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HOW

MANAGEMENT

WORKS

THE CONCEPTS visually explained

Consultant editor Philippa Anderson

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Senior Editors Chauney Dunford, Alison Sturgeon, Andrew Szudek Senior Designer Mark Cavanagh

Editors Richard Gilbert, Katie John, Victoria Pyke, Rachel Warren Chadd

US Editor Jennette ElNaggar

Editorial Assistant Maisie Peppitt

Designers Vanessa Hamilton, Mark Lloyd S

Managing Editor Gareth Jones

Managing Art Editor Lee Griffiths

Jacket Designer Tanya Mehrotra, Surabhi Wadhwa Gandhi Senior Jacket Designer Suhita Dharamjit Managing Jacket Editor Saloni Singh Senior DTP Designer Harish Aggarwal Jackets Editorial Coordinator Priyanka Sharma Publisher Liz Wheeler

Publishing Director Jonathan Metcalf Art Director Karen Self

Jacket Editor Emma Dawson

NT

Jacket Design Development Manager Sophia MTT

Producer, Pre-Production Andy Hilliard Producer Rachel Ng

E

First American Edition, 2020

Published in the United States by DK Publishing 1450 Broadway, Suite 801, New York, NY 10018

Copyright © 2020 Dorling Kindersley Limited DK, a Division of Penguin Random House LLC

20 21 22 23 24 10 9 8 7 6 5 4 3 2 1

001–316270–July/2020

All rights reserved.

Without limiting the rights under the copyright reserved above, no part of this publication may be reproduced, stored in or introduced NT

into a retrieval system, or transmitted, in any form, or by any means (electronic, mechanical, photocopying, recording, or otherwise), without the prior written permission of the copyright owner.

Published in Great Britain by Dorling Kindersley Limited A catalog record for this book

O

is available from the Library of Congress.

ISBN 978-1-4654-9231-9

Printed and bound in China

C

For the curious

www.dk.com

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S

MANAGING

ORGANIZATIONS

Introduction

08

Types of Organizations

52

Evolving Structures

54

MANAGEMENT

Building Support

56

NT

Workplace Culture

58

BASICS

Managing Projects

60

Customers and Other Stakeholders

62

The Evolution of Management

12

Products and Services

64

Management Roles

14

Supply and Demand

66

E Leaders and Managers 16 Marketing and Selling 68

Management Styles

18

Winning Deals

70

Situational Leadership

20

Strategic Thinking

72

Management and Power

22

Effective Planning

74

Scientific Management

24

Disruptive Technology

76

Key Principles

26

Organizational Learning

78

Global Management

28

Market Forces

80

Strategic Management

30

Gap Analysis

82

Risk Management

32

Benchmarking

84

HR Management

34

Sustainability

86

NT Financial Management 36 Managing Constraints 88

Operations Management

38

Business Cases

90

Quality Management

40

Understanding Change

92

IT Management

42

Change Models

94

Marketing Management

44

The 7-S Model

96

O Digital Management 46 Data and Information 98

The Project Cycle

48

Decision-making

100

Force-Field Analysis

102

SWOT Analysis

104

Critical Path Analysis

106

C

Problem-Solving

108

Identifying Causes

110

Design Thinking

112

Resolving Deadlocks

114

Business Processes

116

Value Chain

118

Lean Production

120

Meeting Objectives

122

Key Performance Indicators 124

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COMMUNICATION

MANAGING

Effective Communication

168

Active Listening 170

PEOPLE

Nonverbal Communication

172

Giving Feedback

174

Communication Tools

176

Effective Meetings

178

Team Roles

128

Presentations

180

Personality Types

130

Corporate Communications

182

Competencies

132

Crisis Communications

184

Finding and Selecting Talent

134

Persuasion and Influence

186

Benefits of Diversity

136

Negotiation

188

Workplace Well-being

138

Resolving Disputes

190

Retaining Talent

140

Meeting Employees’ Needs

142

Motivation and Reward

144

Team Development

146

SMART Management

148

Developing Trust

150

Dealing with Staff Conflict

152

Delegation

154

Big Ideas

156

Coaching and Mentoring

158

Continuous Learning

160

Performance Management

162

360-Degree Feedback

164

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Philippa Anderson (consultant editor) has a business degree and is a business writer and communications consultant, who has advised

multinationals, including 3M, Anglo American,

SELF-

and Coca-Cola. She collaborated with Lord

Browne, former CEO of BP, on his memoir,

MANAGEMENT

Beyond Business, and was a contributor to DK’s The Business Book and How Business Works.

Time Management

194

Alexander Black graduated with a degree

Personal Impact

196

in business communications, before moving

Building a Career

198

to Tokyo to write for financial newspaper group

Effective Networking

200

Nikkei, Inc., and investment bank J. P. Morgan.

Work/Life Balance

202

She later worked for a global direct marketing

Coping with Stress

204

specialist in the Asia-Pacific and is now based in

Learning and Development

206

London, where she writes on business and

Learning Styles

208

cultural history.

Staying Alert

210

Accountability

212

Pippa Bourne is director of Bourne Performance,

Developing New Routines

214

helping organizations and individuals to succeed.

She is also a Visiting Fellow at Cranfield

University, where she supports the work of the Centre for Business Performance. Pippa has an MBA and a certificate in coaching and has many years of experience as a practicing manager.

Index

216

Richard Ridout is a workplace technology

Acknowledgments

224

and management transformation specialist.

He has worked at senior management level

across private and public industry sectors, encompassing scientific research, commercial property, entertainment, central government, education, and defense.

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HOW MANAGEMENT WORKS

Introduction

8 9

INTRODUCTION

Management is an instinctive human trait. Children at play will organize themselves to assume different roles, with one often taking the lead. As a business discipline, management came to the fore with the Industrial Revolution, when factory owners needed to maximize human resources. However, while it remains vital to business today, the role of the manager is changing. Managers still have to get the best out of people, but they do so by engaging and empowering the workforce rather than simply giving instructions. As a result, managers require a broad range of personal skills as well as technical abilities; they need to be sympathetic when appraising staff but ruthless when writing budgets—and be as mindful of company values as they are of profit.

For these reasons, being a manager requires patience, adaptability, and skill.

It demands vigilance—the ability to keep track of a project while simultaneously monitoring the external operating environment, where changes in demand and competition can mean the difference between success or failure. There are various approaches that a manager can use to plan the future—from strategic management (see pp.30–31) to design thinking (see pp.112–113)—but none of these is a substitute for watching the market, understanding consumer needs, and being ready to adapt when necessary.

This book explains the changing world of management in a simple and graphic way.

It covers the origins of management theory and explores the range of management roles, using examples from a variety of commercial, nonprofit, and government organizations. It aims to help students and aspiring individuals to understand what management is, and how it works. It also aims to help managers – both to navigate the business world and to improve their management styles. Chapter 1 explains management theory, while Chapter 2 shows how it can be applied in practical contexts. Chapter 3 examines people management; Chapter 4 covers communication; and Chapter 5 looks at personal responsibility.

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MANAGEMENT

BASICS

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The Evolution

of Management

The role of management first emerged with the advent of mass production and continues to evolve today, keeping pace with changing technology, employee expectations, demographics, and global politics.

Developing ideas

of labor. As industries became

The mid-20th century saw the

In the 18th century, economist

more complex during the 19th

incorporation of many new

Adam Smith recognized the need

century, attention turned to

fields of study into management

for workforces to be organized by

improving efficiency by minimizing

theory. Psychology was applied to

task in order to maximize efficiency, labor use and standardizing and how people work; statistics to how

which he described as the division

streamlining processes.

processes were performed; and

A management timeline

As businesses have become more complex in order to compete and survive, the way they have been managed has constantly evolved. While the earliest theories concentrated on improving productivity Frederick Taylor’s

Henri Fayol’s management

through labor, later models looked at broader factors Scientific Management

principles (see pp.26–27 ) view

that help determine success. During this period, the role theory (see pp.24–25) views

employees as people who

of employees has become more central, and there are workers as machines.

need managing.

now new views on the nature of competition itself.

1880

1916

MANAGEMENT ERAS

Execution era: pre-1900s–1960s

The period focusing on mass

production, dominated by improving

efficiency and ensuring consistency

of production and predictability.

Expertise era: 1916–2000s

The rise of management theory,

1913

1943

characterized by applying ideas from

fields such as psychology and science

The Ford assembly line

Abraham Maslow’s

marks the birth of mass

hierarchy of needs (see

to manage highly complex businesses.

manufacturing and the need

pp.142–143) explores what

to manage productivity.

motivates employees to

perform better in their work.

Empathy era: 1990s–present day

An era emphasizing employee

engagement and the value that staff

bring as well as the worth of customer

relationships in a transparent world.

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MANAGEMENT BASICS

The Evolution of Management

12 13

ergonomics to make workplaces

Engaging employees

and machinery safer to use and

The 21st century is an era of

more efficient.

accelerated change, with new

“Management

Management theory also

technologies constantly emerging

became more global at this time.

and disrupting existing markets.

is the art of

As Japan rebuilt its industries after

Management is less about

World War II, it rose to the forefront

lines of command and authority,

getting things

of new management thinking. Its

and more about engaging people,

larger firms ensured employees

building teams, and creating

done through

were engaged, empowered, and

networks. This presents both

people.”

highly productive. Ideas such as

opportunities and risks to

Attributed to Mary Parker Follett,

lean production (see p.120–121)

managers, who must keep pace

US management consultant

were widely adopted; likewise,

with the rate of change in order

zero waste and worker involvement. to lead their teams effectively.

Japanese manufacturers

Bruce Tuckman’s FSNP

The 7-S change model is

John Kotter’s change model

develop management models

model (see pp.146–147)

developed as a tool to help

(see pp.94–95) reveals the

to drive quality (see pp.40–41)

explores the dynamics

managers coordinate and

importance of involving staff

and reduce waste and costs

of team formation

oversee change within their

in organizational change.

(see pp.120–121).

and management.

organization (see pp.96–97).

1950

1965

1980s

1996

EXECUTION ERA PRE-1900s–1960s

EXPERTISE ERA 1916–2000s

EMPATHY ERA 1990s–PRESENT DAY

1960s

1979

1990

2004

Douglas McGregor’s X and

Michael Porter studies

Peter Senge’s learning

Blue Ocean Strategy, written Y factors (see pp.142–143)

the competitive forces

organization model

by W. Chan Kim and Renée

describe the role of

that influence how well

(see pp.78–79) explains how

Mauborgne, (see pp.80–81)

encouragement and discipline

an organization serves its

learning helps organizations

explains the need to find new

in motivating employees.

market (see pp.80–81).

adapt to change.

markets rather than compete.

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Management Roles

Since the late 20th century, the roles and boundaries that defined management have become blurred, yet the manager’s fundamental function—to make things happen through people—is as vital as ever.

Management in flux

the “gig” economy means that a

the clock—people can be “at work”

Technological and societal changes

manager’s team might include a

24/7—and technological advances

have meant that the authoritarian

mixture of employees, temporary

mean that geography is no longer

management roles of the past are

staff, and contractors. Teams might

a limitation.

now largely obsolete. In many

be diverse, multigenerational, and

organizations, hierarchies have

even virtual. Nor is the workplace

Control or empowerment

been replaced by flatter structures,

confined to an office; it could be in

How managers work has also

cross-functional teams, and

the home, a local café, or a train.

changed. Management is no longer

informal networks. The rise of

The working day is not ruled by

top-down—rather, personnel are

1. PLANNING

Fayol’s 5 functions

Setting objectives and methods was once the sole General and Industrial Management by preserve of the manager, but teams are now ful y involved French mining engineer Henri Fayol is

in planning and setting goals and a course of action.

considered to be one of the first key

?

?

works on management theory.

Published in 1916 and popularized

in the 1940s, it outlined Fayol’s five

functions of management, which are

stil relevant today—albeit with an

evolving interpretation for managers

(see right). Another influential area

of Fayol’s work is his management

principles (see pp.26–27).

2. ORGANIZING

In the past, managers assigned tasks and duties, and workers had little say. Nowadays, managers empower 17.6% their teams, and organization is a colaborative effort.

of the US

workforce are

managers and

administrators

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MANAGEMENT BASICS

Management Roles

14 15

3. COMMANDING

involved in planning from the

outset to generate ideas, create

Managers have left behind the top-down model of instructing buy-in, and build teams. Managers

and delegating in favor of aligning people, influencing them, and can no longer rely on authority,

actively earning the leadership role.

command, and control but must

empower those under their care in

order to create and maintain team

cohesion and momentum.

In this new and fast-changing

world, traditionally managed

companies can be left behind;

their inflexible structure may stifle

innovation and prevent them from

responding quickly or steering a

different course when required.

4. COORDINATING

Previously, the

manager ensured

their staff worked

“What you do

to common goals.

Today, a manager

has far greater

is more likely to

create a vision,

impact than

enthuse their

staff, and lead

what you say.”

by example.

Stephen Covey, US leadership expert, 2008

5. CONTROLLING

DIVERSIFYING ROLES

Managers used to control their teams by setting targets New technologies and trends

measuring performance, but now managers prefer to in organizational culture mean

use continual feedback, coaching, and recognition.

that new roles are emerging

while some traditional ones are

disappearing. For instance, in

addition to being central to the

business world, managers are now

vital in the nonprofit—or “third”—

sector. A host of management

roles exist in the public, private,

and third sectors, such as account

managers, diversity managers,

and insight managers.

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Leaders and Managers

Traditionally, leaders decided an organization’s goals, while managers ensured that those goals were met. However, as working practices change, modern managers increasingly need leadership skills in their portfolio.

Combining roles

are now regarded as a collective

academics and consultants have

Until recent years, the distinction

source of creative energy within

studied the difference between

between the leader and a manager

an organization and central to its

leaders and managers. Many have

within an organization reflected

success. In order to maximize the

concluded that the leadership/

traditional business structures.

combined strength of their team

management balance varies

Today, as organizations have had to and deliver performance, managers according to an organization’s

adapt to modern technology, forms

now often have to act as leaders.

size, complexity, and industry.

of communication, and working

As a result of the constantly

To be an effective manager today,

practices, so the roles of leader and

changing way in which modern

however, a willingness to adopt

manager have evolved. Employees

organizations need to be run,

leadership skills is essential.

Different purposes

LEADERSHIP

Organizations need to draw on

both leadership and management

skil s in order to accomplish their

goals. Leadership offers the vision

that sets an organization’s course

for the future. Leaders also provide

effective responses to opportunities,

crises, and change. In contrast,

management involves day-to-day

administration to achieve specific

tasks to a particular standard—for

example, setting budgets, planning

workflows, or taking care of staff.

“Leadership is

the art of getting

someone else to

do something

Leaders

❯ Decide overall direction

❯ Facilitate decisions

you want done

❯ Influence people to achieve

❯ Align people

because he

❯ Strive for effectiveness

❯ Create systems and look

❯ Encourage change

for opportunities to improve

wants to do it.”

Dwight D. Eisenhower, US President, 1954

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MANAGEMENT BASICS

Leaders and Managers

16 17

Leadership, management, and change

Leading management consultant John Kotter

describes management as the process that keeps H

organizations running, whereas leadership is the IG

HIGH CHANGE,

HIGH CHANGE

H

LOW COMPLEXITY

AND COMPLEXITY

task of inspiring and motivating employees.

Strong, inspirational

Considerable leadership

Managers help an organization cope with

leadership necessary

and management skil s

GE

complexity, while leaders enable it to respond to but little management

essential

AN

change. As organizations evolve over time, so does H

their need for management and leadership (see C

LOW CHANGE

LOW CHANGE,

right). Kotter il ustrates this with a military analogy.

TE OF

AND COMPLEXITY

HIGH COMPLEXITY

During peacetime, an army can survive with good AR Limited leadership

Considerable

management at al levels and effective leadership and management

management required

at the top. However, in wartime, an army needs skil s required

but little leadership

competent leadership at every level.

LOW

LOW

LEVEL OF COMPLEXITY

HIGH

MANAGEMENT

NEED TO KNOW

❯ Effective leaders are prepared

to al ow their people to fail—as

learning from failure leads to

success. As Amazon CEO Jeff

Bezos famously said in a letter to

shareholders: “If the size of your

failures isn’t growing, you’re not

Managers

going to be inventing at a size that

can actual y move the needle.”

❯ Facilitate decisions

❯ Plan in detail

❯ Make decisions

❯ Good management, according

❯ Align people

❯ Encourage people to perform

❯ Organize people

to entrepreneur Paul Hawken, is

❯ Create systems and look

❯ Aim for efficiency

❯ Ensure that resources are

“the art of making problems so

for opportunities to improve

❯ React to change

appropriate and available

interesting and their solutions

so constructive that everyone

wants to. . deal with them.”

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Management Styles

The way in which managers lead a team is influenced by the needs and capabilities of the members and also by the circumstances. However, research has shown that there are times when a manager should adopt a specific management style to get the best from their team.

“People

come first.”

Varied approaches

All managers develop their own style of managing people and situations, which will vary depending on who those people are and what the situation demands.

These approaches may also be influenced by prevailing management trends or changes to working practices (see box below). However, there may be situations when a manager’s existing style is not the most effective, so they should be willing to change tactic.

In 2000, US consulting firm Hay McBer drew on a random sample of nearly 4,000 managers worldwide and identified six key management styles (see right).

Daniel Goleman, author of Emotional Intelligence, Affiliative

described the findings in his influential article The affiliative style is best used to motivate staff under

“Leadership that gets results” in Harvard Business stress and to bring an end to conflict. The manager Review. Their research showed that no single style should encourage the team to bond and hold informal was inherently right or wrong; instead, the most meetings where members can share their views.

successful managers were those adept at shifting to the appropriate style for the particular situation.

“Do what

I tel you.”

CHANGING APPROACHES

TO MANAGEMENT

Until the 1980s, most managers typical y remained behind their desks in private offices, at arm’s reach from those they managed. Then, fol owing an initiative at US firm Hewlett-Packard, managers were increasingly encouraged to leave their offices and to communicate with employees face-to-face, which became known as “management by walking around” (MBWA). More recently, however, email has made communication impersonal again, and so MBWA is back in fashion.

In essence, it recognizes the importance of informal Commanding

behavior in building relationships. For example, a This style is most appropriate in times of crisis or urgent manager may choose to wander to another floor and change. The manager demands obedience, gives clear sit at a team member’s desk for an informal meeting direction, takes tough decisions, and disciplines team rather than call them to their own desk.

members who underperform.

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MANAGEMENT BASICS

Management Styles

18 19

“Management is, above all, a practice

where art, science, and craft meet.”

Henry Mintzberg, Professor of Management Studies, McGill University, Quebec (2013)

“Come

“Try this.”

with me.”

Visionary

Coaching

This style is an effective one for setting a clear direction This approach is ideal when managing people eager to or new standards of work. The manager should set out learn. The manager should focus on developing team a clear, compel ing vision and give the team freedom members’ skil s and confidence, delegate interesting to work in their own way, experiment, and innovate.

tasks, and forgive mistakes made during learning.

“What do

“Do as I do,

you think?”

now.”

Democratic

Pace-setting

A democratic style is best suited to stable working The pace-setting style is ideal when team members are environments with experienced employees. The highly competent and motivated. The manager should manager should seek team members’ thoughts and set high standards from the start and maintain high ideas as part of building a consensus for action.

energy, engagement, and motivation.

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Situational Leadership

One of the best-known management models is Situational Leadership, by which managers adapt their leadership style according to the levels of ability and commitment among team members.

The adaptable manager

Organizational Behaviour (1969).

skill and motivation. If a manager

The Situational Leadership model

It is based on the nature of the

can match their leadership style

was originally developed in the

relationship between the manager

to the team members’ fitness for

1960s by behavioural scientist Paul and their team. This relationship work, this will enable the group

Hersey and author Ken Blanchard

can take different forms according

to achieve their goals to the best

in their book Management of

to the task, and the team’s level of

of their ability.

Matching style

to readiness

H

SUPPORTING

IGH

According to the Situational

When team members have the relevant skil s, knowledge, Leadership model, there are four

and experience but are not ready for responsibility, the management styles. Each has two

T

manager suggests ideas and helps make decisions.

aspects—task-focused or directed

OR

behavior and relationship-focused

PP

or supportive behavior—which are

U S

measured in different ratios, from

low to high. At one extreme is “tel ing,”

FOR

based on clear, firm direction with

EEDN

less emphasis on support. In contrast,

“sel ing” and “supporting” provide

support for team members at different

levels of competency. Final y,

“delegating” al ows a manager to

step back and give team members

DELEGATING

freedom and responsibility.

When team members are capable, experienced, and SED

committed, the manager monitors their progress but otherwise

“People differ

UC

gives them enough autonomy to do their job.

not only in their

P-FO

SHI

ability to do but

N

TIO

also in their ‘will

LARE

to do’.”

Paul Hersey, 2008

LOW LOW

TASK-FOCUSED

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MANAGEMENT BASICS

Situational Leadership

20 21

Managers need to recognize

situations, even for the same team

each team member’s level of

members. For example, at the start

NEED TO KNOW

competence and motivation. Hersey of a new project or in a crisis, the

❯ The supporting style is

and Blanchard defined these

manager may need to be more

largely democratic; the team is

characteristics as “performance

assertive, whereas later in a project,

given plenty of responsibility.

readiness” and identified four

when team members have gained

❯ The selling style is less

such readiness levels (see below).

knowledge and experience, the

democratic; the manager

The underlying principle is

manager may be able to take a

provides vision and direction.

that there is no single best style of

more hands-off role. Successful

❯ The telling style is autocratic;

leadership. Managers may have to

managers are those who can adapt

the manager gives clear,

adapt their approach in different

their style to match their team.

authoritative instructions.

❯ The delegating style is hands-

off; the manager leaves the team

to complete the job.

SELLING

When team members lack ability—perhaps due to lack of experience—but are enthusiastic about the job, the manager explains (or “sel s”) the task at hand and is available to give support.

ASSESSING THE

THEORY

HOW

TO . .

Like many management theories,

Situational Leadership has been

analyzed for its pros and cons:

Pros

❯ Easy to understand and apply.

❯ Enables manager to adapt

leadership style to fit the situation.

TELLING

❯ Focuses on maturity/competence

of individuals and teams, often

When team members lack skil s and confidence, and overlooked in considering

may also be unwil ing, the manager gives them precise effective leadership.

instructions and closely monitors their progress.

Cons

❯ Assumes people will always

fol ow the leader.

1

❯ May not apply in all situations—for

2

example, when time is short and

3

tasks are extremely complex.

4

5

❯ May not work where managers

hold a leadership position but act

more as administrators or have

limited power.

TASK-FOCUSED

NEED FOR DIRECTION

HIGH

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Management

and Power

Many managers have power over people. However, there are different kinds of power, and a good manager knows which should be fostered and which should be avoided.

Power at work

kind of power may include the ability to reward or With open-plan office floors and hot-desking, many of discipline team members. Other forms of power come the traditional signs of management power, such as a from having specialist information or skills, being private office, have now disappeared. However, people highly visible in work activities, or cultivating the right have more subtle ways to show their authority.

people (“office politics”). All forms of managerial power Power arises from a person’s relationships with those have their good and bad points; successful managers around them. In work, different levels of power are will moderate their power with fairness and self-formally defined in the organizational hierarchy. This restraint to direct and motivate their team.

Six sources of power

The effective use of power depends on the skil s and character of the person holding power, their relationship with their employees, the task to be done, and the formal definition of management roles. Social psychologists John French and Bertram Raven identified five kinds of managerial power, with Raven later adding a sixth in his Six Bases of Power (2012).

Legitimate

Coercive

This form of power comes with

The opposite of reward power,

a position. The organization gives

Reward

coercive power is the ability to

an appointed manager the power

Power can be derived from the ability deliver punishments. These include to direct the activities of their

to control rewards that are valued

demotion and dismissal but also

subordinates. Legitimate power can

by others. The greater the perceived

psychological forms of bul ying.

be granted, changed, or withdrawn

value of such rewards, the greater

While it can be effective in the

by an organization and, as such,

the power. In business, such

short term, coercion tends to

resides in the position rather

rewards include promotion

cause resentment and is often

than the appointed individual.

and pay but also public

detrimental to performance.

recognition and praise.

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Management and Power

22 23

The “gods” of management

Charles Handy, author of Gods of Management (1995), used ancient Greek gods to exemplify four management cultures based on particular roles and values. Each form has its advantages and shortcomings; managers may encounter different cultures in different companies, or even within different areas of one company.

Zeus: club culture

Apollo: role culture

Athena: task culture

Dionysius:

Power is concentrated

Power is hierarchical

Power is derived

existential culture

in the hands of the top

and clearly defined

from the expertise

Organizations exist for

person, who exerts control

by job descriptions,

required to complete

individuals to achieve

through personal contacts

with decisions being

a task or project, and

their goals, with decisions

rather than procedures

made at the top of the

decisions are made

being made by the consent

(e.g., investment banks

bureaucracy (e.g., life

by meritocracy (e.g.,

of the professionals

and brokerage firms).

insurance companies).

advertising agencies).

(e.g., universities).

Referent

This form of power is derived from

Expert

the trust and respect that a manager

Informational

This kind of power is based on

earns from their team and col eagues.

Power can also be derived from the

specialist skil s and resides in the

Subordinates may come to model

control of information. Informational

individual rather than their official

their own behavior and actions

power relates to specific situations,

role. A manager who is competent

on those of the manager. It can take

whereas other forms of power involve

and knowledgeable is more likely to

time to amass referent power, and

more general relationships. This type

be respected by their subordinates;

a manager needs to understand the

of power can be transitory: if the

however, employees with expertise

attitudes and culture of their team

information is shared with other

can also win respect and power too.

in order to build it.

people, the power can be exhausted.

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Scientific

Management

Frederick Winslow Taylor introduced the idea of Scientific Management to the growing US manufacturing industry in the early 1900s. Today, his ideas still inform a great deal of management theory.

Working smarter

He argued that since workers do

A mechanical engineer by trade,

not naturally enjoy work, they must

Frederick Winslow Taylor developed

be closely supervised under an

his ideas in the 1880s while working autocratic management style.

in a Philadelphia steelworks. He

studied how his workers performed

Analyzing tasks

their individual tasks and evaluated

According to Taylor, managers

how this affected productivity—a

should separate production into

method that was later called

a series of discrete tasks and find

“scientific” analysis. He summed up

the best way to perform each one (in

his findings in The Principles of

contrast to the widespread practice

Scientific Management (1911).His

at the time, of workers devising their

basic premise was that optimizing

own “rule of thumb” methods).

the way a task is done is more

Workers should be given direction

efficient than simply compelling

and training and the tools necessary

employees to work harder.

for them to work as efficiently as

Taylor did not value the human

possible. Finally, they should be

needs of workers, believing that

paid by the number of items they

they were motivated only by pay.

produce in a set period of time, a

FOUR PRINCIPLES

Case study:

Taylor’s studies led him to devise

McDonald’s

four management principles:

McDonald’s is one of the largest

The responsibilities of

❯ Examine each job scientifical y

fast-food brands in the world,

managers and workers are

in order to determine the “one

sel ing 75 burgers every second.

kept separate. Managers

best way” to perform the task.

From Moscow to Marrakesh, the

oversee performance and

❯ Hire the best workers for each

food looks and tastes the same.

quality, while workers deliver

task, and train them to work at

Every branch fol ows identical

service on the front line.

maximum efficiency.

instructions for each stage of the

❯ Monitor each worker’s

process, from preparing, cooking,

performance, and provide

and packaging each food item to

instruction when needed.

mopping the floor. The result is a

❯ Divide the work so that the

triumph of Scientific Management

managers plan and train and the

and a vindication of Taylor’s four

workers execute their tasks.

principles (see box, left).

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MANAGEMENT BASICS

Scientific Management

24 25

practice now termed “piece-rate”

He organized workers so that

became standard for mass

pay. As a result, workers would be

each executed a single task in

production. After World War II,

encouraged to work hard,

the best possible way, and

Taylor’s ideas influenced the kaizen

maximizing productivity.

instead of moving around the

philosophy in Japan, where the

In the early 1900s, Henry Ford

factory, each worker remained

focus was on “lean production”

applied Scientific Management

stationary at an assembly

as well as the elimination of

principles to car manufacturing.

line—an arrangement that

waste (see pp.120–21).

McDonald’s has mastered a

consistent global system that ensures

fast, clean, and reliable service.

Production lines are standardized,

with the use of machines that control

ingredient amounts and cooking times

to ensure high speed and high quality.

Recruitment and training

A “pay-by-performance”

are standardized, and

philosophy provides long-

corporate goals are

term incentives. A recognition

advertised. The company

program, including an

even has a Hamburger

employee of the month prize,

University in Chicago.

helps motivate staff.

“In the past the man has been first; in the future the system must be first.”

Frederick Winslow Taylor, 1911

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Key Principles

In 1916, French mining engineer Henri Fayol wrote his key principles of management based on what he considered fundamental truths. His work became one of the first guides for managers to be published, and it remains influential today.

Start of management theory

complex organizations, and went on to form the When Fayol published his groundbreaking General basis of modern management theory. Although and Industrial Management (1916), which included organizations, and how they are run, have changed his 14 principles—along with his five management significantly over the last century, the basic elements functions (see pp.14–15)—rapid industrialization in of Fayol’s principles still apply. Tasks must be Europe and the US meant that there was an urgent completed efficiently, discipline must be enforced, and need for professional managerial techniques. His work staff must be rewarded. However, to get the best from soon became a widely used guide for managers, giving their teams, managers today must apply the principles them the skills necessary to oversee increasingly in accordance with modern working practices.

SUMMARY OF

HISTORICAL

MODERN

PRINCIPLE

PRINCIPLE

APPLICATION

APPLICATION

DIVISION

Assign specialized tasks

Workers’ roles became specialized

Roles have become more

OF WORK

to those workers with

to perform a single particular task.

generalized.

suitable skills.

AUTHORITY AND

Provide managers

Only managers held authority

RESPONSIBILITY

Employees are

with a level of authority

within an organization.

increasingly empowered.

that reflects their

responsibilities.

DISCIPLINE

The organization must

The organization retained

Rules/procedures now

set clear rules/procedures

formal control over workers.

less formal, with increased

for the manager to apply

peer-pressure control.

to workers.

UNITY OF

Workers should receive

Workers always reported

COMMAND

Teams may have multiple

their orders from only

to a single manager only.

managers, particularly

one manager.

in matrix structures

(see pp.54–55).

UNITY OF

There should be only

Each function followed one plan,

DIRECTION

Team structures and

one plan and one team

overseen by a single manager.

tasks are more complex

performing functions

and often have more than

with the same objective.

one objective.

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Key Principles

26 27

SUMMARY OF

HISTORICAL

MODERN

PRINCIPLE

PRINCIPLE

APPLICATION

APPLICATION

SUBORDINATION

The organization’s goals

Employees were committed

OF INDIVIDUAL

Organizations and

must take precedence

to the organization.

workers are committed

over interests of

to each other.

individuals.

REMUNERATION

Compensation for work

Organizations adopted reasonable

OF PERSONNEL

Rewards for workers

should be reasonable to

pay reward systems.

may include feeling

both organization and

valued and respected

worker.

as well as monetary gain.

CENTRALIZATION

Organizations must

Organizations adopted top-down

Management makes

balance centralization

decision-making, excluding worker

decisions on strategy;

and decentralization

involvement.

workers make decisions

of authority.

on specific tasks.

SCALAR CHAIN

The chain of authority

Management structures became

Chains of command

and communication

rigidly hierarchical with formalized

may vary from linear

should be only formal

communication channels.

hierarchies to informal,

and vertical.

flatter structures.

ORDER

Organizations must

Internal information systems

Internal information

provide a safe workplace

were used to control processes

systems are used for

and resources in the right

and workers.

coordination purposes.

place, at the right time.

EQUITY

Managers should treat

Organizations gained worker

Worker commitment is

employees with equal

commitment through kindness

built through a sense of

fairness and respect

and justice.

shared ownership.

to build commitment.

STABILITY OF

Organizations should give

Organizations trained employees

PERSONAL TENURE

Organizations offer

training and job security

to encourage them to stay.

ongoing training and

to reduce costly high staff

development so that

turnover.

workers choose to stay.

INITIATIVE

Organizations should

Only managers came up with

Many workplaces

employ only managers

and implemented new ideas.

encourage free

who can both conceive

Workers were excluded.

communication and

and implement new ideas.

ideas from workers.

ESPRIT DE

Managers must ensure

Maintaining high morale within

CORPS

Group unity is less rigid;

that workers remain

organizations became vital.

high morale comes from

motivated and cooperate

supporting individuals

with each other.

to give their best.

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Global Management

As global business expands, managers who work across different countries have to understand their international markets and customers and grasp the complexities of differing standards, laws, cultures, and political systems.

A connected world

Thanks to modern technology, organizations

increasingly span the globe, with employee and customer communication across many time zones.

Culture and

Managers at varying levels may have overseas ideology

responsibilities, from buying stock to controlling remote staff. Larger companies may have specialist Studying the culture

and beliefs of a country

managers, such as a business manager to further can help managers

global efficiency and competitiveness, a country understand local business

manager to handle all aspects of the local market, ethics and practices, which is

and a functional manager to nurture skills and useful when generating business

transfer specialized knowledge—all overseen and directing local teams.

by a global manager to ensure coordination.

Whether working in-house

or not, managers need to

be aware of the business

Language

climate of the regions in

Good communications

which they operate. Those

are essential. Hiring an

in touch remotely must

interpreter to relay

ensure that local teams feel

instructions may be

connected. Virtual meetings

necessary at times, and

using expert translation

should be held at convenient

technology can ensure

hours, email communications

that key documents

must be clear, issues settled

are understood.

in a timely way, and all

successes celebrated.

International finance

Managers need to know

how monetary interactions

Managing

between countries spanned by

internationally

an organization affect profits.

Fluctuating exchange rates

Understanding the national culture,

may be a concern, as might

relevant laws, and local customs of

currency controls that restrict

countries within an organization’s

the movement of money.

sphere al ows it to run more smoothly,

avoids fal ing foul of local rules and

“The international manager

regulations, and ensures greater

success. Sensitive handling of local

reconciles cultural dilemmas.”

issues can also be the key to securing

new deals. Here are some pointers

Fons Trompenaars, cross-cultural theorist, 2000

that managers should be aware of.

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Global Management

28 29

CULTURAL SENSITIVITY

The ability to maintain good relations with a virtual team, or clients and business leaders in another country, is essential for a successful manager. To avoid mistakes, local customs and the nuances of different cultures must be understood. Small gestures can impress overseas Bureaucracy and

clients and create a competitive advantage.

regulatory standards

Language

Business practices frequently

Learning some phrases in the local

vary between countries. Managers

language is polite and shows goodwil .

should know, for instance, if a local

Fluency—if resident long term—is even

initiative needs government approval

better. When speaking English, keep it

and must ensure compliance with

clear to avoid misunderstandings.

local regulations on products and staff.

Nonverbal communications

The index finger and thumb touching

means “okay” in the US but is vulgar in

Brazil. Pointing is offensive in many

cultures. A nod may mean “continue”

rather than “yes”. (See Non-verbal

communication, pp.172–73).

Customs

Political and

Mealtimes and eating habits—from

legal systems

making sounds when eating to the

An awareness of the political and legal

use of eating utensils—vary in different

systems in different countries enables

cultures. Specialty foods, from sea

urchins in South Korea to grasshoppers

organizations to take advantage, for

in Mexico, may also cause confusion.

instance, of government incentives

to invest and to avoid problems with

differing tax codes or labor laws.

Time

Attitudes to time differ. While

some countries are strict about time

management, others are less so.

In countries where people are more

relaxed about schedules, negotiations

may progress much more slowly.

Respect

Time zones

There is no direct translation for the

Chinese concept of miànzi (losing face).

Creating consistent schedules

It is about a person’s feeling of prestige

for contacting colleagues and

and plays an important role in Chinese

teams in different time zones helps

business. Understanding the idea is vital

keep operations running efficiently. A

for working relationships in China.

mutual y convenient social hour for

virtual chats and catch-ups can boost

morale and encourage goodwill.

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Strategic

Management

Strategic management is a continuous process by which managers establish an overall direction for an organization, specify objectives, and allocate resources to achieve their long-term goal.

Analyze, plan, execute

desirable one. The process starts

implemented successfully, people

Before the 1960s, “strategy” was

with information and analysis and

across the organization who are

a term that related to warfare and

a crucial knowledge of external

best placed to have information

politics, not business. Strategic

factors (see box, right), which

about customers, competitors, and

management grew as a discipline

together influence the formulation

markets need to be involved.

through the work of management

and implementation of a strategy.

Today, strategic management is

consultants such as Peter Drucker

Having identified options for an

an exciting field—globalization and

and Bruce Henderson, who

organization, managers can select

technology are driving innovation

recognized the need for a process

long-term goals (a strategy) based

and opening up opportunities for

that would take an organization

on their understanding of the firm’s

insightful, adaptable, and forward-

from its present state to a more

capabilities. For the strategy to be

thinking individuals.

Case study: Komatsu

Established in the 1920s, Komatsu

is a Japanese manufacturer of

construction equipment. After

significant losses, it changed

K

its strategic management

OM

approach at the start of the

ATS

21st century. By focusing on

U

their key competitor, Caterpillar,

and spreading a vision of global

leadership, Komatsu’s managers

were able to encourage a desire

to succeed among employees.

Create

Formulate

Implement

1

2

3

strategic intent

a strategy

the strategy

Having established the need for

Next, the managers figured out

The third stage in turning

change, Komatsu’s managers

how to achieve their long-term

Komatsu’s fortunes around was

analyzed the situation, figuring

goal. Their strategy outlined

to implement the long-term

out where the company wanted

how they would gain access to

strategy. Managers strengthened

to be. To fulfill its ambition—to

new customers, reduce costs,

organizational and leadership

lead the market—Komatsu

and enhance competitiveness,

capability and implemented the

needed to “encircle,” or take on,

as well as spread business risk

“Komatsu Way”—a set of values

its main rival, Caterpillar.

across a wider market.

for employees to abide by.

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Strategic Management

30 31

OPERATING ENVIRONMENT

In the 21st century, strategic management has

❯ Global business is being reshaped by disruptive become ever more complex due to increasing

technology (see pp.76–77), the shift from

numbers of external factors that can influence product- to customer-driven demand, increased the operating environment and, therefore,

automation, changes to the retail model with strategic decisions.

online shopping, and the ability to offshore or External factors may include rapidly changing outsource work.

technology, environmental issues, geopolitical

❯ Concerns about climate change, air quality, risk factors, and national and international and plastic pol ution have put sustainability high differences in legislation—for example, while on the list for strategy considerations. Many the use of plastic carrier bags in the UK attracts a manufacturers across the globe are rethinking small levy, in some countries, such as Bangladesh their packaging, with the aim of making it

and Kenya, plastic bags are banned completely.

recyclable and requiring fewer resources.

❯ For worldwide business, geopolitics must be considered because of risks such as terrorism, supply-chain disruption, and differences in how countries are governed.

CATERPILLAR

“The essence

KO

of strategy is

MATSU

choosing what

not to do.”

Michael Porter,

US academic, 1980

Evaluate

4 the strategy

Strategic management is an

ongoing process, so Komatsu’s

managers continue to evaluate

and innovate, measuring and

improving the company’s global

systems in accordance with the

mantra “success today does not

imply success tomorrow.”

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Risk Management

Management is all about making decisions, and all decisions involve risk. By making a risk-management plan to define and analyze risks, managers can more easily cope with unexpected events.

Dealing with risk

extent to which the organization’s

Risks are inherent in every type

environment has changed and is

of business or organization. They

likely to change in the future. Risk

can range from natural disasters

monitoring—in the form of regular

and accidents to legal liabilities,

reviews, constant updating, and

uncertainties in financial markets,

embedding risk management in

or acts of sabotage by competitors.

organizational culture—is vital.

The first step in creating a risk

It ensures that the

management plan is making a

manager and team

risk assessment (see box, right).

can effectively

First, all the risks known to an

address risks and

organization are listed. A weight is

identify

then assigned to each risk, based

opportunities.

on the likelihood of it occurring

The second part

and the level of impact it would

of risk analysis is

have on the organization. The

risk-response

highest-weighted risks are

planning (see below),

RISK ENVIRONMENT

RISK ASSESSMENT

prioritized and a plan is made

in which managers

to address them. The likelihood

and teams determine

of a risk is never based on past

what action to take in

performance alone but also on the

response to a given risk.

1. APPETITE

What level of risk

is the organization

prepared to accept?

NEED TO KNOW

Mitigating risk

Risk-response planning

❯ Many organizations require risk

assessments to be carried out by

helps managers decide

someone who is recognized as

whether to avoid, minimize,

2. GOVERNANCE

being competent to do so. The

or accept a risk. There are

Is responsibility for

elements of competence can

three main elements: the

the risk defined at

be expressed with the acronym

context (risk environment);

every level of the

KATE—knowledge, awareness,

the assessment process; and

organization?

training, and experience.

how to monitor the effects

❯ To identify existing risks and

of any action taken. This

who might be affected, look at

planning will enable a

records of staff accidents (or

manager to al ocate

3. PROCESS

near misses) or il ness.

resources to negotiate

Have procedures

the risks and communicate

been established

effectively with others

for identifying new

involved.

and changing risks?

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Risk Management

32 33

HOW BIG IS THE RISK?

Risks vary in importance, from minor,

commonplace problems to rare but

catastrophic events that can cause an

EXTREME

organization to col apse or even

endanger lives. A risk assessment is

used to assign a risk-weighting for

HIGH

OD

each issue by examining its likelihood

and its impact on the organization.

LIHO

MEDIUM

Risks with the highest potential for

LIKE

damage plus the greatest likelihood

should be prioritized; the goal is to

LOW

keep the likelihood and the impact

of each risk as low as possible.

IMPACT

RISK ENVIRONMENT

RISK ASSESSMENT

RISK MONITORING

4. FRAMEWORK

7. METRICS

Has a risk analysis

Can the value

been carried out

of the risk to the

to include al

organization

“It’s

potential risks?

be measured?

impossible

that the

5. STRATEGY

8. ORGANIZATION

What are the

Have the risks been

improbable

implications of the

fully communicated

risks for the strategy

throughout the

will never

of the organization?

organization?

happen.”

Emil Julius Gumbel,

German mathematician,

6. MITIGATION

9. CULTURE

1958

Have adequate

Are risks being

processes been

reported as an

established to

ongoing policy

mitigate risks?

at al levels?

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HR Management

Organizations need the correct human resources in order to deliver their products and services. HR managers help attract, train, and develop the right people in the right positions, but as worker expectations change, so does the HR role.

Changing role

absence, and well-being. But

expectations and work ethics, adds

The HR manager, or the manager

shifting workforce models bring

another complex dimension, too.

playing an HR role, needs to recruit, new challenges. In addition Managers are increasingly aware

train, appraise, and motivate staff,

to pervasive change within

of the differing attitudes towards

but the modern workplace has

organizations, employment

the growing pool of “millennials”

changed the way the role is

patterns are also shifting. The

(those born between 1980 and

fulfilled (see below). Traditional

gig economy—in which freelance

2000), who will make up 75 percent

elements of the job remain: HR

workers are paid by each “gig”

of the global workforce by the year

managers are still involved at every or job they complete—is growing.

2025. The HR manager needs to

stage of the employee life cycle—

Flexible and virtual working, and

be aware and responsive to their

from attracting and selecting the

the blurring of boundaries between

expectations, such as a preference

right talent to navigating the

work and home life, alter team

to work in teams, the importance

individual’s departure. They must

interactions. A workforce that is

of work-life balance, and the desire

also manage issues such as safety,

multigenerational, with different

for rapid career development.

Reinventing HR

PAST

The role of HR manager has undergone a shift to become a much An HR manager traditional y had a

more proactive one. Managers are now expected to anticipate the more static and conservative role.

company’s staffing needs many years in advance, thinking strategical y and developing existing employees.

Hired and fired people

Was the “police” of the organization

Dealt with payroll and benefits of

employees

CREATIVE

MARKETING

ACCOUNTS

Maintained the status quo

Traditional

Was not technical y proficient

company

IT

SALES

Staff are in a fixed

location performing

Fol owed the organizational strategy

their roles during

set hours.

Was focused on employee input

Worked with clearly defined, ful-time

employees

Was separate from organizational

activities

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MANAGEMENT BASICS

HR Management

34 35

“To make a

EMPLOYEE VALUE PROPOSITION (EVP)

living is no

HR managers must successfully

engage employees. An EVP is

EM

longer enough.

the set of benefits a company

E

OT

offers that differentiates it as

U

IQ

PURPOSE

IO

N

leadership, pride

N

Work also has

an employer. Benefits and

U

A

financial rewards are no

in role, mission

L

to make a life.”

longer enough to attract

and retain key talent

Peter Drucker, management

and rank below other

TIATED

EXPER

theorist, 2012

OPPORTUNITY

WELL-BEING

IE

values, such as a

N

career path,

work-life balance,

T

career path and

I

development,

flexible working,

AL

flexibility. At the

IFFEREN

D

innovation

social scene

apex of these

CO

values is a

NT

sense of

RAC

pride and

REWARDS

ROLE

PETITIVE

TU

purpose.

M

pay, benefits,

job content, team,

A

CO

incentives

workplace

L

ORGANIZATION—culture, vision, values

PRESENT

An HR manager is now expected

to develop staff more actively.

Engages and empowers people

MARKETING

ACCOUNTS

Is thought leader and mentor of the

organization

Promotes employee engagement

and experience

Constantly challenges status quo

Is technicaly advanced, using big

data and analytics

Modern

CREATIVE

company

Shapes organizational strategy

Staff work flexible

hours or part time;

Enables employee output

are in and out of

house; and may

be a combination

Unlocks potential in dynamic and

IT

changing workforce

SALES

of permanent,

contract, or

Is integral to activities, communicating

freelance workers.

with staff to understand their needs

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Financial

Management

Finance is the lifeblood of a company. No matter how good its products or services are, the company will not thrive unless it is on a sound financial footing.

1

Staying afloat

All managers need to know

Financing a

about financial management,

new venture

since most of their decisions will

impact on company finances in

Hannah is a financial manager in a smal ,

privately owned furniture business. She

some way. Financial management

is looking at a project to make chairs

IDEA

involves record-keeping as well

CAPITAL REQUIRED

from recycled materials. There is demand

as reporting, planning, budgeting,

for the environmental y friendly product

To manufacture

implementing financial controls,

Hannah calculates

and unused space in the factory. Here

environmentally

and ensuring that financial

friendly chairs

how much money

are some of the decisions she makes to

from recycled

considerations are central to

is required to start

ensure that the venture is profitable.

materials.

production. This

the decision-making process.

must include the factory

The primary concern of those

space—an indirect

managing finance in a company is

cost, or “overhead”.

how money enters the organization

NEED TO KNOW

(through sales, fundraising, or

❯ Assets are everything of financial financing—such as loans), and

5

value owned by an organization.

how money leaves (expenditure on

❯ Liabilities are everything owed,

materials, wages, distribution, and

such as debts and loans.

investments). In a small company,

❯ Balance sheets are snapshots a financial manager will monitor

of an organization at particular

this process, whereas in larger

dates, listing assets and liabilities.

organizations the work is handled

❯ Profit and loss statements

by a finance department. Whatever

are financial statements listing

the company’s size, its finance staff

sales and costs; they are used to

must keep an eye on the big picture

figure out gross and net profits.

and understand the potential

FINANCIAL

MANAGING

❯ The break-even point is when

short- and long-term impact of

total sales equals total costs.

CONTROLS

THE FUNDS

decisions. Looking after day-to-day

❯ The bottom line is net income

Using risk

Once the project is

expenditures is also crucial. Cash

or total money earned after tax

management (see

up and running,

flow is a key indicator of financial

and other deductions.

pp.32–33) and profit

Hannah manages the

health and something that finance

and loss statements, she

withdrawal of money

staff must always monitor. A lack

assesses the venture’s

from the funding to meet

of adequate funds to pay essential

profitability in both the

costs, including the price

bills, such as rent and wages, is the

short and long term.

of materials and salaries.

principal reason that operations fail.

US_036-037_Financial_Management.indd 36

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MANAGEMENT BASICS

Financial Management

36 37

2

3

4

AGREES ON BUDGET

CAPITAL REQUIRED

CROWDFUNDING

WITH TEAM

Hannah calculates

To fund it, Hannah

Working with a

how much money

opts for online

project team, she

is required to start

crowdfunding. She

schedules a detailed

production. This

sets up the venture as a

budget for the first

must include the factory

separate business and

12 months of the venture,

space—an indirect

offers shares in return for

including the revenues

cost, or “overhead”.

public investment.

from projected sales.

6

7

8

BANK

$

MANAGING

ALLOCATING

THE FUNDS

PAYING TAX

PROFITS

Once the project is

When the chairs

Since the business

up and running,

begin to sel , she

stays in profit, she

Hannah manages the

calculates any

calculates a fair

withdrawal of money

tax owed to the

dividend for her

from the funding to meet

government on sales

investors and reinvests

costs, including the price

(such as VAT) and

the remaining profits

of materials and salaries.

on profits.

in production.

US_036-037_Financial_Management.indd 37

14/02/2020 11:39

Operations

Management

Managing operations within a company involves planning, organizing, and improving the systems it uses to produce goods or provide services. In most larger businesses, this is a dedicated role.

Overarching role

An operations manager involved in manufacture, Operations managers work across a broad range such as in a pie factory (see below), would deal of sectors and industries. They focus on converting with the input of raw materials and oversee all the materials and labor into goods and services as stages of production to the output of the product.

efficiently as possible, using resources in the most An operations manager in a service business, such effective way, to maximize profits. They manage the as an airline, would oversee processes—in this case, organization’s core functions, whether in production, systems involving logistics and engineering.

manufacturing, or service provision (when the product Good operations management is key to a company’s is not a physical object). Responsibilities may include success, whatever the industry, and is one of the areas day-to-day and strategic management that ranges predicted to be transformed by artificial intelligence widely across the organization’s activities.

(AI) and automation, particularly in the service sector.

Managing a process

Sal y is the operations manager in a factory making vegetarian pies.

Her role involves coordinating labor and the use of raw ingredients.

She ensures the pies are made, quality control ed, and labeled to exacting specifications then dispatched for distribution.

INPUT

PROCESS

As the operations manager,

Sally oversees the provision

Sal y also contributes to

and efficient use of

ongoing organizational

ingredients, equipment,

success by checking

and personnel.

processes, improving

systems, and

maintaining quality.

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MANAGEMENT BASICS

Operations Management

38 39

PRODUCT OR SERVICE?

NEED TO KNOW

For operations managers, the distinctions between manufacturing, where

❯ Right first time is the idea that

a physical object is produced, and offering a service, where no object is made, avoiding mistakes in operations

are not so clear-cut today. Many manufacturers now provide services with management is more beneficial

their products, and vice versa. New technology has further blurred the lines and cost-effective than addressing

between manufacture and service; Amazon, for example, is a service provider, problems after detecting them.

yet also makes, markets, and sel s own-branded products.

❯ Effective capacity is the

maximum amount of work an

MANUFACTURER

SERVICE PROVIDER

organization can complete in a

period due to constraints such

Tangible product

Intangible product

as delays, material management,

and issues of quality.

Inventory of stock

No inventory

Low customer contact

High customer contact

Long response time

Immediate response time

Capital intensive

Labor intensive

OUTPUT

Sal y also bears

responsibility for

fulfil ing orders to

meet targets of time

and cost.

SALLY’S PIES

SALLY’S PIES

SALLY’S PIES

SALLY’S PIES

SALLY’S PIES

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Quality

Management

Managers are responsible for ensuring that the quality of work produced by their team meets the required standard—whether they are manufacturing a product or providing a service.

Meeting expectations

product or service meets or exceeds Quality is everything People know good quality when

the expectations of their customers. Traditionally, quality was managed they see it, and, typically, the

Organizations manage quality

through periodic inspections. If a

higher the price a consumer pays,

control by setting standards and

defective product or poor service

the higher the quality expected. A

checking that these are being met

was detected at the time of an

customer buying a car, for example,

at every stage of the process—

inspection, it was corrected—

will expect the quality of a Rolls-

for example, in manufacturing,

preferably before the consumer

Royce to be different from that of

when raw materials arrive in the

became aware of the problem.

a Mini. For businesses, the key to

factory, during production, and

successful quality management

before the finished goods are

is ensuring the quality of their

dispatched to the customer.

Quality

standards are

set according to

Happy customer

customer satisfaction

with the product or

Total quality management puts the

Meeting

service offered.

customer first, defining quality as

set standards

something that meets or exceeds

of quality is a

customer expectations. People

continuous and

from across an organization are

organization-wide

responsible for making sure these

process.

quality standards are met.

Improvements

to quality are driven

by data and analysis,

including customer

feedback.

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MANAGEMENT BASICS

Quality Management

40 41

Today, quality management is at

ZERO DEFECTS

the heart of everything that goes

NEED TO KNOW

on within an organization. Each

Philip Crosby came up with the

❯ Crosby estimated that

process and activity is monitored to

idea of “zero defects” when he was

organizations can lose 20–35

maintain a desired level of quality,

a quality engineer at maufacturing

percent of their revenues by

and the focus is on exceeding

firm The Martin Company in the

making al owances for defects

1950s. In his 1979 bestsel er Quality

customer expectations. This

or mistakes and the cost of

Is Free, he wrote that quality is not philosophy—that the long-term

rectifying them, rather than

about being bad or good but

preventing the problems from

success of a business depends on

about meeting set requirements

occurring in the first place.

customer satisfaction—is known as

the first time and every time.

total quality management (TQM),

Managers are responsible for

❯ In setting clear requirements,

and it originated in industrial Japan

setting standards and ensuring

managers should view work as a

in the 1950s. All employees are

they are met. Crosby accepted

series of processes that will result

that people make mistakes, but he

in predicted outcomes.

committed to improving products,

argued that if organizations make

❯ Improved quality is likely to lead services, processes, and the culture

al owances or expect things to go

to increased profits.

of the organization itself.

wrong, quality is more likely to be

compromised. Problems should

be prevented rather than cured.

Ensuring the customer is

happy with the final product is

at the heart of the organization.

Managers

are responsible

for the process of

measuring quality

against the set

standards.

“Quality is never an accident. It is always the result of intelligent effort.”

John Ruskin, 19th-century social thinker

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IT Management

An information technology (IT) manager is responsible for monitoring a company’s IT systems and resources, ensuring that they are up-to-date and cost-effective.

Technology in the workplace

The primary task of an IT manager is to ensure A changing

that the information systems of an organization are operating both effectively and efficiently. These world

systems include so-called “tangible” resources, IT is a rapidly evolving

such as computers, networks, mobile technology, field, with innovations such

and people, and “intangible” resources, such as as digital platforms (online

software programs and data. In large organizations, businesses like Amazon and

IT managers report to a head of information, or chief Airbnb), artificial intel igence,

information officer (CIO), who is likely to serve on cloud computing (see

the board of directors. As such, the CIO works at the pp.76–77), the Internet

Cloud computing

heart of the organization, ensuring that any of Things (see box, below),

A third of a typical IT budget

and enterprise resource

new initiatives have the required IT support.

is spent on cloud computing

planning (using software to

Today, many IT managers are involved in digital services. These enable

manage day-to-day business

transformation—the process of integrating new companies to store data

activities). In particular,

digital technologies into all aspects of a business.

and access computing

digital technology has

When digitization—the move from paper to digital—

power over the internet.

enabled organizations

first happened, many organizations modeled their to capture and store vast

digital business on the previous paper-based setup.

amounts of sensitive data,

Increasingly, IT managers are choosing to replace making cybersecurity a

traditional models such as company-owned hardware growing concern and

with cloud computing services. A key part of this a key specialization

process is anticipating the impact that these new in IT management.

technologies will have on the workplace of the future.

THE INTERNET OF THINGS

One area changing the role of IT managers is the Internet of Things (IoT), or the embedding of technology in everyday objects. Smart home hubs already al ow people to use their smartphones to control everything from lighting to kitchen appliances. Now, the IoT is transforming business, providing

intel igent data and automation,

Data

creating demand for more skil ed

workers, and enabling remote

Between 2016 and 2018,

working. IT managers

90 percent of the world’s

face rising consumer

data was created. A vast

expectations as IT

2.5 bil ion gigabytes is now

becomes an integral

produced every day.

part of products.

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MANAGEMENT BASICS

IT Management

42 43

New technologies

In 2020,

Digital technology is

changing so rapidly that IT

global spending

students are currently being

prepared to do jobs that

on IT was an

do not yet exist.

Artificial intelligence

estimated

Most IT managers agree that

20 percent of existing IT jobs

will soon be replaced by AI

but think that new jobs wil

emerge to make up for it.

$5

International Dattn

a Corporation, 2020

Cloud computing

A third of a typical IT budget

is spent on cloud computing

DRIVERS OF CHANGE

services. These enable

companies to store data

According to a 2018 survey by

and access computing

research company Gartner, the

power over the internet.

role of the CIO is changing. IT

delivery management now takes

up less of managers’ time, with

new areas such as cybersecurity,

big data, and artificial intel igence

E-commerce

(AI) becoming increasingly

Projections show that by

important. The drivers of this

2023, 22 percent of all retail

change are digitization and

sales will be made online.

technological innovation.

Without an online presence,

a retailer is likely to fail.

NEED TO KNOW

IT teams

Although 71 percent of IT

❯ Big data refers to a volume

departments have a digital

of data that is so large that it

team, there is a shortage of

is difficult to process using

key skil s, such as big data

conventional analytical tools.

analysis and cybersecurity.

❯ Cyberspace is a virtual

Data

concept of the world’s finite

Between 2016 and 2018,

interconnected technology.

90 percent of the world’s

❯ Business Intelligence (BI)

data was created. A vast

uses analytical technology to

2.5 bil ion gigabytes is now

transform data into information

produced every day.

to help with business decisions.

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Marketing

Management

Whatever the product, service, or cause being promoted, managers responsible for marketing need to be aware of consumer trends and use technology effectively to reach their target audience.

Positive

Getting the message right

assist with these tasks. Digital

customer

Marketing is an essential function

skills are essential; technology and

feedback

On target

in any organization that sells

the global market have transformed

Consumers can

products, provides services, or

In a rapidly shifting, highly

easily leave

marketing, and often the main

competitive world, the role of

wants to make its voice heard.

reviews online.

sales channel is online.

marketing manager is a dynamic one

Larger firms may have specialist

Good reviews

When deciding how to promote

that requires customer insight and an

boost sales.

marketing managers, but in smaller and sell products, managers can expert awareness of trends. A

companies, advertising and public

draw on a wealth of digital tools

manager can use various marketing

relations may be combined in brand to determine the target market, tools to hit important targets. These

or product marketing roles.

assess competitors, pinpoint trends, tools must be used correctly, though; The responsibilities of a marketing monitor customer responses, and if mishandled, they may wreck

manager vary by sector but are

predict future sales. However,

campaigns and sales.

likely to include conducting

customers also have digital power—

research, analyzing data, creating

online reviews make an impact—

marketing campaigns, putting

so marketing managers must keep

MA

together social media plans, and

up with social trends and concerns

RKETING TARGE

coordinating team members to

that might affect their sales.

TS

Big data

Customer

analytics

lifetime value

Use the latest technology

Estimate the value of

(including artificial

a customer’s future sales

intelligence to analyze large

potential to guide investment

amounts of data) to uncover

in marketing and loyalty

consumer insights

programs.

and trends.

Viral

Influencer

Subscription

marketing

marketing

economy

Encourage consumers to

Sponsor “influencers”

Offer consumers access to

spread marketing campaigns

on social media to promote

products and services

via social media sites to

products or services to their

through subscription rather

reach a huge global

followers.

than purchasing.

audience.

MARKETING TOOLS

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MANAGEMENT BASICS

Marketing Management

44 45

Positive

customer

Ethical

feedback

Sustainable

policies

Consumers can

Trend

approach

Many consumers

easily leave

awareness

prefer to deal

Consumers are

reviews online.

with organizations

Consumer values

becoming more

Good reviews

Clear

that treat their staff

change rapidly.

environmental y

boost sales.

branding

and suppliers

Trust

Organizations

conscious, so

ethically.

Customers wil

must maintain

firms need to

Customers buy

deal only with

their relevance

be seen to be

into brands they

organizations

by keeping up

green.

believe in. A brand

they trust, and

with trends.

must stand out

in a crowded

companies can

marketplace.

lose trust through

poor service or

misleading

marketing.

MARKETING TARGETS

Direct

marketing

Use highly targeted email

and social media campaigns

to pinpoint customers’

interests and needs.

NEED TO KNOW

❯ Four Ps (product, place, price, and promotion) are the key parts of a

comprehensive marketing plan.

❯ CTA (call to action) is any marketing

“Consumers are seeking

activity designed to prompt an

immediate response or sale.

equilibrium in all aspects of

❯ Inbound marketing draws

their lives—between humans

consumers to products and

services via subtle branding, social

media, and relevant web content.

and technology, brand and

❯ Outbound marketing targets

personal, global and local.”

customers via traditional channels

such as television and bil boards.

Pamela N. Danziger, marketing journalist, 2019

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Digital Management

Digital technology offers great potential to develop new processes, products, and services, and ways of connecting with others —but it must be managed.

Digital world

Embracing change

A manager involved in formulating

Digital technology is essential in

an organization’s digital strategy,

most organizations and must be

and who recognizes its role in

managed effectively. In some

the overall business plan, is better

OBILE USERS

companies, it forms part of IT, while placed to initiate new technologies E M

in others it is linked to marketing

and explain their relevance to

U

TAL POPULATION 7.676 bil ion

QI

via the management of social media employees. Many teams are now TO

N U

channels. Managers working in

multigenerational, and while some

5.112 bn

MOBILE

this field need to understand the

employees may struggle to keep

S

IA USERS

OC

potential of digital technology in

up with the pace of digital change,

ED

IAL

order to make use of it across all

those who have grown up in the

L M

M

A

E

areas of a company. This might

digital age can adapt more easily.

I

D

C

I

O

A

include using social media to

It may, therefore, be useful to break

S

U

E

3.484 bn

3.256 bn

V

S

I

E

market goods or attract customers,

down traditional hierarchies by

T C A

RS

for example, or analyzing data to

appointing digital leaders within

find ways of increasing profitability.

a team to help implement change.

TERNET USERS

IN

4.388 bn

NEED TO KNOW

The digital world

Digital technology has reshaped daily

❯ Digital transformation (DX) is

life in the past 25 years. Mil ions of

the use of digital technologies

to boost efficiency, accelerate

people work, shop, book vacations,

processes, and create new

play games, and listen to music online.

business opportunities.

Most communicate via cell phone

rather than landlines, and nearly

❯ A digital strategy is a company’s half of the world’s population

action plan for applying digital

uses social media. Digital

technologies to enhance existing

business activities. Managers have

managers must embrace

a vital role to play in its integration

the opportunities

“75% of global

within an organization.

this presents for

marketing to an

❯ An ICT system (information and

ever-increasing

marketing

communications technology)

al ows a company to process,

global audience.

spend will

store, and share quantities of data.

be on digital

by 2021.”

Jason Dent, Campaign

Monitor, 2019

US_046-047_Digital_Management.indd 46

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MANAGEMENT BASICS

Digital Management

46 47

Digital world

Global spend through digital channels

FASHION

ELECTRONICS &

FOOD &

FURNITURE &

& BEAUTY

PHYSICAL MEDIA

PERSONAL CARE

APPLIANCES

OBILE USERS

E M

U

TAL POPULATION 7.676 bil ion

QI

TO

N U

$524.9 bn

$392.6 bn

$209.5 bn

$272.5 bn

5.112 bn

MOBILE

TOYS, DIY &

TRAVEL (including

DIGITAL

VIDEO

SOC

HOBBIES

accommodations)

MUSIC

GAMES

IAL MEDIAU

3.256 bn

SER

S

$386.2 bn

$750.7 bn

$12.05 bn

$70.56 bn

TERNET USERS

Global social media channels

IN

FACEBOOK

YOUTUBE

WHATSAPP

WECHAT

INSTAGRAM

TWITTER

LINKEDIN

4.388 bn

Chinese

Social

Instant

Photo- and

Video-

messaging

messaging,

video-

News

Social

WHAT

media and

and social

networking

IS IT?

social media,

networking

sharing

application

sharing social

and mobile

networking

site for

service

website

for

networking

smartphones payment app application

application

professionals

ACTIVE

GLOBAL

2.41 bn

1.9 bn

1.5 bn

1 bn+

1 bn

321 m

303 m

MONTHLY

USERS

(source: Service providers, 2019)

US_046-047_Digital_Management.indd 47

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The Project

Cycle

INITIATION PHASE

❯ Identify the need.

❯ Define the objective

Aside from routine business, a company may also to be achieved.

undertake projects, which are temporary and specific pieces of work that require management at every stage.

Overseeing projects

The manager must use a range

A project is a series of tasks created

of skills (see pp.60–61) to shepherd

to achieve a particular goal. That

the project through each phase

goal could be to deliver a new

(see right) until the agreed goal

product or service or a change in

is achieved, on time, and

the business. Projects differ from

within budget.

ongoing daily tasks in that they

A series of projects with related

Project phases

have a start and finish and must

goals is termed a program. Each

Projects are overseen by project

be achieved within set limitations.

project in the program is headed up

managers and move through initiation,

Some projects are small, low-cost,

by a project manager, and they are

planning, delivery, and handover phases.

and short-lived; others are vast

all directed by a program manager,

multibillion-dollar undertakings

possibly a senior executive. On a

that span decades.

large-scale project, the project

A project manager is responsible

manager may be overseen by a

for the day-to-day running of the

project board—a group of senior

project, organizing resources,

executives with a vested interest

and overseeing a team of people.

in the outcome.

NEED TO KNOW

❯ A waterfall approach consists

of a detailed plan, a schedule, and

handover of a completed project.

“Project

❯ An agile project is done in

sprints and delivered in chunks.

management is

❯ Outputs are the immediate

the train engine

deliverables from the project

(usual y a product or service).

that moves the

❯ Outcomes are the wider changes

the project delivers over time.

organization

The program

❯ Scope is the project’s agreed

output, outcomes, and benefits.

forward.”

A series of projects makes up

❯ Scope creep is the undesirable

a program, which is kept on track

widening scope of a project.

Joy Gumz, Director of

by a program manager.

Project Auditors, 2012

❯ The iron triangle is the limitation of scope, cost, and time.

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MANAGEMENT BASICS

The Project Cycle

48 49

INITIATION PHASE

PLANNING PHASE

DELIVERY PHASE

HANDOVER PHASE

❯ Assess the feasibility.

❯ Coordinate the team.

❯ Hand over to the operations

❯ Consider alternative

❯ Deploy the resources.

team (see Operations

approaches.

Management, pp.38–39).

❯ Manage the work.

❯ Estimate the costs and

❯ Finalize the project or embed

❯ Overcome problems and

expected benefits.

the new product, service, or

difficulties that emerge.

change in business as usual.

❯ Approve the business case and

give permission to proceed.

PROJECT 1

PROJECT 2

PROJECT 3

1

2

3

THE PROGRAM

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MANAGING

ORGANIZATIONS

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Types of

Organization

Companies do not operate in isolation. Managers need to understand the different types of organization that they are likely to encounter, since these can become future partners, clients, competitors, or customers.

Different sectors, different objectives

opposes a government objective or a charity campaigns Organizations fall into three main categories: privately against the actions of a private company. In order for owned companies that seek profit for individuals or their own organization to succeed, it is essential that shareholders; government organizations that serve the managers are able to collaborate effectively with other public interest; and nonprofit bodies, such as charities agencies when necessary, while also being

and community-run projects. Whichever sector a aware of the potential for conflicts and having manager works in, overseeing employees, maximizing the skills required to resolve them.

efficiency and productivity, and setting and meeting Today, organizations are constantly

targets are central to their role. Just as profit-driven changing, and the lines between

companies expect the largest possible return on an different sectors are

investment, so public and nonprofit bodies strive for becoming less distinct.

the best possible outcomes from their initiatives. As Public-private partnerships

such, a successful manager may find their skills in between businesses and

demand regardless of the sector they work in.

governments are now

While their objectives vary, organizations within commonplace, while

different sectors commonly collaborate to share their many larger charities

PUBLIC SECTOR

expertise or resources on joint projects and enterprises. have commercial This includes

For example, a private company may be contracted operations. For a

government-funded

by a government body to perform public services, manager, this trend

bodies that provide

while a charity may provide specialist knowledge offers a wealth of

public services. They

do not operate for

to both. However, conflict can also arise between opportunities.

profit but seek value

organizations, such as when a private company for money on their

expenditure.

NEED TO KNOW

Shared assets and risks

Collaboration across sectors is increasingly

❯ In the US, individual states

widespread and can involve multiple

incorporate most businesses;

organizations and complex relationships. Each very few are incorporated by

partner will be aiming to get something different out of the the federal government.

relationship, and this may be a source of conflict unless the

❯ Public companies openly trade

relationships are managed careful y. Similarly, although each their shares on stock exchanges;

organization will aim to contribute assets and expertise to a private companies, such as limited

joint venture, they may also bring an element of risk to liability companies (LLCs), do not.

the other partners. For example, when the privately owned UK facilities and construction conglomerate Caril ion PLC

col apsed in 2018, the UK government lost £180 mil ion as a result of their public-private partnership. The col apse also stal ed major public infrastructure projects.

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MANAGING ORGANIZATIONS

Types of Organization

52 53

20%

how much less a PPP

PRIVATE SECTOR

can cost a government

This includes organizations

that are owned by individuals

vs. a traditional design-

or shareholders. The enterprises

range from single traders to

bid-build model

international conglomerates.

DJ Gribbin, founder of Madrus LLC

All aim to make a profit for

their owners/investors.

PPPs

A public-private

partnership (PPP) is

a contract between

a government

body and a private

company to

provide a service

or asset. The

JOINT PROJECTS

company expects

to make a

Many nonprofit

profit.

organizations col aborate

with public and private

enterprises to secure funding,

access resources, or raise

their public profile.

NONPROFIT SECTOR

This sector includes

organizations that are

owned by trusts, such as

charities and public

initiatives. They use any

money gained to fund their

activities and to pay their

employees.

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Evolving Structures

The structure of an organization determines where decisions are made, and the ultimate purpose of structure is to satisfy the customer in the most efficient and effective manner.

Types of structures

However, not all organizations have a simple hierarchy.

There are numerous structures within an organization In matrix structures, the strands of reporting are set and between organizations, and many companies are up as a grid. Staff are typically organized into teams having to restructure to keep up with changes in the responsible for project delivery, reporting to a project working environment. Increasingly, they are moving manager, but are also linked to a particular discipline away from traditional hierarchical structures (see right) or department (for example, engineering), and so must and creating flatter ones, such as matrix structures report to a functional manager as well.

(see far right), to speed up decision-making. Temporary collaborations are also becoming more common, in the form of virtual organizations (see above right).

Hierarchical structure

A traditional business has two broad functions: A traditional business structure is a hierarchy a delivery function, which includes research of reporting relationships, with a CEO at the top, and development (R&D), sales and marketing, and fol owed by directors, then managers, and then operations and supply; and a support function, which teams reporting in at successively lower levels.

includes finance, information technology (IT), and human resources (HR). Each function is typically broken down into departments run by a departmental head, and these are further divided into teams overseen by managers. This means that a traditional business structure is hierarchical, featuring a series of reporting relationships and a vertical chain of command. Team managers, for instance, report to their departmental manager, who reports to the directors, who report to the CEO. Even conglomerates, which are made up of multiple, unrelated businesses, usually have a parent company, the CEO of which has influence over its subsidiaries.

“To survive in modern

times, a company must

have an organizational

structure that accepts

change as its basic

premise…”

Ricardo Semler, CEO of Semco Partners

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MANAGING ORGANIZATIONS

Evolving Structures

54 55

VIRTUAL ORGANIZATIONS

THE STAR MODEL

A virtual organization is a network of independent American organizational theorist Jay Galbraith created organizations that are brought together, often the star model to explain why so many organizations temporarily, to produce a product or service. One fail to improve their performance by changing their example of this was the UK Government’s Project structures alone. He thought that structure should be Leadership Programme. Three separately managed guided by an organization’s strategy, or long-term goals, entities—Cranfield University, PA Consulting, and and that it should also be integrated with organizational The Project Academy—pooled their teaching, coaching, processes (how information is distributed), rewards and IT resources and facilities to deliver a development (motivating employees to embrace the strategy), and program for civil servants.

people practices (having the right workforce to take the organization in the desired direction).

STRATEGY

Matrix structure

In a matrix structure, staff have two lines of reporting: to a functional head and a project manager. This system PEOPLE

enables staff to work on a range of short-term projects STRUCTURE

while retaining links with their functional department.

R

P

E

R

W A R DS

O C ESSES

NEED TO KNOW

❯ Organizational structure determines how an organization is managed. It describes the hierarchy of decision-making, where each employee’s job fits within the overall system and how information is passed between reporting levels.

❯ A vertically integrated company is one that owns its supply chain and manages every stage of its product.

This enables it to adapt swiftly to change.

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Building Support

Defining what an organization stands for—its purpose, values, and ethics—plays an essential role in enlisting the support and cooperation of employees, customers, and clients.

Making statements

an image outlining where the

To be successful, managers need

organization aspires to be in the

their staff and the external parties

future—its long-term goals—based

they deal with to support their

on achieving its mission. Typically

organization’s strategy. This means emotive in tone, a vision statement that the organization must appear

describes the journey the

to be relevant—it must stand for

organization is on, which the

something that people can believe

manager wants people to buy into.

in and work towards. An effective

To this, a values statement can be

way for managers to achieve this

added, which then explains the

is through a mission statement.

values the organization will uphold

This is a public declaration that

while on that journey. These values

explains what the organization

usually include moral, ethical, and

does and why. Mission statements

environmental pledges, such as

should be engaging and easy to

how it will treat employees,

remember; for example, Google’s

suppliers, and natural resources.

reads: “To organize the world’s

Collectively, these statements

information and make it universally

form a pledge between the

accessible and useful.”

organization and those it deals

To support a mission statement,

with. It is therefore important that

managers may also produce a

the promises made are attainable

vision statement. This presents

and actively pursued.

Focusing attention

The advantages of a mission statement

are twofold for the manager. When

viewed external y, it forms part of the

organization’s image and brand and serves

to attract like-minded people, such as

employees, clients, and investors. It also

reminds existing stakeholders of what it

stands for. Internal y, it is an effective way to reiterate the organization’s strategy to employees, encouraging them to work

toward it. It also helps remind employees

of the organization’s commitment to

them, promoting trust. For the manager,

an effective mission statement creates a

MISSION STATEMENT

guiding light for and within the

This is what we do,

organization they run.

what we are,

and why we do it.

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MANAGING ORGANIZATIONS

Building Support

56 57

CASE STUDY

Uber Technologies, Inc.

Founded in 2009, Uber sought to reinvent private-hire transportation with its simple taxi-hailing app. As an upstart in an established industry, it needed to attract drivers and customers to its platform.

❯ Mission statement “Transportation as reliable as running water, everywhere for everyone.”

“OUR ORGANIZATION

❯ Vision statement “We ignite opportunity by setting IS RELEVANT TO

the world in motion.”

YOU–WE SHARE

❯ Values statement “We do the right thing. Period.”

YOUR BELIEFS.”

“Why do you exist

as a company?

What’s the really

compelling reason

why you exist?”

Jørgen Knudstorp, CEO Lego, 2017

VISION STATEMENT

VALUES STATEMENT

This is where we want to

This is our promise of how we

be in the future—it is the

will treat people and the planet

journey we are on.

while on our journey.

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Workplace Culture

The culture of an organization is a reflection of its personality.

Developing and sustaining a positive workplace culture can greatly improve morale and attitudes among staff.

The right culture

or more indirectly, through the

For example, a manager in a

The culture of the workplace

reputation arising from its actions.

high-tech business, where success

arises from everything that

Many factors can influence an

depends on rapid decision-making

happens within the organization.

organization’s culture (see below),

and innovation, might foster a very

Internally, culture influences how

not all of which may be within a

different culture from one in a

staff interact with each other; their

manager’s direct control, such as

regulatory body, where checking

productivity and how motivated

decisions made at a more senior

facts and carefully considering

they feel; and how they treat

level or where the company is

policy is paramount. A manager

customers and clients. It is also

located. However, as much as

should also consider the needs of

evident externally, either

possible, a manager should work

their staff, because people respond

directly, in how the

to develop a culture that

to different cultures in different

organization seeks

best suits their area

ways. The culture to avoid,

to present itself,

of responsibility.

however, is a negative one.

Creating a culture

An organization’s culture evolves over time and is influenced by many factors, such as its values, how staff are managed, and even its working environment. Managers must understand

these factors in order to effectively shape and maintain the desired culture.

CULTURE

Practices

Culture is a combination of

Place

numerous factors that can create a positive How an organization

and productive working environment

conducts itself can

The working

or a negative one.

influence how employees

environment provided

feel about working there.

for employees can have

positive or negative

effects on staff morale.

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MANAGING ORGANIZATIONS

Workplace Culture

58 59

TYPES OF ORGANIZATIONAL CULTURE

In the 1990s, Charles Handy—

an Irish management theorist

POWER CULTURE

ROLE CULTURE

and authority on organizational

A small number of

The power and influence

behavior—defined four distinct

people hold power

an individual can have is

and influence. Decisions

determined by their role

types of workplace culture (see

are made quickly and

within a rigid structure.

pp.22–23). Based on power, role,

bureaucracy is reduced, but

Decision-making and

task, or people, each culture

the organization is heavily dependent on the adapting to new circumstances can

has different strengths and

abilities of those in charge. Staff without be slow. Ambitious staff who value results and weaknesses for the organization

power may feel excluded and demotivated.

control over their work may feel frustrated.

and may suit some personnel

better than others. For a manager,

it is important to understand the

TASK CULTURE

PERSON CULTURE

type of culture that is present in

Organizations with a task

Everyone has power—the

their organization and to shape or

culture depend on the

organization exists to

harness it to best suit their staff,

unifying power of group

allow skil ed individuals

goals, and objectives. It is also

working. Personnel are

to achieve their own

selected for finite projects

objectives. This type of

essential to communicate any

and then redeployed to work where their

culture is typified by specialists or

cultural change to staff and

expertise is most needed. Staff must be

consultants who can operate with a degree

encourage them to buy into it.

flexible and adaptable.

of autonomy within an organization.

Vision

People

An organization’s

Values

vision—its goals and

To have a coherent

how it sees itself (see

Leadership

Employees and

culture, the majority of

pp.56–57)—should

stakeholders may feel

people working in the

be reflected in its culture.

The leaders of the

motivated by the values

organization must share

organization exemplify

an organization upholds,

the same values.

the culture and should

such as ethical standards.

set an example to staff

and the outside world.

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Managing Projects

To successfully oversee a project, managers need the skills to deal with the constraints of scope, time, quality, and budget, while also effectively leading a team and communicating with stakeholders.

Keeping a project on task

be readily acquired. For instance, a good project A project life cycle has several phases (see pp.48–49) manager should be able to produce a workable and a project manager must effectively manage each schedule that includes interim goals and tools of these so that the work is delivered on time, such as key performance indicators, enabling on budget, and to specification. This demands close them to monitor work and keep it on track.

control of procedures, strong teamwork, and clear Soft skills are interpersonal ones, such as good communication to all stakeholders. A manager communication. This is a key skill for managers, will also need to troubleshoot problems, such as a who will need to regularly share information with slipping schedule, as they arise (see box, right). All clients, higher management, and team members these challenges require a range of hard and soft skills who may be from different organizations, have (see below). Hard skills are technical ones that can diverse disciplines, or work in multiple locations.

Balancing act

E MANAGEM

Successful project management

EN

involves efficiently managing

IM

T

schedules, risks, financial resources,

T

relationships, individual and team

input, and a range of stakeholders.

To achieve all these objectives, project

PLANNING

BUDGETING

managers need a combination of hard

technical skil s and soft people skil s.

“75%

SELLING

ANAGEMEN

of long-term job

ISK M

R

T

success depends

on people skills, Hard skills

while only

These are technical skil s that

are easy to measure and to teach.

25% on technical They include defining the goals of a project, scheduling and

knowledge.”

budgeting, managing risk,

Peggy Klaus, business author, 2008

and selling.

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MANAGING ORGANIZATIONS

Managing Projects

60 61

OVERCOMING OBSTACLES

Every project manager is faced with chal enges at some stage. The table below shows some commonly encountered problems and gives suggestions on how they might be tackled. These obstacles include an unclear vision at the start of a project, falling behind schedule, scope creep (a change to the objective), and an unrealistic deadline.

Problem

Solution

Problem

Solution

• Seek clarity from senior

• Assess requests for

UNCLEAR

management/stakeholders

SCOPE

change against business

VISION

• Review initial objective

CREEP

case/project objectives

• Ensure team is clear on the

• Negotiate to align any

direction and avoids stal ing

change with project plan

• Revisit timeline and

• Brief stakeholders and staff

March

SCHEDULE

reassess interim goals

UNREALISTIC

on likely impact of new deadline

SLIPPING

• Map out remaining

10

DEADLINE

• Find out reason for delay

work and assess risks

SUNDAY

• Adjust expectations

to customers

• Identify most critical tasks

MUNICAT

M

IO

NEED TO KNOW

CO

N

❯ A Project Initiation

Document (PID) enables

managers to set out the business

case for a project, establish the

LEADERSHIP

NEGOTIATION

scope, size, and duration of the

task, predict any possible risks,

and plan a timeline for the work.

❯ Project planning methods

help managers set clear

objectives.

❯ Key performance indicators

TEAMWORK

SITIVE ATTITU

(KPIs) enable managers to see

O

DE

how closely they are meeting

P

goals such as remaining on

schedule and controlling costs.

Soft skills

These are interpersonal skil s that are

less easy to quantify than hard skil s.

They include the ability to lead, to

create a vision and inspire a team,

to communicate, to negotiate, to

have a positive attitude, and to

motivate and coach a team.

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Customers and

Other Stakeholders

In order to balance the demands and expectations placed on an organization, a manager needs a clear understanding of the people who use its products and services and those who have an interest in, and effect on, the business.

Why stakeholders matter

in order to understand what each

rise that will upset the customer.

An organization’s stakeholders are

group needs and wants from

Trying to please both parties by

vital to its success. Stakeholders

the organization. This allows

paying the rise and also keeping

are those parties that have an

managers to balance the interests

the product price low could then

interest in the organization,

of the various stakeholder groups

affect profits, resulting in a lower

such as its owners, shareholders,

with those of the company.

return for shareholders or owners.

employees, and suppliers, and also

At times, the interests of one

Hence, a balance must be struck

includes the customers who buy

group may conflict with those

between these opposing needs,

or use its products and services.

of others. For example, increasing

remembering that whatever action

Managers must be able to

pay will please employees but will

is taken may have consequences

identify all the stakeholders

push up costs, resulting in a price

for other stakeholders.

The bigger picture

Suppliers

Government

In any organization, there

Those who supply goods

Regulatory authorities

is a host of stakeholders –

or services need to make

influence how organizations

a profit. They also want

are run through their laws

internal and external – whose

C

the company to succeed

and standards, which gives

u

interests matter because

s

in order to be paid and

them a stake in the

to

they all contribute to the

to ensure future

business.

m

success of the business.

Those with a

business.

Few organizations

er

To make decisions

financial stake in

can survive without

s

that benefit al parties,

the business want to

putting their customers’

see profits. Their views

interests first. Dissatisfied

managers – who

areholders count because their

customers can usually

are themselves

Sh

investment sustains

go elsewhere.

stakeholders –

the company.

must know who

these groups are

The people who create goods

People living nearby are also

and understand

and services are crucial. Their

affected by an organization

concerns may include wages,

— from the jobs it offers to the

their concerns.

Owners

E

job security, conditions, or

problems it causes, such as

m

tend to be

p

career progression.

pol ution — so it is vital to

focused on

lo

recognize local impact.

y

making a profit

ee

while keeping costs

s

under control.

Community

Owners

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MANAGING ORGANIZATIONS

Customers and Other Stakeholders

62 63

In some organizations, larger

SATISFYING STAKEHOLDERS

stakeholder groups may consist

of subgroups, often referred to as

Customers are essential stakeholders in most organizations, although

“segments,” which have their own

identifying who the customers actually are is not necessarily straightforward, needs. Shareholders, for example,

as this example demonstrates. Here, the manager of a pet food manufacturer may include a segment of large

balances the needs of the company with those of the customer.

institutional investors, such as

pension funds, who might expect

dividends (regular financial returns

from their shares). A different group

of smaller investors may prefer to

MANUFACTURER

RETAILER

PURCHASER

CONSUMER

see the value of their shares increase

The manufacturer

The retailer wants to The customer wants The dog can eat so that they can sell them at a profit.

wants to sell their

buy the food at the

to buy nourishing

only the food that

“Stakeholder mapping,” usually

pet food for the best

lowest price and sel food at a reasonable is provided. If it a graphical representation of the

price to the retailer,

it for the highest,

price that their dog

does not like the

whose broader

while meeting the

will enjoy. The

food, the

interests of key stakeholders, can

needs must also

needs of suppliers

customer can

customer wil

help managers make decisions—for

be satisfied.

and customers.

shop elsewhere.

want to find an

example, when planning a project

alternative brand.

or developing a marketing strategy.

Suppliers

Government

“To keep everyone

Cust

invested in your

omer

vision, you have

s

to… really analyze

areholders

Sh

Manager

who the different

The manager wants the

organization to prosper

while balancing the

stakeholders are

demands of al

stakeholders.

and what they

individually

respond to.”

Alan Stern, former NASA executive, 2011

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Products

and Services

In recent years, advances in digital technology have changed the nature of products and services. However, the overall objectives of managers involved in these industries remains the same.

Evolving markets

could specialize in producing vinyl

that they produce—in favor of

Traditionally, a “product” was a

records and distributing them to

“intangible” digital products—but

physical item that could be bought

main-street shops, whereas today

they have also adapted to new

and owned, and a “service” was

most music is distributed as a

forms of distribution. This follows

an activity performed for a buyer.

download in digital format. This

a more general trend, in Western

Nowadays, however, the distinction means that record companies have economies at least, of consumers

between the two is not so clear.

not only reduced the number of

preferring experiences to things—

Fifty years ago, a record company

physical, “tangible” products

a fact that has led to a flowering of

Tangible

Intangible

products

$

and intangible

Today, music can

In recent years, there has been a huge

be downloaded

shift toward intangible products.

from a variety of

People used to buy records, cassettes,

websites. It is purely

and CDs, whereas today consumers

electronic and

tend to download music as digital files.

can be accessed

Both the product and the service have

almost anywhere.

changed, marking a shift from the

physical to the digital, and from

the main street to the internet.

$

Tangib

“Being on par in

le p

T

r

ra

o

d

d

it

u

io

c

w

n

t

a

a

s

s

l

a

y

v

, m

terms of price

ail

u

t

a

s

a

b

ic

n

le

g

i

o

b

n

c

le

ly

o

u

p

a

l

r

d

od

s a

be

u

c

and quality only

bo

t t

u

h

o

g

at

n

h

t

t

h

a

e

n

m

d

a

s

i

o

n

l

d

str

gets you into the

eet

game. Service

wins the game.”

Tony Alessandra, author

and marketing expert, 2009

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MANAGING ORGANIZATIONS

Products and Services

64 65

the service sector and a decline in

profit for owners or shareholders.

manufacturing. This shift from the

Managers in charge of any part

NEED TO KNOW

tangible to the intangible, and from

of the creation and delivery

❯ The sales funnel is the entire sales products to services, has had an

process monitor its efficiency,

process, including marketing, from

impact on all sectors of industries.

which is measured by how well

initial contact with a customer to

Many energy companies no longer

money, labor, and materials are

final sale.

see themselves as suppliers of

converted into products or services.

❯ A bill of materials (BOM) is a list electricity and gas but rather as

Quality is the responsibility of

of all the components necessary

providers of heating and lighting,

a quality assurance manager,

to build a product or service.

which has enabled them to develop

whose role it is to ensure that

❯ A product tree or product

associated products and services.

the product or service meets a

structure tree is a visual device that

Nevertheless, the objectives of

certain standard. If it fails to

product managers often use when

considering al the elements a

organizations that offer products

do so, the organization can

product or a service may require.

or services remain unchanged.

face the immediate wrath of its

❯ “Feature bloat” is a derogatory

For a private-sector company, the

customers, not least in the form

term used to describe a product

product or service must make a

of damaging online reviews.

that has too many features.

“Retro” revival

Although the internet offers a

vast choice of music, old-style

CASE STUDY

tangible products are

currently enjoying

Rolls-Royce

a revival.

In the 1990s, Rol s-Royce replaced

its product-based business model

with a customer-based model. It

did so because its aeroengines were

becoming ever more durable and

so were selling in fewer numbers.

In response, it expanded its limited

maintenance and repair service,

which saw profits rise from £300

million in 1993 to £1.2 billion by

2002. In the same year, it launched

Rol s-Royce CorporateCare®, which

offered maintenance at a fixed price

for each hour its engines were in the

air, plus access to lease engines

during maintenance. This profitable

service benefits clients by making

maintenance costs predictable

and removing any risks related

to unexpected events.

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Supply and Demand

The law of supply and demand explains the relationship between sellers and buyers. A manager must understand this fundamental concept in order to ensure that their business runs profitably.

Abundance and scarcity

of supply with plenty of competition, of labor, while demand is affected For centuries, the law of supply

people can choose whom they buy

by consumer preferences and

and demand has been central to

from, and so suppliers have to

influences such as competing

Western capitalism. Essentially, it

charge less. If other suppliers see

products, consumer incomes and

states that there is a price at which

that they can charge more for some

needs, and seasonal fluctuations.

buyers are prepared to buy and at

products, they may decide to enter

Managers must monitor and

which sellers are prepared to sell.

that market, creating more supply.

balance both supply and demand to

If there is a scarcity of a product or

Buyers will then have more choice,

regulate output and prices to their

service that people want, people

so prices will drop accordingly.

benefit. This requires continuous

will pay more for it and suppliers

Supply hinges on factors such as

analysis of not only sales but also

can therefore charge higher prices.

available skills and raw materials,

market trends and forecasting and

However, if there is an abundance

production technology, and the cost planning for future demand.

“price… does not

High supply/low demand

depend on merit

A vendor who has a large stock of fruit and little demand can lose money because they have to sel but on supply

the fruit off cheaply since it cannot be stored.

and demand.”

George Bernard Shaw, Socialism, 1926

A balancing act

This market fruit stall il ustrates some of the key factors in supply and demand.

A vendor must ensure that they have a

regular supply of good-quality produce

from one or more reliable growers.

However, if they stock too much for

the demand, they may have to reduce

prices to avoid wasting the fruit,

reducing their profits. If demand is high

and they cannot meet it, customers

may either look elsewhere or be

prepared to buy less and pay more if

the fruit is generally scarce. The goal

is to achieve a state in which supply

and demand are roughly in balance.

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MANAGING ORGANIZATIONS

Supply and Demand

66 67

ETHICS AND THE LAW OF SUPPLY AND DEMAND

NEED TO KNOW

The law of supply and demand suggests

❯ A free market is a largely

that people will buy more of a product they unregulated economic system

consider to be excel ent value for money.

in which prices for goods and

This has led to the development of fast-moving services are determined by

markets that provide goods at very cheap prices.

supply and demand.

One example of this is the fast-fashion industry.

❯ A monopoly occurs when a

In order to produce low-cost clothing, some supplier or organization controls

retailers have resorted to sourcing garments from enough of the market to force a

manufacturing sweatshops, where workers are change in price.

housed in poor and sometimes dangerous conditions and are paid low wages. However, there has been a

❯ Price fixing is an agreement

backlash against this practice. Several wel -known between competitors to sell a

brands have been “named and shamed,” with the product at a set price—lower,

result that some customers are boycotting their higher, or its current level. In some

products, despite the low prices.

markets, this is considered il egal.

High demand/low supply

Balanced supply and demand

A vendor who does not anticipate demand

Managing the supply of seasonal produce correctly, and has too little stock loses money, which while also assessing both present and future demands, affects profits and consumer confidence.

keeps the business in equilibrium.

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Marketing

and Selling

Effective marketing is essential in any organization that sells products or services or has a cause to promote, such as a charity. It requires a knowledge of the customers and their needs, and how to reach them.

The marketing process

they will pay, how they would prefer to access it, and Marketing is a complex process that involves what they will expect from the product itself and the identifying a need, developing a product or service organization offering it. In addition, the manager must to meet that need, and promoting it to potential identify the best way to promote the product.

customers. The product should be offered at a price Although the exact steps a manager will take to that people will pay and accessible from suitable market their product will depend on what they aim outlets, and the buying and owning experience should to sell, market and customer research is essential.

be as positive as possible. For the manager, this Developing a detailed strategy is also vital to ensure requires researching markets to find opportunities and that the marketing process reaches the right audience learning what customers need from the product, what and encourages it to buy the product.

1

2

Marketing

in action

One of the most widely

used theories about

Identify a market

Develop a product

effective marketing that

The first task is to research a market and identify Having identified a need, a Product

covers the whole process

a need that is currently unfulfil ed by existing (which includes services) should be

is “The 7 Ps,” which refers

products and services. What do people need?

developed to satisfy it, to be sold at

to product, price, place,

a Price that customers will pay.

promotion, physical

evidence, process, and

people. This theory

5

coming

6

was proposed in its

soon

modern form as the “4Ps”

10%

in E. Jerome McCarthy’s

OFF

Basic Marketing (1960).

Another marketing concept,

of debatable origin, is

AIDAS—attention, interest,

desire, action, and

Encourage action

satisfaction. Both theories

Capture attention and interest

Customers need to Desire the

are demonstrated in the

Customers must be made aware of the Product Product before taking Action

scenario shown here.

and its benefits through advertising or Promotion that captures their Attention and inspires Interest.

and buying it, perhaps through

incentives, such as a discount.

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MANAGING ORGANIZATIONS

Marketing and Selling

68 69

THE VALUE OF

NEED TO KNOW

BRANDING

❯ Search engine optimization

“Marketing’s job Customers commonly feel more is a digital tool, used to make an

confident buying products and

organization’s website easier

is never done. It’s services from brands that they like to find on the internet.

or have an affinity with. For the

❯ Targeted marketing involves

about perpetual

customer, a brand embodies the

pinpointing the specific needs

identity and values of the whole

of a market and tailoring the

motion. We must organization, which it should seek sales message to that market.

to maintain. For the organization,

❯ Inbound marketing is the

continue to

its brand values should underpin

process of attracting customers

every aspect of how it deals with

via compel ing internet content.

its customers. This extends to the

innovate...”

quality of its products, how and

❯ USPs, or unique selling points,

Beth Comstock, Former CMO &

where they are made available, and

are the qualities of a product

Vice Chair of General Electric, 2014

how customers are treated at the

or service that make it different

point of purchase and beyond.

from those of the competition.

3

4

?

?

?

?

Develop a product

Having identified a need, a Product

Plan a marketing campaign

Determine place

(which includes services) should be

With a market identified and a Product developed, The Product must be made available to customers developed to satisfy it, to be sold at

a marketing strategy should be planned based on through appropriate outlets, or Place, at the right a Price that customers will pay.

the original research to ensure it is effective.

time and in sufficient quantities to meet demand.

7

8

Encourage action

Sell product

Ensure customer satisfaction

Customers need to Desire the

Every step of the buying process, from advertising Customer Satisfaction is vital. It will be influenced Product before taking Action

to final purchase – the Physical evidence – must give by how the customer is treated by the business at and buying it, perhaps through

the customer confidence in the Product.

each stage – the Process – and its staff, or People.

incentives, such as a discount.

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Winning Deals

Managers always aim to strike the best deal, but this should never be done at the other party’s expense. Far from being a one-off transaction, a successful deal is the basis of a sustainable working relationship.

Negotiating success

work to resolve a problem (see

talking so that everyone’s needs—

To manage effectively, winning is

pp.188–189). To broker such deals,

especially considerations of

not simply making a fast deal and

both parties must consider the

scheduling—are clearly understood.

moving on. According to Stanford

other’s interests at all times. People

Preparing well so that the pricing

University professor Joel Peterson,

tend to dislike being sold things

reflects good value for what is

successful negotiation is more of a

but do like to have their needs met.

being offered is also important.

conversation in which both parties

This means listening rather than

For these reasons, being honest

Prisoner’s Dilemma

Prisoner A talks

Prisoner B talks

Ideal y, people should work together

For talking to police and

For talking to police and

to achieve a win-win. However, game

betraying Prisoner B,

betraying Prisoner A,

theory—a field of study in which

A is jailed for 2 years.

B is jailed for 2 years.

applied mathematics is used to analyze

how parties make interdependent

decisions—shows that this is not always

the case. In the “Prisoner’s Dilemma”,

an imaginary scenario posed by US

researchers Merrill Flood and Melvin

Dresher in 1950, two rational people

are unlikely to cooperate, even if it

appears to be in their best interests.

Two criminals are held separately for a

crime. If each betrays the other, they

each face two years in jail. If one stays

silent while the other betrays them,

the traitor goes free, while the other

receives three years in jail. If both

Prisoner A stays silent

Prisoner B talks

stay silent, they each receive one

Despite staying silent,

For talking to police

year in prison. Collectively, it would

Prisoner A is betrayed by B

and betraying Prisoner

be best for both to keep quiet. But

and is jailed for 3 years.

A, B is set free.

both players will make the move

that is best for them individual y,

but worst for them col ectively:

they are both likely to betray

each other.

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MANAGING ORGANIZATIONS

Winning Deals

70 71

and authentic in negotiations, and

CLOSING A DEAL

striving to ensure that solutions are

fair, are key parts of deal making.

Being skil ed at closing

of the deal and ask whether the

Open, constructive negotiation

a deal is vital. A meeting

other is ready to agree. It is then vital

is especially important given the

can go well for all parties, for the active party to stay silent, human inclination to compete

but unless an agreement

which forces the other to respond.

rather than cooperate. Economists

is reached, the deal is not

In the perfect scenario, both parties

model this tendency in the form

done. Fol ow-up meetings may be

agree to the deal, but if one raises

needed to reach a point where a deal

any qualifying conditions, the other

of the Prisoner’s Dilemma, which

can be agreed on, ideal y face-to-face

should ask further questions to

shows that the best result for a

or on the phone. At this point, one

resolve issues. With goodwil ,

group is never achieved by self-

party should summarize all the points

good deals can be done.

interest alone (see below).

Prisoner A talks

Prisoner B stays silent

“Trust is the

For talking to police

Despite staying silent,

and betraying Prisoner

Prisoner B is betrayed by A

lubricant

B, A is set free.

and is jailed for 3 years.

for successful

business

transactions.”

Joel Peterson, 2018

Prisoner A stays silent

Prisoner B stays silent

For staying silent and

For staying silent and

refusing to betray Prisoner

refusing to betray Prisoner

B, A is jailed for 1 year.

A, B is jailed for 1 year.

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Strategic Thinking

An organization’s strategy—the vision of where it wants to be in the future—should always be at the forefront of a manager’s mind, influencing every aspect of their daily decision making.

Developing strategy

analysis, which can be used by

factors (see below), while the

Strategic thinking is a vital aspect

managers to identify strengths,

Boston Matrix focuses on internal

of a manager’s role. It identifies

weaknesses, opportunities,

capabilities (see box, below right).

long-term goals and determines

and threats (see pp.104–105). The

Together, these tools can be used

how to achieve them. Tools for

PESTLE framework is an effective

to build strategies that are both

strategic thinking include SWOT

method of analyzing wider external wide-ranging and adaptable.

PESTLE

Political (P) and Economic (E)

The PESTLE (political,

economic, social,

Evaluate the political and economic

technological, legal,

climate. How might operations be affected

environmental) tool is an

in countries with which diplomatic relations effective way for managers

are strained? What is likely to happen to

to analyze the external

exchange rates or inflation?

factors that affect an

organization. It ensures that

all decisions are based on

reality rather than wishful

thinking. Ideal y, managers

should communicate the

resulting strategy throughout

the organization and

review it regularly to

keep it up to date.

There are many

Organization

variations on the

PESTLE analysis,

which bring other

factors into play.

Social (S) and Technological (T)

Gauge the impact of social and technological factors on the organization. Is the demographic demand for products or services growing or

declining? Can technology be used to

streamline operations? Do technological

advances pose threats or bring opportunities?

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MANAGING ORGANIZATIONS

Strategic Thinking

72 73

WHO CREATES STRATEGY?

NEED TO KNOW

Strategy used to be considered the sole responsibility

❯ Strategy focuses on a manager’s long-term goals.

of senior managers, but Canadian academic Henry Mintzberg argues that strategy can arise from any level

❯ Tactics concern the short-term actions that managers of an organization. The more people that managers can need to take in order to reach long-term goals.

involve at each level, the greater the number of ideas and

❯ On the difference between strategy and tactics, the stronger the commitment to them. But strategy is not Chinese strategist Sun Tzu observed: “Strategy just for the organization as a whole—each managerial without tactics is the slowest route to victory.

unit, function, or department needs a strategy.

Tactics without strategy is the noise before defeat.”

“Know yourself and

you will win all battles.”

Sun Tzu, Chinese military strategist, c.5th century bce THE BOSTON MATRIX

Developed by the Boston Consulting Group in 1968, the Boston Matrix can be used by managers to set strategies for products, services, or functions.

Those that are classed as “Stars” should be invested in, since they are high growth and have a high market share. “Cash cows” should be milked, since they are low growth but have a high market share. “Question marks,” on the other hand, deserve further analysis, since they have the potential for high growth but currently enjoy a low market share. Final y, “Dogs” should be sold off, since they are low growth and have a low market share.

Success

HIGH

ET KRA TH

ANALYZE

INVEST

F M OW

Legal (L) and Environmental (E)

R

TE O G

AR

Examine the legal and environmental

context. Will future legislation or regulatory change affect the organization? Does the

organization have a firm environmental

SELL OFF

MILK

strategy, and do its activities comply with LOW

sustainability requirements?

LOW

RELATIVE MARKET SHARE

HIGH

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Effective Planning

Successful organizations are the result of in-depth planning, not luck.

To get to where it wants to be in the future, an organization must map out the course it will take and all the stages involved along the route.

Planning for success

in the desired time period. As part of the planning To achieve any goal, resources—such as time, money, process, managers need to embrace uncertainty, people, and equipment—must be identified, sourced, preparing possible alternative courses of action to and then allocated efficiently. Managers should prevent the plan from being derailed by future events.

prioritize tasks according to importance and establish Having a clear plan will encourage buy-in, help staff to a timeline for completion. By instituting monitoring feel that they are all working towards a common goal, processes, managers will be able to evaluate progress and facilitate better understanding and communication towards the goal and ensure that the goal is achieved between everyone involved.

Four types

Tactical planning

of planning

Managers ask “What must happen

To run an organization successful y,

now?”, setting and planning

a manager needs to plan in both the

short-term objectives in order

long and short term. The broadest,

to achieve the longer-term goals.

most far-reaching form of planning is

strategic planning, in which important

external factors, such as potential

market changes, are evaluated against

the organization’s goals. The most

extensive form of strategic planning

is scenario planning, in which a

number of possible future situations

are considered and assessed (see box,

right). Tactical planning is then used

to identify the specific actions that

must be taken. The most immediate

form of planning is operational

planning, whereby the manager

details the way the organization

functions on a daily basis, such as

how it makes its products or delivers

its services. However, no amount of

Strategic planning

forward planning can prevent unseen

chal enges, and it is essential that

Planning strategical y addresses

managers develop contingency plans

the question of why things need to

for each planning stage, in order

happen. It encompasses a high-

to keep the organization on track.

level view of an organization and

where it wants to be in the future.

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MANAGING ORGANIZATIONS

Effective Planning

74 75

“Scenario planning is a

CASE STUDY

discipline for rediscovering

Royal Dutch Shell

The value of scenario planning was recognized by Royal the original entrepreneurial

Dutch Shell in the 1970s, when the oil market was highly volatile due to the formation of the OPEC cartel of power of creative foresight

oil-producing nations. Shell had begun using a “What if?”

approach to plan for potential scenarios in the 1960s, in contexts of accelerated

which left it better prepared than its rivals to weather the economic storm. The company continues to plot change.”

“Shell Scenarios”, including planning for a low-carbon future, along with increased water and food insecurity.

Pierre Wack, developed scenario planning

at Royal Dutch Shell, 1985

Operational planning

Planning the operational, day-

to-day aspects of an organization

involves formulating an ongoing

plan of what needs to happen

and how it should be done.

Contingency planning

Planning for contingencies involves

preparing an alternative course of

action that can be fol owed in the

case of unexpected events.

SCENARIO PLANNING

The aim is to consider different

ways in which the future might

unfold, and the impact of each

scenario on a particular issue.

The rule of thumb is to develop

at least four “What if” scenarios

to get a broad range of outcomes.

However, variables based on data

such as demographic trends are

more reliable than those based on

speculation—for example, about

future economic conditions.

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Disruptive

Technology

Every organization relies on technology, whether for basic communication or as part of a manufacturing process or service provision. However, as technology evolves it brings both opportunities and threats.

Taking a leap

replaced film in the early 2000s. Such sudden Updating technology is an essential part of ensuring and unforeseen new products, referred to as that an organization operates effectively and remains

“disruptive technology” by US academic Clayton competitive. However, it is equally important to Christensen, have the power to reshape whole anticipate how evolving technology may impact on industries. Established products and brands can the organization’s products and services in the future.

rapidly become obsolete, while fledgling start-ups Technology usually develops incrementally, through may become global giants.

continual improvement, as seen in the steady evolution For a manager, disruptive technology can affect of the automobile. However, sudden leaps also occur, their organization in a number of ways. First, it has such as the advent of digital photography, which the potential to make any technology currently used New ways

Work life before the cloud

of workings

Employees are restricted to work hours at set locations, using a local server. The capabilities Cloud computing—the hosting

of mobile devices, such as smartphones, is

of software, files, and information

limited to the amount of data they can store.

online—illustrates the impact that

disruptive technology can have for

managers. In the past, the vital data

and programs used by an organization

was held on individual computers and

local servers, which meant that most

employees who used them were

essential y deskbound. With these

resources now online, staff can access

everything they need via the internet,

al owing for far greater flexibility in

how, where, and when they work.

Outside the workplace, the cloud is

also revolutionizing daily life through

“smart” devices, known as the Internet

of Things (see pp.42–43). Connected

togther via the cloud, these give users

remote control over the technology

in their homes, making life yet

more flexible.

MODEM

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MANAGING ORGANIZATIONS

Disruptive Technology

76 77

outmoded or even redundant, resulting in the need There is no clear answer to this, which serves to to invest in replacements—particularly if competitors illustrate how disruptive such sudden changes rush to be early adopters. While the organization will can be to an organization.

benefit from having the latest technology, it can also cause disruption within the workplace, as new practices are implemented and staff trained. Secondly, CASE STUDY

disruptive technology can sideline the products an organization manufactures or supplies, which can

Apple and Netflix

undermine its very existence unless it is able to Apple and Netflix are both good examples of disruptive innovate or find alternative markets for its goods.

start-ups. Apple made the leap from existing technology In order to benefit from—or prevent the damage that utilized computers as merely tools for handling documents and created entirely new ways of using caused by—disruptive technology, a manager

them. Netflix attacked the video rental model in 1997

must stay alert and be willing and able to respond by sending DVDs by mail and then disrupted the its own accordingly. However, they should first scrutinize model by offering on-demand online video streaming, any new innovation and assess whether to adopt attracting 151 mil ion subscribers by the end of 2019.

it—as it may itself be soon surpassed—or to wait until it becomes more established.

Fatima: Have you viewed the

Cloud

latest spreadsheet and video update

from the team in Delhi?

computing

The “cloud” is an internet

Matteo: Yes, I am looking at the

space that enables users to

spreadsheet now. I will export it as

store and access data using

a PDF and attach it to the sales brief.

remote servers instead of a

local computer’s hard drive.

Fatima: Fantastic, do you have time

to edit the video before we meet?

Mobile new world

Being able to access and

Matteo: OK, although I will need to

store software and data

update the app on my phone first.

online allows for mobile

working. Smartphones

become as capable as

Fatima: If you are free tomorrow,

desktop computers.

can you join me in a video conference

with the managers in Germany?

Matteo: No, sorry, I am working

for another client at home tomorrow,

all day. I will check my schedule.

MODEM

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Organizational

Learning

For an organization to thrive, its managers need to foster a culture of learning. Learning through experience and sharing the resulting knowledge will ensure continuous improvement and development.

Learning to improve

if managers can establish a culture

by a flatter management structure,

In times of change, managers

in which everyone is creating,

with fewer lines of reporting, which

and employees must be prepared

acquiring, and sharing knowledge.

makes it easier for managers to

to adapt rapidly. For example, they

For learning to flourish, managers hear individual voices. Managers may need to respond to what their

need to nurture a supportive

should communicate clearly and

competitors are doing or to a new

environment that enables people to

openly, allowing staff at all levels

technological development. The

learn from mistakes rather than be

to understand what is going on

ability to change quickly and build

blamed for them. Employees should

and put mechanisms in place

capability is greatly enhanced by

be encouraged to voice opinions

to ensure that information

learning—and the impact on an

and be valued for the contributions

is shared, not kept for

organization’s success is far greater they make. This can be facilitated personal advantage.

Senge’s five disciplines

Peter Senge popularized the concept of the “learning organization”

TAL MODELS

in his 1990 book The Fifth Discipline. It refers to an organization that facilitates learning and uses that learning for continuous MEN

transformation. Senge’s five principles, or “disciplines,” are useful to managers trying to establish a culture of learning. The fifth discipline is systems thinking, which integrates the other four.

The thought processes that underlie a person’s perception of what is happening and how

things work can be positive or negative. A

d manager wil help expose them.

goo

“Through learning

we become able

.

to do something

Y

we never were

STER

n as personal

A

able to do…

L M ent to learning and to and continuously A itm

we extend

N m

SO

our capacity

PER

anagers should encourage team

to create…”

ng that learning is know

bers to learn rapidly

astery. M

Peter Senge, The Fifth Discipline, 1990

An individual’s com

applyi m emm

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MANAGING ORGANIZATIONS

Organizational Learning

78 79

HOW PEOPLE LEARN

Different people learn in different ways. Managers need to Some team members will learn best in a group situation, take these “learning styles” (see pp.208–209) into account for instance, while others may prefer to perfect their skil s and offer a variety of learning opportunities to employees.

through private practice before presenting them in public.

PRACTICE

FORMAL TRAINING

LEARNING FROM OTHERS

GROUP LEARNING

Practicing in a low-pressure

Taking a course or being

Watching other people and

Discussing ideas and openly

environment can help people

sponsored through college

gaining from their experience

reflecting on and learning

perfect what they are doing.

wil suit certain employees.

can reinforce learning.

from them can be invaluable.

SYSTEMS THINKING

The understanding that an

organization is made up of

Liste

TEACHING OTHERS

p

n

interdependent parts that

r

i

a

n

c

g

Teaching others forces the

t

,

T

i

c

le

E

e

a

A

teacher to think more deeply

must work in harmony. This

n

s

e

r

a

n

M

e

r

i

d

e

n

about their own knowledge,

can help managers assess

g

L

t

k

o

e

f

E

c

y

ro

A

giving them insight.

learning across all parts of

t

r

t

m

R

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e

o

a

N

e

t

s

o

their organization.

n

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The thought processes that underlie a person’s n

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perception of what is happening and how

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Market Forces

Economist Michael Porter identified five competitive forces that act on every industry. His Five Forces model enables managers to assess the ability of their organization to overcome that competition.

The nature of competition

One important influence on the success of an Flying into turbulence

organization is the competition—the number and Porter’s model can be clearly applied to the airline activities of rivals that provide similar products or industry. The strength of all five forces makes the services. It is therefore important to know what your airline business fiercely competitive, with low competitors are doing. In the 1970s, Michael Porter profit margins. Established rivals all compete on took the concept further by defining other competitive price and customers can easily search for the best forces in addition to rival firms. His article “How deal. Suppliers, such as manufacturers or airports, Competitive Forces Shape Strategy,” published in take much of the profit. New players often offer the Harvard Business Review in 1979, illustrated how low-price fares. Substitutes are available in other awareness of these wider competitive forces can help forms of transportation: trains, buses, and cars.

managers understand their organization’s position in the marketplace and so move toward one that is more profitable and less vulnerable to attack.

Porter identified five forces that influence an organization’s ability to attract and effectively serve Bargaining power

its market and ultimately make a profit. His Five Forces of suppliers

model is sometimes represented as a cross-shaped Those who supply a

structure. Existing competitors—the most obvious scarce or valuable

resource, with few

force—are placed at the center, surrounded by alternatives, can

the four other forces. The bargaining powers demand higher prices.

of buyers and of suppliers form one pair of complementary forces, placed at opposite sides of the diagram. Potential new entrants and

substitute products form the other pair of forces.

NEED TO KNOW

BLUE OCEAN STRATEGY

❯ Low profitability is associated

Blue Ocean Strategy (BOS) is a marketing

with low entry barriers, many

theory and title of a book by W. Chan Kim and substitutes, intense rivalry, strong

Renée Mauborgne. BOS states that a company

suppliers, and/or strong buyers.

is better off searching for uncontested

marketplaces instead of competing in existing

❯ High profitability is associated

with high entry barriers, few

ones. The idea is to create and capture new substitutes, weak rivals, weak

demand, making the competition irrelevant.

suppliers, and/or weak buyers.

A good example of BOS is Netflix. The firm

created uncontested marketing space by

❯ The strongest competitive

loaning movie and TV shows over the internet, force determines the overal

something that no one else was doing at that profitability of the industry.

time (see p.76).

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MANAGING ORGANIZATIONS

Market Forces

80 81

Threat of new entrants

New firms can win market

SOFT DRINKS

share from existing companies,

but their power is limited by

In the soft drinks industry, market forces are barriers such as expertise.

relatively weak. Big brands limit the threat of substitute products by ensuring wide product availability: for instance, installing branded vending machines so that competitors cannot offer their products in the same places. By contrast, the Dr. Pepper brand minimized its vulnerability by avoiding the top-selling cola segment, maintaining a narrow flavor line and marketing extensively.

Bargaining power

Rivalry among

of buyers

existing competitors

Powerful buyers, or

The number and

those with multiple

strength of rivals can

choices, can exert

squeeze profits, but a

pressure to lower the

distinctive brand

prices they pay.

identity can help a firm

win market share.

“The key to growth—even

survival—is to stake out a

position that is less vulnerable

Threat of substitute

products or services

to attack from head-to-head

If a similar or more attractive

product is available elsewhere,

opponents.”

it can reduce prices.

Michael Porter, Harvard Business Review, 1979

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Gap Analysis

Comparing present performance with what was intended, and analysing the difference—the “gap”—between the two, enables managers to identify and address weaknesses within an organization.

Managing improvement

scheduling—and to assess many

A form of strategic planning, gap

different issues. For instance, when

Closing the gap

analysis begins with evaluating the an athletic club’s membership Gap analysis is a four-step process

current “state” of a manager’s area

drops and it misses its subscription

that can be used to give immediate

of responsibility by comparing the

targets, or there is a marked fall in

and long-term improvements.

actual situation with what was

the quality of coaching it delivers,

In order for it to be successful,

expected or desired. This reveals

gap analysis could help identify

a manager must understand the

any missing or weak strategies,

and implement more effective

organization’s current position

capabilities, or resources. By

administrative and athlete-

and set clear, measurable

comparing the current state with

development systems. Or when

objectives for the future.

the target state, the manager

a dairy farm regularly runs short of

can decide what steps need to be

animal feed, it could point to

taken in order to bridge the gap.

improvements needed in stock

Gap analysis can be used in a

management systems. If some

PRESENT

range of different management

members of a team are performing

Low efficiency and

settings—from personnel

better than others, gap analysis

weak profit margins

management to budgets and

could help identify best practices.

ISSUES-BASED

PLANNING

An alternative evaluative tool to

gap analysis, issues-based planning

is most effective when applied to

internal problems. It is well suited

to managers in young or resource-

poor settings where multiple issues

“To be

are faced and involves:

❯ Identifying pressing issues, such

successful, your

as insufficient funding or low

customer satisfaction.

personal plan

❯ Agreeing on action plans—

including who is responsible for

must focus on

each task—to address each issue

over the next 6–12 months.

what you want,

❯ Executing the action plans and

regularly tracking progress.

not what you

Once the issues have been resolved,

have.”

a broader, more complex strategic

planning model can be adopted.

Nido Qubein, President, High Point

University, North Carolina

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MANAGING ORGANIZATIONS

Gap Analysis

82 83

1. Identify area of analysis and

THE VRIO FRAMEWORK

goals to be accomplished: establish which management functions are failing and identify To help determine the internal strengths and measures to reverse the trend.

weaknesses of an organization, a manager may use the VRIO framework. This tool is used to identify the organization’s competitive advantages by asking four questions about its resources and capabilities. Do they add value and enhance overal performance?

2. Establish current state: analyze quantitative Are they rare and in demand? Are they imitable and data—such as employee turnover and rates of therefore difficult for competitors to copy? Are they equipment failure—and qualitative data, such as sufficiently organized within the organization? This customer feedback.

insight can then be used as part of a gap analysis or separately to refocus the organization’s strategy.

3. Define future state: project a

realistic target for employees that is achievable and will enable the organization to function effectively and successful y.

FUTURE

20 percent increase in

4. Bridge the gap: compare current

efficiency; 25 percent

state with future state and identify

increase in profits

measures that will help

get back on track.

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Benchmarking

Benchmarking is a technique that managers can use to enhance the performance of their team or company by studying successful rivals, making comparisons, and initiating improvements.

Setting standards

best practices it employs that

Internal review

Understanding how other teams

might underpin its success.

When used within an organization,

or organizations succeed is an

Having studied the benchmark,

benchmarking allows a manager

important tool for any manager.

the manager then needs to apply

to make comparisons at all levels—

Benchmarking, as this is known,

what they have learned to their

between departments, teams, or

enables managers to identify

own situation and implement

individuals. Again, the objective is

any weaknesses in their own

plans for improvements.

to identify the strengths in one and

business by comparing key aspects

of it with those of leading rivals.

When using this technique,

Assess weaknesses

Establish a benchmark

a manager must first determine

Rahul, a professional dog walker, has

Rahul compares his dog to a

an appropriate benchmark—a

few clients. He fears that his own dog’s

competitor’s, whose pet gives a

rival team or organization whose

scruffiness may be deterring them.

much better impression to clients.

success they wish to mimic. They

should then study that benchmark

by looking at its performance—

comparing specific areas, such

as product quality, customer

satisfaction, or profitability. The

manager should also look at the

processes it uses, such as how it

produces and delivers its products

or services. Finally, the manager

1

2

should explore the benchmark’s

organizational strategy and any

Gather data

Develop a plan

Rahul also conducts research to

Based on his research, Rahul

The process

discover how best to improve

decides on a detailed plan to

the appearance of his dog.

improve his dog’s appearance.

The exact process that a manager wil

fol ow when benchmarking depends

DOG GROOMING

on the nature of their organization,

the nature of the competition, and the

purpose of doing the benchmarking.

The most important steps are

OPEN

identifying the weakness in their

own organization; setting a realistic

benchmark; and researching the gap

between the two organizations. Once

an action plan has been decided, it

should be reviewed to ensure that

4

5

the outcomes are being met.

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Benchmarking

84 85

the weaknesses in the other,

which should then be addressed.

NEED TO KNOW

CASE STUDY

This process is especially useful for

❯ A benchmarking gap is the

Formula 1

companies that operate in multiple

difference between a company’s

The world of Formula 1 motor

regions, or produce a portfolio of

performance and that of its target

racing is highly competitive,

goods or services. The technique

benchmark. The manager should

with just fractions of a second

can also be used to determine

aim to bridge this gap.

making the difference between

the best practice in areas such

❯ The “best in class” is the highest winning and losing. Reducing the

as marketing, finance, and human

standard achieved in a particular

time taken during pit stops is

industry. It sets the benchmark

resources, establishing ethical

therefore critical. In 2012, it took the

for other companies.

standards, as well as when

best teams around 2.4 seconds to

change all four wheels on a racing

considering new technology.

car. This time has since been

reduced dramatical y, partly by

teams meticulously studying what

Establish a benchmark

Identify differences

the fastest ones are doing and

Rahul compares his dog to a

Having set a benchmark, Rahul

how they are doing it. Today,

competitor’s, whose pet gives a

establishes what would make

four wheels can be changed in

much better impression to clients.

his dog more appealing.

less than 1.9 seconds.

“I still work

hard to know

3

my business.

I’m continuously

Action and monitoring

Rahul enacts his plan and has his dog

looking for ways

groomed, which attracts new clients. He

now ensures his pet is always kept clean.

to improve all my

companies.”

Mark Cuban, US entrepreneur

and billionaire, 2011.

6

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Sustainability

A sustainable business is one that has a positive impact on the environment and society. Many businesses are weaving sustainability into their strategy, realizing that doing good is not only right but also wins over investors.

Operating responsibly

good life for workers at his family-

conditions for workers in the

Far from being a new concept,

owned chocolate factories. Both men developing world has pressured operating responsibly has been

realized that people work better

organizations to take responsibility

part of management for centuries.

if they are happier and believed

for their actions and has increased

In the late 1800s, US piano maker

in the responsibility of employers

support for initiatives such as

George Steinway built a rural site

to improve their workers’ lives.

Fairtrade. The drive for sustainable

near New York to house workers.

A new strand emerged in the

practices has also come from

His intention was “to give the

1960s, when the environmental

business—a World Economic

workingmen a chance to live as

movement drew attention to the

Forum survey identifies

human beings ought to live.” In

harm inflicted on the natural world

environmental risks, such

the 1890s, George Cadbury built

by human activity. More recently,

as extreme weather, as

Bourneville in the UK to provide a

public dissatisfaction with poor

a major concern.

Weighing the cost

LABO

MONEY

R

To ensure that an organization

prioritizes sustainability and

that it satisfies all relevant

environmental laws and

regulations, a manager should

TRA

FUEL

MATERIALS

VEL

focus on four key principles.

These ensure that the use

of resources is assessed,

agreed upon, monitored,

and made public.

BENEFITS OF SUSTAINABILITY

❯ Increased loyalty from donors, consumers, or service users who are wil ing to support an organization, product, or brand that

aligns with their own values.

1 Assess

2 Gain

❯ Managers who prioritize the “triple the organization’s

commitments

bottom line”—CSR expert John Elkington’s

impact on the

from staff,

theory of social, environmental, and financial local community,

suppliers, and

factors—can benefit the entire organization.

natural resources,

stakeholders,

❯ People working for an ethical employer—

and the resources

then set targets

such as UK retailer John Lewis, which treats used by suppliers.

and milestones.

employees “as partners”—are more effective

due to working for a cause they believe in.

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Sustainability

86 87

NEED TO KNOW

81%

❯ Corporate Social Responsibility (CSR) provides independent certification for companies that meet standards of social and environmental performance.

of global consumers

❯ United Nations Sustainable Development Goals believe that ethical

call for governments and organizations to achieve sustainability targets in 17 key areas—including equality, shopping is essential

environmental degradation, and climate—by 2030.

Cone Communications/Ebiquity Global CSR Study, 2015

ETHICAL STANDARDS

Placing ethical policy at the heart of an organization’s strategy ensures that sustainability remains a business priority. Accreditations such as Fairtrade, Rainforest Al iance, and certified Organic—which ensure that 3 Measure

4 Remain

goods and suppliers meet environmental and trading progress and

transparent and

standards—bring financial benefits, since consumers report to

advertise the

are wil ing to pay higher prices for ethical products stakeholders,

organization’s

and services. For example, the UK market for organic then review plans

philosophy,

vegetables increased by 5 percent in 2018, while and update as

achievements,

nonorganic sales decreased. Likewise, sales of organic necessary.

and goals.

textiles, such as cotton, grew by 18 percent.

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Managing Constraints

At the heart of the theory of constraints is the idea that a chain is no stronger than its weakest link. For managers, this means that their key task is to identify and manage the weakest parts of their organization.

Focus on limitations

is controlled by three basic

is more likely to meet its goals.

The theory of constraints was

measures: inventory (money

The key is to focus on the most

developed by Israeli management

invested in the organization);

significant limiting factor in an

guru Eliyahu Goldratt, first

operational expense (money

organization, since managing this

introduced in his book The Goal

used to turn inventory into

constraint will produce the

(1984). It is based on the principle

sales); and throughput (the rate

greatest benefit for the entire

that every company’s most

at which money is generated).

system. For example, keeping

important task is to make a profit

Every system has at least one

operational expenses low may

(which is true even of non-profit

weak link, or constraint. If the

make a department highly

organizations). Goldratt views

constraint can be found and

efficient, but it may not benefit

every organization as a system, or

overcome (or controlled, if it is

the organization unless doing

chain, of activities, whose success

unavoidable), the organization

so also improves throughput.

Theory of constraints

Goldratt saw constraints (also known as

Upstream

bottlenecks) as the keys to productivity.

By identifying and managing a constraint,

Throughput is normal here. Trying

a manager can significantly improve

to fix the problem at this point may

output. Conversely, by “fixing” an issue

make things worse; for example,

that is not a constraint, a manager could

adding capacity may increase the

be al ocating resources to the wrong area

buildup of work at the bottleneck.

and making the situation worse.

“... the capacity of the plant

is equal to the capacity of its bottlenecks.”

Eliyahu Goldratt, The Goal, 1984

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MANAGING ORGANIZATIONS

Managing Constraints

88 89

FIVE FOCUSING STEPS

Goldratt’s five focusing steps are used to help involves a company that manufactures washing an organization work around, or even with, its machines but has lost business due to a high most significant constraints. The example below number of faults reported by customers.

IDENTIFY

EXPLOIT

SUBORDINATE

ELEVATE

DON’T STOP

Establish whether the

Make the best

Realign all the other

Mitigate or eliminate the

Identify the next most

constraint is internal or

improvements possible

parts of the system to fit

constraint—for example,

significant constraint,

external, where it occurs

with the existing

around the constraint, for by repairing or replacing and repeat steps 1 to 4

in the system, and

resources available; for

a smooth flow of activity.

faulty machinery, or

to minimize or eliminate

whether it involves

example, focus resources

For example, build up a

devising ways to make

it. Repeat the process

resources, processes,

on the parts that most

“buffer” of stock so that

product repairs faster

for the lifetime of

staff, or policy.

likely need repair.

orders can be fulfil ed.

and easier.

the business.

Bottleneck

Downstream

This is the point at which the throughput,

Efficiency is reduced here since there

or flow of work, is restricted. Problems

isn’t enough work coming through the

here reduce the efficiency of the whole

system. However, making changes at

process, but fixing these problems wil

this point (such as by adding capacity)

solve the issue.

will do nothing to solve the problem.

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Business Cases

At some point, all managers are likely to have to write a business case to define the costs and benefits of a proposed course of action. This document is an essential tool that helps managers determine whether to invest in and proceed with a plan.

An essential overview

Business cases are worth spending

The document typically includes

A business case summarizes the

time on, since they provide essential the business opportunity, benefits, reasoning for starting a project or

information for those who need to

costs, risks, timescales, technical

task. It is often presented in a

make evidence-based, transparent

solutions, and resources required.

well-structured written document.

decisions. For stakeholders, too,

In some sectors, such as local

Writing a robust business case at

they explain the project’s potential

government, a business case may

the start of a project is a valuable

benefits. A business case also sets

be even more comprehensive, as

exercise for managers to undertake; out a framework for implementing it is likely to be part of the formal

it helps consolidate ideas and plans, the project to focus actions and decision-making process. The five

shape scope and direction, and

decisions on the stated goal, as

case business model (see below)

identify gaps at an early stage.

well as to evaluate it.

can be used in such instances.

The five case model

One best practice approach to

STRATEGIC CASE

COMMERCIAL CASE

preparing a business case is the

five case model. This gives a

This demonstrates that the project

This shows that the project is

comprehensive overview, looking

will meet the organization’s needs.

commercial y viable and what

beyond financial aspects to

❯ A good strategic fit means that

the deal will look like.

encompass wider considerations:

the project furthers the aims and

the strategic case, commercial case,

❯ The deal should show value

objectives of the organization.

for money and be well structured,

economic case, financial case, and

❯ The SMART acronym (see

with standards in place for the

management case. Setting out and

pp.148–149) can be used to

new services or project.

exploring each aspect of the proposal

sum up the project’s goals.

enables the managers involved to

❯ A suitable supplier should be

make better-informed decisions and

❯ A strong case for change

both available and able to meet

reduces the risk of wasting resources

shows how the project meets

the needs of the organization.

the changing expectations or

by exploring plans with a limited

needs of the organization.

chance of success. Performing a cost-

benefit analysis or calculating return

on investment (see box, top right)

are all part of putting together

a sound business case. Producing

a business case ensures that any

projects that are implemented have

the greatest chance of successful y

achieving their goals.

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Business Cases

90 91

NEED TO KNOW

❯ Return on investment (ROI) measures gain or loss generated on an investment, relative to the amount

“A sound business

of money invested.

case is a foundation

❯ Net present value (NPV) calculates the future revenue that an investment will generate and discounts it to show what it is worth in today’s money. It enables to effective business

managers to make comparisons with alternative investment options.

decisions.”

❯ Cost-benefit analysis (CBA) compares the value KPMG, multinational professional services network of costs against benefits, which are assigned a monetary value.

ECONOMIC CASE

FINANCIAL CASE

MANAGEMENT CASE

This indicates that the project wil

The financial case shows that

This sets out the plans for delivery,

provide good value for money.

a project will be affordable.

demonstrating that the project wil

❯ The best option is selected after

❯ Funding shows how the project

be delivered effectively, that the

considering a range of options

will be financed over a five-year

organization has the capability to

and is chosen for being the most

period, including profit and loss

produce the project, and that the

cost-effective.

and cash flow, and should indicate

appropriate systems and processes

that the funding is both available

are in place.

❯ The best balance of cost, benefit, and supported.

and risk is considered and then

❯ The inputs required are

decided on.

❯ The projected costs of moving

listed and include the property,

to the new model or plan and

equipment and people needed,

delivering the new services are

and the timescale for delivery.

calculated and should be both

❯ Risks and technical

realistic and affordable.

considerations are identified,

as well as how to mitigate and

resolve them, along with legal

issues and the management

of any assets.

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Understanding Change

Organizations must be prepared to adapt if they are to keep up with a fast-changing business environment. However, change can be traumatic, and managers should be sensitive to how it affects their employees.

Turbulent times

shifts in societal norms, and the blurring of In times of change, managers who hope for things to boundaries between work and home life. Change

“get back to normal” fail to understand that change management is designed to cope with this

is the key to survival. Today, change is complex, turbulence—it is a structured approach that ensures a multifaceted, and pervasive. Global business is smooth transformation and lasting benefits. Successful evolving with technology, and the 21st-century managers view change as a process, albeit a dynamic workplace is being reshaped by connectivity, one, which occurs in response to internal and external STATUS QUO

DISRUPTION

Shock

The first reaction to

Denial

change is usual y shock.

After shock comes

This feeling may not last

denial. The employee

for long, but it is likely

convinces themselves

to affect an employee’s

that the change will not

performance.

affect them or that it

may not even happen.

Anger

Once anger sets in, the

The change curve

employee will often

look for someone within

Psychiatrist Elisabeth Kübler-Ross’s book On the organization to

Death and Dying (1969) described the stages blame for the change.

of grief, based on her work with terminal y il patients. This model is now used by organizations as a way of understanding how people deal with change and how their emotions may affect their performance. The “change curve” helps managers Fear

to communicate effectively and offer appropriate As anger wears off, the employee

support. Kübler-Ross stressed that this is a long is likely to realize that change is

process and that people adjust in different ways.

inevitable. They may feel isolated

by their fear of the unknown.

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MANAGING ORGANIZATIONS

Understanding Change

92 93

factors. There are numerous change models that a There are various ways in which managers can avoid manager can use (see below and pp.94–95), but the these pitfalls. It is essential that they listen to their key focus must always be on how to encourage people team members and convey information that is relevant to move from the present situation to the new one.

to an individual’s role. By considering what might happen in the future, managers can ensure that by the Successful change

time change has been delivered, it will still be relevant.

Research shows that 70 percent of change

Strong leadership is also vital to success—those management programs fail to achieve their goals.

leading the change must be visible and unwavering in According to leading management consultants their support of staff members. By explaining why McKinsey, in the article “Changing Change

change is necessary and presenting it as a revolution, Management” (2015), change fails largely due to rather than evolution, leaders will help employees employee resistance and a lack of executive support.

understand the process and embrace change.

EXPLORATION

REBUILDING

Handling change

Knowing which stage

Commitment

employees have got to on the

Once change has

change curve helps managers

Enthusiasm

been achieved, trust

understand their reactions

By this stage, the

is regained and the

and implement the changes at

employee will

employee is productive

a pace that suits everyone.

have embraced

once again.

the change.

Hope

Relieved to have survived

the change, the employee

can now ask questions

“People don’t

about the opportunities

that it may present.

resist change.

They resist being

Acceptance

changed.”

Accepting the fact that

things are changing will

Peter Senge, US scientist and author

help the employee

banish gloom and begin

to feel optimistic.

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Change Models

Over time, change management theorists have introduced various models to guide organizations through the complex and dynamic process of change, taking into account the emotional responses of employees.

Putting people first

take different periods of time to

consultants McKinsey developed

The earliest change management

adapt to new ideas, introducing

their own 7-S model (see pp.96–97)

models were influenced by studies

the concept of “early adopters”—

in the 1980s, which outlines seven

of how people dealt with loss and

people who are quick to embrace a

essential elements in managing

life changes (see pp.92–93). These

new technology, company, product,

change and takes account of the

studies emphasized that people

or way of working. Early adopters

effects of change on employees.

react differently to change, and so

tend to play an active role in the

John Kotter’s eight-step model,

change management models must

change management process.

from his 1996 book Leading

take employees’ varying emotional

Kurt Lewin’s three-stage change

Change, is one of the most popular

needs into account. In 1962,

model (see box, right) has been

models for integrating required

sociologist Everett Rogers was

popular since the 1950s and

new behaviors into successful

the first to talk about how people

remains valid today. Management

organizational change (see below).

“If you

want truly

to understand

something, try

to change it.”

Kurt Lewin

1

2

3

4

Create urgency

Form a

Create

Communicate

One step at a time

Talk about what

powerful

a vision

the vision

Change management expert John

is happening. If

coalition

Develop a clear

Convey the

Kotter came up with eight steps for

the whole team

Convince team

vision for change

vision powerful y

leading a successful change process.

understands that

members to

so that the team

and as often as

He stressed the importance of

change is needed embrace change

can see how the

possible, using

involving employees in the process

urgently, it wil

by being a strong

future will be

a range of

at every stage, preparing them for

progress more

leader with

different from

communication

change before implementing it.

smoothly.

visible allies.

the present.

channels.

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Change Models

94 95

LEWIN’S CHANGE MODEL

Psychologist Kurt Lewin outlined a three-stage model for change that influenced many later models.

He emphasized that employees must first recognize the need for change. Then, once the change is implemented and ful y integrated, the new way is accepted and becomes the norm.

Unfreeze

Change

Refreeze

Build awareness of why

Set goals and communicate

Embed the change into

change is necessary to avoid

with the team, involving them

team culture and celebrate

resistance from employees.

in the change process.

the new status quo.

NUDGE THEORY

The book Nudge Theory (2008) by

R. Thaler and C. Sunstein, explains

the idea of encouraging, or

“nudging,” change rather than

5

6

7

8

trying to impose it in a traditional

way. People are less likely to resist

change when they have an element

of control. The UK government set

Empower

Create

Build on

Make it stick

up a nudge unit to address policy

action

quick wins

the change

For lasting

and service issues. Late payment

Begin to build

Aim for a series

Always look for

success, embed

of taxes was an ongoing problem,

the structure for

of smal short-

improvements.

the vision in the

but officials found that adding a

change, offering

term wins rather

Each small win

organization’s

note to the late payment letter—

support to

than one big

is a chance to

everyday values

saying that most people pay their

reluctant staff

long-term target.

identify what has

and encourage

taxes on time—increased tax

and rewarding

Success will

gone well and

all employees to

payment rates significantly.

those who help.

motivate a team.

what has not.

embrace it.

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The 7-S Model

The 7-S model is considered the definitive strategic planning tool. It helps managers understand and assess the key elements of their organization that influence its ability to change.

Interdependent elements

These are just as important as

The 7-S model was developed in

the hard elements, because

In Search of Excellence (1982) by

they establish the culture and

Tom Peters and Robert Waterman

environment that enable teams

at management consultancy

to achieve their goals. The seven

McKinsey & Company. Until then,

aspects are equally important. They

STRUCTURE

management theory had focused

are also interdependent so that a

on the use of resources and

change to one element has to be

business structure. However, as

coordinated with all the others.

organizations grew larger and more

complex, coordination began to

be seen as equally important.

Using the 7-S model

The 7-S model introduced the

The first step is to analyze the elements

idea that seven aspects of an

to see how well they are aligned with

organization need to be aligned in

each other; there are numerous online

order for it to achieve its objectives.

checklists, with questions about each

These elements are divided into

element, to help with this process.

“hard” and “soft” groups. The hard

Next, the ideal alignment of elements

The hierarchies that determine

elements are strategy, structure,

for the organization should be

who is accountable to whom, and

and systems, which are usually

determined. Then the desired

the communication lines

associated with management and

improvement or change should

between them.

be defined and implemented.

leadership and tend to involve

measurable goals and physical

tasks. The soft elements are staff,

skills, style, and shared values.

SKILLS

STAFF

NEED TO KNOW

❯ Shared values lie at the core

of the 7-S model. They raise

the first question of strategic

analysis: does the plan accord

with the organization’s values?

❯ The 7-S model is particularly

useful in times of change, such

as during mergers, acquisitions,

reorganizations, or the

introduction of new systems.

The capabilities of the

All the members of

staff, both individual y

the organization, from

and col ectively.

its interns to its CEO.

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MANAGING ORGANIZATIONS

The 7-S Model

96 97

Planning for change

be improved, predict the likely

ADAPTING

The 7-S model is most often used

effects of any changes, implement

THE MODEL

to identify performance problems

new strategies, and plan for

and to highlight any discrepancies

any disruptions. It is particularly

The 7-S model has been

between the present situation

useful during mergers, when

criticized for focusing only on

and the desired goal. This enables

questions of purpose and

internal activities and giving

managers to specify areas that can

value come to the fore.

relatively little attention

to important activities outside

the organization. In response,

two other Ss may be added:

Stakeholders and Setting

(context). With increasing

STRATEGY

SYSTEMS

concerns today about the

global environment, a further S

is being added: Sustainability.

HARD ELEMENTS

These are the elements

traditional y associated with

running an organization.

The overarching plan

All the activities and procedures

They are relatively easy to

for achieving goals and gaining

that staff members use to

define and influence

advantage over competition.

perform their jobs.

compared to the soft

elements.

SOFT ELEMENTS

These elements shape the

culture of an organization

STYLE

rather than the day-to-day

SHARED VALUES

tasks. They establish the

purpose and focus of the

organization and its people.

“A company

doesn’t run if

its people don’t

run with it.”

The manner in which managers

The organization’s mission and

interact with

core values. These set the vision and

Ping Fu, US Vice President of 3D

their teams.

ethical standards for al employees.

Systems, 2016

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Data and

Information

To make effective and timely decisions, managers must often first process data to find the information they need. In an era of extreme data gathering, this requires a modern data-management strategy.

Effective management

and much more. Such a wealth of data can potentially Managers’ decisions must be informed by facts, so enable enterprises to operate more efficiently and they need easy access to relevant, accurate data on capitalize on new business opportunities. To do so, any given issue and a reliable way to analyze it and however, requires an appropriate data-management glean the information they require. Today, this can strategy. The best models provide easy access to present a real challenge because companies often hold essential company data and sift through emails and a large volume of data relating to customers, financial social media streams for facts, figures, or observations transactions, marketing campaigns, service inquiries, (raw data) that may be of use to the organization.

Receiving data

Gathering data

Data analysts, assisted by

Internal and external data

computer algorithms (a type

may be input into the system

of artificial intel igence) help

by employees or collected

sift and store incoming data

electronical y from different

in relevant areas. A system

sources.

that links all types of data is

the most useful because it

al ows different data sets

to be compared.

Handling data

Managers who have to process data

on a variety of topics in order to make

decisions need the data to be relevant,

accurate, and up to date and the

retrieval process to be speedy and

efficient. Ful y integrated data-

management systems make the

process easier, enabling managers to

check the source of a set of statistics,

for example, or compare similar data.

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MANAGING ORGANIZATIONS

Data and Information

98 99

DATA, INFORMATION, KNOWLEDGE, WISDOM

NEED TO KNOW

Often il ustrated as a pyramid,

become meaningful—to become

❯ Enterprise Data Management

the “DIKW model” describes how

information. Major managerial

(EDM) concerns defining,

information stems from data,

decisions, such as whether to make

integrating, retrieving, and

knowledge from information,

people redundant, are based on the

managing data.

and wisdom from knowledge.

information gleaned from data.

❯ General Data Protection

This linear process of analyzing and

Making the right decision also

Regulation (GDPR) is a

understanding data helps managers

requires knowledge, however, which

European law governing the

make good decisions.

comes when information has been

use of any data from which

Data is made up of a jumble of facts,

received and properly understood.

a person can be identified.

symbols, measurements, numbers,

Knowledge enables a manager to

❯ Structured data, such as names

or observations. Without a context,

see patterns in information and

or dates, is easily classified;

it is meaningless; it needs to be

make predictions. Their own

unstructured data, such as emails,

organized, interpreted, and verified

wisdom then al ows them to use

is more difficult to analyze.

by a person or computer in order to

this knowledge to best effect.

1.7

the number

of megabytes

Acting on information

each person is

An efficient management

system can sift through data

estimated to

to produce reliable information

almost immediately. This helps

produce every

Reviewing data

managers make decisions and

react more quickly—for

Ideal y, the data in a data-

second

instance, to changing customer

management system wil be

preferences—giving a company

organized in such a way that

Data Never Sleeps 6.0, Domo, 2017

a competitive edge. In most

managers can retrieve what

cases, however, a manager’s

they need quickly, check that

experience in analyzing data

data is current and accurate,

remains invaluable.

and compare it with other

data in order to turn it

into information.

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Decision-making

The ability to make balanced decisions, even when information is incomplete, is indispensable in a manager. Clear decision-making instills confidence in the team and ensures progress toward goals.

Analysis or intuition?

Making a decision involves defining the objective to be achieved, gathering the necessary information, assessing possible solutions, and then making a firm choice. To aid effective decision-making, managers need the complementary skills of rational analysis and intuition. Step-by-step analysis can help when APPLICANT

there is time available and a more considered decision SENDS IN CV

is required. However, the pace of business in many The application

organizations often requires managers to make quick

Is the candidate

qualified

decisions with limited information; in such situations, for the role?

intuition can be valuable. Many managers may have a preferred decision-making style. Some managers insist on detail and analysis —others think that this can derail decisions, so they rely on intuition honed YES !

by experience. The best managers draw on their preferred style and work to develop alternatives.

NO

MAKING SWIFT DECISIONS

According to Danish organization theorists Kristian Kreiner and Søren Christensen, managers should make decisions quickly, even with minimal information. Their NO

model shows that the consequences of a manager’s decision relate inversely to the extent of knowledge available: the less knowledge, the greater the consequences, and vice versa. Although a manager Mapping

Background check

Does the candidate

may initial y want more information on an issue, it wil have a decreasing impact on the final decision made.

a decision

pass?

When making a complex

decision, it is important

to evaluate all the possible

Y

consequences—intended and

ES !

wledge

unintended—first. One way

TN

Kno

of doing this is by creating a

TE

“yes/no” chart or diagram.

EX

Managers can use this to map

Conse

out their thoughts and to explain

quences of decisions

their decision to those affected by it.

TIME

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MANAGING ORGANIZATIONS

Decision-making 100

101

“Stay committed

to your decisions,

but stay flexible

in your approach.”

Tony Robbins, life coach, 2012

OFFER

THEM

YES !

THE

The application

Expectations

JOB

Is the candidate

Will the role meet

qualified

the candidate’s

for the role?

needs?

NO

YE

SEVEN KEY STEPS

S !

NO

To help make clear, effective decisions,

there are seven essential steps that

managers should follow:

1. Identify the decision that needs

to be made. Define the main issue

REJECT

and the desired outcome.

APPLICATION

2. Collect relevant information.

NO

NO

Seek advice from others who may

have knowledge of the issue.

3. Determine al viable options.

Personality

Make a list of at least four, to give

Would the candidate

a broad range of possible solutions.

fit in with the team’s

culture?

4. Assess each option. Establish the NO

pros and cons; evaluate each option

for feasibility and desirability.

5. Choose the option or combination of options most likely to succeed and

YES !

with the most acceptable risk level.

6. Take action, identify the resources necessary—including staff—and make

a plan to implement the decision.

At interview

7. Review the decision regularly to

Does the candidate show

ensure that it is still the most effective

ability, understanding,

course of action.

and experience?

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Force-field

Analysis

A successful organization is one that is constantly evolving. Force-field analysis is a tool for managing change. It helps managers to identify the forces that encourage change and those that work against it.

Positive forces

forces, there is stability and little change—but when The principles of Force-field analysis were developed restraining forces are outstripped by positive (driving) in the 1940s by social psychologist Kurt Lewin and forces, change becomes possible. In order for change described in Field Theory in Social Science (1951). The to occur, either the positive forces need to be increased basis of Lewin’s idea is that in every organization there or the restraining forces must be weakened.

are positive forces that drive change, and restraining Both types of forces may come from inside or outside forces that produce resistance to change.

an organization. Positive external forces might include Where there is equilibrium between the

increased customer demand or the emergence of new Upgrading

medical

X-RAY XX1

equipment

A hospital manager has a

situation in which an item

of medical equipment has

become outdated and

Proposal

may need to be upgraded.

However, this is far from

Replace outdated

straightforward, not least

machine with a

because of the staff

new model that

training required and

is faster, more

disruption during

powerful, and has

instal ation. The manager

greater capabilities

works with the team to

produce a Force-field

analysis to show all the

X-RAY XX1

forces that need to be

considered. On scoring

the forces from 1 to 5, the

team can see that the

driving forces outweigh

the restraining forces and

so they buy into the

required change.

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MANAGING ORGANIZATIONS

Force-field Analysis 102

103

technology; internal forces might

up a Force-field analysis diagram

to strengthen driving forces and

include a need to increase the

together with the team can

weaken restraining ones. Finally,

organization’s profits, to update

provide a good visual summary.

the manager will prioritize action

equipment, or to change personnel.

The manager defines the specific

steps, identifying resources needed

Restraining external forces might

goal of the change they want to

to implement them.

include a tough market or stringent

see. The team then identifies both

The benefits of a Force-field

regulations; internal forces might

the driving forces and restraining

analysis are that it allows time for

be factors such as increased costs

forces. They evaluate and rate

a manager and team to discuss

and disruption to workflow.

each of the forces—from 1 (weak)

issues in depth, voice concerns,

to 5 (strong)—and figure out totals

and offer solutions in order to reach

Managing change

for each side. The team also

consensus. Potential pitfalls are the

Employee resistance to change

determines which of these forces

subjective nature of the scoring,

can be one major internal restraint.

can be influenced or have some

division in the team between those

A manager can minimize this

flexibility for change. The

for and against change, and an

resistance by first discussing any

manager then, possibly with the

incomplete picture if not all take

changes with their team. Drawing

team, develops a strategy for how

team members participate.

DRIVING FORCES

RESTRAINING

FORCES

❯ Increasing patient

4

expectations

❯ Need for staff training in

3

❯ More demanding

5

use of equipment

efficiency targets

❯ Physical disruption while 2

❯ Recent number of

5

equipment is installed

equipment failures

❯ Projected cost of

4

❯ Need to reduce waiting

5

equipment

times

❯ Risk of obsolescence due

4

to rapid improvements in

Total

19

technology

Total

13

X-RAY XX1

“There is nothing so practical

as a good theory.”

Kurt Lewin, psychologist

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SWOT Analysis

SWOT analysis is a simple but powerful tool that managers can use to identify internal and external factors likely to affect an organization’s performance, across every sector of its operations.

Surveying the landscape

organization and so might include staff, product Developed by US management consultant Albert S.

portfolio, marketing expertise, manufacturing Humphrey in 1966 using data from Fortune 500

capability, and organizational structure. Next, the companies, SWOT analysis is a systematic, creative manager evaluates external opportunities and threats.

tool for managers that examines the Strengths, These are factors beyond the organization’s control Weaknesses, Opportunities, and Threats that an and so might include changing customer habits, organization may encounter. It can be used for day-to-environmental sustainability, the economic outlook, day business operations, one-off projects, or developing or technological advances—including social media new business strategies. It could also be used to marketing and internet selling tools.

examine long-term market opportunities or to engage Setting clear business objectives, such as operational personnel in formulating an organization’s strategy.

or financial goals, is also central to a SWOT analysis.

A manager using SWOT analysis would begin by When managers have identified internal and external identifying internal strengths and weaknesses. These factors, they can assess their positive or negative are factors that lie within the control of the manager or impact on achieving business objectives.

PEST ANALYSIS

Taking stock

PEST analysis, thought to have

SWOT analyses are useful when

originated with Harvard professor

making key decisions, such as

Francis Aguilar, is an acronym for

expanding a business. Freda Flour

Political, Economic, Sociological,

manages a bakery on the north side

and Technological. The acronym,

of town, specializing in artisan bread

which appears in various forms

and gluten-free cakes. It is very

(see pp.72–73), can help managers

successful, with a loyal customer base.

identify external factors that might

Freda wants to open a second branch

influence an organization. A PEST

on the south side of town but knows

analysis should be conducted prior

another bakery is already established

to undertaking a SWOT analysis.

there. She does a SWOT analysis to

evaluate potential risks and rewards.

“It is not the manager’s job to

prevent risks. It is the manager’s job to make it safe to take them.”

Ed Catmull, cofounder of Pixar Animation Studios, 2014

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MANAGING ORGANIZATIONS

SWOT Analysis 104

105

SWOT

BLUEPRINT

$$

SWOT analysis works best with

$$

open questions. For example, a

organic

manager might ask:

$$$$

❯

$$$$

Strengths: What do customers

love about our products? What

do we do better than other

companies in the area?

STRENGTHS

WEAKNESSES

❯ High-quality ingredients

❯ High retail price due to artisanal

❯ Weaknesses: What could we do

methods and ingredient costs

❯ Differentiated products

better? Why do customers not

❯ Premium products limit market

❯ Loyal customer base at

like our products /buy from us?

the existing bakery

❯ Only one staff member, Fred,

❯ Opportunities: What changes

has specialist baking knowledge

❯ Specialist baking knowledge in trends or weaknesses in our

competitors can we exploit?

❯ Threats: What could our

competitors do that would

affect us? What social/shopping

trends might threaten us?

STRATEGIC PLANNING

After addressing each finding

$$$

$

from the SWOT analysis, Freda

makes the fol owing plans:

OPPORTUNITIES

THREATS

❯ Strengths: Develop strong

❯ Growing trend in healthy eating

❯ Potential price increases of

relationships with customers

artisan flour

❯ Organic grocery adjoining new

at new shop to replicate

site complements bakery

❯ Existing bakery charges less due

existing loyal customer base

to not sel ing a premium product

❯ Heavy traffic due to new site’s

❯ Weaknesses: Recruit and

location near train station

❯ Supermarket offers online delivery train specialist baker for

of gluten-free and artisan products

new shop

❯ Opportunities: Cater to

growing interest in healthy

eating by sourcing ethical y

produced ingredients

❯ Threats: Source cheaper

ingredients or cut profit

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Critical Path Analysis

Critical path analysis is a project-management tool for scheduling activities.

Prioritizing and plotting tasks along a path gives a clear overview of the whole project and allows resources to be planned and optimized.

Optimizing project work

Critical path analysis enables a manager to schedule the tasks required to complete a project in the correct sequence and in the most time-efficient way. It also helps avoid conflicting priorities and bottlenecks. The first step is to identify tasks that are “critical,” upon CRITICAL TASKS

which others depend, and to plot them in the correct FLOATING TASKS

order, creating the “critical path.” The manager should then estimate the time required to complete each task, which when added together gives the total time necessary for the project. Noncritical, or “floating,”

tasks are plotted parallel to the main path at START

appropriate stages in the project, and are

completed within the overall time frame.

DAY 1

Prior to the start of the

build, resources are

al ocated according

Building a house

to the critical path.

Critical path analysis is a term that was coined by James Kel y and Morgan Walker in 1956 while developing the Manhattan Project. The model is ideal for planning complex projects that involve precise scheduling of multiple human and material resources, such as constructing a house. The simplified plan shown here highlights 11 key activities on a DIG FOUNDATIONS

BUILD WALLS

critical path of 34 days—the maximum time

to complete this project.Identifying

dependencies—activities that are reliant on other tasks—determines the scheduling and

reveals where a delay in a single activity

risks the whole project being delayed.

6 Days

10 Days

NEED TO KNOW

❯ Fast tracking is the process of

undertaking multiple floating

activities in paral el to reduce

the overall project time.

❯ Crashing is when additional

resources are allocated to a task

to complete it more quickly.

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MANAGING ORGANIZATIONS

Critical Path Analysis 106

107

“How does a project get to be

a year late? One day at a time.”

PROS AND CONS

Frederick Brooks, US computer scientist, 1975

❯ Pro Enables detailed assessment

of requirements of each activity

❯ Pro Al ows optimal allocation

of resources

❯ Pro Can reduce risks and costs

❯ Con Only as reliable as the

BASIC WIRING

FINAL WIRING

assumptions and estimates made

❯ Con No guarantee of success—

every task still needs to be

efficiently managed

❯ Con Identifying spare time does

not make resources available

2 Days

1 Day

BASIC PLUMBING

FINAL PLUMBING

DECORATE

3 Days

2 Days

3 Days

CONSTRUCT ROOF

PLASTER WALLS

LAY FLOORS

5 Days

10 Days

3 Days

GARDEN AND

LANDSCAPING

END

DAY 34

If labor and materials

are al otted to each

task as scheduled, the

build will take 34 days.

3 Days

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Problem-solving

Dealing with the many problems that occur within an organization is part of a manager’s remit. The goal is to understand what went wrong and generate solutions that help to prevent a recurrence.

Opportunity for learning

Understand

While a key goal of management

The plan of action

1 the problem

is to prevent problems, detecting,

The problems that managers are

analyzing, and solving them

Pinpoint and prioritize the issue:

likely to face range from minor issues

effectively when they do occur is

❯ Identify its nature and how critical it to full-blown crises. The task of

equally important (see pp.110–111).

is—whether there wil be significant

problem solving demands the ability

consequences if it is not resolved.

Varied issues, from nondelivery of

to sift through facts, asking the right

raw materials to a security alert or

❯

questions, to diagnose precisely

Rate its urgency and whether waiting will make the problem worse.

a harassment claim, demand both

what has gone wrong. The step-by-

workable solutions and measures to step approach shown here is designed

❯ Consider what can be done and

whether a makeshift solution might

stop them from happening again.

to reach a solution, via analysis and

discussion, that can be accepted by al .

prevent things from getting worse.

Handled correctly, problems can

Achieving that goal consistently when

be opportunities for learning and

problems arise strengthens teams

improvement. Skillful managers

and contributes to the health

develop the ability to think through

of an organization.

a problem systematically. They

must assess its priority, uncover

the facts, pinpoint its root cause,

and work toward the best solution.

Mastering this process, which can

be applied to most problems, helps

to avoid further complications.

Managers who can handle

problems effectively are key

to an organization’s success.

NEED TO KNOW

❯ Active listening is a critical

Generate a solution

problem-solving skil . It means

3 Only when the real

concentrating ful y on what is said

problem is understood should

instead of listening passively.

a manager start to explore

❯ Brainstorming is a technique for

ways to solve it. For example:

generating ideas. It can be highly

❯ Involve others to get different

effective when finding resolutions.

perspectives.

❯ Firefighting is something

❯ Break down big issues into small,

managers need to avoid, as it is al

bite-size, solvable problems.

too easy to constantly step in and

❯ Think laterally to find a creative so neglect day-to-day tasks.

and indirect approach.

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MANAGING ORGANIZATIONS

Problem–solving 108

109

“Problems are

only opportunities

in work clothes.”

Henry Kaiser, US industrialist, 1967

Identify all

2 elements

Look at the problem from

multiple perspectives:

❯ Take time and listen to al

those who are involved.

❯ Identify the root cause

(see pp. 78–79)—address

this rather than symptoms.

❯ Avoid assumptions

and establish facts.

❯ Ask the right questions

(see box, below right).

ASK THE RIGHT QUESTIONS

Effective problem-solving involves suspending judgment and asking the right questions. The best questions are open-Act on a plan

ended and start with words that Rudyard Kipling cal ed his 4

“six honest serving-men”: who, what, when, where, why, and Settle the issue, following

how. Focusing and enlarging on these questions will help these steps:

avoid generalizations and establish accurate facts.

❯ Select the best solution.

❯ Write it down, summarizing

any recommendations.

❯ Communicate and enact the

solution with all those involved.

❯ Find ways to prevent the

problem from recurring,

if possible.

WHO?

WHAT?

WHEN?

WHERE?

WHY?

HOW?

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Identifying Causes

Problem-solving is a key part of a manager’s role, but not all problems have obvious solutions. In order to understand—and hopefully fix—a problem, a manager must first identify and analyze all of its possible causes.

Digging to the roots

into six categories: processes,

detailed investigation, such as

Developed by Japanese

equipment, materials, people,

interviewing staff at all levels.

organizational theorist Kaoru

environment, and management.

When all the possibilities have

Ishikawa in the 1960s, Cause

The best way to do this is to draw

been identified, it should be clear

and Effect Analysis enables

a “fishbone diagram” (see below).

to the manager where the problem

managers to define problems

This depicts the six categories as

lies and what action should be

clearly, solve them, and ensure

vertical lines projecting from the

taken to solve it. This action should

that they never recur.

central “spine” of the problem.

be taken swiftly and details of

The starting point is to define

From each of these lines, the

the lessons learned made known

the problem: what is happening,

manager then draws a series

throughout the organization.

where is it happening, and who

of horizontal lines on which they

is affected by it. The next stage

identify all the problem’s possible

is to group all the possible causes

causes—a process that may involve

Fishbone diagram

Cause 1:

In this example of a fishbone diagram,

Processes

a production process for a component

has been generating too many rejects,

❯ Process speed

and thus a high level of waste. The problem unreliable

is defined at the head of the “fish” and is

❯ Drying temperature

then broken down into Ishikawa’s six

too high

categories. Each cause is divided further

into subcauses; for example, the “people”

❯ Insufficient time

cause includes factors such as lack of

between stages

training and conflict within the team.

The final step is the analysis of the

diagram. In this example, the main

PROBLEM:

cause of the problem is identified

20% WASTE

as the use of substandard material.

❯ Machine running

too fast

❯ Cannot control

drying temperature

❯ Machine breaks

down with no

warning

“Failure is the

Cause 2:

Equipment

seed of success.”

Kaoru Ishikawa

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MANAGING ORGANIZATIONS

Identifying Causes 110

111

THE “FIVE WHYS” TECHNIQUE

A quick way of getting to the heart

❯ 1. Why? There was an oil spil

of a problem is by using the “five

on the floor in the machining

whys” technique pioneered by

department.

Toyota. This involves repeatedly

❯ 2. Why? One of the pressing

asking “Why?” in order to trace the

machines was leaking oil.

cause of a problem. A manager can

usual y do this in five stages, the

❯ 3. Why? The seal was of poor quality.

answer to the first question becoming

❯ 4. Why? Low-cost seals, below

the basis ofthe second question, and

standard specification, had been

so on. For example, if a factory

purchased from a new supplier.

worker fal s and is injured, the

❯ 5. Why? A company-wide directive

fol owing five questions can get

A FACTORY WORKER FALLS,

PROMPTING FIVE QUESTIONS

had been issued for teams to cut

to the root of the problem.

ABOUT THE CAUSE

manufacturing costs.

NEED TO KNOW

❯ Solvable causes are the parts

of a problem that can be

Cause 3:

Cause 5:

solved—that is the area the

Materials

Environment

manager should seek to address.

❯ Insolvable causes are those

❯ Inconsistent quality

❯ Insufficient space

parts of a problem that cannot be

in raw materials

around machine

solved. These must be identified

so that the manager does not

❯ Lower-grade

❯ Poor ventilation

waste time trying to fix them.

material purchased

causes overheating

❯ Cause screening is a method of

❯ Subparts not

❯ Untidy work area

evaluating the potential impact

assembled correctly

obscures source

of a cause and how easy it is to

of problem

prevent that cause.

❯ Conflict in team

❯ Manager unskilled

at handling change

❯ Lack of formal

training

❯ No clear chain of

responsibility

❯ Team feels unable

to raise issues

❯ Targets based on

with manager

quantity rather

than quality

Cause 4:

Cause 6:

People

Management

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Design Thinking

Originally developed to identify customers’ needs, design thinking is an approach that all managers can adopt in order to pinpoint and resolve complex and challenging problems within their organization.

Solving problems

those people are and to establish their needs—for While many of the problems a manager encounters example, the roles of the staff and the tools they need are clear-cut, such as a damaged machine or a lack in order to perform better. From this information, the of funds, others are less defined—for example, why manager should then think laterally and creatively, staff are underperforming. In these situations, design involving those in question, to find ideas. The next thinking is a useful tool for finding solutions. Unlike steps are to develop potential solutions, such as new the traditional approach to problem-solving (see pp.

working practices or new management structures, 108–109), which involves identifying the root cause, and to test them out before implementing them.

this method focuses the manager’s attention on those Although time-consuming, design thinking enables who will benefit from the solution, such as staff.

managers to develop bespoke solutions that benefit Design thinking is a step-by-step technique by specific staff—and thus the organization as a whole.

which a manager should seek to understand and solve the problem from the perspective of those involved. The first steps are to understand who 2

Case study: Apple Inc.

Cofounded by Steve Jobs in 1976, Apple Inc.

began to struggle in the 1980s and ’90s due to intense competition in the computer market.

Jobs, who had left Apple, returned in 1997

1

and used design thinking to develop products Define

based on what customers actual y wanted.

Based on all the information

Apple launched the iMac in 1998 and the

gathered from those involved,

iPhone in 2007—both huge successes. The

define the problem to be solved.

process Jobs fol owed can be used by any

Focus on their needs, not the

manager, whether developing new products

organization’s.

or seeking to solve tricky problems.

Empathize

PHONE

Engage with people and

research their needs. Ful y

understand what they actual y

require before trying

to meet their needs.

PRESENT

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MANAGING ORGANIZATIONS

Design Thinking 112

113

SIX THINKING HATS

Edward de Bono, a leading authority on

In order to solve problems effectively,

thinking skills and author of Six Thinking Hats managers should experiment by “wearing”

(1985), developed the idea of six approaches different hats – thinking in different ways –

in which differently coloured hats each

and should also encourage others in their

represent a different style of thinking.

team to do the same. team to do the same.

NEUTRALITY

OPTIMISM

JUDGMENT

EMOTION

CREATIVITY

ORGANIZING

Focus on facts

Explore the

Consider the Assess your gut

Consider al

Define the

and data only positive aspects

pitfalls and

reactions and

possibilities,

issue, manage

3

to establish all

and benefits

dangers

instincts. Seek

alternatives,

the thinking

the relevant

of ideas

and possible

and express

and fresh

process, and

information.

and plans.

consequences.

opinions.

ideas.

summarize.

Ideate

4

Brainstorm ideas

to solve the problem.

This requires creativity,

analytic judgment,

and a willingness

to take risks.

Prototype

Once ideas have been

5

generated, develop them

into workable solutions or

prototype products.

These should be simple and

user-friendly and solve the

problem identified

at Stage 2.

Test

Test the solutions or new

HELLO?

products on those who wil

“Most people

use them, so their strengths and

weaknesses can be assessed.

make the mistake

Testing may show that

the problem needs to

of thinking design

be redefined.

is what it looks like.

Design is how it works.”

Steve Jobs, cofounder of Apple Inc., 2003

FUTURE

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Resolving Deadlocks

When different parties cannot agree on an issue, a manager may need to step in. A strategy that dissects the problem can break a deadlock and help the parties find a mutually acceptable solution.

Breaking a vicious cycle

A vicious cycle can then begin, in which each A deadlock can occur when two or more parties party is more concerned with saving face than have different solutions to a problem and refuse to reexamining the original issue. It becomes a change their demands. Whatever the reason for such battle that neither side wants to be seen to lose.

an impasse—whether a business deal, an internal A manager has to step back from the dispute and organizational matter, or a negotiation with a third view the arguments of each party fairly and impartially.

party—considerable diplomacy is required. A manager In an internal deadlock, it may be advisable to call may need to act as a mediator if the deadlock involves in a neutral individual to act as a mediator. Adopting department members or the department itself is in a strategy that identifies each viewpoint, areas in dispute with another sector of the organization or an which parties disagree and why, as well as points outside body. Typically, each party believes it has the on which they all concur, can help produce a correct solution and that the other party is wrong.

compromise that breaks the deadlock.

Group decision

A company makes organic T-shirts

$

in the US. Manager Mary has two

$

$

senior team members—George and

Mark—who are in deadlock over

the introduction of new machines.

Each has different assumptions,

interests, and information due

to their different roles. George

is head of finance and is worried

about the capital cost because

he is responsible for profitability.

Mark is head of human

resources and worries about the

training time required and

whether further organizational

change wil affect motivation.

Mary needs to get agreement

from the team and convenes a

meeting, fol owing a five-step

process. By sharing information,

they agree that the new machines

are worth the investment.

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MANAGING ORGANIZATIONS

Resolving Deadlocks 114

115

CONNECTING THE DOTS

“… deadlocks …

Organizational psychologist Roger

member has their own set of dots

Schwarz describes deadlocks as an

and connects those dots in different

have at least

adult version of a connect-the-dots

ways to arrive at what they believe

puzzle. In a team deadlock, the dots

is the correct solution. Arguing

this advantage

represent the assumptions, interests,

about competing solutions without

and information that each person

understanding the assumptions,

… they force

uses to create their own picture.

interests, and information that

The line connecting the dots is the

generated that picture in the first

us to think.”

reasoning process, but each team

place merely maintains the deadlock.

Jawaharlal Nehru, first

Prime Minister of India, 1942

1

2

3

4

5

Identify the

Pinpoint all

Explore why

Agree on which

Jointly develop

assumptions and

of the assumptions

each team member

assumptions and

a solution that

interests of each

and interests that

has their particular

interests need to be

integrates the

team member to

team members do

assumptions and

addressed to break

team members’

understand their

not agree on.

interests.

the deadlock.

shared assumptions

positions.

and interests.

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Business

Processes

Like a project, a process is a series of linked activities. But while a project is temporary and delivers change—or a new product or service—a process is part of the organization’s routine workflow.

A series of steps

It is widely believed that businesses can be run The concept of a business process originated in with four high level operating processes. These manufacturing, where materials are transformed are win the order; supply the order; service the from their raw state through a series of steps into a customer; and develop new products or services. Each final finished product. But processes occur elsewhere, of these operating processes can be broken down into too. In the case of a restaurant, the process may smaller steps. For example, the process of winning an involve receiving a reservation, greeting the customer, order can be subdivided into: attracting customers (via taking their order, and preparing and serving the food.

marketing activities) and closing the order (via sales Process mapping

Managers can analyse business processes to see whether the steps involved are adding value by being necessary, efficient, and effective. Flowcharts are used to help understand stages of a process—in this example, reserving a table in a restaurant. The next step is to design and implement an improved process. The improvements may include removing unnecessary steps or finding better ways of doing things, such as introducing automation.

EXISTING PROCESS

This is a restaurant’s current

reservation process. The

employees need to be available

Attract customer

1

Staff are on hand to

2

to answer the phone and to look

through marketing;

answer customer calls

through the calendar to find

suitable dates for the customer,

phone number supplied

on the phone

requiring a series of steps.

IMPROVED PROCESS

This is the desired situation in

the organization and it is set

alongside the existing situation

for direct comparison. In this

Attract customer

1

scenario, the series of steps

through marketing;

involved in reserving and

website supplied

selecting dates is streamlined

into one step.

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MANAGING ORGANIZATIONS

Business Processes 116

117

activities). Managers must aim

SWIM LANES

to understand and improve any

process—and its associated steps

The actions in a process map (see below) can be organized into “swim lanes”

—under their care. Process mapping

to make it clearer who is performing each action. For instance, a customer (see below) was designed for this.

complaint might prompt an organization to try to resolve the issue, and these activities can be tracked across departments or to external contractors.

Two kinds of processes

Processes are often described

CUSTOMER

as either “value adding” or

“nonvalue adding” (see pp.118–119).

The former are part of operating

ADMINISTRATOR

processes that offer the customer

or user values. The latter are

support processes, such as IT or

SUBCONTRACTOR

accounts, which do not provide

direct value to the user or customer.

“Blame the process,

not the people.”

W. Edwards Deming, US statistician, 1992

Staff check

3 if customer’s

preferred date is

available and, if

Manually enter

Greet customer

4

5

not, suggest

the reservation into the

at restaurant

other options

restaurant booking system

An automated system allows

2

Greet customer

customer to make their own

3 at restaurant

reservation or run through alternative

dates—no staff are involved

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Value Chain

A value chain is a set of activities through which goods or services are developed. Managers need to ensure that each activity is working efficiently in order to maximize the value of the end product.

Value chain management

how the different stages are connected. First, the The concept of the “value chain” was introduced value-adding activities are divided into two groups: by US academic Michael Porter in his 1985 book primary and support activities (see below). The next Competitive Advantage: Creating and Sustaining step is to identify “cost drivers”—anything that affects Superior Performance. A value chain comprises all the cost of an activity or process, such as labor hours—

the activities, from the input of raw materials to and determine whether costs can be reduced without distribution, that add value to the end product. For adverse effects on other activities. The third step is to an organization to make a profit, the final value of a identify “differentiation” activities, such as improved product or service must exceed the cost of creating it.

product quality, innovation, and marketing, all of which Value-chain analysis involves breaking down an add value to the product and give it a competitive edge.

operation into smaller parts so that it is easy to see The analysis can show how each activity can be what is happening at each stage of the process and enhanced (or eliminated, if necessary) to add value.

Primary

activities

Inbound logistics

Operations

Receiving, storing, and

The set of activities by

distributing raw materials,

which the raw materials

parts, or information to be

and other inputs are turned

used in the process and

into the final product for

connecting with suppliers.

the customer.

Support activities

Parts of the chain

A value chain has two elements. Primary

activities, such as logistics and marketing, Procurement

are used to create the product or service.

The activities carried out to obtain

Support activities, such as human resources, the raw materials, resources, and

work alongside the primary activities,

services that will enable operations

helping them run smoothly.

to be performed.

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MANAGING ORGANIZATIONS

Value Chain 118

119

NEED TO KNOW

❯ The sales margin is the amount

❯ A cost driver is a factor that causes of money made after deducting

the cost of an activity or process to

“If it doesn’t

direct costs from the sales price

rise or fal .

of a product or service.

add value,

❯ The differentiation advantage

❯ The return on assets is a way

is the extent to which a product

of calculating the profitability of

or service is better than that of

it’s waste”.

a company based on its assets.

a competitor.

Henry Ford, Founder of

Ford Motor Company, c.1920s

Marketing and sales

Advertising, pricing, and promotion activities to sell the product or service and to attract buyers away from competitors. These may

also include after-sales care.

Outbound logistics

Services

All the activities to do with

The activities that are

delivering the product or

needed to keep the product

service to customers;

working for the buyer after

$$$

$$$

these may include

it is sold and delivered—

connecting with external

such as technical support

transportation, storage, or

or software updates.

fulfillment companies.

Human resource

Technology and infrastructure

management

Equipment and technological

Activities to recruit, train,

procedures used in operations,

develop, and retain workers

plus supportive functions such

(or dismiss them if necessary).

as legal, finance, and accounting.

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Lean Production

The goal of lean production is to identify and deliver what the customer wants from a product. This enables managers to direct their team and resources toward maximizing productivity and minimizing waste.

Establishing value

unsold products, are eliminated.

“People don’t

Lean production involves first

The results include faster and

identifying what the end customer

more efficient processes and

go to Toyota to

values from a particular product or

higher-quality products.

service, which in turn influences

Lean production was pioneered

work; they go

what the customer is prepared to

in the early 1900s by Henry Ford

pay for it. This enables managers

but was brought to its peak by

there to think.”

and teams to refine the “value

Japanese car manufacturer Toyota.

Taiichi Ohno, engineer and founder

stream”—all the activities that

The system relies on a constant

of Toyota Production System, 1978

go into making and delivering a

flow throughout a process and

product. All “non-value-adding”

constant communication between

activities, such as warehousing

those involved to refine the process.

A lean machine

In the 1950s, Toyota reduced lean

operations to five principles to make

2. Map value stream

car manufacturing as efficient as

Define the flow of

possible. It also identified seven types

activities from beginning

of waste that should be avoided, and

to end of a process, to

it has since added an eighth—namely,

eliminate any “non-value-

underused talent. Toyota’s goal

1. Identify value

added” activities.

remains to maximize value while

Find out what the

reducing all kinds of waste.

customer most values

from a process or

product.

Types of waste

DEFECTS

OVERPRODUCTION

WAITING

UNDERUSED TALENT

Labor and resources wasted

Items produced surplus

Unproductive time

Underutilization of workers’

on a service that fails to meet

to customer demand

waiting for the next

skil s and knowledge

customer expectations

step in the process

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MANAGING ORGANIZATIONS

Lean Production 120

121

KAIZEN

Kaizen is a concept that originated

and effectiveness. It also encourages

in the Japanese manufacturing

employees to suggest ways in which

KAI

ZEN

industry after World War II. It became

working life can be improved, both

popular due to its focus on producing

on the production line and in the

high-quality goods at low costs.

company more broadly. The kaizen

Meaning “good change,” kaizen

philosophy has had a huge impact on

demands that managers make

Japanese business, particularly in the

small but constant improvements

field of “just-in-time” manufacturing.

to the working environment in

Today, for example, Toyota assembles

CHANGE

GOOD

order to increase productivity

cars in a matter of hours.

4. Establish pull

Start each new activity

only when there is a

demand for it from the

customer or from

5. Seek perfection

3. Create flow

workers at the next stage

Continue to refine

Organize value-creating

of the process.

process until perfect

steps into a harmonized

value is created with

sequence so process

no waste.

flows smoothly to deliver

product to customer.

TRANSPORTATION

INVENTORY

OVERPROCESSING

MOTION

Time, resources, and money

Excess stock of

Reworking of product, or

Time and effort

wasted in moving products

raw materials and

producing goods of higher

wasted due to poor

and materials unnecessarily

finished goods

specification than required

workflow

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Meeting Objectives

Setting objectives, actioning them, then monitoring how successfully they are being achieved is a core function in any organization. There are two strategic models that managers can use.

Guided by goals

improve performance by setting clearly defined The management by objectives (MBO) model was goals—agreed on by managers and their staff—that developed in the 1950s by Peter Drucker, while Robert depend on the organization’s vision and mission. By Kaplan and David Norton introduced the balanced involving employees in planning and defining goals, scorecard (BSC) in the 1990s. The aim of MBO is to managers foster empowerment and engagement, too.

How the two models

work together

The MBO model can be used in

conjunction with, or to inform, the

BSC framework, because both models

are about succeeding through

1. Review the

defining a strategy and setting

organization’s objectives

objectives. For instance, the

and define goals within a

MBO model can be used to

specific review period.

set objectives, which are

then measured using the

BSC model. Alternatively,

the four perspectives

of the BSC model might

5. Reward

be used to help set

2. Agree on

employees

the objectives of the

employee’s

for achieving

MBO model.

objectives, based

their objectives.

on the organization’s

goals by using SMART

objectives (see

pp.148–149).

4. Evaluate the

performance

of the department.

3. Monitor progress

Applying management

in the department.

by objectives

Managers set and review objectives

for a specific period. This model works

on a rewards basis, so individuals are

recognized for achieving objectives.

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MANAGING ORGANIZATIONS

Meeting Objectives 122

123

The MBO model means business and employee

performance against the business strategy. By performance are manageable internally, while clients examining four measurable areas of business—

or stakeholders can measure success externally.

customer perception, internal business processes, financial perspective, and learning and growth—but Measuring how goals are met

keeping the company vision in mind at all times, BSC

The BSC model is a performance measurement tool reveals how objectives are being met, and highlights widely used to assist in translating mission and vision where changes and improvements can be made.

statements into operational actions and to assess how Using BSC and MBO together enables managers MBO is working. Managers do not normally use BSC

to both align and implement measurable objectives to assess individual performance but to check team with their teams.

Applying the balanced

scorecard

Managers use the organization’s

mission statement as the basis to

complete a scorecard for each of the four

Customer perception

measurable areas, specifying objectives,

is how a company wants

targets, and initiatives that can turn the

to appear to its customers

company’s goals into action.

in order to achieve

its mission.

Use the organization’s

Learning and growth

mission, vision, and strategy

Internal business processes

is a company’s ability

to assess the four measurable

are internal practices that add

to educate itself and

areas of the business.

value and are needed to ensure

innovate so that it keeps

that shareholders and customers

changing and improving.

are satisfied.

Financial perspective

is based on past

performance and assesses

the long-term viability of

the chosen strategy in

monetary terms.

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Key Performance

Indicators

Key performance indicators (KPIs) provide a framework for managers to monitor how well specific areas within their organization are functioning, and to identify potential improvements.

Understanding KPIs

weekly, monthly, or quarterly.

well and where attention should

In order to use KPIs, the manager

To assess how well each area is

be focused in order to immediately

must first identify the areas within

performing, the manager should

address any weaknesses. When

the organization that contribute to

compare the results that were

performed over long periods,

its success, such as manufacturing

achieved with the targets set. By

KPIs can also help the manager

and sales. Measurable performance

doing this, the manager gains a

identify performance trends to

targets are set for each area, then

clear understanding of which areas

either take advantage of or help

monitored at regular intervals—

of the organization are performing

prevent in the future.

Tracking targets

To assess the performance of his

restaurant, Marco identified six

8

7

aspects of the business that were

⁄ 10

⁄

essential to its success, including

10

customer satisfaction, sales,

and delivery time. After setting

targets for each area, he asked

his senior staff to find ways to

meet the targets, and to record

their progress and report the

results each week. At the end

of the quarter, Marco was able

to identify which areas of

the business had performed

consistently and which ones

required improvement.

“What gets

measured

CUSTOMER

DELIVERY TIME

gets

SATISFACTION

Takeaway orders

Marco wanted

were to be

managed.”

10 positive online

delivered within

reviews each

half an hour—70

month.

percent were.

VF Ridgway, US administrative

scientist, 1956

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MANAGING ORGANIZATIONS

Key Performance Indicators 124

125

HOW TO SET KPIS

NEED TO KNOW

KPIs can be used in any type of organization, although to give meaningful

❯ KPIs must align with the

results, they should be applied only to the areas that contribute to its success.

organization's goals and strategy.

Managers therefore need to be specific, deciding exactly where and how

❯ Accurate data is essential for

to use KPIs within their organization. It is also important that the targets KPIs to be valid and effective.

a manager sets are realistic and achievable. If targets are set too high, the

❯

organization is more likely to miss them, giving a false impression of its true Reliable data must be attainable

potential performance. When setting KPIs, a manager must ensure they have: for each KPI area.

❯

❯ A title and purpose describing what is being measured and why.

Communicating KPI targets

encourages the desired outcome.

❯ Targets that are flexible but achievable within a time frame.

❯ KPIs should evolve as the

❯ A formula to ensure that measurements are made in the same way organization's performance

each time, such as calculating a percentage.

changes over time.

❯ A frequency that sets how often the indicator is measured and reviewed.

❯ A person or team responsible for measuring and taking action.

6

5

7

8

⁄ 10

⁄ 10

⁄ 10

⁄ 10

FOOD SALES

FOOD WASTE

UPSELLING

STAFF

Sales were to

Marco hoped to

Staff were asked

SATISFACTION

increase 5

reduce waste by

to increase the

Marco wants

percent each

25 percent. This

sale of side

a happy team.

month. Marco

remains an area

dishes, which

This result

needs to address

of concern.

was successful.

pleased him.

this area.

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MANAGING

PEOPLE

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Team Roles

Management is about building successful teams.

PLANT

RESOURCE INVESTIGATOR

The best teams are those in which each person’s role matches their abilities and interests.

Building a team

By recognizing Belbin’s

One of a manager’s responsibilities

roles, managers can optimize

is assembling teams to carry out

their teams, recruiting

tasks and projects. Each team

members who have the personal

has its own function, and each

characteristics most likely to

team member has a particular

guarantee success in a particular

role to play; the job of the manager

task. Importantly, Belbin pointed

Creative and unorthodox,

is to decide which team member

out that each of his nine roles

Plants provide the seeds for

should do what. One method for

has inherent weaknesses—for

innovation, generating new

doing this was developed by

example, a creative thinker

ideas, and solving seemingly

management psychologist Dr.

may not be a good coordinator.

impenetrable problems.

Meredith Belbin in the 1970s

and outlined in his book

Management Teams (1981).

Nine personality types

MONITOR

IMPLEMENTER

TEAM WORKER

Belbin conducted a five-year

experiment to identify the types of

behavior that would contribute to a

high-achieving team. Although he

concluded that there was

no “perfect” team, he identified

nine key roles, which he based

on nine types of behavior.

Size matters

Serious and careful in tackling

Down-to-earth, practical,

After five years of research, Belbin

problems, Monitors keep the

self-disciplined, and general y

determined that the size of a team

team in check, assessing

cautious, Implementers

is critical to its efficiency. If a team

its progress and evaluating

are natural administrators,

has too many members, for example,

the ideas proposed by

able to turn a brief into a

roles can overlap, leading to confusion

other team members.

systematic plan of action.

about who should do what. Belbin

concluded that the ideal number

for a team is four. This avoids any

duplication of roles and promotes

productive discussions and swifter

decision-making. Also, while there are

nine team roles in total, individuals

typical y have strengths in two or

three areas, meaning that four

people can cover all roles.

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MANAGING PEOPLE

Team Roles 128

129

PLANT

RESOURCE INVESTIGATOR

COORDINATOR

SHAPER

Extroverted and curious,

Calm, controlled, and mature,

Living for chal enge and

Resource Investigators

Coordinators have an

unafraid of confrontation,

are adept at exploring

overview of how a team is

Shapers are assertive and

new opportunities and

performing and inspire team

dynamic team members, who

building relationships with

members to stay focused

make things happen if the

external sources.

on common goals.

group reaches an impasse.

IMPLEMENTER

TEAM WORKER

SPECIALIST

FINISHER

Conscien

Readily adapting to situations

Offering extensive knowledge

tious

F

a

i

n

n

d

is

o

h

r

e

d

rs

e

r

and people, Team Workers

and expert skil s in particular

e

ly

n

,

n

s

o

u

r

d

e

et

th

a

a

i

o

l

t

are genuinely concerned with

subject areas, Specialists act

h

ve

a

r

s

l

oo

be

k

e

e

n

d

others’ wel -being, supporting

as independent advisors,

, dr

te

iv

a

in

m

g

t

t

o

h

e

c

colleagues and helping the

lending gravitas

om

t

p

h

l

e

et

t

e

as

k

team remain effective.

to the team.

at hand.

“Do you want a collection of

brilliant minds or a brilliant

collection of minds? ”

Dr. Meredith Belbin

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Personality Types

Assembling well-balanced teams can be a challenge for any manager. Understanding the personalities of individual staff members helps to maximize cooperation and minimize conflict.

Using personality tests

large organizations. Psychometric

themselves and how they

Identifying personality traits

testing—often in the form of an

might respond in particular

among personnel is a standard

detailed questionnaire that probes

scenarios—can also be used

procedure at many medium and

an individual’s perception of

as a screening method to

ENFJ

INFJ

Myers-Briggs

One of the most influential personality testing models, the Myers-Briggs Type Indicator® categorizes individuals into one of 16 different character types. To determine which type a person is most closely aligned with, they TEACHER

COUNSELOR

are assessed against four pairs of “opposing” qualities: Organized, change-making

Creative, nurturing, insightful

extroversion–introversion; intuiting–sensing; thinking–

feeling; and judging–perceiving. A questionnaire indicates whether an individual is an extrovert (E) or an introvert (I), ENFP

INFP

an intuiter (N) or a senser (S), a thinker (T) or a feeler (F), and a judger (J) or a perceiver (P). On the basis of this they are accorded an overal personality type. For example, someone who has the characteristics ENFJ

is designated a Teacher, whereas the characteristics ISTJ designate an Inspector.

CHAMPION

HEALER

Energetic, passionate

Idealistic, future-focused

ESFP

ISFP

“The best-adjusted

PERFORMER

COMPOSER

Charming, fun-loving

Flexible, spontaneous

people are the

‘psychologically

ESFJ

ISFJ

patriotic’, who are glad

to be what they are.”

Isabel Briggs Myers, Gifts Differing: Understanding PROVIDER

PROTECTOR

Personality Type, 1980

Attuned to the feelings

Industrious, caring

of others

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MANAGING PEOPLE

Personality Types 130

131

assess attributes such as

Values, and Preferences Inventory

understand themselves. Team

intelligence and aptitude when

(MVPI). These aim to provide

members can also be tested

candidates apply for positions.

managers with a thorough

to assess their suitability for

understanding of team members’

promotions and other roles within

Assessing personnel

personalities, enabling them to

an organization. There are various

The most popular personality tests

maximize individual productivity,

online sources for these tests,

include Myers-Briggs (see below),

team efficiency, and overall success. many of which produce scores that the Big Five, DISC, HEXACO,

They can also be invaluable

enable managers to compare the

OPQ32, and Hogan’s Motive,

in helping managers to better

relative strengths of personnel.

INTJ

ENTJ

EXTROVERT

OR INTROVERT?

Evaluating extroversion and introversion is one of the primary ways of classifying individuals. According to a 2016 analysis of BBC data by the Sutton Trust, highly MASTERMIND

COMMANDER

extroverted workers are 25 percent more likely to be Innovative, problem-Change-embracing, sociable

high earners. However, a 2010 study by the management solving

school at the University of Pennsylvania found that INTP

ENTP

introverted leaders were more likely to deliver better outcomes than extroverts.

Extrovert characteristics

❯ Assertive, charismatic, appear

to be natural leaders

ARCHITECT

VISIONARY

❯ Energized by interacting with people, friends, Logical, analytical, systematic

Innovative, inspirational

or strangers

❯ Social y active with peers

ISTP

ESTP

and employees

❯ Excellent at bouncing ideas

off others during the work day

❯ Prone to feeling threatened

by others taking initiative

❯ More likely to volunteer for committees and CRAFTER

DYNAMO

other extra jobs

Observant, practical,

Energetic, dynamic,

problem-solving

conflict-managing

Introvert characteristics

ISTJ

ESTJ

❯ More reluctant to sel themselves

❯ Excellent listeners

❯ Good at drawing energy from ideas, images, and thoughts

❯ Able to make deep connections with people

❯ Happy to let team members take the initiative INSPECTOR

SUPERVISOR

Neat, process-driven

Hardworking, group-

orientated

US_130-131_Personality_types.indd 131

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Competencies

A competency is an ability required for a specific job. Managers need to be able to define and assess employees’ competencies

to ensure that they have the right people doing the right jobs.

Regulatory

compliance

Types of competencies

stockbroking firm, or from those

Certification to show

Goals or targets define what an

of a more junior team member

compliance with health,

employee is required to do. By

in the same organization.

safety, environmental, or

contrast, competencies reveal how

Competencies can be grouped

other regulations

employees achieve their goals—

into two main types—core and

for example, whether the person

functional. Core competencies are

is good at problem solving, works

skills that are valued in most

well within a team, or perseveres

organizations as well as personal

Relevant

in the face of challenges.

traits that align with the workplace

qualifications

Competencies encompass

culture. Functional competencies

Evidence of experience

many areas, from basics such as

are job-related skills, which are

and/or training, such as

literacy to task-specific technical

often measurable and defined

academic or industry

skills and knowledge, professional

by specific qualifications.

qualifications

qualifications, and personal traits

By defining core and functional

and behaviors such as self-

competencies, managers can clarify

motivation. Desired competencies

what is expected in specific roles

can vary according to the

and align individual or team

employee’s role and often differ

activities with the organization’s

by industry. For example, the

overall purpose and values. These

competencies required of a hospital

definitions can be used to recruit

manager may differ from those

job applicants and guide the

required by a manager of a

development of employees.

FROM INTELLIGENCE TO COMPETENCY

In 1973, David McClel and published

focus on identifying competencies

Defining

an influential paper in the journal

and testing for them during the

American Psychologist arguing that

recruitment process.

competencies

testing for intelligence, or IQ, was

When creating a job description

less effective than testing a person’s

for a certain role, it is useful to

competence in managing real life—

including practical, interpersonal,

outline a list of desired competencies

and leadership skil s. McClelland

for prospective job applicants.

drew on research showing that

Managers need to define a few core

academic achievement at school

competencies (see examples, right)

was not a reliable predictor of job

indicating that an employee is

performance. He focused on finding

appropriate for the role and wil

out how a successful worker thinks

help fulfill the organization’s goals.

and acts and how to develop their

The description should also specify

competencies. His ideas formed the

the applicant’s required competencies

basis of the contemporary business

(see above) and define their

expected performance level.

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MANAGING PEOPLE

Competencies 132

133

Technical

NEED TO KNOW

skills

Evidence of technical

❯ Hard skills are formal y acquired, Regulatory

Up-to-date

knowledge, such as a

quantifiable indicators of ability,

compliance

knowledge

certificate from a

such as a certificate or degree.

Certification to show

training course

Evidence of keeping

These skil s come under functional

compliance with health,

abreast of developments

competencies.

safety, environmental, or

in the relevant industry

❯ Soft skills are personal, cognitive, other regulations

or work environment

and behavioral abilities, such as

communication skil s, critical

thinking, and problem-solving.

These fall in the group of core

competencies.

Track

❯ Transversal skills, also known as

record

transferable skil s, can be applied

to a wide variety of jobs. These

Evidence of previous

include basics such as literacy

success in the field of

and numeracy and fundamental

work, such as a portfolio

personal skil s such as the ability

of completed projects

to work well with others.

93%

of all employers say that

CORE COMPETENCIES

❯ Teamwork: the ability to

critical thinking, clear

col aborate and communicate

effectively with coworkers

thinking, and problem-

❯ Decision-making: effective

responses to chal enges

solving abilities are

❯ Good work ethic: resilience,

self-motivation, tenacity

more important than

❯ Thinking skills: analytical

a job applicant’s

thinking, innovative ideas

degree major

Association of American Colleges and Universities, 2013

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Finding and

Selecting Talent

Hiring the right people is central for building a successful team.

Managers need to plan the process to ensure that they choose those with the appropriate personal and professional skills.

Initial planning

roles are asked about their main

post; deciding on the elements of

An effective recruitment and

tasks and the intended outcome of

the interview process, including

selection process has several steps,

their work. This information is used whether to carry out preinterview from identifying a role to be filled to to outline the qualities and skills screening by phone

employing the new candidate and

that candidates should possess.

and who will sit

integrating them into the team.

Next, managers and coworkers

on the interview

The first stage is to carry out a

of the new person need to plan the

panel; and compiling

job analysis of the role. To define

recruitment process. Tasks involve

questions for use in

the core functions and necessary

drafting a job description; deciding

prescreening and

skills, current employees in similar

where and how to advertise the

the interview itself.

THE RECRUITMENT

Fishing for talent

PROCESS

Just because an organization advertises

Finding and retaining the right

a job vacancy, it does not mean that the

employees requires careful

best candidates will apply, or then take

recruitment planning.

the role if it is offered. People have a

choice over where they work, so in

❯ Advertise positions both

order to appeal to the best talent,

internal y and external y.

the organization and role must seem

❯ Promote the organization’s

attractive. Managers must promote

values so that applicants are

the wider benefits of the organization

aware of the organization’s

to candidates, such as rewarding work,

philosophy.

and structured career progression.

❯ Schedule interviews close

together for ease of comparing

candidates.

❯ Check the candidates’

backgrounds and consult

T

their references.

N

EN

TS

❯ Ensure that candidates know

PM

ISSIO

JEC

whether an offer is conditional

O

ELO

(i.e., subject to further testing)

G M

PR

EV

G

or unconditional.

❯ Set up induction processes

INSPIRIN

EXCITIN

to help new employees settle

CAREER D

into the workplace.

US_134-135_Recruiting_Talent.indd 134

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MANAGING PEOPLE

Finding and Selecting Talent 134

135

Interviewing

BEHAVIORAL INTERVIEWING

Once all the applications are in,

the résumés are reviewed. It may

This technique is based on the idea that how someone has behaved be helpful to use prescreening to

in the past is the best predictor of how they will behave in the future.

select a “long list” of applicants

Some sample questions il ustrating the technique are given below.

who will be invited to interview.

Do ask: How did you go about

Do not ask: Have you ever

The interviewer or panel needs

training a supervisor?

trained a supervisor?

to decide in advance who will ask

questions on which topics. To

assess applicants equally, a

checklist should be drafted,

Do ask: Have you ever faced a

Do not ask: What would you do

dissatisfied client?

if a client threatened to leave?

including questions on

personal as well as technical

capabilities. A skills test or a

personality test may also be

Do ask: How did you implement

Do not ask: How would you

change management in your

implement change management

helpful. After the interviews,

previous job?

in our department?

those involved should meet

to discuss the applicants.

S

E

S

N

S

O

R

TS

ITIES

C

EA

N

IA

JEC

LTU

TIO

L

O

TA

F ID

TUR

TLETS

A

L CU

U

C

PR

PEC

G O

T

G

IA

PPO

E O

IVIT

GEN

R EX

L O

TIV

IE

SHARIN

UA

S

EXCITIN

CON

CLEA

EQ

CREA

US_134-135_Recruiting_Talent.indd 135

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Benefits of

Diversity

Everyone within an organization has different ideas and experience to offer. When managed well, this creates a valuable synergy that enables diverse organizations to outperform their non-diverse counterparts.

Managing a diverse team

productivity, since a diverse environment encourages In today’s workplace, most companies have diversity creativity. However, there are challenges in policies and programs. They do so not only to meet harmonizing the different personalities, values, equal-opportunity standards but also to enhance and cultural attitudes of a diverse team, and facing Being inclusive

Just as a garden is more bountiful and vibrant when it has a mixture of different plants, a diverse workplace is often a more productive one. For a manager, the key to achieving a diverse workplace is the use of a bias-free recruitment and selection process and company policies that encourage inclusivity.

Selection process

Mechanisms to ensure

bias-free recruitment

include removing al

personal information

from candidates’

Recruitment

applications.

Inclusive recruitment

starts with informed

advertising, which

should be targeted to

encourage the widest

range of applicants.

US_136-137_Diversity.indd 136

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MANAGING PEOPLE

Benefits of Diversity 136

137

these challenges is a key task for a manager. The Diverse companies

goal is to respect individuals’ differences while at the same time encouraging what they have in common.

outperform industry

Leading an effective team, therefore, involves balancing the needs of both the group and the norms by

individuals within it—and this requires managers to ensure that their personal values do not interfere with team dynamics. Studies have also shown that diversity 35%

among managers leads to greater innovation and higher revenues for their companies. This has led to companies seeking diversity throughout their staff McKinsey & Company, management consultants, 2015

as well as providing on-the-job diversity training.

Bias training

Ongoing training for al

employees can address

issues of unconscious

bias by raising awareness

and offering advice.

Company policies

Working conditions

An inclusive workplace

The different needs of

depends on policies

individual employees,

being implemented to

such as their family

ensure that all employees

responsibilities, should be

feel equal y valued.

perceived and supported.

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Workplace

Well-being

From upgrading furniture and equipment to monitoring workloads, there are many ways in which a manager can boost employee well-being and foster a happier, healthier, and more committed workforce.

Well-being initiatives

imposing strain on any part of

Ensuring that a workplace is both

the body; cognitive ergonomics—

Designing the work

appealing and functions optimally

ensuring that devices and systems

is increasingly a priority for

are user-friendly; and organizational environment managers who want to keep staff

ergonomics—setting up structures,

A workplace that is bright, safe, comfortable, positive and engaged. A well-policies, and work practices that

and ful y functional safeguards employee

designed workplace reduces the

foster manageable workloads.

health and promotes well-being. In a

risk of accidents, illness, and

Well-being initiatives, often led

thoughtful y planned work environment,

stress-related health problems.

by HR managers, vary according to

every aspect, from machines to air quality, Ergonomics—the science of

the company but they can include

is tailored to the tasks required and the

benefit of the staff who carry them out.

tailoring products and systems to

health insurance, user-friendly

Companies that have addressed these

the end user—can help managers

working areas, risk assessments,

issues report higher productivity,

achieve this. Ergonomics covers

fair and open remuneration, and

less absenteeism, and increased

three areas: physical ergonomics—

a management style that involves

staff retention.

designing furniture and devices to

staff in decision-making and

suit a user’s anatomy without

ensures that their voice is heard.

NEED TO KNOW

❯ Anthropometry is the science

of measuring the body and its

proportions, used in the design

of work stations, for example.

Equipment

❯ Participatory ergonomics

Safe machines that

means actively involving

cause no physical

employees in developing and

strain can aid work

implementing workplace changes.

efficiency.

❯ Human-factors engineering is

a discipline that takes into account

human strengths and limitations

when interactive devices, systems,

and structures are designed.

NEW HOMES • NEW HOMES • NEW HOMES

❯ Psychosocial risk management

Workload

is concerned with examining

Monitoring and

workloads, work conditions, and

adjusting workloads can

working methods to reduce the

ensure that employees

likelihood of mental health issues.

are able to manage their

tasks without stress.

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MANAGING PEOPLE

Workplace Well-being 138

139

Doubling ventilation rates can

HOW EMPLOYEES

increase cognitive performance

CAN HELP

by more than

Col aborating with staff can help

10

managers to:

❯ Identify workplace risks.

❯ Ensure that health and safety

controls are practical.

❯ Gain employee commitment to

Associations of Cog0

nitive Fu %

nction Scores with Carbon Dioxide, Ventilation, and Volatile working in a safe, healthy way.

Organic Compound Exposures in Office Workers, Harvard University, 2016

Vision

Free eye tests

and ensuring

Lighting

Air

screen displays

Well-designed lighting will reduce

Filtered air, good ventilation, and

are optimized

eye strain and ensure that staff can

adjustable temperature settings

protects sight.

perform their work efficiently.

support employee well-being.

Software

Using intuitive

programs that are

Workspace

Furniture

easy to operate

To enable staff to work comfortably,

Office furniture should support

helps avoid

workstations and work spaces must

good posture and be adjustable

employee stress.

be designed to suit their needs.

to meet different users’ needs.

Noise

NEW HOMES • NEW HOMES • NEW HOMES

Sound-masking

Signs

technology can

Safety signs and

protect hearing and

important notices

reduce the impact of

should be in

noisy environments

prominent positions

on productivity.

and easy to read.

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Retaining Talent

Engaged and hardworking personnel are a huge asset to any organization. Nurturing and channeling their talents and encouraging them to stay is therefore a key part of management.

Keeping the best

feedback to ensure that they remain motivated. If Managing talented employees effectively and possible, they should be given more autonomy and persuading them to give their all for as long as projects of their own—as well as financial incentives, possible is important for any organization. Gifted and such as a promotion or a bonus (see pp.138–139).

productive staff contribute to the success and future People stay with an organization when they feel of a company and are also expensive to replace.

valued. This means that managers must trust them, Good managers therefore try to keep all employees respect their opinions, and listen to any grievances satisfied by providing encouragement and dealing that they may have. When valued employees do decide swiftly with issues. However, high-achieving staff may to leave, however, it is good practice to hold an exit be easily bored and require challenging tasks to keep interview to establish why they are going and whether them engaged. They may also need constructive anything can be done to change their minds.

Staff turnover

In today’s flexible market, employees change jobs much Give new employees

1

more frequently than in the past. To avoid the high cost an easy first day with a

of replacing staff, managers should make employees prepared workspace and a welcome

feel welcome from the start. They should also set clear lunch or drinks so that they can get

guidelines for the work and offer incentives to ensure to know their col eagues.

that employees stay focused and motivated.

MEASURING TURNOVER

Instigate a trial period

By measuring their employee turnover

2 to enable new employees

rate, companies can monitor the costs

to settle in and for managers

of losing or hiring staff. The percentage

to assess them.

of staff leaving over a set period, such as Average worldwide

a year, is calculated with a formula: the

number of employees who left is divided

staff turnover rate is

by the average number of employees,

and the total is multiplied by 100.

Staff who left

x 100

10

Linkedin, 2017

.9%

(Staff at beginning of set period +

staff at end of set period) ÷ 2

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MANAGING PEOPLE

Retaining Talent 140

141

Motivate employees by

4 providing regular praise and

feedback, new work chal enges, and

opportunities to progress within

the organization.

Invite employees

6 who decide to leave

to complete a questionnaire

Discuss roles and

or attend an exit interview

3 responsibilities, ensuring

to discuss their reasons, and

that employees understand their

how they might be retained.

particular objectives.

Offer financial incentives to

5 productive staff, such as bonuses, pay raises, promotion, or company

benefits such as private health insurance.

THE COST OF STAFF TURNOVER

CASE STUDY

Replacing an employee

Zappos

HR COSTS

can cost a firm 50–60

TRAINING TIME

At online fashion brand Zappos,

percent of that

RECRUITING COSTS

retaining staff begins by recruiting

employee’s annual

the right people. Even the drivers

salary, according to

who pick up the candidates from

the Society for Human

the airport can decide whether

Resource Management.

they are appropriate. After four

When turnover is high,

weeks of paid training, new staff

managers must ensure

PRODUCTIV

W

IT

LOSS OF REVENU

LOW MORALE

are offered $2,000 to leave if the

that productivity is not

LO

Y

E

company is not right for them,

reduced by low morale

ensuring that all who choose to

among staff.

stay on are ful y committed.

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Meeting

Employees’ Needs

Job satisfaction relies on more than a good wage.

People perform better at work if their emotional and psychological needs are met too.

Understanding individuals

Successful managers understand what motivates each of their team members. This is the key to ensuring that they stay focused, maintain company loyalty, and achieve business targets. One of the best-known explanations of what motivates behavior is American psychologist Abraham Maslow’s “hierarchy of needs,”

which helps managers identify what each of their team members needs in order to perform well.

The hierarchy of needs

In 1943, Maslow published his paper “A Theory of Human Motivation”, which he described as a hierarchy of needs: the things that drive humans to act in order to satisfy those needs. His idea can be visualized as a pyramid, starting at the bottom with a person’s basic needs, and working up to emotional and spiritual needs, as each level is satisfied.

NEED TO KNOW

❯ Not everyone prioritizes their

needs in the same order, and

self-actualization is not everyone’s

goal, so the hierarchy may need to

be adapted for different people.

❯ Maslow’s hierarchy was based

on behavioral studies in the US,

but as behaviors vary between

countries, managers should be

sensitive to cultural differences.

❯ It is difficult to measure

satisfaction at each level

since many of the needs are

emotional, and so subjective.

US_142-143_Hierarchy_of_needs.indd 142

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MANAGING PEOPLE

Meeting Employees’ Needs 142

143

Life goals

5

X AND Y FACTORS

Provide guidance,

foster career paths, and

Two alternative views of what

take real interest in each

motivates people to work were

employee as a person.

developed by US management

Self-

professor Douglas McGregor.

actualization

Theory X assumes employees do

not real y want to work and have

Having grown

to be enticed to do so with rewards

and developed on a

or punished for not working. This

Well done!

spiritual level, a person

4

requires a hands-on management

Encourage

can achieve a sense of

style. Theory Y assumes employees

employees and reward

personal fulfillment.

are self-motivated and work to

good work with praise

better themselves, so they are best

and recognition.

managed by encouraging creativity.

Esteem

When a person is

recognized by others for

their achievements, they

begin to feel good about

Build morale

3

themselves, helping

Cultivate a positive

build self-esteem.

attitude within the team;

encourage diversity and

personal friendships.

Love and belonging

People like to feel as

though they are part of

a group—they need to

Secure future

build close relationships

2 Pay employees

and have a sense of being

adequately and provide

accepted and cared for.

a safe, stable, and clean

working environment.

Safety

Having a secure home

to shelter in and a stable

work environment help

Comfort

make a person feel safe in

1 Offer employees

the company of strangers

breaks, reasonable

or acquaintances.

working hours, and

comfortable conditions.

Physiological

A person’s most basic needs relate

to survival: having air to breathe;

having food, water, warmth, sleep,

and somewhere to shelter; and

being able to reproduce.

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Motivation

and Reward

Skilled managers cultivate dynamic and loyal teams by listening to their views, recognizing their value, rewarding success, and removing factors that decrease motivation.

Keeping staff motivated

team member, directly influencing

Employees with motivation show

whether that member is motivated

it through their commitment and

or not. A good manager always

Herzberg’s two-

effort in the workplace. Most

uses intangible rewards and

factor motivation

companies aim to encourage

applies tangible ones where

theory

these people, and less engaged

possible. Failure to motivate team

staff, with a program that rewards

members will result in high staff

Published in 1958, US psychologist

hard work, progress, and success.

turnover and reduced productivity.

Frederick Herzberg’s two-factor

motivation theory divided factors that

There are two types of rewards:

Different employees value

influence employee engagement into

tangible rewards, such as salary

different rewards. Some may want

“motivators” and “hygiene factors”.

increases, promotions, and

to reach management level; others

He argued that motivators, such

bonuses; and intangible rewards,

might value positive feedback or

as achievement, recognition, and

such as praise, interesting and

more responsibility within their

responsibility, have great potential

challenging work, and the hope

role. An effective manager chooses

to increase engagement. However,

of career development. The

the most suitable reward for each

unless hygiene factors, such as poor

department manager will decide

person, making clear the link

pay, low status, and job insecurity, are

how to apply the program to each

between reward and performance.

eliminated, staff will be disengaged no

matter how good the motivators are.

ENGAGEMENT AND MORALE

Motivated

Managers should recognize whether staff are engaged employees are

or not. Disengaged staff tend to be less productive and spread poor morale. They are also more likely to resign.

Low

s

U

ta

n

t

e

m

u

m

o

s

❯ Engaged employees work with pride, p

ti

project positivity toward col eagues, and

feel connected to the company. They

21%

n

l

v

o

a

o

y

t

o

t

e

e

r

f

e

d

e

s

t

e

h

l

m

a

v

a

i

t

s

a

y

t

m

h

lu

e

e

help drive innovation and profitability.

e

i

a

r

d

more productive and

n

w

in

o

g

r

f

k

u

l.

❯ Employees who are not engaged fulfill their core responsibilities but do not

seem to have passion and energy.

❯ Actively disengaged employees

22%

express their unhappiness and

more profitable than

dissatisfaction to coworkers on a daily

basis, bringing down team morale.

unmotivated staff

Gallup Q12 survey, 2016

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MANAGING PEOPLE

Motivation and Reward 144

145

MOTIVATORS

Rewarding

Achievement

Praise and

Responsibility

Growth and

C areer

work

Managers can

recognition

and autonomy

experience

development

Employees feel

create a sense of

Praise, positive

A good manager

Opportunities for

Many workers,

motivated if work

achievement by

feedback, and

should not

growth and

particularly junior

is interesting,

setting clear

recognition of

“micromanage”

personal

staff or those

chal enging,

goals and

success can

but allow

development

aspiring to

rewarding, and

encouraging

increase job

employees

are important

management

worthwhile.

the staff to

satisfaction and responsibility

motivating

roles, wil feel

take pride in

motivate

for their work.

factors.

motivated if

their work.

employees.

promoted.

Unfair

pay

Low

Staff wil feel

s

t their

U

ta

n

t

e

m

u

disengaged if ance.

m

o

s

p

ti

their pay does

n

l

v

o

a

o

y

t

o

t

e

e

r

f

e

d

not reflec

e

s

t

e

h

l

m

perform

a

v

a

i

t

s

a

y

t

m

h

lu

e

e

e

i

a

r

d

n

w

in

o

g

r

f

k

u

l.

HYGIENE FACTORS

Bad

Poor

c

Job

working

ondition

L

s

o

insecurity

ng w

relationships

orking

h

Staff are less

o

Poor relations

urs and

p

oo

likely to engage

among staff or

r faciliti

o

e

r

s

eq

with their work if

u

between staff and

ipmen

c

t

a

n

they feel they are

managers are

reduce

m

o

at risk of losing

demotivating.

tivation.

their job.

US_144-145_Motivation_and_reward.indd 145

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Team Development

Nurturing the skills of a team and helping it grow, meet challenges, and deliver results is a crucial managerial process. Done well, it boosts morale, binds the team, and encourages good performance.

Making the most of teams

Behavioral psychologists have

managers can encourage them to

Whenever a manager takes over

identified the key stages of putting

observe their own behavior and

an existing team or forms a new

a team together, from the initial

understand their experiences.

one to complete a task or project,

team meeting to the delivery of

Developing the talents of

the process of team development

a project. One of the best-known

individual team members is

should begin. It means assembling

illustrations of this process is the

equally important. Proven

the team and helping members

forming, storming, norming, and

strategies (see box, right), such

integrate, work together, face

performing (FSNP) model, first

as providing regular feedback,

challenges, solve problems, and

proposed by American psychological delegating new duties, or providing deliver results. It also involves

researcher Bruce Tuckman in 1965

team members with support

nurturing talent and recognizing

(see below). When team members

materials or a mentor, encourage

and addressing individual needs.

are also made aware of the process, employees to perform at their best.

The FSNP model

The FSNP model il ustrates the key stages of the team development process.

At each stage, a manager can use various techniques to steer the process along the right path. This model still forms the basis of contemporary practice in many organizations.

FORMING

STORMING

Individuals come together and get to know one another.

Relationships develop, members begin to voice ideas, They build trust and learn about the task ahead, and some may jostle for power. In this phase, the team including chal enges and opportunities. Managers should: needs strong leadership from managers, who should:

❯ Break the ice with a social gathering.

❯ Identify potential conflict and intervene sensitively.

❯ Consider trust-building exercises.

❯ Provide clear leadership to stay fixed on goals.

❯ Provide a clear brief with defined roles.

❯ Be prepared to support individual members.

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Team Development 146

147

NURTURING THE TEAM

NEED TO KNOW

Managers can help staff progress by conducting regular

❯ Adjourning is the final stage in the FSNP model, which reviews and offering them chances to develop by: Tuckman added later. It refers to the team disbanding, perhaps at the end of a project. Some members may

❯ Providing a buddy for new starters feel unsettled by this stage approaching.

❯ Scheduling coaching sessions

❯ Swift trust refers to the rapid formation of working

❯

relationships in teams, most commonly virtual, where Giving opportunities to work alongside more there is no time to develop a sense of mutual trust experienced colleagues

before starting work on the task.

❯ Delegating tasks that are more chal enging

❯ Facilitating moves to other parts of the organization to learn new skil s

❯ Providing a mentor for career development

❯ Organizing training courses for professional

“Coming together is

development

❯ Encouraging membership of relevant a beginning, staying

professional bodies

together is progress,

and working together

is success. ”

Henry Ford, founder of Ford Motor Company

NORMING

PERFORMING

Team members are now seizing the initiative and taking greater responsibility. As the team now requires less direction, managers may:

The team finds equilibrium as members work together

❯ Refrain from interfering unnecessarily and let the smoothly, each taking responsibility for their role and team get on with their work.

staying focused on success. Managers should:

❯ Permit a degree of challenge; this is not a problem

❯ Hold regular feedback sessions to check progress.

if members respect one another’s opinions, and it can

❯ Be alert to complacency by noticing its early signs.

lead to innovation.

❯ Encourage and reward small successes.

❯ Identify talents in individuals who could be assisted in their career-path progression.

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SMART

Management

Before assigning a task to a team member, it is vital to define the key aims. Setting SMART

objectives ensures that the task stays on track.

Setting objectives

day-to-day tasks, SMART planning

Doran stated that to be effective,

Initiatives like Peter Drucker’s

is more useful. Standing for specific, an objective does not have to meet management by objectives (see

measurable, achievable, realistic,

all five criteria; however, the closer

pp.122–123) are effective ways

and time-based, it was developed

it comes to meeting them all, the

of helping a company achieve

by US consultant George T. Doran

“smarter” it is.

its business goals. They involve

in 1981. Its simple approach was

After setting SMART objectives,

setting objectives and creating

intended to aid managers confused

it is vital to develop a specific plan

processes to meet them. But for

by the plethora of advice available.

of action to achieve them.

SMART planning

The simplicity of the SMART approach

has made it one of the most popular

S

M

tools for setting and achieving

SALES

objectives. By requiring that each

of an organization’s objectives is

measured against the five criteria,

SMART enables managers and team

members to approach tasks in a

consistent way. It also

100

10

reduces the risk of

setting goals that

are vague, hard to

measure, or may

ultimately never

be met.

S: Specific

M: Measurable

Set precise targets—such as “increase

Ensure that objectives are quantifiable

apple production from 10 to 100 per

so that the success of the task can be

day”—rather than generalizing about

assessed once it is completed. In other

desired results, such as “produce more words, ensure that a measurement apples.” Specify what needs to be

system is in place—for example,

accomplished, why it is important,

recording the numbers of apples

who is involved, where it will occur,

picked per day—and measure at the

and what resources are available.

start of the task and again at the end.

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SMART Management 148

149

“Objectives

GOALS AND OBJECTIVES

and... action

Business management experts have often discussed the differences plans are

between goals and objectives.

Goals

Objectives

the most

❯ Conceptual statements

❯ Specific steps for reaching goals

critical steps

❯ Relate to the big picture for

❯ Usually quantifiable and

the organization

measurable

in a company’s

❯ Employ emotive language

❯ Employ factual language

❯ Define the direction that managers

❯ Motivational, as achieving goals

management

intend a business to take

boosts morale of team members

process.”

❯ Express aspirations

❯ Support long-term goals

❯ Often continuous and long term

❯ Often short term, especial y on

a departmental level

George T. Doran

A

R

T

March

10

SUNDAY

A: Achievable

R: Realistic

T: Time-based

Question whether the group

Ensure that the entire task is

Set a time frame for the objective

has the necessary skil s to achieve

possible. Question whether results

to be achieved. The existing apple

an objective. For example, the

can be achieved given the current

trees need to be pruned in winter

apple business might require expert

constraints and conditions. For

to generate an increased crop the

horticulturists who are able to

example, if the lease on the orchard

fol owing summer. It may take two

increase production because

land is about to expire, it is unrealistic

years to achieve a large increase in

they have the skil s and expertise

to pursue expansion without first

yield and hence production, so ensure

to cultivate the fruit trees.

renegotiating the lease.

this is taken into consideration.

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Developing

Trust

Hard to earn but easy to lose, trust is a fundamental part of building and maintaining a professional reputation. Understanding how it works underpins every aspect of management.

Actions, not words

behavior is and how consistently

As in all areas of life, managers

it is observed and experienced

A delicate balance

do not win trust by what they say

by others within the workplace.

but earn it through what they do

Establishing trust between

The more trust employees have in

and how they act. According to

the manager and their team, and

one another and in their managers,

the stronger and more productive

workplace surveys, employees

within the team, will also have a

a team will be. A manager who

expect their bosses to behave

positive effect on the success of an

conducts business and personal affairs

with honesty and transparency

organization. The employees are

ethical y, communicates openly with

and act responsibly.

not only more likely to be engaged

their employees about what is

First, managers must be seen to

and productive at work but also to

happening within the organization

trust their employees and show that trust, and be advocates for, their and how well team members are

they are willing to stand by their

organization. Trust can be achieved performing, and admits to making word. It is important to foster trust

by encouraging employees to talk,

mistakes is more likely to be deemed

between the members of a team

using trust-building exercises, and

trustworthy. Here are some ways in

and between employees and the

setting an example by always

which managers can build mutual

company. A manager should also

being honest and talking openly

trust in the workplace.

consider how ethical their own

about difficult situations.

CASE STUDY

30%

Hewlett-Packard

In 1998, Hewlett-Packard made Fortune magazine’s list of employees do not

of 100 best companies to work for. But in 1999, a new management team cal ed for a drastic change in strategy, despite good performance to date, which left employees trust the company

feeling unappreciated. When business declined, employees were asked to take pay cuts with a promise they work for

of no redundancies —but 6,000 jobs were lost. A merger Edelman Trust Barometer, 2016

with computer giant Compaq in 2001 cost yet more jobs and was deemed to put an end to HP’s tradition of putting people and principles first.

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MANAGING PEOPLE

Developing Trust

150 151

Deal with issues

Demonstrate social

responsibly—a manager’s

awareness by encouraging

reputation is made or

measures that will benefit

broken during a crisis.

those in need.

Talk about personal values

Be transparent—admit

and past mistakes, but

to making mistakes

beware of sharing too

rather than covering

much information.

them up.

Demonstrate trust in your

Avoid office gossip by

employees—they will feel

taking a neutral stance—do

you do not trust them if you

not engage with rumors or

watch their every move.

acrimonious comments.

Empower team members

Give and accept feedback,

by communicating

be honest and constructive

honestly on the state

and al ow team members to

of the organization.

have their say, too.

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Dealing with

Staff Conflict

Even in well-run teams, moments of conflict can arise. The key to managing them is to recognize the early signs and put strategies in place before minor disagreements turn into something more serious.

Monitoring and understanding conflict

sometimes been brewing for a while before a manager Although a manager should seek to maintain good hears about them. Getting to know individual team working relations within their organization, there are members and how each person reacts to adversity still likely to be instances in which individuals, teams, helps managers recognize the early signs of conflict or departments come head-to-head in moments of (see box, below). Timing is also critical—a manager tension. If not managed, these situations can lead to who deals decisively with conflict before the situation full-blown battles that are potentially destructive, not intensifies will earn the respect of their employees.

only to employee morale but also to company culture If a dispute cannot be resolved in the early stages, or and business performance. In any conflict situation, the conflict involves a complaint about treatment in the the aim is to identify the underlying causes and workplace or company procedures, most organizations reach an amicable resolution. Conflicts may have have a formal process in place for managers to follow.

TOP FIVE SIGNS OF CONFLICT

Resolving conflict

The process outlined by an organization

The negative effects of conflict in an organization can manifest for managing conflict usual y includes

themselves in many ways. Managers need to be able to recognize the fol owing signs in order to prevent a situation from escalating.

both formal and informal guidelines that

managers can fol ow. Low-level conflicts

❯ Loss of motivation: team members become reluctant to participate may be dealt with on a more personal

in meetings or volunteer for new tasks.

basis, between a manager and team

❯ Withdrawal and antagonism: staff can be heard making incendiary members, but escalating grievances

remarks and may take part in fewer social activities than before.

require more official responses.

❯ Drop in productivity: reduced cooperation between employees often leads to less efficient processes and more avoidable errors.

❯ Increased absence: depression or stress at work can lead to long-term il ness or apathy about going to work.

❯ Negative feedback: staff questionnaires or surveys are useful in revealing underlying discontent within an organization.

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Dealing with Staff Conflict 152

153

PREVENTING CONFLICT

Act quickly when a conflict is

suspected to make it easier to

gain evidence of wrongdoing

before confronting anyone.

A delay in dealing with the

issue can lead to team members

losing respect for their manager.

Be aware of varying boundaries

between individual personalities

who may each deal with conflict

differently.

Offer consistent coaching to

give employees the emotional

skil s to deal more objectively

with issues, helping them

steer clear of conflict.

Respect differences and avoid

conflict by giving equal treatment

MAJOR CONFLICT

FORMAL ACTION

to staff who seem different or

An employment

Seek arbitration

have different values.

tribunal claim

(settlement) by an

independent body

Prevent tension by managing

workloads so that staff do not

feel under stress for prolonged

MAJOR CONFLICT

FORMAL ACTION

periods, which can lead them to

A formal grievance

Follow company

become tense and il -tempered.

against another

procedures for tackling

Talk to staff about their work.

employee

grievances

MINOR CONFLICT

INFORMAL ACTION

An ongoing problem,

Discuss the situation informally

with signs of rivalry,

with the individuals and address

stress, or

the underlying issues

resentment

MINOR CONFLICT

INFORMAL ACTION

A one-off

Talk to the employee, listening but not

disagreement

judging; keep a diary on the issue if it

threatens to be ongoing

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Delegation

Delegating—giving authority to a team member to carry out a specific task or role—is a core developmental tool for managers. It empowers staff with new capabilities and makes an organization more effective.

Entrusting authority

tasks required by their senior role,

Delegating responsibility to team

Distributing tasks among a team is

while the chosen team member

members can be energizing as

a basic management principle, but

feels empowered, not only due to

they rise to meet new challenges,

to work effectively, the manager

the trust placed in their abilities

and it also encourages them to

needs to delegate—handing over

but also by the chance to reinforce

take ownership of projects. By

some of their own responsibilities

and develop their skill set. In

delegating a particular task to

and authority to a chosen other.

addition, the new experience and

different staff members in turn,

This has a dual effect: the manager

responsibility can increase their

managers can enhance the overall

is freed up to concentrate on other

importance to their team.

skills and flexibility of their team.

Delegating effectively

Since the employee will be accountable for the outcome of the task or role, how the manager hands over the task is critical, as is their initial guidance.

Managers must prepare the team member by encouraging them to consider relevant factors, including how to integrate the new task with existing duties.

1

2

3

Consider which team

Give the employee enough

Set clear objectives

member is most suitable

authority to do the project

and guidelines

❯ Who can do the task?

❯ Verify that they agree to and

❯ Spell out any aspects of the

❯ Who is performing work they no

understand the expectations.

task that are nonnegotiable.

longer find challenging and wil

❯ Avoid stepping in to

❯ Define what they can and

benefit from doing this?

micromanage the employee.

cannot do without permission.

❯ Are they already overstretched?

❯ Stress to col eagues that the

❯ Give a clear schedule and set

❯ Will they be interested?

employee has a degree of

check-in times and deadlines.

autonomy.

❯ Al ow the employee to make

the task more efficient.

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Delegation 154

155

WHEN TO DELEGATE

46%

Some tasks should always be dealt with by the manager, but many others can be delegated. If a manager is reluctant to hand over responsibilities, this may simply be an attitude that can be changed, rather than a genuine obstacle.

of companies

❯ “There is no time to delegate; it is quicker to do it are concerned

myself.” Although it will take time to brief a staff member, it will pay dividends later when they can more quickly about the

understand what is needed in the future.

delegation

❯ “No one will be able to do this task as well as I can.”

While it is hard to impart experience and expertise, skills of staff

with the right information and training, staff can deliver.

However, some tasks, such as appraisals, disciplinary Institute for Corporate Productivity

(i4cp), 2007

action, and confidential matters, should not be delegated.

❯ “The team member already has a lot of work; I do not want to overload them.” Although staff may be busy, this could be a chance to increase their skill set and experience.

4

5

6

$

?

Be fair and reasonable

Assess the delegate’s

Stay accountable

❯ Provide the employee with

performance

❯ Maintain responsibility for

adequate resources to complete

❯ Provide mentoring, especial y

the outcome of the project.

the task, such as a budget.

if they are doing the task for

❯ If the employee is not delivering,

❯ Al ow sufficient time for the

the first time.

retrace steps 1 to 5 and modify

completion of each stage.

❯ Check in and provide

where needed.

❯ Be available to provide support or

constructive feedback.

❯ Avoid taking back the project

advice if the employee requires it.

❯ Recognize success at each stage

if possible.

and provide encouragement.

❯ Assess the outcome and provide

feedback to the employee.

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Big Ideas

Brainstorming sessions—in which people are encouraged to generate new ideas—can make a valuable contribution to problem-solving and innovation.

When managed correctly, brainstorming can facilitate breakthrough thinking.

Successful brainstorming

Including diverse individuals in the group is the key Business relies on innovation, but in the normal course to successful group brainstorming—a cross section of work, there are limited opportunities for generating of people from different disciplines, with varied new ideas. Advertising executive Alex Osborn created experiences, generally results in greater creativity.

the technique called “brainstorming” in 1948 after Posing the right kinds of questions is also important.

identifying that a lack of original ideas was stifling People will find it easier to contribute constructively growth in some organizations. Brainstorming is a if the scope of the session is focused on a problem dedicated forum in which individuals can freely that needs solving. During the session, the proposed propose ideas, no matter how quirky. These can ideas should all be recorded, and the most promising then be assessed, built on, or adapted.

ones should be short-listed for follow-up.

Together or alone?

Management experts are divided over

whether brainstorming solo or in a group

is more effective. People sometimes

generate more ideas on their own, since

INDIVIDUAL

they are less likely to be influenced by

others, while group brainstorming

BRAINSTORMING

sessions can be beneficial for increasing

Techniques to free up ideas when brainstorming engagement among team members

alone include:

buying in to solutions, and generating

diverse ideas. However, research shows

❯ “Free writing,” which involves writing anything that, since the number of ideas generated

that comes to mind, for a set period of time.

per person declines as group size

❯ Make a “spider diagram” to link ideas together.

increases, a group limited to between five

and seven is ideal. Bearing in mind these

varying benefits, a combination of both

approaches may deliver the best results.

S

EA

ID

S

S

EA

EA

“Brainstorm

ID

ID

means using the

brain to storm a

creative problem.”

Alex Osborn, Your Creative Power, 1948

MOST EFFECTIVE FOR GENERATING A LARGE NUMBER OF IDEAS

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Big Ideas 156

157

CASE STUDY

TOP TIPS FOR BRAINSTORMING

Creativity in brainstorming flourishes when certain limits are set at

3M and the 30 per cent rule

the start of the session:

Executives at US multinational

❯

company 3M are committed to

Provide a clear brief with one objective to enable a more focused approach supporting ideas that emerge

in the session.

from brainstorming sessions. They

❯ Maintain order by managing the people involved and preventing any introduced a rule that 30 percent

participants from dismissing the ideas of others and stifling creativity as wel of the revenue generated by each

as ensuring that everyone participates.

division must come from products

❯ Ask thought-provoking questions, such as: “What is the biggest drawback created over the previous four

of the company’s product?”, “How can we identify new markets?”, or “In what years. This motivates employees

ways can the company reduce costs without significantly impacting on our to innovate and to come up with

customers and clients?”

new products.

GROUP BRAINSTORMING

Tips for successful group sessions include:

❯ Use an outside facilitator so that the

❯ Hold back from criticism—treat all manager and team can focus on ideas.

ideas as equal y valid.

❯ Set a time limit for the session.

❯ Prioritize unusual or promising ideas.

❯ Remove all possible distractions, such

❯ Build on and refine proposals.

as electronic devices.

❯ Give participants a set period after

❯ Encourage participants to generate the meeting during which they can

as many ideas as possible.

submit any further ideas.

S

S

EA

EA

ID

ID

S

S

EA

ID

S

EA

ID

EA

ID

MOST EFFECTIVE FOR GENERATING TEAM SYNERGY AND BUY-IN TO SOLUTIONS

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Coaching and

Mentoring

Developing employees through coaching and mentoring has become part of the fabric of modern management. It ensures that staff get the relevant training and keeps them more engaged and productive.

The manager as guide

knowledge and professional

skills for their work and develop to

A key aspect of good management

judgment. For management, the

their full potential. A further bonus

involves guiding and training staff

benefits of both types of training

is that staff may stay longer in their

to ensure that they perform at their

are that staff quickly learn the right

posts because they feel valued.

best. Coaching and mentoring,

which have long existed, have

become more popular in recent

years and are now often part

of training and development

programs. Managers who

have hands-on experience and

COACHING

on-the-job knowledge are in

an excellent position to direct

❯ Short-term training designed to teach these types of trainings.

new skills relevant to the employee’s work.

Coaching is generally short term

❯ Specific to a particular task or area of work and may involve the manager,

and can help staff solve immediate problems.

another staff member, or an outside

❯ Clearly outlines what steps to take in a real trainer teaching employees skills

work situation the employee will encounter.

relevant to their work. Mentoring,

❯ Produces immediate feedback for a manager often directed by the manager,

on employee performance.

is focused on building long-term

Tailored training

Coaching and mentoring are different

techniques with different objectives.

Managers play a role in both. They may

appoint an outside trainer or experienced

staff member to coach a new employee in

skil s relevant to their job but may choose to mentor other staff over a longer term,

helping them advance their career.

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MANAGING PEOPLE

Coaching and Mentoring 158

159

CASE STUDY

94%

Retaining knowledge at American Express

The management at American Express introduced of employees would stay

an initiative in a bid to retain knowledge that could be lost when its workers retired. Those about to retire longer at a company if

were invited to shed their responsibilities gradual y and spend some of their time teaching and mentoring it invested in their career

younger employees. This al owed retiring staff to enjoy the benefits of a salary and workplace engagement for LinkedIn, Workplace Learning Report, 2018

longer, while educating the existing workforce.

GETTING INVOLVED

There are many ways in which a manager can play an active role in personal y mentoring team members:

❯ Make time available.

❯ Observe a new team member as they carry out a task.

❯ Informally discuss how the task went.

MENTORING

❯ Invite the team member to self-evaluate.

❯ Long-term program in which

❯ Offer feedback and agree on future objectives.

the manager or another experienced

senior staff member (who reports

❯ Encourage the team member to try new approaches.

back to the manager) guides one

or more employee.

❯ Focuses on an individual’s overal

professional and personal growth.

❯ Sets fluid goals that can alter as business objectives change.

❯ Has an agenda that evolves over

time as the individual develops.

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Continuous Learning

A valuable development tool, continuous learning is the practice of ongoing staff training—within and outside of the workplace. Initiated by the manager, it enables personnel to improve their skills and performance and increases their motivation.

Educating employees

A challenge facing organizations

“microlearning” resources, as

Managers can play a critical role in

today is that many individuals

and when required (see box, right).

actively facilitating their employees’

do not feel they have time to be

In any organization, however,

development at every level, from

away from their job to attend

managers should seek to nurture

mentoring within the organization

courses. As a result, the concept

the development of the members of

to organizing external courses.

of “learning in the flow of work”

their teams by ensuring that they

An employee will learn on the job

has emerged in recent years.

have access to the type of learning

through experience, but continuous

Organizations at the forefront

programs they most need.

learning formalizes the process,

of continuous learning now

providing support and resources

offer digital

through an ongoing learning

systems that

“curve” that yields tangible results. give employees The learning programme should

immediate

encompass not only job skills, but

access to

also include opportunities for

intellectual and behavioral growth.

The continuous

Experience

learning curve

Facilitate the

To encourage staff to progress

individual’s learning

along a curve of continuous learning,

by giving them new

managers should provide a range of

tasks and al owing

Mentoring

developmental opportunities. The

them to make

Provide employees

exact types of training—and the order

mistakes

with access to

in which different aspects of learning

CONTINUOUS LEARNING CURVE

one-on-one advice

are undertaken—wil vary according

and career-path

to the needs of the individual and

E

Continuous

guidance

the organization.

NC

professional

A

development

FORM

Encourage gaining

further qualifications

PER

Initial

Knowledge

with industry-

capability

Enroll them on formal

recognized bodies

Assess the skil s

external courses, as wel

and attitudes

as in-house training

of new starters

DEVELOPMENT CURVE WITHOUT CONTINUOUS LEARNING

TIME (YEARS)

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Continuous Learning 160

161

MACRO- VS. MICROLEARNING

Most employees have little time for formal expert-led

“macrolearning” courses, so self-guided digital

“microlearning” tools have become increasingly popular.

Microlearning

Macrolearning

“I need to know now”

“I want to learn new skil s”

Requires 5 minutes or less;

Requires several hours

desk-based

or days; classroom-based

Topic/problem-based

Concepts, principles,

and practices

Search the answer to a

Study exercises set and

question

graded by experts

Personal access to indexed, Learn from experts; get Collaboration

searchable systems

coaching and support

Al ow them to learn

User-friendly, accurate,

Authoritative materials

new approaches and

digital content

from teacher or author

acquire new tools by

working with others

Experience

Sources: videos, articles,

Sources: courses,

microlearning platforms,

classes, and corporate

Facilitate the

and workflow learning

programs

individual’s learning

tools

by giving them new

tasks and al owing

Mentoring

them to make

Provide employees

mistakes

with access to

CONTINUOUS LEARNING CURVE

one-on-one advice

and career-path

guidance

CASE STUDY

Uber Technologies, Inc.

To help train Uber drivers in Europe, the Middle East, and Sub-Saharan Africa, Uber adopted a microlearning platform via users’ smartphones. Drivers who used it were ready to start in the business 13 percent faster than those who attended sessions in person at a training facility. Ongoing training with the learning platform gave drivers more opportunities to earn money and helped increase driver productivity and satisfaction by 8

percent, compared with other drivers.

DEVELOPMENT CURVE WITHOUT CONTINUOUS LEARNING

TIME (YEARS)

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Performance

Management

Managers can gauge the performance

of team members by using a performance

1. Plan

management system (PMS). This is

❯ Begin the process as soon as an

a framework that defines employees’

employee joins the organization.

goals and enables regular discussion

❯ Agree on performance expectations

and goals with the individual.

of their progress.

❯ Make the objectives time bound by

including schedules and deadlines.

Ongoing feedback

❯ Ensure that their goals are consistent with the original job description.

A performance management system

(PMS) is intended to measure an

❯ Reassess and reset goals at regular intervals, typical y at the start

individual’s progress from the day they

of each business year.

join an organization, throughout their

career, until they leave or retire.

By using a PMS, managers can monitor

the progress of team members, those

team members can receive feedback

on their progress, and senior leaders

can gain an overall picture of which

areas of the organization are thriving

and which are not.

Before progress can be measured, the

manager sets benchmarks or objectives.

These form the starting point of the

employee’s journey through the company

and must be aligned with the values of

the organization. Progress should be

monitored regularly, while feedback

sessions provide an opportunity

for managers to give praise and

4. Reward

encouragement. At the end of the

year, or after an agreed interval,

❯ Ensure that the individual’s achievements managers should also hold

are formal y recognized.

a formal review of the

❯ Provide a reward in proportion to their employee’s performance.

achievements and goals. These can include

a pay increase; a bonus; a job promotion; time off.

❯ Assign a project specifical y tailored to the individual as an opportunity for them to develop further.

❯ Ensure that they are acknowledged by their peers by giving public praise of their achievement.

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MANAGING PEOPLE

Performance Management 162

163

2. Monitor

CONTINUOUS

PERFORMANCE

❯ Measure performance on a regular basis; conduct reviews no less frequently than

MANAGEMENT

monthly or quarterly.

In recent years, organizations

❯ Provide constructive feedback.

such as Adobe and Microsoft

❯ Coach the employee to help them

have found it productive to

reach their performance goals.

treat performance management

❯ Adjust their goals when a change in as an ongoing process in which

the business environment forces the

performance is discussed and

organization to reassess its priorities.

reviewed in smal er, consecutive

cycles, instead of annual y. They

have found that more regular

performance discussions and

more immediate feedback lead

The Performance

to more motivated employees.

Management system (PMS)

REAL-TIME

There is no one-size-fits-all PMS—each organization FEE

must create a system that reflects its own values and ILE GOALS

D

G

BA

goals. Central to its success is a shared commitment CK

from both managers and employees to strive for goals

that are aligned with their organization’s objectives.

A

T

Holding regular monitoring and coaching sessions March

N

is helpful for employees and managers alike (see D

E

A

M

box, right), to encourage continued progression, 10

I

P

LY

MONDAY

and prevent bad habits from developing.

CHECK-INS DISCUSS DEVELO

32%

of employees

3. Review

have to wait

❯ Appraise the employee’s

performance in a review.

for more than

❯ Listen to feedback from peers (including 3 months to get

other managers) about the employee.

❯ Identify any adjustments that need to feedback from

be made to the employee’s trajectory.

❯ Help the employee plan their future.

their manager

Officevibe survey, 2016

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360-degree Feedback

A structured method of assessing an employee’s capabilities, 360-degree feedback involves collating views from various coworkers to generate a fair and holistic overview.

Wide-ranging assessment

a balanced picture of a person’s

The first known use of 360-degree

abilities, compared with one

feedback was by German military

produced by a manager alone.

personnel in World War II. Later

While the 360-degree technique

used by the Esso Research and

gives a broad overview of an

Engineering Company in the 1950s

individual’s performance, it is

and General Electric in the 1980s,

less detailed than a performance

it is now practiced by a wide

appraisal that focuses on specific

variety of organizations.

practical skills and targets.

Feedback on an individual is

However, managers should give

usually invited from colleagues,

feedback in an objective but

the direct supervisor, subordinates,

positive way; otherwise, the

managers of other departments,

appraisee could be demoralized

and even clients or customers. This

by any critical comments they

wide-ranging assessment provides

receive from respondents.

Subordinates

Team or staff members who

report to the appraisee

Structured questionnaire

The 360-degree process involves a structured questionnaire that is used by both the respondents and the appraisee. The questions invite respondents to assess the appraisee in relevant areas such as leadership, teamwork, planning, and achievements. Many organizations now use online questionnaires to help them analyze the information and produce results quickly.

Selection

1 To build trust and confidence, the appraisee should be given as much input as possible into shaping the process. The person may be invited to select the respondents who will rate their performance.

Questionnaire

2 The questionnaire is given to the respondents.

The questions should be open-ended and focus on specific skil s that the appraisee shows or needs to improve. The appraisee also completes a copy for self-assessment.

Peers

Results

3

Col eagues of a similar

Results are compiled by the manager, who then rank to the appraisee

discusses them with the appraisee. The feedback is used to help the appraisee build on their strengths and work on areas that need improvement.

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MANAGING PEOPLE

360-degree Feedback 164

165

CULTURAL

Self

DIFFERENCES

The appraisee, who

gives an honest account

Even though 360-degree feedback

of themselves

is a widely accepted practice,

cultural differences can affect

results through “leniency bias”—

that is, the tendency of individuals

to overrate or underrate

col eagues, or themselves,

depending on cultural attitudes.

For example, in regions with a

strong social hierarchy, such as

Southeast Asia, respondents may

inflate scores for fear of giving

offense or out of respect for

the appraisee. They may also

be inclined to underrate their

own performance. This leads to

a significant gap between how

an employee rates themselves

and how they are rated by

others. In the US, on the other

Manager

hand, results of self-appraisal

The appraisee’s direct

and those of respondents are

manager or managers

typical y more closely matched.

Multinational companies take this

into account when comparing the

performances of regional offices.

90%

NEED TO KNOW

❯ Using eight to ten respondents

maximizes the reliability of the

of Fortune 500

feedback results.

companies use

❯ In some territories, such as

Customers or clients

the US, the UK, and the EU, an

People outside the company

employee has the right to see

360-degree

who depend on the appraisee

information about them held by a

company—including any feedback

feedback

from a 360-degree questionnaire.

Terri Linman, San Diego State

University, California, 2006

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COMMUNICATION

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Effective

Communication

An understanding of the way in which people process visual and written information is the basis of good management. It is fundamental to productive team building, ensuring clarity of purpose and positive connection.

Clear communication

As far back as 1964, subscribers to the Harvard Verbal communication

Business Review rated the ability to communicate

❯ Use short sentences and simple words as “the most important factor in making an executive for clarity.

promotable.” Numerous reports confirm significant

❯ Speak at an unhurried pace; al ow pauses business losses as a result of poor communication.

so that listeners can take in what you say.

Good communication skills are vital to every aspect

❯ Hold your head up and breathe calmly of a manager’s role, ensuring they are able to get their to keep your voice clear.

points across clearly and concisely when briefing staff,

❯ Vary the pitch and volume of your

discussing issues, and offering feedback. This also voice to keep listeners interested.

means choosing the right medium (see Communication

❯ Ask questions to create dialogue.

Tools, pp.176–177) and level of formality and asking the right questions at the right time (see box, far right)—for instance, framing open questions to team members in a straightforward way that is easy to understand.

The ability to listen and respond to staff is another core component, because it motivates and engages others (see Active Listening, pp.170–171). An understanding of nonverbal communication (see pp.172–173) is also important, so that managers do not inadvertently undermine their own messages and are able to interpret accurately others’ cues.

Nonverbal communication

Forms of communication

❯ Make frequent eye contact (if cultural y Managers need to be proficient at handling all forms appropriate) and let facial expressions

of communication, whether verbal (in person or on indicate your interest in the other person.

the telephone), nonverbal (body language and tone),

❯ Show respect for the personal space of others.

or written (via letters and emails). Each of these

❯ Dress appropriately for your environment.

require certain skil s to effectively convey meaning

❯ Sit or stand straight to show confidence.

and foster a positive personal connection.

❯ Use a warm, pleasant tone of voice to build rapport.

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COMMUNICATION

Effective Communication 168

169

Assigning tasks effectively

❯ Think through your expectations and frame them clearly, verbal y or in writing.

QUESTIONS TO AVOID

❯ Brief the employee directly; ask them to repeat your instructions to ensure

Open questions invite fuller

that they understand.

responses, while some types

❯ Discuss with the employee how they

of questions can alienate staff

plan to carry out the task; check that

and should be avoided.

they have the correct resources.

❯ Manipulative questions

❯ Give a clear deadline for the task and can sound intimidating and

arrange a follow-up conversation.

lead to mistrust. Do not say:

“So you will send me that

summary by tonight, won’t you?”

Instead, say: “Could you let me

have the summary by tonight?”

❯ Multiple questions cause

confusion. Do not ask: “When

can you do it? How about today?

Tomorrow? Or the day after?”

Ask a single question only.

❯ Destructive questions can

provoke animosity. Do not say:

“Are you saying that I am lying?”

Instead, find out what the

listener is thinking by asking:

“What concerns you about

what I have just said?”

Written communication

❯ Keep your messages concise;

use short words and sentences.

❯ Define the main point or

instruction at the start of

your message.

❯ Use pleasant and respectful

wording, even when raising

“The art of

problems or making criticisms.

❯ Close your message with a clear

communication

request for the response or action

needed and provide a due date.

is the language

❯ Proofread your message

before you send it.

of leadership.”

James Humes, US presidential

speechwriter

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Active Listening

Active listening means being fully engaged with what a speaker is saying, as well as observing any non-verbal cues. It is an integral part of effective communication, and an essential skill for all managers.

Learning to listen

is listening without reacting,

Mastering the skill of active

Research has shown that a

whereas active listening requires

listening enables managers to open

manager’s performance, and their

the listener to respond. This entails

channels of communication within

efficiency as a leader, are directly

picking up on the speaker’s body

the workplace. Team members are

linked to their ability to listen

language and tone of voice,

more likely to talk about their ideas

effectively. This skill is especially

mentally taking note of the points

or any issues if they feel that they

important in management, as it has

that they are making, and resisting

are really being listened to and

been found that paying attention

the urge to interrupt them.

will perform better as a result.

helps to cultivate a motivated and

loyal team—who then have the

confidence to share their ideas.

Active listening also enables a

manager to recall information

more accurately and reduces the

likelihood of misunderstandings.

Unlike hearing, listening is

not an automatic response.

Being a proficient listener

involves concentrating fully on

what the speaker is saying—which

is a skill that can be learned and

honed over time. Behavioral

psychologists also make a

distinction between passive and

active listening. Passive listening

How to listen

actively

Listening with your complete attention

encourages the speaker by showing

them that they are being heard. An active

listener can use nonverbal responses,

such as nodding, making eye contact,

or smiling—or verbal responses, such

as asking relevant questions or recal ing

particular details. It is important to show active listening thoughout a conversation.

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COMMUNICATION

Active Listening 170

171

1. Focus

Fewer than

Eliminate distractions by

turning off your phone and

2. Show

not trying to multitask; pay

empathy

attention, be patient, and

Nod to acknowledge the

do not interrupt.

speaker’s words, and if

2% of

fitting, make eye contact.

professionals

have had

3. Mirror

any training

Pay attention

to the speaker’s

in listening

body language by

subtly mirroring it.

skills

Glenn Llopis,

www.forbes.com, 2013

4. Paraphrase

Confirm your understanding

by repeating in your own

words what you believe

the speaker has said.

BARRIERS TO ACTIVE

LISTENING

❯ External distractions,

5. Respond

such as a phone ringing

or the noise of traffic on

Wait until the speaker

the road outside

has finished talking before

you respond to what they

have said.

❯ Physical distractions,

such as thirst, hunger, a

headache, or the need

to go to the bathroom

❯ Internal distractions,

such as thinking about

how to respond before

the speaker has finished

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Nonverbal

Communication

The messages people convey through nonverbal signals are often more revealing than their words. Understanding their meaning can help managers interact better with their colleagues, staff, and clients.

A powerful tool

People’s facial expressions and

gestures can powerfully influence

their interactions with those

around them. Research into this

area of study—kinesics—was

CHECK YOUR

CONTAIN YOUR

pioneered by anthropologist Ray

APPEARANCE

MOVEMENTS

Birdwhistell, first outlined in his

The way you dress creates a

When making gestures,

book Introduction to Kinesics (1952).

first impression. Ensure that

keep them small and close

It reveals that 55 percent of

your clothing and grooming are

to your body because this

communication is body language,

appropriate for your audience,

gives an image of

38 percent is vocal (such as tone of

your reasons for communicating,

confidence and

voice), and only 7 percent is verbal.

and the setting.

authority. A low but

Effective use of nonverbal cues

audible voice and a

can influence workplace outcomes.

relaxed posture add

For instance, a manager who

to a sense of calm

control.

smiles, uses a light tone, and has

a relaxed posture when giving

feedback to staff can create a

positive impression, even when

difficult subjects are being

broached. However, unwitting

use of negative body language

may have an adverse effect. A

Using nonverbal cues

stiff posture and avoidance of eye

In the workplace and elsewhere, gestures, tone, eye contact when meeting a new client

contact, and posture can instantly convey a message could be interpreted as hostility,

over and above your words. Being aware of your own and neutral feedback delivered

body language and that of others, and understanding with negative body language

what it indicates, can prove invaluable in interactions can be viewed as criticism.

with col eagues and in negotiations.

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COMMUNICATION

Nonverbal Communication 172

173

SAME GESTURE, DIFFERENT MEANING

Not all the members of a global organization may read body language the same way. Some gestures can have quite different 93% of

connotations in different cultures. For instance, enthusiastic arm communication

gestures are thought impolite in Japan, and a thumbs-up can be considered a rude sign in certain Islamic countries (see pp.28–29).

is nonverbal

Ray Birdwhistell,

Introduction to Kinesics, 1952

BE CAUTIOUS

BE AWARE OF

USE VOCAL DYNAMICS

WITH TOUCH

EYE CONTACT

How something is said can be

The expectations or

Making eye contact with

more important than what is

prohibitions on touching

someone usual y reinforces trust;

said. Tone, volume, rate, pitch,

others in a business

however, in some Asian cultures,

forcefulness, and enunciation al

context vary from

looking a superior in the eye as

contribute to the meaning of the

culture to culture.

you speak can be considered a

words that are used and convey

Managers should

disrespectful action.

how the speaker feels about the

make sure they are

people in the room.

aware of and

respect local

customs.

ELECTRONIC COMMUNICATION MODES

With ever-advancing

Phone calls

Email

Instant

technology, and as businesses

A short, sharp

Phrases such as

messaging

pursue global connectivity and

tone can sound

“Kind regards”

In informal

instant access to information,

frustrated or even

are a sign of politeness

correspondence, an

fewer transactions are

angry when the listener

and respect. Avoid

emoji such as a smiley

conducted face to face, and

can not see your facial

more officious ones,

face can help convey

other forms of communication

expression. Using a

such as “per my last

the intent and context

are used instead (see pp.176–

light, cheery voice

email,” which can

of your message. But

177). In the absence of body

on the phone conveys

sound rude or

be careful not to use

language, it is crucial to avoid

friendliness.

condescending.

emojis that contradict

misunderstanding. Here are a

some other part of the

few guidelines for phone cal s,

message, because they

emails, and instant messaging.

can seem snide.

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Giving Feedback

Every organization relies on its personnel to perform their roles effectively and work toward common goals. Giving and receiving feedback on performance is a key part of this process.

Making feedback work

It is widely recognized that when it is constructive and communicated well, feedback—whether from team leaders to team members or from staff to management—benefits organizational efficiency (see pp.164–165). Feedback can occur informally on a daily basis, but it is also an important part of a formal and structured appraisal process. Crucial to an employee’s feeling of being valued, it can also provide a sense of progression that can be more motivating than other incentive-based factors, such as a pay increase.

How managers give feedback can influence whether staff make progress or become demoralized. Research by the Center for Creative Leadership has shown that unconstructive, harshly delivered feedback is ineffective, as it may cause the recipient to feel defensive, while feedback—whether positive or negative—delivered in a constructive manner is crucial for staff development.

However, a manager’s focus should not be only Allow the recipient

on a person’s strengths. Ignoring weaknesses an opportunity to give

gives a false impression to the recipient and feedback on how wel

obstructs the improvement of teamwork.

they feel they are

Instead, managers should deliver any negative managed to help open

feedback in a constructive, nonjudgemental way.

a two-way dialogue.

ptly,

bers

promem

m

Give feedback

otherwise, team

Strategies for

ay feel frustrated that

m they were left to continue

tion.

delivering feedback

their tasks without due

correc

Managers should give prompt feedback that is specific but not personal and ensure it is delivered positively—both in terms of wording and emotional signals (see box, right).

Questions should be kept open-ended, al owing the recipient to develop their own thoughts in response.

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COMMUNICATION

Giving Feedback 174

175

Deliver feedback positively

and constructively. Framing

feedback negatively can feel

threatening for the recipient.

EMOTIONAL SIGNALS

Business professor at the University of Miami Marie Dasborough studied two groups of

people receiving feedback. The first group

was given negative feedback accompanied

by positive emotional signals, such as smiles and nods. The second group received positive feedback accompanied by negative emotional

signals, for example, frowning and a critical gaze. In fol ow-up interviews, those in the first group felt better about their performance than those in the second group. In other words, the way in which feedback is delivered can have stions to

a more powerful motivational effect than

reflection

turing the

the content itself.

Ask queulate

stim

tion could help

instead of lec

ipient. Encouraging

rec

ipient experiment

self-reflec

the rec

with different ideas and

explore new approaches.

Ensure that feedback is not

personal. Whether positive

or negative, your comments

should relate to a person’s

performance in their role,

and not to their character.

Be specific rather

40%

than general. Feedback

of workers are actively

should focus on

particular examples

disengaged when they

of a behavior, noting

the time and place.

get little or no feedback

Forbes, 2017

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Communication Tools

When face-to-face communication is not possible, it is important to choose the correct alternative method, which depends on the audience, the context, and the nature of the message.

Virtually face to face

Although conventional tools such as are in a virtual meeting room that Communications theorist Marshall

phone and email remain mainstays

is always open, using group chats

McLuhan coined the phrase “the

of communication, managers are

or video conferencing, sharing

medium is the message” in 1964,

increasingly turning to more

documents, and creating work.

which means that the way a

sophisticated cloud-based software

Being able to talk to employees in

message is understood depends

and platforms that enable remote

this way reduces the need for travel,

on how it is delivered. This idea

communication via apps. Similar to

and managers can monitor their

still underpins approaches

social media, these platforms allow

team’s workflow and contribute

to communication today.

team members to work as if they

from almost anywhere.

Types of tools

There are two main groups of

communication tools: one-way

and two-way. One-way tools are

effectively bul etin boards, but

y

they can reach a large audience

Intranet

Webcasts

Webinars

and so are good for informing or

e-wa

An intranet (internal

These are good for

Like webcasts, webinars

educating staff. For immediate

network of computers)

educating employees— (web seminars) are

feedback or training, however,

On

is a useful way of getting presentations and useful teaching tools.

two-way tools are more suitable.

a message across to

events are broadcast

Some include limited

large numbers of

live over the internet.

audience participation.

employees.

ay

Email

Web conferences

Telephone

-w

This has replaced postal

A web conference

A telephone call or

o

mail in many instances

enables people in

conversation via text

Tw

and is a rapid way to keep

different locations to

message al ows two

in touch with colleagues

participate in a meeting

or more people to

and customers alike.

and share documents.

communicate instantly.

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COMMUNICATION

Communication Tools 176

177

Communication Tools

By using social

TOP TOOLS: WHICH ONE WHEN?

collaboration tools, When

Which tool

companies can

❯ Employees do not know who to contact if they Company intranet

increase worker

have questions or need details of members within with employee profiles

departments and who they report to

productivity by

❯ Managers lose track of project progress dates Workflow tool

and deadlines or projects stall while awaiting with progress steps,

2

approval from senior management

notifications, and alerts

❯ Staff miss vital information sent via email, and Alerts and

managers are unsure if emails were received notifications tool

❯ Customer retention is declining, customer Issue-tracking

feedback is negative, or employees are missing software

McKinse 5

y Global I %

nstitute, 2012

customer or interdepartmental queries

Podcasts

Presentations

Voicemail

Video-sharing sites

Information concerning

A presentation, whether In emergencies or

Sites such as YouTube

a project or a change in

live or recorded, is an

when the internet is

enable users to view or

company policy can be

excel ent way to convey

down, messages can

upload videos, which

uploaded to the internet

vital information to

be left on employees’

may be instructional,

as a digital audio file.

a large audience.

voicemail.

on almost any topic.

Collaborative platforms

Communication apps

Issue-tracking software

Web-based platforms

Apps such as Slack and

This software tracks

such as Sharepoint enable

Flock offer collaboration

communication history,

team members to chat,

services ranging from

aiding accountability

share files, and work

video conferencing

and helping resolve

together on projects.

to task tracking.

issues promptly.

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Effective Meetings

Meetings facilitate communication, collaboration, and decision-making.

By following some simple guidelines, managers can ensure that meetings are well executed and boost their teams’ performance.

Enhancing effectiveness

In contrast, meetings at which

Meetings are essential in any

decisions are required, such as

Types of meetings

organization and are an integral

agreeing to a plan, must be

part of management. In their

structured. To be effective, an

When cal ing a meeting, managers

simplest form, they are a way for

agenda should be set and followed.

must decide what type of meeting it

managers to share information

Although the manager may lead the will be and clearly communicate its purpose to attendees. Setting an

with their staff, peers, or seniors,

meeting, they should encourage

appropriate venue and time slot is

such as routine team updates. Such

others to participate and actively

also vital—shorter for updates and

meetings can be informal and do

listen. Minutes must be taken,

information-sharing meetings, longer

not need an agenda or for minutes

recording what was said by whom,

for brainstorming or problem-solving

to be taken. The manager should

what has been discussed, and any

meetings. Managers should also be

relay the information clearly, using

decisions made. These should then

clear on their role in the meeting,

handouts or slides as required, then be circulated after the meeting to from chairing, delegating, or sharing

invite questions to make sure

all participants and used to follow

information to encouraging creativity.

everyone has understood.

up on any outcomes agreed.

!

Regular status updates

Information-sharing

Decision-making

These al ow the manager to share

To be effective, the manager must

Although a manager may lead the

information or request it from

have all the information required

meeting, the participation of all

their team members. Meetings

and be wil ing and able to answer

attendees should be encouraged

can be quick and informal.

questions from attendees.

in order to reach agreements.

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COMMUNICATION

Effective Meetings 178

179

MAKING MEETINGS WORTHWHILE

75%

Studies have shown that poorly prepared meetings can be unproductive and waste participants’ time. To maximize the productivity of meetings, achieve tangible results, and leave participants feeling that their time has been well spent, managers should of workers

consider the fol owing factors, dependent on the type of meeting: receive

❯ Decide on the objective of the meeting and make sure all participants ful y understand it so that they can decide whether they need to attend.

no formal

❯ Provide an agenda ahead of time, so that attendees can bring all necessary information with them or prepare questions.

training

in how to

❯ Limit the duration of the meeting to the time necessary to meet its aims.

Do not arrange a 60-minute meeting if only 45 minutes is required.

conduct

❯ Soon after the meeting, produce minutes (having first invited a good meetings

minute taker). These should list decisions and time frames for actions.

TED.com, 2017

❯ Follow up with participants to ensure that all actions are being executed in accordance with the minutes.

?

!

Problem-solving

Innovating

Ideas-sharing

Depending on the problem,

Similar to problem-solving

Most productive when people

informal brainstorming sessions,

meetings; the manager should

are relaxed; the manager should

(see pp.156–157) facilitated by the

welcome all ideas and al ow the

al ow everyone to speak freely

manager, can be very productive.

attendees to discuss their merits.

and bounce ideas off each other.

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Presentations

Being able to engage an audience and convey a core message with a persuasive presentation is a key managerial skill. However, preparing and delivering good presentations takes practice.

Grabbing attention

with minimal text to qualify it.

presenter to appeal to people’s

The best presentations are often

This simple, graphic-centered

needs by including stories, figures,

those that rely on graphics more

approach—one number/fact

and facts that will be relevant to

than words. When Steve Jobs

per slide—is now the standard

them. When putting a presentation

made presentations for Apple, the

presentation method for all

together, consideration should be

audience took notice – not just

Apple executives, and it is a good

given to audience members who

because of who he was, but also

example for managers to follow.

have difficulty hearing or reading.

because his delivery had impact.

It is important to fully research

Preparation is crucial – not

Analysts point to his technique

the audience beforehand so they

only for working out what to say

of often just presenting a large

can be engaged with a presentation and creating slides, but also for statistic or number on a slide,

they can relate to. This enables the

anticipating possible questions.

Presenting well

1 Prepare

2 Make slides

An effective presentation is one that

Find out who will be coming

creative

the audience will remember. Making

and tailor the content

Vary the template and colors

regular eye contact with attendees,

accordingly. Send an agenda

of slides and include images to

smiling, and using open, natural

in advance to remind

help get the message across.

gestures all help make a speaker

people to attend.

Use easy-to-read

appear more competent. Learning

fonts: a point size

to speak in public with passion and

of 30 works well.

conviction, and to answer questions

confidently, wil earn any manager

the respect of their audience.

5 Stimulate

6 Close

7 Question ready

the audience

End the presentation by

Develop your own questions

summarizing its key points,

(in case no one asks), research

Keep the audience focused

cal ing for action if required,

widely to prepare for a variety

by asking rhetorical questions,

and asking the audience

of questions, and have useful

citing research and anecdotes

for questions.

facts and figures

from experience, and

on hand.

quoting experts.

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COMMUNICATION

Presentations 180

181

FONTS FOR PRESENTATIONS

CASE STUDY

The ideal presentation font has excellent legibility,

The “Ratner effect”

especial y at a distance, and conveys an image in keeping with the topic. Here are six to consider as alternatives to On April 23, 1991, successful jewelry entrepreneur Calibri, the standard font for Microsoft PowerPoint: Gerald Ratner made a speech that effectively destroyed the multimil ion-pound empire that he had built up Franklin Gothic: strong, approachable; many from his father’s modest retail business. In front of an weights and widths available

audience consisting of more than 6,000 business people Garamond: elegant, sophisticated; good for small print and journalists, Ratner made a statement that became Segoe UI: extensive range of symbols; good for headings his undoing—raising the question of whether he was and small print

unprepared or was simply trying to be amusing. When Tahoma: clear, distinct characters; suited to scientific asked how his stores could sell a sherry decanter for just or technical text

£4.95, he replied “… because it’s total crap.” Consequently, the value of the company’s shares fell by £500 mil ion Impact: dramatic, heavy; ideal for strong headings in a few days, and Ratner lost both the business and Verdana: developed for legibility on screens; good his personal wealth, which was tied up in shares.

for small text

“People who

3 Open with

4 Explain the

impact

objective of

know what

Connect emotional y as wel

the presentation

they’re talking

as intellectual y with the

Introduce each idea

audience by starting

separately, one point per

about don’t need

with a humorous or

slide, and back up

touching story or a

each point with

PowerPoint.”

startling fact.

a statistic.

Steve Jobs, Co-founder of Apple Inc.

NEED TO KNOW

❯ The core message is the

key point of a presentation.

8 Final close

9 Follow-up

It needs to be communicated

Bring the audience’s attention

Keep up the momentum of

clearly and briefly.

back to the goal by reiterating

the presentation by emailing

❯ Nonverbal communication

the key points and cal ing for

a summary to attendees and

(see pp.172–173) is the practice of

action again if relevant.

asking for feedback to

using gestures and body language

improve future

to help get a message across.

presentations.

Speakers should use open,

confident gestures and move

around when presenting to help

keep the audience engaged.

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Corporate

Communications

Corporate communications is the practice of developing an organization’s reputation and conveying its values to an internal and external audience.

Having a good reputation is fundamental to the success of a company.

Sending the right message

Most organizations have an individual, team, INTERNAL COMMUNICATION

or department that is responsible for corporate communications. This role involves managing the Employee well-being

organization’s image and reputation and promoting

❯ Develop an intranet for sharing

its values both internally to employees and externally company information and keeping

to media and stakeholders (including shareholders, staff engaged

partners, customers, and clients).

❯ Provide forums for employees

In its infancy, corporate communications focused to share and give feedback

on company products and so specialized in setting up

❯ Involve frontline managers to

external publicity events and writing press releases.

communicate company goals

More recently, the focus has shifted toward cultivating to employees at all levels

staff engagement and fostering employee well-being.

❯ Publish employment policies online, This has led to organizations setting up intranets to enabling stakeholders to see how

share information and holding regular meetings with the organization is implementing its

employees to discuss performance and future goals.

employee well-being program

However, the key task of corporate communications

❯ Manage change by sharing information remains to manage an organization’s reputation, since with staff as soon as it is available; take any change in this can have an effect on revenue, regular surveys on how the organization

is responding to the change; celebrate

workplace productivity, and employee retention.

milestone goals with progress parties

Companies with

effective internal

Cementing

a reputation

communications

The overall goal of a corporate

offer

communications manager is to build

an organization’s reputation—as an

employer who people want to work

for and as a responsible contributor

47%

to the community. Both internal and

external communications are vital in

creating and maintaining this image.

higher returns

for shareholders

Towers Watson, professional services firm, 2010

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COMMUNICATION

Corporate Communications 182

183

EXTERNAL COMMUNICATION

Media relations

❯ Be honest and open in media communications. Stay true to organizational values and ensure that words are supported by actions Social responsibility

❯ Take a stand on social issues—this will improve employee INTERNAL COMMUNICATION

engagement and promote the organization’s image

❯ Send out a clear, convincing message to show how the company is taking action on these social issues (stakeholders will reject messages that seem hol ow)

❯ Time the delivery of a message well; speaking out too soon on an issue can seem rushed, and any message needs to be careful y Reputation

thought out

❯ Show the

organization to

Sustainability

be a good employer

❯ Announce sustainability goals, then measure progress

❯ Promote the

❯

organization’s

Report this progress to employees and stakeholders, who wil efforts to be an

be influenced by the organization’s standing in the community ethical business

Corporate philanthropy

❯ Use social media to promote organizational philanthropy—for example, fundraising events

❯ Present data in the form of infographics to convey philanthropic causes and effects in an appealing, accessible way COMMUNICATING EFFECTIVELY

Goals for communications managers include:

CASE STUDY

❯ Keep employees engaged: help employees cope with organizational change and understand how the

Marks & Spencer

company’s goals are relevant to them.

❯ Plan internal and external communications Underlining the importance of organizations conveying carefully: create more interesting content, adapt integrity, British retailer Marks & Spencer faced a content produced by others, and identify stakeholders backlash in 2019 from the media and consumers after who can help deliver a key message.

a giveaway promotion aimed at children that offered single-use plastic toys. The campaign was at odds with

❯ Rethink digital communication: try a variety of the company’s publicized corporate policy of cutting out technologies, such as apps or social media, to establish plastic packaging and achieving zero waste by 2025.

which channel is most likely to reach the target audience.

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Crisis

Communications

In business terms, a crisis is a situation that can harm an organization or threaten its clients or customers. In such situations, managers need a plan of action.

Being prepared

both within the organization

Some crises will be internal,

and with outside parties, can

such as when a company’s assets

make the difference between

lose value or the company cannot

recovery and disaster.

afford to pay its debt; others will

The initial response should

be external, such as when a

be immediate, acknowledging

product is found to be harmful

what has happened and showing

to consumers. The dangers arise

compassion for those affected.

not just from the situation itself

This should be followed by an

but from the effect it has on an

announcement between 24 and

organization’s public profile.

48 hours later, stating the key facts.

Even an internal crisis can

Managers need time to gather

quickly develop into an external

information, but public unrest will

crisis if the issue reaches social

grow if they wait too long. At such

media or traditional news channels. times, legal support may be needed, 6. Test the plan

For this reason, managers need to

but this should be handled carefully;

by carrying out

anticipate possible crises and

it must be seen to benefit those

training and

develop a plan to deal with them.

affected by the crisis rather than

practice runs so

Prompt, clear communication,

merely protect the organization.

that the crisis-

management

team (made up of

senior managers,

spokespersons,

5. Ensure that

and legal and

the plan covers

PR experts) is

all areas of the

prepared.

1. Identify

2. Make a list

3. Anticipate

4. Set out

organization

potential risks to of stakeholders—

potential data

communications

and not just

the organization

those who need to

breach crises

guidelines by

communications.

or brand and

be kept informed

by creating data-

appointing a

assess how likely

in the event of a

breach platforms

spokesperson to

they are to occur.

crisis, including

and emergency

represent or speak

managers and

websites that can

for the company.

employees, clients, be activated if a

Define what

investors, media

breach happens.

information should

outlets, and the

be conveyed—and

general public.

when and where.

Precrisis: prepare crisis plan

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COMMUNICATION

Crisis Communications 184

185

“If it is going to

7. Monitor all

come out eventually,

media forms,

looking for any

better have it come

fluctuations or

inconsistencies

out immediately. ”

in the way in which

Henry Kissinger, former US Secretary of State, 1982

the organization’s

business is being

reported.

8. Activate

emergency

communications

as soon as a crisis

occurs so that the

spokesperson can

give an immediate

response.

60%

of board

members say

9. Between 24

that it took

and 48 hours

later, ensure that

over a year for

the spokesperson

10. Establish

11. If necessary,

12. Analyze

conveys key facts

virtual and

seek advice from

the crisis once

their organization to stakeholders, physical legal advisors,

it is under control.

staff, and the

communications

a PR agency, or

Determine how

centers to handle

subject matter

effective the plan

to recover

media. Provide a

schedule of further inquiries and deal

experts.

was and what could

with website,

be done to improve

from a crisis

announcements

and follow this

social media, and

it in the future.

up with regular

customer service

updates.

questions.

“A Crisis of Confidence,”

Deloitte, 2016

Acute crisis: activate crisis plan

Postcrisis

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Persuasion

and Influence

Being skilled in the art of positive persuasion is a great asset in people-management and the key to successful negotiation. The more persuasive a manager is, the greater their influence in the workplace.

Nurturing positivity

existing supporters should not be ignored: support Persuasion is more effective at eliciting change than evaporates quickly when people are taken for granted.

compulsion—imposing decisions rarely earns respect It may be best initially to look for short-term change.

or motivates. But persuasion is time-consuming, so it Getting a “foot in the door”—gaining a small is worth assessing in advance who can be persuaded, commitment now—can start a process that leads to and how. The manager must define the issue to be greater changes in the long term. And it is not always addressed, but involving staff in discussions will make necessary to persuade everyone at once. Since people them feel that they are being treated fairly and that are affected by the attitudes of their peers, obtaining their views are being listened to. While persuading the support of a few at first can trigger a ripple effect, those with opposing views may be the main aim, leading to wider acceptance later on.

Creating synergy

Accomplished persuaders leave

people feeling better off, however

brief the interaction, and they have

this effect not only in face-to-face

and small-group encounters, but also

when addressing broader segments

of the organization. Sincerity and

empathy are essential—being

perceived as trustworthy and

credible wil increase a manager’s

influence. Appealing to the

common good, using “we” rather

than “I”, helps others to identify

with your viewpoint, and reminding

listeners that they are free to make

their own decisions shows respect.

Conversely, scare tactics create an

unhelpful climate of fear, while

constant nagging (a common

sign of micromanagement)

causes people to disengage.

Being persuasive

❯ Choose the right time and place to make the argument. Practice your pitch

to avoid seeming uncertain.

❯ Make simple, logical points; eliminate negatives and emphasize positives.

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COMMUNICATION

Persuasion and Influence 186

187

PRACTICING PERSUASION

“The greatest ability

in business is to get

Ancient Greek philosopher Aristotle outlined four modes of persuasion that can be utilized by managers to ensure along with others

their proposals have the strongest chance of success.

❯ Ethos (character): making sure that you are qualified and to influence

to make your argument, having gained the relevant expertise through experience

their actions.”

❯ Pathos (feeling): using passion, imagination, and vision to appeal to your listeners’ emotions John Hancock, US merchant and statesman, c.1776

❯ Logos (word): presenting your message clearly and logical y, having researched the details of your proposed course of action

❯ Kairos (opportune moment): choosing the best opportunity for communicating your message and ensuring that it is tailored to your audience

❯ Explain the benefits and personal

Exerting influence

❯ Build trust and establish credibility advantages to your listeners.

❯ Nurture relationships, whether

by honoring promises and

with team members, service

commitments and being consistent.

❯ If your audience is initially

users, customers, or stakeholders.

sceptical, opposing arguments can be

❯ Display empathy and demonstrate

neutralized by raising them yourself in

❯ Be likeable and curtail any

an understanding of other people’s

a mild form and then refuting them.

annoying behaviors or habits.

perspectives.

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Negotiation

Negotiation can be a minefield, but managers who become skilled at it are highly valued. To succeed, all types of negotiation require thorough preparation and clear, unambiguous communication.

Realistic objectives

personal ones—and decide on the

Negotiation can take place by email

The role of a manager frequently

minimum acceptable outcome.

or phone or face to face (either

involves negotiation. This can

Secondly, they should research the

online or in person). The overall

take place between organizations,

other party and assess their likely

style of the negotiation, whether

between different departments of

interests. That way, when the other

assertive, passive, or aggressive,

a single organization, and between

party puts forward their position,

should be carefully considered

teams. Not all negotiations are

the negotiator is then equipped to

(see box, right). The choices made

successful, but careful planning

question and respond effectively.

during the communication will

increases the likelihood of a

They can perhaps probe the other

determine its success or failure.

positive outcome.

party’s interests further to discover

At any stage, the negotiator can

First, a negotiator must set

their true motivation or reply with a

concede, make polite demands,

realistic objectives—in line with

counterposition that the other party threaten, or, if the negotiation stalls, organizational goals rather than

will consider more acceptable.

suggest a further joint discussion.

Prepare

❯ Set objectives in accordance with

A three-step

corporate objectives

strategy

❯ Decide on the desired outcome as wel

as the minimum acceptable outcome

The negotiation process is a little

❯ Research and discuss options with col eagues like a duel. It is best to prepare

❯ Plan the negotiation strategy and prepare wel , assessing your opponent’s

a written agenda

strengths and thinking through

❯ Set potential guidelines that both parties your tactics; you do not want to

agree to in advance

be caught off guard. When you

❯ Consider alternatives if the negotiation fails meet, an initial charm offensive

before you set out your position

can be disarming. Final y, guided

by your opponent’s reactions,

close a deal or agree on the

next steps.

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COMMUNICATION

Negotiation 188

189

NEGOTIATION STYLE

NEED TO KNOW

To negotiate successful y, it is important to cultivate the correct manner, both

❯ The BPA is the best possible

of speech and body language (see pp.172–173). The goal is to be assertive and agreement—the one that meets

to avoid the extremes of being passive or aggressive.

the negotiator’s and the other

party’s interests.

❯ The ZOPA is the zone of possible

agreement—the range of options

that each party would accept.

Passive

Assertive

Aggressive

❯ The BATNA is the best alternative

❯ Submissive

❯ Confident

❯ Confrontational

to a negotiated agreement—in

other words, plan B.

❯ Noncommittal

❯ Steady

❯ Hostile

❯ The bottom line is the point

❯ Emotional and

❯ Factual rather

❯ Blames the

defensive

than emotional

other party

beyond which neither negotiator

will proceed because it is not

❯ Uses ambiguous

❯ Makes statements

❯ Makes statements

in their interests to do so.

language

starting with ”I”

starting with”You”

Engage

Close

❯ Introduce yourself and build a rapport

❯ Observe physical signals from the other

❯ Ask questions to probe the other party’s

party: are they looking tired? Are their

interests (their needs and motivations)

arguments fading?

❯ Make your offer and listen to their response;

❯ Summarize agreements and concessions

a first offer is rarely accepted. All proposals

❯ Get agreements in writing

should be seen as legitimate and fair

❯ Fol ow up on agreed commitments

❯ Consider compromises; seek concessions;

❯ Suggest mediation, or a second discussion, make concessions

if agreement cannot be reached

❯ Create value by offering options: conditions,

❯ Be prepared to walk away

contingencies, and trade-offs

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Resolving Disputes

A dispute can be difficult to resolve, especially when parties are entrenched in their positions. It falls to the manager to find a fair, appropriate solution that minimizes disruption to the organization.

The peace process

and with empathy—can diffuse

regular meeting to allow

A manager who has to settle a

a heated situation and partially

grievances to be aired and dealt

dispute—in the workplace or with

improve working relationships.

with before they become disputes

a client—must remain detached,

Start conversations as soon as

(see pp.152–153). Following any

act quickly, listen empathetically,

possible after a problem arises, but

dispute (internal or external),

and work toward a practical

only once all parties have calmed

any resolutions should be set

solution step by step. To achieve

down. If the issue is a workplace

in writing and communicated

this, it helps to know the best

conflict, it may be best to set up a

to everyone involved.

approach to adopt in a particular

situation. In 1974, US academics

Kenneth Thomas and Ralph

E

Kilmann published their research

TIV

Competing

on the subject in their bestselling

SSER

❯ Each party pursues their own

book The Thomas-Kilmann Conflict

A

concerns, regardless of the

Mode Instrument. The book sets

impact on the other.

out five styles for resolving conflict,

❯ This method is assertive and

each using a different balance of

uncooperative; each party

assertiveness and cooperation.

uses whatever power they

feel is necessary to win.

Resolving any type of dispute,

or mediating between two parties,

❯ Appropriate if defending

a situation believed to be

usually requires a difficult

correct, either moral y

conversation with one or both

ESS

or legal y.

sides. Being prepared for it—

EN

armed with all the relevant

information and knowing each

TIV

Avoiding

party’s legal rights—is crucial.

ER

Conducting the conversation in

❯ Both parties avoid

SS

confrontation; they pursue

an appropriate, unhurried way—

A

neither their own concerns

nor those of the other person.

Five strategies for

❯ This style is both unassertive

and uncooperative.

resolving differences

❯ Appropriate if attempting

diplomatical y to sidestep

Kenneth Thomas and Ralph Kilmann

E

an issue, postpone it until

propose five approaches for diffusing

TIV

a more appropriate time,

conflict and bringing it to an end.

or withdraw from a

The Thomas-Kilmann Conflict

SSERA

threatening situation.

Mode Instrument uses a matrix that

UN

measures levels of assertiveness on

one axis and cooperation on the

other. A manager must decide the

UNCOOPERATIVE

most appropriate approach to take.

LEVEL OF COOPERATION

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COMMUNICATION

Resolving Disputes 190

191

FUNCTIONAL AND

DYSFUNCTIONAL CONFLICT

54%

Not all workplace disagreements are bad. A certain amount of conflict is healthy, but it depends on the type.

of employees believe that

Functional conflict is positive and leads to constructive criticism and healthy debate about issues, such as how much money to invest and the organization’s direction.

managers could handle

Dysfunctional conflict, such as defamatory remarks disputes more effectively

or withholding information to gain power, is negative.

It can cause tension among team members and lead to Workplace Conflict and How Businesses Can Harness It to Thrive, increased stress and low levels of employee satisfaction.

CPP Global Human Capital Report, 2008

Collaborating

❯ Parties work together to

resolve a dispute in a way

that satisfies them both.

❯ Method is assertive and

Compromising

cooperative—the exact

opposite of “Avoiding.”

❯ Both parties try to find

the middle ground to

❯ Appropriate when parties

“split” their differences—

want to ful y explore a

a win-win outcome.

disagreement and learn

from each other’s insights

❯ Moderately assertive and

to find a creative solution.

moderately cooperative.

❯ Appropriate when the

objective is a solution

to satisfy both parties; it

Accommodating

addresses an issue more

❯ One party sacrifices their

than “Avoiding” but not

own self-interest to satisfy

in as much depth as

the other.

“Col aborating.”

❯ Unassertive and highly

cooperative—the exact

opposite of “Competing.”

❯ Appropriate if the other

party needs help or is right

or if one party wants to

demonstrate goodwil

and maintain positive

relationships for the future.

COOPERATIVE

LEVEL OF COOPERATION

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SELF-

MANAGEMENT

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SELF-

MANAGEMENT

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Time Management

Time is a valuable, finite resource that must be used wisely to achieve success. Managers can use a range of methods to ensure that their time—and that of any team member—is used effectively.

Using time wisely

to organizational priorities. If

ideally requires. It is important that

For managers, the key to effective

identifying potential collaborations tasks are prioritized objectively time management is to understand with similar organizations is a key and that time estimates are not

how time is being spent. Keeping

objective, and only 10 percent of

overoptimistic, since it can be

a log over a period of days or

time is spent on cultivating links

demotivating if plans are not

weeks is a good starting point and

with prospective partners, the

realized. It is helpful to categorize

helps highlight any anomalies.

reasons for this should be explored.

tasks according to importance and

The next step is to analyze the

The next thing to do is to plan,

urgency. For example, restoring

activities recorded in the log to

focusing attention on key tasks

telephone and IT services in a

evaluate how they compare

and the amount of time that each

country hotel is likely to be both

EFFORT

The Pareto principle

To reduce

Named after Italian economist

inefficiency

Vilfredo Pareto, the Pareto principle

80%

❯ Identify the 80 percent

is the observation that for any given

of activities that are the

activity, roughly 80 percent of output

least efficient. Assess

comes from 20 percent of inputs.

which ones can be

From a managerial perspective, this

dropped.

means that 80 percent of the effort

❯ Question whether the

spent on a project could potential y

activities that remain can

be wasted. And so it is vital that

be done more efficiently.

managers identify the most

productive 20 percent of their

❯ Explore alternative

activities and give them the

approaches, such as

highest priority.

outsourcing tasks.

NEED TO KNOW

❯ Parkinson’s Law, published in

The Economist in 1955, states that

“work is elastic in its time”—it can

stretch (or be compressed) to fill

its al otted time.

20%

RESULTS

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SELF-MANAGEMENT

Time Management 194

195

urgent and important, whereas

EFFECTIVENESS

analyzing guest surveys for

“Most people

AND EFFICIENCY

the monthly review meeting is

get ahead

important but not urgent. Planning

Two concepts that are often

in this way helps determine which

confused with each other are

during the

activities should be completed first.

effectiveness and efficiency.

Lastly, managers can create

Being effective is about working

time that

to achieve the right goals—those

an environment that is conducive

that deliver the desired results.

to good time management. For

other people

For a manager, this means

example, personnel might be

ensuring that their team is

encouraged to adopt techniques

waste.”

correctly focused. In contrast,

such as structuring their day

Henry Ford, founder of the

being efficient means making

Ford Motor Company

according to their times of peak

the best use of one’s resources

productivity and to break down

to achieve one’s goals, such as

manufacturing a product with the

complex projects into smaller tasks.

minimum amount of waste and at

the lowest possible cost. As such,

efficiency is an ongoing state of

EFFORT

improvement that a manager may

encourage from their team once

its effectiveness has been

established.

20%

Being effective

To maximize

means identifying and

efficiency

hitting the correct target.

❯ Identify the 20 percent of

activities that are the most

efficient. Assess what factors

make them successful.

❯ Explore whether any of

the identified measures

can be applied to the less

productive activities.

❯ Prioritize the small

number of activities that

produce more.

80% Being efficient means

hitting the target without

RESULTS

wasted effort.

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Personal Impact

Understanding and developing your personal impact will help you to create effective relationships and build a successful career.

Being self-aware

Personal impact can also affect

The “open self”

Personal impact relates to the

success in the workplace. If a

Aspects of yourself that

effect that a person has on others,

manager is too dominant, people

both you and others

and how they and their ideas

may be reluctant to venture their

know (e.g., that you are

are received. Studies have shown

opinions, and new ideas may be

outgoing, friendly, and

that we form an opinion of a

missed. Likewise, if someone is

like to be with others)

person within a second of meeting

perceived as being weak, others

them—but our opinions are often

may ignore them, and their

mistaken. All kinds of unconscious voice remains unheard.

biases affect our judgment,

based on anything from their

The Johari

body language to their clothing.

window

The way to overcome these

One way of increasing

biases is to develop self-awareness.

self-awareness is by

This involves becoming mindful

using the Johari

of our responses to others and,

window technique.

The

crucially, of other people’s

Developed by US

“hidden self”

responses to us. The latter is

psychologists Joseph

Aspects of yourself

particularly important, since

Luft and Harrington

that you know but

other people have biases, too.

Ingham, it gives

others do not know

For example, if an interviewee

people a clearer

(e.g., that you are

believes that managers in

view of who they

obsessed with fitness)

general are rude and

are. As such, it is

overbearing, this may affect

an invaluable tool

how they approach an

for managers and

interview, regardless of

employees alike

1

the interviewer’s manner.

(see below).

Learning to be open

The Johari window divides the personality into four quadrants: aspects that are known both to us and to others; aspects that are known to us but not others; aspects that are known to Resolve

others but not us; and aspects that are known to neither To improve your

us nor others. To achieve greater self-understanding, it is relationships, resolve

important to compare how we see ourselves to how we to expand the

are seen by others. The goal is to increase the size of the scope of your

first quadrant of the window—our “open self”—by open self.

seeking feedback and revealing more about ourselves.

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SELF-MANAGEMENT

Personal Impact 196

197

MANAGING EMOTIONS

US writer Daniel Goleman drew on the ideas of US

psychologists Peter Salovey and John Mayer to write Emotional Intelligence (1998). Unlike IQ, which relates to cognitive intel igence, emotional intel igence or The “blind self”

EQ involves understanding our emotions, the Aspects of yourself

emotions of others, and how we communicate

that others know

feelings. There are five dimensions:

but you do not know

❯ Self-awareness: the ability to recognize moods (e.g., that you are a

and emotions

calming presence)

❯ Self-regulation: the ability to recover from setbacks and to manage disruptive moods

❯ Motivation: the ability to achieve goals for personal reasons, without external rewards

❯ Empathy: the ability to understand the emotions of other people

❯ Social relationships: the ability to form networks and build rapport

The “unknown self”

The

Aspects of yourself

“Knowing others

“hidden self”

that neither you nor others

Aspects of yourself

know (perhaps that

is intelligence;

that you know but

you are resilient or

others do not know

exceptionally brave)

knowing yourself

(e.g., that you are

obsessed with fitness)

is true wisdom.”

Lao Tzu, Chinese philosopher, 6th century bce 2

3

4

Learn

Inform

Be aware

Discover things

Help others

Understand that there

that others know

understand

are things about you

about you but you

you better by

that both you and

do not by seeking

revealing more

others have yet

feedback.

about yourself.

to discover.

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Building a Career

Achieving a successful career in management takes time and effort. It involves understanding yourself, setting and assessing personal goals, and recognizing opportunities to progress.

Setting objectives

Effective management involves leading

others, making decisions, and taking

responsibility—it can also mean

“Management

working under pressure. For anyone

is efficiency

considering a career in management,

the first step is to question whether

in climbing

4

they have the skills and personality it

requires. Existing managers looking

the ladder

to progress should also assess their

ACTIVELY SEEK

strengths in these areas, then decide

of success.”

OPPORTUNITIES

whether their skills and ideas are

Stephen Covey, The 7 Habits of

Practice new skil s —for example,

current and whether they really

Highly Effective People, 1989

by volunteering to give a

would thrive in a more demanding role.

presentation. Be visible in the

In order to develop a management

organization. Talk to people

career, it is important to set objectives.

who may help with career

Although the route taken will always

development.

reflect the opportunities that arise,

aspiring to chairmanship will be a

different journey to that of team leader.

1

Planning and

BUILD A PORTABLE

managing a career

SKILLS BASE

PLAN A PATH

Success is built on more than

While certain jobs offer structured

knowledge and technical ability.

progression, most people’s careers

Create a vision of the future: in 10

Effective communication and the

develop organical y, with upward

years’ time, what would the ideal job

ability to work with others are vital

or lateral moves—and sometimes

involve? What are the requirements

skil s in any role. Anticipate what the

downward ones. There is no

of the ideal job, such as training or

ideal role requires, and work to

set path to fol ow: the route

gaining experience in a different field?

develop those abilities in readiness.

will depend on the individual,

Set goals—what will need to have

the field of work, and the

been achieved and by when?

openings available. However,

Create a picture of what success

people can take certain steps

will look like at each stage.

to help develop a career in

management, in whatever

direction they choose.

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SELF-MANAGEMENT

Building a Career 198

199

7

STAY AHEAD

6

Even at the top of a career,

it is important to continue

learning. Mentoring junior

BE SURE THE VISION IS

staff keeps managers

5

STILL ATTRACTIVE

abreast of new ideas.

Personal situations alter and

fresh avenues open up. With

REVIEW PROGRESS

experience, goals can change.

Are goals being met? If not, why

Question whether the vision

is that the case? What can be

needs to be adapted or a new

learned from success and

course steered.

failure? Are the goals stil

appropriate, or has something

changed?

3

2

DEAL WITH SETBACKS

Reassess values and goals. Do they

still fit? Are they realistic? Are there

BUILD A PORTABLE

other ways to achieve an

ambition—a sideways move,

SKILLS BASE

perhaps? Understand that everyone

Success is built on more than

has setbacks. Regain motivation and

knowledge and technical ability.

look for new opportunities.

Effective communication and the

ability to work with others are vital

skil s in any role. Anticipate what the

ideal role requires, and work to

develop those abilities in readiness.

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Effective Networking

Networking involves establishing and maintaining a range of contacts, both inside and outside the workplace. For a manager, collaborating with a network can greatly enhance both their business and their career.

Building relationships

those relationships. Useful contacts include decision-Every manager has a unique combination of personal makers, people with interesting ideas, and those who skills, knowledge, and experience. By building can provide introductions to other key figures. To relationships with a variety of people, managers network successfully, a generous, responsive, and can share their own strengths, learn from those of supportive attitude toward other people is essential.

others, and benefit from a larger pool of expertise.

Although social media tools for work-based

Networking also provides access to influential networking (such as LinkedIn) are an excellent way to people and can generate career opportunities.

make new contacts, it is also important to meet people The three stages to networking involve deciding face to face. Informal meetings, industry events, and which people to approach as contacts, finding social meetups organized by professional associations opportunities to reach them, and maintaining can be useful opportunities for networking.

Six degrees of separation

1. LORI

Research carried out by the US psychologist As a col ege lecturer,

Stanley Milgram in the 1960s suggests that most Lori has a wide range

people can be connected to almost anyone else of contacts in a variety

in the world through a chain of just six linked of disciplines and

acquaintances. A wider scope of networking

professions. She sits

on the board of a

therefore offers potential access to a huge range smal conservation

of contacts from different industries, locations, charity in Mexico.

and backgrounds. It can also help managers

build their reputation and open new

career opportunities.

SOMA

5. MATT

Before

Media manager for

The personnel manager of a smal

a brand of power

advertising agency, Soma wants to

tools, Matt takes a

progress to a more global y focused

six-week course—also

company. She begins to widen her

attended by Ingrid—

network of contacts and links up

in his spare time.

with Lori, a former col ege friend.

After

2. JUAN

During a meetup with Lori, who has

seen a tweet from Juan, Soma hears Marine biologist Juan

about the management position at

combines conservation work

Niko’s company. She successful y

with professional consultancy

applies for the position.

for a number of scientific

research agencies.

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Effective Networking 200

201

150

USING A NETWORK

is the number

A network is a group of relationships that can be of people with whom we

continual y maintained in the course of daily life. The quality of a manager’s contacts is more important than can maintain a meaningful the quantity—having too many people with whom to maintain a relationship will make it impossible to have relationship

meaningful interactions. Contacts tend to be either transactional or col aborative in nature: transactional relationships can bring faster short-term gains, but Robin Dunbar, Grooming, Gossip, and

col aborative relationships are usual y more productive the Evolution of Language, 1996

in the long term.

Transactional relationship

Each party views the interaction as an

opportunity for personal gain.

❯ The results of the interaction are the most important focus in a transactional relationship.

❯ If there is conflict, each party is most concerned about getting the best outcome for themselves.

4. INGRID

Collaborative relationship

A manager at a pension fund,

Communication between parties is deeper,

Ingrid helps with the accounts

and the focus is on help and mutual support.

of a community organization

❯

that donates to one of

Each person considers the other’s feelings about Aamir’s projects.

the results of an interaction.

❯ Resolving conflict to everyone’s satisfaction is more important than winning the conflict.

6. NIKO

Matt’s cousin Niko is an artist at a multinational PR firm. She

shares a post from her company

advertising a management vacancy

with her social network. It is seen by

Matt and passed on via the other

four linked acquaintances by social

media and word of mouth.

3. AAMIR

A former col eague of Juan’s,

Aamir now manages donor

relations for an international

NGO that funds projects in

the developing world.

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Work/life Balance

Being a manager can be demanding, but it is important not to let it take up too much of your personal time. A good work/life balance is essential, both for mental health and for personal relationships.

Why it matters

Strategies such as working from

Working overly long hours and

home (an option exercised by 16

allowing work to encroach on

percent of managers in the US)

weekends and even vacations is a

can help people balance work with

21st-century malady. Technology

personal responsibilities. However,

and the global nature of many

it is still important to establish

enterprises has introduced a

boundaries between work and

24-hour working culture that makes home life and ensure that there is it difficult to switch off. It is all too

enough time available for activities

tempting to fit in extra tasks at the

that relax and distract, such as

end of a day or respond to work

going to the movies and exercising.

calls from another time zone.

Leisure time is for enjoying life,

Work and home life

Like most people, managers

have to juggle competing

demands on their time

and therefore have to

figure out their priorities.

For some, this means

completely separating work

and family life; for others, it

means integrating the two.

The most important thing

is to create a balance

WORK

that works for you. The

fol owing are eight rules

Focusing exclusively on work during office

that can help.

hours ensures that tasks are finished on time.

❯ Create time to concentrate. Limit

interruptions, such as checking email,

to certain times of the day.

❯ Avoid social media distractions. Ignore all the personal online interests until

you have finished work.

❯ Make a list of concerns. Do this at the end of the day so you can switch off from

work when you get home.

❯ Tidy your desk. Do this as a ritual before you leave work. This will make it easier

to resume work in the morning.

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Work/life Balance 202

203

while exercise boosts physical and

BALANCING WORK

mental health. Enjoying time with

AND FAMILY LIFE

82%

friends and family is also crucial

because they provide a vital

Forbes magazine suggests that

support network.

working parents should give up five

of managers

Vacations—ideally more than

things to lessen the load: their pride

a week long—are excellent for

about asking for help when they

think that

need it; the belief that time must

recharging the batteries, especially

always be split evenly (work or

if the “out of office” message is in

flexible working

home may at times need more

place and colleagues know to make

attention); the idea that they should

contact only in an emergency. As

is beneficial to

neglect their own interests (“me”

more companies now recognize,

time matters); the desire to keep

their business

the work/life balance matters every

children endlessly happy;

day—because overworking can

Flexible Working, The Institute of

and guilt (working couples can

damage mental health as well as

Leadership and Management

still be great parents).

office and personal relationships.

HOME

Relationships and leisure are vital

aspects of life and should not

be crowded out by work.

❯ Don’t seek perfection.

Try to al ot a fixed time span

for necessary work to al ow

space for leisure activities.

❯ Maximize personal time.

Where possible, get outside

help with chores you may

dislike, such as housework.

❯ Share jobs at home. Involve

the children, who benefit from

feeling responsible.

❯ Create downtime. This is

for taking a break even from

scheduled leisure activities.

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Coping with Stress

Stress affects mental and physical health, as well as the ability to perform well at work. Managers who learn how to respond to pressure can maintain their well-being and that of their team.

Recognizing and addressing stress

Stress is the adverse response to excessive Weathering the storm

pressures—a feeling of being unable to cope and A variety of domestic and work problems can trigger that everything is out of control. Although everyone unhealthy levels of stress. Many people try to carry may have these feelings for short periods when on regardless, believing that “giving in” is a sign of experienced over the long term, the effects of stress Take control by

weakness. This only worsens the situation. Health analysing what is

can be serious. Various hormones released in the experts strongly recommend taking control of the causing problems.

body to boost energy in an emergency, such as situation, building emotional strength, maintaining adrenalin, may help an individual meet a tight a strong social network, and staying positive.

deadline, but remaining on high alert over long periods can lead to anxiety, insomnia, and a weakened immune system, among other ill effects.

As a manager, it is important to recognize signs of stress in yourself and address them, since it will also impact your team if stress is expressed in behaviors FAMILY COMMITMENTS

such as loss of focus or uncharacteristic bursts of anger.

There are several life events that can trigger high stress levels (see below). Regarding work-related stressors, employers in many countries have a legal responsibility for providing a safe place to work, Stay connected

Keep things in

including managing work-related stress. Aside from to the team by

perspective—

chatting with them

most “crises”

raising issues with superiors, individuals can use and managing by

don’t deserve

many strategies to build resilience (see right).

walking around.

catastrophe status.

THE STRESS SCALE

As a manager, it is important to be aware of how life events can affect your stress levels. Researchers Richard Raye and Thomas Holmes devised a scale for measuring stress by al ocating a certain number of points to each event. If a person exceeds 150 points on the scale, they

“The great thing,

are likely to become il . Some top-rated events include: then… is to make

Event

Points

Death of a spouse/partner

100

our nervous system

Divorce

73

our ally instead

Marital separation

65

Death of a close family member

63

of our enemy.”

Il ness or injury

53

William James, philosopher

and psychologist, 1890

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Coping with Stress 204

205

DEADLINES

FINANCIAL

PRESSURE

Take control by

Build a support

Accept what can’t

analysing what is

network—talk to trusted

be changed and

causing problems.

colleagues and spend time

focus on what can be.

with friends and family.

CONFLICT

WORKLOAD

Set aside time

to relax—build

it into a schedule

Exercise

Practice breathing

and stick to it.

regularly—doing

techniques for relaxation—

so in green spaces

yoga or

is particularly

Tai Chi can have a

restorative.

calming influence.

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Learning and

Development

Taking responsibility for learning can not only support career development but also lead to greater personal fulfillment. Opportunities for growth are not limited only to years in formal education—they can be a lifelong pursuit.

Constant growth

The other factor is actively putting processes in place.

Learning is the acquisition of knowledge and skills, Managers may be offered ongoing training, but they whereas development is the gradual mastery of can still take charge of their own development—for those skills, putting knowledge into practice and instance, by prompting feedback from line managers to incorporating it into everyday work. Both are help identify blind spots. They might also do a personal important for growth in a managerial career.

audit, rating their skills in key parts of the role and Part of success in this area involves having the pinpointing areas to improve. These findings can then right mindset. In her 2006 book Mindset, psychologist become part of a development plan they can follow Professor Carol Dweck talks about “the growth (see below). The plan might focus on areas such as mindset.” This allows people to believe that they skills, growth, and relationships, but it should be are not limited by circumstances but can improve aligned with the manager’s organizational role, and and seize opportunities to learn and grow.

changes should have the support of line managers.

Reevaluation

As circumstances change

and new opportunities arise,

it is vital to go back

to the plan and check

that it still works.

Onward and upward

A development plan to advance your career

consists of a set of questions and answers, combined with a schedule for achieving

“You don’t learn to walk

your goals. It should begin with a vision of the future: What will it look and feel like?

by following rules. You

What learning is needed to achieve it? Steps that appear too large can be daunting, so

learn by doing and

the plan should be broken down into

smal er milestones. It should also be a

falling over.”

mixture of formal and informal learning.

Richard Branson, 2014

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SELF-MANAGEMENT

SELF-MANA

Learning and Development 206

207

80%

Over

of senior professionals

believe that executive education/leadership development has improved their skills VanDyck Silveira, CEO of FT | IE Corporate Learning Alliance, 2017

Informal learning

This is an ongoing

Taking a leap

process of keeping

Trying out new learning

an eye on how things

methods, developing new

work—and watching

skil s, and being curious al

other people.

contribute to developing

an enterprising mindset.

INFORMAL LEARNING

Learning informally on the job, particularly on challenging projects, is where managers will gain the most experience.

❯ Failure provides a rich learning experience, helping you to reflect Formal learning

on how things could be handled better.

This is structured,

❯ Taking risks moves you out of your comfort zone. Accepting a classroom-based or

chal enge and doing something new adds to your experience and online learning. It is

helps to expand your knowledge and skil s.

usually delivered by an

institution and leads

❯ Seeking feedback and accepting it shows how your actions appear to others and how they can be improved.

to a qualification.

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Learning Styles

Staff training should never be a case of “one size fits all”. The manager who understands how both they and their staff learn best will be well equipped to choose the most effective types of training.

Routes to learning goals

individual learns (see box, far right).

ANDS-ON EXPERIENCE

Since the 1970s, researchers have

Other styles include the Honey and

H

explored the different ways in

Mumford model, which links

which people like to learn. Their

theorist David Kolb’s idea of a

work can help managers to identify

four-stage learning cycle with four

the optimum learning style of

types of personality, each of which

EXPERIENCING

ACTIVISTS

individual employees, and match it

is best suited to one of the four

Like to try things out

and become immersed

to an appropriate training course.

learning stages (see right).

in new experiences.

Three well-known expositions of

A range of questionnaires based

They may rush,

learning styles are Walter Barbe’s

on such models can help employees

however, and take

VAK model from 1979, which

discover their own preferred style.

unnecessary risks.

explores how people absorb

Finding training to match styles is

knowledge; the Felder-Silverman

increasingly viable as technology

model from 1988, which links

can deliver courses in many

learning style to personality type;

formats. All learning styles are

and the Dunn and Dunn model

equal, but at times it may be

PPLYING AND TESTING

from 1978, which focuses on

A

helpful for people leave their

influences that can affect how an

comfort zone to learn in new ways.

“Learning is the process whereby

PRAGMATISTS

knowledge is created through the

Like to apply their

transformation of experience.”

learning to the real

world. They are less

keen on theory,

David A. Kolb, American educational theorist, 1971

T

preferring to get

RY

on with things and

IN

try them out.

G T

LIZATION AND ABSTR

H

A

AC

IN

ER

TI

The learning cycle

G

O

S

EN

N

O

G

UT

In 1984 theorist David Kolb proposed

Honey and Alan Mumford added to

the idea of a four-stage learning cycle,

the idea, identifying four personalities

shown here on the outer rim of the

that perform best at a given stage in

wheel of learning (right). The first

the cycle. An activist likes the hands-

stage is experiencing something,

on experience, a reflector enjoys

fol owed by thinking or reflecting

thinking things through, a theorist

on it, then forming ideas about it,

forms ideas, and a pragmatist is

and final y, trying it out. In 1986 Peter

someone who applies the knowledge.

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Learning Styles 208

209

THE VAK MODEL

Walter Barbe in the US described three

learning styles in his VAK model. Most people prefer one of them but often use all three.

❯ Visual: by seeing or writing down

ANDS-ON EXPERIENC

H

E

information

RE

❯

V

Auditory: by listening

IEW

❯ Kinesthetic: by actively doing things IN

REFLECTORS

G

EXPERIENCING

Watch, gather information,

FELDER-SILVERMAN MODEL

and reflect on what has

happened. They tend to

Engineering professor Richard Felder and

be careful and thorough,

psychologist Linda Silverman extended

taking time to think

the VAK model by linking learning styles

before acting.

to personality types.

❯ Sensing: prefer concrete thinking and facts LEARNING

❯ Intuitive: prefer concepts and ideas CYCLE

❯ Verbal: like written and spoken information An effective learning

❯ Visual: prefer diagrams, images, and charts cycle, as explained by

❯ Active: prefer to try things out

David Kolb, has four

SERVATION AND REFLECTION

stages, as seen here on

BO

❯ Reflective: like to think things through, the wheel’s outer rim.

often alone

Peter Honey and Alan

❯ Sequential: like an orderly approach in Mumford suggest that

smal steps

each stage best suits

❯ Global: like large steps and holistic thinking one of four different

types of personality.

LEARNING ENVIRONMENTS

THEORISTS

In the 1970s, American professors Rita Dunn Like to work with facts and

and Kenneth Dunn reviewed 80 years of

defined concepts, to

research into how children learn. They found T

question and analyze

five preferences that could help identify an RY

S

information, and to create

individual’s optimal learning environment—

IN

logical models. They are less

something that applies equal y to adults.

G T

LIZATION AND ABSTRA

suited to unstructured

❯

H

Environmental: how do noise, light, and A

C

IN

ER

T

working environments.

temperature affect the learner?

I

G

O

S

EN

N

❯

Emotional: does the learner need structure, O

G

U

guidance, and motivational support?

T

❯ Sociological: does the learner like to work DRAWING CONCLUSION

alone or in a team?

❯ Physiological: at what time of day does the learner learn best?

❯ Psychological: do they handle information analytically, reflectively, or impulsively?

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Staying Alert

Managers should be optimistic when starting a new business or project, but a certain degree of caution, and remaining alert to possible pitfalls, will make success more likely.

Striking a balance

in a particular person or idea that

demotivates employees, who will

For a new venture to thrive, a

danger signals are missed. So a

feel that they are not trusted. In

manager must have faith in their

balance must be struck between

competitive organizations, distrust

staff, systems, processes, and

accepting that everything will work and suspicion are not unusual, but technology. Blind trust, however,

according to plan and constant

in a heightened form they become

can prove hazardous. For example,

double-checking, which is

paranoia. If such feelings persist,

a manager might believe so much

extremely time-consuming and

they can be both personally and

Watching the future

STRATEGIC

INFLECTION POINT

Andy Grove, the founder of Intel, set out his thoughts on FURTHER GROWTH

success in his bestsel ing book Only the Paranoid Survive (1996). He warned that success breeds complacency and that complacency leads to failure—that a certain amount of fear can be a useful tool in certain business contexts. He believed that the best managers are GROWTH PHASE

those who are always watching for the next

threat and that this involves a certain

D

kind of paranoia. He coined the

2. Turning point

ECLIN

term “strategic inflection point”

E

to describe the point at which

However successful the venture,

change becomes inevitable—

managers must stay alert to

and said that depending on

any changes in the operating

how they meet it, companies

environment; the sooner any

either thrive or fail.

threats are spotted, the sooner

they can be acted on. These

inflection points require changes

to the way business is conducted.

1. Blast off

An organization launches

a new product or service. If

the operating environment is

favorable, the venture may be

a success from the outset.

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Staying Alert 210

211

professionally ruinous, and lead to

3a. Success

the erosion of the vital relationship

between management and staff.

New ideas may guide the venture

The best approach is not to

into a period of further growth.

However, managers should not be

assume that things will go wrong,

complacent; there wil be more

but to stay alert for warning signs

inflection points in the future.

and plan for possible future

problems. Crucially, this requires

being mindful to external threats –

especially those posed by rival

organizations in the operational

environment (see below).

“By failing to

FURTHER GROWTH

prepare, you are

preparing to fail.”

Benjamin Franklin, one of the

GROWTH PHASE

Founding Fathers of the United States

DECLINE

CASE STUDY

Intel’s change of direction

When it was founded in 1968,

American technology corporation

Intel produced memory chips for

computers. However, during the

1970s, under the leadership of

Andy Grove, it faced a strategic

inflection point: Japanese

3b. Failure

companies were dominating the

memory market. Intel changed

If the organization fails to change,

direction and began producing

its venture will not succeed. It

microprocessors instead—a

will not be able to compete with

decision that saved it from failure

rival organizations that have

and reset its course for success.

adapted to the new environment.

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Accountability

Managers have to be accountable, which means being answerable for what they do, taking ownership of a sphere of activity, and accepting the consequences of what happens. This is essential for good performance.

Taking the strain

However, if the office is broken

A manager, therefore, is

Accountability and responsibility

into and the equipment is stolen,

answerable not only for their

are sometimes confused, but there

accountability will lie with the

own actions but also for those

are subtle differences between

manager. It is the manager who

of the people they manage.

the two. For example, the last

will have to investigate what

However, this does not mean

person in the office may be

happened, explain the situation

that the manager should be a

responsible for locking the doors

to their superiors, and ensure

scapegoat for anything that goes

at night so that the office is secure.

that it never happens again.

wrong. If, for example, a deadline

Team accountability

A manager has to be accountable for their actions, decisions, and Taking charge

the overall fate of their enterprise. However, to achieve success, A manager should

they must also instill accountability in their employees. Just as a have an overview

manager is answerable to their superiors for the actions of their of everything that is

team, so the individuals in a team should be accountable to happening and ensure

their manager. This means that everyone owns their share that each person accepts

of the enterprise and feels responsible for the outcome.

their responsibilities.

Crucial y, the manager

accepts that they are

accountable for the team.

Conducting the team

Just doing a job is not enough.

Supporting others and not

al ocating blame are important

for good teamwork.

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SELF-MANAGEMENT

Accountability 212

213

is missed, the manager should

LEARNING TO BE ACCOUNTABLE

be accountable but should also

investigate who may have erred

Being accountable requires courage

❯ Exercising judgment in the

and speak to those individuals

as it often means:

face of conflicting evidence

accordingly. For this reason, staff

❯ Having difficult conversations

❯ Being honest and open with

should also be encouraged to take

with people about performance

others about what is happening

ownership of their part of the

❯ Ensuring that each person

❯ Sacrificing your own interests

process. Accountable staff boost

understands their responsibilities

for the sake of what is right

performance and help maintain

❯ Taking hard decisions for the

❯ Holding up a mirror to your

a positive and ethical culture.

greater good of the team

own conduct

Without accountability, people

tend to blame each other, and

nothing is resolved or improved.

“The benefits and

Accepting

responsibility

possibilities that are

Each team member has

a part to play, ensuring

created by being

that they carry out their

responsibilities to the

personally accountable

best of their ability.

are countless.”

Jay Fiset, Reframe Your Blame:

How to Be Personally Accountable, 2006

CREATE THE RIGHT CULTURE

Encouraging accountability in your team means primarily accepting it yourself—fol owing through on your commitments and recognizing that others are dependent on what you do. It also means keeping team members involved in your decisions so that they are ful y aware of their own responsibilities. By setting an example of accountability, you can inspire people in your team to follow suit.

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Developing

BE PROACTIVE

New Routines

The best managers not only keep an eye on their teams, but also analyse their own behavior and recognize the effect that it has on others.

Self-analysis

they must know what has to

In a busy and often stressful

be achieved and what a good

workplace, it is essential for a

outcome will look like. Taking

1

manager to take time to reflect on

all of this into account, they have

how their behavior affects others.

to decide what the most effective

Far from being a sign of insecurity,

course of action is likely to be.

Take the initiative

self-analysis is an important part of

Proactive managers take

self-development, and without it a

Routine behavior

responsibility for issues over

manager is unlikely to succeed.

Self-understanding is a good start,

which they know they have

Management involves exercising

but adopting new habits as a result

control and use their own

judgment in situations in which

is essential if change is to occur.

initiative to solve problems.

not all the facts are known. In

A habit is a routine of behavior,

order to exercise good judgment,

conscious or subconscious, that is

a manager must therefore

repeated regularly. People often

understand their own values

think about habits as being purely

and beliefs and recognize how

physical, like taking a walk every

their own biases affect the way

morning, but everyone has habits

THINK WIN-WIN

they view particular situations.

of thinking, too. Reflecting on

They also need to understand

what these are and embedding

that others might perceive

new, positive patterns of thinking

things differently. Finally,

is vital for success.

Seven habits

4

In 1989, American businessman Stephen Covey wrote the bestsel ing book The 7 Habits of Highly Effective People, which inspired millions of people to make better decisions and build better relationships. Covey identified Respect others

seven habits that people should cultivate to improve their lives. The first The best managers think “win-three habits focus on moving from dependence to independence; the win.” This means that they

second three concern cooperation; and the final habit concerns understand the viewpoint of

continuous growth and renewal. Although intended for the general others and solve problems in a

public, the habits are easy to adapt to a management setting.

way that is best for everyone,

not just for themselves.

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SELF-MANAGEMENT

Developing New Routines 214

215

PUT FIRST THINGS FIRST

ITH THE END I

W

N

“Be a light,

M

IN

IN

EG

D

not a judge.

B

Be a model,

3

not a critic.

Be part of the

2

Prioritize

solution, not

When prioritizing tasks, effective

managers consider not only

the problem.”

Look to the future

which task is most urgent but also

Stephen Covey, The 7 Habits of Highly

Successful managers know what

Effective People, 1989

which is the most important.

they want to achieve and have

an end goal in mind. This

helps them understand the

steps that are needed to

reach their destination.

SYNERGIZE

DERSTAND THEN TO

SHARPEN THE SAW

N

BE

U

UN

TO

D

T S

E

R

R

I

S

F

T

6

K

O

E E

O

S

D

5

7

Consider other views

Appreciating different

viewpoints enables constructive

managers to build on their

Keep growing

Understand the problem

strengths, mitigate their

Effective managers stay sharp,

Before rushing in with a solution,

weaknesses, and enrich

maintaining a habit of self-

emotional y intelligent managers

their original ideas.

renewal and growth in order

listen to problems and try to see

to remain productive.

them through the eyes of others.

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Index

Page numbers in bold refer

audience, knowing your 180

to main entries.

authority 26, 27, 154

C

automaton 38, 42

A

Cadbury, George 86

capacity, effective 39

B

careers: development of 144, 145, 160,

199, 206

A/B testing 45

planning and managing 198–99

accountability 212–13

Bailey, Chris 194

Carillion 52

achievement 145, 162

balance sheets 36

cash cows 73

actions: action plans 82, 108

balanced scorecard (BSC) 122–23

cash flow 36

course of 14

Barbe, Walter 208, 209

Caterpillar 30

developing trust with 150

bargaining power 80, 81

Catmull, Ed 104

encouraging 68, 95

BATNA 189

Cause and Effect Analysis 110

problem-solving 108, 109, 110

behavioral interviewing 135

cause screening 111

activists 208

Belbin, Dr. Meredith 128–29

Center for Creative Leadership 174

activities, critical path analysis and

benchmarking 84–85

centralization 27

106–107

Bezos, Jeff 17

Chan Kim, W. 13

Adobe 163

bias training 137

change: 7-S model and 13, 96

advertising 44, 45, 119, 134

Big Five test 130

the change curve 92–93

advice, seeking 184

bill of materials (BOM) 65

change models 13, 94–95

affiliative management style 18

Birdwhistell, Ray 172

Force-field analysis and 102–103

agendas 178, 179, 180

Blanchard, Ken 20–21

managing 46, 103, 182

agile projects 48

Bloesch, Roland 99

organizational structure and 54

AIDAS 68

Blue Ocean Strategy (BOS) 13, 80

planning for 96

Airbnb 42

body language 29, 168, 170, 172–73, understanding 92–93

airlines 80–81

180, 181, 187, 196

charities 52, 68

alert, staying 210–11

chief information officer (CIO) 42, 43

Alessandra, Tony 64

Bono, Edward de 113

Christensen, Clayton 76

Amazon 39, 42

bonuses 140, 141, 144

Christensen, Søren 100

American Express 159

Boston Consulting Group 73

climate change 31, 87

analysis: cause and effect 110

Boston Matrix 72, 73

cloud computing 42, 76–77

critical path 106–107

bottlenecks, managing 88–89

coordination 15

Force-field 102–103

bottom line 36, 189

coaching 15, 19, 147, 153, 158–59, 163

PESTLE 104

boundaries 14–15, 34

coercive power 22

rational 100

BPA (best possible agreement) 189

cognitive performance 138, 139

self-analysis 214

brainstorming 108, 112, 156–57

collaboration 161, 191, 194, 201

SWOT 104–105

branding 45, 56, 69

between organizations 52

value-chain 118

Branson, Richard 206

collaborative platforms 177

anthropometry 138

break-even point 36

temporary 54

appearance 172, 196

Brooks, Frederick 107

command: chains of 27, 54

Apple Inc. 77, 112, 180

budgets 36, 37

unity of 26

apps 176

bullying, psychological 22

commanding management style 15, 18

arbitration 108, 153

business cases 90–91

commercial case 90

arguments, persuasive 186–87

Business Intelligence (BI) 43

commitment, building 27

Aristotle 187

business managers 28

communication 187, 199

artificial intelligence (AI) 38, 42, 43, 44

business-to-business (B2B)

active listening 170–71

assets 36, 119

marketing 44

communicating visions 94

attention, focusing 56–57, 68

bytes 43

corporate 182–83

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HOW MANAGEMENT WORKS

Index 216

217

crisis 184–85

culture 28

development: career 145, 160, 199, 206

effective 168–69, 178–79, 183

creating a workplace culture

and learning 206–207

forms of 168–69, 173, 183

58–59, 213

personal 27, 145

guidelines 184

cultural sensitivity 29, 165, 173

team 146–47

internal and external 182–83

culture of learning 78

differences: identifying 85

KPI targets 125

reporting on risks 33

resolving 190–91

languages and 28, 29

types of management culture 23

differentiation activities 118, 119

negotiation 188–89

types of organizational culture 59

digital technology: digital management

nonverbal 29, 168, 170, 172–73, 180, customers 62–63

46–47

181, 187, 196

bargaining power of 81

digital platforms 42

persuasion and influence 186–87

customer perception 123

digital tools 44, 69

presentations 180–81

customer relationships 12

digital transformation 42, 43

time zones 29

needs and values 44, 112, 120

products and services 64–65

tools for 176–77

positive feedback 45

DIKW model 99

trust and 150, 151

quality management and 40–41

direction, unity of 26

verbal 168

satisfying 41, 63, 69

DISC test 130

written 18, 169

cybersecurity 42, 43

discipline 13, 18, 26

community 62

cyberspace 43

disputes, resolving 190–91

community interest companies

disruptive technology 31, 76–77

(CICs) 52

diversification, roles and 15

Compaq 150

diversity 136–37, 156

competency 21, 132–33

D

division of work 26

competition 12, 13, 80, 81

Doran, George T. 148–49

complacency 210, 211

Danziger, Pamela N. 45

Dr Pepper 81

compromise 191

Dasborough, Marie 175

Dresher, Melvin 70

compulsion 186

data: amount produced every day 42

drinks industry 81

Comstock, Beth 69

analyzing 43, 44, 46

Drucker, Peter 30, 35, 122–23, 148

conferences, web 176

cloud computing 76

Dunbar, Robin 201

confidence, developing 19

data breaches 184

Dunn, Kenneth 208, 209

conflict 152–53, 190–91, 201, 205

DIKW model 99

Dunn, Rita 208, 209

constraints, managing 88–99

gathering 42,84, 98

Dweck, Carol 206

contacts 200–201

ICT systems 46

DX (digital transformation) 46

contingency planning 74, 75

KPIs and 125

control 15

management of 98–99

coordinators 129

quantitative and qualitative 83

core competencies 132–133

deadlines 61, 205

E

core functions 134

deadlocks, resolving 114–15

core message 181

deals, winning 70–71

e-commerce 43, 44

corporate communications 182–83

decision-making 100–101, 133

“early adopters” 94

Corporate Social Responsibility

effective meetings 178

economic case 90, 91

(CSR) 87

financial management 36

economic climate 72

cost-benefit analysis (CBA) 91

making swift decisions 100

effectiveness 178–79, 195, 200–201

cost drivers 118, 119

mapping a decision 100–101

efficiency 25, 46, 194, 195

Covey, Stephen 15, 198, 214– 215

organization structure and 54

Eisenhower, Dwight D. 16

Cranfield University 55

risk management 32–33

Elkington, John 86

crashing 106

seven key steps to 101

emails 18, 99, 173, 176

crisis 18, 184–85

defects 41, 120

emotional intelligence (EQ) 197

critical path analysis 106–107

delegation 20, 147, 154–55

emotions 175, 197

Crosby, Philip 41

Deming, W. Edwards 117

empathy 112, 171, 186, 187, 190, 197

crowdfunding 37

democratic management style 19

employees 12, 27, 62

CTA (call to action) 45

Dent, Jason 46

change and 13, 94–95

Cuban, Mark 85

design thinking 112–13

coaching and mentoring 158–59

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INDEX

competencies 132–33

continuous learning 160–61

F

G

developing trust 150–51

diversity 136–37

Facebook 47

Galbraith, Jay 55

gap analysis 82–83

employee value proposition (EVP) 35

failure 17, 207, 211

Gartner 43

engaging 13, 183

Fairtrade 86, 87

General Data Protection Regulation

finding and selecting talent 134–35

family life, balancing with work

(GDPR) 99

learning to improve 78

202–203, 204–205

General Electric 164

Maslow’s hierarchy of needs 12

fast-fashion industry 67

geopolitical risk factors 31

meeting the needs of 142–43

fast tracking 106

gestures 172, 173, 180, 181

motivation and reward 122, 144–45

Fayol, Henri 12, 14–15, 26–27

“gig” economy 14, 34

performance management system

feature bloat 65

global business 30

(PMS) 162–63

feedback 15, 146, 151

disruptive technology and 31

personality types 128–31

constructive 140, 141

global management 28–29

productivity and 24

giving 174–75

global spend via digital channels 47

recognition of performance 13, 25, 27

learning from 206, 207

goals 132

resolving disputes 152–53, 190–91

ongoing 162

decision-making and 100

retaining talent 140–41

positive customer 45

differences between objectives

source of creative energy 16

presentations 181

and 149

staff turnover 140, 141, 144

staff conflict and 152

effectiveness and efficiency 183, 195

team development 146–47

360-degree 164–65

employees’ 162, 163

360-degree feedback 164–65

Felder, Richard 208, 209

establishing 74

understanding 142

Felder-Silverman model 208– 209

improving performance with 122

value of 12

finances 32, 54

KPIs and 125

working for ethical companies 86

financial case 90, 91

life goals 143, 198, 199

workplace culture and 58, 59

financial incentives 140, 141

long-term 30, 55, 56, 73

workplace well-being 138–39, 182

financial perspective 123

management by objectives 148

empowerment 14–15, 151, 154

financial pressure 205

marketing 45

engagement, and morale 144

financing new ventures 36–37

measuring how goals are met 123

Enterprise Data Management (EDM) 99

finishers 129

project 48, 60

environment: learning 209

Fiset, Jay 213

role of team in setting 14

operating 31, 58

fishbone diagrams 110–11

SMART planning 148–49

environmental issues 31, 45, 73, 86, 87

Five-Factor Model (FFM) 130

strategic thinking and 72

equal-opportunities standards 136

Five Forces model 80–81

tactics and 73

equity 27

“five whys” technique 111

workplace culture and 59

ergonomics 13, 138

flexible working 34, 35, 203

“gods” of management 23

esprit de corps 27

Flood, Merrill 70

Goldratt, Eliyahu 88–89

Esso Research and Engineering

flowcharts 116

Goleman, Daniel 18, 197

Company 164

Follett, Mary Parker 13

Google 56

esteem, building 143

Force-field analysis 102–103

gossip, office 151

ethics 45, 86

Ford, Henry 25, 119, 120, 147, 195

government 29, 52, 53, 62

defining 56

Ford Motor Company 12, 25

Grove, Andy 210–211

ethical standards 59, 87

Formula 1 85

growth: growth mindset 206

law of supply and demand 67

Franklin, Benjamin 211

personal 145, 215

trust and 150

free markets 67

exchange rates 28, 72

French, John 22

exit interviews 140, 141

FSNP model 13, 146–47

H

experiences 64–65

Fu, Ping 97

expert power 23

fundraising 36, 37

habits, adopting new 214–15

extroverts 131

funds, managing 37, 91

Hancock, John 187

eye contact 173, 180, 187

future, looking to the 210, 215

Handy, Charles 23, 59

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HOW MANAGEMENT WORKS

Index 218

219

Hawken, Paul 17

exit interviews 140, 141

Hay McBer 18

L

job 100–101, 134, 135, 196

Henderson, Bruce 30

intranet 176, 182

Hersey, Paul 20–21

labor laws 29

introverts 131

Herzberg, Frederick 144

language 28, 29

intuition 100

Hewlett-Packard 18, 150

Lao Tzu 197

inventories 88, 121

HEXACO test 130

leaders: role of 16–17

IQ 132, 197

hierarchies 14, 54, 97

Situational Leadership

iron triangle 48

hierarchy of needs 12, 142–43

model 20–21

Hogan’s Motive, Values, and Preferences Ishikawa, Kaoru 110

successful change and 93

Inventory (MPVI) 130

issue-tracking software 177

workplace culture and 59

Holmes, Thomas 204

issues-based planning 82

lean production 13, 25, 120–21

home working 202

IT (information technology) 42–43,

learning: continuous 160–61

Honey, Peter 208, 209

46, 54

and development 123, 206–207

Honey and Mumford model 208

how people learn 79

HR management 34–35, 54, 118,

macro- vs. micro- 160, 161

119, 138

J

organizational 13, 78–79

human-factors engineering 138

problem-solving and 108

Humes, James 169

styles of 208–209

Humphrey, Albert S. 104–105

James, William 204

legal systems 29

hygiene factors 144–45

jobs: descriptions 134

legal context 73

insecurity 145

legal liabilities 32

I

interviews 100–101, 134, 135, 196

legislation 31

Jobs, Steve 112, 113, 180, 181

legitimate power 22

Johari Window 196–97

Lewin, Kurt 94, 95, 102–103

liabilities 32, 36

ICT systems 46

John Lewis 86

life/work balance 202–203

ideas, brainstorming 27, 156–57, 179

judgment, good 214

limitations, focusing on 88–89

identity, defining 56–57

just-in-time manufacturing 121

limited companies 52

ideology 28

LinkedIn 47, 140, 159, 200

image, mission statements and 56

Linman, Terri 165

implementers 128

listening 108, 168, 170–71

incentives, financial 140, 141

K

loans 36

inclusivity 136

logistics 118, 119

influence and persuasion 44, 186–87

Kaiser, Henry 109

loyalty, increasing 86

information, management of 98–99

kaizen 25, 121

Luft, Joseph 196–97

informational power 23

Kaplan, Robert 122

infrastructure 119

KATE 32

Ingham, Harrington 196–97

key performance indicators (KPIs)

initiative 27, 138

61, 124–25

M

innovation 30, 137, 179

Kilmann, Ralph 190–91

Instagram 47

kinesics 172

McClelland, David 132

Institute for Corporate Productivity 155

Kipling, Rudyard 109

McDonald’s 24–25

The Institute of Leadership and

Kissinger, Henry 185

McGregor, Douglas 13, 143

Management 203

McKinsey & Company 93, 94,

Klaus, Peggy 60

intangible products 64, 65

96–97, 137

Intel 210, 211

Knudstorp, Jørgen 57

McLuhan, Marshall 176

intelligence, testing for 132

Kolb, David A. 208–209

management: digital 46–47

internal reviews 84–85

Komatsu 30–31

evolution of 12–13

internet 46, 69

Kotter, John 13, 17, 94–95

Fayol’s principles of 26–27

Internet of Things (IoT) 42, 76

KPMG 91

financial 36–37

interviews: behavioral interviewing

Kreiner, Kristian 100

global 28–29

135

Kübler-Ross, Elisabeth 92

“gods” of 23

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INDEX

HR 34–35

Microsoft 163

setting 14, 74, 104, 148–49,

IT 42–43

Milgram, Stanley 201

188, 198

management by objectives (MBO)

Mintzberg, Henry 19, 73

SMART objectives 122, 148–49

122–23, 148

minutes 178, 179

obstacles, overcoming 61

management case 90, 91

mission statements 56–57, 123

OCEAN test 130

managers as leaders 16–17

mistakes 39, 41

online presence 43, 44, 45

marketing 44–45

mobile devices 46, 76, 77, 173, 176

operations 119

operations 38–39

monitors 128

environment 31

percentage of managers in the US 14

monopoly 67

expenses 88

power and 22–23

morale 27, 58, 143, 144, 146

management 38–39

project 60–61

motivation 27, 197

operations management 44–45

quality 40–41

continuous learning and 160

planning 74, 75

risk 32–33

Herzberg’s theory 144–45

responsibility 86–87

roles 14–15, 17

keeping staff motivated 18, 141,

opportunities: opportune moments 187

scientific 24–25

144–45

seeking 198

strategic 30–31

Maslow’s hierarchy of needs 142–43

SWOT analysis 104–105

styles of 18–19, 20–21

recognizing levels of 21

OPQ32 test 130

time 194–95

staff conflict and 152

optimism 210–11

manufacturing industry 63

multinational companies 165

order 27

decline in 65

Mumford, Alan 208, 209

organizations: change and 92–93,

operations management and 38, 39

music 64–65

94–95

quality management 40–41

Myers-Briggs Type Indictator® 130–31

evolving structures 54–55

marketing 65, 118, 119

organizational learning 78–79

digital technology and 46

7-S model 96–97

inbound 69

N

types of 52–53

marketing management 44–45

Osborn, Alex 156

marketing and selling 68–69

needs: identifying 68

outcomes 48

targeted 69

Maslow’s hierarchy of needs 142–43

outputs 48

“The 7 Ps” 68

meeting 70, 112, 142–43

overheads 37

markets: evolving 64

negotiation 70–71, 188–89

owners 62

finding new 13

Nehru, Jawaharlal 115

identifying 68

net income 36

market forces 80–81

net present value (NPV) 91

Marks & Spencer 183

Netflix 77, 80

P

The Martin Company 41

networking 197, 200–201

Maslow, Abraham 12, 142–43

nonprofit bodies 52, 53

PA Consulting 55

mass production 12, 25

nonvalue adding processes 117, 120

pace-setting management style 19

matrix structure 54, 55

nonverbal communication 29, 168, 170,

Pareto, Vilfredo 194

Mauborgne, Renée 13

172–73, 180, 181, 187, 196

Pareto principle 194

Mayer, John 197

Norton, David 122

Parkinson’s Law 194

MBWA (management by walking

Nudge Theory 95

pay 22

around) 18

increases in 144, 174

media relations 183

pay-by-performance 25

mediation 114, 190

O

pay reward systems 27

meetings 28, 178–79

unfair 145

mental health 138, 202–203, 204–205

objectives: defining 100

perception, customer 123

mentoring 147, 158–59, 160, 199

delegation and 154

performance: active listening and 170

messages: core message 181

differences between goals and 149

benchmarking and 84–85

instant messaging 173

employees’ 162

coercive power and 22

sending the right 182

management by objectives (MBO)

continuous performance management

miànzi 29

122–23, 148

163

micromanagement 186

meetings 179

design thinking and 112

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HOW MANAGEMENT WORKS

Index 220

221

improving through objectives 122–23

problem-solving 61, 108–109,

key performance indicators (KPIs)

133, 179

R

124–25

resolving deadlocks 114–15

performance management system

process mapping 116–17

Rainforest Alliance 87

(PMS) 162–63

procurement 118

Ratner, Gerald 181

SWOT analysis and 104–105

production: lean 13, 120–21

Ratner effect 181

360-degree feedback 164–65

mass 12, 25

Raven, Bertram 22

7-S model 96

productivity: constraints as keys to 88

Raye, Richard 204

person culture 59

diversity and 136

reevaluation 206

personal development 78, 145

effective meetings 178–79

recognition 15, 22, 143, 144, 145

personal impact 196–97

improving 12, 121

recruitment 25, 100–101, 196

personality: Belbin’s definitions of

motivation and 144

finding and selecting talent

128–29

scientific management and 24

134–35, 136

Johari Window 196–97

social collaboration tools and 177

testing for competencies 132–33

learning and 208–209

staff conflict and 152

referent power 23

personality types 130–31

trust and 150

reflectors 209

tests to identify 130–31, 135

workplace well-being and 138

regulatory standards 29

persuasion and influence 186–87

products 64–65, 120

relationships: bad working 145

PESTLE analysis 72, 104

developing 68

building 12, 18, 143, 200

Peters, Tom 96–97

disruptive technology and 76, 77

personal impact 196–97

Peterson, Joel 70, 71

feature bloat 65

resolving conflict 190, 201

philanthropy, corporate 183

marketing and selling 44, 68–69

team development 146, 147

physiological needs 143

product trees 65

work/life balance 202–203

piece-rate pay 24

profits: allocating 37

relaxation time 203, 205

planning 14, 84

high and low profitability 80

remote communication 176

action plans 108

international finance and 28

renumeration 27

crisis communications 184–85

profit and loss statements 36

reorganizations 96

development 206

theory of constraints 88

reputation 182, 183

effective 74–75

The Project Academy 55

research and development (R&D) 54

financial management 36

Project Initiation Document (PID) 61

resource investigators 129

issues-based 82

Project Leadership Programme 55

respect 23, 29, 214

project planning methods 61

projects: managing 60–61

responsibility 24, 26, 86–87, 145,

role of personnel in 14–15

optimizing 106

212, 213

SMART planning 148–49

overseeing 48

retail sales 43, 63

strategic 105

the project cycle 48–49, 60

return on investment (ROI) 91

podcasts 177

promotion 22, 119, 140, 141, 144, 145

revenue, diversity and 137

policies, company 137

prototypes 113

reviews 163

political systems 29, 72

psychometric testing 130

internal 84–85

Porter, Michael 13, 31, 80–81, 118

psychosocial risk management 138

online 44, 45, 65

positivity, nurturing 186

public-private partnerships (PPP)

rewards 22, 27, 55, 122, 144–45, 162

power 22–23, 59

52–53

Ridgway, VF 124

practice 58, 79

public relations 44

risks: identifying 91, 184

pragmatists 208

public sector 53

learning from taking 207

praise 22, 143, 144, 145, 162

purpose, defining 56

risk assessments 32, 33, 138

presentations 177, 180–81

risk management 32–33, 36, 138

prices, supply and demand 66–67

SWOT analysis and 104

prioritizing 106, 194–95, 215

Q

Robbins, Tony 101

Prisoner’s Dilemma 70–71

Rogers, Everett 94

private sector 52–53, 65

quality management 40–41, 65

roles: diversifying 15

proactive managers 214

Qubein, Nido 82

management 14–15

problems: design thinking and 112–13

questionnaires 164, 208

role culture 23, 59

identifying causes of 110–11, 215

questions, asking 109, 169, 180

specialized 26

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INDEX

team roles 128–29

social collaboration tools 176–77

sustainability 45, 86–87, 183

Rolls-Royce 65

social factors 72

Sutton Trust 131

Royal Dutch Shell 75

social media 44, 45, 183, 184, 202

swift trust 147

Ruskin, John 41

digital technology and 46

swim lanes 117

global channels 47

SWOT analysis 72, 104–105

S

networking 200

Syal, Rajeev 53

social responsibility 183

synergy, creating 186

social trends 44, 45

systems 97

safety 143

Society for Human Resource

sales 36, 44, 54, 65, 119

Management 141

Salovey, Peter 197

software 42, 139, 177

T

scalar chain 27

specialists 129

scenario planning 74, 75

spider diagrams 156

tactics 73, 74

schedules, slipping 60, 61

stability of personal tenure 27

talent: finding and selecting 134–35

Schwarz, Roger 115

stakeholders 60, 62–63, 90, 97, 182, retaining 140–41

scientific management 24–25

184, 185

team development 146–47

scope 48

standards: ethical 87

underused 120

scope creep 48, 61

quality management and 40–41

tangible products 64, 65

search engine optimization 69

setting 84–85

target audiences, reaching 44

self-actualization 143

star model 55

targets 124, 125, 132, 148–49

self-analysis 214

statements 56–57

tasks: assigning 26, 169

self-awareness 196–97

status, low 145

prioritizing 106, 194–95, 215

self-esteem 143

Steinway, George 86

self-regulation 197

Stern, Alan 63

task culture 23, 59

selling: management styles 20, 21

stock, taking 104

tax 29, 37

marketing and 68–69

strategy 96, 123

Taylor, Frederick Winslow 12, 24–25

Semler, Ricardo 54

Blue Ocean Strategy (BOS) 80

teams: accountability 212–13

Senge, Peter 13, 78, 93

digital strategy 46

active listening and 170

service industry: 64–65, 119

gap analysis 82–83

benchmarking and 84–85

marketing and selling 68–69

resolving deadlocks 114–15

brainstorming 156–157

operations management and 38–39

7-S model 96–97

delegation and 154

quality management 40–41

strategic case 90

dynamics of 13

setbacks, dealing with 199

strategic inflection point 210

effective communication 168

“The 7 Ps” 68

strategic management 30–31

finding and selecting talent 134–35

7-S change model 13, 96–97

strategic planning 74, 105

FSNP model 146–47

shapers 129

strategic thinking 72–73

how managers lead 18–19

shareholders 62, 63

SWOT analysis and 104–105

makeup of 14

Shaw, George Bernard 66

stress 138, 153, 191

managing a diverse 136–37

Silverman, Linda 208, 209

coping with 18, 204–205

personality types 128–31

Situational Leadership model 20–21

recognizing and addressing 204

planning and setting goals 14

six degrees of separation 200–201

the stress scale 204

resolving disputes 152–53, 190–91

Six Thinking Hats® 113

structures 54–55, 97

size of 128

skills 96

style 97

team development 79, 146–47

developing 19, 146

subordination of individuals 27

team roles 128–29, 133

hard and soft 60–61, 133

subscription economy 44

technology 30, 31, 39, 119

learning and 206

success 70, 74

digital management of 46–47

portable skills base 199

Sun Tzu 73

disruptive technology 76–77

skills tests 135

suppliers 62, 80

“early adopters” 94

transversal 133

supply and demand 66–67

electronic communication modes 173

smart home hubs 42

supply-chain disruption 31

Force-field analysis and 102–103

SMART management 90, 122, 148–49

support: building 56–57, 205

global management and 28

Smith, Adam 12

supporting management styles 20, 21

IT management 42–43

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HOW MANAGEMENT WORKS

Index 222

223

products and services and digital

values 58–59

workplace 139

technology 64–65

culture and 58

changing 14

technological factors 72

defining 56

workplace culture 58–59

updating 76

promoting 182

World Economic Forum 86

using to reach target audiences 44

shared 96, 97

writing 156, 169

telling management styles 20, 21

strategic management and 30

testing 113

values statements 56–57

theorists 209

VanDyck Silveira 207

XYZ

Theory X/Y 143

vertically integrated companies 55

thinking: critical thinking 133

vicious cycles, breaking 114

X/Y theories, McGregor’s 13, 143

design thinking 112–13

video-sharing sites 177

YouTube 47, 177

Thomas, Kenneth 190–91

views, considering other 215

Zappos 141

3M 157

viral marketing 44

ZOPA (zone of possible agreement) 189

360-degree feedback 164–65

virtual organizations 54, 55

throughput 88

vision 187

time: attitudes to 29

attractiveness of 199

time management 194–95

creating 15, 94

time zones 29

embedding 95

total quality management (TQM) 41

setting out clear 19

Toyota 120–21

shared 79

training 25, 137, 147

strategic thinking and 72–73

coaching and mentoring 158–59

unclear 61

continuous learning 27, 160–61

vision statements 56–57, 123

learning styles and 208

workplace culture and 59

transparency 150, 151

visionary management style 19

trends 44, 45, 66

vocal dynamics 173

“triple bottom line” 86

VRIO framework 83

Trompenaars, Fons 28

trust 45, 56, 154, 187, 210–11

developing 150–51

W

swift trust 147

winning deals and 71

Wack, Pierre 75

Tuckman, Bruce 13, 146–47

waste: elimination of 13, 25

24/7 working culture 14, 202

types of 120–21

Twitter 47

waterfall approach 48

Waterman, Robert 96–97

U

weakness: identifying areas of 82, 84

ignoring 174

SWOT analysis 104–105

Uber Technologies, Inc. 57, 161

webcasts/webinars 176

United Nations Sustainable

WeChat 47

Development Goals 87

well-being: coping with stress

University of Pennsylvania 131

204–205

USPs (unique selling points) 69

workplace 138–39, 143, 182

“What if” scenarios 75

V

WhatsApp 47

work ethic 133

work/life balance 92, 202–203

VAK model 208–209

workflow, poor 120, 121

value: adding 83, 117, 120

working conditions, poor 145

importance of feeling valued 140

working days 14

value chains 118–19

workload 138, 205

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ACKNOWLEDGMENTS

Acknowledgments

Dorling Kindersley would like to thank Matthew Williams for additional writing; Alethea Doran and Jemima Dunne for editing; Janashree Singha, Steve Stetford, and Debra Wolter for proofreading; and Vanessa Bird for indexing.

Credits

p.30_31 IT management ‘ How much data do we create every day?’ Marr. B;. Forbes, 2018; p.100 Consequence model The Decison Book, Krogus & Tschäppeler, 2008 (b).

pp.122–123 MBO model The Practice of Management, Drucker, P., 1954; BSC theory “The Balanced Scorecard,”

Kaplan and Norton, 1992. p.146 FSNP model

“Developmental Sequence in Small Groups,” Bruce Tuckman, Psychological Bulletin, 1965. p.196 The Johari Window The Johari Window, Luft and Ingram, 1995. pp.208–209

VAK model Teaching through Modality Strengths: Concepts Practices, Walter, B., 1979; Felder-Silverman model Learning and Teaching Styles in Engineering Education, Felder and Silverman, 1988; Dunn and Dunn model Teaching Students through Their Individual Learning Styles, Dunn, R. and Dunn, K., 1978; Four-stage learning Experiential Learning: Experience as the Source of Learning and Development, Kolb, D. A., 1984.

p.210–211 Strategic inflection point graph Only the Paranoid Survive, Grove, A., 1996.

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Document Outline

- CONTENTS

- Introduction

- MANAGEMENT BASICS

- The Evolution of Management

- Management Roles

- Leaders and Managers

- Management Styles

- Situational Leadership

- Management and Power

- Scientific Management

- Key Principles

- Global Management

- Strategic Management

- Risk Management

- HR Management

- Financial Management

- Operations Management

- Quality Management

- IT Management

- Marketing Management

- Digital Management

- The Project Cycle

- MANAGING ORGANIZATIONS

- Types of Organizations

- Evolving Structures

- Building Support

- Workplace Culture

- Managing Projects

- Customers and Other Stakeholders

- Products and Services

- Supply and Demand

- Marketing and Selling

- Winning Deals

- Strategic Thinking

- Effective Planning

- Disruptive Technology

- Organizational Learning

- Market Forces

- Gap Analysis

- Benchmarking

- Sustainability

- Managing Constraints

- Business Cases

- Understanding Change

- Change Models

- The 7-S Model

- Data and Information

- Decision-making

- Force-Field Analysis

- SWOT Analysis

- Critical Path Analysis

- Problem-Solving

- Identifying Causes

- Design Thinking

- Resolving Deadlocks

- Business Processes

- Value Chain

- Lean Production

- Meeting Objectives

- Key Performance Indicators

- MANAGING PEOPLE

- Team Roles

- Personality Types

- Competencies

- Finding and Selecting Talent

- Benefits of Diversity

- Workplace Well-being

- Retaining Talent

- Meeting Employees’ Needs

- Motivation and Reward

- Team Development

- SMART Management

- Developing Trust

- Dealing with Staff Conflict

- Delegation

- Big Ideas

- Coaching and Mentoring

- Continuous Learning

- Performance Management

- 360-Degree Feedback

- COMMUNICATION

- Effective Communication

- Active Listening

- Nonverbal Communication

- Giving Feedback

- Communication Tools

- Effective Meetings

- Presentations

- Corporate Communications

- Crisis Communications

- Persuasion and Influence

- Negotiation

- Resolving Disputes

- SELF-MANAGEMENT

- Time Management

- Personal Impact

- Building a Career

- Effective Networking

- Work/Life Balance

- Coping with Stress

- Learning and Development

- Learning Styles

- Staying Alert

- Accountability

- Developing New Routines

- Index

- Acknowledgments

Table of Contents

CONTENTS

Introduction

MANAGEMENT BASICS

The Evolution of Management

Management Roles

Leaders and Managers

Management Styles

Situational Leadership

Management and Power

Scientific Management

Key Principles

Global Management

Strategic Management

Risk Management

HR Management

Financial Management

Operations Management

Quality Management

IT Management

Marketing Management

Digital Management

The Project Cycle

MANAGING ORGANIZATIONS

Types of Organizations

Evolving Structures

Building Support

Workplace Culture

Managing Projects

Customers and Other Stakeholders

Products and Services

Supply and Demand

Marketing and Selling

Winning Deals

Strategic Thinking

Effective Planning

Disruptive Technology

Organizational Learning

Market Forces

Gap Analysis

Benchmarking

Sustainability

Managing Constraints

Business Cases

Understanding Change

Change Models

The 7-S Model

Data and Information

Decision-making

Force-Field Analysis

SWOT Analysis

Critical Path Analysis

Problem-Solving

Identifying Causes

Design Thinking

Resolving Deadlocks

Business Processes

Value Chain

Lean Production

Meeting Objectives

Key Performance Indicators

MANAGING PEOPLE

Team Roles

Personality Types

Competencies

Finding and Selecting Talent

Benefits of Diversity

Workplace Well-being

Retaining Talent

Meeting Employees’ Needs

Motivation and Reward

Team Development

SMART Management

Developing Trust

Dealing with Staff Conflict

Delegation

Big Ideas

Coaching and Mentoring

Continuous Learning

Performance Management

360-Degree Feedback

COMMUNICATION

Effective Communication

Active Listening

Nonverbal Communication

Giving Feedback

Communication Tools

Effective Meetings

Presentations

Corporate Communications

Crisis Communications

Persuasion and Influence

Negotiation

Resolving Disputes

SELF-MANAGEMENT

Time Management

Personal Impact

Building a Career

Effective Networking

Work/Life Balance

Coping with Stress

Learning and Development

Learning Styles

Staying Alert

Accountability

Developing New Routines

Index

Acknowledgments