Why Good Management is so Difficult – LBS Professor Julian Birkinshaw

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…
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

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?


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?


Overall employee engagement levels
are depressingly low

80

60

40

20

0

Highly Engaged Moderately Engaged Disengaged

Data: Towers Perrin/Towers Watson Copyright Julian Birkinshaw 2011

Who are you happiest with?

Friends 3.3
Parents/relatives 3.0
Spouse 2.8
My children 2.7
Co-workers 2.6
Clients/customers 2.4
Alone 2.2
Boss 2.0
(Rating is on a 1-5 scale)


Cynicism about the quality of
management in UK companies is rife


Companies that put their employees
first appear to do very well


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!

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)


Rethinking the System of Management

Business Model Management Model
Choices an organisation Choices firms make
make about: about:
• Sources of revenue • Coordinating activities
• Cost structure • Making decisions
• What to make / buy • Motivating employees
• How to make a profit • Defining objectives


A Framework for reinventing
management
Coordinating Activities
Bureaucracy Emergence
Making Decisions
Hierarchy Collective Wisdom
Motivating People
Extrinsic Intrinsic
Defining Objectives
Alignment Obliquity
Traditional Principles Alternative Principles


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


How do people think management will
change over the next five years?
1 2 3 4
Bureaucracy Emergence

Hierarchy Collective Wisdom

Extrinsic Intrinsic

Alignment Obliquity
Our Management Our Management
Model today Model in 5 years

Two different ways of thinking about
management

What do we want to How should we act to
get done? harness their latent
enthusiasm and skill?

How do we need to What hopes, aspirations,
act to get our fears, concerns do
employees to do it? employees experience
at work?


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?


Respondents are worried about lack of
opportunities, and failing to deliver
Lack of opportunities for advancement 3.3

Fear of failing to deliver to expectations 3.3

Lack of clarity about organisation vision 2.8

Lack of resources for getting work done 2.8

Incompetence/negative attitudes at work 2.8

Lack of fit with organisation’s values 2.8

Fear of looking foolish with colleagues 2.6

Excessive change/turbulence in workplace 2.6
(Rating is on a 1-5 scale)


A hierarchy of employee’s
“fears, concerns and frustrations”

Lack of opportunities for personal development
Self-
actualisation Fear of failing to deliver on (high) expectations
Esteem, Concern with the stress of the work
achievement, respect Frustration with ineffective processes
Belonging, love, friendship Concern about not fitting in
Concern with uncertainty and change
Safety, security of employment
Fear of redundancy
Physiological needs

Maslow’s Hierarchy Employee fears and concerns


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?


The Seven Deadly Sins of Management
• Envy
• Greed
• Gluttony
• Lust
• Pride
• Sloth
• Wrath


GREED
LUST
Setting
Goals
Making Monitoring
adjustments Performance

Reviewing
Results


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


GREED
LUST
Setting
Goals
WRATH
Making Monitoring
adjustments Performance
GLUTTONY
Reviewing
results


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


GREED
LUST
Setting
Goals
Making Monitoring WRATH
adjustments Performance GLUTTONY

Reviewing
results
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


GREED
LUST
Setting
Goals
Making Monitoring WRATH
SLOTH adjustments Performance GLUTTONY

Reviewing
results
PRIDE
ENVY

Adjustment Sins
• Sloth – not caring about
others, inattentive, more
concerned for your own
comforts than those of
others, abrogation of
responsibilities


Quick Quiz:
To what extent does your current boss…
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

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?


In summary…
What employees need What they often get
• Give your people • Confusing or unclear
important work to do objectives
• Provide them with • Micro-management and
space meddling
• Provide support when • Lack of information, lack
it is needed of concern
• Given people • Limited or no feedback
recognition & praise


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)


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

So how can we improve the quality of
management in our companies?

Learn how to
see the world
through the
eyes of our
employees

Marketing Management
1. Get to know your 1. Get to know your
customers properly employees properly
2. Deliver on the 2. Deliver on the
customer employee
experience experience
3. Turn your 3. Turn your
customers into employees into
promoters promoters


1. Get to know your employees properly


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


2. Deliver on the employee experience

• Give the “service” mentality
some teeth
– HCL’s Smart Service Desk
– HCL’s open 360 feedback


3. Turn your employees into promoters

Net Promoter Score: How likely is it that you
would recommend this company to a friend or
colleague?
Not at all Extremely
likely likely

1 2 3 4 5 6 7 8 9 10

Detractor Neutral Promoter


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 Neutral Promoter

87 people 60 people 55 people


A top quality boss is the best single
predictor of employee engagement


Coda: Experimentation as an approach
to management innovation


A new management style

Hypothesis: A greater emphasis on ‘coaching’ will
increase the effectiveness of my team

Before After
Traditional style Supervisor spends 5 hours
of supervision more per week providing
of team feedback and coaching team

Intervention: Supervisor has 5 hours Result: Team members
per week freed up (fewer meetings) more engaged, significant
increase in cross-selling
Team are asked to look for new ways of
from lower performers
increasing cross-selling


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.


Why Good Management is so Difficult – LBS Professor Julian Birkinshaw

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