Tuesday, March 11, 2008

What Makes an Effective Executive - Azara Feroz Sayed

When me and Feroz were getting to know each other, I had asked Feroz what would be the Management Book that he would recommend me for reading. He mentioned Peter Drucker. For some reason, till now my knowledge was limited to Peter Druckers quotes, news about his death and couple of articles in the media around the time of his death. Classic Drucker is the book I am reading now. Below is a chapter from the book on Effective Executives available at http://hbswk.hbs.edu/archive/4208.html

An Effective Executive does not need to be a leader in the sense that the term is now most commonly used. Some of the best business and nonprofit CEOs I've worked with over a sixty-five-year consulting career were not stereotypical leaders. They were all over the map in terms of their personalities, attitudes, values, strengths, and weaknesses. They ranged from extroverted to nearly reclusive, from easygoing to controlling, from generous to parsimonious.

What made them all effective is that they followed the same eight practices:

They asked, "What needs to be done?"
They asked, "What is right for the enterprise?"

They developed action plans.
They took responsibility for decisions.
They took responsibility for communicating.
They were focused on opportunities rather than problems.

They ran productive meetings.
They thought and said "we" rather than "I."

The first two practices gave them the knowledge they needed. The next four helped them convert this knowledge into effective action. The last two ensured that the whole organization felt responsible and accountable.

Get the Knowledge You Need - Ask the first two questions.
Ask, What Needs to be Done? Note that the question is not "what do I want to do?". Failure to ask this question will render the ablest executive ineffectual. I have never encountered an executive who remains effective while tackling more than two tasks at a time. Hence, after asking what needs to be done, the effective executive sets priorities and sticks to them. After completing the original top-priority task, the executive resets priorities rather than moving on to number two from the original list. He once again asks, "What must be done now". This results generally in new and different priorities.

Every five years, Jack Welch asked himself, "What needs to be done now?" And every time. he came up with a new and different priority. He asked himself which of the two or three tasks at the top of the list he himself was best suited to undertake. The others he delegated. Effective executives try to foucs on jobs that they do specially well. They know that enterprises perform if top management performs.

Ask, Is this the right thing for the enterprise? This does not gaurantee that the right decision will be made. Even the most brilliant executive is human and thus prone to mistakes and prejudice. But failure to ask this questions virtually guarantees a wrong decision.

Write an Action Plan - Execute are doers; they execute. Knowledge is useless to execute unless it has been translated to deeds. Executive needs to plan thier course and think about
* desired results - what contributions enterprise should expect from me over the next 18 months or 2 yrs? What results will I commit to?
* restraints - Is this course of action ethical? It is acceptable within the organization? Is it legal? Is it compatible within the mission, values and policies of the organization?
* Timelines for review and revisions

The Action Plan, is the basis for executive's time management. Without an action plan an executive becomes a prisoner of events. Napoleon planned every one of his battles more meticulously than any other general. Without check-ins to re-examine the plan as events unfold, the executive has no way of knowing which one really matters and which are noist.

Act - When they translate plans into action, executives need to pay particular attention to decision making, communication, opportunities (as opposed to problems), and meetings.

Take responsibility for decisions - A decision has not been made until people know:
* The name of the person accountable for carrying it out;
* The deadline;
* The names of the people who will be affected by the decision and therefore have to know about, understand, and approve it — or at least not be strongly opposed to it
* The names of the people who have to be informed of the decision, even if they are not directly affected by it.

An extraordinary number of organizational decisions run into trouble because these bases aren't covered. One of my clients, thirty years ago, lost its leadership position in the fast-growing Japanese market because the company, after deciding to
enter into a joint venture with a new Japanese partner, never made clear who was to inform the purchasing agents that the partner defined its specifications in meters and kilograms rather than feet and pounds—and nobody ever did relay that information.

It's just as important to review decisions periodically — at a time that's been agreed on in advance — as it is to make them carefully in the first place. That way, a poor decision can be corrected before it does real damage. These reviews can cover anything from the results to the assumptions underlying the decision. Such a review is especially important for the most crucial and most difficult of all decisions, the ones about hiring or promoting people. Studies of decisions about people show that only one-third of such choices turn out to be truly successful. One-third are likely to be draws—neither successes nor outright failures. And one-third are failures, pure and simple. Effective executives know this and check up (six to nine months later) on the results of their people decisions. If they find that a decision has not had the desired results, they
don't conclude that the person has not performed. They conclude, instead, that they themselves made a mistake. In a well-managed enterprise, it is understood that people who fail in a new job, especially after a promotion, may not be the ones to blame. It's just as important to review decisions periodically as it is to make them carefully in the first place.

Executives also owe it to the organization and to their fellow workers not to tolerate nonperforming individuals in important jobs. It may not be the employees' fault that they are underperforming, but even so, they have to be removed. People who have failed in a new job should be given the choice to go back to a job at their former level and salary. This option is rarely exercised; such people, as a rule, leave voluntarily, at least when their employers are U.S. firms. But the very existence of the option can have a powerful effect, encouraging people to leave safe, comfortable jobs and take risky new assignments. The organization's performance depends on employees' willingness to take such chances.
A systematic decision review can be a powerful tool for self-development, too. Checking the results of a decision against its expectations shows executives what their strengths are, where they need to improve, and where they lack knowledge or
information. It shows them their biases. Very often it shows them that their decisions didn't produce results because they didn't put the right people on the job. Allocating the best people to the right positions is a crucial, tough job that many executives slight, in part because the best people are already too busy. Systematic decision review also shows executives their own weaknesses, particularly the areas in which they are simply incompetent. In these areas, smart executives don't make decisions or take actions. They delegate. Everyone has such areas; there's no such thing as a universal executive genius.
Most discussions of decision making assume that only senior executives make decisions or that only senior executives' decisions matter. This is a dangerous mistake. Decisions are made at every level of the organization, beginning with individual professional contributors and frontline supervisors. These apparently low-level decisions are extremely important in a knowledge-based organization. Knowledge workers are supposed to know more about their areas of specialization—for example, tax accounting—than anybody else, so their decisions are likely to have an impact throughout the company. Making good decisions is a crucial skill at every level. It needs to be taught explicitly to everyone in organizations that are based on knowledge.

Take Responsibility for Communicating - Effective executives make sure that both their action plans and thier information needs are understood. Specifically, this means that their plans and ask for comments from all thier colleagues, superiors, subrdinates and peers. As the same time, they let each person know what information they will need to get thhe job done. The information flow from suboridnate to boss is what usually get the most attention. But executives need to pay equal attention to peer's and superior's information needs. Far too many executives behave as if information and its flow were the job of information specialist, the accountant. As a result, they get an enormous amount of data they do not need but liitle of the information they do need. The best way around this problem is for each executive to identify the information he needs, ask for it and keep pushing till he gets it.

Focus on Oppurtunities - Good executives focus on oppurtunities rather than problems. Problems have to be taken care of, of course; they must not be swept under the rug. But problem solving, however necessary, does not produce results. It prevents damage. Exploiting oppurtunities produces results. Above all, effective executives treat change as an oppurtunity rather than a threat. Executies scan seven situations for oppurtunities
* unexpected success or failure in their own enterprise, in a competing enterprise, or in industry
* a gap between what is and what could be in a market process, process, product or service
* innovation in a process, product or service
* changes in industry structure and market structure
* demographics
* changes in mind-set, values, perception, mood or meaning
* new knowledge or new technology

Effective executives also make sure that problems do not overwhelm oppurtunities. In most companies, the first page of the monthly management report lists key problems. It is wiser to list oppurtunities on the first page and leave problems for the second page. Unless there is a true catastrophe, problems are not discussed in management meetings until oppurtunities have been analyzed and properly dealt with.

Staffing is another important aspect of being oppurtunity focused. Effective executives put their best people on oppurtunities rather than on problems. One way to staff for oppurtunities is to task each member of the management group to prepare two lists every six months - a list of oppurtunities for the entire enterprise and a list of the best performing people throughout the enterprise. These are discussed, then melded into two master lists, and the best people are matched to the best oppurtunities. This practice is one of the key strengths of Japanese business.

Make Meetings Productive - Every study of executive workday has found that even junior executives and professionals are in a meeting of some sort - more than half of every business day. Effective executives know that any given meeting is either productive or total waste of time. The key to running an effective meeting is to decide in advance what kind of meeting it will be and ensure approapriate preparation. Making a meeting productive takes lots of self-discipline. It requires that executive determine what kind of meeting is appropriate and then stick to that format. It is necessary to terminate the meeting as soon as its specific purpose is accomplished. Good follow-up is just as important as the meeting itself.

Alfred Sloan, the most effective business executive I have ever know. Sloan headed General Motors from 1920s until 1950s. Sloan announces the meeting purpose at the beginning of a meeting. He then listened. He never took notes and he rarely spoke except to clarify a confusing point. At the end he summed up, thanked the participants and left. Then he immediately wrote a short memo addressed to one attendee of the meeting. In that note, the summarized the discussion and its conclusions and spelled out any work assignment decided upon in the meeting. He specified the deadline and the executive responsible for the assignment. He sent a copy of the memo to everyone who'd been present at the meeting. It was through these memos - each a small masterpies - that Sloan made himself into an outstandingly effective executive.

Think and Say "We" - Effective executives know that they have ultimate responsibility which can be neither shared nor delegated. But they have authority only because they have the trust of the organization. This means they think of the need and the oppurtunities of the organization before they think of their own needs and oppurtunities. This one may sound simple but needs to be strictly observed.

The last practice, which should be elevated to the level of a rule : Listen First Speak Last.

Effective executives differ widely in their personalities, strengths, weakness, values and beliefs. All they have in common is that they get right things done. Some are born effective. Effectiveness is a discipline. And, like every discipline, effectiveness can be learned and must be earned


Add to Technorati Favorites My Zimbio
Top Stories