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
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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
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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
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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 are less visible but no less dramatic.
Web Wise: The Best and Worst
Managers of the Year
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Business Week annually selects its
“Top 25 Managers of the Year.”
In 2002, it also felt compelled to
select the “Worst 25 Managers.”
Among the “Top 25 Managers”
were Lou Gerstner, Fujio Mitarai,
Oprah Winfrey, and Carole Black.
http://www.businessweek.com/magazine
/content/02_02/b3765001.htm
Critical Skills Across Business Functions
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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 (Cont.)
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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 Organizations
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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. spends 3.5% of its 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
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AT&T Wireless Services is fighting to maintain its leadership in
the face of intense competition and technological changes.
It uses a process called Managing Personal Growth (MPG) to
help employees identify key competencies or critical skills,
develop them with company resources, and translate them into
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
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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:
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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.
Focus on Management:
IBM Manager Jam
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With 319,000 employees and 32,000 managers across six
continents, IBM is one of the world’s largest businesses.
With an increasingly mobile work force, many managers
supervise employees they rarely see face to face.
Some joke that IBM now stands for “I’m By Myself.”
Samuel Palmisano, IBM’s new CEO, launched a two-year
program exploring the role of the manager in the 21st century
and needed management skills.
The project’s first event was “Manager Jam,” a 48-hour realtime Web event in which managers from 50 different countries
swapped ideas and strategies for dealing with problems shared
by all, regardless of geography.
8,100 managers logged onto the company’s intranet to
participate in discussion forums.
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
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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)
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Knowing How to
Learn
Reading
Writing
Mathematics
Listening
Oral Communication
Problem Solving
Creative Thinking
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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 predicted that
the average 22-year-old college graduate in
the year 2000 would 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
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
Focus on Management:
Hiring for Competencies at Merck
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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
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These are all skills that will serve you well in
life in general.
The abilities to communicate, to interact
effectively with others, to negotiate, to solve
problems, to lead, to think critically, to
motivate others, to listen well, to deal with
conflict, and to continue learning are
valuable in social relationships, making daily
transactions, and leading a fulfilling life.
Managerial Skills Sets
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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
(Figure 1-4)
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
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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
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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 Gap
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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)
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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
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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 (Cont.)
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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.
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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
(Figure 1-6)
Skills
Assessment
Skills
Awareness
Skills
Attainment
Skills
Application
Steps in the “4 A’s” of Skill Learning
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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.
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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
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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:
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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/asp/programs/history/herman/reports/futurework/report.htm
Skills in the Global Labor Market
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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 of
employees 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.
The Management Skills Framework
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Our management skills framework focuses on
human and conceptual skills.
We classify the skills as primarily:
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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
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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!
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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.