Why Good Management is so Difficult – LBS Professor Julian Birkinshaw
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Copyright Julian Birkinshaw 2011
Uncommon Sense Why Good Management is So Difficult
Professor Julian Birkinshaw London Business School
& The Management Lab
Alumni Reunion, May 2012
Copyright Julian Birkinshaw 2011
Quick Quiz: To what extent does your current boss…
1. …seek growth for growth’s sake?
2. …pursue ‘pet’ projects he/she is interested in, regardless of
whether they fit with the organisation’s goals?
3. …become visibly angry at work when relatively small mistakes
are made?
4. …get overly involved in the details of all the projects he/she is
responsible for?
5. …seek out recognition and plaudits for what he/she has
achieved?
6. …try to take credit for the good work of others?
7. …organise things for his/her own convenience, rather than
taking care of the needs and interests of others?
Answer on a 1-5 scale: 1=not at all, 2=not really, 3=neutral, 4=to some extent, 5=to a very great extent
Copyright Julian Birkinshaw 2011
A Puzzle
If something doesn’t work very well
And a (proven) better alternative exists…
Surely we would expect everyone to gravitate
towards that alternative?
Copyright Julian Birkinshaw 2011
Overall employee engagement levels
are depressingly low
0
20
40
60
80
Highly Engaged Moderately Engaged Disengaged
Data: Towers Perrin/Towers Watson
Copyright Julian Birkinshaw 2011
Who are you happiest with?
Friends
Parents/relatives
Spouse
My children
Co-workers
Clients/customers
Alone
Boss
3.3
3.0
2.8
2.7
2.6
2.4
2.2
2.0 (Rating is on a 1-5 scale)
Copyright Julian Birkinshaw 2011
Cynicism about the quality of
management in UK companies is rife
Copyright Julian Birkinshaw 2011
Companies that put their employees
first appear to do very well
Copyright Julian Birkinshaw 2011
Companies that put their employees first
are more profitable
• “Based on 7,939 business units, Positive relationships were
found between employee satisfaction/engagement and business
outcomes including profit” (Harter et al, 2002)
• Companies on the “100 Best Companies to Work For” list
enjoy positive workforce attitudes and performance advantages
over the broad market” (Fulmer et al, 2003)
• “A value-weighted portfolio of the 100 Best Companies earned
an annual alpha of 3.5% from 1984 to 2009” (Edmans, 2011)
This is not a new story!
Copyright Julian Birkinshaw 2011
Resolving the puzzle – from two
different directions
A top-down perspective
(rethinking the “system” of management)
A bottom-up perspective
(rethinking the “role” of management)
Copyright Julian Birkinshaw 2011
Rethinking the System of Management
Business Model
Choices an organisation
make about:
• Sources of revenue
• Cost structure
• What to make / buy
• How to make a profit
Management Model
Choices firms make
about:
• Coordinating activities
• Making decisions
• Motivating employees
• Defining objectives
Copyright Julian Birkinshaw 2011
Defining Objectives
Motivating People
Making Decisions
A Framework for reinventing
management
Emergence Bureaucracy
Collective Wisdom Hierarchy
Intrinsic Extrinsic
Obliquity Alignment
Coordinating Activities
Traditional Principles Alternative Principles
Copyright Julian Birkinshaw 2011
Obliquity
Goals are best achieved indirectly
If you want to get to point A, aim at point B
Don't aim at success — the more you aim at it and make it a target, the
more you are going to miss it. For success, like happiness, cannot be pursued;
it must ensue, and it only does so as the unintended side effect of one's
personal dedication to a cause greater than oneself.
Viktor Frankl, Holocaust Survivor and Philosopher
Copyright Julian Birkinshaw 2011
How do people think management will
change over the next five years?
Bureaucracy Emergence
Hierarchy Collective Wisdom
Extrinsic Intrinsic
Alignment Obliquity
1 2 3 4
Our Management
Model today
Our Management
Model in 5 years
Copyright Julian Birkinshaw 2011
Resolving the puzzle – from two
different directions
A top-down perspective
(rethinking the “system” of management)
A bottom-up perspective
(rethinking the “role” of management)
Copyright Julian Birkinshaw 2011
Two different ways of thinking about
management
What do we want to
get done?
How do we need to
act to get our
employees to do it?
What hopes, aspirations,
fears, concerns do
employees experience
at work?
How should we act to
harness their latent
enthusiasm and skill?
Copyright Julian Birkinshaw 2011
The current research: Enabling our
employees to do their best work
Part 1
• What makes my work motivating and
fulfilling?
• What are my fears, concerns and
frustrations in the workplace?
Copyright Julian Birkinshaw 2011
Respondents are worried about lack of
opportunities, and failing to deliver
Lack of opportunities for advancement
Fear of failing to deliver to expectations
Lack of clarity about organisation vision
Lack of resources for getting work done
Incompetence/negative attitudes at work
Lack of fit with organisation’s values
Fear of looking foolish with colleagues
Excessive change/turbulence in workplace
3.3
3.3
2.8
2.8
2.8
2.8
2.6
2.6 (Rating is on a 1-5 scale)
Copyright Julian Birkinshaw 2011
A hierarchy of employee’s
“fears, concerns and frustrations”
Physiological needs
Safety, security of employment
Belonging, love, friendship
Esteem, achievement, respect
Self-actualisation
Lack of opportunities for personal development
Fear of failing to deliver on (high) expectations Concern with the stress of the work Frustration with ineffective processes
Concern about not fitting in
Concern with uncertainty and change Fear of redundancy
Maslow’s Hierarchy Employee fears and concerns
Copyright Julian Birkinshaw 2011
The current research
Part 2
• What are the characteristics of a good
boss and a bad boss?
• What are the specific things he or she
does that enable me (or not) do my best
work?
Copyright Julian Birkinshaw 2011
The Seven Deadly Sins of Management
• Envy
• Greed
• Gluttony
• Lust
• Pride
• Sloth
• Wrath
Copyright Julian Birkinshaw 2011
Setting
Goals
Monitoring
Performance
Reviewing
Results
Making
adjustments
GREED
LUST
Copyright Julian Birkinshaw 2011
Goal Setting Sins
• Greed – Empire building, growth
for growth’s sake, overseeing
rather than adding value
• Lust – desire to pursue pet
projects for their own sake,
rather than to further the
organisation’s goals
Copyright Julian Birkinshaw 2011
Setting
Goals
Monitoring
Performance
Reviewing
results
Making
adjustments
GREED
LUST
GLUTTONY
WRATH
Copyright Julian Birkinshaw 2011
Monitoring Sins
• Wrath – blowing up at the
slightest error, being an asshole,
poisoning the culture
• Gluttony – taking too much on,
stealing others decisions, not
delegating
Copyright Julian Birkinshaw 2011
Setting
Goals
Monitoring
Performance
Reviewing
results
Making
adjustments
GREED
LUST
GLUTTONY WRATH
PRIDE ENVY
Copyright Julian Birkinshaw 2011
Reviewing Sins
• Pride – hubris, believing your
own hype, not admitting your
mistakes
• Envy – not recognising the
achievements of others, trying
to take credit for their work
Copyright Julian Birkinshaw 2011
Setting
Goals
Monitoring
Performance
Reviewing
results
Making
adjustments
GREED
LUST
SLOTH
ENVY PRIDE
GLUTTONY WRATH
Copyright Julian Birkinshaw 2011
Adjustment Sins
• Sloth – not caring about
others, inattentive, more
concerned for your own
comforts than those of
others, abrogation of
responsibilities
Copyright Julian Birkinshaw 2011
Quick Quiz: To what extent does your current boss…
1. GREED…seek growth for growth’s sake?
2. LUST…pursue ‘pet’ projects he/she is interested in, regardless
of whether they fit with the organisation’s goals?
3. WRATH…become visibly angry at work when relatively small
mistakes are made?
4. GLUTTONY…get heavily involved in the details of all the
projects he/she is responsible for?
5. PRIDE…seek out recognition and plaudits for what he/she has
achieved?
6. ENVY…try to take credit for the good work of others?
7. SLOTH…organise things for his/her own convenience, rather
than taking care of the needs and interests of others?
Answer on a 1-5 scale: 1=not at all, 2=not really, 3=neutral, 4=to some extent, 5=to a very great extent
Copyright Julian Birkinshaw 2011
In summary…
What employees need
• Give your people
important work to do
• Provide them with
space
• Provide support when
it is needed
• Given people
recognition & praise
What they often get
• Confusing or unclear
objectives
• Micro-management and
meddling
• Lack of information, lack
of concern
• Limited or no feedback
Copyright Julian Birkinshaw 2011
Google’s Rules for Good Management
1. Be a good coach
2. Empower your team and don't micromanage
3. Express interest in team members' success and personal well-being
4. Don't be a sissy: Be productive and results-oriented
5. Be a good communicator and listen to your team
6. Help your employees with career development
7. Have a clear vision and strategy for the team
8. Have key technical skills so you can help advise the team.
(Google’s Quest to Build a Better Boss, Adam Bryant, New York Times, March 12th)
Copyright Julian Birkinshaw 2011
Why is there such an enormous gulf
between the rhetoric and the reality?
1. Managing well is harder than it seems
2. Competing priorities and limited time
3. Good management requires non-intuitive
behaviour
Copyright Julian Birkinshaw 2011
So how can we improve the quality of
management in our companies?
Learn how to
see the world
through the
eyes of our
employees
Copyright Julian Birkinshaw 2011
Marketing
1. Get to know your
customers properly
2. Deliver on the
customer
experience
3. Turn your
customers into
promoters
1. Get to know your
employees properly
2. Deliver on the
employee
experience
3. Turn your
employees into
promoters
Management
Copyright Julian Birkinshaw 2011
1. Get to know your employees properly
Copyright Julian Birkinshaw 2011
Cutting through the hierarchy: How do
you get closer to the front line?
• Skip-level meetings
• Web-enabled chat and discussion forums
• Front-line work
• “Smokers corner”
• Reverse mentoring
Copyright Julian Birkinshaw 2011
2. Deliver on the employee experience
• Give the “service” mentality
some teeth
– HCL’s Smart Service Desk
– HCL’s open 360 feedback
Copyright Julian Birkinshaw 2011
3. Turn your employees into promoters
Net Promoter Score: How likely is it that you
would recommend this company to a friend or
colleague?
1 2 3 4 5 6 7 8 9 10
Detractor Neutral Promoter
Extremely
likely Not at all
likely
Copyright Julian Birkinshaw 2011
The “Net Management Promoter Score”
How likely is it that you would recommend your line
manager to a colleague as someone they should work
for in the future? (1=not at all likely, 10=extremely
likely)
Detractor
87 people
Neutral
60 people
Promoter
55 people
Copyright Julian Birkinshaw 2011
A top quality boss is the best single
predictor of employee engagement
Copyright Julian Birkinshaw 2011
Coda: Experimentation as an approach
to management innovation
Copyright Julian Birkinshaw 2011
A new management style
Before
Traditional style
of supervision
of team
After
Supervisor spends 5 hours
more per week providing
feedback and coaching team
Hypothesis: A greater emphasis on ‘coaching’ will
increase the effectiveness of my team
Intervention: Supervisor has 5 hours
per week freed up (fewer meetings)
Team are asked to look for new ways of
increasing cross-selling
Result: Team members
more engaged, significant
increase in cross-selling
from lower performers
Copyright Julian Birkinshaw 2011
Principles of Experimentation
1. Focus on causes, not symptoms.
2. Make your hypotheses explicit.
3. Limit the scope of your experiment.
4. Run the new in parallel with the old.
5. Start at home.
6. Use volunteers, if possible.
7. Iterate.
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