Chapter 1Chapter 1

The Management Challenge:

Critical Skills for the New Workplace

Characteristics of the NewCharacteristics of the NewWorld of WorkWorld of Work

The New Worldof Work

Complex

Ambiguous

Changing

Diverse

Global

Today’s OrganizationsToday’s Organizations

• Hierarchies are flatter.

• Deadlines are shorter.

• Teams are pervasive.

• Employees must manage themselves.

• Technology is transforming the nature, pace, and possibilities of work.

Demands of the Modern WorkplaceDemands of the Modern Workplace

Demands ofthe ModernWorkplace

Attention toEthical Behavior

Flexibility

CreativityCooperation

PoliticalSavvy

Proactivity Speed

Management Skills and Company Management Skills and Company SuccessSuccess

• One study of manufacturing firms showed managers’ ability to be three times as powerful in explaining company profitability as all other factors combined.

• A study in the United Kingdom revealed management weaknesses to be the primary cause of insolvencies, with poor management being cited in more than 80 percent of cases.

• These and many other studies of large and small firms are consistent in pointing to management skills as critical to firm success.

Some Management Success StoriesSome Management Success Stories

• Management success stories are abundant, cases in which management skills have created or transformed organizations in remarkable ways.

• Among the many examples of management success stories to be examined in future chapters are such well known ones as:

– Herb Kelleher’s development of a successful culture of fun at Southwest Airlines

– Mary Kay Ash’s inspirational leadership at Mary Kay Cosmetics

– Jack Welch’s transformation of GE

• Others we’ll consider, such as Aaron Feuerstein’s humane management decisions at Malden Mills, are less visible but no less dramatic.

• Business Week annually selects its “Top 25 Managers of the Year.”

• The Top 25 Managers in 1999 were a diverse group, including Minuru Arakawa of Nintendo America, Steve Jobs of Apple Computer and Pixar, Timothy Koogle of Yahoo!, Jenny Ming of Old Navy, Martha Stewart of Martha Stewart Omnimedia, and Jack Welch of GE.

• http://www.businessweek.com/2000/00_02/b3663001.htm

Web Wise: The Top 25 ManagersWeb Wise: The Top 25 Managersof the Yearof the Year

Timothy Koogle Martha Stewart

Critical Skills Across Business FunctionsCritical Skills Across Business Functions

• A study of financial staff found that, in addition to financial leadership, strategic thinking, effective communication, and leadership were identified as critical skills.

• A survey of chief information officers found that more than three-fourths believe that more widespread use of technology will require IT workers to communicate more effectively and articulately. With more frequent information exchange, skills such as communication, diplomacy, and problem solving will grow in importance.

Critical Skills Across Business Functions Critical Skills Across Business Functions (Continued)(Continued)

• A study of “Sales Management Competencies for the 21st Century” identified eight critical competencies for top-performing sales managers, including providing strategic vision, assembling teams of skilled employees, sharing information with employees, coaching, diagnosing performance, negotiating, and selecting high-potential employees.

• The American Institute of Certified Public Accountants Core Competency Framework identified communicating, handling personal relationships, and facilitating learning and personal improvement among the skills and competencies accounting professionals will need for success in the future.

Skills Training in OrganizationsSkills Training in Organizations

• American corporations spend more than $64 billion annually for the training of their workforces, about 85% of it in the area of management skills.

• Dana Corp. requires all its employees to complete 40 hours of education each year. The company has three Dana University schools.

• Merck & Co. spent 3.5% of its 1999 payroll, or about $100 million, on employee skills development programs.

• Abbott Technologies provides its employees with tuition reimbursement of up to $7,000 for undergraduate studies and $9,000 for graduate studies.

• General Electric spends about $1 billion annually on education and training programs.

Focus on Management: Skills Focus on Management: Skills Training at AT&T Wireless ServicesTraining at AT&T Wireless Services

• AT&T Wireless Services is fighting to maintain its leadership in the face of intense competition and technological changes.

• It is using a process called Managing Personal Growth (MPG) to help employees identify key competencies or critical skills, develop them with resources available through the company, and translate them into day-to-day decisions and actions that help the company meet its goals.

• Employees must take responsibility for developing those critical skills on an ongoing basis

• Once employees have gone through a process of deciding what new competencies they want to acquire, employees talk with their supervisors to develop an individual plan for their development.

• Employees’ job security is grounded in what they know and the value they can create around themselves.

The Status of Skills TrainingThe Status of Skills Training

• A survey by the Conference Board showed that a full 98% reported that their skills training reaped significant economic benefits for the firm.

• Still, many companies are failing to develop key managerial skills. For example, studies show:– just 21% of companies were able to identify where employees want to

be in terms of skill development in a year– 58% of managers had received no leadership training, 72% had

received no training on giving feedback on performance, and 87% had received no training in stress management

• As such, you cannot assume that every company will help you develop needed skills.

The Need for Management SkillsThe Need for Management Skills

The Need forManagement Skills

ManagerialSkills and

Life Success

ManagerialSkills and

Hiring

ManagerialSkills in theNew Work

Environment

Managerial Skills and HiringManagerial Skills and Hiring

• Companies are hiring for skills, including management skills.• A report released in 2000 by the U.S. General Accounting Office

provided succinct advice for organizations: “Hire, develop, and retain employees according to competencies. Identify the competencies -- knowledge, skills, abilities, and behaviors -- needed to achieve high performance of mission and goals, and build and sustain the organization’s talent pool through recruiting, hiring, development, and retention policies targeted at building and sustaining those competencies.”

• Many companies go further, by tracking skills acquisition in their workforce and tying pay to skills attained, even if the skills are not used.

The 16 Basic Skills Employees Need The 16 Basic Skills Employees Need (Figure 1-1)(Figure 1-1)

• Knowing How to Learn• Reading• Writing• Mathematics• Listening• Oral Communication• Problem Solving• Creative Thinking

• Self-Confidence• Motivational Goal Setting• Personal and Career

Development• Interpersonal Skills• Negotiation• Teamwork• Organizational Effectiveness• Leadership

Ranking of HR Managers’ Perceptions of Criteria for Ranking of HR Managers’ Perceptions of Criteria for Evaluating Business Graduates (From Figure 1-2)Evaluating Business Graduates (From Figure 1-2)

Criterion Mean

Oral Communication Skills 4.6

Listening Skills 4.5

Resume 4.4

Interpersonal Communication Skills 4.3

Problem-Solving Skills 4.2

Work Experience 3.7

College Attended 3.1

Contacts within the Organization 2.2

BLS PredictionBLS Prediction

The Bureau of Labor Statistics predicts that the average 22-year-old college graduate in the year 2000 will have more than eight different employers before he or she reaches the age of 32; that is a change of employers every 15 months.

Managerial Skills in the New Work Managerial Skills in the New Work EnvironmentEnvironment

Managerial Skillsand Career Success

Entrepreneurship

Growth in Manage-ment Positions

Downsizing andDelayering

Hiring for theSecond Job

Self-ManagedWork Teams

Job Enrichmentand Empowerment

Managerial Skills in the New Work Managerial Skills in the New Work EnvironmentEnvironment

Demand forManagerial

Skills

Entrepreneurship

Downsizing andDelayering

Job Enrichmentand Empowerment

Self-ManagedWork Teams

Hiring for theSecond Job

Growth inManagement Positions

Hiring for Competencies at MerckHiring for Competencies at Merck

• When Merck and Company needed to fill a large number of field representative positions, it decided to focus specifically on competencies.

• Hiring managers were asked to identify the specific traits, skills, and behaviors most critical to job performance.

• A process was then developed to screen for those competencies at various steps of candidate assessment.

• Each candidate was then scored on the criteria to give a rating of his or her potential.

• The process was more efficient than previous approaches, yielded greater consistency across regions, and increased diversity.

Managerial Skills and Life SuccessManagerial Skills and Life Success

Managerial Skills SetsManagerial Skills Sets

• Technical skills include knowledge about methods, processes, and techniques needed to carry out some specialized activity as well as the ability to use tools and equipment related to the activity.

• Human skills deal with human behavior and interpersonal processes, communication, cooperation, and social sensitivity.

• Conceptual skills include analytical ability, creativity, efficiency in problem solving, and ability to recognize opportunities and potential problems.

• Thus, the typology distinguishes between abilities to deal with things, people, and ideas and concepts.

Management Skills Needed for Success by Management Skills Needed for Success by Organizational Level (Figure 1-3)Organizational Level (Figure 1-3)

Conceptual

Conceptual

Conceptual

Human

Human

Human

Technical

Technical

Technical

Top-Level Managers

Middle-LevelManagers

First-Level Managers

Differences Between School and Differences Between School and BusinessBusinessSchool Business

AchievingSuccess

Individual Teamwork

Critical Ability Tests Relationships

Structure Quantified Subjective

Graduate's Role Customer Employee

Performance Objective Judgments

Communication Written Verbal

Prestige Senior Trainee

School Success andSchool Success andCareer SuccessCareer Success

• A wide range of studies show that success in school does almost nothing to predict subsequent career success.

• It is the growing evidence of this very weak link that has led many educators and managers to call for a greater emphasis on skills in the learning process.

• The authors of a major study of management education sponsored by the American Assembly of Collegiate Schools of Business concluded that, “The challenge of how to develop stronger people skills needs to be faced by both business schools … and by corporations and firms in their management development activities…”

The Knowing-Doing GapThe Knowing-Doing Gap

• Simply knowing -- recognizing or understanding what to do to manage an organization -- is not enough for an individual to become a successful manager.

• Jeffrey Pfeffer and Robert Sutton became intrigued by the large number of managers and executives that they worked with who knew what needed to be done but failed to implement it.

• They referred to this phenomenon as the “Knowing-Doing Gap.”

Causes of the Knowing-Doing GapCauses of the Knowing-Doing Gap

• Knowledge management efforts emphasize technology and the exchange of codified information; this does not address how the information can be used to make better decisions to enhance work-unit or organizational effectiveness.

• Knowledge management tends to treat knowledge as a tangible thing, as a stock or quantity, and therefore separates knowledge as a thing from the use of the thing.

• Formal systems can’t easily store or transfer tacit knowledge. Tacit knowledge is information that is important for doing something effectively that cannot be captured, measured, or codified by formal knowledge systems in organizations.

Causes of the Knowing-Doing Gap Causes of the Knowing-Doing Gap (Continued)(Continued)

• The people responsible for transferring and implementing knowledge management frequently do not understand the actual work being documented.

• Knowledge management tends to focus on specific practices and ignore the importance of philosophy. This refers to the tendency for people to want to know “what to do” to solve problems they face in organizations. If the knowledge acquired by the manager or business professional is merely a collection of practices without a coherent, overarching philosophy, then it becomes difficult to implement these practices.

Bridging the Knowing-Doing GapBridging the Knowing-Doing Gap

• Why before how: Philosophy is important. Make sure that all members of an organization understand and are committed to the way of thinking about how to achieve given business objectives.

• Knowing comes from doing and teaching others how. Teaching through apprenticeships, coaching and mentoring helps organizational members how to “do the right things.”

• Action comes before elegant plans and concepts. The key is to focus on the bottom line of taking action and to ensure that talking about what to do is always coupled with specific actions.

• There is no doing without mistakes. Organizations that bridge the knowing-doing gap are able to learn and become smarter based on their successes and failures in the marketplace.

Bridging the Knowing-Doing Gap Bridging the Knowing-Doing Gap (Continued)(Continued)

• Fear fosters knowing-doing gaps. So drive out fear. Manage must create a value system, organizational culture, and policies and procedures that do not punish individuals for doing the right thing even if the results are less than optimal.

• Beware of false analogies. Fight the competition, not each other. Management must promote a cooperative work environment where everyone is committed to working together to achieve the same business objectives.

• Measure what matters and what can help turn knowledge into action. Management should identify a handful of critical measures of success for the organization and track them on an ongoing basis.

• What leaders do, how they spend their time, and how they allocate resources, matters.

The Social Learning PerspectiveThe Social Learning Perspective(Figure 1-5)(Figure 1-5)

Pre-Assessment

ConceptualLearning,Modeling

Conceptual& Behavioral

Practice

LifeApplication

The “4 A’s” of Skill LearningThe “4 A’s” of Skill Learning

SkillsAssessment

SkillsAwareness

SkillsAttainment

SkillsApplication

Steps in the “4 A’s” of Skill LearningSteps in the “4 A’s” of Skill Learning

• Skills Assessment.– The first step in skill learning is to get baseline measures on important

skills and to foster interest in those skills.• Skills Awareness.

– This step includes discussion of important background material, such as why the topic is important, key approaches to mastering the skill, and other relevant information.

• Skills Attainment.– Here, through a variety of experiential methods, you develop the skill.

• Skills Application.– This final step involves life application, such as using the skills in case

analyses, life situations, and field projects.

The Bottom Line: Mastering The Bottom Line: Mastering Management SkillsManagement Skills

Take Baseline(Pre-Test)

Measures of theTarget Skill(s)

Take Baseline(Pre-Test)

Measures of theTarget Skill(s)

Master Contentthat Supports theApplication of the

Target Skill(s)

Master Contentthat Supports theApplication of the

Target Skill(s)

Practice theApplication of the

Target Skill(s)in an Exercise or

Case Study

Practice theApplication of the

Target Skill(s)in an Exercise or

Case Study

ObtainDevelopmental

FeedbackRegarding theTarget Skill(s)

ObtainDevelopmental

FeedbackRegarding theTarget Skill(s)

Practice theApplication of theTarget Skill(s) in

an OrganizationalContext

Practice theApplication of theTarget Skill(s) in

an OrganizationalContext

Take Post-TestMeasures of theTarget Skill(s)

Take Post-TestMeasures of theTarget Skill(s)

Web Wise: FutureworkWeb Wise: Futurework

• On Labor Day 1999 the U.S. Department of Labor issued a report titled Futurework: Trends and Challenges for Work in the 21st Century. The report sought to outline three major challenges for the 21st century workplace and workforce:– The challenge of being skilled, not stuck in the new economy.– The challenge of flexibility and family as employers seek more

flexibility to compete in the global marketplace and workers pursue more opportunities to spend time with their loved ones.

– The challenge of destiny and diversity as employers hire from a more diverse pool of workers in the future.

• http://www.dol.gov/dol/asp/public/futurework

Global Perspective: Skills in the Global Global Perspective: Skills in the Global Labor MarketLabor Market

• Firms and their management are becoming increasingly global.

• A record number of foreign CEOs are now running major U.S. companies.

• The number of international assignments is expected to accelerate in the next five years.

• Many people fail in international assignments, and almost half say they would not work abroad again.

• This all suggests that employees often lack the skills needed to succeed in international positions.

Alain Belda

Samir Gibara

Fred Hassan

The Management Skills FrameworkThe Management Skills Framework

• Our management skills framework focuses on human and conceptual skills.

• We classify the skills as primarily:– personal (such as self-management and critical thinking)

– interpersonal (such as communicating and resolving conflict)

– managerial (such as leading, motivating, managing teams, strategic planning, and creating a positive work culture)

• The framework also considers three levels of effectiveness -- employee, work unit, and organizational.

Management Skills FrameworkManagement Skills Framework(Figure 1-7)(Figure 1-7)

ORGANIZATION

Organizational Effectiveness

Work Unit Effectiveness

Employee Effectiveness

MANAGER

Managerial Skills

Interpersonal Skills

Personal Skills

Action Planning and ImplementationAction Planning and Implementation

• Action planning refers to the process through which a manager formulates the specific steps that will be taken to address business problems and challenges.

• The action plan becomes a blueprint or roadmap for actual implementation.• Guidelines for developing and implementing effective action plans include:

– The process must be systematic and actively managed.– Action planning requires a “layering” approach in which action steps are

translated into specific supporting actions in relation to each employee who will be involved in implementation.

– There must be ongoing and systematic evaluation of the results achieved after implementation of the action plan.

The Bottom Line: Action Planning and The Bottom Line: Action Planning and ImplementationImplementation

IdentifyKey

Problems

DefineObjectivesAssociatedwith Solving

the KeyProblems

IdentifyKey

Measuresof Success

for EachObjective

Work withEmployees

to FormulateAction Stepsto Achieve

EachObjective

AssignResponsibility

forImplementingEach Action

Step to aSpecific

Employee

Clarify theRole of EachEmployee in

Supporting theImplementation

of the Plan

ProvideManagementSupport (e.g.,

Direction,Budget,

Training) forEmployees

Evaluatethe Results ofImplementing

the ActionSteps Against

Your InitialObjectives

Modify theObjectivesor Action

StepsBased on

YourEvaluation

Lighten Up: Performance!Lighten Up: Performance!

• Companies are finding creative ways to develop their employees’ skills, and many are turning to literature, music, and the arts.

• When management consulting firm McKinsey & Company wanted to develop its employees’ abilities to inspire, it hired outsiders to help the firm’s consultants and partners write and stage an opera in three days.

• At Sears, Lockheed Martin, and Bristol Myers Squibb, a conductor and symphony orchestra rehearse Brahms to bring alive issues of leadership and teamwork for aspiring top managers.

• Kodak, Arthur Anderson, and Boeing have brought in poets to foster employees’ creativity, and others are using Shakespeare’s Henry V as a case study on vision, strategy, and leadership skills.