Four Steps To Minimize The Risk Of Top Management Failing
Sharing some new techniques to help focus down on the leadership competencies that management must have to achieve success with the business plan’s ‘Must-Win-Battles’, and for you, to reduce surprises and the risk of churn at the top.
Just so you know where we are coming from
We have spent the last 25 years working hands-on with over 300 companies delivering programs to help them grow their business and improve their bottom line. And in doing this we are almost always reminded of that pearl of wisdom I first heard from Michael Hammer, the corporate re-engineering guru, that if you don’t have the right leadership from the top management team 70% of your efforts to grow and transform the business will fail. It is the ‘quality’ of top management that drives change, delivers the results, and makes sure that improvements stick.
A couple of years back we started to see some quantifiable data that proved that point. Hay, Sorbonne, BCG and others started publishing survey information gathered from Shareholders and Investors as companies changed ownership, and over 80% of them said that the quality of management was by far the single biggest factor that added shareholder value to the enterprises they were investing in. They also disclosed that within the first two years of executing the business plan, over 60% of top managers in the team were changed out, and this constituted a major risk in reaching the targets.
There must be a better way
So all the profiled head-hunting, organisational due diligence and management assessments are just not often and reliably enough identifying the traits that are needed for the future. The current accelerated churn in the C-suite is a symptom that we are not understanding managers’ capabilities versus the goals.
Past great performance accepted, companies are challenged to do something new, and this requires the leaders to be capable of outstanding new performance that delivers and exceeds expectations – because that is what Shareholders and Boards are really looking for from management.
Step one – look forwards not backwards
Our own experience on the job lead us to re-examine the way ‘quality management for the future’ was being defined and measured. We developed a new view that put management capability in the framework of what is needed for success, tomorrow, and imbedded this in a systematic approach that could be learnt and used by everyone who has the responsibility to assess managements’ capability to achieve ‘the plan’.
Step two – understand the must win battles
Not surprisingly the seconds step is about having a very clear and precise understanding yourself of what the business plan requires top management to achieve. Amongst all the expectations you have from top management, what are the vital few goals that absolutely must be a success, and without which, the plan will fail. We call these ‘Must-Win-Battles’, and there are usually only very few of these. And if you have more than five then you may need to re-evaluate your strategy. Everyone from Shareholders, Directors, C-Management and key staff must be aware that these are the priorities and their measure of success too.
Step three – what key leadership competencies count?
Now knowing what management must tightly focus on, you can be very specific about what you expect a manager to excel at, and assess whether he has demonstrated this competency in the past, and if not, can you help him or her learn it fast. Given that there are probably only 3-4 must-win-battles, our experience points to a top manager contributing 2-3 competencies to the top team. We use 13 key competencies that seem to cover everything.
Step four – use a common rating yard-stick
We all have chemistry and emotions that filter our view of someone, including ourselves. So it is important when grading a particular manager’s key competency that we get away from the ‘like’ and ‘dislike’ and rate their level of performance on a more quantifiable scale. This can be done by matching descriptions of a specific performance level with what has been observed or demonstrated. This descriptive way enables different people to contribute their observations into a common rating matrix that gets everyone away from ‘well I thought he was a A+’.
Yes, you are right, there are some more steps like –
“now I understand this manager what am I going to do about it’, and
“I can use this approach to profile for my new CFO”.
So if you are interested, click on the link below to get some more info.
ManagerMax WebOverview 2016 V1
Anthony Harvey, Managing Partner at Carpe Diem International Germany