On June 19, 2012 the New York Times published an article, “The Body’s Protein Cleaning Machine” about the Nobel Prize winning chemist Dr. Avram Hershko. His life work has been on understanding how the body’s cells rid themselves of old, defective proteins. Every cell has a protein ubiquitin that tags old and degenerated proteins for destruction. “Maybe you’ve heard of Parkinson’s disease and Alzheimer’s? There we have bad proteins accumulating in the brain and destroying brain cells. The reason we don’t get Alzheimer’s when we are 10 is that when we are young, the bad proteins are disposed of quickly. With age, the cell’s machinery may lose the ability to do that.”
This very interesting notion that the body has a built-in mechanism to rid itself of bad proteins reminded me of old lessons about the need for our businesses to have a similar mechanism. Product obsolescence is a terrible drag on sales and gross margins. A better strategy is to have an end of life process to drive out product obsolescence. Peter Drucker ((Peter Drucker, The Effective Executive, Harper Colophon Books, p.108)) put it this way:
Systematic sloughing off of the old is the one and only way to force the new. There is no lack of ideas in any organization I know. “Creativity” is not our problem. But few organizations ever get going on their own good ideas. Everybody is much too busy on the tasks of yesterday. Putting all programs and activities regularly on trial for their lives and getting rid of those that cannot prove their productivity work wonders in stimulating creativity even in the most hidebound bureaucracy.
In earlier posts in this series on Peter Drucker’s book The Effective Executive: the definitive guide to getting the right things done, we reviewed his list of basic practices:
“….know where their time goes.”
“….focus on outward contribution”
“….build on strengths….”
“….concentrate on the few major areas where superior performance will produce outstanding results.”
“…. make effective decisions.”
This posting is devoted to the third practice, build on strengths.((1))
The effective executive makes strength productive. He knows that one cannot build on weakness. To achieve results, one has to use all of the available strengths – the strengths of associates, the strengths of the superior, and one’s own strengths. These strengths are the true opportunities. To make strength productive is the unique purpose of organization. It cannot, of course, overcome the weaknesses with which each of us is abundantly endowed. But it can make them irrelevant. Its task is to use the strength of each man as a building block for joint performance.((2))
How many times have I asked clients, “Do you have insurance on your business assets? Do you have liability insurance? Key person insurance?” For many small business people these questions are a combination of absurd and uncomfortable. Frequently I am brushed off with, “I can’t afford that.”
Learning how to be an effective manager is a primary task for every manager. However, most managers learn management skills on the job without guidance and in a haphazard fashion. A few companies have formal mentoring programs but, of these, few have a structured approach. Very few courses are offered in business schools on how to be an effective manager. To the extent that a manager becomes an effective manager, it is learned by stumbling about and reinventing the wheel.
Peter Drucker’s The Effective Executive: the definitive guide to getting the right things done((1)) has been a continuing resource for me in learning how to be an effective manager and teaching others these management skills . I find myself re-reading it in parts and all of it every year. To spread the wisdom around and reflect further on this guide for the general manager((2)) I will devote a series of postings here to its content on how to be an effective manager. Continue reading →
I am using the 2006 edition published by Harper Collins. I will also refer to The Effective Executive in Action by Drucker and J. A. Maciariello published by Harper Collins, 2006 [↩]
I use the word “manager” throughout in place of “executive” because I believe that Drucker’s ideas scale up and down the management hierarchy very well. These are lessons for everyone one from front line supervisor to CEO [↩]
The failure rate in bringing business plans to fruition is very high. Many observers, including me, have found a number of common failure modes. First among all are the shortcomings in the planning and execution processes themselves. The failure to actually put the plan into action
A good planning process engages all of the significant stakeholders in the creation of the plan. This practice is productive because 90% or more of the facts required to create the plan are sitting in the room when all of the stakeholders are there. Creating the plan through a team effort leverages this knowledge, provides opportunities for problems and opportunities to surface and be resolved, and the resulting plan is inherently owned by everyone because they were present and involved in its creation.
A good planning process insists on ruthlessly testing every assumption. It is a common practice to conduct sessions with no holds bared brainstorming and critiques. This is most essential when planning for a transformation strategy for a mature business. Business leaders find it extremely difficult to prune away the past even when it has no future. Past successes seductively appear to forecast future success.
By far the most significant cause of failure for business plans is the inability of the management to translate the plan effectively into day to day work. Most business plans fall far short of the detailed work required to decompose strategies into tactics. No where do the list of tasks, properly sequenced, appear with clear delineation of responsibility, authority, deliverables, budgets and resources and deadlines. And, finally, there is no clear communications and feedback plan so that those in frontline positions know what to do, why, when, and what are the expected results.
More about why business plans fail over the next four postings
Peter Drucker’s The Effective Executive was first published in 1967 and has been in print ever since. I first read it during the 1980s. When I began to coach general managers and owners of small businesses I re-read it with a fresh perspective.
The Effective Executive continues to be a book that I return to for its little pearls of wisdom. Once you get over the now obscure examples from WWII and the 1950s and its dated language (e.g., the pronoun “she” never appears), it remains a most useful and continuously provocative statement of the tasks of the general manager.
Here are a few quotes for illustration.
“In every area of effectiveness within an organization, one feeds the opportunities and starves the problems.”
“…the more an executive works at making strengths productive, the more he will become conscious of the need to concentrate human strengths available to him on major opportunities. This is the only way to get results.”
“No one has much difficulty getting rid of the total failures. They liquidate themselves. Yesterday’s successes, however, always linger on long beyond their productive life. Even more dangerous are the activities which should do well and which, for some reason or other, do not produce. These tend to become… “investments in managerial ego” and sacred.”
“Systematic sloughing off of the old is the one and only way to force the new.”
“…no decision has been made unless carrying it out in specific steps has become someone’s work assignment and responsibility. Until then, there are only good intentions.”
Find this little book (183 pages long), read it. You will be enriched.
Whenever I hear a manager talk about personnel in a complaining tone that focuses on their lack of motivation, sloppiness, and all the other shortcomings that managers so frequently speak or or think about, I am reminded of a central fact about business.((1))Continue reading →
this actually applies to any organization where there is a hierarchy, non-profits, education, government, and more [↩]
The other day I was talking with a business owner about her people management practices. In comparing some thoughts about how to effectively supervise people she noted that waving your finger and giving instructions was almost always a non-starter. She said that she thought that “people need to be brought around softly”. Continue reading →
I receive a regular email titled, “Management Intelligence…… from Edward de Bono and Robert Heller”((1)) . Their most recent email was “Management Intelligence: A proven checklist for business success”. Here is the checklist they provided:
THINK simply and directly about what you are doing and why?
BEHAVE towards others as you wish them to behave towards you?
EVALUATE each business and business opportunity with total, fact-based objectivity?
CONCENTRATE on what you do well?
ASK questions ceaselessly about performance, markets and objectives?
MAKE MONEY- knowing that, if you don’t, you can’t make anything else?
ECONOMISE always seeking Limo (Least Input for Most Output)?
FLATTEN the organisation to spread authority and responsibility?
ADMIT to your own failings and shortcomings and correct them?
SHARE the benefits of success with all those who helped to achieve it?
TIGHTEN up the organisation wherever and whenever you can because familiarity breeds slackness?
ENABLE everybody to optimise their individual and group contribution?
SERVE your customers with all their requirements to standards of perceived excellence in quality?
TRANSFORM performance by innovating creatively in products and processes including the processes of management?
Again from this email concerning this list: “These questions penetrate to the heart of successful management. They have passed, and will pass, the test of time.
This list looks a lot like others I have seen, and certainly many entries would be on such a list that I might create. But, whenever I see lists like this, I say to myself, “Great, but how do I do this?” Lets just take number 15, for example, “Transform performance by innovating….”. What business processes do I put in place that assure that these results are regularly and sustainably produced? Or, what approaches and tools do I deploy to achieve number 8, “Economize…” ? Again, are there tools and approaches available that assure the we meet number 13, “ENABLE everybody to optimize their individual and group contribution?” Continue reading →