ENTERPRISE
From the January 23, 2004 print edition
Transition Issues

This is the sixth in a series of eight articles on business transition issues.

In your business are the right people in the right positions and are there successors in training? How effectively are you preparing for the future? Starting with the right management talent, how are you developing the management knowledge and skills to effectively execute?

Managers and leaders: Professor Warren Bennis at the University of Southern California is recognized for first making the distinction between management and leadership. He says management is doing things right, and leadership is doing the right things. You certainly need both. Professional managers need to make sure their organizations are doing the right things and doing them well. That’s a manager’s job, in a nutshell.

To do things right puts an emphasis on high-quality business systems. In order to achieve predictable results, a system needs to be well-designed and well-administered. It is management’s job to make sure the right systems are in place and that they efficiently produce positive results. Doing the right things involves creating an environment where business colleagues are contributing their best efforts toward achieving these business results. This is leadership: creating the culture that enables colleagues to participate in achieving preferred results.

This process does not happen naturally. People in the organization do not perform at optimal levels naturally. The corporate culture has a tremendous impact on the creativity and commitment of the work force. And this is the great opportunity of the executive leadership — to create the high-performance culture. It takes management and leadership. We call ourselves professional managers, but we must use all of our leadership skills to be successful managers. We must become proficient at managing ourselves, our business systems and our personal leadership system.

Those who bear the title: Here is the bad news. Currently in the United States, there is an epidemic of managers bearing the title yet having no formal training as to exactly what a manager is supposed to do. The worst outbreak of this dangerous phenomenon is in the small to medium-sized businesses. Thus, it is no surprise that the greatest percentage of business failures occur in this population. What a lot of business practitioners don’t realize is there is a distinct body of business knowledge that really works. The winners use the knowledge; the losers don’t even know it exists. The critical business knowledge comprises the best business practices — which highly increases the probability of success. Unfortunately, many managers rely on their intuition instead. Who do you think will win?

The purpose of management: Business management has as its “reason of being” the one thing that will enable its continued existence — positive economic performance. The business can justify its existence and its authority only by the financial results it creates.

According to guru Peter Drucker, a business enterprise fails if it is not successful in:

• Producing positive financial results,
• Supplying goods and services desired by the customer, and
• Maintaining or improving renewal capabilities to sustain positive financial results.

To support high-level performance this needs to be absolutely clear in the minds and actions of every manager. This should be all managers’ absolute resolve for their “game plans.”

Their training should prepare them to execute with predictable success in these areas. Yet, the trend of promoting untrained manager candidates into manager positions continues to gain momentum.

How can we continue to expect ill-prepared managers to lead for excellence? It is time to re-evaluate how we prepare our managers to help create the future.

What kind of future do you want? That will be determined by how well you prepare your managers.

Hal Johnson has been CEO of eight companies and has authored two books on mentoring business performance. He is chairman and CEO of LeadershipONE, a business transition consulting firm. He may be reached at (916) 391-3042 or at [email protected].

© 2003 American City Business Journals Inc.