Chapter 1
The Management Challenge:
Critical Skills for the New
Workplace
Characteristics of the New
World of Work
Global
Complex
The New World
of Work
Diverse
Ambiguous
Changing
Today’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 Workplace
Attention to
Ethical Behavior
Proactivity
Political
Savvy
Speed
Demands of
the Modern
Workplace
Cooperation
Flexibility
Creativity
Management Skills and Company
Success
• 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 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.
Web Wise: The Top 25 Managers
of the Year
• 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
Timothy Koogle
Martha Stewart
Critical 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
(Continued)
• A study of “Sales Management Competencies for the 21st
Century” identified eight critical competencies for topperforming 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 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
Training 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 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 Skills
Managerial
Skills and
Life Success
Managerial
Skills and
Hiring
The Need for
Management Skills
Managerial
Skills in the
New Work
Environment
Managerial 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
(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
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 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
Environment
Entrepreneurship
Downsizing and
Delayering
Growth in Management Positions
Managerial Skills
and Career Success
Hiring for the
Second Job
Job Enrichment
and Empowerment
Self-Managed
Work Teams
Managerial Skills in the New Work
Environment
Growth in
Management Positions
Hiring for the
Second Job
Self-Managed
Work Teams
Entrepreneurship
Demand for
Managerial
Skills
Downsizing and
Delayering
Job Enrichment
and Empowerment
Hiring 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 Success
Managerial 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
Organizational Level (Figure 1-3)
Top-Level
Managers
Conceptual
Middle-Level
Managers
Conceptual
First-Level
Managers
Conceptual
Human
Human
Human
Technical
Technical
Technical
Differences Between School and
Business
School
Business
Achieving
Success
Critical Ability
Individual
Teamwork
Tests
Relationships
Structure
Quantified
Subjective
Graduate's Role
Customer
Employee
Performance
Objective
Judgments
Communication
Written
Verbal
Prestige
Senior
Trainee
School Success and
Career 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 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 “KnowingDoing Gap.”
Causes 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
(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 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
(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 Perspective
(Figure 1-5)
PreAssessment
Conceptual
Learning,
Modeling
Conceptual
& Behavioral
Practice
Life
Application
The “4 A’s” of Skill Learning
Skills
Assessment
Skills
Awareness
Skills
Attainment
Skills
Application
Steps 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
Management Skills
Take Baseline
(Pre-Test)
Measures of the
Target Skill(s)
Practice the
Master Content
Application of the
that Supports the
Target Skill(s)
Application of the
in an Exercise or
Target Skill(s)
Case Study
Take Post-Test
Measures of the
Target Skill(s)
Practice the
Application of the
Target Skill(s) in
an Organizational
Context
Obtain
Developmental
Feedback
Regarding the
Target Skill(s)
Web 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
Labor 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 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 Framework
(Figure 1-7)
O
R
G
A
N
I
Z
A
T
I
O
N
M
A
N
A
G
E
R
Organizational Effectiveness
Work Unit Effectiveness
Employee Effectiveness
Managerial Skills
Interpersonal Skills
Personal Skills
Action 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
Implementation
Identify
Key
Problems
Define
Objectives
Associated
with Solving
the Key
Problems
Modify the
Objectives
or Action
Steps
Based on
Your
Evaluation
Identify
Key
Measures
of Success
for Each
Objective
Evaluate
the Results of
Implementing
the Action
Steps Against
Your Initial
Objectives
Work with
Employees
to Formulate
Action Steps
to Achieve
Each
Objective
Provide
Management
Support (e.g.,
Direction,
Budget,
Training) for
Employees
Assign
Responsibility
for
Implementing
Each Action
Step to a
Specific
Employee
Clarify the
Role of Each
Employee in
Supporting the
Implementation
of the Plan
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.