UK: IM SOUNDING BOARD - THE AWARENESS THAT ADDS VALUE. - In every commercial organisation managers are employed to create shareholder value. This is their prime aim, their central focus in making the choice of emphasis from their individual list of prior

by Neville Bain.
Last Updated: 31 Aug 2010

In every commercial organisation managers are employed to create shareholder value. This is their prime aim, their central focus in making the choice of emphasis from their individual list of priorities. They need to identify, from their own area of influence, the actions that really do add value at the end of the process and those that do not. Lessons from successful companies demonstrate clearly that winners focus on those things that are truly important, while losers dissipate their energies by spraying around in a random way. Therefore successful managers must understand their objectives, have them agreed with their bosses and periodically self-appraise their performance against this list.

Within my own company, I am clear that my unique value-adding contribution lies in the following four areas: Strategy - in the formulation and implementation of group strategy and provision of quality input to the bottom-up decisions of each of our six separately managed business areas.

People - in the selection, motivation, empowerment of key people to be successful in achieving their objectives; also in ensuring that the organisation is supportive of those objectives.

Goals - in agreeing finite goals or commitments for each business and in monitoring performance against these.

Leadership - in providing leadership, through having the right culture, towards the achievement of goals and the realisation of an already understood vision. This involves being a team coach, communicating heavily and travelling extensively.

There are also four central themes in my book, Successful Management. First, that Change is Continuous. The inescapable truth, confirmed by the research that went into the book (as well as by observation), is that change is all around us, is fast-moving, is accelerating and will continue indefinitely. Managers need to be comfortable operating in this environment, and even to make a friend of change. This implies that they must learn some key lessons. They must develop an ability to think clearly about issues impacting on their special areas, be prepared to optimise, to make trade-offs and do all this very speedily. The concept is 'Ready, Fire, Aim' - making final adjustments to decisions as we go along, rather than analysing to death and implementing laboriously. In a fast changing world where businesses are buffeted by external forces, managers need to be nimble, to respond capably, to keep the company on track and to meet its objectives. Proper training must be given, especially in the important area of communication and the development of interpersonal skills.

Managers must be outwardly focused, aware of important trends that will impact on their business or industry. They need to be opportunity-aware, without losing the more usual inward-looking focus on doing things better and responding to threats. Given the speed of change, of increasing pressure for performance and the wider scope of jobs that flow from flatter organisations, they need to be capable of coping with pressure by maintaining a balance in their lives. In short, they must possess emotional resilience.

The second main theme is that Strategy is Fundamental. In a fast-moving world a business needs clear goals and a plan of how to reach them. The strategy needs to be well thought through and be capable of delivering competitive advantage that is sustainable in the longer term. The firm must be capable of developing such a strategy and have a clear communication plan for making the key elements known.

The third theme is Dependence on People. Why is it, when every manager knows that committed, talented people are essential to superior performance, that this aspect still receives insufficient attention? In a survey carried out for the book, it emerged that the 90 responding managers gave personal development and management development, on average, just 4% and 8% of their time.

In the same survey, it appeared that the methods that firms employed for finding, preparing and 'enabling' new general managers were often random, and certainly suboptimal. Most businesses recruited top managers on the basis of their track record, rather than on a careful evaluation of the person's skills, abilities and experiences set against the future requirements of the job. Moreover, having been appointed, most new general managers were left largely on their own. Only 9% considered they had been given any useful help after taking charge for the first time. An astonishing 80% received no training or preparation at all.

Leadership (the fourth main theme) is an essential element at all levels. Many of us tend to think of a leader as a powerful, often charismatic, individual. This is altogether too limited in the context of business leadership. The essence of leadership can be gleaned from the qualities seen in its most successful exemplars. In brief, they are flexible, inspirational, enthusiastic, people-oriented; they build trust; they are open, of high integrity; they are experimental; they communicate well; and they are ready to enable others to act. These are all 'inspirational' qualities. But there are others, too, which must also be present, and which are more perspirational. Leadership also means putting in place the tools that are needed to turn vision into reality. It entails, for example, organisational clarity and the setting of objectives, designing reward systems aligned with goals, determining compatible resource allocations and providing the right controls and measures.

Successful managers will understand how they add value to their organisations and will measure their progress against objectives that are fully compatible with corporate goals. They will take hold of their own development plans, and agree these with appropriate people in the organisation. The new skills which successful managers continuously develop will be aimed at their present role-needs and the needs of the future. They will thus require a constant awareness of trends and their implications. Managers with such all-round awareness, who are capable of managing themselves and providing leadership, are the ones who will deliver competitive advantage.

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