Articles and Interviews

Could you briefly introduce yourself to our readers?

I have been a consultant to professional firms around the world for 20 years. Before that, I was a professor at Harvard Business School. All of my books on professional businesses have been translated into Dutch. In a recent book (Business Minds by Tom Brown) I was identified as one of the top 40 business thinkers in the world.

Your basic assumption in Practice What You Preach is that certain elements have a direct influence on the profits of companies, because top companies have a better score on certain questions. How do you know that these factors influence their profits? Could other factors be influencing the company’s results? When questioning these firms, might you find that they also score differently on other topics on your list?

I did not assume anything. I studied 139 businesses in 15 countries, then used traditional statistical approaches to test exactly this question. The odds that the relationships I found are coincidental (i.e., actually driven by something else) are less than one in a thousand. If I only had 13 businesses, chance and coincidence might be factors, but with 139 data points it is very unlikely.

I’m interested in how you measure managers. Which criteria are most appropriate to use when measuring the effectiveness of a manager (not particularly top management but just individual managers)?

The job of a manager is to make other people in his or her group successful— sometimes in spite of themselves! The manger’s job is to be a creator of energy, excitement and enthusiasm so that people in the group accomplish more than they would without the manager.

There are two ways to judge a manager’s effectiveness. First, you can look at the group’s performance: profits, growth, client satisfaction and people development. Second, you can and should ask the people within the group to evaluate whether the manager is adding any value. Here is a questionnaire from my latest book (First Among Equals, to be published in May 2002) that can be used to evaluate the manager:

The manager

• Causes me to stretch for performance goals
• Is concerned about long-term issues, not just short-term profits
• Provides constructive feedback that helps me improve my performance
• Is a source of creative ideas about our business
• Helps me to grow and develop
• Conducts team meetings in a manner that breeds involvement
• Makes me feel that I am a member of a well-functioning team
• Emphasizes cooperation as opposed to competitiveness between work groups
• Is prompt in dealing with underperformance and underperformers
• Helps me understand how my tasks fit into the overall objectives for the firm
• Keeps me informed about the things I need to know to perform my role properly
• Actively encourages me to volunteer new ideas and make suggestions for the improvement of the practice
• Encourages me to initiate tasks or projects I think are important
• Is good at keeping down the level of “politics and politicking”
• Is more often encouraging than critical
• Is accessible when I want to talk
• Is fair
• Is consultative in his or her decision making
• Acts more like a coach than a boss
• Is publicly generous with credit

• Is effective in communicating

  Which methods are commonly used to measure the results of managers?

  Unfortunately, most managers are judged too narrowly. They are judged on group results, but only financial group results; there is a need for a more balanced scorecard. In addition, it is rare that the views of those being managed are used formally to assess the manger. They are sometimes collected in so-called 360-degree feedback systems, but that data is used for information only and is not a formal part of the manager’s performance appraisal.

  I’ve interviewed GE Plastics’ European HR manager. He told me how managers and in fact all employees are constantly being judged by the company. At the beginning of the year the criteria by which an employee will be assessed is outlined. Each employee is assessed on various occasions throughout the year and also at the end of the year. Criteria used include 1) results and 2) values. The main value of the company is integrity.

  Everyone is being judged at these two levels and gets to hear if he or she is top A), middle B) or low C) level. Employees scoring low in both areas must work on improvement. In that way, all employees are required to constantly improve and develop themselves. This is of course a very brief outline of how they work, but no doubt you know a lot more about GE. Could you give a reaction on this method of judging management? Do you think it is effective? Is it an example to other companies, or does it not leave enough space for people to be different?

  The GE system is a major step in the right direction and should be copied by many businesses. The data in my book Practice What You Preach confirms that the most effective managers (i.e., those able to get their people to perform at the highest level) were notable because of their character, not their skills. The employees I interviewed repeatedly told me that they worked at their best because their managers were people of high integrity, had clear and uncompromising standards, and were completely trustworthy. This was a surprise to me, because they don’t teach you anything about these things in your business education. The conclusion is the same as that reached by Jim Collins in his (data-driven) books Built to Last and Good to Great—that the best managers have a clear ideology and combine a pursuit of profits with a purpose beyond profits. He reports the same thing I found: The most successful managers are not ego-driven, but are ambitious for their group. Their people trust them to do the right thing for the group as a whole.

  The reason this is so important is that you can improve your group in the short term by being none of these things, but instead just by being a hard task-master: very demanding, worrying only about the short term. But the evidence is now accumulating that this will bring only a short-term benefit. To succeed in the long term, you must be seen to be both demanding and supportive.

  Judging from your book, managers have a big influence on a company’s results. Could you explain that briefly to our readers?

  My book demonstrates (with data) that there is a clear path to profits that must be followed. To make the most money, you must deliver superior value to the marketplace, and to deliver superior value, you must have an excited, energized, enthused, driven, committed, ambitious, passionate workforce. To achieve this, you must have individual managers with emotional intelligence and interpersonal and social skills who know when and how to exhort, critique, inspire, challenge, compliment, nag and, above all, mange emotions. Exciting people is not a logical, intellectual or rational skill, but rather an emotional skill in which few of us were ever trained. (That’s why my next book First Among Equals is a how-to-do-it manual for managers.)

  What role do you see for HR managers in improving the assessment and development of managers?

  HR can help a lot in the selection process for managers. Unfortunately, it’s still true that we choose managers based on all the wrong criteria. We choose them because they are technically smart, or financially astute, or can sell, or any of a number of irrelevant things. The only REAL question is whether people respond to you by raising their performance. Are you a net creator of excitement or a net destroyer of it? Do people trust you (and hence accept your guidance)? Do people believe you are a man or woman of principle or a “do anything to make a euro” type?

  At the moment we have poor promotion screening systems to choose good managers. HR could help develop them.

  HR could also help develop some training for managers, who are mostly untrained. We train people in business, but that’s not the same as training them in how to manage. We need better programs in the basic skills of winning influence and dealing with human beings.