enforce certain behaviors by subordinates, he or she should try first to achieve the desired ends through the application of influence and persuasion. This is because the direct application of organizational power leads to a grudging, half-hearted response. People do not like being ordered about. They are embittered by the recognition of their own powerlessness. And they will seek opportunities to turn the tables, to sabotage, or to withhold their best effort. Think of organizational power as a last resort. Once you have used it, you have nowhere to go. If it fails, you are out of alternatives. Even if you succeed in gaining compliance, you will have no way to ratchet up your demands. As a manager, you will find a few times when the direct application of your organizational power is necessary: in a crisis, for example, or when you must settle a disagreement between to two uncompromising subordinates. So save the power you have for those rare occasions; don’t dissipate it in situations where persuasion or influence can accomplish the same end.
Increasing Influence Because of its usefulness as a tool for managing without authority, a manager should actively take steps to increase his or her influence in the organization. © American Management Association. All rights reserved. http://www.amanet.org/
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Aside from gaining influence by gathering more organizational power, there are several ways to do this. It’s useful to think of influence as based on personal attributes including trustworthiness, reliability, and assertiveness. Cultivating these attributes will not in itself increase your influence, but without them, you cannot be influential. Trustworthiness Trust is a condition that gives us confidence in the character, ability, or truthfulness of someone else. In a business context, trust is something that’s earned over time by:
• • • • • • • • • •
Telling the truth, no matter now painful. Delivering both the good news and the bad. Taking responsibility for our mistakes. Identifying the upside and downside potential of our suggestions. Recognizing the value of ideas that compete with our own. Giving careful thought and analysis to our proposals. Providing decision makers with the information they need to make wise choices. Putting organizational goals above our own. Respecting confidentiality. Having the courage to say “I don’t know” when appropriate.
Reliability In the workplace, reliability is a personal quality that gives others confidence in saying or thinking, “I can count on that person to follow through.” Not everyone has a reputation for reliability; those who lack it have little ability to influence others. Like trust, a reputation for reliability is developed over time. Start developing yours today by:
• • • • •
Never making promises you cannot or will not keep. Remembering that decisions are ineffective in the absence of implementation (follow-through). Not giving up when you encounter impediments. Keeping all your agreements, large and small (this includes being on time for appointments and meetings). Doing your research.
Assertiveness Assertiveness is another foundation attribute of influential people. You will exercise little influence if you allow others to push you aside, or if you simply keep your light under a basket. Sticking up for your own interests in straightforward ways will earn you respect. Besides cultivating the personal attributes of influential people, there are other behaviors that will increase your influence at the office.
•
Enlist the power of reciprocity. Reciprocity refers to the giving of something in return for receiving something. The old phrase “I’ll scratch your back if you’ll scratch mine” is based on positive reciprocity. Reciprocity is a powerful AMACOM Self Study Program http://www.amaselfstudy.org/
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•
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force in human society, one that extends to the workplace. A person who receives a favor feels an obligation to repay it in some way—to reciprocate. Thus, every time you do a favor for someone at work—your boss, peers, and subordinates—you add to your “accounts receivable,” or influence. Develop and demonstrate expertise. Special knowledge or expertise in an area deemed important by the organization is another source of influence. What expertise is important in your organization? Technology? Customer understanding? An ability to re-engineer work processes to make them faster and cheaper? A relationship with a key supplier? Whatever it is, if you are the master of that critical expertise—the “go to” person—you will have influence. So build expertise in something that matters. Create dependencies. As we discussed earlier, the people on whom others depend have influence. For example, if your boss depends on you for generating the production output that makes her look good to senior management (and earns her a bonus), you have some influence over your boss. As you create dependencies within your workplace network, you will gain organizational influence.
Think About It . . . Which people in your organization, operating unit, or department seem to have great influence? Forgetting for a moment about the influence that comes with formal authority, explain the sources of their influence. List two influential people below and indicate their source(s) of influence.
Can you think of one person whose influence can be credited to his or her personal attributes? To the power of reciprocity, expertise, or the dependencies of others? Please explain.
PERSUASION One of the most powerful ways to influence others is persuasion. Persuasion is the process of communication that enables one person to alter the beliefs, at-
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titudes, or actions of others. Salespeople employ persuasive communication in their work with customers every day. Their goal is to get customers to adopt a positive view of a product or service, to see its benefits to them, and to act by placing an order. If you’re thinking, “That’s fine for salespeople, but I’m not a salesperson, I’m a manager!” think again. You must learn to sell your ideas to your peers, your boss, and your subordinates. You must convince them that your ideas are not only sensible, but in their interests. And you must persuade them to act on those ideas. Successful managers do this all the time. Those managers are less apt to command or compel than to persuade those with whom they work. If you keep your eyes open for it, you’ll see persuasion applied around you every day. It’s so commonplace that we often don’t think about it. Yet it is essential to getting things done in the workplace.
Exercise 4-2 Your Experience with Persuasion Look back over the past few weeks and identify three situations in which you or someone you work with used persuasive communication. Indicate the goal of that communication. Finally, note whether the persuader was successful; if not, why not? Persuaders
Goal
Successful? (Yes or No)
If not, why not?
1. 2. 3.
THE FOUNDATIONS OF PERSUASION Like a building, effective persuasion rests on a solid foundation: a combination of trust, understanding of others, a credible case, and persuasive language (Exhibit 4-1).
Trust We’ve covered this territory earlier in the chapter. Being seen as trustworthy is a key personal attribute of influential people, and it is absolutely critical to anyone who aims to persuade others to his point of view. It’s difficult to persuade people of anything if they do not trust us. Even if we were to tell them that the sky is blue, they might not be persuaded because they don’t trust us. AMACOM Self Study Program http://www.amaselfstudy.org/
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xhibit 4-1 The Foundations of Persuasion
Persuasion
Trust
Understanding
Credible Case
Persuasive Language
Would you be persuaded to accept someone’s sales forecast if you thought that person wasn’t knowledgeable about the subject, or was using sloppy forecasting methods, or was trying to pull the wool over your eyes? Would you enter into a negotiated agreement with someone whom you did not trust to carry out her end of the bargain? Absolutely not! Anyone who aims to persuade in the absence of trust faces an uphill climb. We trust people when we believe that:
• • • • • •
They speak the truth. They respect or safeguard our interests. They know what they’re talking about. They are sincere in what they say to us. They have been reliable in the past. They will not disclose confidential information.
If asked, would your coworkers say that you have these trust-inspiring qualities? If they wouldn’t, you need to do some rebuilding if you want to be a persuader. The following six “tips” are things you can do today and every day to inspire trust in those around you.
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Tips for Establishing Trust 1. Always keep on the right side of the truth in your dealings with others. Lies, even little ones, have a way of being found out. 2. Make an effort to understand the interests of others; then demonstrate respect for those interests. 3, Never talk off the top of your head about serious business; instead, develop expertise in the subjects you deal with. 4. Be sincere in your dealings—not a phony. Few things are as annoying and as difficult to disguise as false sincerity. 5. Cultivate a reputation as a person whom others can count on when the chips are down. If you agree to do something, always follow through. 6, Learn how to keep confidences. People are more inclined to trust a person who will not share sensitive information with others without first asking permission to do so. If you follow this advice you will develop a reputation as a trustworthy person, and that reputation will enhance your persuasiveness in all aspects of work and life.
Exercise 4-3 How Trustworthy Are You? Use a scale of 1 to 5 to answer the following questions and determine whether you can be considered trustworthy; 1 represents the lowest level of trustworthiness and 5 the highest level. 1
2
3
Lowest
4
5
Highest
1. Do you always tell the truth in your dealings with others? ___________ 2. Do you make an effort to understand and respect the interests of others? ___________ 3. Do you speak from expertise in the subjects you deal with? ___________ 4. Are you sincere in your dealings? ___________ 5. When you agree to do something, do you always follow through? ___________ 6. Do you keep confidences? ___________
Understanding You’ll also be more persuasive in your communications as you come to understand the people you’re trying to influence. It’s intuitively obvious that the more you know about someone, his interests, viewpoints, and needs, the more AMACOM Self Study Program http://www.amaselfstudy.org/
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successful you’ll be in communicating persuasively with that person. You’ll be prepared to deliver your message in a manner that addresses those needs in a positive way. You can learn a great deal about the needs of others by simply asking questions. For example, a sharp car salesman won’t just point a potential customer to the back lot and hope she finds something she likes. He’ll ask questions first: “What are you driving now? Do you like it?” “How large is your family?” “Are you interested in gasoline efficiency and safety? “Speed and pick-up?” “Do you haul a boat?” You get the idea. Understanding your audience before you try to persuade them is common sense. If, for example, you aim to persuade your boss and coworkers to adopt a new process for handling an essential office routine, try to understand:
• • • •
How attached are individual coworkers to the current process? How would the change you propose affect them—both negatively and positively? Who, if anyone, would resist the change, and why? Who, if anyone, would strongly support the change and, perhaps, become your ally?
If you think about the interests of the people you aim to persuade, you’ll be in a better position to bring them around to your point of view. Understanding the people you aim to persuade includes understanding how decisions are made. This is important because persuasion usually aims to influence a particular decision: a change in the work schedule or process, which new office technology should be purchased, how bonuses will be allocated, and so forth. So, before you try to persuade anyone of anything, determine how the decision that concerns you will be made. Will it be made by your boss or by your boss’s boss? Does the decision require agreement among members of a committee? Typically, lower-level managers are allowed to decide on the small local issues, while bigger decisions are pushed up the chain of command to more senior managers, the executive team, the CEO, or even to the board of directors. In some departments, project or work teams can make decisions up to a certain level. When decisions affect many people or departments, a committee usually has the final say—and that committee may seek input and advice from specialists. For example, within large corporations, recommendations on salaries and bonuses for senior managers are generally made by board-level compensation committees. Those committees seek input from the finance department, the human resources department, and in many instances, from compensation consultants.
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Identifying Key Decision Makers and the People Who Influence Them Once you understand how decisions are made, the persuader’s next task is to identify the key players and thought leaders. Thought leaders are the people whom others listen to when important matters are on the table. These “centers of influence” may have organizational authority—such as a supervisor or manager—technical expertise, or just the kind of good sense that commands respect from others. They may not make decisions, but they influence the people who do. Decision makers listen to these thought leaders. Key decision makers and thought leaders are the people on whom you should focus your persuasive communication. Just be careful; the person you assume to be the decision maker may be highly influenced by one or more people you wouldn’t expect. Consider this example: Imagine that you are the IT manager of a mid-sized mail-order company. Julia manages the customer service department; her employees are very comfortable with the old telecommunications system, but you think it should be replaced to reduce maintenance costs. Bob and Samantha, Julia’s direct reports, supervise the other 15 people in the department and try to assure that their work follows the game plan and is highly efficient. You would probably tell yourself, “Julia’s the decision maker, but she’ll likely consult with Bob and Samantha on something like this.” And you would probably be right. But don’t accept the obvious; try to find out who else will influence the decision. In this case, you might discover that Eugene, the head of tech support, is a major influence. Stan, the chief financial officer, would also be likely to influence the decision. Actually, since Stan is the person who must authorize payment for the new system, he, and not Julia, may be the real decision maker.
A Credible Case The third foundation of successful persuasion is a credible case, based on logic and supported with evidence. People have trouble saying no to logical arguments and evidence. Consider the following example. When Sarah approached her boss with a proposal for a flexible work schedule, she planned her talking points carefully. “Working from home will allow me to give my full attention to my work. As you know, the kind of keyboarding I do requires intense concentration, and there are always interruptions here in the office. Besides, if I don’t have that hour-long commute to the office, I can get started earlier in the day and do the team’s work planning and assignments before anyone else even gets in.” “But what about distractions at home?” asked Dick. “Won’t you be tempted by things around the house?” AMACOM Self Study Program http://www.amaselfstudy.org/
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“I have an office over the garage—it’s separate from the house, so I wouldn’t go into the main house except at lunchtime. And my mother-in-law lives in an apartment in my house, so if one of the kids is home sick she can take care of them.” By building a credible, logical case for her proposal, Sarah had countered each of the objections she knew that her boss would bring up. So, in the end, he agreed to try out her suggestion. “How could I say no,” he told himself. “She had thought through the important issues and developed a plan I couldn’t disagree with.” This example underscores the importance of something discussed earlier—understanding the people you aim to persuade. Sarah understood her boss’s concerns and how he was likely to respond to her plan. She used that understanding to create a logical argument in favor of her revised work situation. It’s easy for people to be dismissive of persuasive efforts when the wouldbe persuader hasn’t done his homework—that is, hasn’t developed a solid, fact-based case. This is especially true when a proposal requires people to change what they are doing or take a calculated risk. But as the previous story makes clear, fair-minded people find it difficult to say no to things that are logical and valuable. Too many people fail to give proper attention to this third building block of persuasion. They have an idea that makes sense to them, but don’t take the time to see it from the perspective of the people whose approval and collaboration they need. Tips for Building a Credible Case 1. Check your assumptions. Think through the things that must happen for your idea to succeed: a change in the work routine, an increase in the budget, training of personnel, and so forth. Be sure that your assumptions are reasonable and that your audience will agree that they are reasonable. 2. Think of feasible alternatives to your idea, as well their strengths and weaknesses. That way if someone says, “We should do it this way instead,” you’ll be prepared to point out the shortcomings of that alternative or adopt some of its strong points. 3. Develop a contingency plan. A contingency plan identifies actions that can be taken if your idea doesn’t work. For example, “We’ll keep the old telecom system online for several weeks as a backup. That way, if the new system has bugs, we’ll still be able to communicate while we work them out.” 4. Obtain endorsements for your case. When people see endorsements or testimonials from people they know and respect, they are more likely to open their minds to your idea. “This new telecom system will improve our productivity. But don’t just take my word for it. Here’s a list of companies that have been using the same system for one or more years; let’s contact a few of them.”
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Exercise 4-4 Persuading Your Boss Imagine that you want to take one week off to attend an industry conference. You believe that doing so will make you more knowledgeable about the direction in which the industry is heading and also strengthen your network of industry contacts. How can you build a credible case to convince your boss? Before you try to persuade her of the merits of your idea alone, do the following: List three concerns or objections that your boss might have to this arrangement; for each, indicate how you would respond to those concerns/objections in persuading your boss. Boss’s Concerns/Objections
How I Would Respond
1.
2.
3.
Persuasive Language The three building blocks just described are necessary but insufficient for success in most cases of persuasion. They may get you close to the finish line but you’ll need one more thing to carry you over—persuasive language. You need language that addresses the head (logic) in some cases, and the heart (emotions) in others—and in some cases, both. Head language is usually most appropriate when the decision hinges on quantifiable information, and when the people involved are analytical and data-oriented—accountants, engineers, strategic planners, stock analysts, and so forth. Head language appeals to the logical mind, which demands reliable evidence. A manager negotiating salary with a new hire, for example, will use industry information, local cost-of-living data, and competitiveness analysis to explain his offer. He will support his case with factual information: “Yes, I know that salaries are much higher in New York, where you’re currently working, but here in Indianapolis the cost of living is about 17 percent less, and salaries reflect that.” In some cases, however, persuasion is more effective when it speaks to the heart. Every great public speaker understands the power of an emotional appeal. Consider Winston Churchill’s famous broadcast to the British people in the early days of World War II, when their army had been defeated in AMACOM Self Study Program http://www.amaselfstudy.org/
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France and the island nation stood alone against the more powerful forces of Nazi Germany. Churchill did not cite dull statistics to his listeners. Instead, he spoke to their hearts, evoking the emotional courage they would need to carry on during the months ahead. Even though large tracts of Europe and many old and famous states have fallen or may fall into the grip of the Gestapo and all the odious apparatus of Nazi rule, we shall not flag or fail. We shall go on to the end, we shall fight in France, we shall fight on the seas and oceans, we shall fight with growing confidence and growing strength in the air, we shall defend our island, whatever the cost may be. We shall fight on the beaches, we shall fight on the landing grounds, we shall fight in the fields and in the streets, we shall fight in the hills; we shall never surrender. . . In some cases, a successful appeal to the heart will outweigh whatever weaknesses the logical case may have. Persuasive language also emphasizes benefits. Every salesperson knows the difference between features and benefits. When someone says “This computer has a 2.33 megahertz processor and a VereX bus,” that person is describing features. Features are necessary in that they set the groundwork. You should communicate them, especially if your audience is technically oriented, or if the discussion calls for a full airing of the details. But many people are persuaded by benefits, not features. Here are some examples of persuasive speech that emphasize benefits:
• •
“Because this is such a fast computer (feature), you won’t be sitting there waiting and waiting (benefit). And we all hate waiting…” “If we adopt the new work process I’ve described (feature), we will improve employee productivity by 20 percent. And that will save our department $180,000 every year. That’s money we could share between our owners and employees (benefit).”
When speaking persuasively, be positive and affirmative in communicating your ideas. Some people cannot make an unqualified statement. “I think that . . .” is their preferred opener to every statement. If you’re trying to persuade someone to adopt your view, don’t say, “I think that . . .” You might as well say, “I’m not sure, but . . . .” These qualifications tell listeners that you may be wrong, or that you lack confidence in your view, or that you’re offering nothing but a personal opinion. Qualified Statement
Affirmative Statement
“I think that my idea will increase sales.”
“Sales will increase when we implement my idea.”
“I think that we should change our process.”
“We must change our process in order to reach our productivity goal.”
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If you have built a credible case, you can make affirmative statements with confidence, and your confidence will inspire confidence in your listeners. Also, minimize the use of “if.” “If we manage to change our process, productivity will improve.” This is another qualifier. Instead, be affirmative and say something like this: “When we change the process . . .” or “Once we’ve changed the process, productivity will improve.” What are your sources of influence? Whatever they are, use your influence as you would your formal authority as a manager—that is, use it sparingly and wisely. Think of your influence as a work in progress: it is always being either enhanced or undermined by your actions, and it is only as strong as your most recent behavior. Using your influence unfairly or for the wrong ends will only destroy it. Once destroyed, it is almost impossible to rebuild.
Managers often find themselves in situations where they must produce results through other people over whom they have no power or authority. Even when they do have authority, their dependence on others limits their ability to exercise it. In these cases, the ability to persuade and to influence can help them get the job done. Influence is a tool that managers can use to accomplish their goals when they lack organizational authority. Influence refers to a person’s ability to alter or affect the behavior of others without recourse to the power to command. Managers can increase their influence by cultivating the personal attributes of influential people: trustworthiness, reliability, and assertiveness. Persuasion is a communication process through which we alter or affect the attitudes, beliefs, or actions of others. The four building blocks of persuasion are trust, understanding, a credible case, and persuasive language. To build trust, always behave in a trustworthy way. Increase your understanding of the people you are trying to persuade; you should also become aware of how decisions are made in your organization, and identify the key decision makers for the decision you are trying to influence. Build a credible case by checking your assumptions, being aware of alternatives to your idea, developing a contingency plan, and obtaining endorsements from others. Finally, to be successful in persuasion, use the language of persuasion. Emphasize the benefits of your proposal; speak to both the intellect and the emotions; use positive, definite language— and, when possible, cite endorsements from others.
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Review Questions
1. A person can increase his or her influence by:
1. (d)
(a) being punctual. (b) exercising formal authority whenever possible. (c) allowing others to lead. (d) developing and demonstrating expertise.
2. A communicative process through which we alter or affect the attitudes, 2. (d) beliefs, or actions of others is called: (a) dialogue. (b) debate. (c) contingency planning. (d) persuasion.
3. Trust is:
3. (a)
(a) confidence in a person’s character or truthfulness. (b) a product of a person’s receptivity to particular ideas. (c) communication that harmonizes beliefs. (d) a key element in planning.
4. Which of the following is one of the three building blocks of persuasion, 4. (b) as described in this chapter? (a) The ability to speak and write well (b) Understanding the people you aim to persuade (c) Organizational authority (d) Control over resources
5. Managers who recognize their ______________ others are less inclined 5. (b) to command, to order, to threaten those who work for them. (a) authority over (b) dependencies on (c) power relative to (d) equality with
Do you have questions? Comments? Need clarification? Call Educational Services at 1-800-225-3215 or e-mail at
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5 Developing Your Leadership Style Learning Objectives By the end of this chapter you should be able to:
• Describe the evolving theories of leadership. • Explain the concept of flexible leadership. • Describe the role of the manager in leading •
change. List the key change management steps.
There is more to a manager’s job than planning, organizing, staffing, and controlling his or her group or unit. A manager must also lead. Leading involves influencing others to voluntarily accomplish a mission. There are important differences between leading and managing. The authors like to sum up those differences as follows: Managers assure that people are doing things right. Leaders, on the other hand, are concerned that people are doing the right things. Managers make sure that the trains are running on time. Leaders think beyond the administration of current tasks to objectives that will assure the organization’s future survival and success. They expand the train tracks into new, unserved territory. Once leaders identify important objectives, they influence others to work toward them. They show the way forward. The contrasting vocabularies associated with these two related activities may help you appreciate the difference between managing and leading:
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Managers
Leaders
Short-term
Long-term
What
Why
Direct
Inspire
Implement
Innovate
Focus
Envision
Objectives
Aspirations
As a new manager, you must develop leadership capability. This chapter will get you started. It will briefly expose you to the traits theory of leadership, but quickly move to more practical concepts that will help you develop a successful “style” of leadership. Finally, we’ll consider the leader as change agent, evaluate when that role is appropriate, and explore what the leader must do to make change successful.
EVOLVING THEORIES OF LEADERSHIP Few subjects in the business world have inspired so many speeches, articles, books, and research initiatives as leadership. This interest is not new. Our fascination with leaders can be traced back to the earliest literature, which gave us tribal leaders and heroes such as Odysseus, Moses, Beowulf, and El Cid. In telling the tales of their times, poets and historians of every age have spent most of their ink on great leaders. This persisted into the nineteenth century, when writers such as Francis Parkman and William Prescott—the first generation of American historians—painted vivid portraits of the men and women whose leadership and actions shaped their times and the Western hemisphere in which they lived: Champlain, LaSalle, Cortes, Pizarro, and others. They continued the tradition of focusing on heroic leaders. As the social and psychological sciences developed in the twentieth century, academic researchers took up where the historians left off. But they focused on traits, the unique personal features that set leaders apart: their self-confidence, imagination, vision, rhetorical skills, energy, determination, and physical prowess, among others. This line of inquiry gradually gave way to studies of what leaders do. For example, they:
• • • • •
Create a vision of the future that others willingly adopt. Articulate what others strongly feel but have not found the words to express. Look beyond current boundaries to new possibilities. Behave in ways that are consistent with their words and ideals. Successfully challenge others to “stretch” to new levels of achievement.
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That line of scholarship eventually morphed into the study of leadership “style,” the core of this chapter. Here are a few examples of leadership styles.
• • • •
Authoritarian, or autocratic leader. This individual makes all the decisions, and tells people what to do and how to do it. In the political world, the ironfisted Soviet leader Joseph Stalin was an extreme model of this leadership style. People who opposed or deviated from his rule usually disappeared. Democratic leader. This leader ultimately calls the shots but encourages participation in decision making and planning. “I would welcome your thoughts about this issue before I make a decision.” Delegating leader. The delegating leader sets priorities and standards and encourages others to find ways to meet them. This is reminiscent of the advice of Lao Tzu, the sixth-century BCE philosopher: “To lead the people, walk behind them.” Charismatic leader. The pioneering sociologist Max Weber used the term “charisma” to describe “a certain quality of an individual personality, by virtue of which he is set apart from ordinary men and treated as endowed with supernatural, superhuman, or at least specifically exceptional powers or qualities” (Weber, 1947). Charismatic people lead through personal magnetism or the power of their ideas. Charismatic leadership is more often observed in politics and religion than in the more practical world of commerce, but we have famous examples of charismatic business leaders (for instance, Lee Iacocca) who affected dramatic turnarounds or change within their organizations.
As a new manager, one of your greatest challenges will be the development of a leadership style that is appropriate to the situations for which you are responsible, and to the people (followers) you are required to lead.
FLEXIBLE LEADERSHIP Flexible leadership is a leadership approach that presumes that different situations and different subordinates call for different styles. Flexible leaders change their styles as the situation changes, telling people what to do in some circumstances, asking for their contributions to a decision in others, and so forth.
No Single Best Way The notion of flexible, situation-based leadership goes back at least as early as the 1950s when Robert Tannenbaum and Warren H. Schmidt published a nowclassic article in the Harvard Business Review entitled “How to Choose a Leadership Pattern” (Tannenbaum and Schmidt, 1958). As a testament to its timeless relevance to managers, that article remains in print to this day. Tannenbaum and Schmidt described a continuum like the one shown in Exhibit 5-1. As you can see, as the manager’s use of an authoritarian leadership style decreases (moving left to right), a more democratic style prevails. Depending on the situation, a manager will apply more or less formal authority. In a crisis situation, for example, she may decide what needs to be done and simply announce it to her subordinates. © American Management Association. All rights reserved. http://www.amanet.org/
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xhibit 5-1 The Tannenbaum-Schmidt Leadership Continuum More Authoritarian
More Democratic
Area in which the manager exercises authority Area in which subordinate exercises initiative or freedom Low subordinate freedom
High subordinate freedom
We have a serious problem this morning. Our shipment of samples did not arrive at the Las Vegas trade show, which opens tomorrow. If we don’t get them there by morning, we could lose lots of potential sales. So, Frank, call the warehouse and tell them to box up another shipment to the same address, this time to be sent by FedEx. Tell the warehouse it’s urgent and that they should pull out all the stops. Have them call me if there are any questions. The last pickup has already left the warehouse today, so Sharon and Ed, while Frank’s doing that, take a company vehicle and drive over to the warehouse. As soon as the shipment is packed, take it down to the FedEx office and ask for next-morning delivery. Here’s our account number. Do you understand? This situation, which would fall on the far-left side of the continuum, called for rapid action and highly directive leadership. There was no time to confer, to meet, or to ask for the input of others. The manager had to tell people what to do! A different situation might call for a different leadership approach, as in the following email from the same manager to her subordinates. To: Trade show marketing staff Subject: Upcoming Chicago Show The Chicago trade show begins two months from today. Because this is such an important event, we’ve reserved a double booth display area in a prime exhibit hall location. At this point we need to make decisions about our display, which items we’ll feature, and how many people from our group should be on hand. I’ve reserved the third-floor conference room for Tuesday, April 12, 10-12AM for an all-hands meeting. Come prepared to share your
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ideas about the above. Everyone’s contribution is welcome on this important matter. Here we have the same manager and the same staff, but the manager’s tone and style is quite different, isn’t it? Instead of telling, she is welcoming participation from subordinates. This may be perfectly appropriate, given the situation.
Exercise 5-1 Assessing Leadership Style Describe two situations where your boss demonstrated his leadership style. What were the issues? Describe your boss’s style in each situation, the degree to which he was telling you what to do or fully delegating responsibility to you (low subordinate freedom versus high subordinate freedom), and, in your view, whether that style seemed appropriate or effective. Situation 1: ___________________________________________________________________ Boss’s style: __________________________________________________________________ How appropriate or effective, given the situation?
Situation 2: ___________________________________________________________________ Boss’s style: __________________________________________________________________ How appropriate or effective, given the situation?
Now, looking back at Exhibit 5-1, where would you locate each of those styles on the leadership continuum? Situation 1: ___________________________________________________________________ Situation 2: ___________________________________________________________________
Followers Matter The notion that good leaders respond to situations was advanced further in the 1960s by Paul Hersey and Ken Blanchard in Management of Organizational Behavior, which has remained popular for four decades through many editions (Hersey, Blanchard, and Johnson, 2007). In its most recent edition, the authors
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suggest managers consider another situational dimension: the performancereadiness of followers, or subordinates. Performance readiness describes the training and commitment of employees. Are they able to do the work undirected by their leaders? Are they unable but welcoming of guidance? Are they unsure of themselves but have a strong commitment to the organization’s success? Are they both competent and committed? The answers to these questions should determine where the leader/manager positions himself on the leadership style continuum. As a manager, for instance, you may be philosophically disposed to giving your subordinates a free hand in making important decisions and implementing group initiatives—you’d prefer to be a democratic leader and practice participative management. After all, that’s probably how you would like to be led. But if your subordinates lack experience or know-how, or if they are not particularly committed to the organization, such a well-meaning, democratic style may produce a disaster! Consider situations A and B: Situation A: You’ve been assigned to manage a fast-food restaurant that’s part of a national chain. The company has spent years perfecting its blueprint for fast, economical operations. There’s even an operations manual that defines every step of running the restaurant and how every job should be performed. With the exception of your assistant manager, all employees are either part-time or have been with the restaurant for less than four months. Turnover is high. Most employees view their work as routine and short-term and have no strong commitment to it. In these conditions, a highly directive form of leadership is appropriate. Situation B: You have a PhD in molecular biology and ten years of lab experience in pharmaceutical research. You’ve recently changed tracks from pure research to management, and ten people work under you. One is a secretarial-administrative person, the rest are all technical professionals with academic credentials and lab experience equal to yours. All have a high level of commitment to their craft; all could leave today and begin working in another lab tomorrow, yet they choose to remain at your organization. What form of leadership is appropriate here? Situations A and B are a world apart, aren’t they? The fact that most workers in the fast-food restaurant are newcomers and have little serious commitment to their work means that someone must direct them—that is, tell them what to do. Operations are based on standardized routines that have been perfected over the years; you won’t want people independently deciding how to do their jobs. Situation B couldn’t be more different. There, highly skilled personnel understand their work and are professionally dedicated to it. As the manager, you’d be most effective adopting a democratic leadership style that invited greater decision-making participation by these lab workers.
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What Do Leaders Do? The actions and behavior of leaders will vary depending on the context. Moving from left to right on the leadership style continuum shown in Exhibit 5-1, flexible leaders will adapt to the circumstances they face. • When the job must be closely defined or the employees cannot take on a high level of responsibility, flexible leaders make the decisions and tell their subordinates what jobs should be done and supervise them closely. Communication is mostly one way: boss to subordinate. • When tasks are less defined and employees are more motivated and long-tenured, leaders can rely more on influence than on authority. They coach and persuade. Subordinates’ suggestions are solicited, and communication is two-way. • Moving along the continuum of higher employee freedom, when subordinates are allowed to make routine decisions and solve local problems with oversight, the leader’s behavior is supportive. • At the highest levels of knowledge of the work and employee empowerment, the flexible leader will delegate. Subordinates are given much greater autonomy. As a manager, the important thing to take away from this section is the need to adapt your style of leadership to both the work situation and to the preparation and commitment of your subordinates. Both are liable to change over time, or perhaps in the course of a single day. So it’s best not make a habit of a particular leadership style—even one that’s most comfortable for you.
Think About It . . . Take a moment to reflect on your leadership style and answer these questions. 1. Which style seems most appropriate today? Consider the nature of the work and the preparation and commitment of those you are managing. List one or two reasons why you believe this style is most appropriate now.
2. What can you do as a manager to increase the preparation and commitment of those you are leading?
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Think About It continued from previous page. 3. How will your role as a manager change as you become more of a coach and a delegator? Think about how you can support subordinates as they gain greater autonomy and take on more responsibility for making decisions.
LEADING CHANGE You will recall that our discussion of what leaders do included things such as creating a vision of the future, looking beyond current boundaries to new possibilities, and challenging others to stretch to new levels of achievement. Achieving success in new ventures—whether the vision is your own or it originates higher up in the organization—requires that managers become adept at leading change. This important role can be very challenging. Change is difficult for many people, both managers and their subordinates. It upsets comfortable routines and interpersonal relationships, and challenges everyone to learn new things. Because some people benefit from the status quo, they view change as a threat—an enemy to their own well-being. They will resist change and attempt to undermine those who support it. As Machiavelli warned readers in his Discourses in the sixteenth century: . . . there is nothing more difficult to carry out, nor more doubtful of success, nor more dangerous to handle, than to initiate a new order of things. For the reformer has enemies in all those who profit by the old order. Yet for all of its disruptions and perils, change is periodically necessary. All progress depends on it. For business organizations, change is often necessary when something in the market environment changes:
• • • •
A new, threatening competitor enters the market—as when Toyota and Honda entered the U.S. auto market in the 1970s. A superior technology is introduced—such as the appearance of digital imaging technology in the early 1980s, a period dominated by film photography. Customer requirements change—such as McDonalds loss of business to competitors in the first years of this century, when customer tastes shifted away from its standard hamburger and French fries menu. An unexploited market opportunity is discovered—as happened when Apple discovered a huge untapped market for portable, digital sound (iPod).
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Companies that fail to respond to changes like these face serious consequences. Other changes seem less cataclysmic, but their success or failure can make or break an organization. As a manager you might be asked to lead or support one of these change initiatives:
•
• •
The company must replace its customer database with a more robust and flexible tool that supports new types of marketing initiatives. The information technology and customer service departments resist the complex new program, and even the sponsoring marketing department does not truly understand the scope of the change. The organization is moving to a new building. No one, not even the executives, will have an office with a door that closes. In a company reorganization, two formerly competing departments are merged. No one is laid off, but the groups are expected to work together and benefit from each other’s experiences.
It requires thoughtful and careful planning to emerge successfully from a change initiative, whether it originates from within the organization or is caused by upheavals in the environment.
KEY CHANGE MANAGEMENT STEPS When change is essential, someone must lead it. Major organizational changes are led by key executives, who are supported by implementation teams of mid- and lower-level managers. Smaller changes may be confined to a department or work group, and led by the local manager. So there’s every possibility that you may need to lead change at some time in your career. No matter what the scope of the change, managers typically must follow the same steps:
• • • • •
Correctly identify the problem and its solution. Communicate the need for change. Enlist support. Create a workable plan. Implement the plan.
Let’s now look at these steps in detail.
Correctly Identify the Problem and Its Solution It’s easy to say “We’re losing revenues and profits—something has to change!” Pinpointing the reason for bad performance and its solution is usually more difficult. It might be weak products, a shrinking pool of potential customers, greater competition, or poor internal management. Getting a handle on the problem involves time, analysis, thought, and the input of people closest to the problem. Executives and managers, who have a bird’s-eye view of the business, often make the mistake of imposing their own view of the problem and its solution. Doing so creates two problems:
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• •
Their assessment is likely to be wrong because they are removed from dayto-day operations and they may have predetermined notions of causes and solutions. Change imposed from the top is likely to generate resistance or apathy among those forced to implement it.
You can mitigate these problems by giving employees a greater hand in identifying the problem and crafting a solution. Steve knew that his group had to improve time-to-market for its products and he thought he had a pretty good idea of where the problem lay. However, rather than “solving the problem” by himself, he asked a team of employees to look at the issue. The group conducted an analysis of the current processes and found five major bottlenecks in addition to the one that Steve had identified. Trusting their own discovery process, the group embraced the necessary changes and dramatically improved time-to-market over the next six months.
Communicate the Need for Change Leaders of most successful change initiatives create a sense of urgency around the change. After all, why make the effort if there’s no real need to change? Change initiatives are usually expensive, disruptive of routines, and demand sacrifice. At the very least, they impose extra work. The best way to neutralize those negatives and enlist support for a change initiative among employees is to communicate the need for change. As a manager, you must articulate certain things:
• •
“If we don’t change, we’ll all be hurt (because of layoffs, fewer promotions, smaller bonuses, and so forth).” Paint a picture that will make sense to them. “Change will be difficult, but we’ll be better off as a result.” People need to see a real benefit as the outcome of the change.
Enlist Support Change cannot be imposed. Collaboration is required at every level. So once you’ve communicated the “what” and “why” of change to your subordinates, enlist their support. Start with the informal leaders who exist in every organization and every department. You, for example, may be the formal leader of your unit, but there are very likely one or more individuals who have substantial influence among your subordinates, even though they have no formal authority. If you make these people your change allies, many other people will fall in line. When Steve was ready to remove the bottlenecks found by the team, he already had a cadre of supporters. Members of the analysis team had already begun to talk with others about the issues, and had started thinking of ways to address them.
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Exercise 5-2 Leading Change Identify an important change that must be made in your organization. Perhaps your company relies on a product technology that is being undermined by new developments; perhaps a near-religious dedication to quality is needed. Whatever it is, describe the change you’d like to make in your company or your unit.
Now, as the change leader, how would you communicate the need for change—and its benefits— to other employees? What would you say?
Finally, which formal and informal leaders in your organization would have to be enlisted as supporters in order for your plan to succeed?
Create a Workable Plan Using a clear understanding of the problem as your starting point, engage appropriate people in a plan to solve it. “Appropriate” people are those who:
• • • •
Are close to the problem. Have a stake in its successful resolution. Have some special talent or insight to contribute. Will be asked to implement the change plan.
Again, you want to avoid any action that gives the appearance of an imposed change. People are much more likely to implement a plan of their own making than one imposed by corporate headquarters. Most change management experts warn against trying to change too much at once. Therefore, limit the scope of your change plan; don’t bite off more than you can chew. If you create success with a plan of limited scope, © American Management Association. All rights reserved. http://www.amanet.org/
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people will be encouraged to take it a step or two further. If you try to change too much and fail, no one will have the stomach for another attempt. Your plan should also include clear milestones. For example, “By February 15, the design of the new sales organization should be complete. By March 15 it should be approved by senior management.” Milestones help keep change initiatives on track. Steve asked Brandi to convene a group to address the three worst “bottlenecks.” Many of the team members’ jobs would be affected by the changes, but because they had been involved in defining the problem and designing its solution, they were all highly committed to the effort’s success. Brandi’s team proposed these milestones: Suggest new process map by July 1; Scope any changes to job descriptions by July 15; Design training by August 15; New process tested and in place by September 15.
Implement the Plan Implementation is usually the most difficult part of change management. Even with a correct diagnosis of the issue, a strong and well-executed communication strategy, and a solid implementation plan, most change efforts face challenges in the implementation phase.
• The devil is in the details. It’s easy to paint with a broad brush, but putting
off dealing with the details can cause big problems. It’s all well and good to propose 24/7 customer service coverage, but who will answer the phone at 3:00AM? And what about coverage for sick time and vacation? Concepts are more palatable than reality. Often people who are on board • with a plan for change grow less enthusiastic when the amount of effort required from them becomes clear. Costs and effort begin to add up. As the implementation progresses, costs • to the organization or individuals become apparent. The change effort itself can start to weigh heavily, as meetings and training sessions add to the team’s normal workload. This is one reason why it’s important to plan some “early wins” during your change effort. Implementation is best handled by a team of people who have a keen interest in success, and who are accountable for results. As a manager, you may be either a team participant or a team leader. If you are the leader, a democratic style (as described above) is the surest way to get the most from your team members. After getting the go-ahead on their plan, Brandi’s team began implementing the changes they had designed. They decided to focus on one relatively easy fix first. This change was so successful, saving a half-day in the overall process, that several employees who had complained about changes to their job descriptions adopted a more open, wait-and-see attitude.
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Leadership is a big, important issue for every manager’s career. We’ve just scratched the surface of it here. The notion of adapting your leadership style to the context and the people you must lead, as described here, will get you off to a good start and serve you well throughout your career. You can learn much more through reading and through direct observation. Develop a habit of reading the biographies and autobiographies of important military, political, and business leaders. Also, observe the habits and styles of effective leaders within your own company and community. You can learn a great deal from them. And above all, practice. If your initial experiences in leadership roles are disappointing or make you uncomfortable, don’t be discouraged. Learn from those experiences and keep trying.
Developing an effective leadership style is critical to the success of a new manager. This begins with an understanding of the differences between managing and leading: managers assure that people are doing things right, and leaders are concerned that people are doing the right things. Theories of leadership have evolved over time, from the study of individual leaders to a focus on leadership traits and studies of what leaders do. We can now define four classic leadership styles: authoritarian, democratic, delegating, and charismatic. Authoritarian leaders make all decisions and tell people what to do and how to do it. Democratic leaders ultimately make decisions but encourage participation in decision making and planning. Delegating leaders set priorities and standards and encourage others to find ways to meet them. Charismatic leaders lead through personal magnetism or the power of their ideas. The most useful leadership style for new managers to adopt is a flexible one that is responsive to the context, the situation, and the employees involved. Flexible leaders change their styles as the situation changes, telling people what to do in some circumstances and asking for their contribution to a decision in others. They recognize the need to adapt their style of leadership to both the work situation and to the preparation and commitment of their subordinates. One important leadership function is leading change. This important role can be challenging, as organizational change alters existing processes and relationships and requires new learning for everyone. A successful change management process involves five steps: identifying the problem and its solution, communicating the need for change, enlisting support, creating a workable plan, and implementing the plan.
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Review Questions
1. Which of the following is one of the steps that managers must follow
1. (b)
in leading change? (a) Follow your instincts. (b) Communicate the need for change. (c) Raise emotions to a high level. (d) Try to change everything at once.
2. Hersey and Blanchard advance the theory of situational leadership
2. (a)
by encouraging people consider the ________________________ of their followers or subordinates. (a) performance-readiness (b) intelligence (c) goals (d) intuition
3. A good situational leader is able to change leadership ___________
3. (c)
as the situation changes. (a) communication content (b) traits (c) style (d) rewards
4. In the twentieth century, academic research of leaders turned from
4. (a)
the traits of leaders to studies of: (a) what leaders actually do. (b) how leaders are selected. (c) the training of future leaders. (d) charisma.
5. If the job of managers is to assure that people are doing things right, the job of a leader is to assure that: (a) subordinates behave correctly in the right situations. (b) people focus on short-term goals. (c) people do the right things. (d) tasks are executed according to plan.
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6 Planning and Setting Goals
Learning Objectives By the end of the chapter you should be able to: • Describe the strategic planning process and four generic strategy types. • Explain how operational planning is used to achieve strategic goals. • Describe the function of control plans. • Outline the characteristics of effective goals and how to formulate them. As stated earlier in this course, one of the basic functions of management is planning. Effective planning begins with organizational goals and moves progressively through strategic planning, operational planning, and planning for control, as shown in Exhibit 6-1. Goals for an organization represent its top-level aspirations—for example, to dominate its market and provide a 15 percent return on shareholder equity, or to be the leading provider of software solutions for financial institutions. The choice of top-level goals cannot be pulled out of a hat; goals must be based on a realistic understanding of two things:
1. The external environment: competition, customer demand and expectations, the larger economy, and so forth. 2. The internal environment: the firm’s financial resources, business allies, core competencies, employee skills, and weaknesses. Notice the feedback loop in the exhibit between the “control” box and strategic and operational planning. If actual results are contrary to plan, control sends a signal to management that it must revisit its strategic and/or operational planning.
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xhibit 6-1 Elements of Planning
Goals External and Internal Environments Strategic Plans
Operational Plans
Control Plans
Adapted from What Managers Do, 4th edition, page 31, by William R. Allen and Harold L. Gilmore, 1993. Used by permission of the publisher, American Management Association, New York, New York. All rights reserved. www.amacombooks.org .
STRATEGIC PLANNING Strategic planning defines how the organization will achieve its highest goals. Again, planning must be informed by a realistic grasp of the external and internal environments, which strategic planners often analyze in terms of “SWOT”: strengths, weakness, opportunities, and threats. Strategy describes how the business will differentiate itself from competitors in a way that imparts a competitive market advantage. Differentiation is only effective if customers appreciate the difference, and it is usually the only way to achieve above-average returns over the long run. Southwest Airlines, for example, didn’t try to copy the plans of United, Delta, Northwest, and other air carriers with full service, a variety of aircraft, and hub-and-spoke routing. It differentiated itself with a no-frills, low-price strategy that flew the same model aircraft from point to point. Thanks to that strategy, and Southwest’s attention to its human resources, the airline grew from a small, regional firm to a major carrier, the most profitable firm in its industry.
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Exercise 6-1 Strategic Differentiation Does your company attempt to strategically differentiate itself from its main competitors? Think about this and then describe in your own words how it differentiates itself.
Now, answer this question: Does your company’s strategic differentiation give it an advantage over competitors? ________ Explain your answer.
Strategic planning is carried out at the top of the organization, typically by a team that includes the CEO, a board member (often the chairman), key stakeholders, such as the chief financial officer and VP of Marketing, and staff. Large corporations employ vice presidents of planning (or development), who take de facto leadership of the planning process. A company can choose from an unlimited number of strategies. However, most of those strategies can be lumped into one or another of the strategies described in the following sections.
Low Cost Leadership To succeed, practitioners of this strategy must build an organization and operations that can deliver goods or services at the lowest available cost. And they must work continually to reduce their operating costs through greater internal efficiencies and distribution effectiveness, cost and salary controls, lower cost of materials, and increased productivity.
Solid Customer Relationships While some customers will always opt for the lowest price, others appreciate and will maintain relationships with sellers they know and trust, and with sellers who go to great lengths to please them. This explains why some small town retailers manage to stay in business when most people are driving out © American Management Association. All rights reserved. http://www.amanet.org/
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to Walmart to get lower prices. This strategy succeeds when a company personalizes its contacts with customers and learns how customers want to be served.
Product/Service Uniqueness or Quality Some strategies aim to succeed in a special niche. The chosen niche may be small, but it allows a small producer to exercise some market leadership and command a high price. For example, most acoustic guitars are built today in factories and sell for between $500 and $3,000. Competition is stiff and requires mass market producers to be highly efficient and accept modest profit margins. A small number of artisans survive and prosper, however, by custombuilding fine instruments using premium woods and decorative inlays that guitar aficionados will gladly pay $5,000 to $12,000 to own and play. The growth of the “micro-brew” beer industry is another example of strategy based on product uniqueness or quality. If a significant number of people didn’t value the quality or uniqueness of locally brewed brands, the beer market would be totally dominated by three or four national producers.
Geographic Expansion Since the ultimate end of strategy is to reap greater sales revenues and, eventually, profits, one common strategy is to cast one’s nets more broadly. Consider Staples, Costco, Home Depot, Starbucks, Dunkin’ Donuts, Whole Foods, and McDonalds. Revenues and profits for these companies grow to a small degree through year-over-year store operations. They might crank out another 5 percent or 8 percent growth by attracting more people to existing stores, but to get the larger revenue/profit number these companies aim for, they must expand geographically. Thus, we see companies creating new outlets at a breakneck pace. Sometimes companies expand too quickly, as Starbucks did when it increased its reach to encompass more than 8,500 company-owned stores and another 6,500 licensed outlets in 2007. The global recession of 2008 reduced the number of people willing to spend $3.50 for a cup of coffee. Starbucks’ response to the changes in the external environment was a retreat to a smaller number of outlets—effectively a change to a costcutting strategy.
Think About It . . . The number of different business strategies is almost infinite, yet most of them fall within one (or sometimes two) of the general categories described here. Which type does your company follow?
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OPERATIONAL PLANNING Operational planning is a process that engages both senior and unit level managers in answering these questions: What must we do to make our strategy work? Who will do what and when will they do it? You might think of operational planning as a process for assuring strategy implementation. Taking strategy as its starting point, operational planning determines the concrete activities that the company’s different operating units—marketing, product development, manufacturing, logistics, and so forth—must implement to make the strategy a success. For example, if a lowcost leadership strategy is adopted, operational planning would likely include the following activities:
• • • • •
Product developers will design products to minimize the cost of materials and assembly. Manufacturing will seek lower-cost suppliers and outsource some or all production to low-wage assemblers. Finance will seek new opportunities to reduce the company’s cost of capital. Marketing will create customer communications that emphasize price and value. The human resources department will develop compensation, training, and early-retirement programs that will reduce people costs from current levels while maintaining production.
Each of those activities will be broken down still further into their component parts—what some people call action plans, as shown in Exhibit 6-2. Managers, supervisors, and employees are then assigned responsibility for these activities as part of operational planning. In conducting operational planning, it is very important that supporting activities be closely aligned with the strategy. Thus, if the strategy is to win customers though low-cost leadership, every major activity must be costconscious, and the culture of the organization must encourage and reward thinking and action that, for example, eliminates unnecessary costs and finds ways to do things faster, cheaper, and better. Likewise, if the strategy is focused on winning through technological leadership, operational planning and the culture of the organization must emphasize activities that encourage innovation, speed the product development process, and keep personnel at a high level of technical proficiency.
CONTROL PLANS Control represents the last of the formal planning activities. Control involves mechanisms that monitor activities and compare them to previously set plans. Management intervenes when it observes variances between plans and actual performance. Standards, schedules, and budgets are key control tools. These provide the feedback that help managers understand how well or how poorly their plans are being implemented. For example, the marketing department’s schedule of strategy implementing activities may call for completion of its © American Management Association. All rights reserved. http://www.amanet.org/
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xhibit 6-2 Action Plans Derive from Larger Operational Plans
Operational Plan Outsource some manufacturing to low-wage suppliers overseas
Action Plan
• • • • •
Create an outsourcing team Identify potential suppliers Conduct quality/reliability checks Do financial analysis of alternatives Make recommendation to management
annual marketing plan by November 1, and implementation of a product promotion campaign by January 31. If marketing personnel don’t meet those dates, the control system sends a signal to management that something’s gone wrong and that corrective measures are needed.
GOALS The plan processes we’ve described began with high-level organizational goals. To executives, managers, and employees, those goals should be what the North Star is to the terrestrial navigator: a reference point that keeps people properly oriented and heading in the right direction. Whenever they ask, “Are we doing the right thing?” the large goals of the organization will help them answer the question correctly and keep them on the right course.
The Characteristics of Effective Goals Top-level goals are broadly stated: to earn a 15 percent return on invested capital; to be the market-share leader; and so forth. Though these broadly stated goals provide guidance for top management and a company’s directors who are concerned with the big picture, they are not particularly useful as one travels down the chain of command where the everyday work of the AMACOM Self Study Program http://www.amaselfstudy.org/
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enterprise is done. The supervisor in the parts stockroom, for example, may understand and appreciate the top-level goal, but is not going to see a clear connection between what he does every day and its percentage impact on the business’s rate of return. For that supervisor, and for mid- and lower-level managers and their subordinates, goals must be restated in practical, concrete terms that support top-level goals but that are clearly related to their own work. To a field salesperson, for instance, any of these might be suitable goals:
• • • • •
Increase unit sales by 10 percent in the next calendar year. Increase sales revenue by 12 percent in the next calendar year. Open two new accounts each month. Submit complete activity reports to the district sales manager within one week of a customer site visit. Hold travel and entertainment outlays at last year’s level.
For the salesperson, those goals are more actionable, measurable, and within his or her control than are a broadly stated organizational goal such as “to earn a 15 percent return on invested capital.” Effective goals, then, are:
• • • • • • •
Measurable—for instance, increase unit sales by 20 percent. Time-defined— for instance, add two new customers each month. Challenging but achievable—they make managers and employees stretch, but are not so difficult that people will dismiss them as unattainable. Clearly important to the organization—they focus on key matters, not the trivial. Connected to higher-level strategy and goals—people can see a relationship between their personal goals and higher organizational goals. Linked to the incentive structure—positive outcomes are encouraged and rewarded. Written—goals and their measurement metrics and are part of the performance management system; managers use them in appraising employee performance.
SMART Objectives When creating objectives, the SMART acronym is a handy way to ensure you include all the important elements.
• • • • •
Specific. Objectives should be clear, concrete, and detailed. Measurable. Success or failure should be measurable, and the measurement tool or metric should be specified. Achievable. The objective must be possible, and not so far off in the future that it becomes meaningless. The objective should stretch the employee, but not frustrate him. Realistic. Any necessary time and resources must be made available. Time-bound. There is an agreed-upon timeframe or deadline for completion of the objective.
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Exercise 6-2 Building Effective Goals Imagine that your organization’s strategy is to be the high-quality supplier in its industry. What might a goal be for someone in your manufacturing department? First, state a desired and measurable outcome that is important and consistent with the strategy: ____________________________________________________________________________ Add any time constraints or deadlines: _____________________________________________ Confirm that the goal is both ambitious and achievable . Check the goal against the SMART criteria. Now build a goal for someone in Marketing. Remember to make the goal important and consistent with the company’s strategy. The measurable outcome: _______________________________________________________ The time constraints: ___________________________________________________________ Confirm: Is the goal both achievable and ambitious ? Check the goal against the SMART criteria.
Alignment with Higher Goals The goals of each unit should support—that is, should be aligned with—the goals of the unit above it, as described in Exhibit 6-3. In this organizational chart for a multinational enterprise, Fred, a salesperson in the Northeast sales region, is assigned goals that support those of his region. The Northeast region’s goals, in turn, support the goals of the national sales unit, which support those of the U.S. division of which it is a part. Finally, the U.S. division, like its European counterpart, supports the highest goals of the corporation. If management has done a good job, goals up and down the organization will be in alignment, a condition in which all operating goals and activities of the organization are linked in support of top-level goals. Alignment is a catalyst of organizational power, effectiveness, and success because it focuses attention, energy, and effort on key goals. For an organization to reach its full potential, however, simply linking goals in the manner described here is insufficient. Alignment must operate at other levels. Management must assure, for example, that people have the resources they need to achieve their goals (resource alignment). The company’s rewards structure must also be aligned with goals; people must see that they will receive better compensation and career opportunities if they do the right things (alignment of interests).
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xhibit 6-3 Goal Alignment in Action
Corporate
US Division
Nat’l Sales
NE Sales
Fred
EU Division
Mfg
South Sales
Sue
Admin
West Sales
Bill
The culture of the organization must also be aligned with its goals (or vice versa). There must be harmony between the two; it is the job of senior management to assure that harmony. For an organization, culture is defined by attitudes, beliefs, values, and norms. Some companies have strongly identifiable cultures that persist for decades, if not for generations. Minnesota-based 3M Corporation, for example, has a culture that encourages and supports inventiveness. That culture goes back to the 1920s. Its unofficial “15 percent” rule gives technical and scientific personnel the opportunity to spend up to 15 percent of their time tinkering with ideas that interest them. Many new and profitable products have emerged from that program. Hewlett Packard is a company that honors engineering excellence and know-how. Its culture continues, to a large extent, to follow the “HP Way” established by its founders William Hewlett and David Packard in the late 1930s.
Think About It . . . How would you describe the culture of your company?
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Think About It continued from previous page. What behaviors does your company value or reward above all others? Explain:
Is your company’s culture in harmony with its goals? Explain:
Within the larger culture of the company, your department or work unit has its own culture. This local culture is at least as important to your employees as the broader corporate culture. A positive culture plays a critical part in employee motivation and engagement. As manager, you have a key role in defining the culture of your workgroup. Remember, actions speak louder than words! Your behavior will set the example and drive your employees’ perception of the group’s culture.
Think About It . . . How would you like your employees to describe the culture of your workgroup or department?
How can your behavior set the example for this culture?
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Organizations approach planning and set goals by starting with a strategic plan. Strategy describes how the business will differentiate itself from competitors in a way that imparts a competitive market advantage. The planning process typically starts at the top of the organization with a team including the CEO, a board member, key stakeholders, and staff. Most strategic plans fall into one of four categories: low cost leadership, solid customer relationships, product/service uniqueness or quality, or geographic expansion. Once a company’s strategic direction is set, specific objectives are established and managers begin the operational planning that will allow the organization to reach its goals. This defines what will be done, by whom, and how, to reach the company goals. Action plans that define the roles of managers, supervisors, and employees are part of operational planning. Control plans are created to monitor progress. Key tools of control plans are standards, schedules, and budgets. These provide feedback to help managers evaluate how well or poorly their plans are being implemented. While top-level organizational goals should be broad and visionary, objectives for individuals should be “SMART”: Specific, Measurable, Achievable, Realistic, and Time-bound. It is critical that goals be aligned throughout the organization, so that individual goals support department goals, which in turn support divisional and finally company-wide goals. Management contributes to this effort by assuring that people have the necessary resources to succeed and by building a corporate culture that encourages and supports the organization’s strategic goals.
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Review Questions
1. To be effective, goals up and down the organization must be:
1. (c)
(a) independent. (b) approved by the HR department. (c) in alignment. (d) determined before operational planning is complete.
2. ____________ describes what must be done to make the company’s
2. (d)
strategy work, who will do it, and when. (a) Strategic planning (b) Goal alignment (c) Organizational culture (d) Operational planning
3. What is a characteristic of an effective goal?
3. (c)
(a) Forward looking (b) Decoupled from higher-level goals (c) Challenging but achievable (d) Communicated verbally
4. Strategic planning should be informed by a keen understanding of
4. (b)
the organization’s: (a) rewards structure. (b) internal and external environments. (c) history. (d) lower-level goals.
5. Effective goals are measurable, time-defined, important, ambitious, and: (a) cross-functional. (b) interesting. (c) easy. (d) achievable.
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5. (d)
7 Work Processes and Continuous Improvement Learning Objectives By the end of the chapter you should be able to: • Explain the concept of business process and why managers must understand it. • Describe how continuous process improvement eliminates steps and/or activities that add cost, time, and errors. • Explain the difference between process improvement and process innovation. Some managers believe that the way to improve employee performance is to motivate their subordinates to worker harder. They give pep talks, offer financial incentives and—when all else fails—apply threats. Those efforts may result in modest productivity improvements, but gains are likely to evaporate when the incentives and the pressure let up. The surest way to make substantial and permanent gains in quality, speed, and cost reductions is to work smarter, through work process improvement. That is one of the key discoveries of the quality revolution that began in Japan’s post-World War II era and diffused to North America in the 1980s and elsewhere in the years that followed. This chapter introduces three related concepts you need to understand if your goal is to get people to work smarter: business processes, continuous process improvement, and process innovation. These are among the most important new ideas to enter the field of management in the past fifty years. Once you understand these concepts, you will see your subordinates’ tasks with new eyes and find ways to work with them to improve output and satisfaction. As you seek ways to improve performance, you’ll learn to ask and answer these two important questions:
1. What work processes are under my management? 2. What can I and my people do to make these processes more effective? © American Management Association. All rights reserved. http://www.amanet.org/
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WHAT WE MEAN BY BUSINESS PROCESSES Organizations produce goods and services through what are generally called business processes. A business process is a set of repeatable activities, or steps, that transform inputs into outputs that customers value. Consider the example of the continuous casting process of sheet steel making used by Nucor Corporation. Its “mini-mills” purchase scrap steel, melt it in electric arc furnaces, then pour the molten steel through a caster, producing a continuous, thin ribbon of steel that is eventually cooled, cut, and shipped to customers. Nucor’s process has several inputs (scrap steel, labor, electricity, and machinery) and process steps (purchasing scrap steel, melting, casting, and so on). If we were to “map” this process, it would look something like the linear one shown in Exhibit 7-1.
xhibit 7-1 Process for Making Sheet Steel Purchase scrap steel
Melt in furnace
Cast
Cool
Cut
Ship to customer
As you would imagine, the business of making steel is more complex than what is shown in the exhibit. Each of the six steps in reality contains many sub-processes. And the company has a number of support operations (such as accounting, marketing, and human resources) that each have their own processes. However, the steps in the exhibit do, in fact, describe Nucor’s process for making sheet steel. Business processes are not unique to manufacturing, but are found in service firms and non-profit organizations as well. Consider the lending department of a commercial bank. Like the steel-maker, it creates value by converting inputs to outputs through process steps, as in this simplified example:
• • • • •
Step 1. Have the customer fill out a loan application. Step 2. Check the application. If the applicant appears creditworthy, pass the application on to Step 3; if not, reject the application and communicate the decision to the applicant. Step 3. Verify the applicant’s credit history in greater detail. If acceptable, move on to Step 4; if not, reject the application and communicate the decision to the applicant. Step 4. Appraise the value of the collateral. If the value exceeds the requested loan amount, continue to Step 5. If not, reject the application and communicate the decision to the applicant. Step 5. Commit to the loan and assemble all documents for closing.
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Assuming that all went well, this loan approval process would continue on to a successful closing, in which the applicant would sign all necessary papers. Each step of the process, from beginning to end, would involve people, procedures, and their management.
Exercise 7-1 Your Work Processes How does your organization create value for its customers? What are its major inputs and process steps? Describe them briefly below:
What is your role in those processes?
CONTINUOUS PROCESS IMPROVEMENT Understanding your company’s or department’s business processes is the first step toward greater output quality, speed, and lower cost. The next step is to find ways to improve them—not just once, but repeatedly. Continuously. Continuous process improvement (CPI) is a management philosophy that continually reexamines business processes in an effort to find and eliminate steps and/or activities that add time, cost, and errors. Japanese industry is credited with perfecting continuous improvement—or kaizen—as a management approach. For them, it was a way to eliminate waste in materials, time, and error rework, and it became a central feature of the Toyota Production System. The starting point of continuous improvement is a clear understanding of work processes, which are documented through a technique called process mapping. Process mapping defines in graphic form, usually as a flow chart, the pathway through which inputs are turned into value-added outputs. A process map records the entire sequence of activities, the exact inputs, who does what, who has responsibility, and the measures of successful output. Those measures may include the process’s cycle time—the amount of time required to run a piece of work through the process—process costs per unit, the percentage of output units that meet quality standards, or something else. © American Management Association. All rights reserved. http://www.amanet.org/
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xhibit 7-2 A Simple Process Flow
Receive notification that there are no pencils in supply closet
Select desired pencil style and quantity
Request Purchase Order number from Acct. department
Receive Purchase Order number
Order pencils
Receive pencils
Put pencils on shelf in supply closet
Define the Beginning and Ending The first step in process mapping is to identify where the process begins and ends. The beginning may be triggered by someone’s action. That person might be inside or outside the organization.
• • •
A customer enters an order on the website, triggering the order fulfillment process. A customer calls with a problem or complaint, initiating the customer service process. One of the outside sales representatives submits her weekly expense account, triggering the employee expense reimbursement process.
The end of the process typically occurs when the process product or outcome is complete, or when work is handed off to another process group. For example, the order fulfillment process is deemed complete when someone in the shipping department has packed the order, affixed an address label, and placed the package on the loading dock. The employee expense filing process ends when the person handling it forwards all the paper work and an official request for payment to the accounts payable department. A process’s beginning and ending, and all the activities between them, can be mapped in flowchart form. (See Exhibit 7-2). In some cases processes will cross department boundaries.
Exercise 7-2 Creating a Process Flow 1. Look at the process map for ordering pencils in Exhibit 7-2. What is the beginning or triggering event? _________________________________________________________________ 2. What is the end of the process? ________________________________________________ 3. This process intersects with the Accounting Department. The Accounting Department very likely has a standard process of its own for approving Purchase Order requests. Can you imagine what some of the steps might be? ________________________________________
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Exercise 7-2 continued from previous page. 4. Think of a simple process in your area of responsibility. Map it, using Exhibit 7-2 as an example.
Look for Improvement Opportunities When processes are mapped carefully, with each step noted in detail, opportunities for improvement may appear. Exhibit 7-3 is a representation of some of the steps in the process we just mapped. Once a manager and his or her subordinates have the process map in front of them, they can evaluate its component parts with the goal of finding any activities that:
• • • •
Add more cost than value. Could be done faster or better. Could be eliminated entirely with no reduction of output value. Could be done in parallel with other activities.
This exercise should be approached with objectivity and as a learning experience by the entire work team. There is no place in this exercise for placing blame. The goal is to find weaknesses in an inanimate thing—the process— not with the people who have been asked to make it work. Look again at Exhibit 7-3. It is probably not really necessary to rethink the style of pencils the department uses each time they are purchased. A time-saving process improvement would be to keep the item number and reorder quantity of frequently ordered items handy—maybe even on the shelf where the pencils are stored.
xhibit 7-3 Process Steps Exploded
Locate pencils in vendor catalog
Select style
Research past pencil usage to determine order qty.
Request Purchase Order number from Acct. department
Receive Purchase Order number
Order pencils
Receive pencils
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Put pencils on shelf in supply closet
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Involve the Right People The most productive way to pursue continuous improvement is through the people who manage and work the business processes in question. These people have the best understanding of the process, its strengths, and its weaknesses. Chances are they already have a number of good ideas. It’s not a job for consultants or staff personnel, except in a facilitative role. At Toyota, kaizen groups are formed at the workstation level and are guided by their line supervisors. Further up in the organization, managers examine larger components of the production system. Over the years, this approach has enabled Toyota to improve the quality of its products, reduce cycle time, and cut costs. Others who have adopted this management tool have experienced similar results. Improvements are usually produced in small increments, but those small increments add up over time.
Exercise 7-3 Implementing a Process Improvement Look again at the process you mapped in Exercise 7-2. If you wanted to improve this process, whom would you involve? 1. List the members of your department or workgroup whose input would be important: ______________________________
______________________________
______________________________
______________________________
2. What other departments are involved, either because the process crosses department boundaries, or because others are affected by the output?
3. Who should be the team leader of this effort?
Look for Root Causes of Problems Opportunities for process improvements are generally available when we recognize a problem and ask “why?” “Why does it take us so long to process an insurance claim?” “Why does one out of every 20 products come off our assembly line with one or more defects?” “Why has the number of worker injuries gone up in the warehouse over the past year?”
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“Why are so many of our mail order customers complaining about receiving damaged goods?” A manager who didn’t understand processes or process improvement would try to answer these questions by blaming people. “Insurance claims take a long time to process because our employees are working too slowly.” “Defective products are coming off the line because assembly workers are goofing off—not paying attention to their jobs.” You get the picture. Instead of instinctively blaming people for an observed problem, a process-savvy manager will suspect that something is wrong with the process; his or her first act will be to seek out the root cause of the problem. A root cause is the initial cause in a causal chain. Do you remember the old British rhyme: For want of a nail the shoe was lost. For want of a shoe the horse was lost. For want of a horse the rider was lost. For want of a rider the battle was lost. For want of a battle the kingdom was lost. And all for the want of a horseshoe nail. That rhyme describes a causal chain in which a root cause, lack of a horseshoe nail, produced a hugely unfavorable outcome: loss of the kingdom. In a causal chain, the best way to cure the unfavorable outcome is to eliminate the root cause. Unfavorable outcomes in business processes are often the “effect” of hidden causes. Though it’s tempting to deal with the effect, doing so doesn’t really solve the problem. Thus, if management complains that it’s taking too long to process insurance claims, we might be tempted to hire more people to handle the workload. That solution would address the effect (slow processing), but would do nothing to eliminate the cause—and the cost of adding more personnel. Or, a manager might try to “inspect errors out” of a product, instead of “building quality in.” Again, the symptom would be addressed without curing the disease. Root causes are not always easy to determine. One tool for revealing them is the fishbone chart. A fishbone chart, so-called because of its appearance, is a diagrammatic way to work backward from an effect to its root cause. In Exhibit 7-4, the “spine” of the fishbone represents the path from input to output. Each of the “bones” is a potential cause of the unwanted effect: equipment, policies, people, employee tools, etc. The job of the work team is to examine all the possibilities. They must also look beyond the obvious. Thus, cause A may have © American Management Association. All rights reserved. http://www.amanet.org/
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xhibit 7-4 Fishbone Chart C
Causes
B
A Effect
Causes
two possible contributing causes B, and C. Are either of these the root cause of the problems? Thus, if slow processing of insurance claims is found to be the fault of a particular employee (A), the root cause might be something further upstream: inadequate training of this employee (B), or a problem with the employee’s personal computer (C). By exploring all possible causes of the unwanted effect, a process improvement team can pinpoint and then eliminate the root cause
Measure the Process Measurement is an essential part of process improvement. Measurement tells you if you have a problem—and how big that problem is. Depending on the process, you might measure:
• • • • • • •
Customer satisfaction. Output volume—for example, number of claims processed each week. Quality as a function of how many units of output meet a predetermined standard, or how many units must be scrapped or reworked. Number of products returned for warranty claims. Percent of on-time deliveries. Process cycle time. Per-unit cost.
Measure before and after you’ve implemented your process improvements. The resulting metrics show the extent to which your actions were effective. One way to measure the effectiveness of your processes is through benchmarking. Benchmarking is the act of comparing business processes, time cycles, or outputs to some standard, usually other examples in the same industry. You can measure your results against industry information or other similar processes in your company. If your processes take longer, or are less productive than the benchmarks, then they may be good candidates for a process improvement project. AMACOM Self Study Program http://www.amaselfstudy.org/
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Exercise 7-4 Measure your Processes Identify two processes that you are involved with, as either an employee or manager. Then describe how those processes are currently measured. If no one is measuring them, what should be measured? Finally, comment on the effectiveness of those measures. Do they really tell you if your processes are efficient and effective? What’s being (or should be) measured?
Process
Effectiveness of the measures
1.
2.
Understand the Sequence of Activities and their Dependencies Many workplace activities are locked into linear relationships where one task must be completed before another can begin, as described in Exhibit 7-5. There you see how an individual must gather data, then analyze it, and then report her findings. One activity must await the completion of the one before it. In some cases, you can reduce the time required to complete a work process if one activity can be done in parallel with another, as shown in the exhibit. Here, a mortgage bank can conduct its property appraisal while its credit analysts are evaluating the loan applicant’s credit and ability to repay. Conducting tasks in parallel saves overall time and is possible when one task is not dependent on the completion of another. Discuss sequence relationships with employees. They may come up with more parallel operations.
Think About It . . . Which of your workplace activities must be done in linear fashion?
“Think About It” continues on next page.
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Think About It continued from previous page. Which tasks must be completed before others can begin?
Which tasks are currently handled in parallel—or could be done in parallel?
Empower People Continuous improvement is a bottom-up activity that depends on the enthusiastic participation and collaboration of the people who operate the business process. It cannot be ordered or driven from the top. Enthusiastic participation and collaboration on the part of process operators is a function of good morale and a sense of ownership and control. People must believe that process improvement will make their work life better and their pocketbook fatter.
xhibit 7-5 Sequence Relationships Linear Relationship
1. Gather data
2. Analyze
3. Report findings
Parallel Relationship
1. Gather data from mortgage applicant
2. Analyze data 4. Make credit decision 3. Appraise property value
Time
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The best environment for continuous improvement is a workplace characterized by employee empowerment. Employee empowerment refers to a workplace culture that gives subordinates substantial discretion in how they accomplish their objectives. Managers tell them what needs to be done, but leave it up them to find the best way to do it. Empowered employees are also given greater authority over company resources. For example, an employee who deals directly with customers may be authorized—without first checking with her boss—to give discounts, refunds, or other services in order to resolve problems or correct errors on the spot. Research suggests that empowerment contributes to greater initiative, motivation, workplace satisfaction, and commitment among employees. And that satisfaction and commitment is needed to succeed with continual process improvement. Employee empowerment stands in sharp contrast to command-and-control management, a model of management in which information relative to customers and operations flows upward through the chain-of-command to the top, where decisions are made. Directives based on those decisions are then communicated downward through the same chain of command. This approach to management does not inspire the level of employee commitment and collaboration needed for effective, continuous process improvement.
The Shewhart-Deming Cycle Many trace continuous process improvement (CIP) methodology back to Walter Shewhart and W. Edwards Deming, pioneers in the development of statistical process control. As early as the 1930s, Shewhart had developed a model for implementing CIP, now referred to as the Shewhart-Deming Cycle. The cycle has four parts: Plan, Do, Check, and Act. As shown in the graphic below, managers begin the cycle by planning a change or experiment in the process, then Do, or make, the change. They then Check to observe the effect on the process. Finally, they Act to implement the process change. When the cycle ends, it begins again—assuring continuous process improvement.
Act
Plan
Check
Do
Improvement
Source: Richard Luecke, Scuttle Your Ships Before Advancing (New York: Oxford University Press, 1993), 68. Used with permission.
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Think About It . . . The contemporary office environment generally offers many opportunities for process improvements. For example, every time employee A does one piece of a job and then hands it off to employee B for the job’s completion, inefficiency can result if the job sits on employee B’s desk for some period of time. And when B finally gets around to doing her part of the job, she must first study what A has done. Can you design a process where time is not lost in transit between workers? Now think about the work done in your office, including your own. Can you identify opportunities for workflow improvements? Explain.
PROCESS INNOVATION Continuous process improvement is pursued through small, incremental changes. Over time, those changes add up, but usually at a diminishing rate, since the easy improvements are found and implemented fairly quickly (see Exhibit 7-6). An alternative to this approach is called process innovation. Process innovation is a wholesale alteration of a process that results in a major, immediate improvement (also seen in Exhibit 7-6). What does process innovation look like? Consider the example we used to introduce this chapter: Nucor Corporation and its mini-mill process of casting sheet steel. Its process was a major innovation in the centuries old steel industry—an innovation facilitated by Nucor’s adoption of an unproven technology: continuous casting. Prior to Nucor’s breakthrough, sheet steel had been made through a batch process. In that process, molten steel was poured into mattress-sized, white-hot ingots. Each ingot passed through a long series of rollers and reheating furnaces that progressively reduced its thickness. This process required billion of dollars of capital equipment, huge plants, and thousands of workers. It also required billions more in ore mining, shipping, and smelting operations on the front end of the process. Nucor achieved the same result at a fraction of the capital investment and cost by totally altering the process. No mining or shipping of ore. No smelting plants. No blast furnaces or miles of milling machines. Instead, it bought scrap steel on the open market, melted it in an electric arc furnace, and used its innovative casting technology to pour a continuous ribbon of sheet steel. That process innovation made Nucor the most profitable steel maker on the planet. While traditional steel makers were losing money and laying off employees, Nucor was making millions and expanding its operations. AMACOM Self Study Program http://www.amaselfstudy.org/
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xhibit 7-6 Incremental Improvement Versus Process Innovation
Performance Continuous process improvement
Process innovation
Time
Henry Ford’s Process Innovation Almost everyone knows the story of Henry Ford and his famous assembly line. This is, in fact, an example of process innovation. The first automobiles were made through a craft system. A crew of highly trained workers would assemble an entire vehicle from scratch (a batch system), then start on another, often with a different design and unique features. Henry Ford’s great innovation was to move to an assembly line approach (a flow system), making a standard product. This approach reduced cycle time and costs by orders of magnitude, bringing the price of an automobile within reach of the average worker. Process innovation—whether at the industry or the company level—is an infrequent occurrence, but it quickly takes performance to a much higher level. As the exhibit indicates, performance can be enhanced through the application of continuous process improvement. Together, process improvement and process innovation take performance to super-high levels. At its first minimill, for example, Nucor reaped the substantial benefits of process innovation. Once that process was up and running, its work crews found small ways to make the process work more effectively. © American Management Association. All rights reserved. http://www.amanet.org/
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Seeking Process Innovation The Nucor case is one of process innovation at the company level. Chances are that you are more interested in process innovation at the departmental or work team level. It makes no difference; the principle is the same at every level. Remember our process for ordering pencils? We improved the process by posting the item number and order quantity on the shelf where the pencils are stored. What if the manager and team discussed possible process innovations? Perhaps they would create an inventory management system for supplies, conduct a biweekly stock check, and order every item that was below a predetermined quantity. That way, no one would have to notice that there were no pencils and inform the administrator, and the department would never run out of pencils again. The question is, how can you and your team create a process innovation capable of improving performance by a huge amount? Perhaps the best way to do this is to:
• • •
Enlist your team in a brainstorming effort; many brains are better than one. Suspend all assumptions about what you can or cannot do. You don’t want assumptions to limit your imagining of a better way. Describe the output goal you seek. Make it a stretch goal—plan to process a commercial loan application in one day or less instead of three, and reduce customer service wait times by 75 percent. Think big!
Now, tell yourself and your team to imagine that the current process does not exist—that you are starting with a clean slate. Ask everyone to think of how they would design a work process to meet their stretch goal. If this advice seems far-fetched, consider these examples of process innovation at work:
•
• •
To please customers and cut costs, a major life insurance company set a goal of reducing the time needed to approve or deny an insurance application from three weeks to two days. Within one year the company had created a totally new, computer-aided approach to processing applications that met the two-day goal for 90 percent of applications. To reduce time and costs in creating the company website, a marketing department invested in a new content management system that automated moving text and images created for printed pamphlets into the website design templates. An accounting department created a “fast track” process for paying invoices under a certain dollar amount for individual contractors.
Examples like these can be found in both manufacturing and service industries. Where could you innovate in your department? One final reminder: Many process improvements and all process innovations are changes. As we discussed in Chapter 5, change efforts require careful management.
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Tips on Seeking Process Innovation There is no magic formula for creating process innovation. The situation at every company and every work unit is unique. However, here are a few places to look for innovative possibilities: • Wherever work is handled in batches. Batches require hand-offs and restarting, both of which rob the process of time. Think of how the work could be done in a constant flow. • Wherever people are doing repetitive work. Sometimes software can handle repetitive work faster and at lower cost. • Wherever operations are separated by physical distance. In situations where the physical output of process step 1 must be transported to another location for process step 2, consider relocating step 2 to the end point of step 1. • Wherever people are doing work that could be outsourced to a third party capable of doing the work better and at less expense. One caution: Never outsource a process that uniquely adds value for your customers. You must retain the capacity to control those unique value-adding functions; these are core to your business.
Working smarter through work process improvement is the surest way to make substantial and permanent gains in quality, speed, and cost reduction. The concepts of business process, continuous process improvement, and process innovation are among the most important recent ideas in the field of management. Managers who understand these concepts will have a clearer understanding of the work their subordinates do; they will also find ways to improve output and satisfaction. The key steps to process improvement are: (1) define the process’s beginning and end; (2) look for improvement opportunities; (3) involve the right people; (4) look for root causes of problems; (5) measure the process; (6) understand the sequence of activities and their dependencies; and (7) empower people. Continuous process improvement means continually reexamining business processes in an effort to find and eliminate steps or activities that add time, cost, and errors. Process mapping, the starting point for continuous process improvement, records the entire sequence of activities and the measures of successful output. These measures include cycle time and process costs per unit.
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Process innovation is a wholesale alteration of a process that results in a major, immediate improvement. It is an infrequent occurrence that quickly takes performance to a much higher level. Some techniques for stimulating process innovation include brainstorming, suspending assumptions about what you can or can’t do, and articulating stretch goals for your team. Opportunities for process innovation may exist where people do repetitive work, where work is handled in batches, where operations are separated by physical distance, and where work could be outsourced to a third party.
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Review Questions
1. Which of the following aims for a major, immediate improvement in
1. (b)
a business process? (a) Process mapping (b) Process innovation (c) Kaizen (d) Continuous process innovation
2. Which workplace management style is most likely to foster continuous
2. (d)
process improvement? (a) Command-and-control (b) A narrow span of control (c) Management by walking around (d) Employee empowerment
3. Which tool helps identify the root causes of process problems?
3. (d)
(a) Process map (b) Gantt chart (c) Catch ball technique (d) Fishbone chart
4. The first place to look for performance improvement should be the:
4. (b)
(a) worker attitudes. (b) business process. (c) incentive system. (d) process cycle time.
5. The most important people to involve in continuous process improvement are: (a) consultants. (b) senior management. (c) people who manage and work the business process. (d) time study experts.
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Part Three: Managing Others
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8 Managing Performance
Learning Objectives By the end of this chapter you should be able to:
• Explain the purpose of performance manage• • •
ment. Describe the performance appraisal process and its steps. Identify four important characteristics of effective feedback. Articulate the purpose of coaching and its process steps.
As a manager, your success depends on how effective your subordinates are at their jobs, and how effectively they work toward personal and unit goals. It is your job to define their objectives, assess their progress, and help them reach their goals. Through performance management you can assure the success of your department by improving the performance of individuals.
PERFORMANCE MANAGEMENT Performance management is a set of activities that managers use to measure and improve the effectiveness of their subordinates. This chapter focuses on three tools in particular: performance appraisal, giving and receiving feedback, and coaching. These work together to help managers and their subordinates identify performance problems and opportunities and to address them effectively (Exhibit 8-1). Other elements of performance management include motivational rewards, employee training, and career development, which are beyond the scope of this chapter.
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xhibit 8-1 Three Tools of Performance Management Appraisal
Performance Management
Feedback
Coaching
PERFORMANCE APPRAISAL Performance appraisal is a management practice that aims to assess how well an individual measures up to unit standards and/or his or her assigned goals. Its findings are used for pay and promotion purposes, as well as employee development. It will be described here through a series of steps that the new manager can follow, the first being agreement on performance expectations and individual goals. The pros and cons of 360-degree appraisal will be included in the discussion via a sidebar. Many companies conduct an annual formal performance appraisal, followed by periodic review. Appraisal of individual employees begins with their individual goals. At the beginning of the appraisal period, these objectives are established through discussion between the manager and employee, and then confirmed in writing. It is very important that the employee and his or her manager agree on those goals. Goals, then, are the yardstick against which performance is measured. The manager notes whether the employee exceeded the goals, met the goals, or if there are gaps between assigned goals and what the employee actually accomplished. If gaps are found, the manager and employee will then try to find the causes. Perhaps the employee has not been diligent; perhaps his or her skills are insufficient to the task. Perhaps something in the workplace environment over which the employee has no control—such as insufficient resources—explains the problem. Whatever the causes of performance gaps, the act of finding them through the appraisal process is the first step toward eliminating them. On the other hand, you may find that the employee has exceeded her goals. It’s important to understand the causes of good news, too. Is the improvement a one-time fluke, or is there something other department members can learn from Susan’s achievement? AMACOM Self Study Program http://www.amaselfstudy.org/
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“Susan, we asked you to decrease costs in your area by 15 percent this year. Congratulations! You achieved a 23 percent decrease! How did you accomplish that?”
A Six-Step Process Busy managers seldom look forward to the annual employee appraisal. It’s a chore that eats up time—especially when they have many direct reports— and it puts them in the position of passing judgment on others, which many people find uncomfortable when deficiencies exist. Though positive appraisal reports produce good things for their subordinates (raises, bonuses, promotions, and goodwill), they know that their unfavorable appraisals may result in negative financial and career consequence for people they’ve gotten to know on a personal basis. One way to take some of the time and discomfort out of performance appraisal is to follow a systematic and objective process. We offer one here. It has six steps:
1. 2. 3. 4. 5. 6.
Preparation The appraisal meeting The identification of performance gaps or opportunities Planning to close gaps Recording the appraisal Periodic follow-up
The process works best when both the manager and subordinate are involved in each step. Preparation Busy people are tempted to “wing it” as they enter the appraisal process; they schedule a meeting time, look through the employee’s file fifteen minutes ahead of the meeting, and take it from there. This casual approach will not produce good results. The manager’s preparation should begin at the start of the appraisal period with direct and regular observation of the subordinate’s work. Does he appear to be having trouble? Is her work completed on time and up to standards? Is he collaborating with coworkers, and so forth? It’s a good idea to record those observations in the employee’s file as they are made. Since we all tend to remember recent events and impressions more than those experiences in the distant past, the manager who revisits observations recorded over time is less likely to base his overall judgment of employee performance on what he observed in the previous week or month. The employee being appraised should prepare in a similar fashion, making notes on what he or she has done well or poorly, what resources (such as training) would lead to better future performance, and so forth. Shortly before the appraisal meeting, the manager should obtain any relevant up-to-date statistics from an accurate and neutral source: sales data from the financial system, error rates from shop floor records, and so forth.
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The appraisal meeting The appraisal meeting should be held in a setting that will make both parties feel comfortable and encourage dialogue. It’s usually best to begin by encouraging the employee to express his or her views. “Please tell me how you feel about your work over the past year. Do you feel you’ve done well relative to the goals we set this time last year?” Then, give your full attention to the response. In fact, the employee should do most of the talking in this conversation; you should focus on listening and try to talk less than a fourth of the time. You need to hear the employee’s version of reality. Avoid the temptation to jump in if you hear something with which you disagree; instead, make a quick note of it. Demonstrate your attention through verbal cues, such as, “I see” or “How have you developed good rapport with your teammates?” Ask questions to learn more. For example, “One of your goals was to develop productive relationships with our key customers; how do you feel that you’ve done in that area?” When assessing performance, point to successes and failures—and don’t fixate on the failures if doing so would give an unbalanced view of the employee’s performance during the year. Also, avoid unsupported generalizations, such as “I don’t think you’ve done a very good job in supporting our customers.” If you have a complaint, document it in some way and be sure to explore causes: “Our annual survey of your customer accounts showed a 20 percent reduction in post-sales service satisfaction. What’s going on here? ” Throughout the meeting, keep the focus on goals that you and your subordinate agreed to during previous appraisal session. The tips in Exhibit 8-2 will help you keep the meeting on track. Identification of performance gaps or opportunities Performance can exceed expectations, meet expectations, or fail to meet expectations. If you keep the focus on goals, and if those goals are specific and measurable as we discussed in Chapter 6, you and your subordinate can have a productive conversation about performance. You should discuss and praise
xhibit 8-2 Tips for Conducting an Appraisal Session Be professional, serious, and focused on performance issues. Listen to the employee. Acknowledge good performance before you move to areas of weakness. Don’t generalize. Provide specific examples of performance that concerns you. Keep your subordinate involved in the discussion. In the end, summarize your assessment and any improvement plan the two of you have agreed to follow. Restate the person’s goals going forward. Secure your subordinate’s agreement on those goals.
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positive results: “You exceeded your goal of new client acquisition by 30 percent. That’s fantastic. Tell me how you did that?” You must also identify and point out performance gaps and their causes: “But you fell short of your sales quota by 18 percent this year. What accounts for that shortfall?” Listen carefully to what your subordinate says about his or her performance shortfalls, as you may learn something that will help the two of you get things back on track. You may discover, for example, that you are part of the problem: you haven’t given the person sufficient time or resources to complete her tasks; or your directions may have been ambiguous. You may also discover that the person has had insufficient training. Listening can help you identify opportunities to improve the performance of this employee and others in your organization. If performance gaps are apparent, be sure that the subordinate recognizes them. You don’t want that person to leave the meeting thinking that everything is fine and that her performance meets expectations. Planning to close the gaps Once you’ve discovered the cause of performance gaps, you and your subordinate will be in a position to eliminate them through coaching, formal training, or other means. The subordinate must be fully involved in any plan to improve performance, otherwise you are unlikely to get the desired results. So give your subordinate the first shot at planning the solution. “Okay, we have both acknowledged the problem. So tell me, what in your view is the best way to fix it?” If his or her solution appears sound, defer to it in your action plan. The subordinate is more likely to take the action plan seriously if he or she thought of it and proposed it. A good action plan for performance improvement will have specific goals, a timeline (including any intermediate steps), and the employee’s formal agreement. Set that plan in writing, put it in the employee’s file, and give the employee a copy. Recording the appraisal An appraisal session should always end with a look forward to the coming year. The appraisal meeting is the time to revisit assigned goals and discuss them with the employee: Are those goals still appropriate? Is it time to set the bar of performance a bit higher? Can the employee “stretch” to a new level of performance? Discuss goals with the other person and, if a change is appropriate, get his or her agreement. Most companies have a standard performance appraisal process administered by the human resources department. Formal performance appraisals, such as the type we’ve described here, are typically recorded in writing and signed by the manager/supervisor and the employee, with the original going to the employee’s personnel file in HR, and a copy given to the employee. That record becomes the basis for promotions and demotions, changes in compensation, and in the worst cases, discipline or dismissals. Many company human resources departments have a standard form for making and recording performance. If your company does not have one, consider the material in Exhibit 8-3. © American Management Association. All rights reserved. http://www.amanet.org/
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xhibit 8-3 Grading Performance As you record your appraisal of employee performance, focus on quality, quantity, timeliness, and cost-effectiveness. • Quality is a measure of the accuracy, effectiveness, or usefulness of the employee’s work. If you’ve made goals specific and measurable, you can use error rates, customer satisfaction, and other metrics to assess quality. • Quantity. How much work did the person produce? Did the quantity equal, exceed, or fall short of goal? • Timeliness. Were assignments completed on time? • Cost-effectiveness recognizes the employee’s contributions to cost savings or control—reducing the cost of each unit of output, eliminating waste, and so forth. Characterize each category of the employee’s performance in terms of a rational scoring system: Excellent, fully successful, adequate, minimally successful, and unsatisfactory. These are roughly equivalent to the A, B, C, D, F letter grades that people already understand.
After the meeting, record the date of your appraisal session, make a note of any disagreements you and the employee have about his or her performance, and describe the new goals the employee will pursue during the coming year, if any. If a performance improvement plan is part of your appraisal, attach a signed copy of the plan. Periodic follow-up Action plans intended to improve performance count for nothing unless people execute them effectively and with real dedication. As a manager, you cannot put your subordinate’s performance improvement plan in the file and think that your job is done. You must monitor compliance with the plan, meet periodically with the subordinate to ask how things are going, and check progress against the plan’s goals and timeline. If progress is falling short, your intervention will be required. A manager should also follow up on the progress from time to time. Don’t wait until the annual performance review to find out that the employee did not understand the objective, or that the objective is not realistic. Use informal meetings to ask, “How are you progressing with the goals we set during our last appraisal session? Are you having any difficulty? Have we given you adequate resources to reach your goal?” Most people are reluctant to tell their boss that they’re falling behind, so probe beneath the surface of their answers for evidence that things are in fact on track, and listen for any muted appeals for help.
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Exercise 8-1 Preparing for a Performance Appraisal Consider one of your subordinates. 1. What are that employee’s goals for this appraisal period?
2. Check your files for notes you have made during the course of the year on accomplishments, problems, and the feedback you gave the employee at the time.
3. How will you measure performance? Do you need to obtain any data?
4, Has this employee exceeded your expectations in any areas? Are there areas of needed improvement?
5. If there are gaps, have you discussed them in ongoing reviews?
360-Degree Appraisal Managers have traditionally evaluated subordinates’ work performance in terms of what they observe, and how they (the managers) personally view progress against goals. Unfortunately, a manager sees only a fraction of a subordinate’s workplace performance. The person’s coworkers, internal customers (other departments served by the subordinate), and those who report to the subordinate may see a different reality. One survey conducted in a west coast hospital found that several middle managers received extremely high performance rates from their bosses, the hospital executives. The peers and subordinates of these same managers, however, gave the managers failing grades, rating them as poor leaders, weak communicators, bad teammates, and inept managers. © American Management Association. All rights reserved. http://www.amanet.org/
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This type of situation has generated interest in 360-degree appraisal, a performance assessment tool that gathers information about an employee’s performance from many people who work with or interact with the person on a regular basis. These observers may be higher, lower, or equal in rank to the person being evaluated. The goal of 360-degree feedback is to gain a more accurate assessment of an employee’s contribution to the organization and its work, and to avoid the kinds of perceptual errors found the hospital case. Peer
Boss
Person being reviewed
Team member
Subordinate
Subordinate
Peer
A 360-degree feedback is expensive. Each of the appraisers (generally four to eight) must spend roughly an hour completing a questionnaire, and someone else must analyze and collate all their ratings and remarks. Nevertheless, it has become part of performance appraisal in many organizations, especially for managers and executives.
FEEDBACK Feedback is communication that provides information about how well a person is performing against expectations. Feedback helps subordinates and managers better understand mutual expectations, celebrate successes, address workplace problems, and seek improvement. It is a two-way conversation, and is most effective when the parties trust each other and when both are good listeners and explainers. The term feedback refers to the process by which information about a system’s output returns (is “fed back”) to its source so that future output can be regulated or adjusted. In your car, for instance, there is a feedback link between the radiator and the engine temperature gauge on the dashboard. That gauge asks, “How hot is the engine?” and a sensor in the radiator feeds back—that is, communicates—that information. If the gauge registers abnormally high engine temperature, the operator is alerted and can take corrective action. Exhibit 8-4 is an example of a “feedback loop,” showing a signal or communication going out from A to B, and then being fed back to A.
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xhibit 8-4 A Feedback Loop
A
B
The annual performance appraisal described in the first section of this chapter is used, in part, to generate feedback between managers and their subordinates. That is a formal approach to feedback.
Giving Effective Performance Feedback Performance feedback used to be called “constructive criticism,” but that only captures a small part of what feedback means. Constructive criticism is something that can be communicated by feedback—and it’s a large part of what supervisors and managers do—but it represents a one-way street in which the listener learns something (usually negative) and the speaker learns nothing. So, as you develop your feedback skills, remember that you must give equal attention to your capacity to give and receive information. Effective feedback in a workplace setting has several important characteristics:
• • • •
It is descriptive, not judgmental. It focuses on modifiable, not unchangeable behavior. It deals with specific, not general, observations. It is well-timed.
Let’s take a closer look at each of these characteristics. Be descriptive, not judgmental. Effective feedback does not judge or criticize. It describes. For example, a boss trained in giving feedback won’t say, “You can’t handle the job.” Instead, he will describe what he observes: “I’ve noticed that you’re not entirely familiar with using Excel spreadsheets to report sales results.” Though a sensitive person might hear a note of criticism in that statement, the boss is really describing what he observed. Feedback should not go beyond what is observed and it should not make
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a judgment of the person’s motivation. To comment on motivation (“You aren’t interested in what we’re doing here”) would be, at best, guesswork. Judgmental feedback creates defensiveness that prevents the listener from gaining real improvement pointers from the interaction. So when you provide feedback, give concrete examples of the behavior you observe. Focus on the observed problem, not on the person. Compare these two examples. Judgmental
Descriptive
George, when are you going to get your act together and get in here on time for a change? It seems like you are always late. Don’t you even care about your job?
George, before September you clocked in on time almost every day. But according to the time records, you have been 10 or more minutes late 14 times in the last month. That’s more than half the workdays. What’s changed?
The descriptive example is clearly less judgmental and more likely to get results. Note that effective feedback usually takes longer to articulate and it begins with the positive and then moves to areas of performance that need improvement. Even positive feedback should follow the “descriptive” rule. After all, it is the objective results that are important. But do add your congratulations when you convey positive feedback. Judgmental At last you’ve made it in on time!
Descriptive George, ever since we adjusted your schedule to accommodate your child’s new school bus pickup you’ve had a perfect on-time record. I’m glad we addressed that issue before it became a problem for both of us!
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Exercise 8-2 Expressing Feedback Descriptively Think of a performance gap you want to address with one of your subordinates. 1. Express that performance problem here in a judgmental fashion:
2. Now express the same issue in a descriptive manner. Remember to start with positive information.
Address modifiable behavior, not unchangeable traits. Effective feedback focuses on things that can be changed. Most people want to improve their work, and if they are given ideas in areas they can change, they will at least try them. But to be told that you could be better in a particular task if you were taller, for instance, or had a different personality type, is both insulting and useless. Thus, feedback should concentrate on aspects of job performance that are within the power of the listener to change and improve. Consider the following examples. Which of these two examples focuses on modifiable behavior?
Example 1: Sharon, we need to talk about a couple of aspects of the new operating procedure. Based on the data I am receiving from your workstation, you are entering data meant for an existing customer file and creating a duplicate file. You can avoid this by conducting a search before entering data to see if the customer file exists before assuming you should open a new one. Example 2: Sharon, how many times do I have to explain this operating procedure to you? Everyone else caught on weeks ago. I’m beginning to wonder if you have the intelligence for this position. © American Management Association. All rights reserved. http://www.amanet.org/
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Unchangeable Behavior Intelligence level
Modifiable Behavior Process steps
In the second example the manager is criticizing something the employee cannot change, calling her intelligence into question, whereas the first example allows Sharon to alter an aspect of her job performance that is changeable. Focusing on how coworkers can improve areas within their control is a notable feature of effective feedback. Be specific, not general. Terms such as always or never are seldom true and are too general for the individual to know where to start in improving job performance. For a supervisor to say “You’re always leaving early” is probably not accurate. Saying “I’ve noticed that you’ve left 15 minutes early every Tuesday and Wednesday for the past month” is both more accurate and specific, and leads to another useful question. “What’s happening on Tuesday and Wednesday that is making you leave—a transportation problem, picking up your kids at childcare?” Feedback that focuses on a specific incident or set of incidents, preferably recent, will be much less personal and more accurate, thus increasing the chances of getting to the root cause of the problem. Positive feedback should likewise be specific. Saying “That was a terrific presentation” communicates very little useful information to the listener. Saying “Your slides and the pace of your delivery were both very effective” provides much greater information value. The listener doesn’t have to guess at which part of her presentation was so effective. Which of the following feedback examples is more useful? General You’re great, Silvia. I can always count on you.
Specific Silvia, the sales numbers were just what the board needed to see. Accurate, broken down by division, charted out nicely, and delivered a day early so Joe could copy them for the meeting without spending the night here. Thanks!
Which of these examples of negative feedback is not specific? Example 1: You’re always late with these calculations, Matt. And when you do finally get them in, you are never accurate. I always have to recheck them. Example 2: The calculations you brought in are two days late, Matt. For the past four months you have been, on average, two or three AMACOM Self Study Program http://www.amaselfstudy.org/
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days late. Your calculations are 82 percent accurate, which is good but not good enough. To make it better, you need to recheck the calculations for our accounts in the South region. They can be tricky. Meanwhile, let’s talk about a time-management plan to help you get these figures in on time. The first feedback example is very general and offers no concrete evidence for the obvious irritation the speaker feels. In the second example, Matt is more likely to leave the discussion with a clear picture of where his performance needs improvement and how to go about improving it. Choose your timing carefully. In most things in life, timing is everything. As a rule of thumb, feedback should be delivered soon after the incident or set of incidents has occurred. This is because the passing of time causes at least two things: memories become inaccurate, and emotions “rewrite” the incident the way a person felt it happened rather than the way it really happened. Emotions can also get in the way if you give feedback too soon after a particular event. More details on how to gauge appropriate timing appear later in this chapter. Now, which of the following two examples exhibits good timing? Lloyd, do you have a minute? Good. Do you remember early last month when we were working together on the proposal for Tri-State Electric? Well, you had figured the specs in a way they wouldn’t understand, and then you didn’t let them drill down on the specs in the Q&A after the presentation. No wonder we lost that bid!
Frank, is this a good time to talk? Good. Something happened in the team meeting this morning that I wanted to ask you about. Remember when Maria was offering her idea about how to market our new product? Well, you interrupted her five or six times. And even when she told you she would get to your questions, you didn’t let up. That got her off track and affected the rest of her presentation. Is that your recollection of the situation?
In the example of well-timed feedback, the person giving feedback isn’t referring to something that took place a month earlier. As you can see from these examples, timing involves at least two dimensions: giving feedback soon after the incident(s), and making sure the other person has the time to talk.
Exercise 8-3 Your Experience You have probably received feedback many times, either in the workplace or in school or other environments. Think back to one memorable example—preferably one that occurred in the past week, Exercise 8-3 continues on next page. © American Management Association. All rights reserved. http://www.amanet.org/
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Exercise 8-3 continued from previous page. so that your memory is fresh. In the space provided, briefly describe the nature of that feedback (say, an annual performance review). Then score the feedback giver, on a scale of 1 to 5, on each feedback characteristic (1 = lowest). Follow each score with a brief comment on what was good, bad, or how it could have been done better. Nature of the feedback: Characteristic
Score (1–5)
Comment
Descriptive/not judgmental Addresses modifiable behavior Specific/not general Well-timed
More Feedback Tips Choose the Right Environment Remember the old adage: Praise in public, criticize in private. Generally speaking, any feedback you give to another person that has even a hint of negativity (“Your presentation came across as a monotone”) should not be given within earshot of others. Doing otherwise is likely to create hostility or a sense of humiliation in the person with whom you are communicating. So, as a basic principle, seek a private setting to give feedback that is less than flattering. Stay Focused One of the biggest mistakes people make with communicating feedback is trying to cover too many things at once. This is often true of supervisors giving feedback to their subordinates. When you hear something like “And another thing you do wrong around here is . . . ,” you know that the supervisor has lost focus and is simply “piling on” all the things that have been bothering him. Keep in mind the feedback concept of specific incident(s). Focus on one issue—the primary one—and support it with evidence from a recent and significant incident. When you begin with the recent and significant incidents, the other party is better able to see the point. Use the secondary evidence if your listener is unconvinced of the problem or begins to minimize the issue.
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It is always possible that the person who’s getting feedback about performance may try to switch to another topic as a way of getting off the “hot seat” or, in the case of a colleague, of turning the tables. In those cases you can say pleasantly, “Those are good points, and I’d like to talk about them at another time. Can you help me see how they are relevant to the topic at hand?”
Think About It . . . Are you a manager or supervisor? If you are, take a minute to think about opportunities you have in your typical day to provide feedback—positive and negative—to your people. List three of those opportunities you’ve had in the past week. Did you take advantage those opportunities? If you’re not a manager or supervisor, list three recent situations in which you wish that your boss had provided some informal coaching or feedback. 1. __________________________________________________________________________
2. __________________________________________________________________________
3. __________________________________________________________________________
To summarize, here’s a list of Dos and Don’ts for sharing feedback. Do . . .
•
• •
Keep the topic and wording task-oriented, even if the other person tries to personalize it. For example, you might say, “Each of the last two project reports was a week late.” The response might be: “So you’re saying I’m disorganized.” You can then respond, “No, I said that each of the last two projects were a week late. They were well done, but late.” Invite the other person’s perceptions. For example, you might ask the person who’s been late in submitting work, “How do you see the situation?” Or, “Have I overloaded you with assignments?” Pause and wait for a response before saying anything more. Explain the consequences of the problem you are discussing with the other person. “Being a day or two late with those project reports wouldn’t matter if you and I were the only ones involved. But the marketing group can’t begin its work until they’ve received your report. So, if you’re late, that creates problems for them. Do you see what I mean?” Wait for an acknowledgment from the other person. © American Management Association. All rights reserved. http://www.amanet.org/
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• • •
•
Listen to the answer and clarify any misunderstandings if needed. Encourage the person to suggest a solution if you’re discussing a performance gap. If a subordinate offers an acceptable solution to a performance problem, she’ll be more likely to implement that solution than one imposed on her. Offer a suggestion if the other person has none of her own. “One way to resolve this would be to put a reminder on your daily ‘to do’ list a week or two in advance—then you can give a few hours each day to the project rather than trying to crank it out right at the deadline.” Then ask for feedback: “How does that sound?” Again, wait for a response. Gain commitment to whatever resolution you and the other person agree on. Restate how much you value the person and her work. “So you will block out two or three hours each day to get the next assignment completed by the end of the month? That’s great. You know, Helen, I really appreciate the quality of your work and our working relationship. This is the first time I’ve felt I needed to raise a concern. Thanks for hearing me out.”
Don’t
• • •
Don’t compare the person to others. Avoid saying, “If only you were as organized as Anne—she always gets her assignments completed on time.” Don’t put a judgmental “spin” on your feedback. Avoid something like, “This is just another example of how disorganized you are. You have no timemanagement skills.” Instead, stick to the problem. Don’t indicate that there are other problems too; deal with one thing at a time. Talking about other problems will overwhelm the person receiving the feedback and reduce the chance that the current problem will be addressed. Don’t say, “And while we’re on the topic of these reports, they aren’t very well designed. The typeface isn’t attractive at all. I think it needs a design overhaul.” Instead, say, “I’d like to talk about how we can improve the report’s timely delivery.”
Receiving Feedback Always remember that feedback is a two-way street: giving and receiving information. Your effectiveness as a manager will not be complete unless you master both. You must be ready and willing to receive feedback, even when it takes the form of constructive criticism of your own work or the manner in which you are managing others. This does not mean you should become a doormat or a scapegoat for everything that goes wrong in the office. It means that you should be open and approachable to people who may have something valuable to say. People who are good at receiving feedback:
• • •
Give the speaker plenty of time to talk; they understand that they learn nothing when they are doing all of the talking. Give the speaker their full attention; doing so is the only way to capture what they have to say. Demonstrate responsiveness to what they hear; if you invite feedback, you have an obligation to respond. AMACOM Self Study Program http://www.amaselfstudy.org/
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Ask for specifics. For instance, if a subordinate complains that your instructions are too vague, ask “Can you give me an example of when I’ve done that?”
Exercise 8-4 Your Feedback Experience Look over your weekly calendar. Are you anticipating a meeting or situation in which you will receive feedback? What feedback would you find most helpful? What criticism do you anticipate? How could you best respond to that criticism? Jot down your answers in the space below.
Closing the Feedback Loop Remember the definition of feedback? It is the process by which a system’s output (information) returns to its source so that future output can be regulated and improved. The whole purpose of giving and receiving feedback in the workplace is to change behavior so that performance improves. You can help the process along by providing the necessary tools and by checking in periodically to assure that improvement is being made. Provide the necessary tools. Be sure that the person receiving feedback has everything needed to change the desired behavior. Perhaps additional training is necessary, or a more flexible work schedule, or the assistance of another employee. So, if you’re giving feedback, make sure that the other person is equipped to act on your input. If you have received feedback, don’t say, “Thanks for the suggestion—I’ll do that” without first checking to see that you have the resources needed to follow through. Check in periodically. The next time the task or function under discussion is performed, check to see if any problems have been addressed. If you were the recipient of the feedback this will ensure that you understand in concrete terms the problem and how corrective actions are having an effect. This further shows your willingness to improve your workplace performance.
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Checking in also provides an opportunity for both parties to solve any unforeseen glitches in the new method. For instance, let’s say that you were the manager in the previous example. Your subordinate has told you that you don’t always give her enough time to complete assigned projects. A week has gone by and you have two new reports you want her to take on. Once you’ve explained the reports, you might say something like this as a way of “checking in.” “I know that you’ve had some concerns about the amount of time I’ve given you to complete reports like these. We talked about that last week. So I’m wondering about these. Ideally, I’d like the first drafts of these reports two weeks from today. Does two weeks seem reasonable given your other duties? Tell me what you think.”
COACHING Coaching is a process through which managers help their subordinates develop skills, prepare for new responsibilities, or eliminate performance problems. Good managers look for opportunities where coaching can improve performance:
•
•
Janis’s boss asked her to plan and organize an interdepartmental meeting. Never having done such a thing, she didn’t know where to begin. Observing her confusion, her boss offered some advice: “Try to break the job down into its major parts: locating the best time and place for the meeting, creating an agenda, inviting the right people, and so forth.” The boss offered to provide feedback on her progress as she planned the meeting. Bill had just been promoted to a supervisory position. One of his first problems was dealing with two difficult employees. One of these individuals was chronically late to work; the other spent more time gabbing with others than working. Both were argumentative whenever Bill spoke to them about their problems. “I’m spinning my wheels with these two,” Bill confessed to his manager. “They’re taking up time that I should be spending on other things.” Bill’s boss understood the problem and agreed to show him methods for handling problem employees. “You’re bound to encounter people like these throughout your career,” he told Bill, “so you’d better learn to deal with them now.” They agreed to talk for twenty minutes every Tuesday afternoon for the next month.
Exercise 8-5 Which of Your People Needs Coaching? List each of your subordinates (up to five) in the left-hand column. In the right-hand column indicate how these individuals would benefit from coaching by you. (If you’re not yet a manager, play the boss’s role in this exercise and list yourself and your coworkers. What are their coaching needs?) The first row has been completed to serve as an example.
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Exercise 8-5 continued from previous page. Subordinate
Henry
How Coaching Would Improve Performance
Has a habit of dominating team meetings, to the point where others stop contributing. Henry must learn to share the stage.
The Coaching Process Many coaching opportunities can be handled on the spot without planning or preparation. Consider the following example: Samantha’s subordinate, Charlie, has stopped by to drop off a report he was assigned to write. “This is my first draft,” Charlie said. “You asked to see it before I finished it off and sent to the corporate staff.” “Right,” Samantha replied as she scanned the draft. After a moment, she gave her assessment—and some advice. “You’re off to a good start here, Charlie. You’ve covered all the key issues. It’s very thorough. But let me give you a tip: Most of the corporate people will be looking more for your conclusions than the details. They only have time to scan these reports.” “So what should I do in the final draft?” Charlie asked. “Give them what they want. State your conclusions up front, in summary form, and move some of the nitty gritty to an appendix. That way, the CEO and his people can get what they need quickly, and the few people who need the details can find them in the appendix. Do you see what I mean?” “Gotcha.” © American Management Association. All rights reserved. http://www.amanet.org/
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In this case Samantha provided on-the-spot, informal coaching aimed at improving Charlie’s performance. No preparation or planning was necessary. Other coaching situations require planning. These situations may involve the manager’s observation of a serious performance gap, as recorded in the subordinate’s performance appraisal. Or the employee may request coaching to develop new skills to move up to a promotion. In any case, manager and subordinate must consider how they will approach the matter, perhaps even working with the human resources department. Together they can develop a coaching plan that lists the objectives of the coaching relationship. Once the performance problem or learning opportunity has been identified, formal coaching follows a four-step process that involves both the coach and “coachee”:
1. Discussion between the two parties. The manager and subordinate discuss the situation and how they might best address it. 2. Agreement and commitment. They agree on an action plan with achievable goals; both commit to executing the plan. 3. Active coaching. In this step the manager provides one-on-one guidance or instruction. Alternatively, the manager may delegate the coaching role to another qualified person. For example, if the subordinate needs help in making an effective sales presentation, the manager may ask a top sales person to take the subordinate along on a day of customer calls. In either case, there should be plenty of feedback between coach and coachee during this step. 4. Follow-up. The manager must check back later to assure that the subordinate has had the opportunity to practice new skills and hasn’t gone off the tracks. For instance, if you’ve helped someone develop his meeting planning skills, check back with him periodically. Has he planned any meetings, and were they successful? What can he do better next time? Reinforce what was learned and assure yourself that the person is using his new skills correctly.
Performance management is a set of activities that managers use to measure and improve the effectiveness of their subordinates. These include performance appraisal, feedback, and coaching. Performance appraisal is used to assess how well individual employees measure up to unit standards and/or their assigned goals. Appraisal findings are used for pay and promotion purposes, as well as employee development. Formal appraisals follow a process that includes preparation, the appraisal meeting, the identification of performance gaps and their causes, planning to close performance gaps, and periodic follow-up. The appraisal process works best when it is objective and when the appraised employee is actively engaged in the process. Workplace feedback is communication that provides information about how well a person is performing against expectations. Feedback helps suborAMACOM Self Study Program http://www.amaselfstudy.org/
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dinates and managers better understand mutual expectations, workplace problems, and solutions. Workplace feedback is most effective when it is descriptive, not judgmental; focused on modifiable behavior; based on specific, not general, observations, and well-timed. If managers give feedback to their subordinates, they must be prepared to receive it as well. Coaching is a process through which managers help their subordinates develop skills, prepare for new responsibilities, or eliminate performance problems. Good managers look for opportunities where coaching can improve performance. Most of those opportunities can be handled on the spot, without planning or preparation. More formal coaching, like formal appraisal, follows a multistep process that includes discussion, agreement and commitment, active coaching, and follow-up.
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Review Questions
1. To be successful, formal coaching requires:
1. (b)
(a) a monetary incentive. (b) commitment by the coach and subordinate to an action plan. (c) agreement on unit strategy. (d) assistance from the human resources department.
2. Which of the following is a characteristic of effective feedback?
2. (a)
(a) Descriptive, not judgmental (b) Negative in tone (c) General in nature (d) Intuitive
3. Which of the following steps is common to both performance appraisal
3. (c)
and coaching? (a) Behavior change through example (b) 360-degree feedback (c) Follow-up (d) Rewards
4. The starting point for formal performance appraisal is:
4. (a)
(a) previously stated individual goals. (b) corporate strategy. (c) peer review. (d) future goals.
5. Performance management is: (a) an approach to disciplining subordinates. (b) a discipline used to determine employee goals. (c) a set of activities that managers use to measure and improve employee effectiveness. (d) based on academic theories of human motivation.
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5. (c)
9 Making Sound Decisions
Learning Objectives By the end of the chapter you should be able to:
• Identify the steps of a rational decision-mak• • • • •
ing process. Define the problem or decision correctly. Consider the context of the decision. Create and evaluate feasible alternatives. Make the decision. Implement the decision.
Which job applicant should you hire? How should your department’s budget be spent? Who should be in charge of the upcoming trade show? Should we adopt a new technology now, or wait until we can better gauge its performance? Should you buy or lease three new delivery trucks? Managers make many decisions like these in the course of the day and are responsible for their outcomes. You could reasonably say that the workaday life of an organization is nothing more than a series of activities initiated and controlled by decisions. You can also say without contradiction that the wellbeing of an organization depends on the quality of its decisions—especially the big ones. Many decisions can be made on the spot and with little or no input from others. All important decisions, however, should be handled through a rational, fact-based process. This chapter describes a rational decision-making process that you can © American Management Association. All rights reserved. http://www.amanet.org/
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apply to all types of important workplace decisions. That process has five steps and involves collaboration among the manager/decision-maker and other appropriate parties. Those steps are: frame the issue or problem, consider the context of the decision, consider and evaluate alternatives, select the best choice, and then implement the decision. This process is rational in the sense that it emphasizes facts and evidence, leaving little room for power politics to creep in and spoil the result. The decision process offered here, however, provides no guarantee of a good outcome. Decisions, after all, involve the future, about which there is no certainty. Thus, even a well-made decision can produce a disappointing result. However, a solid decision process can put the odds of success on your side. It can also shield you from second guessing and criticism that often follow a poor outcome. Before discussing the right way to make decisions, consider the wrong way, as described in the following scenario. Hans is the Vice President of Research and Product Development for a consumer products company. The job of his unit of scientists and engineers is to develop and launch pet food products that address customer wants and needs, as determined by the company’s market researchers and field salespeople, and with the approval and funding of top management. The company’s market research people had become quite excited about a new dog food product concept: a one-day ration shaped like a bone. Market surveys found that dog owners were attracted to the idea of giving their pets a single meal in a treat-like form that would satisfy all the dog’s nutritional needs for the day. No such product was available. To meet this need, one of Hans’s people suggested creating a bone-shaped, bone-tough product. “We could make it hard and very dense, like a bone. And we could cram an entire day’s nutrition into it.” Customers invited to a focus group loved the idea, and further market research indicated that it would be favorably received by dog owners, who would switch from dry and canned food to “Daily Dog Bone Ration,” as they called it. So Hans estimated the resources he’d need to develop and manufacture the new product, and requested funding from management. As proposed by Hans, the project seemed like a straightforward decision with plenty of market and cost data: Spend $1 million to create a complete product design, another $2 million to develop a process for manufacturing it, and another $2.5 million for promotional test marketing in four major metro areas around the United States. If responses from those tests were favorable, manufacturing would be ramped up at a cost of some $5 million for a nationwide product roll-out. Hans anticipated quick approval by management, but he hadn’t counted on Jennifer, the Vice President of the canned dog food division. Jennifer had learned of Project Dog Bone a month earlier. Fearful that its success would cut into her division’s canned food sales (and her annual bonus), she began lobbying Ray, the company’s fisAMACOM Self Study Program http://www.amaselfstudy.org/
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cally conservative and cautious chief financial officer (CFO). “Ray, they’re talking about pouring $10 million into a risky venture that, if it’s successful, will cannibalize our canned food sales. We can’t afford that.” Ray took it all in. Jennifer also used her weekly luncheon with the CEO to subtly pour cold water on Hans’s project. “I understand that Hans and his R&D people are working on some type of far-out dog food experiment. Food shaped like a bone,” she said disparagingly while munching her salad. “Our chain supermarket customers are very conservative. They probably won’t go for that. And I think that Ray is concerned about sinking millions into a risky idea when so many other parts of the business are starved for cash.” By the time Hans obtained a hearing from the company’s New Products Committee, Jennifer had managed to sow seeds of doubt. Both the CEO and CFO were on the committee, as was Phil, the VP of Marketing. Phil had seen the positive market research on Project Dog Bone but he didn’t want to advocate for it, especially if his two more powerful colleagues, Ray and the CEO, were set against it. During the ensuing discussion, Hans had to champion his idea, just as a lawyer would defend his client before a judge and a panel of jurors: by presenting his data and arguing for a favorable verdict. As head of the canned pet food division, Jennifer participated in the meeting. She played a prosecutor-like role, arguing against the project and its funding. “Yes, we have some positive market surveys,” she said, “but they only involved a small sample of potential customers. And the risks are very high. We could lose millions.” Hans countered with his projected costs, and sales revenues forecasted by the marketing department. “Where did those revenue forecasts come from,” Jennifer parried, “out of a hat?” In the end the executive committee was split 2-to-1 against Hans. And so the Daily Dog-Bone Ration concept died an early death. What was wrong with this decision process? The most obvious problem was Jennifer, who used her influence to poison the water for the new dog food product by exploiting peoples’ natural aversion to risk. Phil, the marketing vice president, also did his part to undermine the decision by playing office politics; he didn’t want to oppose the CEO and CFO. All of them—even Hans—were guilty of accepting a yes or no situation. No one offered an alternative to the proposed new product or the plan for marketing it. This is not an unusual example of decision-making in organizations, from the boardroom to the shop floor. Management often approaches key decisions as “We’ll either do this or we won’t,” with no discussion of alternative choices. Powerful individuals apply influence in ways that do nothing to produce a good decision. People in the know often hold back because they don’t want to oppose someone who might have something to say about their bonus or future promotion. © American Management Association. All rights reserved. http://www.amanet.org/
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In order to win in this environment, a person must be a strong advocate and present the good parts of a proposal while remaining silent about any deficiencies. In order words, he or she must sell the idea to the decision makers. This is not a good way to make important decisions. The process you’ll learn about in the rest of this chapter is far superior.
Exercise 9-1 A Recent Key Decision Consider a key decision made within the past year by your boss or by your company’s senior management. Now answer these questions: 1. Was the decision based on a systematic evaluation of the facts?
2. Did anyone apply his or her organizational power to shape the decision? If yes, explain.
3. What uncertainties did the decision maker(s) wrestle with?
4. With the benefit of hindsight, did this decision lead to a good outcome? If not, what went wrong?
A RATIONAL DECISION-MAKING PROCESS The process described in this chapter is a simplified version of one developed in the early 1980s by Strategic Decisions Group, a Palo Alto, California-based strategy consulting firm (Matheson and Matheson, 1998). It is based on principles of decision science and has been applied in one form or another over the years by firms in the auto, aerospace, pharmaceutical, energy, motion picture, and information technology industries. It is effective in that it involves the right people, and requires them to step back from what might be the obvious decision choices and to develop alternative choices that may prove better. AMACOM Self Study Program http://www.amaselfstudy.org/
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The process involves five steps:
1. 2. 3. 4. 5.
Define the issue or problem correctly. Consider the context of the problem or issue. Create and evaluate feasible alternative choices. Make the decision. Implement the decision.
At every step of this decision-making process, which is diagrammed in Exhibit 9-1, it is important to get the input of key stakeholders.
Involve the Right People When simple choices must be made, a manager may have all the information needed to make a good decision. Decisions on big, complex, and costly issues, however, require more information and the knowledge and insights of many people. A rational process therefore involves three sets of people—the “right” people:
• • •
The actual decision makers. These individuals have the final say in the matter. They also have the organizational authority to make the decision stick and to allocate the resources needed to implement it. Individuals with relevant knowledge or insights. These might be staff personnel, market researchers, salespeople with close contacts with customers, engineers who understand the technical issues, financial experts, and so forth. Employees who will implement the decision or have a stake in the outcome. Decisions produce consequences. In many cases, the ultimate decision makers are far removed from those consequences and lack information that is critical to successful implementation. People who must implement a decision or live with its consequence often have insights that decision makers lack.
Involving the right people may be the single most important part of the decision process. You want to bring in people with relevant information and ex-
xhibit 9-1 A Rational Decision Process
Define the problem or decision correctly
Consider the context of the decision
Create and evaluate feasible alternatives
Make the decision
Involve the right people
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perience, with open minds, and an ability to deal with data and with the uncertainty that goes hand in hand with every important decision. Further, you want these people to work together, to share ideas, and to create back-andforth dialogue. The decision makers must be part of that dialogue from the start. If you are the decision maker, the worst thing you can do when a complex issue is at stake is to have your subordinates do all the framing, generate all the alternatives and evaluate them, and discuss all the assumptions and risks without your involvement. No matter how carefully the group tries to report its deliberations, too much is lost in that approach. When the time comes to make the decision, you will be lacking key information.
STEP 1: DEFINE THE PROBLEM OR DECISION CORRECTLY The first step in a rational decision-making process is to correctly define the issue, the problem, or the opportunity. Doing this isn’t always simple, as different people often bring different mental frames to a situation. A frame is the mental window through which we view the world or a particular problem or issue (Harvard, 154). A frame influences how we see, hear, and interpret the world around us. Have you ever heard the expression, “If your only tool is a hammer, everything looks like a nail?” That’s an example of framing in action. In our previous example, Hans, the R&D manager, probably envisioned Project Dog Bone largely as a technical matter: “How can we pack a day’s worth of nutrition into a hard, bonelike product that will appeal to dogs?” Ray, the cautious CFO, surely saw the decision as a budgeting issue: “Where will we get $10–$12 million for this new project when so many of our current initiatives are begging for investment capital?” For her part, Jennifer saw the decision as a product-line issue: “This is one more product thrown into our current mix of canned and dry pet food; it’s bound to take sales away from our other lines.” Because of their different training and professional responsibilities, each of these characters in our story approached the matter with a different frame of reference. Communication among participants is the best way to overcome the framing problem. Each participant should explain to the others how he perceives the issue and why. The others should listen and learn from what is said. As each party to the decision learns about the perspectives of his colleague, he will form a more complete and realistic understanding of problem, issue, or opportunity. Had this been done in our story, the various participants probably would have developed a broader, more nuanced understanding of the decision that Hans brought before them. It was, in fact, a technical, financial, and product-line problem. They would then have to determine whether the technical issues could be overcome, whether the new product would be financially successful, and what that success would do to their product-line strategy. The answers to these questions would inform the final decision.
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STEP 2: CONSIDER THE CONTEXT OF THE DECISION Once you’ve defined the problem or decision correctly, the second process step is to consider its context. What is driving the problem or decision? Is it part of a larger issue? For instance, in the Project Dog Bone case, decision makers should inform themselves of the broader business surrounding Hans’ proposal:
• • • •
Is the market for dog food declining, stable, or growing? What are the key competitive factors? How profitable is the company’s current line of dog foods? Is the dog food business strategically important to the company’s future?
Once they understood the context of the proposal, participants would be in a better position to ask probing questions:
• • •
Does Hans have the human resources needed to take on this project? If he began work on Project Dog Bone, would another project, perhaps of greater importance, have to be pushed to the sidelines? Would success in the project open the door to other opportunities for the company?
The answers to these and similar questions would provide context for the decision.
Exercise 9-2 The Context of Your Decisions Identify one important decision that either you or your work team must make in the near future. Then list four to five questions you would ask to create a context for that decision. Describe the decision: __________________________________________________________ Q 1. ________________________________________________________________________ Q 2. ________________________________________________________________________ Q 3. ________________________________________________________________________ Q 4. ________________________________________________________________________ Q 5. ________________________________________________________________________ Do you see how answers to these questions would create a context for a rational decision-making process?
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STEP 3: CREATE AND EVALUATE FEASIBLE ALTERNATIVES Have you ever proposed something to your boss or a friend and had that person come back the next day to tell you that, “I like your idea. It got me thinking about a different way to approach the same problem—one that may work even better!” This is an example of creating alternatives. Alternatives enrich possibilities for decision makers. Decision makers always have a minimum choice: they can say “yes” to a course of action, or say “no” and continue with the status quo. But yes and no are limited possibilities. Possibilities can often be expanded when the “right” people, as described earlier, put their minds around a problem or decision. Informed people and people with a stake in the outcome can often find alternatives that are superior to the initial proposal. In the Project Dog Bone case, for example, someone in the company’s pet food manufacturing unit might have altered the proposal by suggesting that production be outsourced to a contract manufacturer, thereby lowering the capital cost of the project and its risks to the company. Ray, the CFO, would surely see this as a superior alternative. Likewise, Jennifer’s concerns about resistance from supermarkets might be allayed by an alternative that produced “private label” versions of the product for big supermarket chains operating in different markets.
Think About It . . .
Think back to the decision that you described in Exercise 9-1. What alternatives to that problem or choice are available? In your view, are these worse than, equal to, or superior to the initial decision choice?
Your goal in this step should be to create a manageable set of feasible alternatives. By manageable, we mean few enough in number that process participants will have time to fully evaluate them. In most cases that would be three to six alternatives. By feasible, we mean realistic possibilities—within the capabilities of the company.
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Brainstorming as a Method One of the best ways to create a manageable set of feasible ideas is to bring the right people together to brainstorm the issue. Brainstorming is a method of soliciting ideas from a group of individuals in rapid fashion. It doesn’t challenge participants to be logical or fact-based, nor does it examine ideas as they emerge. It’s an opportunity for people to generate lots of ideas quickly. Out of this collective idea dump, good decision or problem-solving alternatives sometimes emerge. Brainstorming participants should observe four basic rules:
• • • •
Seek quantity. What you want here is lots of ideas. Out of many ideas a group is bound to generate some very good ones. Worry about that later. Don’t criticize. Criticizing will make the stream of ideas dry up. Besides, at this stage, who can say if a top-of-the-head idea is good or bad? Welcome even far-out ideas. Face it, real change comes from far-out ideas, not ideas that are marginally different than the ones you have now. Find ways to combine and improve ideas. This is the last part of the process. You want to combine similar or complementary ideas into a manageable set. More on this later.
Here’s how a brainstorming session generally works. A session leader, or facilitator, asks people to suggest the ideas or problem solutions that occur to them at the moment. As each idea is contributed from the floor, the leader writes it on a flip chart, or a sticky note that gets pasted to the wall, or some other medium of recording. The leader should courteously thank each contributor but avoid passing judgment on individual ideas in any way, such as, “Come on Frank, you can do better than that.” Nor should the leader disqualify any offered idea, “Thanks but no thanks for that one, Judy.” Judgmental comments like these will reduce the number of ideas volunteered from the floor. Once people run out of ideas, the session facilitator asks participants to help her group submitted ideas into clusters of similar ideas. This is one of the reasons that sticky notes are so handy in these sessions; they can be moved around readily. Only after grouping ideas do people get down to evaluating the merits of each.
Evaluation This is another key information-gathering phase of the process, in which ideas are “fleshed out” with information. Let’s suppose that by brainstorming, the Project Dog Bone team came up with the following set of alternatives:
• • • •
The initial concept: a one-day dog food ration shaped like a bone. A package containing two smaller bone-shaped meals, one for breakfast and one for dinner. A package containing one small bone-shaped meal for breakfast along with a sealed bag containing soft, chew “kibble” for the dog’s dinner. Small bone-shaped portions packaged in a 20-pound bag. “That way,” says its advocate, “we won’t have to produce and inventory separate small, © American Management Association. All rights reserved. http://www.amanet.org/
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•
medium, and large dog versions. One bone would constitute a small dog’s daily ration, two would satisfy the medium-sized dog, and three or more would take care of the dogs over 70 pounds.” Do nothing. The status quo is almost always a feasible alternative—one against which the pros and cons of other alternatives can be measured.
Once the set of alternatives is selected, participants should do a thorough evaluation of each option. In order to make a sound decision, the decision criteria must be discussed and agreed on by the participants. Using criteria helps the group make an objective, well-thought-out decision, and provides a rationale for why the decision was made. The ability to rationally explain your decision helps you win the support of those whose approval you need. Examples of criteria include cost of implementation, return on investment, resources required, percentage of needs met, and so forth. In the case of Project Dog Bone, the final alternative, “do nothing,” might seem to require no evaluation, but it should be examined with the same rigor as the others. For this project, the team should provide the following information for the key decision makers for each alternative:
•
• • • • • • • •
A list of assumptions—a “must have” for decision makers whenever estimates of future outcomes such as sales and costs are forecasted. The assumptions may well be the same for all the alternatives: size and trends of dog food market, percentage of pet owners who work full time, shop in pet stores, and so forth. The estimated cost of implementation. Forecasted cash flow and accounting profits from the project. Likely pricing of the new product. Return on investment. Resource requirements (people, capital, and equipment). The likely strategic impact—for example, how will the new Dog Bone product affect the sales of the company’s canned foods? Will the new product open a new market? Likely competitor responses if the proposal succeeds—for example, would a competitor launch similar products? How long would it take them to launch knock-off products? Risks (of technical failure, of market rejection, of not gaining store shelf space, for example).
Some decision teams attempt to produce worst-case, best-case, and mostlikely case scenarios for their alternatives. However they do it, the point is to provide decision makers with objective information and estimates for each alternative. Evaluation should draw on the thinking of all the “right” people—people who know from experience what resources will be needed to implement the decision, people who have a good idea of what customers will pay for the resulting dog food, people who know how to estimate implementation costs and risks, and so forth.
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Risk Risk is a natural companion of every decision because its consequences unfold in the future, about which there can be no certainty. As a manager, every one of your decisions involves risk: Your decision to open a branch office in New Orleans in 2005 was backed by thorough research; who would have anticipated the disaster created by Hurricane Katrina? The new person you just hired has a great résumé and stellar recommendations, but only time will tell how successful she will be in the unique environment of your company. Every new hire is an experiment to some extent. Decision makers must pay particular attention to risk. If the decision team has done its job, the risks involved in every alternative will have been spelled out in detail. Those risks can then be factored into the final decision. As Admiral Chester Nimitz told the commander of the outnumbered U.S. Navy task force he sent to the decisive Battle of Midway in June 1942, “Take calculated risks. That is much different than being rash.” Taking “calculated risks” means accepting an alternative whose potential up-side benefits exceed its potential down-side costs. In other words, its potential rewards should exceed (at a minimum) any potential loss. The absolute worst alternatives are those with high risks and low potential rewards. Make a list of every risk you can think of for key alternatives, then consider how each risk can be avoided or its impact reduced if it comes to pass. For instance, a new product often carries some risk of a personal injury lawsuit. That risk can be offset through insurance; the insurer assumes the liability risk in return for a premium payment. If the decision involves hiring a new employee, risk can be reduced by making continued employment contingent on good performance during a probationary period. Because risk is always present, make it part of your evaluation of every alternative. Try to measure the probability of desired outcomes against the probability of something going wrong.
Exercise 9-3 Risk Reduction As a new manager, one of your first decisions was to hire an outside firm to develop and install a new website for your company. You recognize three risks: the site might not be reliable (that is, it crashes repeatedly), it might not be up and running on schedule, and it might go over the budget of $75,000. Indicate two things you might do to reduce any of these risks, 1. __________________________________________________________________________
2. __________________________________________________________________________
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STEP 4: MAKE THE DECISION Let’s see what happened to the Project Dog Bone team when Hans got a second chance to present his product idea, after a disappointing drop in cat food sales and a surge in dog adoptions by two-income families. Hans first selected the “right people” who would have to be involved in all the steps. In addition to the members of the New Product Committee, Hans involved Greg from Manufacturing, Jorge from Packaging, Toni from Store Relations, and Susan from Market Research. Hans got a commitment from the New Product Committee members to participate in the discussions, not just rely on the research team to provide synopses of their work. Then Hans worked to define the decision. After thought and discussion with his advisors, he realized that, like many decisions, this one was really several separate but related decisions. First, should the company introduce the Project Dog Bone product? If that decision was yes, then further decisions would need to be made about the possible outsourcing of manufacturing, packaging, and sales channels. Next, Hans and the team considered the context, especially the growing pet food market and the shopping behavior of pet owners. As the team began to generate alternatives, people who had participated in the earlier exercise were in for a surprise. Because this time the decision had been framed as “Should we pursue a single-meal bone-like dog food product?” the alternatives had changed. This time, the alternatives were: Go with Hans’s original idea of a bonelike meal product; rethink the bone-like product as a dog snack; redesign the product concept as a “healthy teeth and gums” diet supplement; and do nothing.” (The variations on the product idea would be relevant only after the overall idea got approval.) This time, the decision makers on the New Product Committee had enough information to make a rational, nonpolitical decision. Information on the context—the pet food market, the competitive landscape—led the team to evaluate the alternatives differently. They now understood that competitors would capture market share if the company did nothing. A new product offering would increase sales and could be positioned to minimize cannibalizing current sales. Of all the potential new product ideas, Daily Dog Bone Ration was the most promising. Hans was thrilled when the New Product Committee came back with the decision to pursue Project Dog Bone and granted his team access to $1 million for the next stage of development.
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STEP 5: IMPLEMENT THE DECISION Though implementation is a different subject, it must nevertheless be part of any decision process. Decisions that approve a particular change or course of action should also include a plan for implementation. One of the virtues of the process described here is that it includes people who must live with the decision through its implementation. Their inclusion provides some assurance that an effective implementation plan will be developed and that the people who will execute the plan will be more committed to it.
Think About It . . . Every successful decision includes an implementation plan. Indeed, the first step after reaching a decision is often to create an implementation plan. Hans’s implementation plan for Phase 1 included creating a budget, assigning designers, conducting further market research, and creating a project plan with milestones for reporting to the New Product Committee and securing funds for Phase 2. Think about a decision being considered in your organization. If the decision is made to proceed with the project, what must the implementation plan include?
As stated in the beginning of this chapter, the five-step decision process described here cannot guarantee a good outcome. Decisions, to a greater or lesser degree, involve uncertainty. Thus, it is very possible to make a good decision yet have a bad outcome. For managers, this is a fact of life and need not be a sign of poor performance, especially if the risks have been considered in advance. What is a sign of poor performance is a bad outcome that follows a bad decision—that is, a decision that was badly framed, that failed to include available information and the insights of the knowledgeable people, and that did not consider or evaluate feasible alternatives and their risks.
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The well-being of an organization depends on the quality of its decisions. As a manager, you make many decisions and are responsible for their outcomes. All important decisions should be handled through a rational process that emphasizes fact finding and evidence gathering and leaves little room for power politics to exert influence. Though a good outcome cannot be guaranteed, a solid decision-making process can improve the odds of success and guard against second guessing and criticism in the event of a poor outcome. Step 1, define the problem or decision correctly, ensures that the issue, problem, or opportunity being considered is presented in the proper frame of reference. Step 2, consider the context of the decision, examines what is driving the problem or decision and reveals if it is part of a larger issue. Step 3, create and evaluate feasible alternatives, provides for alternatives that enrich possibilities for decision makers. Informed people and people with a stake in the outcome can often find alternatives that are superior to the initial proposal. Step 4, make the decision, follows when the issue, problem, or opportunity has been properly defined; information on the context has been evaluated thoroughly; and a range of alternatives has been considered. Step 5, implement the decision, requires that a plan for implementation be in place for decisions that involve a particular change or course of action. Including those people who must live with the decision provides some assurance that an effective implementation plan will be developed and that the people who execute the plan will be more committed to it. Generating alternatives and reducing risk are two other important components of effective decision-making.
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Review Questions
1. A decision team should create:
1. (b)
(a) winning arguments. (b) a manageable set of feasible alternatives. (c) fall-back positions. (d) rational and irrational choices.
2. Which is a natural companion of every decision?
2. (d)
(a) Complexity (b) Confusion (c) Conflict (d) Risk
3. Decisions that approve a particular course of action should also
3. (d)
include a plan for: (a) customer feedback. (b) pay raises. (c) risk enhancement. (d) implementation.
4. When complex decisions are being made, people with
4. (b)
_____________________ should be involved: (a) advanced degrees (b) relevant information and experience (c) no personal stake in the outcome (d) a personal agenda
5. Good decisions are made through a(n) ________________ process. (a) intuitive (b) preferential (c) rational (d) aligned
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10 Handling Difficult People and Situations Learning Objectives By the end of the chapter you should be able to:
• Describe the difference between useful and • •
unproductive conflict in your workplace. Describe a two-step process for dealing with difficult employees. Describe the challenges and solutions for dealing with high-value customers and difficult bosses.
If you’ve ever worked for yourself and had no employees to worry about, you have probably been as close to a conflict-free working environment as you will ever experience. No egos bumping up against one another. No workers complaining about their pay or peers. Sure, there is an occasional irascible client to deal with, but overall the level of conflict experienced by the independent consultant, tradesperson, freelance writer, and so on is pretty low and easily managed. Unfortunately, individuals working alone face certain limitations. Big jobs—designing an office building, providing broad-based medical services, manufacturing, and similar activities—require many hands and minds working together. And that’s where the trouble begins. When you bring a dozen people together to do a job, you may get a dozen opinions on how the job should be handled. Among those same twelve people, there’s also bound to be some personal friction that reduces collaboration and performance. In many respects an organization is like an engine with many moving parts. Moving parts naturally generate efficiency-robbing friction (conflict), and some parts may be defective (a poorly performing employee). One of the manager’s jobs is to minimize the conflict-driven frictions that prevent the organization from fulfilling its productive potential.
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Dealing with conflict and difficult employees absorbs a significant portion of the typical manager’s day, and is usually the least favorite part of his or her job. As one business owner told the authors, “My job would be ideal if it weren’t for all the people problems.” This chapter will not immunize you to those annoyances, but it will give you ideas for dealing with them more effectively.
WORKPLACE CONFLICT Conflict is a state in which the ideas, interests, plans, goals, egos, and agendas of individuals clash. A clash of interests between sovereign states and the federal government contributed to the American Civil War. In Spain, conflict between supporters of conservatism and the supporters of liberal and socialist ideas spilled over into civil war during the 1930s. Organizations do not break down into shooting wars, but conflict over ideas, interests, plans, goals, and individual egos often impede performance. Here are a few examples:
•
•
•
•
Winner take all. The Vice President of Sales for a nationwide company plans to retire soon. Two powerful regional sales managers are vying to replace him. One will win and the other will lose in that contest. Both have large egos. Their contentious jockeying for position is undermining collaboration among the sales management team and hurting morale. Not good for me. The CEO appointed a cross-functional team to study the pros and cons of purchasing a multimillion dollar “enterprise management” software system. The finance representative on the team is pushing for the system, seeing it as a major time-saver for her department. The information technology person on the team is following his boss’s line in opposing the new system. “We don’t have the resources to implement and debug a system that big,” he complains. “It will be a nightmare for us.” The engineering person on the team is also opposed, believing that the millions spent on a new system will starve his department and others of resources. To the annoyance of everyone else, the engineering representative has been secretly lobbying against the system among senior management. Turf warfare. The Vice President of Corporate Marketing and the General Manager of the Consumer Products Division have locked horns in a turf war over which of them will control the Division’s advertising budget. “We’re in a better position to balance ad spending across the entire corporation,” says the marketing VP. The division GM sees a serious loss of control in that idea. “He’s just trying to build a little empire for himself,” he says dismissively of his colleague in marketing. It’s personal. Nancy and Brett are both subordinates of Helen, a newly appointed manager. The two were recently romantically linked but now avoid speaking with one another, even though their work cubicles are adjacent to one another. If Nancy has something to share with Brett, she either does so via email or has it delivered by a coworker. No one understands the exact nature of their conflict, but it has made work within the small office difficult for everyone and generated an unhealthy level of gossip.
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Do any of these conflicts seem familiar? Chances are that you will have to deal with conflicts like them sometime during your management career.
Exercise 10-1 Conflict Where You Work Identify one case of conflict you have observed in your workplace, then answer the following questions: Who is involved in this conflict? ___________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ What is at issue in this conflict (for example, fighting over scarce resources)? ____________________________________________________________________________ ____________________________________________________________________________ What effect is this conflict having on work performance, if any? __________________________ ____________________________________________________________________________
Not Always Bad Some level of conflict is inevitable whenever people are brought together. Conflict, however, is not always a bad thing. Consider its opposite: unanimity, a state in which everyone is in agreement. At first blush, you’d probably say, “What’s wrong with everyone being in agreement?” Well, consider the bad things that happen when leaders surround themselves with like-minded people who will not or cannot say, “I think that’s a bad idea. I know of a better alternative.” People use the term groupthink to describe these situations. People afflicted with groupthink generally have a strong team identity and strive for consensus and conflict-avoidance. As a result, dissenting ideas are suppressed, and dissenters are excluded (“She wasn’t a team player”). People often make big mistakes when everyone thinks the same and when conflicting ideas are suppressed. President Kennedy’s decision to support the ill-fated Bay of Pigs invasion by anti-Castro Cuban exiles is often described as a classic case of groupthink. Kennedy’s advisors were all in agreement and did not invite dissenting views. Similar forces are common in the workplace, where people often share a common view of the customer and the competitive environment.
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Sarah is a new editor of a leading magazine for people who like to cook. At the meeting to discuss possible articles for the September issue, she had some ideas. “How about a feature on tailgating?” “Ha!” snorted Esmé, the editorial director, “Our readers aren’t interested in tailgating! They want elegance!” “Yes,” piped up Rolando, “It’s simply not what our readers care about.” “How do we know that?” asked Sarah. “It’s simple,” responded Esmé. “As the most prestigious cooking magazine in the country, we tell our readers what they need to know. They trust us to identify what is important. We have not selected tailgating. Now let’s see, we need an international feature, a vegetarian feature, and who wants to take on this month’s new and unusual ingredient?” Heads nodded around the room. Years of pre-eminence in the market niche assured that employees agreed on many things—the infallibility of Esmé being foremost among them. Sarah volunteered for the equipment feature. In October, the magazine’s main rival scored big newsstand sales and free publicity for its cover article: “Knock Their Socks Off ! Haute Cuisine Meets the Tailgate.” A controlled level of conflict is an antidote to groupthink because conflict can raise important issues and people must grapple with them. Consider the example described earlier in which a team of people representing different corporate units were studying the pros and cons of an expensive software system. Conflict within that group served a valuable purpose: alerting management to the potential problems of the system, and the fact that some units might benefit while others would suffer. Conflict between the VP of Corporate Marketing and the Division General Manager is also useful in the sense that it raises a question of interest to management: Which entity is in the best position to deliver cost-effective advertising for the Consumer Products Division? Of the four conflict examples presented above, “winner take all” and personal conflicts may be of zero positive value. Conflict between the two competing sales managers does not appear to help their organization. If one is chosen to become the new Sales VP, the other may be bitter or may even leave the company. As for hard feelings between Nancy and Brett, no good can come of their conflict, which is simply making work more difficult for them and their peers.
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Exercise 10-2 Valuable Conflict Return for just a moment to the workplace conflict you identified in Exercise 10-1. Do you see any value to the organization in that conflict—that is, has it forced people to debate important issues? Please explain:
Dealing with Conflict Conflict is an inevitable feature of organizational life. Your job as a manager is to:
1. Recognize when conflict adds value and when it does nothing but impede performance.
2. Determine the cause of the conflict. 3. Eliminate unproductive conflict. 4. Keep useful conflict from getting ugly, and eventually resolve it in a manner that maximizes satisfaction for the conflicted parties.
5. Follow up. Each situation is different, so you must rely on your judgment to determine which conflict adds value and which does not. Unlike useful conflict, which raises important issues, unproductive conflict typically:
• • • • • •
Diverts attention from important tasks. Damages morale. Polarizes people into hostile and opposing camps. Reduces cooperation. Leads to inappropriate behavior. Does not lead to a beneficial end.
Unproductive conflict, such as the personal rift between Nancy and Brett, should be quickly eliminated. In these cases, communication is often the best remedy. The manager of these individuals might speak with each separately and frankly, pointing out the negative impact of their conflict on the department and their peers. If neither party will change his or her behavior, then the manager must lay down the law. If that fails, someone must be moved out of the department.
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A manager may also work to resolve conflict through communication and negotiation. You should, for instance:
• •
•
Ask each conflicted party to express their concern or complaint in a calm and rational manner. Others should listen without commenting until each party has had their say. Paraphrase the core of each side’s concern or complaint; then ask clarifying questions. “So if I understand you correctly, you think that shifting responsibility for the division’s advertising to corporate marketing will reduce your sales effectiveness. Is that your position?” Once the person confirms that you have it right, dig deeper. “What makes you think that shifting responsibility for advertising would weaken your sales?” The goal here is to get a clear picture of the problem as each side understands it, and to make sure that the conflicted parties understand each other. Get people talking about their interests. Interests are often hidden beneath expressed concerns or positions. For example, referring back to the dispute about buying and installing an enterprise management software system, the IT department’s interest may be fulfilling its mission of providing timely and reliable IT services to internal customers. That essential mission may be undermined if its personnel must divert their attention to the huge job of installing and debugging the new system. Encourage people to set aside debate over their concerns or “positions” and to begin talking instead about their true interests. Each party should understand the interests of the other.
Once everyone’s interests are on the table, you have an opportunity to find a solution that accommodates each person’s interests.
Look for Win-Win Opportunities There are generally two types of solutions to conflict: win-lose and win-win. A win-lose solution is one in which all value gained by one party is obtained at the expense of someone else, which is why it is often called a “zero sum” game. For example, if two people are competing for a single promotion, the person who gets it wins at the expense of the other, barring some other arrangement. Win-lose situations assume that the value at stake is fixed: if there is only one promotion available, it cannot be divided or shared. Some disputes are, in fact, zero sum games. But never make that assumption. Instead, look for a win-win solution, one that benefits all parties. You can often find a win-win solution when both parties talk openly about their interests. Dialogue about interests often uncovers opportunities for value creating trades, the basis for conflict resolution in many cases. A value-creating trade is one in which Party A gives something of little value to himself to Party B, for whom that “something” has important value. Party B, in return, gives Party A something that she values very little, but which A values greatly. Consider this example of a value-creating trade: Alyssia and Jack had been feuding for weeks over 600 square feet of office space that would soon be vacated. Each wanted that space for AMACOM Self Study Program http://www.amaselfstudy.org/
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his or her own department. Eventually, they brought their dispute to their mutual boss, Ralph, who would eventually decide how the space would be used. Each made a case for why they had to have the space, and why they were more deserving of it than the other. Ralph listened until each had their say. It appeared to be one of those situations where the value at stake was fixed (600 square feet for floor space). “Well,” said Ralph, “what if we divided the space into two equal parts? Would that work for you?” “Not at all,” Alyssia insisted. “I need 550 square feet to handle the orders for the year-end holiday and the Easter and Mother’s Day crunch. Nothing less will do.” Jack was almost as uncompromising. “We must have at least 400 feet to assemble and pack the semi-annual sales kits.” Faced with the dilemma, Ralph tried to think of ways to expand the value at stake and satisfy each party. “You both have a valid point,” he remarked, “but is there any way that each of you could have the entire space at a particular time?” “You mean swap times?” asked Jack. “Right,” said Ralph. “Since your tasks are somewhat countercyclical, you would take over the space during those months when you need extra space, and Alyssia would do the same in the months leading up to major holidays.” “I’m not sure that would work out,” Alyssia said reservedly. “We’d have to check our annual departmental work schedules.” “Yes, do that,” Ralph suggested. “Sit down together with a calendar and see how you could accommodate each other in using this new space. Then let me know what you’ve found out.” By ceding the space in the spring, when he did not need it, Jack offered Alyssia something she valued at no cost to himself. Alyssia did the same when she let Jack used the space during her off season. This example is contrived, but it makes the point: When people understand their interests and those of others, it’s sometimes possible to create conflict-resolving trades that satisfy everyone.
Think About It . . . Think for a moment about one or more situations in which a value-creating trade led, or could have led, to an agreeable conflict resolution. Briefly describe the conflict:
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Think About It continued from previous page. What were the real interests of the parties?
What trades eventually satisfied, or might have satisfied, the conflicted parties?
Another problem that managers have to address is dealing with difficult people. Although it’s tempting to blame conflict on the personalities of the people involved, this is usually not the reason for office disturbances. Perfectly nice and reasonable people can find themselves in both productive and unproductive conflict with others. And the most “difficult” people that managers deal with may not overtly cause conflict—although their antics can wreak havoc on any organization. Instead, difficult people bring their own challenges for the manager.
DIFFICULT PEOPLE Every manager eventually runs into difficult people. They are that small minority of customers who are always complaining or insisting that they be given special treatment or favors—more than you’re already giving them. They are the under-performing subordinates who act as if the company owes them a living. Difficult people also include high performers who use their contributions to the company to justify bad behavior. Their behavior can be rude, malicious, or just strange. Your boss may also be a difficult person. As a manager, you must be prepared to deal with a range of difficult people. No one looks forward to confronting a difficult person. It’s an unpleasant task. Conflict avoidance is much easier and more comfortable. But avoidance is unlikely to cure the problem. In some cases, failing to confront a difficult person may cause serious financial problems for your company. Consider the following example, as described to the authors by the CEO of a small private company: Harvey was our top salesperson. My predecessor had hired him away from a competitor. Harvey was a selling dynamo. He brought in orders we never would have gotten without him. But he was also a big headache, insisting that our warehouse fill orders to companies that should have been on credit hold because of receivables 60 days or more overdue. AMACOM Self Study Program http://www.amaselfstudy.org/
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When our office manager objected, he would threaten to quit, which scared the former CEO, who always backed down. Harvey also lorded over some of our people, telling them that they would be out of work were it not for his sales performance. When I took over the first thing I noticed was the $260,000 in past due payments owed by one of Harvey’s key customers. After a little digging, I discovered similar, though smaller examples of pastdue accounts. The former CEO wouldn’t confront Harvey. I knew that I had to do it, otherwise he might drive us into insolvency. This CEO eventually confronted his star salesperson, insisting that Harvey collect his customer’s past due receivables and begin following the company’s credit rules. This was a painful conversation for the CEO. Harvey responded by leaving—taking many of his customers with him. “It took us almost two years to recover our receivables and to fill the sales gap that Harvey created when he left,” reflected the CEO. “But it had to be done.” Are You a Conflict Avoider? Everyone avoids conflict to one degree or another, if only because conflict makes them uncomfortable. How low is your discomfort threshold? Do you change the subject when faced with conflict? Do you give in when faced with an opposing view? Do you verbally agree to things that you have no intention of doing? Do you typically put up with a bad relationship rather than change it or leave it? If you answered yes to these questions, you’re a conflict avoider and you’ll have to change if you want to be a successful manager.
A Two-Step Process Yes, confronting difficult people is stressful, but it’s something you must do for yourself and your organization. If you have any reluctance, or experience a sudden attack of “conflict avoidance,” the following process may help you move forward. Step 1: Prepare Preparation will put you in a stronger frame of mind. Preparation involves forethought and making notes to yourself:
• • •
Make a written note of the behavior or issue you need to discuss with this person. As with other feedback discussions, it is important to focus on behavior, not character traits. Be very specific: “Late to work ten times in the past four weeks.” Write down the negative consequences that result from this behavior or issue: “Other people on the team cannot get started until you’re there.” Indicate what must change. You should have in your mind the ideal outcome: “Always on time and ready to work at 9AM.”
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•
• •
Anticipate what the other person is likely to say and prepare a counterpoint: “Unreliable bus service might be a valid excuse for being late to work once in great while, but not ten times in four weeks. You know when our business day starts. If the buses are chronically late, take an earlier bus. It’s your job find a way to be here on time.” Be prepared for diversionary tactics. Difficult people don’t always cooperate by sticking to the issue at hand. “I’ve worked here 14 years and the old boss never had a problem with my schedule. I think I’ll just ask my Uncle Paul, the CFO, what he thinks about it.” Have a plan for change. Being the source of the problem, the other person should usually have the first opportunity to create a plan for change. But have a plan of your own in case he or she is uncooperative or needs a suggestion.
Step 2: Set up a meeting Call or email the person. In a businesslike manner, briefly state your purpose: “I’d like you to meet me in the first-floor conference room tomorrow at three o’clock. It’s about your arrival time at work. I’ll see you then.” If you do this on the phone, do not entertain any discussion beyond your statement. “I don’t wish to discuss this over the phone. We’ll take it up tomorrow at three.” This type of planning will raise your confidence, stiffen your backbone if that’s needed, and put you in a much better position to deal with the difficult person. When you finally meet, do so in a business-like setting. Stay focused on the problem. Listen well and patiently, but hold firm to the result you insisted on in your plan. Another kind of difficult person doesn’t cause performance problems directly, but somehow manages to sow the seeds of unhappiness with her colleagues. This conversation can be more challenging, because you don’t have the performance issue to hang your hat on, and the employee may be careful to be on good behavior in your presence.
“Samantha, several people have told me that you think the company’s sales bonus plan is unfair. Can we talk about the plan now?” “Who’s been tattling on me this time? Welcome to the police state—a person can’t even state an opinion without having it turn into a big deal!” “I’m sure you know the plan was carefully designed to increase sales by rewarding successful salespeople, so I’d like to understand your concerns. If we’ve missed something in the plan design, it’s probably more useful to share your concerns with me than with your colleagues—at least I might be able to do something about them.” As a new manager, don’t be surprised if these difficult conversations unsettle you and drain you of energy. But once you’ve gotten through a few of them successfully, they will become less and less stressful.
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DIFFICULT PEOPLE: SPECIAL CASES When you deal with problem subordinates, you have something they lack: organizational authority. If you stay within the scope of your authority, your boss and company will back you up, and you will be able to enforce the outcome you see as necessary. The same method can be applied when dealing with your peers, even though you lack the leverage of organizational authority. But you’ll need to alter your approach a bit in dealing with two very special classes of people: customers and your boss.
What’s the Customer Worth? Customers are the source of revenue for the vast majority of enterprises, so you need to treat them with special care, especially if you’re in a business with high customer acquisition costs.
Think About It . . . Have you ever noticed how hard magazine publishers work to get you to renew your subscriptions? They send repeated letters (YOUR SUBSCRIPTION IS ABOUT TO EXPIRE—ACT NOW!), drop the subscription price, and sometime offer gifts just to get you to sign up for one or more additional year. They make that effort because the cost of replacing defectors is much, much higher than the cost of getting people to renew. Credit card companies and commercial lenders face the same high customer acquisition costs. What about your business? Is the cost of capturing a customer high or low? Explain:
Your answer will have an impact on your dealings with “difficult” customers. Whether they demand extra services, pay their bills late, or complain about the products or services they purchase, some customers cost your company more than others. Which ones are worth it?
Some companies are ferocious in their dedication to winning customers and keeping them happy. As a marketing executive of an entrepreneurial company told one of the authors, “We always say yes to our customers. Then we go back to the office and try to figure out how we can make good on our commitment.” That’s an extreme approach, but one that has enriched that particular company and its shareholders. Most customers are fair-minded in their relationships with vendors. They recognize that both parties—you and they—must benefit. A few, however, can be difficult, and those few can eat up a lot of your time. It’s likely that the 20/80 rule applies to difficult customers: namely, 20 percent of customers © American Management Association. All rights reserved. http://www.amanet.org/
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consume 80 percent of your customer-tending time. But some of these difficult customers are worth the trouble. One of the authors recalls a particular customer, Frank, who frequently asked for more than he paid for. He would call the office periodically to ask for some favor that went beyond the terms of the customer-vendor agreement—free overnight shipping when the delay was his fault, a rush delivery of printed materials, or special treatment for one of his friends. The office staff hated this and routinely complained about Frank. “What a pain this guy is,” they would say among themselves. “Frank calls here every week or two with something he wants us to do for him—as if we have nothing else to do.” As the company’s main contact with Frank, the author had a different attitude toward this customer. He respected Frank’s professional accomplishments and he saw the problems Frank caused as minor relative to the value he contributed to the company. Of the company’s several hundred active customers, Frank alone accounted for almost ten percent of all company revenues and almost 15 percent of gross profits. “We should all be very happy with Frank,” he liked to remind the office staff. “I wish we had ten more difficult customers like him!” Not every difficult customer, however, is as valuable as Frank. Dealing with some difficult customers costs money and saps people’s energy—to the point of making them profitless to serve. So you must decide how far you’ll
xhibit 10-1 Customer Lifetime Value Analysis
Revenues from the customer
+$
-$
Costs of serving the customer
Acquisition cost Years
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go in catering to these difficult customers. One method for making your decision is customer lifetime economic value analysis. This method estimates the present value of all net cash flows from the customer over a period of years. As shown in Exhibit 10-1, the company experienced an initial cost in acquiring a particular customer. In each subsequent year, serving this customer resulted in a mix of revenues and costs. The net of these cash flows (revenues less costs) were approximately zero during the first year, but increasingly positive (that is, profitable) as time went on— a pattern that every company hopes for in its customer relationships. This customer is a gift that keeps on giving—and worth working hard to keep. Contrast the positive cash flow of this customer to the situation shown in Exhibit 10-2. Here we have the case of customer who is unprofitable to serve—roughly breakeven on a year-to-year basis. If this unprofitable customer is also a difficult person, you should ask yourself, “Do I want to knock myself out dealing with him?” Unless you anticipate a major change in the value of this customer, you’d be better off parting ways with him. Doing so will reduce stress and give you more time to spend with customers of real value. Whether you’re dealing with a valuable customer you hope to retain or with a valueless customer you’d like to “fire,” observe these guidelines:
xhibit 10-2 Customer Lifetime Value Analysis
Revenues from the customer
+$
-$
Costs of serving the customer
Acquisition cost Years
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• • • • • •
Be thoroughly professional. Be in command of the facts. Be totally conversant with your company’s policies regarding discounts, payment terms, and so forth. Understand the customer’s interests and your own. Listen carefully. The customer may have a valid reason for being difficult. Seek a win-win solution.
Think About It . . . Can you turn a “difficult” customer into a source of ideas for your company? The extra services and special product tweaks that “problem” customers request can give you a glimpse into your customers’ needs—and maybe valuable new market opportunities. Furthermore, almost everyone likes to be asked for advice and input. Listening to your problem customer may help you turn him into a champion.
Your Boss Your boss is probably the most important person in your work life. Consequently, if he or she is difficult, you need to find a way to alter the situation for the better. The problem of difficult bosses is so widespread that a website (badbossology.com) has arisen to provide solace to the multitudes who suffer under them. How do people feel about their bosses? A Badbossology.com survey with 1,118 respondents found that 48 percent would fire their bosses if they could; 29 percent would send their bosses for psychological assessment; and 23 percent would enroll their bosses in a management training course. Another of its surveys found that the majority of employees spend 10 hours or more each month complaining about or listening to others complain about bad bosses, while nearly one-third spend 20 or more hours in boss-bashing. Just how reliable these data are is open to question; nevertheless, they underscore what everyone in the working world knows in his bones: there are a lot of difficult people in management positions. Hopefully, you’re not one of them. What makes a boss “difficult”? Consider these causes:
•
• •
Doesn’t communicate. This is a typical cause of bad-bossdom. Direct reports don’t know their boss’s priorities or his expectations of them. The boss provides no feedback. People are kept in the dark about management’s plans. Lots of hard work is wasted when the boss complains, “That’s not what I wanted. Do it over.” Fails to respect subordinates and their contributions. People feel devalued, and that is taking a toll on morale. Failing to get respect, the boss’s direct reports return the favor, creating tension. Fails to develop subordinates’ skills and careers. Good managers provide coaching and give their direct reports important, career-enhancing assignments. AMACOM Self Study Program http://www.amaselfstudy.org/
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They are happy when their best people are promoted into more important positions. The bad boss does not want subordinates to grow professionally—that would only encourage them to leave for a better job. Creates a bottleneck. Nothing can be undertaken or decided without this boss’s okay, making her a bottleneck in the flow of work. Since she’s seldom available to make routine decisions, uncompleted work piles up. Micromanages. Either through a lack of trust, an obsession with control, or a need to let everyone know that she’s the brightest person in the room, this boss has to be involved in everything and make all the decisions. Competent subordinates feel suffocated. Is highly political. Everything this boss does is done to advance his career. He will blame others for his mistakes and take personal credit for their accomplishments. He will also lie and withhold information when doing so furthers his ambitions. He will not support his people if doing so involves a political risk for him.
If you spend enough time in organizations, you’re bound to encounter a boss with one or more of these bad characteristics. Working for any one of them is bound to be difficult—though a useful object lesson in how not to manage people. Though there are a few personally flawed characters in this list of bad managers, most of them are good people who just haven’t learned how to communicate or deal effectively with the human resources entrusted to them. Perhaps they had no managerial training. Perhaps they learned the ropes of management from a boss who had one or more of those bad habits. Perhaps they are simply buckling under the pressure of their jobs. Whatever the case, if your difficult boss is a fair, well-intentioned person, there’s a good chance that the two of you can develop a productive and mutually beneficial working relationship. How you build a good working relationship with a difficult boss should be determined by the situation. Much will depend on the nature of the person you’re dealing with and his or her openness to change. The first step, however, is always communication. Even if your boss is closed-mouth and a poor listener, you must find a way to get through. And the most important thing for you to communicate is your interest in helping him or her to be successful. That kind of offer is irresistible to every rational boss—good ones and bad ones alike. Above all:
• •
Frame your conversations in terms of his or her interests and responsibilities, and how you can help. Be very aware of top management’s priorities and concerns, and how your unit, working through your boss, can address them.
Neither of these actions, however, will solve the problem of the difficult boss who is irrational, incompetent, or lacking integrity. In that case, you have two choices: (1) quit or make a lateral move within the organization, or (2) minimize contact with your toxic boss until such time as he or she is forced to walk out. Truly terrible bosses are eventually fired or retired. While you wait for that happy day, build support for yourself within the wider organization:
• •
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•
who outranks your boss. Resist whining about your boss; remain professional at all times.
These actions will provide a measure of employment protection and, very possibly, open the door to a new and better job within the company.
You Yes, you! The most important factor in keeping employees engaged is a positive relationship with their boss. Look again at the list of behaviors that characterize bad bosses, and honestly assess yourself against them.
Exercise 10-3 Becoming a Good Boss The “flip sides” of the traits of a bad boss are all good habits to practice. Rate your own behavior from 1 to 10, with 1 being “rarely” and 10 being “always.” 1. I communicate information, expectations, and feedback in a timely and positive fashion. ______ 2. I respect my subordinates and let them know that I value their contributions. ________ 3. I work with my subordinates to develop their skills and careers. ________ 4. When my input is required, I provide it in a timely way. ________ 5. I delegate appropriately and avoid micromanaging. ________ 6. I try to be fair and make decisions based on the merits of the case, not on favoritism or office politics. ___________
Being a good boss is an important part of becoming a successful manager. These actions, as well as the other tips and advice found throughout this book, will serve you throughout your career.
Conflict is a state in which the ideas, interests, plans, goals, egos, and agendas of individuals clash. Workplace conflict can be destructive. Examples of unproductive conflict include: the winner-take-all scenario, where one individual or department wins and another loses, undermining collaboration and hurting morale; the not-good-for-me scenario, in which an individual or a group advances or blocks an agenda based solely on their own interests, without regard for the overall health of the organization; turf warfare, where parties battle for control of resources and influence; and the it’s personal sce-
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nario, which develops when personal conflicts spill over into the workplace. Controlled conflict can also be valuable, bringing new ideas to the table, improving discussion, and ensuring that management hears all sides of an issue. Difficult people can take up a lot of a manager’s time. When dealing with difficult employees, use a two-step process to address the issue. Step 1 is to prepare by making notes on the behavior or issue, noting negative consequences, indicating what must change, anticipating the response, preparing for diversionary tactics, and making a plan for change. Step 2 is to set up a meeting by phone or e-mail to be held in a business-like setting. At this meeting you will listen carefully, while holding firm to the result you outlined in your plan. When the difficult person is a customer, analyzing his value to your organization will help you determine how best to handle him. One method for assessing a customer’s value is customer lifetime economic value analysis. In dealing with all difficult customers, regardless of value to the organization, you must be professional; in command of the facts; well informed about organizational policies on discounts, payment terms, and so on; understand both the customer’s interests and your own; willing and able to listen carefully; and ready to seek a win-win solution. Perhaps the most challenging “difficult” relationship is the difficult boss. When this is the case, frame your conversations in terms of his or her interests and responsibilities, and how you can help. Be very aware of top management’s priorities and concerns, and how your unit, working through your boss, can address them. The characteristics of bad bosses—poor communication, lack of respect for others, not developing staff, being a bottleneck, micromanaging, and acting politically—can all be studied as ways to be a better boss.
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Review Questions
1. Which is a typical characteristic of a difficult boss?
1. (b)
(a) Is too open with subordinates (b) Doesn’t communicate (c) Has a process orientation (d) Delegates challenging tasks
2. In dealing with a difficult customer, you should give some thought
2. (d)
to this customer’s: (a) personal feelings. (b) relationship with your employees. (c) interest in competing products or services. (d) lifetime economic value to the company.
3. John has given Bernice a file cabinet he doesn’t need. This helps
3. (b)
Bernice immensely. In return, John asks if his people can use Bernice’s photocopier periodically. “Sure,” says, Bernice, “it’s idle half the time.” This is an example of: (a) process sharing. (b) a value-creating trade. (c) an even trade. (d) conflict resolution.
4. A manager should work to eliminate:
4. (b)
(a) all conflict. (b) unproductive conflict. (c) conflict over the best way to achieve a unit goal. (d) time spent on discussing differences of opinion.
5. Conflict serves a useful purpose in an organization when it: (a) pits competing employees in winner-take-all situations. (b) allows managers to exercise their organizational authority. (c) forces people to raise and debate important issues. (d) divides employees along loyalty lines.
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5. (c)
Afterword
You’ve come to the end of our course on Becoming a Manager. The ten preceding chapters have examined many of the key challenges you will face and have offered practical solutions for overcoming them. Mastering the material in this course will get you off to a good start on your managerial career, but there is much more to learn. Because of space constraints we have either excluded or given cursory treatment to many important topics, including: managing teams, motivating subordinates, project management, negotiating, aligning rewards with goals, budgeting, strategic planning, organizational structure, and managing cultural diversity—to name just a few. There are, in fact, enough facets to the study of management to engage an entire lifetime of learning. We recommend that you continue your management education through the many books, articles, and training course currently available. Learning—and the application of what you learn—will help you master your profession. Start today.
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Bibliography
Cohen, Allen and David Bradford, Influence Without Authority. New York: John Wiley & Sons, 1989. These management scholars introduce the metaphor of currencies, a kind of IOU that managers can use to expand their workplace influence. Currencies, according to the authors, are the resources and favors that managers offer to others in exchange for cooperation. The book is filled with practical examples of people placed in situations where they must manage without sufficient authority. Delpo, Amy, and Lisa Guerin, Dealing with Problem Employees. Berkeley, CA: Nolo, 2001. Every manager encounters problem employees. This book explains how to handle them—without creating legal liabilities for yourself and your organization. Hersey, Paul, Kenneth Blanchard, and Dewey Johnson, Managing Organizational Behavior, Ninth Edition, Englewood Cliffs, NJ: Prentice Hall, 2007. The authors apply behavioral sciences findings to modern management and issues of motivation, situational leadership, and change management. Herzberg, Frederick, “One More Time: How Do You Motivate Employees?” Harvard Business Review, January 2003. A classic article on motivating in the modern workplace. What works and what doesn’t? Herzberg will help you figure it out. Hill, Linda, Becoming a Manager: Mastery of a New Identity, 2nd edition. Boston, MA: Harvard Business School Press, 2003. Hill, a professor at Harvard Business School, studied the transition of 19 young individual contributors to the ranks of management. The difficulties they experience and personal transformation they underwent are well described, often through the words of the subjects. Any new manager would benefit from skimming this book.
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Labovitz, George and Victor Rosansky, The Power of Alignment. New York: John Wiley & Sons, Inc., 1997. “Alignment is the essence of management,” says FedEx founder Fred Smith in this important book. All managers understand the important of clear goals—for themselves, their units, and their subordinates. Alignment of effort, and the rewards that support it, is the centerpiece of performance. This book explains both the importance of aligning individual and unit goals with the strategic goals of the enterprise, and how to do it. Luecke, Richard, Business Communication. Boston, MA: Harvard Business School Press, 2003. This short book offers readers a clear and comprehensive overview on communicating effectively. The emphasis is on written and presentation formats. Luecke, Richard, Power, Influence, and Persuasion. Boston, MA: Harvard Business School Press, 2005. Part of the Harvard Business Essentials Series, this book takes a broad look at how managers and employees can impact the decisions and actions of their organizations, stressing the very necessary role of power, influence, and persuasion in organizational work. Maslow, Abraham H., editor, and Deborah C. Stephens, The Maslow Business Reader. New York, John Wiley & Sons, Inc. 2000. This volume collects some of Maslow’s most important essays, including his seminal thinking in “A theory of human motivation,” (the hierarchy of needs). Matheson, David and Jim Matheson, The Smart Organization. Boston, Harvard Business School Press, 1998. The authors describe the “smart” organization as one that routinely makes good decisions. They describe the decision process developed by Strategic Decisions Group, of which they were principals when the book was written. Mintzberg, Henry, “The Manager’s Job: Folklore and Fact,” Harvard Business Review, March–April 1990, 164. A classic article based on Mintzberg survey research of how executives actually spend their time. The fragmented chaotic picture he draws stands in dramatic contrast to the orderly process of management described in most college textbooks. Oncken, Jr., William and Donald L. Wass, “Management Time: Who’s Got the Monkey?” Harvard Business Review. Boston: Harvard Business School Publishing, 2000. Are you feeling overwhelmed by work? Are you always short of time? Do you delegate duties to subordinates only to have them put the “monkey” onto your back? If these are your problems, order this classic article, which contains plentiful good advice about effective delegating. Schwartz, Andrew E., Delegating Authority. New York: Barron’s Business Success Series, 1992. Delegating is a method you can use to develop the skills of subordinates and get them accustomed to taking responsibility and accountability. Schwartz’s guide will help you delegate using five steps: goal setting, communication, motivation, supervision, and evaluation.
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BIBLIOGRAPHY
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Tannenbaum, Robert and Warren H. Schmidt, “How to Choose a Leadership Pattern,” Harvard Business Review (1958). A landmark article on situational leadership and picking an appropriate style of leadership, it can be purchased online and downloaded from HBR’s articles archive at www.hbsp.harvard.edu. Watkins, Michael, The First 90 Days: Critical Success Strategies for New Leaders at All Levels. Harvard Business School Press, 2003. This author focuses on the perilous transition that so many corporate managers face: taking on a new position or a new major initiative. This research concludes that the first three months in those positions are critical. He offers practical strategies for success in those months. If you’re looking for a short-cut, read an online interview with the author on this subject at http://hbswk.hbs.edu/item/3771.html. Weber, Max, Theory of Social and Economic Organization. Translated by A. R. Anderson and Talcott Parsons, 1947.
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Online Resources
Managers and supervisors who want to learn new ideas for doing their jobs can find lots of useful information on the Internet. So, if you’d like to learn more, surf the following sites, which we’ve listed under key topics. Some of the URLs are long and complex, so copy the URLs that interest you, then paste them into the address line of your Internet browser. That way you’ll avoid spelling errors. NOTE: These URLs were live when this course went to press. Some may have been taken down since then. Communicating with Offsite Employees Many work teams are geographically dispersed. Telephones, email, and video conferencing help these team members communicate. Here’s an online article with more about how you can use those technologies to keep in touch with people you seldom see in the office. http://www.sideroad.com/Business_Communication/communicating-withoffsite-employees.html Language and Culture Differences Though language and cultural differences were beyond the scope of this course, the management implications and challenges of those differences are very real in the U.S. and many other locations. Here is a source of information on these subjects. http://www.beyondintractability.org/essay/cross-cultural_communication/ Persuasion Persuasion is one of the most valuable tools that any manager can cultivate. Each of these sites has an essay listing three or more things you can do to be more persuasive. http://www.sideroad.com/Sales/persuasive-communication.html http://www.sideroad.com/Business_Communication/persuasive_communi cation-business.html
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Communicating with Difficult People Chapter 10 discussed the handling of difficult people. You can learn more at this site. http://www.sideroad.com/Business_Communication/communicating-withdifficult-people.html Sometimes the problem isn’t the other person; you’re simply dealing with a sensitive or difficult matter—a “difficult conversation.” The following link will take you to an article that explains how to engage in those difficult conversations. It is written by a certified mediator. http://www.mediate.com/articles/persingerT7.cfm General Information Harvard Business School operates a very useful free site called Working Knowledge. Every week it has new, practical articles by business scholars on different aspects of business and business management. Older, archived articles are easily found and retrieved. Most articles can be downloaded online. http://hbswk.hbs.edu/ Not wanting to be outdone by Harvard, a major rival, the University of Pennsylvania’s Wharton School of Business has a similar site, Knowledge@Wharton, found at http://knowledge.wharton.upenn.edu. It too has hundreds of practical, current articles on all aspects of business, including the issues that matter to newly appointed managers. To find appropriate articles, go to the home page, then click the subject areas of interest, or type a keyword into the site’s search engine. Another general help site is http://www.managementhelp.org. It contains short, practical advice on a broad spectrum of management issues: how to run a meeting, staff a department, develop future leaders, and so forth. Just go to the main page and click the subject that interests you. Meetings Nobody gets a bill at the end of a meeting, but meetings do have a cost. At a minimum that cost is the sum of the salary and benefits paid to all attendees during the length of their meetings. Have you ever speculated about the cost of meetings you attend? If you go to http://www.effectivemeetings.com/diversions/meetingclock.asp, you will find a free downloadable calculator that can help you make an informed cost estimate.
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Glossary
360-degree feedback A system that provides employees with feedback not only from their managers, but from other employees with whom they interact in the course of their duties—primarily their peers and subordinates. Action plan Subset of an operational plan. Action plans break down the activities cited in the operational plan into their component parts. Activity log In time management, a detailed record of how a person spent his or her time over the course of a day or week. Alignment A condition in which all operating goals and activities of the organization are linked in support of its topmost goals. Benchmarking The act of comparing business processes, time cycles, or outputs to some standard, usually other examples in the same industry. Body language expressions. Business process customers value.
Nonverbal communication that includes gestures, postures, and facial A set of activities, or steps, that transforms inputs into outputs that
Coaching A process through which managers help their subordinates develop skills, prepare for new responsibilities, or eliminate performance problems. Command and control A model of management in which information relative to customers and operations flows upward through the chain of command to the top, where decisions are made; directives based on those decisions are then communicated downward through the same chain of command. Conflict clash.
A state in which the ideas, interests, plans, goals, egos, and agendas of individuals
Conflict avoiders People who are so uncomfortable with conflict that they will alter their behavior or position in order to avoid unpleasantness.
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Contingency plan A plan that identifies actions that can be taken if another plan doesn’t work or if some undesired outcome occurs. Continuous process improvement (CPI) A management philosophy that continually reexamines business processes in an effort to find and eliminate steps and/or activities that add time, cost, and errors. CPI results in gradual, incremental improvements that make processes faster and cheaper, and increase output quality over time. Called kaizen in Japan. Control A basic function of management. Control involves mechanisms that monitor activities and compare them to previously set plans. Management intervenes when it observes variances between plans and actual performance. Standards, schedules, and budgets are key control tools. Cycle time
The amount of time required to complete a business process.
Delegation another.
The assigning of work, and responsibility for that work, by one person to
Employee empowerment A workplace culture that gives subordinates substantial discretion in how they accomplish their objectives. Feedback Communication that provides information about how well a person is performing against expectations. Feedback helps subordinates and managers better understand mutual expectations, celebrate successes, address workplace problems, and seek improvement. It is a two-way conversation that is most effective when the parties trust each other, and when both are good listeners and explainers. Fishbone chart As used in process improvement, a diagrammatic way of working backward from an effect to its root cause. Flexible leadership A leadership approach that presumes that different situations and different subordinates call for different styles. Frame In decision making, the mental window through which we view the world or a particular problem or issue. A frame influences how we see, hear, and interpret the world around us. Influence A person’s ability to alter or affect the behavior of others without recourse to the power to command. Kaizen Leading Manager
See Continuous process improvement. The act of influencing others to voluntarily accomplish a mission. A person who gets things done through people and other resources.
Mentor Someone who volunteers to help someone else, usually a younger person, master his trade, develop his career, and negotiate the politics of the enterprise. Nonverbal communication but with body language. Open-ended question
The transmitting and receiving of messages without words,
A question that cannot be answered with “yes” or “no.”
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GLOSSARY
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Operational planning A process for assuring strategy implementation. Operational planning determines the concrete activities that the company’s different operating units—marketing, product development, manufacturing, logistics, and so forth—must implement to make the strategy a success. Paraphrasing
Stating in your own words what you have just heard from a speaker.
Performance appraisal A management practice that aims to assess how well an individual measures up to unit standards and/or his or her assigned goals. Its findings are used for pay and promotion purposes, as well as employee development. Performance management A set of activities that managers use to measure and improve the effectiveness of their subordinates. Those activities include performance appraisal, giving and receiving feedback, coaching, rewards, employee training, and career development. Persuasion A communication process through which we alter or affect the attitudes, beliefs, or actions of others. Planning The act of deciding how the organization should accomplish its goals: what should be done, how, and by whom. Process mapping An activity that defines, in graphic form, the pathway through which inputs are turned into value-added outputs. A process map records the entire sequence of activities, the exact inputs, who does what, who has responsibility, and the measures of successful output. Span of control Strategic planning
The number of people reporting to a manager in an organization. Planning that defines how the organization will achieve its goals.
Team-based work Work performed in a coordinated manner by a set of employees, often individuals with very different skills. Thought leaders People to whom others listen when important matters are on the table. These “centers of influence” may have organizational authority—a supervisor or manager— technical expertise, or just the kind of good sense that commands respect from others. Time management use.
The allocation of a limited resource—available time—to its highest
Trust A condition wherein we have reliance or confidence in the character, ability, or truthfulness of someone else. Value-creating trade A trade in which Party A gives something of little value to itself to Party B, for whom that “something” has important value. Party B, in turn, gives Party A something in return that it values very little, but which A values greatly. Virtual team A team of geographically separate members who work toward common goals across time, space, and organizational boundaries; members seldom meet face-to-face, but depend heavily on communication technologies. Win-lose solution A solution in which all value gained by one party is obtained at the expense of someone else. Also called a “zero sum” game. Win-win solution
A solution in which all parties benefit.
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Post-Test
Becoming a Manager
Course Code 96023 INSTRUCTIONS: Record your answers on one of the scannable forms enclosed. Please follow the directions on the form carefully. Be sure to keep a copy of the completed answer form for your records. No photocopies will be graded. When completed, mail your answer form to: Educational Services American Management Association P.O. Box 133 Florida, NY 10921
If you are viewing the course digitally, the scannable forms enclosed in the hard copy of AMA Self-Study titles are not available digitally. If you would like to take the course for credit, you will need to either purchase a hard copy of the course from www.amaselfstudy.org or you can purchase an online version of the course from www.flexstudy.com.
1. To make a good decision, begin by: (a) correctly defining the issue or problem. (b) identifying sources of support. (c) narrowing the focus to a single alternative. (d) analyzing the data.
Do you have questions? Comments? Need clarification? Call Educational Services at 1-800-225-3215 or e-mail at
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2. Which process do managers use to assign formal authority, responsibility, and accountability for work activities to subordinates? (a) Promotion (b) Process improvement (c) Delegation (d) Teamwork
3. A key function of management is: (a) financing. (b) persuading. (c) influencing. (d) planning.
4. _______________________ are the starting point for effective time management. (a) Promotion opportunities (b) Time motion studies (c) Delegated tasks (d) Goals
5. Decisions on big, complex, and important issues require: (a) top-down control. (b) the knowledge and insights of many people. (c) a plan for allocating outcome responsibility. (d) an enlarged role for legal and accounting specialists.
6. Which is a managerial tool for providing feedback to subordinates? (a) Brainstorming session (b) Quarterly report (c) Balanced scorecard (d) Annual performance review
7. Which is a management approach that seeks to improve output and reduce errors and cost through many incremental steps? (a) Continuous process improvement (b) Command-and-control (c) Process innovation (d) Kaizen
8. In resolving conflict, one should look beyond people’s stated positions to their: (a) attitudes. (b) interests. (c) organizational skills. (d) educational background.
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POST-TEST
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9. Communication through which we alter or affect the attitudes, beliefs, or actions of others is called: (a) dialogue. (b) debate. (c) contingency planning. (d) persuasion.
10. In the workplace and in other settings, our dependence on others (subordinates, peers, and bosses) gives them some measure of: (a) authority. (b) freedom of action. (c) influence. (d) responsibility.
11. Repeatable activities, or steps, that transform workplace inputs into outputs that customers value is called a(n): (a) chain of causation. (b) operational framework. (c) matrix operation. (d) business process.
12. A state in which the ideas, interests, plans, goals, egos, and agendas of individuals clash is: (a) equilibrium. (b) insolvency. (c) conflict. (d) quiescence.
13. Difficult bosses may: (a) praise performance too publicly. (b) take credit for the accomplishments of others. (c) delegate challenging tasks. (d) insist that employees take training classes.
14. A manager should give feedback to a subordinate: (a) in public whenever possible. (b) only during the annual performance review. (c) always in writing. (d) soon after the incident of interest has occurred.
15. A person responsible for getting things done through people and other resources is called a(n): (a) individual contributor. (b) manager. (c) subordinate. (d) freelancer.
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16. A person who aims to give effective feedback should focus on: (a) positives and negatives equally. (b) only those things that the other person is prepared to hear. (c) negative behaviors that reduce team performance. (d) modifiable behaviors, not unchangeable ones.
17. Which of the following become(s) less important as one rises through the ranks of management? (a) Interpersonal skills (b) Ability to communicate (c) Technical skills (d) Peer networks
18. Which provides a means of altering the behavior of others without recourse to the power to command? (a) Groupthink (b) Attitude alignment (c) Control (d) Influence
19. The assignment of work, and responsibility for that work, by one person to another is called: (a) expanding the span of control. (b) downloading. (c) delegating. (d) multitasking.
20. You may find that the most important thing you can do as the manager of former coworkers is to: (a) celebrate your promotion. (b) maintain the same relationships you previously had. (c) demand full compliance with company policies. (d) recognize that your relationship has changed.
21. ______________ defines how the organization aims to achieve its highest goals. (a) Alignment (b) Strategic planning (c) Matrix management (d) Optimization
22. Which of the following should a new manager seek as a workplace mentor? (a) His or her current boss (b) An executive coach (c) A human resources specialist (d) A former boss or other respected executive
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POST-TEST
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23. A personal quality that sets leaders apart from ordinary people and makes them appear endowed with exceptional powers or qualities is: (a) charisma. (b) self-confidence. (c) intelligence. (d) communication skill.
24. Which is an element of performance management that assesses how well an individual measures up to unit standards and/or his or her assigned goals, and is used for pay and promotion purposes, as well as employee development? (a) Feedback (b) Employee development (c) Career counseling (d) Performance appraisal
25. Which activity do managers use to help their subordinates develop skills, prepare for new responsibilities, or eliminate performance problems? (a) Formal performance appraisal (b) Coaching (c) Behavior modification (d) Motivation
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Index
A-B-C prioritization system, 35–37 achievers, getting to know, 13 action developing a reputation for, 13–15 independence of, 24–27 action plans, 85, 86 definition of, 177 follow-up on, 118 gathering information for, 14 activities, xii of leaders, 68 prioritizing, 34–37 recording, 34, 35 recurring, 37–38 sequence and dependencies of, 101–102 activity log, 34, 35, 177 alignment definition of, 177 of organizational culture and goals, 88–90 of time management and goals, 34–36 alternatives (decision making), 61, 142–145 American Management Association (AMA), xi, xii, 181 Apple, 74 appraisal, see performance appraisal assertiveness, for increasing influence, 54–55 assumptions, checking, 61 authoritarian leaders, 69, 70
authority, 49–64 and influence, 52–55 organizational, lack of, 49–50 and organizational dependency, 50–52 and persuasion, 55–64 and power, 53 autocratic leaders, 69
Badbossology.com, 164 bad news, boss’s preferences for hearing, 29 benchmarking, 100, 177 Blanchard, Ken, 71–72 body language, 177 boss, 19–31 assessing yourself as, 166 dependencies with, 51–52 developing career plan with, 29–30 disrespect of your time by, 39 expectations of, 20–27 handling difficulties with, 164–166 identifying/supporting goals and priorities of, 19–20 persuading the, 62 preferred control levels of, 24–27 preferred relationship style of, 27–29 saying “no” to, 23–24, 38 brainstorming, 143 “branding” yourself, 14 breaking the ice, 10–11 businesses processes, 93–95, 177
Career plan, developing, 29–30, 164–165 change management key steps in, 75–79 leadership style for, 74–75 change plan, 77–79 charismatic leaders, 69 Churchill, Winston, 62–63 coaching, 130–132, 177 collaboration, 76 command-and-control management, 103, 177 communication by boss, 164 for conflict resolution, 156 feedback as, 120–130 of need for change, 76 online resources for, 175, 176 to overcome framing problems, 140 see also persuasion conflict, 152 definition of, 177 personal, 152, 153 unproductive, 155–156 valuable, 153–155 see also workplace conflict conflict avoidance, 158–159 conflict avoiders, 177 context of decisions, 141 contingency plan, 61, 178 continuous process improvement (CPI), 93, 95–104 defining beginning and ending in, 96–97 definition of, 178
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empowerment of people for, 102–103 involving the right people for, 98 looking for opportunities for, 97 process measurement for, 100–101 root causes of problems in, 98–100 sequence of activities and dependencies in, 101–102 control, 178 control levels, of your boss, 24–27 control plans, 85, 86 Costco, 84 CPI, see continuous process improvement credible case, building, 60–61 cross-functional teams, 13, 152 culture, organizational, 88–90 customer lifetime economic value analysis, 163–164 customer relationships, 83–84, 161–164 cycle time, 95, 178
Decision makers hierarchy of, 59 identifying, 60 in rational decision process, 139, 140 decision making, 135–148 involving the right people in, 139, 140 rational process for, 138–147 skills for, 5 wrong approach to, 136–138 delegating leaders, 69 delegation, 40–45, 178 Deming, W. Edwards, 103 democratic leaders, 69, 70 dependencies, 51–52 of activities, 101–102 creating, 55 organizational, 50–52 descriptive feedback, 121–123 differentiation, 82, 83 difficult people, 158–166 bosses as, 164–166 customers as, 161–164 online resources for dealing with, 176 two-step process for confronting, 159–160
Discourses (Niccolo Machiavelli), 74 disrespect, by boss, 39, 164 Dunkin’ Donuts, 84
Educational Services, AMA, xi, 181 effective goals, 86–88 efficiency, as management skill, 37–38 Eisenhower, Dwight D., 28 employee empowerment, 102–103, 178 “enabler” goals, 34 end goals, 34 endorsements, for credible case, 61 environment, for feedback, 126 evaluation of decision alternatives, 143–144 of delegated work, 45 expectations of new subordinates, 10 of your boss, understanding, 20–27 for your goals and priorities, 21–22 for your performance, 22–24 expertise, 55
Feedback, 120–130 definition of, 178 environment for, 126 giving, 121–128 judgmental vs. descriptive, 121–123 managing, 129–130 on modifiable behavior, 123–124 receiving, 128–129 specific vs. general, 124–126 360-degree, 119–120 timing of, 125 fishbone charts, 99–100, 178 flexible leadership style, 69–74, 178 followers, leadership and, 71–73 Ford, Henry, 105 former peers dealing with, 8–10 support from, 13 frames, mental, 140, 178 Franklin, Benjamin, on losing time, 36
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Geographic expansion, 84 goals, 81, 86–91 aligning organizational culture and, 88–89 aligning time management and, 34–36 of boss, supporting, 19–20 effective, 86–88 and performance appraisal, 114–115 performance metrics related to, 23 prioritizing, 35–36 for your job, understanding, 21–22 grading of tests, xi, xii groupthink, 153, 154
Hersey, Paul, 71–72 Hewlett, William, 89 Hewlett Packard, 89 Home Depot, 84 Honda, 74 “How to Choose a Leadership Pattern” (Robert Tannenbaum and Warren H. Schmidt), 69 implementing decisions, 147 independence of action, understanding limits of, 24–27
Individual contributors, managers vs., 4–7 influence, 52–55 definition of, 178 through persuasion, 55–56 information, boss’s preferences for, 28 information format, boss’s preferences for, 28 interpersonal skills, 5
Judgmental feedback, 121–122 Kaizen, 95, 98, see also continuous process improvement
Language online resources for, 175 persuasive, 62–64 Lao Tzu, on leadership, 69 leaders definition of, 178 managers vs., 67–68
INDEX
leadership low cost, 83 in 90-day plan, 14–15 theories of, 68–69 leadership style, 67–79 assessing, 71 evaluating, 73–74 examples of, 69 flexible, 69–74 for leading change, 74–79 and theories of leadership, 68–69 learning, in 90-day plan, 14 listening, in 90-day plan, 14 low cost leadership, 83
Machiavelli, Niccolo, on reformers, 74 management, teaching, xiii Management of Organizational Behavior (Paul Hersey and Ken Blanchard), 71–72 managers definition of, 178 leaders vs., 67–68 role of, xiii, 3–17, see also transition to manager role matrix organizations, 50–51 McDonald’s, 74, 84 measurement performance, 22–24 process, 100–101 meetings appraisal, 115 to deal with difficult people, 160 with new subordinates, 10–11 online resources for, 176 staff, 14 time management for, 38–39 mental frames, 140 mentors, 30, 178 micromanaging, 165 milestones, 78 Mintzberg, Henry, 33 modifiable behavior, 123–124
Negotiation, 156 Nimitz, Chester, on calculated risks, 145 90-day plan, 14–16, 30 nonverbal communication, 178 Nucor Corporation, 94–95, 104, 105 Online resources, 175–176
online version of course, xi, 181 open-ended questions, 178 operational planning, 81, 82, 85, 179 opportunities for improvement, 97, 116, 117 organization, as management skill, 37–38 organizational culture, alignment of goals and, 88–90 organization charts, 11–12 organizations choosing goals of, 81 matrix, 50–51 as mini-societies, 4
Packard, David, 89 paraphrasing, 179 peers relationships with, 11–13 working across organization boundaries by, 13 see also former peers performance, 113 business process improvement for, 93 coaching for, 130–132 of delegated tasks, monitoring, 44–45 process innovations to improve, 106 your boss’s expectations for, 22–24 performance appraisal, 114–120 definition of, 179 preparing for, 119 six-step process for, 115–118 360-degree, 119–120 performance feedback, 120–130 performance gaps, 115, 117 performance management, 113–114, 179 performance measurement, 22–24 performance readiness, 72 personal conflict, 152, 153 persuasion, 55–64 building credible case in, 60–61 definition of, 179 foundations of, 56, 57 influence through, 55–56 language for, 62–64 online resources for, 175 and trust, 56–58
189
and understanding, 58–60 planning, 81–86, 91 for coaching, 132 definition of, 179 operational, 81, 82, 85 strategic, 81–84 plans action, 14, 85, 86, 118, 177 career, 29–30, 164–165 change, 77–79 contingency, 61, 178 control, 85, 86 90-day, 14–16, 30 political bosses, 165 post-test, xi, 181–185 power, 53 pre-test, xi, xvii–xxi priorities of boss, supporting, 20 of your job, 21–24 prioritization of goals, 35–36 of work, 34–37 problems among subordinates, 10 defining, 140 with difficult people, 158–166 finding root causes of, 98–100 identifying, in change management, 75–76 of workplace conflict, 152–158 process innovation, 93, 104–107 process mapping, 95–97, 179 procrastination, 38
Quality of products/services, 84 quick wins, 14–16 Rational decision-making process, 138–147 alternatives considered in, 142–145 decision context in, 141 implementation of decision in, 147 making the decision in, 146 problem/decision definition in, 140 steps in, 139 reciprocity, 13, 54–55 recurring activities, 37–38 relationships boss’s preferred style for, 27–29 with customers, 83–84, 161–164
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with peers, 11–13 with subordinates, 8–11 with your boss, 19–31, 165–166 reliability, for increasing influence, 54 replacement, training, 41–42 responsibility of managers, 4 review questions, xii risk, in decision making, 145 root causes of problems, 98–100
Saying “no,” 23–24, 38 scannable forms, xi, 181 Schmidt, Warren H., 69, 70 sequence of activities, 101–102 Shewhart, Walter, 103 Shewhart-Deming Cycle, 103 skills of individuals vs. managers, 5 of subordinates, developing, 164–165 SMART objectives, 87 solutions, identifying (change management), 75–76 Southwest Airlines, 82 span of control, 179 staff meetings, 14 Stalin, Joseph, 69 Staples, 84 Starbucks, 84 Strategic Decisions Group, 138 strategic differentiation, 82, 83 strategic planning, 81–84, 179 subordinates breaking the ice with, 10–11 clarifying your role with, 11 delegating to, 40–45 developing skills and careers of, 164–165 disrespect for, 164 expectations of, 10 initial meetings with, 10–11 performance readiness of, 72 relationships with, 8–10 support for change, enlisting, 76 from peers, 13 for your boss’s goals and priorities, 19–2 SWOT analysis, 82 Tannenbaum, Robert, 69, 70 team-based work, 179 teams conflict within, 152
cross-functional, 13, 152 groupthink in, 153, 154 virtual, 179 technical skills, 5 thought leaders, 60, 179 360-degree appraisals, 119–120 360-degree feedback, 120, 177 3M Corporation, 89 time demands, on your boss, 29 time management, 33–45 activity log for, 34, 35 boss’s impact on, 39–40 and common time traps, 38–40 definition of, 179 effective delegation for, 40–45 organization and efficiency in, 37–38 prioritizing work for, 35–37 time traps, 38–40 Toyota, 74, 98 Toyota Production System, 95 transition to manager role, 3–17 common stumbling block in, 5 dealing with former peers in, 8–10 dealing with subordinates in, 8–11 getting help with, 6–7 from role as individual contributor, 4–7 trust, 54, 56–58, 179 turf warfare, 152
Understanding, as foundation of persuasion, 58–60 uniqueness of products/services, 84 urgent matters, 37 Urwick, Lyndall, 41
Valuable conflict, 153–155 value-creating trades, 156–158, 179 virtual teams, 179
Weber, Max, on charismatic leaders, 69 Whole Foods, 84 win-lose solutions, 156, 179 winner-take-all conflicts, 152, 153 win-win opportunities, 156–158, 179 work, prioritizing, 34–37 workplace conflict, 152–158 AMACOM Self Study Program http://www.amaselfstudy.org/
avoidance of, 159 dealing with, 155–156 value of, 153–155 win-win opportunities in, 156–158
Zero sum games, 156
