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About This Course

Most people rise to the ranks of management on their success as individual contributors or supervisors.
In those roles they developed important skills, did excellent work, and proved their worth as reliable
members of their departments or work teams. Once these people become managers, however, they
must learn a new skill: how to achieve organizational goals through people and other resources—not
through individual effort alone. Becoming a Manager helps them learn the key elements of that skill and
navigate the transition to management with confidence.

The role of the new manager demands a new mindset, new activities, and new relationships with people
throughout the organization. Becoming a Manager guides the first-time manager through these and
other challenges. Part One, Making the Transition, explores how to make the critical shift from individual
contributor to manager; what it takes to build a successful partnership with your boss; and the key
elements of managing time, which is every manager's scarcest commodity. Part Two, Developing Your
Management Skills, examines how to use influence and persuasion to manage without formal authority;
how to develop a leadership style; the elements of planning and setting goals; and the critical roles of
work processes and continuous improvement. In Part Three, Managing Others, readers learn how to
master the performance management process; adopt a process for making sound decisions; and handle
difficult people and situations, including high-value customers or a difficult boss. Throughout the course,
examples, exercises, Think About It sections, and topical sidebars provide readers opportunities for
practice, feedback, and application.

Perry McIntosh has over twenty-five years of experience in corporate office environments. Much of that
experience was gained in the publishing industry, where she began as an entry-level copyeditor and
worked her way up to senior managerial and directorship positions, including leadership positions on
cross-functional teams. She currently runs her own book production service. Ms. McIntosh has an AB
degree from Smith College and a certificate from the Center for Creative Leadership.

Richard Luecke has been a freelance business writer since 1992. His books have been published by
Oxford University Press, John Wiley & Sons, and Harvard Business School Press. He has also developed
many teaching cases for MBA and executive education courses. Most of his work, however, involves
collaborations with business school faculty, management consultants, and corporate executives. His
recent clients include Harvard Business School Publishing, Massachusetts institute of Technology,
Mercer Human Resources Consulting, Northeastern University, and Babson College. Mr. Luecke earned
an MBA from the University of St. Thomas and a BA in History from Shimer College.

How to Take This Course


This course consists of text material for you to read and three types of activities (the pre-and post-test,
in-text exercises, and end-of-chapter review questions) for you to complete. These activities are
designed to reinforce the concepts introduced in the text portion of the course and to enable you to
evaluate your progress.

PRE-AND POST-TESTS

Both a pre-test and post-test are included in this course. Take the pre-test before you study any of the
course material to determine your existing knowledge of the subject matter. Submit one of the
scannable answer forms enclosed with this course for grading. On return of the graded pre-test,
complete the course material. Take the post-test after you have completed all the course material. By
comparing results of the pre-test and the post-test, you can measure how effective the course has been
for you.

To have your pre-test and post-test graded, please mail your answer forms to:

Educational Services

American Management Association

P.O. Box 133

Florida, NY 10921

All tests are reviewed thoroughly by our instructors and will be returned to you promptly.

If you are viewing the course digitally, the scannable forms enclosed in the hard copy of AMA Self-Study
titles are not available digitally. If you would like to take the course for credit, you will need to either
purchase a hard copy of the course from www.amaselfstudy.org or you can purchase an online version
of the course from www.flexstudy.com.

THE TEXT

The most important component of this course is the text, where the concepts and methods are
presented. Reading each chapter twice will increase the likelihood of your understanding the text fully.
We recommend that you work on this course in a systematic way. Reading the text and working through
the exercises at a regular and steady pace will help ensure that you get the most out of this course and
retain what you have learned.

In your first reading, concentrate on getting an overview of the chapter content. Read the learning
objectives at the beginning of the chapter first. They will act as guidelines to the major topics of the
chapter and identify the skills you should master as you study the text. As you read the chapter, pay
attention to the headings and subheadings. Find the general theme of each section and see how that
theme relates to others. Don't let yourself get bogged down with details during the first reading; simply
concentrate on understanding and remembering the major themes.

In your second reading, look for the details that underlie the themes. Read the entire chapter carefully
and methodically, underlining key points, working out the details of examples, and making marginal
notes as you go. Complete the activities.

THE REVIEW QUESTIONS

After reading a chapter and before going on to the next chapter, work through the Review Questions.
Answering the questions and comparing your answers to those given will help you grasp the major ideas
of that chapter. If you perform these self-check exercises consistently, you will develop a framework in
which to place material presented in later chapters.

GRADING POLICY

The American Management Association will continue to grade examinations and tests for one year after
the course's out-of-print date.

If you have questions regarding the tests, the grading, or the course itself, call Educational Services at 1-
800-225-3215 or send an e-mail to ed_svc@amanet.org.

Introduction

Welcome to the AMA Self-Study course Becoming a Manager. Some readers may be currently working
toward a future management position. Others may have been recently promoted to their first
managerial job. No matter what your current level of training or experience, this course will help you be
more effective.

Managers play an essential role in organizational life. For that reason it is important that they
understand their responsibilities and goals, and learn how to be effective in getting things done through
the people and the other resources available to them. Many people assume that effective managers are
born with special talents. "She has a knack for dealing with people." "He's a natural leader." "She's one
of those naturally organized people who never wastes a minute."

True, some people come to their jobs with backgrounds and experiences that make them good
managers—that make them look like "naturals." However, management is a human activity of many
parts—interpersonal communications, planning, coaching, leadership, persuasion, and others. Each can
be learned through study and developed through practice.

The subject of management is often taught through its "classical" functions: planning, organizing,
motivating, staffing, and controlling. Most college textbooks on the subject are organized around those
functions and the abundant academic research that has investigated them over many decades. There is
much to be said for that approach. However, those books are often detached from the day-to-day
challenges that most new managers confront. Reading about ten different (and sometimes conflicting)
theories of workplace motivation, for instance, does not do the new manager much good when she's
confronted with her first problem subordinate.

This course takes a different, more practical approach. It focuses on workplace issues that will make or
break you as a new manager: making the difficult transition from individual contributor to boss; building
an effective working relationship with your superior; managing time (every manager's scarcest
commodity), knowing how to manage without formal authority, making good decisions, and so forth.
You'll learn about these issues and how to deal with them effectively in the chapters that follow. Many
are based on common sense. For example, you'll learn in Chapter 2 that a key to building a good
relationship with your boss is to understand your boss's priorities and align your priorities with hers.
That's common sense, not rocket science. Unfortunately, common sense ideas and solutions are
routinely overlooked by managers who have more to do than they can possibly handle. So, we draw
attention to them in the text.

The course offers numerous practice opportunities through the exercises and "Think About It" sections.
These are designed to reinforce concepts as you learn them. However, to improve, there is no substitute
for applying what you learn in this course to your on-the-job activities. So, as you learn new concepts,
apply them in your workplace. Before you know it, you will have advanced from the rank of apprentice
to journeyman to master.

Here's what you'll learn in the chapters that follow:


Open table as spreadsheet Chapter

Key Learnings

1 This chapter will help you understand your new role. It explains the mental transition you must make
from that of an individual contributor to that of a manager. It will help you build productive
relationships with two key constituencies: your subordinates and your managerial peers. Finally, it
explains three things you should do during the critical first 90 days on the job: listen, learn, and lead.
Leading should take the form of accomplishing a manageable number of goals. Success with these will
establish your reputation as a "doer" and give you the confidence you need to address larger, long-term
problems and opportunities.

2 The most important relationship you have in the workplace is the one between you and your boss.
This chapter focuses on steps you should take to make it a mutually beneficial one. First identify your
boss's goals and priorities and figure out how your work will support them. Then, learn what your boss
expects of you and how your performance will be measured. Ask your boss how she prefers to
communicate with her subordinates: how much information does she want, and when and how should
you deliver it? Finally, work with your boss to create a plan for your professional development through
training, mentoring, or challenging assignments.

3 This chapter covers two concepts that will help you maximize the time available to you. First, employ
the principles of time management by first understanding how you use your time. Then look at your
goals and prioritize your activities. Focus on becoming more organized and efficient in all you do, and
eliminate time traps such as procrastination and unnecessary meetings.

Delegation is the key to gaining more time in your day. The chapter provides a five-step plan to delegate
effectively.

4 Because managers often find themselves in situations where they must produce results through other
people over whom they have no power or authority, this chapter focuses on using influence and
persuasion to get things done. The chapter offers ways a manager can increase his or her influence in
the organization, then explores persuasion as a communication process through which we can affect the
attitudes, beliefs, or actions of others. The four building blocks of persuasion are trust, understanding, a
credible case, and persuasive language.
5 Managers ensure that people are doing things right; leaders ensure they are doing the right things.
This chapter defines four classic leadership styles, authoritarian, democratic, delegating, and
charismatic. A flexible leadership style that is responsive to the context, the situation, and the
employees involved will prove most useful.

This chapter outlines five steps in a successful change management process: identifying the problem and
its solution, communicating the need for change, enlisting support, creating a workable plan, and
implementing the plan.

6 In this chapter you learn how organizations develop a strategic plan. Most strategies fall into one of
four categories: low cost leadership, solid customer relationships, product/service uniqueness or quality,
or geographic expansion.

Operational planning defines what will be done, by whom, and how, to reach the company goals.
Control plans are created to monitor progress.

The chapter explains how to align goals throughout the organization, so that individual goals support
department goals, which in turn support divisional and finally company-wide goals.

7 The surest way to make substantial and permanent gains in quality, speed, and cost reductions is
through work process improvement. This chapter explains the key steps to process improvement and
introduces the concept of continuous process improvement.

Process innovation is a wholesale alteration of a process that results in a major, immediate


improvement. This chapter explains how this differs from and can combine with continuous process
improvement, and provides examples of where to look for process innovation opportunities.

8 This chapter explores activities that managers use to measure and improve the effectiveness of their
subordinates: performance appraisal, feedback, and coaching.
Performance appraisal is used to assess how well individual employees measure up to unit standards
and/or their assigned goals. Formal appraisals follow a process that includes preparation, the appraisal
meeting, the identification of performance gaps and their causes, planning to close performance gaps,
and periodic follow-up.

Feedback is communication that provides information about how well a person is performing against
expectations. Workplace feedback is most effective when it is descriptive, not judgmental; focused on
modifiable behaviors; based on specific, not general, observations, and well-timed. Managers must be
prepared to receive feedback as well.

Coaching is a process through which managers help their subordinates develop skills, prepare for new
responsibilities, or eliminate performance problems. Good managers look for opportunities where
coaching can improve performance. Formal coaching, like formal appraisal, follows a multistep process
that includes discussion, agreement and commitment, active coaching, and follow-up.

9 This chapter introduces a five-step rational decision-making process that begins with defining the
problem or decision correctly. Managers are advised to consider the context of the decision, then create
and evaluate feasible alternatives. Step 4 is making the decision, and the final step is implementation.
Along the way, the chapter offers coaching on generating alternatives and reducing risk, which are
important components of an effective decision-making process.

10 Conflict is a state in which the ideas, interests, plans, goals, egos, and agendas of individuals clash.
Workplace conflict can be destructive, but conflict can also be valuable, bringing new ideas to the table
and improving discussion. This chapter addresses how to deal with destructive conflict and foster
valuable conflict.

Difficult people take up a lot of most managers' time. When the difficult person is a customer, analyzing
his value to your organization will help you determine how best to handle him. The chapter offers
special tips for occasions when the difficult person is your boss. Avoiding the behaviors of bad bosses—
poor communication, lack of respect for others, not developing staff, being a bottleneck,
micromanaging, and acting politically—will help managers improve their management skills and become
better bosses.

Pre-Test
Becoming a Manager

Course Code 96023

INSTRUCTIONS: Record your answers on one of the scannable forms enclosed. Please follow the
directions on the form carefully. Be sure to keep a copy of the completed answer form for your records.
No photocopies will be graded. When completed, mail your answer form to:

Educational Services

American Management Association

P.O. Box 133

Florida, NY 10921

If you are viewing the course digitally, the scannable forms enclosed in the hard copy of AMA Self-Study
titles are not available digitally. If you would like to take the course for credit, you will need to either
purchase a hard copy of the course from www.amaselfstudy.org or you can purchase an online version
of the course from www.flexstudy.com.

1. To make a good decision, begin by:

correctly defining the issue or problem.

identifying sources of support.

narrowing the focus to a single alternative.

analyzing the data.

2. Which process do managers use to assign formal authority, responsibility, and accountability for work
activities to subordinates?
Promotion

Process improvement

Delegation

Teamwork

3. A key function of management is:

financing.

persuading.

influencing.

planning.

4. _______________________ are the starting point for effective time management.

Promotion opportunities

Time motion studies


Delegated tasks

Goals

5. Decisions on big, complex, and important issues require:

top-down control.

the knowledge and insights of many people.

a plan for allocating outcome responsibility.

an enlarged role for legal and accounting specialists.

6. Which is a managerial tool for providing feedback to subordinates?

Brainstorming session

Quarterly report

Balanced scorecard

Annual performance review

7. Which is a management approach that seeks to improve output and reduce errors and cost through
many incremental steps?
Continuous process improvement

Command-and-control

Process innovation

Kaizen

8. In resolving conflict, one should look beyond people's stated positions to their:

attitudes.

interests.

organizational skills.

educational background.

9. Communication through which we alter or affect the attitudes, beliefs, or actions of others is called:

dialogue.

debate.
contingency planning.

persuasion.

10. In the workplace and in other settings, our dependence on others (subordinates, peers, and bosses)
gives them some measure of:

authority.

freedom of action.

influence.

responsibility.

11. Repeatable activities, or steps, that transform workplace inputs into outputs that customers value is
called a(n):

chain of causation.

operational framework.

matrix operation.

business process.
12. A state in which the ideas, interests, plans, goals, egos, and agendas of individuals clash is:

equilibrium.

insolvency.

conflict.

quiescence.

13. Difficult bosses may:

praise performance too publicly.

take credit for the accomplishments of others.

delegate challenging tasks.

insist that employees take training classes.

14. A manager should give feedback to a subordinate:

in public whenever possible.

only during the annual performance review.


always in writing.

soon after the incident of interest has occurred.

15. A person responsible for getting things done through people and other resources is called a(n):

individual contributor.

manager.

subordinate.

freelancer.

16. A person who aims to give effective feedback should focus on:

positives and negatives equally.

only those things that the other person is prepared to hear.

negative behaviors that reduce team performance.

modifiable behaviors, not unchangeable ones.


17. Which of the following become(s) less important as one rises through the ranks of management?

Interpersonal skills

Ability to communicate

Technical skills

Peer networks

18. Which provides a means of altering the behavior of others without recourse to the power to
command?

Groupthink

Attitude alignment

Control

Influence

19. The assignment of work, and responsibility for that work, by one person to another is called:

expanding the span of control.

downloading.
delegating.

multitasking.

20. You may find that the most important thing you can do as the manager of former coworkers is to:

celebrate your promotion.

maintain the same relationships you previously had.

demand full compliance with company policies.

recognize that your relationship has changed.

21. ______________ defines how the organization aims to achieve its highest goals.

Alignment

Strategic planning

Matrix management

Optimization
22. Which of the following should a new manager seek as a workplace mentor?

His or her current boss

An executive coach

A human resources specialist

A former boss or other respected executive

23. A personal quality that sets leaders apart from ordinary people and makes them appear endowed
with exceptional powers or qualities is:

charisma.

self-confidence.

intelligence.

communication skill.

24. Which is an element of performance management that assesses how well an individual measures up
to unit standards and/or his or her assigned goals, and is used for pay and promotion purposes, as well
as employee development?

Feedback
Employee development

Career counseling

Performance appraisal

25. Which activity do managers use to help their subordinates develop skills, prepare for new
responsibilities, or eliminate performance problems?

Formal performance appraisal

Coaching

Behavior modification

Motivation

Part One: Making the Transition

Chapter List

Chapter 1: Getting on Top of Your New Role

Chapter 2: Working with Your Boss

Chapter 3: Making the Most of Your Tim

Chapter 1: Getting on Top of Your New Role

OVERVIEW

Learning Objectives
By the end of this chapter you should be able to:

Discuss the issues involved in the transition from individual contributor to manager.

Build productive relationships with subordinates.

Build productive relationships with peers.

Create a plan for the first 90 days in your new job.

It's Monday morning, day 1 of your new job as a first-time manager. You looked the same in the mirror.
Perhaps you dressed a bit more formally this morning, but not dramatically so. If you're working for the
same company that you worked for yesterday, you probably rubbed shoulders with the same people in
the elevator, greeted people in the same way as you walked through the corridors, and poured yourself
a cup of coffee like everyone else.

Everything appears the same on the surface, but you feel different.

The difference becomes more tangible as you approach your new work space. People with whom you've
worked for the past two years say "Good morning," but there's something unusual in the way they do
it—as if they are sizing you up, as if they are looking for something different in you. They all
congratulated you two weeks ago when your promotion was announced, but they did so as your
workplace pals. "Are they my pals today?" you wonder.

Your new reality becomes more tangible when you enter your new work area. Yes, it's still small, but this
one is all yours—no cube-mate. And there's a window and a small conference table with two chairs over
on one side, which gets you to thinking about how you'll use that table. You form a mental image of
yourself and a subordinate sitting at that table talking about some problem for which your help is
needed. You visualize yourself sitting at that table, skimming a résumé while a job candidate in a new
suit waits and watches nervously. "I've never hired anyone before," you say to yourself.
You're probably experiencing some anxiety at this point. Like a runner waiting for the starting gun
before a 10 kilometer race, you may feel an odd blend of nervousness ("Now what do I do?") and
anticipation ("I finally have a chance to try some of the new things I've wanted to do").

Day 1 for a newly minted manager marks an important work-life passage, ushering in new
responsibilities and accountabilities. The new manager is also cast in a new role within the organization.
Organizations are, above all else, mini-societies shaped by a bewildering mix of leadership, formal
authority, individual influence and ambition, internal politics, interpersonal dependencies, sub-group
interests, collaborative networks, and informal coalitions. The new manager must identify where he or
she fits into this social enterprise and figure out how best to accomplish his or her goals.

This chapter will help you understand the transition from individual contributor to manager, and your
new role as a manager with respect to two important groups: subordinates and peers.

FROM INDIVIDUAL CONTRIBUTOR TO MANAGER

Most new supervisors and managers are plucked from a set of employees who have no other
responsibility than to complete assigned tasks. Even when they must collaborate with others in
completing those tasks, they are not responsible for the work or behavior of others—only for
themselves. They are individual contributors. A manager, in contrast, is responsible for getting things
done through people and other resources—not through his or her individual handiwork alone. Thus, the
manager isn't simply accountable for his or her own output and actions, but for those of subordinates as
well.

This added responsibility for the work and behavior or others creates a dramatic difference between the
lives of managers and individual contributors. That difference was captured not long ago by the student
newspaper at Harvard Business School in an interview it conducted with a U.S. Army captain—the
military equivalent of a corporate middle manager—who was nearing the end of his two-year program
as an MBA student. When asked how his life as a student differed from his life as an active duty officer,
he said this (paraphrased):

The biggest difference I notice as a student is that I don't have to worry about anyone but myself, which
makes my life much easier and less complicated. I have my assignments to do, and I collaborate
periodically with other students on case presentations. But in the end, I have no responsibilities for
anything but my own work. As a company commander in the Army, it was very different. I had over a
hundred people to worry about all day, every day. If someone wasn't pulling his weight or was having a
problem, it wasn't just his problem. It was my problem and my responsibility.

That young officer's observation nicely captures a key role difference between the individual contributor
and the manager, and that difference is one of the first attitudinal hurdles that the new manager must
overcome. While the individual contributor focuses on managing assigned tasks, the manager must
focus on a far broader set of concerns that involve planning and assigning work to others, monitoring
their performance, coaching, problem-solving, resolving disputes, and on and on.

One of the most common stumbling blocks for new managers is a failure to appreciate how their role
has changed. They continue thinking and acting as individual contributors, focusing on tasks while
overlooking the management of their subordinates, planning, coordinating effort, and so forth. They
have trouble letting go of their old tasks and moving on to their new responsibilities. This is a partly the
fault of the system through which people are selected for managerial work. Most new managers are
promoted because of their high performance as individual contributors. They had mastered important
task-related skills and were very good at applying them. Those skills earned them praise and
recognition—and promotions! As managers, however, those skills are less important. As they rise
through the managerial ranks, they must shift their attention. Exhibit 1-1 describes how technical, task-
oriented skills become less important as a person moves from the individual contributor role through
the ranks of management. Interpersonal and decision-making skills rise in importance during these
transitions.

Exhibit 1-1: Technical Skills Are Less Important


Now consider the case of Amelia, who is making the transition to management, and confronting its
challenges.

Like most people promoted into management, Amelia had been very successful in her old job. "After
eight years working the phones, I was the go-to gal for problem calls. If a customer wanted something a
little out of the ordinary, I would figure out how to make the system work for him. After I was promoted
to supervisor, I had to really hold myself back from solving everybody's problems like I used to. Hey, I
had enjoyed personally helping customers and being a hero! But once I became the supervisor, I needed
to help my subordinates solve those problems themselves."

One way Amelia found to change from being the hero to being a manager was to talk with her friend
Ellen, who had been promoted in another department a year before. The transition was fresh in Ellen's
memory, and she shared some of the lessons she had learned. If you are a new manager, or anticipate
becoming one in the near future, you can learn a lot by talking with people who have already made the
transition to that role.

Think About It …

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What technical, task-oriented skills had you developed as an individual contributor?


_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________

What recognition did you receive from your boss and from peers for mastery of those skills?

_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________

As a manager, are you experiencing difficulty in letting go of your role as a skillful individual contributor?
If the answer is yes, describe that difficulty.

_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________

How comfortable are you dealing with people at all levels of your organization?

_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________

Are you more comfortable implementing decisions than making them?


_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________

Familiar technical skills will remain important to some degrees in your managerial role. They will help as
you coach your subordinates and manage their performance. But they can no longer occupy your full
attention or be your main source of workplace self-satisfaction.

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Exercise 1-1: Learn from Other Managers

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Identify a manager who is willing to speak with you about his or her transition experience. Ideally, this
will be a person who has been a manager for less than two years. Then ask for a half-hour or more of
their time.

What were this manager's most difficult transition challenges?

_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________

How did the manager deal with them?


_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________

What issues does he or she still struggle with as a manager?

_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________

In terms of your own managerial career, what is the most important thing you've learned from your
interview with this manager?

_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________

RELATIONSHIPS WITH SUBORDINATES

Getting on top of your new role requires that you establish a business-like and productive relationship
with the people who report to you. You and they depend on each other. You depend on them for quality
performance of your unit's work, and they depend on you for resources and rewards. If you all
understand this mutual dependence, you'll be off to a good start.

Dealing with Former Peers


If you are like many new managers, you were promoted from the ranks and are now managing former
peers. This has its advantages and disadvantages:

Advantages Disadvantages

 You know these people, their strengths and  Former peers know your weaknesses; they may know
weaknesses, their interpersonal relationships and details about your personal or work life that you wish they did
ability to work together; personal problems that affect not.
their work performance.
 Some former peers may secretly resent your success—
 You are familiar with the work that must be done. after all, you've moved up to a higher-level, higher-paying job
while they've stayed behind.
 You have a good idea about problems faced by the
unit (dysfunctional work processes or individual  Some former peers may expect that you will remain their
slackers). personal friend, and that you will side with them when their
interests and the interests of the unit or company are in
 You understand the politics of the organization—
conflict.
who exerts formal and informal influence, who can be
trusted or not trusted, who is allied with whom on key  Former peers will watch you carefully, looking for evidence
issues, and so forth. that you have changed in how you relate to them—pulling
rank on them or acting as through you're "too good" to
associate with them on a personal level.

You may find that the most important thing you can do as the manager of former coworkers is for both
you and them to recognize that your relationship has changed. You can be friends and trust each other,
but you cannot be "pals" in the sense that you once were. You can continue having lunch together, but
not as an occasion to grouse about the company and its "stupid" policies. And if you have lunch with
subordinates, you must spread yourself around; you cannot always go with Bill or Helen without giving
the appearance of favoritism. Your relationships have to become more businesslike and somewhat more
formal.

It is possible to make this change to a more professional relationship without seeming like your
promotion has "gone straight to your head." Your new activities may even help. For example, if your
calendar is full of meetings and other duties, it will not seem unreasonable to suggest that your former
coworkers set up a time to talk with you rather than always catching you on the fly. If you are courteous
and fair in your dealings with all staff, your employees will also notice that you do not favor old friends.
Even those who would have liked to take advantage of your friendship will respect you for this.

Think About It …

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Have you ever had to work for a person who had formerly been your peer or coworker? If you have,
think back about that time and answer these questions.
How did your relationship and interactions with this person change?

_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________

What, if anything, became uncomfortable or unclear in that relationship?

_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________

How did your former peer, now your boss, handle his or her new role in terms of your working
together? Did this boss become standoffish? Act superior? Become "bossy"?

_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________

What can you learn from that new boss's experience in establishing a new role for yourself?

_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________

What is one thing that this new boss did that you will avoid doing?

_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________

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Stepping in as a manager of people with whom you had no previous relationship (as peer or coworker) is
simpler. However, whether you're promoted from the ranks or hired in from the outside, you should
recognize that your new subordinates will have certain expectations of you. They will expect you to:

Eliminate task-related impediments that are outside their own spheres of authority and action—
problems that only management can solve.

Provide the resources they need to accomplish their assigned tasks.

Listen when they have grievances or improvement suggestions.

Be fair in how you assign work and reward effort.


Keep them informed about matters that affect their work and careers.

Be a champion for their work unit with upper management.

Make decisions.

Advocate for their training and career development.

Work harder than they do.

Some subordinate expectations will put you a difficult position. Many new managers, for example, find
that their people demand more of their time than they have time to give. They also discover that
subordinates want to drag them into the middle of conflicts and workplace problems that subordinates
should settle on their own. As a manager, you must exercise good judgment in determining which
conflicts you want to wade into, and which problems you want to take on. Subordinates may also try to
"delegate up" problems or tasks they prefer not to deal with. Given the many demands on your time,
you cannot allow your staff to push every problem onto your shoulders—especially if you have capable
workers who are expected to deal with problems as part of their normal duties.

Breaking the Ice

Any lack of clarity about your role will cause speculation and gossip among subordinates. They need to
know very soon how you intend to manage and what your expectations are of them. The best way deal
with this situation is to meet individually with each of your direct reports. Naturally, you will talk
informally with your staff from your first day, but it's best to schedule these one-on-one meetings after
you've been on the job for a few weeks. This will give you a chance to form some impressions about
your new environment and role. Prepare for these meetings by reviewing each person's personnel file,
which should be available from the human resources department. Those files will describe each person's
job, compensation, employment background, and will contain past performance data.

Make your meeting with each subordinate friendly but businesslike. Share the unit's broader goals and
indicate your commitment to them. But encourage the subordinate to do most of the talking—about
themselves, their personal goals, their work, what they see as impediments to their success and the
unit's success, and so forth. This is your chance to demonstrate your accessibility and your willingness to
listen: two traits that workers respect in a manager. If anyone tries to go off on a rant about how bad
the company is or how unfairly he's been treated, redirect the conversation to goals and to the positive
steps that can be taken toward them.

These initial meetings with individual subordinates may not be the time for you to communicate your
plans and your expectations of them. Especially if you are new to the company or the department, you
may not yet know what you expect of each employee. You may need time to listen, analyze, and think
about those matters. Instead, use these meetings to clarify your role in the minds of your people. You
want them to understand that you are:

Committed to working with them toward the unit's goals.

A person who stands up for his interests while respecting those of others

Fair-minded but intolerant of chronic whiners and slackers.

Open to positive suggestions.

Friendly but serious about your work and responsibilities.

Results-oriented.

Confident—not someone who needs to be liked.

An initiator of action, not a passive bystander.

If you can frame yourself in terms of those characteristics, you will earn respect and succeed in
communicating your role to subordinates.
RELATIONSHIPS WITH PEERS

New managers often think that their subordinates, formal organizational authority, and annual budget
are the only resources they need to achieve their assigned goals. In reality, they seldom have anywhere
near what they need. Budgets are lean and there always seem to be too few hands to do all the work.
New managers also find that they are dependent to a greater or lesser degree on the cooperation and
assistance of people in other parts of the company (more on this in Chapter 4). You'd never realize this
by looking at the organization chart, like the one shown in Exhibit 1-2, which describes a company in tidy
little boxes. Those lines and boxes, however, simply indicate reporting relationships, not how work is
actually done and how company goals are achieved. Much of that happens within the "white space"
between the boxes on the chart.
Exhibit 1-2: A Typical Organization Chart

Example 1: The Eastern Sales Manager has an important account whose purchases are not being
shipped because of a credit problem. The Sales Manager knows the CFO's assistant and calls her up to
explain the problem and how it's being cleared up. "I know that our policy is not to ship new orders if
any outstanding purchase payments are past due by more than 30 days, but here's the situation …" He
makes a case for shipping now and making this good customer happy while the payment problem is
being sorted out. The CFO's office approves the deal, and the problem is solved.

Example 2: The Inventory Control manager, who works for the Vice President of Manufacturing, has just
returned from the annual Inventory Control Association annual conference. While there, he attended a
workshop at which a new, cost-saving application of IT tools was described. Hopeful that he could use
the same tools to advantage, the manager called up an acquaintance in his own company's IT
department. After discussing the situation, the two agree to meet for lunch in the company cafeteria to
discuss the possibilities.

Example 3: A manager in New Product Development is being pressed by her boss, the Vice President of
Manufacturing, to provide specifications for a new line of flat-bed scanners for which she is responsible.
She cannot provide those specs until the Marketing department completes its research on customer
requirements for the new scanners. She and the marketing research manager have collaborated
successfully on several other projects, so she has no reluctance in contacting him and pressing him to
complete his research as quickly as possible. "We have all the data already," he tells her, "but we
haven't been able to tabulate it all because so many people are on vacation this month." To solve the
problem, they agree to jointly contact the head of human resources and prevail on him to hire a temp to
handle the tabulation work.

Notice in each of these examples how solutions were created by peers working across organizational
boundaries. No subordinates were involved, nor did these managers receive any support from their
bosses. Each case underscores the importance of developing good working relationships with people in
other parts of the enterprise, even when no formal connection is present. These are people who have or
are experiencing problems similar to yours. If you are like most new managers, you will find former and
current peers to be your most valuable source of support—both technical and emotional. Unlike your
boss, peers have no judgmental role to play in your work life, which makes them easier to approach.

Here are some things you can do as a new manager to build a peer network that will help you achieve
your goals:

Get to know as many "achievers" as you can within the company: managers, non-managers, and
technical professionals. Once a week, for example, call a different one of these people on the telephone
and say, "Hi, I'm so-and-so, a new manager in the XYZ department. I'd like to make your acquaintance
and learn about what you do and how we might help each other. Would you have time for coffee
anytime soon?" You'll be amazed by how much you'll learn if you follow this technique.

Join cross-functional teams when you can. Cross-functional teams bring people with different skills and
experiences together to solve problems and exploit opportunities. Being a member of one or more of
these teams will bring you into close contact with key members of the organization. By working with
them, you'll quickly learn which of them are effective and reliable. You'll also develop working
relationships that are likely to pay off in the future.

Remember that to get you must give. Reciprocity is the currency of collaboration in workplace networks.
If someone does you a favor, look for an opportunity to repay it.
Develop a reputation for action. Talk is cheap. The workplace is full of people who will say, "We ought to
do …" or "Somebody ought to do …" Few of these people deliver. If you develop the opposite
reputation, people in your peer network will want you on their teams.

YOUR 90-DAY PLAN

In his book, The First 90 Days: Critical Success Strategies for New Leaders at All Levels, Harvard Business
School professor Michael Watkins makes the point that leaders, from the CEo level down, are highly
vulnerable during the first few months in their new jobs. While these new leaders are trying to orient
themselves and figure out what to do and how to deal with their new situations and subordinates,
everyone around them is forming opinions about their competence. (Watkins, 2003). It may be tempting
to make a big splash right away, but successful managers take their time to assess the situation. Use
your first 90 days on the job to listen, learn, and lead.

Listen

Rather than springing into action on Day 1, listen to what your subordinates, peers, and boss have to say
about the situation you're in, the roadblocks to change, company priorities, and so forth. We've already
suggested that you get to know your subordinates through one-on-one informal meetings in which you
spend most of your time listening. Extend those one-on-ones to staff meetings in the weeks that follow.
Get your people engaged in dialogue about workplace problems and opportunities. Some good ideas are
bound to emerge. Invite participation from other departments by individuals who have useful
information and insights. Again, let other people do most of the talking.

Learn

Use the first few weeks to learn as much as possible about your unit's resources, its constraints, its
customers, and its performance. As a new manager, you probably never had budget responsibilities
before, so use this time to study your budget and learn where your unit stands on a year-to-date basis. If
your unit has direct contact with customers, get out of the office and spend some time with important
customers. Accompanying your company's sales or service reps on their calls one day each week will
teach you a great deal about the competitive situation, customer expectations, and what people think of
your company and its products.

What you learn in the first few weeks will help you develop action plans.

Lead
Listening and learning are important, even if you have ideas of what needs to be done. But sometime
within the first 90 days, you must "brand" yourself as a doer, a problem-solver, an action-oriented
manager who gets results. Too many new managers feel that if they just keep the machinery turning and
don't make any mistakes, their job is done. Their focus is on activities, not results. "I may take on some
initiatives next year," they say, "but not until I've settled into the job." Don't take this approach. The
company and your boss shouldn't have to wait until you're totally comfortable in your new role. Instead,
plan to put some points on the scoreboard by the end of the first 90 days. Solve a problem, launch an
initiative, introduce an innovation—do something that will make people say "Wow. It looks like we
finally got the right manager in that position." otherwise your boss, peers, and subordinates will mark
you down as a mediocre, risk-averse manager.

What should you do? The answer will be determined by the situation. However, do not attempt to do
too much at once. That will likely lead to failure, and failure at this stage will darken everyone's mood
and dampen their spirits. If you fail on this first venture, you may not be able to rally people for another
venture. So, consider what you've learned about the situation and identify two or three things that:

Are clearly achievable.

Are viewed as important by your boss, your people, and the organization.

Can be achieved within 90 days.

Call these the "low-hanging fruit" or "quick wins" if you like. Success with these will please your boss and
create forward momentum, which will inspire confidence in your people, making it easier to rally them
around future initiatives. More important, it will give you the personal confidence you need to confront
larger, more challenging problems and opportunities.

Exercise 1-2: Your 90-Day Plan

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Identify four important problems or opportunities you should address in your role as manager.

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Now, consider which of these meet the criteria for "quick wins." That is, which are clearly achievable;
considered important by your boss, your people, and the organization; and achievable within 90 days?

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Pick the one that seems most easily achieved and briefly describe how you would organize people
around dealing with it.

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This chapter has identified actions you must take in stepping into your new role as manager. It has
suggested how you can relate to two important constituencies: subordinates and peers. Your most
important constituent, however, is your boss. What should you do about him or her? That question is
addressed in the next chapter.

RECAP

The first task of a new manager is to develop a new mindset: that of a manager instead of an individual
contributor. One issue involved in this transition includes understanding how your role in the
organization has changed, how you now fit into the social enterprise of the workplace, and how you can
best accomplish your goals. Another challenge is to shift the emphasis from the technical and task-
oriented skills critical to your past success as an individual contributor to the decision-making and
people skills at the core of your new role as manager. Whereas in the past you were accountable only
for your own success or failure, as a manager you are now responsible for the work and performance of
others.

In this new role, you must forge new relationships with your subordinates and peers. If you were
promoted into your new position and are managing former peers, you'll have several advantages:
knowledge of their strengths and weaknesses, familiarity with the work and ongoing problems and
issues, and an understanding of organizational politics. Disadvantages of managing former peers can
include their knowledge of your weaknesses, possible resentment of your promotion, and unrealistic
expectations that you will show favoritism or pull rank. All new subordinates will have expectations that
you can remove impediments, provide resources, listen to grievances, demonstrate fairness,
communicate openly, champion the unit, make decisions, advocate for them professionally, and work
harder than they do. Individual meetings with your subordinates will give you the opportunity to
communicate how you intend to manage and what your expectations are of them.
Your new peers may include colleagues who outranked you in the past. Most new managers find former
and current peers to be their most valuable source of support. You can build a strong peer network by
getting to know as many "achievers" as you can within the company, joining cross-functional teams
when you can, remembering that to get you must give, and developing a reputation for action.

To assure a successful transition, create a 90-day plan that focuses on listening, learning, and leading.
Listen to what your subordinates, peers, and boss have to say about a range of issues. Engage people in
dialogue at staff meetings and invite participation from other departments by individuals with useful
information and insights. Learn as much as you can about your unit's resources, constraints, customers,
and performance. This information will help you develop action plans. Lead by identifying yourself as an
action-oriented manager and delivering on two or three goals that are clearly achievable; viewed as
important by your boss, subordinates, and the organization; and can be accomplished within 90 days.

REVIEW QUESTIONS

INSTRUCTIONS: Here is the first set of review questions in this course. Answering the questions
following each chapter will give you a chance to check your comprehension of the concepts as they are
presented and will reinforce your understanding of them.

As you can see below, the answer to each numbered question is printed to the side of the question.
Before beginning, you should conceal the answers by placing a sheet of paper over the answers as you
work down the page. Then read and answer each question. Compare your answers with those given. For
any questions you answer incorrectly, make an effort to understand why the answer given is the correct
one. You may find it helpful to turn back to the appropriate section of the chapter and review the
material of which you were unsure. At any rate, be sure you understand all the review questions before
going on to the next chapter.

1. What should you do in the first 90 days in your new managerial position?

Concentrate on technical tasks.

Exercise formal authority whenever possible so that people will know that you are in charge.
Encourage dissent.

Listen, learn, and lead.

1. (d)

2. One way of building a peer network within the larger company is to:

join cross-functional teams.

become more specialized.

delegate more work to subordinates.

plot your own path.

2. (a)

3. Identify one disadvantage for the person who must now manage former peers.
Former peers believe that they can trust their new manager.

Former peers know the new manager's weaknesses.

The new manager doesn't know how to communicate.

Former peers expect the new manager to be successful.

3. (b)

4. Which of the following becomes more important as one rises higher and higher in the ranks of
management?

Decision-making and people skills

Task-oriented skills

Technical know-how

Daily routines

4. (a)
5. As described in this chapter, one of the most common stumbling blocks for new managers is a failure
to:

master budgeting concepts.

use their new organizational power to its full advantage.

appreciate how their role has changed.

enforce behavioral discipline.

5 (C)

Chapter 2: Working with Your Boss

OVERVIEW

Learning Objectives

By the end of this chapter you should be able to:

Align your priorities with your boss's key goals.

Identify what your boss expects from you.

Describe how your boss wants to relate to you.


Talk with your boss about career development.

Subordinates and peers are important people in your work life. But your relationship with your boss is
most important because that person is both an evaluator of your performance and a gatekeeper to the
resources and career development you need. To develop a good working relationship with this
individual, you need to understand your boss's priorities, his or her expectations of you, and how the
two of you can work effectively together.

IDENTIFY AND SUPPORT YOUR BOSS'S GOALS AND PRIORITIES

As a manager, your job is to get results through your assigned subordinates. Guess what? Your boss is in
the same boat—accountable for results—and you are one of the subordinates through whom he or she
will produce them. Thus, your boss looks to you as a facilitator of his or her own success, just as you look
to your subordinates to help you reach your goals. Once you understand this mutual dependency, you
will be in a much better position to work out a good relationship between the two of you.

The starting point for relationship building is your boss's goals. Do you know what they are? If she is the
national sales manager, her primary goal is very likely a numerical sales revenue figure—say, $120
million. She may have secondary goals as well, such as preventing defection by the company's
bestproducing sales representatives; developing the management capabilities of her five regional sales
managers; reducing travel, entertainment, and other selling expenses by a certain amount; and so forth.
Once you've identified these goals, you'll recognize things that you can do—by yourself and through
your subordinates—to make your boss successful. For instance, returning to our example, you might
meet with your subordinates and brainstorm expensereducing options. "I'd like your ideas on how our
group can reduce travel, entertainment, and other selling expenses without jeopardizing sales revenues.
No idea is out of bounds at this point."

Like you, your boss has many goals, and some will have higher priorities than others. Do you understand
those priorities? It's important that you do. Because you have limited time and resources, you must
focus on the things that matter most to your boss.

Talk About priorities

It's possible to identify your boss's priorities through day-to-day communications: during one-on-one
meetings, staff meetings that include your boss's other direct reports, lunches, and so forth. Like
everyone else, bosses like to talk about the things that weigh most heavily on their minds—the things
that keep them awake at night. All they need is an opportunity.
Once you've identified those priorities, find out how you can address them. Don't assume that there is
only one way or that you will know the one best way. Your boss may have other ideas. So talk with your
boss one-on-one about:

His priorities

Which ones he wants you to address now

How best to address them (there may be many feasible alternatives)

By demonstrating your interest in your boss's priorities, and helping him attain his key goals, you will
establish yourself in his mind as a reliable and indispensable ally, which will enhance your working
relationship with this important person.

UNDERSTAND WHAT YOUR BOSS EXPECTS FROM YOU

Your boss has expectations of you. These include:

Your goals and priorities—they should be aligned with hers

Your work performance

Your independence of action

You need to understand and respond to these expectations. Let's consider each.

Talk About Your Goals and Priorities


Clear goals are like a compass. Whenever we are unsure if we're working on the right things or headed
in the right direction, all we have to do is revisit our goals. In the absence of goals, we have no assurance
that we're doing the right things or that our performance is meeting expectations.

As an individual contributor, your goals were spelled out for you, often in very specific form: for
example, increase sales in your territory by 10 percent this year; open three new accounts each month.
As a manager, you too should have goals, though you may be able to negotiate these to some extent
with your supervisor. If your goals aren't clear, talk to your boss about them. Keep talking until you get
some clarity.

Once you understand your goals, you can begin prioritizing your activities. As a new manager, you may
have a checklist of things you want to accomplish, especially if you have been working in the same unit
for a while. You will have had plenty of time to observe operations and develop plans for improving
them, but take the advice given in the previous chapter: listen and learn before firming up those plans.
Take advantage of the only grace period you are likely to get to gather information you may not have
had access to in your former role. Whether you create your plans soon or later, don't plan and act in a
vacuum: seek input from your subordinates and, more importantly, from your boss.

As much as you may think you understand what needs to be done, and as much as you may think you
understand your boss's priorities, share your ideas with your boss before taking them too far down the
road. Your boss has a larger view of the organization and of inter-unit relationships that may be affected
by your plan. Consider this example:

Iris is a newly hired manager in the human resources department of a 900-employee company. She was
recruited to that position from another firm. During the course of her interviews with her current boss,
the Vice President of Human Resources, other managers, and staff members of the HR department, she
observed a great many opportunities for improving the existing employee development program.

During her first few weeks on the job, Iris followed up on one of her initial ideas. "This company has no
clear roadmaps for career development and advancement," she told herself. "We need those roadmaps
and related training programs if this company expects to retain the best and brightest people."

Every day on the job confirmed Iris's conviction that her idea was sound. Not wanting to burden her
busy boss with a half-baked idea, she spent a great deal of time developing her plans and estimating a
budget for it. She then developed a written document and PowerPoint™ presentation to explain it all.
Iris then scheduled a meeting with her boss.

She was nervous going into the meeting but also energized by the positive response she anticipated.
"This plan makes sense," she told herself. "I think he'll be impressed by its scope and the level of detail
I've put into it."

The new manager was crestfallen by her boss's dismissive response to her plan and all the work she had
put into it. "That was a nice presentation, Iris," he told her, "but your predecessor suggested something
very similar a few years ago and senior management was dead set against it." He went on to explain that
senior management was viscerally opposed to structured programmatic solutions like hers. "They
believe that smart, competent people will work out their own advancements through the ranks. We
don't need an elaborate and expensive program for that." Her boss was also visibly disappointed that
she had invested so much time in this ill-fated plan when so many other things needed her attention.

"Next time you get an idea like this," he counseled, "check in with me before you take it this far."

Iris had demonstrated initiative in creating a plan for solving an observable problem. However, she had
wasted substantial time by failing to obtain her boss's early response to her idea. She discovered too
late that her priority did not align with his. Experiences like this one can be avoided through regular
communication.

Your boss wants to know how you plan to spend your time. Communication is the best way to assure
alignment between his priorities and yours.

Your Work performance

Every boss has performance expectations of subordinates, and your boss is no different. It is important
that you understand those expectations and how your boss defines them. More specifically, you should
determine which aspects of your work will be measured and how.

Modern organizations use various "metrics" to determine how well or how poorly their operations are
performing. Production facilities use output per machine-hour or per labor-hour, scrap rates, and other
quantitative measures. Product development departments consider cycle time to keep tabs on how long
it takes to move a new product concept from the idea stage to a market launch. The shorter the time,
the better. Sales organizations measure performance by revenues per salesperson, by new accounts
opened, and by customer retention rates.

An online commerce company studied by one of the authors measured the effectiveness of its site
engineering team by, among other things, the speed with which a website search returned product
results. It tracked marketing effectiveness both by ad revenues and by the number of site visitors who
"clicked through" to its advertisers' sites. These were among twelve "key performance indicators" (KPIs)
checked daily by executives. They used these to monitor the performance of the company and its
operating units (and their managers).

Chapter 8 of this course provides a more complete discussion of performance measurement and the
characteristics of effective measures. Suffice it to say here that you should understand clearly how your
boss will measure your job performance. What will be measured? How will measurement be made? Get
straight answers to both of these questions. Then ask for periodic feedback from your boss on how well
you are doing.

As you discuss performance metrics with your boss, also discuss the resources you will need to perform
to your boss's standard. Have you been given sufficient time, people, financial backing, and other
resources to do the job? If you have doubts, air them with your boss. If she agrees that your resources
are insufficient, she must either provide more resources or make an adjustment to her performance
standard.

Exercise 2-1: Your Goals and Performance Metrics

In this exercise, make a list of your top three goals. Next to each goal, describe the metric your boss will
use to judge your performance.

Goals Performance Metrics

1.

2.

3.
Do you know how to say "no" to your boss? Some bosses love to pile on extra work without giving a
thought to the time and resources needed to complete it. "I have to make a presentation to the board
next Tuesday on the progress we're making in breaking into the Korean market. I want you to pull
together all the data and organize it into a written script with a dozen or so slides. Have it ready by
Monday morning."

Some people find it impossible to say no to requests like this one, even though they lack the time and
resources to complete the work on time or up to standard. After all, it's the boss who calls the shots,
right? If you are one of those people, think back to your priorities. Your boss many not recognize how
additional work will disrupt work toward things he considers important. By citing priorities, you can put
the ball back in his court, and force him to make the hard choice about how you should spend your time.
In this way, you can avoid saying "no" while keeping your work life on an even keel. For example, you
might say:

"Yes, my people can have it ready by Monday morning, but only if we put the Chicago report on hold for
three days. I don't have the resources to complete both projects by Monday. We can handle one or the
other. Which is your preference?"

You might also offer alternatives such as, "We could complete both reports if you will authorize some
weekend overtime pay for two of my staff people."

Think About It …

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Have you experienced a situation like the one we've just described? If you have, describe it briefly, then
indicate how you might have handled it without explicitly saying "no" to your boss.

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Your Independence of Action

Making decisions is an essential element of managerial life. As a manager you must choose between
competing alternatives, decide what action to take, determine who should do it, and so forth. Your
subordinates look to you for dozens of decisions in the course of every week. The questions you must
answer are:

"Which decisions can I delegate to subordinates?"

"Which decisions are for me to make?"

"Which decisions should I make only after consultation with my boss?"

"Which decisions should be made by my boss alone?"

Your independence of action is at the heart of these questions.

Some bosses give their managers substantial independence of action, allowing them to act and to make
decisions within broad boundaries. They don't want their subordinates running to them with every
decision. Others enforce tighter control. They want to control even low-level decisions and activities. If
you are a new manager, or new to your department, it is not unnatural or unreasonable for your boss to
limit your independence of action. After all, the boss is probably unsure of your ability to make sound
decisions and handle difficult situations on your own. Your skills are still untested and unproven.
Assuming good performance on your part, that control should gradually be relaxed. If it remains rigid,
you may have a problem boss. (See Chapter 10 on micro-managing bosses and how to deal with them).

Whether tight or loose control is the best way for your boss to operate is for him or her to decide. From
your perspective, the important thing is to understand the ground rules: when can you act on your own
and when should you consult with your boss and obtain approval? This is one of the first things that you
and your new boss should talk about.

In some cases, the limits of your independence can be clearly defined: "You can make any decision or
sign any invoice involving less than $5,000. Anything above that requires my approval." Or your boss
may reserve issues that require moving up the chain of command for herself: "Please discuss problems
that cross department lines with me first." Most actions and decisions, however, cannot be quantified.
Consequently, you must develop a sense of your boss's comfort level. You can do that through direct
communication and through experience. However, when in doubt, ask!

Example

Errol is repeatedly late for work. I've talked to him about this problem at least four times in the past
three months, but with little effect. I have explained how his tardiness affects the department, and I
have followed up our conversations with written documentation. He doesn't have a legitimate reason
for our cutting him some slack— he just drifts in late. At this point, I think it'd be a good idea to bring HR
into the picture, but I know he's a long-time employee and I'd like to know your thoughts on this.

Let your boss know the issue, what you have done, and what you think the next step should be.
Checking in with your boss like this will, over time, will increase his or her confidence in your decision-
making skills and help you understand the boundaries of your independence that cannot be quantified.

Exercise 2-2: Your Boss's Preferred Control Levels

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Take a look at the continuum in the graphic image below. Think of it as your boss's preferred level of
control over your actions and decisions in the different areas described, with 1 (on the extreme left)
representing the lowest level of control and 5 representing the highest. Circle the number representing
your boss's preferred level of control over your actions and decisions. In each case, think about why
your boss is most comfortable with that level of control, then answer the questions below.

Department budget issues: establishing revenue and expense goals

Given your current experience as a manager, where on the continuum do you think you boss's comfort
level should be? (State the number.)

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_____________________________________________________________________________________
___________________________________

Is there a discrepancy between your boss's current level of control and where you think that level should
be? If there is, explain why you believe the difference exists. (Example: "My boss doesn't trust me yet.")

_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________

Employee issues: hiring, firing, and increasing salaries


Given your current experience as a manager, where on the continuum do you think you boss's comfort
level should be? (State the number.)

_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________

Is there a discrepancy between your boss's current level of control and where you think that level should
be? If there is, explain why you believe the difference exists. (Example: "My boss wants complete
control in this area.")

_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________

Working with groups outside your department

Given your current experience as a manager, where on the continuum do you think your boss's comfort
level should be? (State the number.)
_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________

Is there a discrepancy between your boss's current level of control and where you think that level should
be? If there is, explain why you believe the difference exists. (Example: "My boss enjoys managing these
relationships and wants to get a better sense of my political skills.")

_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________

LEARN HOW YOUR BOSS WANTS TO RELATE

You probably have a preferred style of relating to your subordinates. If you're like most managers, you
want them to let you know when they are experiencing problems or are undecided about what to do.
On the other hand, you don't want your subordinates in your office every two minutes, wringing their
hands the instant they hit a bump in the road. You also want people to keep you informed of important
developments for which you are ultimately responsible.

Your boss also has a preferred style for dealing with you and other direct reports. Do you know what
that style is? You should learn your boss's preferences in each of these areas: information; information
format; bad news; and time demands.

Information
Most bosses want to know about progress against deadlines; problems with important customers;
expenditures that may affect budget projections; and so forth. Talk to your superior about the specific
matters on which he or she wants to be kept posted. You want to provide what is needed but not
overload your boss with more than is useful. Ask also about email. Email causes information overload
when people automatically copy their boss on just about every electronic message they send or receive.
Ask: "On which matters do you want to be copied?"

Information is a two-way street; you need information and feedback from your boss as much as she
needs it from you. A weekly meeting is often the best opportunity for information sharing and feedback.

Information Format

People have different format preferences with respect to information. Some prefer a short, verbal
report: "In a nutshell, tell me the current status of the Meyers project." Others want written reports
with plenty of supporting data. As an example of preferences, consider this true story, told to one of the
authors by a university professor who, during World War II, served as a lowly clerk in General Dwight
Eisenhower's command following the Normandy landing.

"One day, my Colonel asked me to prepare a logistical report for the General," recalled the professor,
who had been a corporal at the time. "Two days later I gave the Colonel the report—all thirty-five pages
of it—which he took to General Eisenhower. He brought the report back to me and said, 'The General
wants a condensed version. It's too long.'

"By the next morning I had a five-page version of my original report, which the Colonel took back to
Eisenhower. Fifteen minutes later a runner came to fetch me. 'The Colonel wants you to join him in
General Eisenhower's office—pronto!'

'Wow,' I thought to myself. 'What could the top General in the U.S. Army in Europe want from me?'

"Well, I was ushered in to the General's office, nervous as could be. The Colonel and some other high-
ranking officers were standing by. Eisenhower was sitting at his desk with my five-page report in his
hands. He looked up at me and asked, 'Corporal. Did you write this report?' 'Yes sir,' I answered. 'In that
case,' said the General, 'tell me the key points.'"
General Eisenhower had a war to win. He didn't have time to study long reports, even five-page
condensations. He wanted the key points and nothing else. If your boss is action-oriented, he may want
his information served up the same way: just the key points. A reflective, analytical sort of boss on the
other hand may want all the details—down to the footnotes!

Bad News

We all like to share good news when we have it, but there's a strong temptation to keep bad news to
ourselves, particularly when it reflects on the job we're doing. We like to think that bad news will blow
over, or that we'll be able to remedy the situation. On the one hand, you shouldn't be an alarmist,
constantly running to your boss about things that might go wrong or small things that you can fix. Failing
to inform about bad news might make you guilty of "covering up." Any time your boss has to ask, "Why
didn't you tell me sooner about this?" your reliability and truthfulness in her eyes will take a beating.

Try to find the murky dividing line between being an alarmist and covering up. When in doubt, report
bad news sooner than later; your boss may be able to help with the problem. And never let your boss
learn your bad news from someone else!

Time Demands

Most people will tell you that they don't want their supervisors getting into their hair. They despise
micro-management. On the other hand, there is evidence that they want more time with their bosses
than they're getting. You too probably want more of your boss's time than you're receiving right now.
Should you go for it? Perhaps, but before you do, try to answer these questions:

Is my boss open to giving me more time? The answer is wrapped up in your boss's preferred style of
dealing with subordinates.

Is my boss able to give me more time? Perhaps his or her schedule is too packed already.

What you're after here is a proper balance between your need for face-time with the boss versus his or
her ability or inclination to provide it. In any case, you should make the most of the time given to you.
That means sticking to important business, not trivial matters. Plan what you need to cover in your
meetings together, and let your boss know your agenda. "I want to bring you up to date on the
KitchenQuik sale and learn what you may need from me to prepare for next month's board meeting."
DEVELOP A CAREER PLAN WITH YOUR BOSS

As a new manager, you will have your hands full of work. Your calendar will be packed. Even with a
calendar, your day may feel out of control, with people calling you on the telephone, sending email
queries, and walking into your office with news and problems. With all this on your plate, your next
career move would seem to be the last thing you should think about. However, if you want to get ahead
in your work life, what you're doing now should be nothing more than one rung on a career ladder.

Career ladders are essential for organizations: they create a pipeline of capable, ambitious people
prepared to fill vacancies created by growth, retirements, transfers, and defections. Recognizing the
importance of the human capital pipeline, most forward-thinking companies make managers
responsible for the career development of their promotable subordinates. Is this the policy at your
company? If it is, then your career development should be part of the relationship you have with your
boss, just as your subordinates' career paths are part of your relationship with them.

Of course, you must first plant your foot firmly on your current rung of the career ladder if you want to
ascend higher! Remember the 90-day plan we suggested in Chapter 1? Add a self-development
component that will help you excel in your new role. Spend time determining the skills you need to
acquire or perfect; figure out what you need to learn in the short and long term. This will put you on the
path to success in your new role. Over time, assuming that your performance is good and that you are
"promotable" material, your boss should take various actions to help you move up the career ladder.
These include:

Providing you with career-enhancing experiences—projects and assignments that broaden your
understanding of the business

Coaching and training designed to improve your technical and managerial skills

Networking opportunities—assigning you to cross-functional teams whose members include managers


and technical professionals from other departments

Discussing career development with your boss may be premature if you are new at your job. But once
you've gotten a handle on your work and demonstrated good performance, make it part of your ongoing
conversation.
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Find a Mentor

The word mentor comes from Homer's Iliad and refers to the role of trusted advisor that Mentor played
to Telemachus while his father, Ulysses, was off fighting the Trojan War. In the organizational world, a
mentor is someone who volunteers to help someone else, usually a younger person, master his trade,
develop his career, and negotiate the politics of the enterprise. A good mentor acts as a role model,
offers advice, provides introductions to the right people, and, in some cases, provides political
protection for his or her protégé.

Do you have a mentor? If you don't, start looking for one. But don't look to your boss for this role. He or
she is in a judgmental position over you and has the power to reward or punish. Look instead to a
former boss or other high-placed executive with whom you have a good relationship to fill this role. That
person should be successful and respected within the organization.

The right mentor can help you navigate in your organization or industry and help you avoid missteps
that would reflect badly on you. Many people feel more comfortable exposing areas of weakness or
ignorance to their mentors than their bosses. It can be very useful to get the perspective of a senior
person who is not your boss, who is not invested in your short-term results.

--------------------------------------------------------------------------------

RECAP

As a new manager, your most important workplace relationship is with your boss. To ensure that this
relationship gets off on the right foot, first identify your boss's goals and priorities, then figure out how
your work will support them. Once you've identified your boss's goals, focus on those that have top
priority. Talk with your boss about these priorities, which goals he or she wants to address first, and how
you can best address them.
Learn what your boss expects of you by discussing your goals with him or her. Keep talking until you
have clarity about what your boss sees as most important. Share your ideas with your boss and get
feedback on what's important. Communication is the best way to assure alignment between your boss's
priorities and yours. It is also important to know which aspects of your performance will be measured
and how this will be done. Get straight answers to these questions and ask for periodic feedback on how
well you are doing. Your boss will have a preferred style of control—tight or loose. You should
understand when you can act on your own and when you should obtain approval before acting.
Checking in periodically will increase your boss's confidence in your decision-making skills.

Ask your boss how she prefers to communicate with her subordinates: how much information does she
want, and when and how should you deliver it? Be sure to communicate bad news as well as good news.
If you feel you need more time with your boss, first determine if she is open to giving you more time and
able to do so. Seek to make the most of whatever time you have with your boss by planning that time
carefully and communicating your agenda in advance.

Finally, work with your boss to create a plan for your professional development through training
opportunities or challenging assignments. Add a selfdevelopment component to your 90-day plan to
solidify the skills you need in your current position. Actions that will help you advance in your career
include taking on projects that broaden your understanding of the business, coaching and training to
improve your technical and managerial skills, and networking opportunities.

Act as your personal mentor

REVIEW QUESTIONS

1. What is one way your boss can help you develop your management career?

Reduce your day-to-day responsibilities

Encourage you to become more specialized

Give you assignments that broaden your understanding of the business

1. (c)

2. Determine how much and in what form your boss prefers to receive:
workplace gossip.

the complaints of your subordinates.

industry updates.

information.

2. (d)

3. A new manager must get a realistic sense of the __________________his or her superior will allow.

independence of action

operating leverage

interpersonal conflict

number of failures

3. (a)

4. In terms of building a boss-subordinate relationship, it's important to understand how your


performance will be:

compensated.

criticized.

measured.

recorded in your personnel file.

4. (c)

5. The starting point for building a good working relationship with your boss is to:
demonstrate tough-mindedness.

spend as much time with your boss as possible.

understand your boss's goals and priorities.

keep your distance.

5. (c)

Chapter 3: Making the Most of Your Time

OVERVIEW

Learning Objectives

By the end of the chapter you should be able to:

Document how you currently allocate your time.

Prioritize your work in terms of key goals.

Be organized and efficient.

Identify and eliminate time-wasters in your workday.

Delegate effectively.

So much to do. So little time. Time may be the manager's most critical yet beleaguered asset. As scholar
Henry Mintzberg has told us (Mintzberg, 1990), managers work at an unrelenting pace. Their activities
are characterized by brevity, variety, and discontinuity. They are, indeed, pulled from one direction to
another, distracted by unanticipated emergencies, and scheduled to the hilt. They find that they have
more to do than they have time. In many cases, time pressure leads to stress and burnout.
Consequently, managers must learn to use the time they have to their best advantage; they must learn
to spend it as wisely as cash.

This chapter describes two ways in which new managers can make the most of their limited time: time
management and delegation. Though they are two very different activities and draw on different skills,
they address the same problem: having much to do and too little time. Managers are expected to
allocate the human, physical (plant and equipment), and financial resources under their control to their
highest and best uses. Since time—like capital— is a constraint on output potential, it makes sense to
treat it in a similar way. This leads to our definition of time management as the allocation of a limited
resource—available time—to its highest use.

HOW ARE YOU SPENDING YOUR TIME?

A good way to begin time management is to take a close look at how you are currently allocating your
time. How much time do you spend in meetings, talking on the telephone, coaching subordinates, and
planning your work? How many hours do you dedicate each day to paperwork and email
communications? Most time management experts recommend that you answer these questions by
creating what they call an activity log. An activity log, like the partial one shown in Exhibit 3-1, is a
detailed record of how you spent your time over the past week or several days. Notice how this log
lumps activities into general categories: email; planning; paperwork; meetings; and so forth. This
approach creates a record of the number of minutes expended in each activity. (The "Activity Priority"
column at the far right in the exhibit will be explained later.)

Accounting for every minute of the working day over a period of many days may seem an onerous and
time-wasting chore, but it is the only way to get an accurate picture of how much time you are spending
on particular activities.

Once you understand where your time is being spent, you'll be in a much better position to get control
of it—that is, to allocate time to the things that matter most to your managerial effectiveness, and to
waste as little as possible.

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Time Management Tip


When you create an activity log, record activities as they happen. Don't wait until the end of the day to
write down what you did and how much time you spent on each activity. You may remember the
scheduled meetings, and you may remember a two-hour lunch with a prospective customer, but you'll
probably forget half of the phone calls, interruptions, and impromptu conversations that happened in
the course of the day. So keep your activity log handy, and add to it as you end each activity.

--------------------------------------------------------------------------------

There are many approaches to time management, and many commercially available tools, such as daily
planning systems and training seminars. For our limited purposes here, we offer a simple and practical
three-step method: prioritize, organize, and eliminate time traps.

PRIORITIZE YOUR WORK

To be effective, time management must be aligned with your goals. Chances are that your boss has
given you several goals to work toward—either when you were hired or during your most recent
performance appraisal. Some of those goals are surely more important than others. Some are end goals
(for example, increase sales in your district by 15 percent this year) while others are "enablers" that
serve the end goals (for example, hire one new salesperson for the district team). Other goals, such as
"help employees create better work life balance," may be nice to have, but they are not essential to the
achievement of your main goals—at least in the short term. But don't be tempted to let them slip
entirely—they can escalate to critical importance. What would you do if your top salesperson
threatened to quit because she has no time with her family?

Exhibit 3-1: Activity Log Example

Time Activity Category Minutes Consumed Activity Priority

8:15 Email 12

8:27 Planning the day's activities 20

8:47 Informal meeting with boss: bonus plan 18

9:15 Formal meeting: w Shelly and Rob 30

9:45 Phone calls 8

9:53 Informal meeting: w Harvey 11

10:04 Paperwork: sales report 32

In managing your time, you must prioritize your activities, making sure that those that are aligned with
your most important goals have first call on your time. You don't want second-and third-tier goals to eat
up time that should be spent on higher-priority matters. Most people use an A-B-C system (with A being
the most important) to prioritize their work. If you have several top-priority things to accomplish within
each category, go a step further by prioritizing the As and Bs (for example, Al, A2, etc.).

Exercise 3-1: Prioritize Your Work

--------------------------------------------------------------------------------

Use the space below to prioritize your goals and related activities as either A, B, or C. If you have several
goals within each category, prioritize these.

"A" Goals: Critical to my success.



"B" Goals: Secondary in importance or enablers of my "A" goals.



"C" Goals: Nice to have, but the least important of the things I must accomplish.



Once you've prioritized your goals, allocate your time accordingly. This does not necessarily mean that
you should assign the majority of your time to one or more A-level goals; that might not be necessary or
wise. It simply means that as you make tradeoffs, you shouldn't allow lower-level goals to crowd out the
time you need to accomplish your A-level goals.

Use a paper or software day-planner when you allocate time among your specific goals and activities.
Begin with the A-level items. Once you've assigned them the time they require, move on to B-and C-
level items in that order until you've filled most of your calendar. We say "most" because every manager
needs a certain amount of slack time in the schedule to deal with problems and opportunities that
cannot be predicted. Only you can be the judge of how much slack time is appropriate.
Treat each day in your planner as a "to do" list. As you go through the day, make every effort to
complete every A-level item on the list. Avoid spending time on B-and C-level matters if doing so will
result in your failing to complete your A-level chores. Follow the wisdom of Benjamin Franklin, who
urged his readers to "Lose no time; be always employed in something useful; cut off all unnecessary
actions."

Now that you understand the importance of priorities in time management, revisit your activity log
sheet. By filling in the "Activity Priority" column, you can easily calculate the percentage of time you are
dedicating to A, B, and C level goals. Create one of these sheets over the next few days and then
determine if you're spending your time on the things that are most important.

--------------------------------------------------------------------------------

What About Urgent B-and C-Level Matters?

Don't be surprised to see your days filling up with urgent B-and C-level matters. Your administrative
assistant's mother has passed away; you should attend the wake. A new employee hasn't been paid
because of a glitch in the HR department; you need to fix this problem right away. Another manager
calls to say, "We have a job candidate coming in today for a second round of interviews. Could you
spend half an hour with her and give us an assessment? Say at 2 o'clock?"

Each of these matters is urgent, but none has a high priority in terms of your business. Strict adherence
to time management principles would move you to say, "Sorry, I must work on more important things."
The facts of organizational life and good judgment, however, dictate that you compromise between that
principle and those urgent issues. Slack time can help you do this.

--------------------------------------------------------------------------------

BE ORGANIZED AND EFFICIENT

Many of the things that managers do are routine and repetitive: responding to phone messages;
emailing the agenda for the weekly staff meeting; applying for travel and entertainment expense
reimbursements; submitting monthly reports to your boss; drafting annual employee performance
appraisals, and so forth. Most of these recurring activities are necessary and contribute to your success.
But they eat up a substantial portion of your limited time. Because they're recurring, you can leverage
time savings by being more organized and efficient in how you deal with these chores. Here are a few
ways to do that.

Eliminate routine and repetitive chores that add little value. For example, if you're spending too much
time reading unnecessary emails that your subordinates copy to you each day as a matter of course, tell
your people which communications you want to see and which you do not. Doing that can cut your
incoming email traffic in half! Also, if you're holding weekly staff meetings, try to determine whether
biweekly meetings would be just as effective.

Automate wherever possible. Develop word processing or spreadsheet templates for the recurring
reports you must develop and submit to others. Once you have templates, you can simply fill in the
empty sections—saving substantial time each month.

Handle it once. Get into the habit of disposing of incoming paperwork quickly. If a quick scan indicates
that it's unimportant, toss it. If it's important but not urgent, put it into a "to do later" file (that is, do it
when and if all your A-level chores are complete). If it's important, add it to your schedule.

ELIMINATE COMMON TIME TRAPS

Many of the time problems people experience are of their own making, the result of personal habits.
Some managers procrastinate; others cannot say no to requests; and just about everyone wastes time in
meetings.

Procrastination

Everyone procrastinates to one degree or another. What about you? If you take our advice and assign A,
B, and C priorities to your work, and then find from your activity log that you are taking care of the Bs
and Cs at the expense of A-level tasks, then you are procrastinating. If you are, ask why. Do you lack
confidence? Are those A-level tasks boring or unpleasant? Do they involve working with difficult people?
Whatever the reason, you must find it and overcome it. Otherwise, you will not be an effective manager.

Cannot Say No

Other managers take on more than they can handle, often from their bosses. "How can I say no to my
boss?" they complain. In other instances they observe things that should be done and, in the absence of
other volunteers, they step forward. "okay, I'll take care of it." Managers who behave in these ways are
quickly overscheduled, and their work output is either late or haphazard. High priority tasks are pushed
back on their calendars. People like this risk being busy rather than effective.

--------------------------------------------------------------------------------

Tip for Saying No to Your Boss

Before you instinctively accede to every request made by your boss, take a look at your schedule. Unless
you have slack in your schedule, anything you add to your list of obligations will be at the expense of
something else—probably things that your boss thinks are very important. So, give a little push-back
when the boss is piling it on. Say something like this: "Yes, I can take that off your hands. But if I do,
either X or Y will have to go onto the back burner for the next week. So, how would you like me to
prioritize these jobs?" This response will move important decisions about priorities onto your boss's
plate and help him or her understand that your time is not elastic.

--------------------------------------------------------------------------------

Meeting Mayhem

Depending on which research you believe, U.S. managers spend somewhere between one-third and
two-thirds of their working hours in meetings. That's a huge block of time. Unfortunately, many
meetings are time-wasters.

A full treatment of meeting management is beyond the scope of this chapter; however, you can save
tremendous amounts of time for yourself and your subordinates if you do the following:

Hold meetings only when they are necessary: when people need to (1) share ideas and information that
cannot be shared in other ways; (2) brainstorm a problem or opportunity; (3) solve a problem; (4) make
a decision; or (5) take collective action.
Invite only individuals who have something to contribute or gain.

Keep meetings as short as possible by sticking to an agenda.

End each meeting with an action plan with assigned responsibilities.

Meetings should always move the ball measurably forward and produce value to the organization
greater than their costs. (Go to the "Online Resources" section at the back of the course to find an
online tool for roughly calculating the cost of a meeting.)

--------------------------------------------------------------------------------

Does Your Boss Sometimes Disrespect Your Time?

Bosses are not always respectful of their subordinates' time. In some cases they ask people to attend
meetings that could be avoided. In others they divert subordinates from A-level to C-level tasks. They
sometimes fail to give clear instructions, resulting in work that must be redone.

And then there's the boss who impedes your ability to get things done by making himself the pinch-
point through which all your progress must pass. For example, you can't go to stage two of a project
until he's approved your work on stage one. But he's too busy to review what you've done in stage one,
or he's traveling for the next two weeks. So you wait and wait.

As a subordinate, it's not your job to second-guess your boss, but it is possible to avoid some time-
wasters if you respond tactfully to his or her requests. Consider these examples:

"How would you expect me to contribute to that meeting?"


"If I put the sales report on the back burner and shift over to the project you've suggested, I won't be
able to finish the report until next Thursday. Is that okay with you?"

"Before I tackle that assignment, let me first check my understanding of what you want done."

"My report on stage one of the project will be ready for you on Friday morning. Will you be able to read
it and give us feedback? Will that work with your schedule?"

Responses such as these are not insubordinate. They do not challenge the boss's judgment. They are,
however, subtle reminders that your time is valuable and that you have work priorities that, in the end,
are your boss's priorities. They give your boss an opportunity to rethink his or her requests.

--------------------------------------------------------------------------------

Exercise 3-2: Practice Fielding Requests

--------------------------------------------------------------------------------

What might you say to your boss in the following situations to help you manage your own time most
effectively?

Your boss asks you to sit in on a meeting with another department to discuss a project you are only
slightly familiar with.

_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________

Your boss's signature is required for a large software purchase for a time-sensitive project, but he
"hasn't gotten around to" reviewing the proposal.

_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________

DELEGATE EFFECTIVELY

One of the authors still recalls his first experience as an extremely low-level manager. It happened
during the second week of Army basic training. The platoon drill sergeant had picked him to be his
assistant—the platoon guide— and his first assignment seemed simple enough.

"Listen up," the sergeant barked. "There's some white paint down in the supply room. Get two cans of it
up here on the double!"

The platoon guide ran down to the supply room, grabbed two buckets of paint and raced back to the
sergeant's small office taking two stairs at a time. "Two cans of white paint, sergeant!"

The drill sergeant assumed an expression of mocking bemusement. "Private," he began calmly, "You
disappoint me. I said 'Get that paint up here on the double,' didn't I?"

"Yes, sergeant."
"But I didn't tell you to get it." His face reddened as he shouted, "You were supposed to get one of those
other guys to fetch the damn paint!"

The savvy sergeant taught a valuable lesson, which takes us back to the purpose of management: to get
results through people and other resources. Effective delegation will help you get those results and free
up the time you need to attend to tasks that only you as a manager can do.

Delegation is the process by which managers assign formal authority, responsibility, and accountability
for work activities to subordinates. The importance of effective delegation was underscored many years
ago by Lyndall Urwick (1944, 51), who observed that, "Without delegation, no organization can function
effectively." He also stressed that the inability of managers to delegate well is a general cause of failure
in organizations. This observation is, if anything, even more relevant in today's flatter organizations,
where managers have more demands on them than ever before. Assigning tasks to the appropriate staff
member has never been more important.

Delegation does not benefit managers alone. Subordinates also benefit. When you tell a subordinate,
"I'd like you to handle this for me," you are demonstrating trust, which motivates most people.
Delegating also provides subordinates with opportunities to learn and to do new things, both of which
motivate good employees.

Subordinates might not always welcome the idea of having more work put on their shoulders—
especially when the delegated tasks are boring, undesirable, or more than their schedules can handle.
Their concerns over delegated work can be overcome, however, when managers are thoughtful about
what and how often they delegate tasks to individual employees.

Think About It …

--------------------------------------------------------------------------------

If you were promoted to a new position tomorrow, which of your subordinates would be prepared to fill
your shoes? Does any one of them have the know-how and experience to fill the job you're doing right
now?
_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________

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Train Your Replacement

Some managers feel more secure knowing that none of their subordinates have the qualifications to
challenge them for their jobs. But that attitude often traps managers in their jobs, with few promotion
prospects. In these cases, top management says, "We'd like to promote Jones, but his department
couldn't function without him. It would take us 10 months to train someone or find a replacement on
the outside."

It is much wiser to use delegation as a tool to develop your staff. If you always set the agenda and lead
the staff meeting, ask a promising employee to take a crack at it once a month. If you always review the
raw materials order, teach a staff member to check its accuracy and discuss what to do in case of an
error. Let subordinates know when you want to have input, and try to make your involvement the
exception rather than the rule. Delegating effectively will not only increase your staff's capabilities: it
may free a pathway for your own promotion.

A Step-by-Step process for Delegating Correctly

What's the best way to delegate tasks? Most experts suggest the following fivestep process.

Step 1: Determine the appropriateness of delegating the task.


You're pressed for time and you'd like to delegate a part of your work to others. But first ask yourself,
should I delegate this task? Generally, you should consider delegating anything that your subordinates
are capable of handling. Examples of tasks you can delegate include:

Managing routine purchases and contact with suppliers; approving routine payments.

Preparing reports of a non-sensitive nature.

Deciding how to handle routine problems in the employee's daily job and implementing the decisions.

However, a few essential managerial activities should stay with you. These include:

Hiring, firing, and disciplining your direct reports.

Appraising the performance of people who report directly to you.

Tasks that have been delegated to you by someone else (by your boss, for example) with the
understanding that your unique skills are required to handle them correctly.

Decisions for which you have the ultimate responsibility.

Step 2: Identify the right person for the job.

As a general statement, the right person is whoever has the know-how and sense of responsibility to do
the job right—a person in whom you have confidence. And though you may find that several
subordinates meet that description, you can narrow the list by asking these questions:
Who has the time to do the job? You should avoid the "burnout" that comes from overloading a
subordinate. You should also avoid the temptation to repeatedly turn to the one or two reliable people
who do good work and don't push back when you ask them to help you out. They will soon notice that
they are working extra hard while their peers are putting the minimum effort. When that happens, their
enthusiasm and respect for you will diminish. So try to spread the work around as best you can.

Who would benefit from the job? If you're grooming someone for a promotion, delegating progressively
more challenging tasks is a good way to bring that person to a higher level. The best way to learn new
skills is to take on new assignments.

Who cares about the job? It's always smart to delegate a job to someone who has a stake in its
successful completion.

Exercise 3-3: Delegating Within Your Unit

--------------------------------------------------------------------------------

If you are a manager or supervisor, take a look at your current workload. Which tasks could reasonably
be delegated to a subordinate? Or turn the question on its head: What kinds of tasks are your various
subordinates capable of taking on? In the table below, list up to four of your subordinates, then indicate
the tasks you could reasonably delegate to each one. Also indicate any special guidance you'd need to
provide to assure their success. In the final row of the table, estimate the total time these several
delegations would save you. Then set a target date for assigning the biggest time saver you discover.

Subordinate Task(s) I Could Delegate to This Person Special Guidance I Should Provide

Silvia Organize the biweekly staff meeting Help her create a meeting checklist

Total time saved during the first week: _______________

Target date to delegate (task) _____________ to (person) _______________: ___________

Step 3: Explain the task and set goals.


once you decide what and to whom to delegate, talk to that person about the task. Explain what needs
to be done and when. Indicate the resources available to help with the task, and describe how you will
measure success. Then ask, "Do you have any questions about this?" "Do you foresee having any
problems with this assignment?" If the task is brand new to the employee, you may need to coach him
or her in procedures. But true delegation usually allows the employee to figure out how to accomplish
the task. Once all the issues are cleared up, arrange a time when you can meet to review progress or
final results. Finally, explain why the task is important in terms of unit goals.

Consider this example:

"Silvia, I think you should take a bigger role in coordinating the different project teams, so I have a small
job I'd like you to take over—running our biweekly staff meetings."

"What would that involve?" she asked.

"Well, let's think about that. You will need to prepare an agenda in advance. What will you need to do
that?"

"Hmmm. We always have reports or agenda items from the team leaders. I could poll them all a couple
of days before the meeting."

"That sounds like a good plan. And then you use the facilitation skills you learned in that workshop last
month to lead the session. And there's the logistical stuff."

"oh yeah. The agenda needs to be sent out the day before. And we need to reserve a conference room.
And snacks! Will we continue to hold these meetings at 9AM on the first and third Tuesdays of the
month?" Silvia asked.

"Exactly," said the boss. "And the minutes should be circulated by the following Monday. Once you've
done it once or twice it will be a snap. Just remember, your goal will be create the agenda, reserve the
room, remind everyone of the meeting, manage the meeting, and take and distribute meeting notes."
The manager then asked if Silvia understood and if she anticipated any problems with the assignment. "I
can't think of any," she replied, "but I'll let you know if I run into any."

"How about your own schedule?" he asked. "This chore will probably take three hours of your time
every other week. Can you handle that?"

"I'll squeeze it in," she responded.

"Fair enough," said her boss. "I appreciate your taking this on and I know that you'll do a great job, Silvia.
These meetings are important. It's one of the few occasions we have to get everyone together to share
information and ideas and to discuss problems. And I think this job will give you more opportunities to
interact with our team leaders. You can learn a lot from them. But just remember, Silvia, in taking on
this job, you'll own it. Agreed?"

"Agreed." Silvia and her boss then planned a time to talk about the assignment as well as topics for the
next bi-weekly meeting.

Step 4: Monitor progress.

As a manager, you routinely monitor employee performance, and the same applies to delegated tasks,
especially those that are newly assigned or unfamiliar to your subordinates. If they are stuck or going off
the tracks, it's best to find out right away. The earlier you catch a problem, the more quickly you can
intervene and apply coaching or other corrective actions.

For example, when Silvia and her boss reviewed how the first meetings had gone, the boss noted that
Ralph had added new discussion items during the middle of the meeting. Silvia said, "You know how
Ralph is. He just can't be bothered to tell me his agenda items in advance."
Her boss replied, "You work hard allocating time for discussion of the agenda items in these meetings.
You can't let Ralph hijack the session by not cooperating. How do you plan to handle this for the next
meeting?"

"I think I'll remind Ralph that I have been charged with setting the agenda in advance so that the group
can prepare their thoughts and bring any data necessary for each agenda item. And I'll let him know that
I hold the gavel and the group will not discuss unplanned topics."

Step 5: Evaluate performance.

once the delegated task is complete, step back and evaluate the person's performance. Was it up to
your expectations or did it fall short? Were the goals you communicated met, and did the staff member
meet the metrics of success you agreed on? If not, why not? How well the person performed should
influence your future delegating decisions. Naturally, good performance should be recognized in some
way. Depending on the size, importance, and duration of the task, recognition can range from a simple
"Well done!" and the assignment of even more interesting and challenging tasks, to an eventual
promotion.

RECAP

Time is the manager's most valuable resource, so it's important to use it wisely. The first step to
managing your time is to look closely at how you are currently allocating it. Creating an activity log over
the course of a day or a week will give you an accurate picture of how much time you spend on
particular activities (meetings, phone calls, email, paperwork) and put you in a better position to control
it.

Prioritizing, organizing, and eliminating time traps is an effective three-step time management system.
Prioritize your activities so that those that are aligned with your most important goals have first call on
your time. Organize by eliminating routine chores that add little value, automating wherever possible,
and handling paperwork once. Eliminate common time traps by becoming aware of how much time you
spend procrastinating, taking on more than you can handle by failing to say no, and attending meetings
that add little value to the organization.

Delegation is the key to gaining more time in your day. The five steps to effective delegation are:
determine the appropriateness of delegating the task, identify the right person for the job, explain the
task and set goals, monitor progress, and evaluate performance.
REVIEW QUESTIONS

1. Besides saving time for you, delegation can be used to:

punish slackers by giving them unpleasant assignments.

give subordinates opportunities to gain experience and develop new skills.

overload schedules.

shift unpleasant tasks from manager to subordinates.

1. (b)

2. Which of the following tasks should not be delegated a subordinate?

Meeting planning

Writing a report

Showing a new employee how to get onto the company intranet

Appraising the performance of people who report directly to you

2. (d)

3. Which tool helps you understand how you currently allocate your management time?
A sign-in sheet

A time-motion study

An appraisal review form

An activity log

3. (d)

4. A manager should not allow ____________________ to crowd out the time needed to accomplished
A-level goals.

procrastination

lower-level goals

valuable meetings

negative thinking

4. (b)

5. A common time trap at many companies is:

meetings.

activity logs.
prioritization.

goal alignment.

5. (a)

Part Two: Developing Your Management Skills

Chapter List

Chapter 4: Managing Without Authority

Chapter 5: Developing Your Leadership Style

Chapter 6: Planning and Setting Goals

Chapter 7: Work Processes and Continuous Improvement

Chapter 4: Managing Without Authority

OVERVIEW

Learning Objectives

By the end of this chapter you should be able to:

Identify your dependence on those around you, and their dependence on you.

Describe how you can increase your influence in the organization.

Describe the importance of persuasion as a management tool.


Describe the four elements that are the foundation of persuasion.

Many new managers believe that organizational authority is all they need to get things done. This is far
from true. In the contemporary workplace, authority usually counts for far less than the ability to
influence and to persuade others. Even people with tremendous organizational power discover that
their power does not give them a free hand in getting things done; they find that they are dependent on
the good will, support, and collaboration of others—including their subordinates.

Today's managers frequently find themselves in situations in which they have no organizational
authority, but must get things done. Consider the following real-life situation:

Sal is a mid-level manager in the marketing department of Quasartech, Inc., a young, fast-growing
Internet company. Its "product" is its website search engine, which makes it possible for users to locate
and gather information on small businesses throughout the United States that happen to be for sale. Its
goal is to build and operate a site that will help anyone interested in purchasing an existing small
business to (1) locate businesses for sale and (2) find information that will help them determine if they
want to investigate further. The company makes money by selling ad space on the site.

Sal's boss has asked him to be the leader of a cross-functional team of employees whose goal would be
to develop one aspect of the company's website. "We need to get more for-sale listings on the site," he
explained. "The more listings we have, the more people will be drawn to our site—and to the
advertising that pays the bills around here."

Sal accepted the assignment, and after some thought and discussion with others, drew up a list of
people whose skills and experiences would contribute to the success of his venture—the manager of the
client relations group, one of his peers in marketing, two people from the software engineering group,
and one salesperson. He determined that each person would spend two hours in meetings and five
hours in assigned tasks each week. He then went to the managers of those individuals and asked if they
could spare those people for the equivalent of a day each week for the next two months. With their
consent, Sal recruited the people he needed.

Unlike his direct subordinates, Sal had no authority over the people on the team. They didn't report to
him, and Sal wasn't in a position to provide them with promotions, salary increases, or bonuses. He
could not fire or even discipline them. If he ordered anyone to do anything, that person could correctly
reply, "I don't work for you, Sal." One team member, the client relations manager, actually enjoyed
higher organizational rank than Sal.

In order to succeed in the situation just described, Sal had to motivate people to work together toward a
common goal, and give it their best effort. If Sal relied exclusively on his organizational authority as a
manager, he would never be successful in getting his team members to satisfactorily complete their
task.

In today's team-oriented business culture, situations like Sal's are common, and managers must learn to
accomplish their goals without benefit of formal authority. But these are not the only situations in which
managing without authority is necessary. People like Sal—and like you—must enlist the support and
collaboration of peers and of people who outrank them. They must also deal with subordinates who
respect and respond to qualities other than formal authority. But what can a manager do in these
situations? This chapter will explain two concepts for managing when formal authority is absent or not
effective: influence and persuasion. But first, let's consider organizational dependency, a concept that
explains why the power of formal authority is so limited.

--------------------------------------------------------------------------------

The Matrix Organization

Some companies adopt a structure with centralized "operations" departments supporting separate
product development and sales departments. Advocates say that these so-called matrix organizations
allow organizations to act quickly and effectively. The matrix structure depends more on intracompany
collaboration and the ability of people to manage without formal authority than does the traditional
hierarchical structure.

Corporate Officers

Gizmos Widgets Knick-Knacks

Marketing

Manufacturing

When Flora from the Gizmos division approached Peter in Marketing for extra help on her upcoming
S'mores Griller launch, Peter replied, "I'd love to help you, but we are up to our eyeballs working on the
holiday figurines. Knick-Knacks budgeted this as a $30 million item this year." Because Peter reports to
the VP of Marketing, not to the Gizmos division, Flora cannot rely on her organizational authority to
change his mind.

DEPENDENCIES

Most employees depend on their bosses for all kinds of important things: pay raises, protection from
other powerful managers—even their jobs. This sense of dependence is based on long-established
notions about people with authority being in a dominant position relative to their employees, who are in
subservient, dependent positions. The dominance-dependence relationship can be found throughout
human history. The feudal system of the European Middle Ages, for example, was characterized by a
dominant ruling class and a subservient peasantry that worked the land owned by the masters.
However, even in this situation, dependency was a two-way street. The serfs depended on their feudal
masters for military protection from invaders, for justice, and for order; the masters, in turn, depended
on their serfs to produce the crops on which their wealth and privileges depended and to serve as foot
soldiers in war. Though the scales were tipped in favor of the ruling class, masters and serfs nevertheless
depended on each other.

We observe a similar two-way street in organizational life: employees are dependent on their bosses,
but those bosses—despite their authority—depend on the energy, efforts, and know-how of their
subordinates. And, just as in the feudal system where the barons depended on one another for trade
and mutual defense, managers participate in a complex network of interdependencies with their peers
in other departments, people of higher or lower rank throughout the organization, and outside contacts
such as vendors and customers. Managers who recognize their dependence on others are less inclined
to command, to order, or to threaten those who work for them, or to pull rank in cross-departmental
disagreements. They understand the limited utility of their formal authority and seek out other ways of
getting things done through people. They value the greater power of influence and persuasion, and they
work to develop these skills.

Exercise 4-1: What Are Your Dependencies?

--------------------------------------------------------------------------------

Who do you depend on to accomplish your assigned goals? Name two people in a different department
whom you rely on. Why do you think these individuals are willing to assist you?

I depend on (Peter, for Relationship (Peer, for For (Doing extra market Why? (I provide advance mock-ups
example) example) research, for example) for his focus groups)

1.
I depend on (Peter, for Relationship (Peer, for For (Doing extra market Why? (I provide advance mock-ups
example) example) research, for example) for his focus groups)

2.

Now, switch gears and list people who depend on you. Again, list your work relationships with those
individuals, and the nature of their dependency on you. Why are you willing to help these people?

Depend on me Sales Relationship For Super rush product Why? They say good things about me to upper
team Peer delivery management

1.

2.

INFLUENCE

Recognition of one's dependencies is a first step in managing without authority. That recognition
clarifies the need to enlist the collaboration of others in achieving organizational goals. Successful
managers enlist collaboration through the application of personal influence, which we define as a
person's ability to alter the behavior of others without recourse to the power to command. If we think
about it, each of us can trace some aspects of our behavior to the influence of others. We may work late
on some days, not because we were ordered to do so, but because our work team expects a task to be
completed by the next morning. We may take up some civic cause because of the influence of a
neighbor whom we admire.

Influence is present in many situations, from the settlement of disputes to the assignment of a plum
project. We see many similar situations in the workplace. Consider this example:

Helen, a powerful executive, is pushing to establish a branch office in Winnipeg, Canada. Mike, the VP of
Sales, thinks the numbers supporting the proposal are a little weak, but he has decided not to oppose
the plan. "Helen's intuition has been right before—the Manitoba office has been a big success. And
Helen has the CEO's ear on a lot of issues that affect me and the sales force," Mike tells himself. "I can
live with the Winnipeg office, and I need Helen as a partner, not an adversary."

Power often lurks in the background of influence. As President Theodore Roosevelt famously said,
"Speak softly, but carry a big stick." The power hidden behind softly spoken words can influence others
to take a particular course of action. For example, you may use influencing tactics to get an employee to
take on a new assignment—by explaining how it will benefit her career development, or by appealing to
her team spirit—but the fact remains that you are her boss and could conceivably order her to take the
assignment.
--------------------------------------------------------------------------------

Use Power Only When You Must

Even when a manager has the power to enforce certain behaviors by subordinates, he or she should try
first to achieve the desired ends through the application of influence and persuasion. This is because the
direct application of organizational power leads to a grudging, half-hearted response. People do not like
being ordered about. They are embittered by the recognition of their own powerlessness. And they will
seek opportunities to turn the tables, to sabotage, or to withhold their best effort.

Think of organizational power as a last resort. Once you have used it, you have nowhere to go. If it fails,
you are out of alternatives. Even if you succeed in gaining compliance, you will have no way to ratchet
up your demands.

As a manager, you will find a few times when the direct application of your organizational power is
necessary: in a crisis, for example, or when you must settle a disagreement between to two
uncompromising subordinates. So save the power you have for those rare occasions; don't dissipate it in
situations where persuasion or influence can accomplish the same end.

--------------------------------------------------------------------------------

Increasing Influence

Because of its usefulness as a tool for managing without authority, a manager should actively take steps
to increase his or her influence in the organization. Aside from gaining influence by gathering more
organizational power, there are several ways to do this. It's useful to think of influence as based on
personal attributes including trustworthiness, reliability, and assertiveness. Cultivating these attributes
will not in itself increase your influence, but without them, you cannot be influential.

Trustworthiness

Trust is a condition that gives us confidence in the character, ability, or truthfulness of someone else. In
a business context, trust is something that's earned over time by:
Telling the truth, no matter now painful.

Delivering both the good news and the bad.

Taking responsibility for our mistakes.

Identifying the upside and downside potential of our suggestions.

Recognizing the value of ideas that compete with our own.

Giving careful thought and analysis to our proposals.

Providing decision makers with the information they need to make wise choices.

Putting organizational goals above our own.

Respecting confidentiality.

Having the courage to say "I don't know" when appropriate.

Reliability

In the workplace, reliability is a personal quality that gives others confidence in saying or thinking, "I can
count on that person to follow through." Not everyone has a reputation for reliability; those who lack it
have little ability to influence others.
Like trust, a reputation for reliability is developed over time. Start developing yours today by:

Never making promises you cannot or will not keep.

Remembering that decisions are ineffective in the absence of implementation (follow-through).

Not giving up when you encounter impediments.

Keeping all your agreements, large and small (this includes being on time for appointments and
meetings).

Doing your research.

Assertiveness

Assertiveness is another foundation attribute of influential people. You will exercise little influence if
you allow others to push you aside, or if you simply keep your light under a basket. Sticking up for your
own interests in straightforward ways will earn you respect.

Besides cultivating the personal attributes of influential people, there are other behaviors that will
increase your influence at the office.

Enlist the power of reciprocity. Reciprocity refers to the giving of something in return for receiving
something. The old phrase "I'll scratch your back if you'll scratch mine" is based on positive reciprocity.
Reciprocity is a powerful force in human society, one that extends to the workplace. A person who
receives a favor feels an obligation to repay it in some way—to reciprocate. Thus, every time you do a
favor for someone at work—your boss, peers, and subordinates—you add to your "accounts
receivable," or influence.
Develop and demonstrate expertise. Special knowledge or expertise in an area deemed important by
the organization is another source of influence. What expertise is important in your organization?
Technology? Customer understanding? An ability to re-engineer work processes to make them faster
and cheaper? A relationship with a key supplier? Whatever it is, if you are the master of that critical
expertise—the "go to" person—you will have influence. So build expertise in something that matters.

Create dependencies. As we discussed earlier, the people on whom others depend have influence. For
example, if your boss depends on you for generating the production output that makes her look good to
senior management (and earns her a bonus), you have some influence over your boss. As you create
dependencies within your workplace network, you will gain organizational influence.

Think About It …

--------------------------------------------------------------------------------

Which people in your organization, operating unit, or department seem to have great influence?
Forgetting for a moment about the influence that comes with formal authority, explain the sources of
their influence. List two influential people below and indicate their source(s) of influence.

_____________________________________________________________________________________
________________________

_____________________________________________________________________________________
________________________

Can you think of one person whose influence can be credited to his or her personal attributes? To the
power of reciprocity, expertise, or the dependencies of others? Please explain.

_____________________________________________________________________________________
________________________
_____________________________________________________________________________________
________________________

_____________________________________________________________________________________
________________________

_____________________________________________________________________________________
________________________

PERSUASION

One of the most powerful ways to influence others is persuasion. Persuasion is the process of
communication that enables one person to alter the beliefs, attitudes, or actions of others. Salespeople
employ persuasive communication in their work with customers every day. Their goal is to get
customers to adopt a positive view of a product or service, to see its benefits to them, and to act by
placing an order. If you're thinking, "That's fine for salespeople, but I'm not a salesperson, I'm a
manager!" think again. You must learn to sell your ideas to your peers, your boss, and your
subordinates. You must convince them that your ideas are not only sensible, but in their interests. And
you must persuade them to act on those ideas. Successful managers do this all the time. Those
managers are less apt to command or compel than to persuade those with whom they work.

If you keep your eyes open for it, you'll see persuasion applied around you every day. It's so
commonplace that we often don't think about it. Yet it is essential to getting things done in the
workplace.

Exercise 4-2: Your Experience with Persuasion

--------------------------------------------------------------------------------

Look back over the past few weeks and identify three situations in which you or someone you work with
used persuasive communication. Indicate the goal of that communication. Finally, note whether the
persuader was successful; if not, why not?

Persuaders Goal Successful? (Yes or No) If not, why not?

1.
Persuaders Goal Successful? (Yes or No) If not, why not?

2.

3.

THE FOUNDATIONS OF PERSUASION

Like a building, effective persuasion rests on a solid foundation: a combination of trust, understanding of
others, a credible case, and persuasive language (Exhibit 4-1).

Trust

We've covered this territory earlier in the chapter. Being seen as trustworthy is a key personal attribute
of influential people, and it is absolutely critical to anyone who aims to persuade others to his point of
view. It's difficult to persuade people of anything if they do not trust us. Even if we were to tell them
that the sky is blue, they might not be persuaded because they don't trust us.

Exhibit 4-1: The Foundations of Persuasion

Would you be persuaded to accept someone's sales forecast if you thought that person wasn't
knowledgeable about the subject, or was using sloppy forecasting methods, or was trying to pull the
wool over your eyes? Would you enter into a negotiated agreement with someone whom you did not
trust to carry out her end of the bargain? Absolutely not! Anyone who aims to persuade in the absence
of trust faces an uphill climb.

We trust people when we believe that:


They speak the truth.

They respect or safeguard our interests.

They know what they're talking about.

They are sincere in what they say to us.

They have been reliable in the past.

They will not disclose confidential information.

If asked, would your coworkers say that you have these trust-inspiring qualities? If they wouldn't, you
need to do some rebuilding if you want to be a persuader. The following six "tips" are things you can do
today and every day to inspire trust in those around you.

--------------------------------------------------------------------------------

Tips for Establishing Trust

Always keep on the right side of the truth in your dealings with others. Lies, even little ones, have a way
of being found out.

Make an effort to understand the interests of others; then demonstrate respect for those interests.
Never talk off the top of your head about serious business; instead, develop expertise in the subjects
you deal with.

Be sincere in your dealings—not a phony. Few things are as annoying and as difficult to disguise as false
sincerity.

Cultivate a reputation as a person whom others can count on when the chips are down. If you agree to
do something, always follow through.

Learn how to keep confidences. People are more inclined to trust a person who will not share sensitive
information with others without first asking permission to do so.

If you follow this advice you will develop a reputation as a trustworthy person, and that reputation will
enhance your persuasiveness in all aspects of work and life.

--------------------------------------------------------------------------------

Exercise 4-3: How Trustworthy Are You?

--------------------------------------------------------------------------------

Use a scale of 1 to 5 to answer the following questions and determine whether you can be considered
trustworthy; 1 represents the lowest level of trustworthiness and 5 the highest level.

Do you always tell the truth in your dealings with others? ___________
Do you make an effort to understand and respect the interests of others? ___________

Do you speak from expertise in the subjects you deal with? ___________

Are you sincere in your dealings? ___________

When you agree to do something, do you always follow through? ___________

Do you keep confidences? ___________

--------------------------------------------------------------------------------

Understanding

You'll also be more persuasive in your communications as you come to understand the people you're
trying to influence. It's intuitively obvious that the more you know about someone, his interests,
viewpoints, and needs, the more successful you'll be in communicating persuasively with that person.
You'll be prepared to deliver your message in a manner that addresses those needs in a positive way.

You can learn a great deal about the needs of others by simply asking questions. For example, a sharp
car salesman won't just point a potential customer to the back lot and hope she finds something she
likes. He'll ask questions first:

"What are you driving now? Do you like it?"

"How large is your family?"

"Are you interested in gasoline efficiency and safety?


"Speed and pick-up?"

"Do you haul a boat?"

You get the idea. Understanding your audience before you try to persuade them is common sense. If, for
example, you aim to persuade your boss and coworkers to adopt a new process for handling an essential
office routine, try to understand:

How attached are individual coworkers to the current process?

How would the change you propose affect them—both negatively and positively?

Who, if anyone, would resist the change, and why?

Who, if anyone, would strongly support the change and, perhaps, become your ally?

If you think about the interests of the people you aim to persuade, you'll be in a better position to bring
them around to your point of view.

Understanding the people you aim to persuade includes understanding how decisions are made. This is
important because persuasion usually aims to influence a particular decision: a change in the work
schedule or process, which new office technology should be purchased, how bonuses will be allocated,
and so forth. So, before you try to persuade anyone of anything, determine how the decision that
concerns you will be made. Will it be made by your boss or by your boss's boss? Does the decision
require agreement among members of a committee?

Typically, lower-level managers are allowed to decide on the small local issues, while bigger decisions
are pushed up the chain of command to more senior managers, the executive team, the CEo, or even to
the board of directors. In some departments, project or work teams can make decisions up to a certain
level. When decisions affect many people or departments, a committee usually has the final say—and
that committee may seek input and advice from specialists. For example, within large corporations,
recommendations on salaries and bonuses for senior managers are generally made by board-level
compensation committees. Those committees seek input from the finance department, the human
resources department, and in many instances, from compensation consultants.

--------------------------------------------------------------------------------

Identifying Key Decision Makers and the People Who Influence Them

Once you understand how decisions are made, the persuader's next task is to identify the key players
and thought leaders. Thought leaders are the people whom others listen to when important matters are
on the table. These "centers of influence" may have organizational authority—such as a supervisor or
manager—technical expertise, or just the kind of good sense that commands respect from others. They
may not make decisions, but they influence the people who do. Decision makers listen to these thought
leaders.

Key decision makers and thought leaders are the people on whom you should focus your persuasive
communication. Just be careful; the person you assume to be the decision maker may be highly
influenced by one or more people you wouldn't expect. Consider this example:

Imagine that you are the IT manager of a mid-sized mail-order company. Julia manages the customer
service department; her employees are very comfortable with the old telecommunications system, but
you think it should be replaced to reduce maintenance costs. Bob and Samantha, Julia's direct reports,
supervise the other 15 people in the department and try to assure that their work follows the game plan
and is highly efficient. You would probably tell yourself, "Julia's the decision maker, but she'll likely
consult with Bob and Samantha on something like this." And you would probably be right. But don't
accept the obvious; try to find out who else will influence the decision.

In this case, you might discover that Eugene, the head of tech support, is a major influence. Stan, the
chief financial officer, would also be likely to influence the decision. Actually, since Stan is the person
who must authorize payment for the new system, he, and not Julia, may be the real decision maker.

--------------------------------------------------------------------------------
A Credible Case

The third foundation of successful persuasion is a credible case, based on logic and supported with
evidence. People have trouble saying no to logical arguments and evidence. Consider the following
example.

When Sarah approached her boss with a proposal for a flexible work schedule, she planned her talking
points carefully. "Working from home will allow me to give my full attention to my work. As you know,
the kind of keyboarding I do requires intense concentration, and there are always interruptions here in
the office. Besides, if I don't have that hour-long commute to the office, I can get started earlier in the
day and do the team's work planning and assignments before anyone else even gets in."

"But what about distractions at home?" asked Dick. "Won't you be tempted by things around the
house?"

"I have an office over the garage—it's separate from the house, so I wouldn't go into the main house
except at lunchtime. And my mother-in-law lives in an apartment in my house, so if one of the kids is
home sick she can take care of them."

By building a credible, logical case for her proposal, Sarah had countered each of the objections she
knew that her boss would bring up. So, in the end, he agreed to try out her suggestion. "How could I say
no," he told himself. "She had thought through the important issues and developed a plan I couldn't
disagree with." This example underscores the importance of something discussed earlier—
understanding the people you aim to persuade. Sarah understood her boss's concerns and how he was
likely to respond to her plan. She used that understanding to create a logical argument in favor of her
revised work situation.

It's easy for people to be dismissive of persuasive efforts when the would be persuader hasn't done his
homework—that is, hasn't developed a solid, fact-based case. This is especially true when a proposal
requires people to change what they are doing or take a calculated risk. But as the previous story makes
clear, fair-minded people find it difficult to say no to things that are logical and valuable.
Too many people fail to give proper attention to this third building block of persuasion. They have an
idea that makes sense to them, but don't take the time to see it from the perspective of the people
whose approval and collaboration they need.

--------------------------------------------------------------------------------

Tips for Building a Credible Case

Check your assumptions. Think through the things that must happen for your idea to succeed: a change
in the work routine, an increase in the budget, training of personnel, and so forth. Be sure that your
assumptions are reasonable and that your audience will agree that they are reasonable.

Think of feasible alternatives to your idea, as well their strengths and weaknesses. That way if someone
says, "We should do it this way instead," you'll be prepared to point out the shortcomings of that
alternative or adopt some of its strong points.

Develop a contingency plan. A contingency plan identifies actions that can be taken if your idea doesn't
work. For example, "We'll keep the old telecom system online for several weeks as a backup. That way,
if the new system has bugs, we'll still be able to communicate while we work them out."

Obtain endorsements for your case. When people see endorsements or testimonials from people they
know and respect, they are more likely to open their minds to your idea. "This new telecom system will
improve our productivity. But don't just take my word for it. Here's a list of companies that have been
using the same system for one or more years; let's contact a few of them."

--------------------------------------------------------------------------------

Exercise 4-4: Persuading Your Boss


--------------------------------------------------------------------------------

Imagine that you want to take one week off to attend an industry conference. You believe that doing so
will make you more knowledgeable about the direction in which the industry is heading and also
strengthen your network of industry contacts. How can you build a credible case to convince your boss?
Before you try to persuade her of the merits of your idea alone, do the following: List three concerns or
objections that your boss might have to this arrangement; for each, indicate how you would respond to
those concerns/objections in persuading your boss.

Boss's Concerns/Objections How I Would Respond

1.

2.

3.

Persuasive Language

The three building blocks just described are necessary but insufficient for success in most cases of
persuasion. They may get you close to the finish line but you'll need one more thing to carry you over—
persuasive language. You need language that addresses the head (logic) in some cases, and the heart
(emotions) in others—and in some cases, both.

Head language is usually most appropriate when the decision hinges on quantifiable information, and
when the people involved are analytical and data-oriented—accountants, engineers, strategic planners,
stock analysts, and so forth. Head language appeals to the logical mind, which demands reliable
evidence. A manager negotiating salary with a new hire, for example, will use industry information, local
cost-of-living data, and competitiveness analysis to explain his offer. He will support his case with factual
information: "Yes, I know that salaries are much higher in New York, where you're currently working,
but here in Indianapolis the cost of living is about 17 percent less, and salaries reflect that."

In some cases, however, persuasion is more effective when it speaks to the heart. Every great public
speaker understands the power of an emotional appeal. Consider Winston Churchill's famous broadcast
to the British people in the early days of World War II, when their army had been defeated in France and
the island nation stood alone against the more powerful forces of Nazi Germany. Churchill did not cite
dull statistics to his listeners. Instead, he spoke to their hearts, evoking the emotional courage they
would need to carry on during the months ahead.
Even though large tracts of Europe and many old and famous states have fallen or may fall into the grip
of the Gestapo and all the odious apparatus of Nazi rule, we shall not flag or fail.

We shall go on to the end, we shall fight in France, we shall fight on the seas and oceans, we shall fight
with growing confidence and growing strength in the air, we shall defend our island, whatever the cost
may be. We shall fight on the beaches, we shall fight on the landing grounds, we shall fight in the fields
and in the streets, we shall fight in the hills; we shall never surrender…

In some cases, a successful appeal to the heart will outweigh whatever weaknesses the logical case may
have.

Persuasive language also emphasizes benefits. Every salesperson knows the difference between
features and benefits. When someone says "This computer has a 2.33 megahertz processor and a VereX
bus," that person is describing features. Features are necessary in that they set the groundwork. You
should communicate them, especially if your audience is technically oriented, or if the discussion calls
for a full airing of the details. But many people are persuaded by benefits, not features. Here are some
examples of persuasive speech that emphasize benefits:

"Because this is such a fast computer (feature), you won't be sitting there waiting and waiting (benefit).
And we all hate waiting…"

"If we adopt the new work process I've described (feature), we will improve employee productivity by
20 percent. And that will save our department $180,000 every year. That's money we could share
between our owners and employees (benefit)."

When speaking persuasively, be positive and affirmative in communicating your ideas.

Some people cannot make an unqualified statement. "I think that …" is their preferred opener to every
statement. If you're trying to persuade someone to adopt your view, don't say, "I think that …" You
might as well say, "I'm not sure, but …." These qualifications tell listeners that you may be wrong, or that
you lack confidence in your view, or that you're offering nothing but a personal opinion.
Qualified Statement Affirmative Statement

"I think that my idea will increase sales." "Sales will increase when we implement my idea."

"I think that we should change our process." "We must change our process in order to reach our productivity goal."

If you have built a credible case, you can make affirmative statements with confidence, and your
confidence will inspire confidence in your listeners.

Also, minimize the use of "if." "If we manage to change our process, productivity will improve." This is
another qualifier. Instead, be affirmative and say something like this: "When we change the process …"
or "Once we've changed the process, productivity will improve."

What are your sources of influence? Whatever they are, use your influence as you would your formal
authority as a manager—that is, use it sparingly and wisely. Think of your influence as a work in
progress: it is always being either enhanced or undermined by your actions, and it is only as strong as
your most recent behavior. Using your influence unfairly or for the wrong ends will only destroy it. Once
destroyed, it is almost impossible to rebuild.

RECAP

Managers often find themselves in situations where they must produce results through other people
over whom they have no power or authority. Even when they do have authority, their dependence on
others limits their ability to exercise it. In these cases, the ability to persuade and to influence can help
them get the job done.

Influence is a tool that managers can use to accomplish their goals when they lack organizational
authority. Influence refers to a person's ability to alter or affect the behavior of others without recourse
to the power to command. Managers can increase their influence by cultivating the personal attributes
of influential people: trustworthiness, reliability, and assertiveness.

Persuasion is a communication process through which we alter or affect the attitudes, beliefs, or actions
of others. The four building blocks of persuasion are trust, understanding, a credible case, and
persuasive language. To build trust, always behave in a trustworthy way. Increase your understanding of
the people you are trying to persuade; you should also become aware of how decisions are made in
your organization, and identify the key decision makers for the decision you are trying to influence. Build
a credible case by checking your assumptions, being aware of alternatives to your idea, developing a
contingency plan, and obtaining endorsements from others. Finally, to be successful in persuasion, use
the language of persuasion. Emphasize the benefits of your proposal; speak to both the intellect and the
emotions; use positive, definite language— and, when possible, cite endorsements from others.
REVIEW QUESTIONS

1. A person can increase his or her influence by:

being punctual.

exercising formal authority whenever possible.

allowing others to lead.

developing and demonstrating expertise.

1. (d)

2. A communicative process through which we alter or affect the attitudes, beliefs, or actions of others
is called:

dialogue.

debate.

contingency planning.

persuasion.

2. (d)

3. Trust is:
confidence in a person's character or truthfulness.

a product of a person's receptivity to particular ideas.

communication that harmonizes beliefs.

a key element in planning.

3. (a)

4. Which of the following is one of the three building blocks of persuasion, as described in this chapter?

The ability to speak and write well

Understanding the people you aim to persuade

Organizational authority

Control over resources

4. (b)

5. Managers who recognize their_____________ others are less inclined to command, to order, to
threaten those who work for them.

authority over

dependencies on
power relative to

equality with

5. (b)

Chapter 5: Developing Your Leadership Style

OVERVIEW

Learning Objectives

By the end of this chapter you should be able to:

Describe the evolving theories of leadership.

Explain the concept of flexible leadership.

Describe the role of the manager in leading change.

List the key change management steps.

There is more to a manager's job than planning, organizing, staffing, and controlling his or her group or
unit. A manager must also lead. Leading involves influencing others to voluntarily accomplish a mission.

There are important differences between leading and managing. The authors like to sum up those
differences as follows: Managers assure that people are doing things right. Leaders, on the other hand,
are concerned that people are doing the right things. Managers make sure that the trains are running on
time. Leaders think beyond the administration of current tasks to objectives that will assure the
organization's future survival and success. They expand the train tracks into new, unserved territory.
Once leaders identify important objectives, they influence others to work toward them. They show the
way forward.

The contrasting vocabularies associated with these two related activities may help you appreciate the
difference between managing and leading:

Managers Leaders

Short-term Long-term

What Why

Direct Inspire

Implement Innovate

Focus Envision

Objectives Aspirations

As a new manager, you must develop leadership capability. This chapter will get you started. It will
briefly expose you to the traits theory of leadership, but quickly move to more practical concepts that
will help you develop a successful "style" of leadership. Finally, we'll consider the leader as change
agent, evaluate when that role is appropriate, and explore what the leader must do to make change
successful.

EVOLVING THEORIES OF LEADERSHIP

Few subjects in the business world have inspired so many speeches, articles, books, and research
initiatives as leadership. This interest is not new. Our fascination with leaders can be traced back to the
earliest literature, which gave us tribal leaders and heroes such as Odysseus, Moses, Beowulf, and El Cid.
In telling the tales of their times, poets and historians of every age have spent most of their ink on great
leaders. This persisted into the nineteenth century, when writers such as Francis Parkman and William
Prescott—the first generation of American historians—painted vivid portraits of the men and women
whose leadership and actions shaped their times and the Western hemisphere in which they lived:
Champlain, LaSalle, Cortes, Pizarro, and others. They continued the tradition of focusing on heroic
leaders.
As the social and psychological sciences developed in the twentieth century, academic researchers took
up where the historians left off. But they focused on traits, the unique personal features that set leaders
apart: their self-confidence, imagination, vision, rhetorical skills, energy, determination, and physical
prowess, among others. This line of inquiry gradually gave way to studies of what leaders do. For
example, they:

Create a vision of the future that others willingly adopt.

Articulate what others strongly feel but have not found the words to express.

Look beyond current boundaries to new possibilities.

Behave in ways that are consistent with their words and ideals.

Successfully challenge others to "stretch" to new levels of achievement.

That line of scholarship eventually morphed into the study of leadership "style," the core of this chapter.
Here are a few examples of leadership styles.

Authoritarian, or autocratic leader. This individual makes all the decisions, and tells people what to do
and how to do it. In the political world, the iron-fisted Soviet leader Joseph Stalin was an extreme model
of this leadership style. People who opposed or deviated from his rule usually disappeared.

Democratic leader. This leader ultimately calls the shots but encourages participation in decision making
and planning. "I would welcome your thoughts about this issue before I make a decision."

Delegating leader. The delegating leader sets priorities and standards and encourages others to find
ways to meet them. This is reminiscent of the advice of Lao Tzu, the sixth-century BCE philosopher: "To
lead the people, walk behind them."
Charismatic leader. The pioneering sociologist Max Weber used the term "charisma" to describe "a
certain quality of an individual personality, by virtue of which he is set apart from ordinary men and
treated as endowed with supernatural, superhuman, or at least specifically exceptional powers or
qualities" (Weber, 1947). Charismatic people lead through personal magnetism or the power of their
ideas. Charismatic leadership is more often observed in politics and religion than in the more practical
world of commerce, but we have famous examples of charismatic business leaders (for instance, Lee
Iacocca) who affected dramatic turnarounds or change within their organizations.

As a new manager, one of your greatest challenges will be the development of a leadership style that is
appropriate to the situations for which you are responsible, and to the people (followers) you are
required to lead.

FLEXIBLE LEADERSHIP

Flexible leadership is a leadership approach that presumes that different situations and different
subordinates call for different styles. Flexible leaders change their styles as the situation changes, telling
people what to do in some circumstances, asking for their contributions to a decision in others, and so
forth.

No Single Best Way

The notion of flexible, situation-based leadership goes back at least as early as the 1950s when Robert
Tannenbaum and Warren H. Schmidt published a now-classic article in the Harvard Business Review
entitled "How to Choose a Leadership Pattern" (Tannenbaum and Schmidt, 1958). As a testament to its
timeless relevance to managers, that article remains in print to this day. Tannenbaum and Schmidt
described a continuum like the one shown in Exhibit 5-1.

As you can see, as the manager's use of an authoritarian leadership style decreases (moving left to
right), a more democratic style prevails. Depending on the situation, a manager will apply more or less
formal authority. In a crisis situation, for example, she may decide what needs to be done and simply
announce it to her subordinates.

Exhibit 5-1: The Tannenbaum-Schmidt Leadership Continuum


We have a serious problem this morning. Our shipment of samples did not arrive at the Las Vegas trade
show, which opens tomorrow. If we don't get them there by morning, we could lose lots of potential
sales. So, Frank, call the warehouse and tell them to box up another shipment to the same address, this
time to be sent by FedEx. Tell the warehouse it's urgent and that they should pull out all the stops. Have
them call me if there are any questions.

The last pickup has already left the warehouse today, so Sharon and Ed, while Frank's doing that, take a
company vehicle and drive over to the warehouse. As soon as the shipment is packed, take it down to
the FedEx office and ask for next-morning delivery. Here's our account number. Do you understand?

This situation, which would fall on the far-left side of the continuum, called for rapid action and highly
directive leadership. There was no time to confer, to meet, or to ask for the input of others. The
manager had to tell people what to do! A different situation might call for a different leadership
approach, as in the following email from the same manager to her subordinates.

To: Trade show marketing staff

Subject: Upcoming Chicago Show

The Chicago trade show begins two months from today. Because this is such an important event, we've
reserved a double booth display area in a prime exhibit hall location. At this point we need to make
decisions about our display, which items we'll feature, and how many people from our group should be
on hand.
I've reserved the third-floor conference room for Tuesday, April 12, 10-12AM for an all-hands meeting.
Come prepared to share your ideas about the above. Everyone's contribution is welcome on this
important matter.

Here we have the same manager and the same staff, but the manager's tone and style is quite different,
isn't it? Instead of telling, she is welcoming participation from subordinates. This may be perfectly
appropriate, given the situation.

Exercise 5-1: Assessing Leadership Style

--------------------------------------------------------------------------------

Describe two situations where your boss demonstrated his leadership style. What were the issues?
Describe your boss's style in each situation, the degree to which he was telling you what to do or fully
delegating responsibility to you (low subordinate freedom versus high subordinate freedom), and, in
your view, whether that style seemed appropriate or effective.

Situation 1:
_____________________________________________________________________________________
________________________

Boss's style:
_____________________________________________________________________________________
______________________

How appropriate or effective, given the situation?

_____________________________________________________________________________________
____________________________________
_____________________________________________________________________________________
____________________________________

Situation 2:
_____________________________________________________________________________________
_________________________

Boss's style:
_____________________________________________________________________________________
________________________

How appropriate or effective, given the situation?

_____________________________________________________________________________________
____________________________________

_____________________________________________________________________________________
____________________________________

Now, looking back at Exhibit 5-1, where would you locate each of those styles on the leadership
continuum?

Situation 1:
_____________________________________________________________________________________
________________________

Situation 2:
_____________________________________________________________________________________
________________________
--------------------------------------------------------------------------------

Followers Matter

The notion that good leaders respond to situations was advanced further in the 1960s by Paul Hersey
and Ken Blanchard in Management of Organizational Behavior, which has remained popular for four
decades through many editions (Hersey, Blanchard, and Johnson, 2007). In its most recent edition, the
authors suggest managers consider another situational dimension: the performancereadiness of
followers, or subordinates. Performance readiness describes the training and commitment of
employees. Are they able to do the work undirected by their leaders? Are they unable but welcoming of
guidance.? Are they unsure of themselves but have a strong commitment to the organization's success?
Are they both competent and committed? The answers to these questions should determine where the
leader/manager positions himself on the leadership style continuum. As a manager, for instance, you
may be philosophically disposed to giving your subordinates a free hand in making important decisions
and implementing group initiatives—you'd prefer to be a democratic leader and practice participative
management. After all, that's probably how you would like to be led. But if your subordinates lack
experience or know-how, or if they are not particularly committed to the organization, such a well-
meaning, democratic style may produce a disaster!

Consider situations A and B:

Situation A: You've been assigned to manage a fast-food restaurant that's part of a national chain. The
company has spent years perfecting its blueprint for fast, economical operations. There's even an
operations manual that defines every step of running the restaurant and how every job should be
performed. With the exception of your assistant manager, all employees are either part-time or have
been with the restaurant for less than four months. Turnover is high. Most employees view their work as
routine and short-term and have no strong commitment to it. In these conditions, a highly directive
form of leadership is appropriate.

Situation B: You have a PhD in molecular biology and ten years of lab experience in pharmaceutical
research. You've recently changed tracks from pure research to management, and ten people work
under you. One is a secretarial-administrative person, the rest are all technical professionals with
academic credentials and lab experience equal to yours. All have a high level of commitment to their
craft; all could leave today and begin working in another lab tomorrow, yet they choose to remain at
your organization. What form of leadership is appropriate here?
Situations A and B are a world apart, aren't they? The fact that most workers in the fast-food restaurant
are newcomers and have little serious commitment to their work means that someone must direct
them—that is, tell them what to do. Operations are based on standardized routines that have been
perfected over the years; you won't want people independently deciding how to do their jobs. Situation
B couldn't be more different. There, highly skilled personnel understand their work and are
professionally dedicated to it. As the manager, you'd be most effective adopting a democratic leadership
style that invited greater decision-making participation by these lab workers.

--------------------------------------------------------------------------------

What Do Leaders Do?

The actions and behavior of leaders will vary depending on the context. Moving from left to right on the
leadership style continuum shown in Exhibit 5-1, flexible leaders will adapt to the circumstances they
face.

When the job must be closely defined or the employees cannot take on a high level of responsibility,
flexible leaders make the decisions and tell their subordinates what jobs should be done and supervise
them closely. Communication is mostly one way: boss to subordinate.

When tasks are less defined and employees are more motivated and long-tenured, leaders can rely
more on influence than on authority. They coach and persuade. Subordinates' suggestions are solicited,
and communication is two-way.

Moving along the continuum of higher employee freedom, when subordinates are allowed to make
routine decisions and solve local problems with oversight, the leader's behavior is supportive.

At the highest levels of knowledge of the work and employee empowerment, the flexible leader will
delegate. Subordinates are given much greater autonomy.
--------------------------------------------------------------------------------

As a manager, the important thing to take away from this section is the need to adapt your style of
leadership to both the work situation and to the preparation and commitment of your subordinates.
Both are liable to change over time, or perhaps in the course of a single day. So it's best not make a
habit of a particular leadership style—even one that's most comfortable for you.

Think About It …

--------------------------------------------------------------------------------

Take a moment to reflect on your leadership style and answer these questions.

Which style seems most appropriate today? Consider the nature of the work and the preparation and
commitment of those you are managing. List one or two reasons why you believe this style is most
appropriate now.

_____________________________________________________________________________________
_________________________
_____________________________________________________________________________________
_________________________

What can you do as a manager to increase the preparation and commitment of those you are leading?

_____________________________________________________________________________________
_______________________
_____________________________________________________________________________________
_______________________
How will your role as a manager change as you become more of a coach and a delegator? Think about
how you can support subordinates as they gain greater autonomy and take on more responsibility for
making decisions.

_____________________________________________________________________________________
_______________________
_____________________________________________________________________________________
_______________________

LEADING CHANGE

You will recall that our discussion of what leaders do included things such as creating a vision of the
future, looking beyond current boundaries to new possibilities, and challenging others to stretch to new
levels of achievement. Achieving success in new ventures—whether the vision is your own or it
originates higher up in the organization—requires that managers become adept at leading change.

This important role can be very challenging. Change is difficult for many people, both managers and
their subordinates. It upsets comfortable routines and interpersonal relationships, and challenges
everyone to learn new things. Because some people benefit from the status quo, they view change as a
threat—an enemy to their own well-being. They will resist change and attempt to undermine those who
support it. As Machiavelli warned readers in his Discourses in the sixteenth century:

… there is nothing more difficult to carry out, nor more doubtful of success, nor more dangerous to
handle, than to initiate a new order of things. For the reformer has enemies in all those who profit by
the old order.

Yet for all of its disruptions and perils, change is periodically necessary. All progress depends on it. For
business organizations, change is often necessary when something in the market environment changes:

A new, threatening competitor enters the market—as when Toyota and Honda entered the U.S. auto
market in the 1970s.

A superior technology is introduced—such as the appearance of digital imaging technology in the early
1980s, a period dominated by film photography.
Customer requirements change—such as McDonalds loss of business to competitors in the first years of
this century, when customer tastes shifted away from its standard hamburger and French fries menu.

An unexploited market opportunity is discovered—as happened when Apple discovered a huge


untapped market for portable, digital sound (iPod).

Companies that fail to respond to changes like these face serious consequences. Other changes seem
less cataclysmic, but their success or failure can make or break an organization. As a manager you might
be asked to lead or support one of these change initiatives:

The company must replace its customer database with a more robust and flexible tool that supports
new types of marketing initiatives. The information technology and customer service departments resist
the complex new program, and even the sponsoring marketing department does not truly understand
the scope of the change.

The organization is moving to a new building. No one, not even the executives, will have an office with a
door that closes.

In a company reorganization, two formerly competing departments are merged. No one is laid off, but
the groups are expected to work together and benefit from each other's experiences.

It requires thoughtful and careful planning to emerge successfully from a change initiative, whether it
originates from within the organization or is caused by upheavals in the environment.

KEY CHANGE MANAGEMENT STEPS

When change is essential, someone must lead it. Major organizational changes are led by key
executives, who are supported by implementation teams of mid-and lower-level managers. Smaller
changes may be confined to a department or work group, and led by the local manager. So there's every
possibility that you may need to lead change at some time in your career.

No matter what the scope of the change, managers typically must follow the same steps:
Correctly identify the problem and its solution.

Communicate the need for change.

Enlist support.

Create a workable plan.

Implement the plan.

Let's now look at these steps in detail.

Correctly Identify the Problem and Its Solution

It's easy to say "We're losing revenues and profits—something has to change!" Pinpointing the reason
for bad performance and its solution is usually more difficult. It might be weak products, a shrinking
pool of potential customers, greater competition, or poor internal management. Getting a handle on the
problem involves time, analysis, thought, and the input of people closest to the problem. Executives and
managers, who have a bird's-eye view of the business, often make the mistake of imposing their own
view of the problem and its solution. Doing so creates two problems:

Their assessment is likely to be wrong because they are removed from day-to-day operations and they
may have predetermined notions of causes and solutions.

Change imposed from the top is likely to generate resistance or apathy among those forced to
implement it.

You can mitigate these problems by giving employees a greater hand in identifying the problem and
crafting a solution.
Steve knew that his group had to improve time-to-market for its products and he thought he had a
pretty good idea of where the problem lay. However, rather than "solving the problem" by himself, he
asked a team of employees to look at the issue. The group conducted an analysis of the current
processes and found five major bottlenecks in addition to the one that Steve had identified. Trusting
their own discovery process, the group embraced the necessary changes and dramatically improved
time-to-market over the next six months.

Communicate the Need for Change

Leaders of most successful change initiatives create a sense of urgency around the change. After all, why
make the effort if there's no real need to change? Change initiatives are usually expensive, disruptive of
routines, and demand sacrifice. At the very least, they impose extra work. The best way to neutralize
those negatives and enlist support for a change initiative among employees is to communicate the need
for change. As a manager, you must articulate certain things:

"If we don't change, we'll all be hurt (because of layoffs, fewer promotions, smaller bonuses, and so
forth)." Paint a picture that will make sense to them.

"Change will be difficult, but we'll be better off as a result." People need to see a real benefit as the
outcome of the change.

Enlist Support

Change cannot be imposed. Collaboration is required at every level. So once you've communicated the
"what" and "why" of change to your subordinates, enlist their support. Start with the informal leaders
who exist in every organization and every department. You, for example, may be the formal leader of
your unit, but there are very likely one or more individuals who have substantial influence among your
subordinates, even though they have no formal authority. If you make these people your change allies,
many other people will fall in line.

When Steve was ready to remove the bottlenecks found by the team, he already had a cadre of
supporters. Members of the analysis team had already begun to talk with others about the issues, and
had started thinking of ways to address them.
Exercise 5-2: Leading Change

--------------------------------------------------------------------------------

Identify an important change that must be made in your organization. Perhaps your company relies on a
product technology that is being undermined by new developments; perhaps a near-religious dedication
to quality is needed. Whatever it is, describe the change you'd like to make in your company or your
unit.

_____________________________________________________________________________________
__________________________
_____________________________________________________________________________________
__________________________

Now, as the change leader, how would you communicate the need for change—and its benefits—to
other employees? What would you say?

_____________________________________________________________________________________
__________________________
_____________________________________________________________________________________
__________________________
_____________________________________________________________________________________
__________________________
_____________________________________________________________________________________
__________________________

Finally, which formal and informal leaders in your organization would have to be enlisted as supporters
in order for your plan to succeed?

_____________________________________________________________________________________
_________________________
_____________________________________________________________________________________
_________________________
_____________________________________________________________________________________
_________________________

--------------------------------------------------------------------------------

Create a Workable Plan

Using a clear understanding of the problem as your starting point, engage appropriate people in a plan
to solve it. "Appropriate" people are those who:

Are close to the problem.

Have a stake in its successful resolution.

Have some special talent or insight to contribute.

Will be asked to implement the change plan.

Again, you want to avoid any action that gives the appearance of an imposed change. People are much
more likely to implement a plan of their own making than one imposed by corporate headquarters.

Most change management experts warn against trying to change too much at once. Therefore, limit the
scope of your change plan; don't bite off more than you can chew. If you create success with a plan of
limited scope, people will be encouraged to take it a step or two further. If you try to change too much
and fail, no one will have the stomach for another attempt.

Your plan should also include clear milestones. For example, "By February 15, the design of the new
sales organization should be complete. By March 15 it should be approved by senior management."
Milestones help keep change initiatives on track.
Steve asked Brandi to convene a group to address the three worst "bottlenecks." Many of the team
members' jobs would be affected by the changes, but because they had been involved in defining the
problem and designing its solution, they were all highly committed to the effort's success. Brandi's team
proposed these milestones: Suggest new process map by July 1; Scope any changes to job descriptions
by July 15; Design training by August 15; New process tested and in place by September 15.

Implement the Plan

Implementation is usually the most difficult part of change management. Even with a correct diagnosis
of the issue, a strong and well-executed communication strategy, and a solid implementation plan, most
change efforts face challenges in the implementation phase.

The devil is in the details. It's easy to paint with a broad brush, but putting off dealing with the details
can cause big problems. It's all well and good to propose 24/7 customer service coverage, but who will
answer the phone at 3:00AM? And what about coverage for sick time and vacation?

Concepts are more palatable than reality. Often people who are on board with a plan for change grow
less enthusiastic when the amount of effort required from them becomes clear.

Costs and effort begin to add up. As the implementation progresses, costs to the organization or
individuals become apparent. The change effort itself can start to weigh heavily, as meetings and
training sessions add to the team's normal workload. This is one reason why it's important to plan some
"early wins" during your change effort.

Implementation is best handled by a team of people who have a keen interest in success, and who are
accountable for results. As a manager, you may be either a team participant or a team leader. If you are
the leader, a democratic style (as described above) is the surest way to get the most from your team
members.

After getting the go-ahead on their plan, Brandi's team began implementing the changes they had
designed. They decided to focus on one relatively easy fix first. This change was so successful, saving a
half-day in the overall process, that several employees who had complained about changes to their job
descriptions adopted a more open, wait-and-see attitude.
Leadership is a big, important issue for every manager's career. We've just scratched the surface of it
here. The notion of adapting your leadership style to the context and the people you must lead, as
described here, will get you off to a good start and serve you well throughout your career.

You can learn much more through reading and through direct observation. Develop a habit of reading
the biographies and autobiographies of important military, political, and business leaders. Also, observe
the habits and styles of effective leaders within your own company and community. You can learn a
great deal from them. And above all, practice. If your initial experiences in leadership roles are
disappointing or make you uncomfortable, don't be discouraged. Learn from those experiences and
keep trying.

RECAP

Developing an effective leadership style is critical to the success of a new manager. This begins with an
understanding of the differences between managing and leading: managers assure that people are
doing things right, and leaders are concerned that people are doing the right things.

Theories of leadership have evolved over time, from the study of individual leaders to a focus on
leadership traits and studies of what leaders do. We can now define four classic leadership styles:
authoritarian, democratic, delegating, and charismatic. Authoritarian leaders make all decisions and tell
people what to do and how to do it. Democratic leaders ultimately make decisions but encourage
participation in decision making and planning. Delegating leaders set priorities and standards and
encourage others to find ways to meet them. Charismatic leaders lead through personal magnetism or
the power of their ideas.

The most useful leadership style for new managers to adopt is a flexible one that is responsive to the
context, the situation, and the employees involved. Flexible leaders change their styles as the situation
changes, telling people what to do in some circumstances and asking for their contribution to a decision
in others. They recognize the need to adapt their style of leadership to both the work situation and to
the preparation and commitment of their subordinates.

One important leadership function is leading change. This important role can be challenging, as
organizational change alters existing processes and relationships and requires new learning for
everyone. A successful change management process involves five steps: identifying the problem and its
solution, communicating the need for change, enlisting support, creating a workable plan, and
implementing the plan.

REVIEW QUESTIONS

1. Which of the following is one of the steps that managers must follow in leading change?

Follow your instincts.

Communicate the need for change.

Raise emotions to a high level.

Try to change everything at once.

1. (b)

2. Hersey and Blanchard advance the theory of situational leadership by encouraging people consider
the ___________________________ of their followers or subordinates.

performance-readiness

intelligence

goals

intuition

2. (a)
3. A good situational leader is able to change leadership ___________ as the situation changes.

communication content

traits

style

rewards

3. (c)

4. In the twentieth century, academic research of leaders turned from the traits of leaders to studies of:

what leaders actually do.

how leaders are selected.

the training of future leaders.

charisma.

4. (a)

5. If the job of managers is to assure that people are doing things right, the job of a leader is to assure
that:

subordinates behave correctly in the right situations.


people focus on short-term goals.

people do the right things.

tasks are executed according to plan.

5. (c)

Chapter 6: Planning and Setting Goals

OVERVIEW

Learning Objectives

By the end of the chapter you should be able to:

Describe the strategic planning process and four generic strategy types.

Explain how operational planning is used to achieve strategic goals.

Describe the function of control plans.

Outline the characteristics of effective goals and how to formulate them.

As stated earlier in this course, one of the basic functions of management is planning. Effective planning
begins with organizational goals and moves progressively through strategic planning, operational
planning, and planning for control, as shown in Exhibit 6-1.
Goals for an organization represent its top-level aspirations—for example, to dominate its market and
provide a 15 percent return on shareholder equity, or to be the leading provider of software solutions
for financial institutions. The choice of top-level goals cannot be pulled out of a hat; goals must be based
on a realistic understanding of two things:

The external environment: competition, customer demand and expectations, the larger economy, and
so forth.

The internal environment: the firm's financial resources, business allies, core competencies, employee
skills, and weaknesses.

Notice the feedback loop in the exhibit between the "control" box and strategic and operational
planning. If actual results are contrary to plan, control sends a signal to management that it must revisit
its strategic and/or operational planning.

Exhibit 6-1: Elements of Planning


Adapted from What Managers Do, 4th
edition, page 31, by William R. Allen and Harold L. Gilmore, 1993. Used by permission of the publisher,
American Management Association, New York, New York. All rights reserved. www.amacombooks.org.

STRATEGIC PLANNING

Strategic planning defines how the organization will achieve its highest goals. Again, planning must be
informed by a realistic grasp of the external and internal environments, which strategic planners often
analyze in terms of "SWOT": strengths, weakness, opportunities, and threats.

Strategy describes how the business will differentiate itself from competitors in a way that imparts a
competitive market advantage. Differentiation is only effective if customers appreciate the difference,
and it is usually the only way to achieve above-average returns over the long run. Southwest Airlines, for
example, didn't try to copy the plans of United, Delta, Northwest, and other air carriers with full service,
a variety of aircraft, and hub-and-spoke routing. It differentiated itself with a no-frills, low-price strategy
that flew the same model aircraft from point to point. Thanks to that strategy, and Southwest's
attention to its human resources, the airline grew from a small, regional firm to a major carrier, the
most profitable firm in its industry.

Exercise 6-1: Strategic Differentiation


--------------------------------------------------------------------------------

Does your company attempt to strategically differentiate itself from its main competitors? Think about
this and then describe in your own words how it differentiates itself.

_____________________________________________________________________________________
___________________________________

_____________________________________________________________________________________
___________________________________

_____________________________________________________________________________________
___________________________________

_____________________________________________________________________________________
___________________________________

Now, answer this question: Does your company's strategic differentiation give it an advantage over
competitors?_________Explain your answer.

_____________________________________________________________________________________
___________________________________

_____________________________________________________________________________________
___________________________________

_____________________________________________________________________________________
___________________________________
--------------------------------------------------------------------------------

Strategic planning is carried out at the top of the organization, typically by a team that includes the CEO,
a board member (often the chairman), key stakeholders, such as the chief financial officer and VP of
Marketing, and staff. Large corporations employ vice presidents of planning (or development), who take
de facto leadership of the planning process.

A company can choose from an unlimited number of strategies. However, most of those strategies can
be lumped into one or another of the strategies described in the following sections.

Low Cost Leadership

To succeed, practitioners of this strategy must build an organization and operations that can deliver
goods or services at the lowest available cost. And they must work continually to reduce their operating
costs through greater internal efficiencies and distribution effectiveness, cost and salary controls, lower
cost of materials, and increased productivity.

Solid Customer Relationships

While some customers will always opt for the lowest price, others appreciate and will maintain
relationships with sellers they know and trust, and with sellers who go to great lengths to please them.
This explains why some small town retailers manage to stay in business when most people are driving
out to Walmart to get lower prices. This strategy succeeds when a company personalizes its contacts
with customers and learns how customers want to be served.

Product/Service Uniqueness or Quality

Some strategies aim to succeed in a special niche. The chosen niche may be small, but it allows a small
producer to exercise some market leadership and command a high price. For example, most acoustic
guitars are built today in factories and sell for between $500 and $3,000. Competition is stiff and
requires mass market producers to be highly efficient and accept modest profit margins. A small number
of artisans survive and prosper, however, by custom-building fine instruments using premium woods
and decorative inlays that guitar aficionados will gladly pay $5,000 to $12,000 to own and play. The
growth of the "micro-brew" beer industry is another example of strategy based on product uniqueness
or quality. If a significant number of people didn't value the quality or uniqueness of locally brewed
brands, the beer market would be totally dominated by three or four national producers.

Geographic Expansion

Since the ultimate end of strategy is to reap greater sales revenues and, eventually, profits, one
common strategy is to cast one's nets more broadly. Consider Staples, Costco, Home Depot, Starbucks,
Dunkin' Donuts, Whole Foods, and McDonalds. Revenues and profits for these companies grow to a
small degree through year-over-year store operations. They might crank out another 5 percent or 8
percent growth by attracting more people to existing stores, but to get the larger revenue/profit
number these companies aim for, they must expand geographically. Thus, we see companies creating
new outlets at a breakneck pace. Sometimes companies expand too quickly, as Starbucks did when it
increased its reach to encompass more than 8,500 company-owned stores and another 6,500 licensed
outlets in 2007. The global recession of 2008 reduced the number of people willing to spend $3.50 for a
cup of coffee. Starbucks' response to the changes in the external environment was a retreat to a smaller
number of outlets—effectively a change to a cost-cutting strategy.

Think About It …

--------------------------------------------------------------------------------

The number of different business strategies is almost infinite, yet most of them fall within one (or
sometimes two) of the general categories described here. Which type does your company follow?

_____________________________________________________________________________________
___________________________________

_____________________________________________________________________________________
___________________________________

OPERATIONAL PLANNING

Operational planning is a process that engages both senior and unit level managers in answering these
questions: What must we do to make our strategy work? Who will do what and when will they do it?
You might think of operational planning as a process for assuring strategy implementation. Taking
strategy as its starting point, operational planning determines the concrete activities that the company's
different operating units—marketing, product development, manufacturing, logistics, and so forth—
must implement to make the strategy a success. For example, if a low-cost leadership strategy is
adopted, operational planning would likely include the following activities:

Product developers will design products to minimize the cost of materials and assembly.

Manufacturing will seek lower-cost suppliers and outsource some or all production to low-wage
assemblers.

Finance will seek new opportunities to reduce the company's cost of capital.

Marketing will create customer communications that emphasize price and value.

The human resources department will develop compensation, training, and early-retirement programs
that will reduce people costs from current levels while maintaining production.

Each of those activities will be broken down still further into their component parts—what some people
call action plans, as shown in Exhibit 6-2. Managers, supervisors, and employees are then assigned
responsibility for these activities as part of operational planning.

In conducting operational planning, it is very important that supporting activities be closely aligned with
the strategy. Thus, if the strategy is to win customers though low-cost leadership, every major activity
must be cost-conscious, and the culture of the organization must encourage and reward thinking and
action that, for example, eliminates unnecessary costs and finds ways to do things faster, cheaper, and
better. Likewise, if the strategy is focused on winning through technological leadership, operational
planning and the culture of the organization must emphasize activities that encourage innovation, speed
the product development process, and keep personnel at a high level of technical proficiency.

CONTROL PLANS
Control represents the last of the formal planning activities. Control involves mechanisms that monitor
activities and compare them to previously set plans. Management intervenes when it observes variances
between plans and actual performance. Standards, schedules, and budgets are key control tools. These
provide the feedback that help managers understand how well or how poorly their plans are being
implemented. For example, the marketing department's schedule of strategy implementing activities
may call for completion of its annual marketing plan by November 1, and implementation of a product
promotion campaign by January 31. If marketing personnel don't meet those dates, the control system
sends a signal to management that something's gone wrong and that corrective measures are needed.

Exhibit 6-2: Action Plans Derive from Larger Operational Plans

GOALS

The plan processes we've described began with high-level organizational goals. To executives, managers,
and employees, those goals should be what the North Star is to the terrestrial navigator: a reference
point that keeps people properly oriented and heading in the right direction. Whenever they ask, "Are
we doing the right thing?" the large goals of the organization will help them answer the question
correctly and keep them on the right course.

The characteristics of effective Goals

Top-level goals are broadly stated: to earn a 15 percent return on invested capital; to be the market-
share leader; and so forth. Though these broadly stated goals provide guidance for top management
and a company's directors who are concerned with the big picture, they are not particularly useful as
one travels down the chain of command where the everyday work of the enterprise is done. The
supervisor in the parts stockroom, for example, may understand and appreciate the top-level goal, but is
not going to see a clear connection between what he does every day and its percentage impact on the
business's rate of return. For that supervisor, and for mid-and lower-level managers and their
subordinates, goals must be restated in practical, concrete terms that support top-level goals but that
are clearly related to their own work. To a field salesperson, for instance, any of these might be suitable
goals:

Increase unit sales by 10 percent in the next calendar year.

Increase sales revenue by 12 percent in the next calendar year.

Open two new accounts each month.

Submit complete activity reports to the district sales manager within one week of a customer site visit.

Hold travel and entertainment outlays at last year's level.

For the salesperson, those goals are more actionable, measurable, and within his or her control than are
a broadly stated organizational goal such as "to earn a 15 percent return on invested capital." Effective
goals, then, are:

Measurable—for instance, increase unit sales by 20percent.

Time-defined— for instance, add two new customers each month.

Challenging but achievable—they make managers and employees stretch, but are not so difficult that
people will dismiss them as unattainable.
Clearly important to the organization—they focus on key matters, not the trivial.

Connected to higher-level strategy and goals—people can see a relationship between their personal
goals and higher organizational goals.

Linked to the incentive structure—positive outcomes are encouraged and rewarded.

Written—goals and their measurement metrics and are part of the performance management system;
managers use them in appraising employee performance.

--------------------------------------------------------------------------------

SMART Objectives

When creating objectives, the SMART acronym is a handy way to ensure you include all the important
elements.

Specific. Objectives should be clear, concrete, and detailed.

Measurable. Success or failure should be measurable, and the measurement tool or metric should be
specified.

Achievable. The objective must be possible, and not so far off in the future that it becomes meaningless.
The objective should stretch the employee, but not frustrate him.

Realistic. Any necessary time and resources must be made available.


Time-bound. There is an agreed-upon timeframe or deadline for completion of the objective.

--------------------------------------------------------------------------------

Exercise 6-2: Building Effective Goals

--------------------------------------------------------------------------------

Imagine that your organization's strategy is to be the high-quality supplier in its industry. What might a
goal be for someone in your manufacturing department?

First, state a desired and measurable outcome that is important and consistent with the strategy:

_____________________________________________________________________________________
________________________

Add any time constraints or deadlines:______________________________________

Confirm that the goal is both ambitious and achievable .

Check the goal against the SMART criteria.

Now build a goal for someone in Marketing. Remember to make the goal important and consistent with
the company's strategy.

The measurable outcome:_____________________________________________________


The time constraints:_______________________________________________________

Confirm: Is the goal both achievable and ambitious ?

Check the goal against the SMART criteria.

--------------------------------------------------------------------------------

Alignment with Higher Goals

The goals of each unit should support—that is, should be aligned with—the goals of the unit above it, as
described in Exhibit 6-3. In this organizational chart for a multinational enterprise, Fred, a salesperson in
the Northeast sales region, is assigned goals that support those of his region. The Northeast region's
goals, in turn, support the goals of the national sales unit, which support those of the U.S. division of
which it is a part. Finally, the U.S. division, like its European counterpart, supports the highest goals of
the corporation. If management has done a good job, goals up and down the organization will be in
alignment, a condition in which all operating goals and activities of the organization are linked in support
of top-level goals.

Alignment is a catalyst of organizational power, effectiveness, and success because it focuses attention,
energy, and effort on key goals. For an organization to reach its full potential, however, simply linking
goals in the manner described here is insufficient. Alignment must operate at other levels. Management
must assure, for example, that people have the resources they need to achieve their goals (resource
alignment). The company's rewards structure must also be aligned with goals; people must see that they
will receive better compensation and career opportunities if they do the right things (alignment of
interests).

Exhibit 6-3: Goal Alignment in Action


The culture of the organization must also be aligned with its goals (or vice versa). There must be
harmony between the two; it is the job of senior management to assure that harmony. For an
organization, culture is defined by attitudes, beliefs, values, and norms. Some companies have strongly
identifiable cultures that persist for decades, if not for generations. Minnesota-based 3M Corporation,
for example, has a culture that encourages and supports inventiveness. That culture goes back to the
1920s. Its unofficial "15 percent" rule gives technical and scientific personnel the opportunity to spend
up to 15 percent of their time tinkering with ideas that interest them. Many new and profitable products
have emerged from that program. Hewlett Packard is a company that honors engineering excellence
and know-how. Its culture continues, to a large extent, to follow the "HP Way" established by its
founders William Hewlett and David Packard in the late 1930s.

Think About It …

--------------------------------------------------------------------------------

How would you describe the culture of your company?

_____________________________________________________________________________________
___________________________________
_____________________________________________________________________________________
___________________________________

What behaviors does your company value or reward above all others? Explain:

_____________________________________________________________________________________
___________________________________

_____________________________________________________________________________________
___________________________________

Is your company's culture in harmony with its goals? Explain:

_____________________________________________________________________________________
___________________________________

_____________________________________________________________________________________
___________________________________

--------------------------------------------------------------------------------

Within the larger culture of the company, your department or work unit has its own culture. This local
culture is at least as important to your employees as the broader corporate culture. A positive culture
plays a critical part in employee motivation and engagement. As manager, you have a key role in
defining the culture of your workgroup. Remember, actions speak louder than words! Your behavior will
set the example and drive your employees' perception of the group's culture.

Think About It …
--------------------------------------------------------------------------------

How would you like your employees to describe the culture of your workgroup or department?

_____________________________________________________________________________________
___________________________________

_____________________________________________________________________________________
___________________________________

_____________________________________________________________________________________
___________________________________

How can your behavior set the example for this culture?

_____________________________________________________________________________________
___________________________________

_____________________________________________________________________________________
___________________________________

_____________________________________________________________________________________
___________________________________

RECAP

Organizations approach planning and set goals by starting with a strategic plan. Strategy describes how
the business will differentiate itself from competitors in a way that imparts a competitive market
advantage. The planning process typically starts at the top of the organization with a team including the
CEO, a board member, key stakeholders, and staff. Most strategic plans fall into one of four categories:
low cost leadership, solid customer relationships, product/service uniqueness or quality, or geographic
expansion.

Once a company's strategic direction is set, specific objectives are established and managers begin the
operational planning that will allow the organization to reach its goals. This defines what will be done,
by whom, and how, to reach the company goals. Action plans that define the roles of managers,
supervisors, and employees are part of operational planning.

Control plans are created to monitor progress. Key tools of control plans are standards, schedules, and
budgets. These provide feedback to help managers evaluate how well or poorly their plans are being
implemented.

While top-level organizational goals should be broad and visionary, objectives for individuals should be
"SMART": Specific, Measurable, Achievable, Realistic, and Time-bound. It is critical that goals be aligned
throughout the organization, so that individual goals support department goals, which in turn support
divisional and finally company-wide goals. Management contributes to this effort by assuring that
people have the necessary resources to succeed and by building a corporate culture that encourages
and supports the organization's strategic goals.

REVIEW QUESTIONS

1. To be effective, goals up and down the organization must be:

independent.

approved by the Hr department.

in alignment.

determined before operational planning is complete.

1. (c)
2. ____________ describes what must be done to make the company's strategy work, who will do it,
and when.

Strategic planning

Goal alignment

Organizational culture

Operational planning

2. (d)

3. What is a characteristic of an effective goal?

Forward looking

Decoupled from higher-level goals

challenging but achievable

communicated verbally

3. (c)

4. Strategic planning should be informed by a keen understanding of the organization's:

rewards structure.
internal and external environments.

history.

lower-level goals.

4. (b)

5. Effective goals are measurable, time-defined, important, ambitious, and:

cross-functional.

interesting.

easy.

achievable.

5. (d)

Chapter 7: Work Processes and Continuous Improvement

OVERVIEW

Learning Objectives

By the end of the chapter you should be able to:


Explain the concept of business process and why managers must understand it.

Describe how continuous process improvement eliminates steps and/or activities that add cost, time,
and errors.

Explain the difference between process improvement and process innovation.

Some managers believe that the way to improve employee performance is to motivate their
subordinates to worker harder. They give pep talks, offer financial incentives and…when all else
fails…apply threats. Those efforts may result in modest productivity improvements, but gains are likely
to evaporate when the incentives and the pressure let up. The surest way to make substantial and
permanent gains in quality, speed, and cost reductions is to work smarter, through work process
improvement. That is one of the key discoveries of the quality revolution that began in Japan's post-
World War II era and diffused to North America in the 1980s and elsewhere in the years that followed.

This chapter introduces three related concepts you need to understand if your goal is to get people to
work smarter: business processes, continuous process improvement, and process innovation. These are
among the most important new ideas to enter the field of management in the past fifty years. Once you
understand these concepts, you will see your subordinates' tasks with new eyes and find ways to work
with them to improve output and satisfaction. As you seek ways to improve performance, you'll learn to
ask and answer these two important questions:

What work processes are under my management?

What can I and my people do to make these processes more effective?

WHAT WE MEAN BY BUSINESS PROCESSES

Organizations produce goods and services through what are generally called business processes. A
business process is a set of repeatable activities, or steps, that transform inputs into outputs that
customers value. Consider the example of the continuous casting process of sheet steel making used by
Nucor Corporation. Its "mini-mills" purchase scrap steel, melt it in electric arc furnaces, then pour the
molten steel through a caster, producing a continuous, thin ribbon of steel that is eventually cooled, cut,
and shipped to customers. Nucor's process has several inputs (scrap steel, labor, electricity, and
machinery) and process steps (purchasing scrap steel, melting, casting, and so on). If we were to "map"
this process, it would look something like the linear one shown in Exhibit 7-1.

Exhibit 7-1: Process for Making Sheet Steel

As you would imagine, the business of making steel is more complex than what is shown in the exhibit.
Each of the six steps in reality contains many sub-processes. And the company has a number of support
operations (such as accounting, marketing, and human resources) that each have their own processes.
However, the steps in the exhibit do, in fact, describe Nucor's process for making sheet steel.

Business processes are not unique to manufacturing, but are found in service firms and non-profit
organizations as well. Consider the lending department of a commercial bank. Like the steel-maker, it
creates value by converting inputs to outputs through process steps, as in this simplified example:

Step 1. Have the customer fill out a loan application.

Step 2. Check the application. If the applicant appears creditworthy, pass the application on to Step 3; if
not, reject the application and communicate the decision to the applicant.

Step 3. Verify the applicant's credit history in greater detail. If acceptable, move on to Step 4; if not,
reject the application and communicate the decision to the applicant.

Step 4. Appraise the value of the collateral. If the value exceeds the requested loan amount, continue to
Step 5. If not, reject the application and communicate the decision to the applicant.

Step 5. Commit to the loan and assemble all documents for closing.
Assuming that all went well, this loan approval process would continue on to a successful closing, in
which the applicant would sign all necessary papers. Each step of the process, from beginning to end,
would involve people, procedures, and their management.

Exercise 7-1: Your Work Processes

--------------------------------------------------------------------------------

How does your organization create value for its customers? What are its major inputs and process
steps? Describe them briefly below:

_____________________________________________________________________________________
__________________________

_____________________________________________________________________________________
__________________________

_____________________________________________________________________________________
__________________________

_____________________________________________________________________________________
__________________________

What is your role in those processes?

_____________________________________________________________________________________
__________________________
_____________________________________________________________________________________
__________________________

CONTINUOUS PROCESS IMPROVEMENT

Understanding your company's or department's business processes is the first step toward greater
output quality, speed, and lower cost. The next step is to find ways to improve them—not just once, but
repeatedly. Continuously. Continuous process improvement (cPI) is a management philosophy that
continually reexamines business processes in an effort to find and eliminate steps and/or activities that
add time, cost, and errors. Japanese industry is credited with perfecting continuous improvement—or
kaizen—as a management approach. For them, it was a way to eliminate waste in materials, time, and
error rework, and it became a central feature of the Toyota Production System.

The starting point of continuous improvement is a clear understanding of work processes, which are
documented through a technique called process mapping. Process mapping defines in graphic form,
usually as a flow chart, the pathway through which inputs are turned into value-added outputs. A
process map records the entire sequence of activities, the exact inputs, who does what, who has
responsibility, and the measures of successful output. Those measures may include the process's cycle
time—the amount of time required to run a piece of work through the process—process costs per unit,
the percentage of output units that meet quality standards, or something else.

Exhibit 7-2: A Simple Process Flow

Define the Beginning and Ending

The first step in process mapping is to identify where the process begins and ends. The beginning may
be triggered by someone's action. That person might be inside or outside the organization.

A customer enters an order on the website, triggering the order fulfillment process.

A customer calls with a problem or complaint, initiating the customer service process.
One of the outside sales representatives submits her weekly expense account, triggering the employee
expense reimbursement process.

The end of the process typically occurs when the process product or outcome is complete, or when work
is handed off to another process group. For example, the order fulfillment process is deemed complete
when someone in the shipping department has packed the order, affixed an address label, and placed
the package on the loading dock. The employee expense filing process ends when the person handling it
forwards all the paper work and an official request for payment to the accounts payable department.

A process's beginning and ending, and all the activities between them, can be mapped in flowchart
form. (See Exhibit 7-2). In some cases processes will cross department boundaries.

Exercise 7-2: Creating a Process Flow

--------------------------------------------------------------------------------

Look at the process map for ordering pencils in Exhibit 7-2. What is the beginning or triggering

event?
_____________________________________________________________________________________
__________________________________________

What is the end of the


process?______________________________________________________________________________
_____________________________

This process intersects with the Accounting Department. The Accounting Department very

likely has a standard process of its own for approving Purchase Order requests. Can you

imagine what some of the steps might


be?__________________________________________________________________________________
____________________________
_____________________________________________________________________________________
______________

Think of a simple process in your area of responsibility. Map it, using Exhibit 7-2 as an example.

--------------------------------------------------------------------------------

Look for Improvement Opportunities

When processes are mapped carefully, with each step noted in detail, opportunities for improvement
may appear. Exhibit 7-3 is a representation of some of the steps in the process we just mapped.

Once a manager and his or her subordinates have the process map in front of them, they can evaluate
its component parts with the goal of finding any activities that:

Add more cost than value.

Could be done faster or better.

Could be eliminated entirely with no reduction of output value.

Could be done in parallel with other activities.

This exercise should be approached with objectivity and as a learning experience by the entire work
team. There is no place in this exercise for placing blame. The goal is to find weaknesses in an inanimate
thing—the process— not with the people who have been asked to make it work. Look again at Exhibit 7-
3. It is probably not really necessary to rethink the style of pencils the department uses each time they
are purchased. A time-saving process improvement would be to keep the item number and reorder
quantity of frequently ordered items handy—maybe even on the shelf where the pencils are stored.

Exhibit 7-3: Process Steps Exploded

Involve the Right People

The most productive way to pursue continuous improvement is through the people who manage and
work the business processes in question. These people have the best understanding of the process, its
strengths, and its weaknesses. Chances are they already have a number of good ideas. It's not a job for
consultants or staff personnel, except in a facilitative role. At Toyota, kaizen groups are formed at the
workstation level and are guided by their line supervisors. Further up in the organization, managers
examine larger components of the production system. Over the years, this approach has enabled Toyota
to improve the quality of its products, reduce cycle time, and cut costs. Others who have adopted this
management tool have experienced similar results. Improvements are usually produced in small
increments, but those small increments add up over time.

Exercise 7-3: Implementing a Process Improvement

--------------------------------------------------------------------------------

Look again at the process you mapped in Exercise 7-2. If you wanted to improve this process, whom
would you involve?

List the members of your department or workgroup whose input would be important:

______________________________________________
______________________________________________
______________________________________________
______________________________________________

What other departments are involved, either because the process crosses department boundaries, or
because others are affected by the output?

_____________________________________________________________________________________
__________

Who should be the team leader of this effort?

_____________________________________________________________________________________
__________

--------------------------------------------------------------------------------

Look for Root Causes of Problems

Opportunities for process improvements are generally available when we recognize a problem and ask
"why?"

"Why does it take us so long to process an insurance claim?"

"Why does one out of every 20 products come off our assembly line with one or more defects?"

"Why has the number of worker injuries gone up in the warehouse over the past year?"
"Why are so many of our mail order customers complaining about receiving damaged goods?"

A manager who didn't understand processes or process improvement would try to answer these
questions by blaming people.

"Insurance claims take a long time to process because our employees are working too slowly."

"Defective products are coming off the line because assembly workers are goofing off—not paying
attention to their jobs."

You get the picture.

Instead of instinctively blaming people for an observed problem, a process-savvy manager will suspect
that something is wrong with the process; his or her first act will be to seek out the root cause of the
problem. A root cause is the initial cause in a causal chain. Do you remember the old British rhyme:

For want of a nail the shoe was lost.

For want of a shoe the horse was lost.

For want of a horse the rider was lost.

For want of a rider the battle was lost.

For want of a battle the kingdom was lost.

And all for the want of a horseshoe nail.


That rhyme describes a causal chain in which a root cause, lack of a horseshoe nail, produced a hugely
unfavorable outcome: loss of the kingdom. In a causal chain, the best way to cure the unfavorable
outcome is to eliminate the root cause.

Unfavorable outcomes in business processes are often the "effect" of hidden causes. Though it's
tempting to deal with the effect, doing so doesn't really solve the problem. Thus, if management
complains that it's taking too long to process insurance claims, we might be tempted to hire more
people to handle the workload. That solution would address the effect (slow processing), but would do
nothing to eliminate the cause—and the cost of adding more personnel. Or, a manager might try to
"inspect errors out" of a product, instead of "building quality in." Again, the symptom would be
addressed without curing the disease.

Root causes are not always easy to determine. One tool for revealing them is the fishbone chart. A
fishbone chart, so-called because of its appearance, is a diagrammatic way to work backward from an
effect to its root cause. In Exhibit 7-4, the "spine" of the fishbone represents the path from input to
output. Each of the "bones" is a potential cause of the unwanted effect: equipment, policies, people,
employee tools, etc. The job of the work team is to examine all the possibilities. They must also look
beyond the obvious. Thus, cause A may have two possible contributing causes B, and C. Are either of
these the root cause of the problems? Thus, if slow processing of insurance claims is found to be the
fault of a particular employee (A), the root cause might be something further upstream: inadequate
training of this employee (B), or a problem with the employee's personal computer (C). By exploring all
possible causes of the unwanted effect, a process improvement team can pinpoint and then eliminate
the root cause

Exhibit 7-4: Fishbone Chart

Measure the Process


Measurement is an essential part of process improvement. Measurement tells you if you have a
problem—and how big that problem is. Depending on the process, you might measure:

Customer satisfaction.

Output volume—for example, number of claims processed each week.

Quality as a function of how many units of output meet a predetermined standard, or how many units
must be scrapped or reworked.

Number of products returned for warranty claims.

Percent of on-time deliveries.

Process cycle time.

Per-unit cost.

Measure before and after you've implemented your process improvements. The resulting metrics show
the extent to which your actions were effective.

One way to measure the effectiveness of your processes is through benchmarking. Benchmarking is the
act of comparing business processes, time cycles, or outputs to some standard, usually other examples
in the same industry. You can measure your results against industry information or other similar
processes in your company. If your processes take longer, or are less productive than the benchmarks,
then they may be good candidates for a process improvement project.

Exercise 7-4: Measure your Processes


--------------------------------------------------------------------------------

Identify two processes that you are involved with, as either an employee or manager. Then describe
how those processes are currently measured. If no one is measuring them, what should be measured?
Finally, comment on the effectiveness of those measures. Do they really tell you if your processes are
efficient and effective?

Process What's being (or should be) measured? Effectiveness of the measures

1.

2.

Understand the Sequence of Activities and their Dependencies

Many workplace activities are locked into linear relationships where one task must be completed before
another can begin, as described in Exhibit 7-5. There you see how an individual must gather data, then
analyze it, and then report her findings. One activity must await the completion of the one before it. In
some cases, you can reduce the time required to complete a work process if one activity can be done in
parallel with another, as shown in the exhibit. Here, a mortgage bank can conduct its property appraisal
while its credit analysts are evaluating the loan applicant's credit and ability to repay. Conducting tasks
in parallel saves overall time and is possible when one task is not dependent on the completion of
another. Discuss sequence relationships with employees. They may come up with more parallel
operations.

Think About It …

--------------------------------------------------------------------------------
Which of your workplace activities must be done in linear fashion?

_____________________________________________________________________________________
___________________

_____________________________________________________________________________________
___________________

Which tasks must be completed before others can begin?

_____________________________________________________________________________________
___________________

_____________________________________________________________________________________
___________________

Which tasks are currently handled in parallel—or could be done in parallel?

_____________________________________________________________________________________
___________________

_____________________________________________________________________________________
___________________

--------------------------------------------------------------------------------

Empower People
Continuous improvement is a bottom-up activity that depends on the enthusiastic participation and
collaboration of the people who operate the business process. It cannot be ordered or driven from the
top. Enthusiastic participation and collaboration on the part of process operators is a function of good
morale and a sense of ownership and control. People must believe that process improvement will make
their work life better and their pocketbook fatter.

Exhibit 7-5: Sequence Relationships

The best environment for continuous improvement is a workplace characterized by employee


empowerment. Employee empowerment refers to a workplace culture that gives subordinates
substantial discretion in how they accomplish their objectives. Managers tell them what needs to be
done, but leave it up them to find the best way to do it. Empowered employees are also given greater
authority over company resources. For example, an employee who deals directly with customers may be
authorized—without first checking with her boss—to give discounts, refunds, or other services in order
to resolve problems or correct errors on the spot. Research suggests that empowerment contributes to
greater initiative, motivation, workplace satisfaction, and commitment among employees. And that
satisfaction and commitment is needed to succeed with continual process improvement. Employee
empowerment stands in sharp contrast to command-and-control management, a model of management
in which information relative to customers and operations flows upward through the chain-of-command
to the top, where decisions are made. Directives based on those decisions are then communicated
downward through the same chain of command. This approach to management does not inspire the
level of employee commitment and collaboration needed for effective, continuous process
improvement.

--------------------------------------------------------------------------------
The shewhart-Deming Cycle

Many trace continuous process improvement (CIP) methodology back to Walter Shewhart and W.
Edwards Deming, pioneers in the development of statistical process control. As early as the 1930s,
Shewhart had developed a model for implementing CIP, now referred to as the Shewhart-Deming Cycle.
The cycle has four parts: Plan, Do, Check, and Act. As shown in the graphic below, managers begin the
cycle by planning a change or experiment in the process, then Do, or make, the change. They then Check
to observe the effect on the process. Finally, they Act to implement the process change. When the cycle
ends, it begins again—assuring continuous process improvement.

Source: Richard Luecke, Scuttle Your Ships Before Advancing (New York: Oxford University Press, 1993),
68. Used with permission.

--------------------------------------------------------------------------------

Think About It …

--------------------------------------------------------------------------------

The contemporary office environment generally offers many opportunities for process improvements.
For example, every time employee A does one piece of a job and then hands it off to employee B for the
job's completion, inefficiency can result if the job sits on employee B's desk for some period of time. And
when B finally gets around to doing her part of the job, she must first study what A has done. Can you
design a process where time is not lost in transit between workers?
Now think about the work done in your office, including your own. Can you identify opportunities for
workflow improvements? Explain.

_____________________________________________________________________________________
___________________

_____________________________________________________________________________________
___________________

_____________________________________________________________________________________
___________________

_____________________________________________________________________________________
___________________

PROCESS INNOVATION

Continuous process improvement is pursued through small, incremental changes. Over time, those
changes add up, but usually at a diminishing rate, since the easy improvements are found and
implemented fairly quickly (see Exhibit 7-6). An alternative to this approach is called process innovation.
Process innovation is a wholesale alteration of a process that results in a major, immediate
improvement (also seen in Exhibit 7-6).

What does process innovation look like? Consider the example we used to introduce this chapter: Nucor
Corporation and its mini-mill process of casting sheet steel. Its process was a major innovation in the
centuries old steel industry—an innovation facilitated by Nucor's adoption of an unproven technology:
continuous casting. Prior to Nucor's breakthrough, sheet steel had been made through a batch process.
In that process, molten steel was poured into mattress-sized, white-hot ingots. Each ingot passed
through a long series of rollers and reheating furnaces that progressively reduced its thickness. This
process required billion of dollars of capital equipment, huge plants, and thousands of workers. It also
required billions more in ore mining, shipping, and smelting operations on the front end of the process.
Nucor achieved the same result at a fraction of the capital investment and cost by totally altering the
process. No mining or shipping of ore. No smelting plants. No blast furnaces or miles of milling
machines. Instead, it bought scrap steel on the open market, melted it in an electric arc furnace, and
used its innovative casting technology to pour a continuous ribbon of sheet steel. That process
innovation made Nucor the most profitable steel maker on the planet. While traditional steel makers
were losing money and laying off employees, Nucor was making millions and expanding its operations.

Exhibit 7-6: Incremental Improvement Versus Process Innovation

Henry Ford's Process Innovation

Almost everyone knows the story of Henry Ford and his famous assembly line. This is, in fact, an
example of process innovation. The first automobiles were made through a craft system. A crew of
highly trained workers would assemble an entire vehicle from scratch (a batch system), then start on
another, often with a different design and unique features. Henry Ford's great innovation was to move
to an assembly line approach (a flow system), making a standard product. This approach reduced cycle
time and costs by orders of magnitude, bringing the price of an automobile within reach of the average
worker.

--------------------------------------------------------------------------------

Process innovation—whether at the industry or the company level—is an infrequent occurrence, but it
quickly takes performance to a much higher level. As the exhibit indicates, performance can be
enhanced through the application of continuous process improvement. Together, process improvement
and process innovation take performance to super-high levels. At its first mini-mill, for example, Nucor
reaped the substantial benefits of process innovation. Once that process was up and running, its work
crews found small ways to make the process work more effectively.

Seeking Process Innovation

The Nucor case is one of process innovation at the company level. Chances are that you are more
interested in process innovation at the departmental or work team level. It makes no difference; the
principle is the same at every level. Remember our process for ordering pencils? We improved the
process by posting the item number and order quantity on the shelf where the pencils are stored. What
if the manager and team discussed possible process innovations? Perhaps they would create an
inventory management system for supplies, conduct a biweekly stock check, and order every item that
was below a predetermined quantity. That way, no one would have to notice that there were no pencils
and inform the administrator, and the department would never run out of pencils again.

The question is, how can you and your team create a process innovation capable of improving
performance by a huge amount? Perhaps the best way to do this is to:

Enlist your team in a brainstorming effort; many brains are better than one.

Suspend all assumptions about what you can or cannot do. You don't want assumptions to limit your
imagining of a better way.

Describe the output goal you seek. Make it a stretch goal—plan to process a commercial loan
application in one day or less instead of three, and reduce customer service wait times by 75 percent.
Think big!

Now, tell yourself and your team to imagine that the current process does not exist—that you are
starting with a clean slate. Ask everyone to think of how they would design a work process to meet their
stretch goal.

If this advice seems far-fetched, consider these examples of process innovation at work:
To please customers and cut costs, a major life insurance company set a goal of reducing the time
needed to approve or deny an insurance application from three weeks to two days. Within one year the
company had created a totally new, computer-aided approach to processing applications that met the
two-day goal for 90 percent of applications.

To reduce time and costs in creating the company website, a marketing department invested in a new
content management system that automated moving text and images created for printed pamphlets
into the website design templates.

An accounting department created a "fast track" process for paying invoices under a certain dollar
amount for individual contractors.

Examples like these can be found in both manufacturing and service industries. Where could you
innovate in your department? One final reminder: Many process improvements and all process
innovations are changes. As we discussed in Chapter 5, change efforts require careful management.

--------------------------------------------------------------------------------

Tips on Seeking Process Innovation

There is no magic formula for creating process innovation. The situation at every company and every
work unit is unique. However, here are a few places to look for innovative possibilities:

Wherever work is handled in batches. Batches require hand-offs and restarting, both of which rob the
process of time. Think of how the work could be done in a constant flow.

Wherever people are doing repetitive work. Sometimes software can handle repetitive work faster and
at lower cost.
Wherever operations are separated by physical distance. In situations where the physical output of
process step 1 must be transported to another location for process step 2, consider relocating step 2 to
the end point of step 1.

Wherever people are doing work that could be outsourced to a third party capable of doing the work
better and at less expense. One caution: Never outsource a process that uniquely adds value for your
customers. You must retain the capacity to control those unique value-adding functions; these are core
to your business.

RECAP

Working smarter through work process improvement is the surest way to make substantial and
permanent gains in quality, speed, and cost reduction. The concepts of business process, continuous
process improvement, and process innovation are among the most important recent ideas in the field of
management. Managers who understand these concepts will have a clearer understanding of the work
their subordinates do; they will also find ways to improve output and satisfaction.

The key steps to process improvement are: (1) define the process's beginning and end; (2) look for
improvement opportunities; (3) involve the right people; (4) look for root causes of problems; (5)
measure the process; (6) understand the sequence of activities and their dependencies; and (7)
empower people. Continuous process improvement means continually reexamining business processes
in an effort to find and eliminate steps or activities that add time, cost, and errors. Process mapping, the
starting point for continuous process improvement, records the entire sequence of activities and the
measures of successful output. These measures include cycle time and process costs per unit.

Process innovation is a wholesale alteration of a process that results in a major, immediate


improvement. It is an infrequent occurrence that quickly takes performance to a much higher level.
Some techniques for stimulating process innovation include brainstorming, suspending assumptions
about what you can or can't do, and articulating stretch goals for your team. Opportunities for process
innovation may exist where people do repetitive work, where work is handled in batches, where
operations are separated by physical distance, and where work could be outsourced to a third party.

REVIEW QUESTIONS

1. Which of the following aims for a major, immediate improvement in a business process?

Process mapping
Process innovation

Kaizen

Continuous process innovation

1. (b)

2. Which workplace management style is most likely to foster continuous process improvement?

Command-and-control

A narrow span of control

Management by walking around

Employee empowerment

2. (d)

3. Which tool helps identify the root causes of process problems?

Process map

Gantt chart
Catch ball technique

Fishbone chart

3. (d)

4. The first place to look for performance improvement should be the:

worker attitudes.

business process.

incentive system.

process cycle time.

4. (b)

5. The most important people to involve in continuous process improvement are:

consultants.

senior management.

people who manage and work the business process.

time study experts.


5. (c)

Part Three: Managing Others

Chapter List

Chapter 8: Managing Performance

Chapter 9: Making Sound Decisions

Chapter 10: Handling Difficult People and Situations

Chapter 8: Managing Performance

OVERVIEW

Learning Objectives

By the end of this chapter you should be able to:

Explain the purpose of performance management.

Describe the performance appraisal process and its steps.

Identify four important characteristics of effective feedback.

Articulate the purpose of coaching and its process steps.

As a manager, your success depends on how effective your subordinates are at their jobs, and how
effectively they work toward personal and unit goals. It is your job to define their objectives, assess their
progress, and help them reach their goals. Through performance management you can assure the
success of your department by improving the performance of individuals.

PERFORMANCE MANAGEMENT
Performance management is a set of activities that managers use to measure and improve the
effectiveness of their subordinates. This chapter focuses on three tools in particular: performance
appraisal, giving and receiving feedback, and coaching. These work together to help managers and their
subordinates identify performance problems and opportunities and to address them effectively (Exhibit
8-1). Other elements of performance management include motivational rewards, employee training,
and career development, which are beyond the scope of this chapter.

Exhibit 8-1: Three Tools of Performance Management

PERFORMANCE APPRAISAL

Performance appraisal is a management practice that aims to assess how well an individual measures up
to unit standards and/or his or her assigned goals. Its findings are used for pay and promotion purposes,
as well as employee development. It will be described here through a series of steps that the new
manager can follow, the first being agreement on performance expectations and individual goals. The
pros and cons of 360-degree appraisal will be included in the discussion via a sidebar.

Many companies conduct an annual formal performance appraisal, followed by periodic review.
Appraisal of individual employees begins with their individual goals. At the beginning of the appraisal
period, these objectives are established through discussion between the manager and employee, and
then confirmed in writing. It is very important that the employee and his or her manager agree on those
goals.

Goals, then, are the yardstick against which performance is measured. The manager notes whether the
employee exceeded the goals, met the goals, or if there are gaps between assigned goals and what the
employee actually accomplished. If gaps are found, the manager and employee will then try to find the
causes. Perhaps the employee has not been diligent; perhaps his or her skills are insufficient to the task.
Perhaps something in the workplace environment over which the employee has no control—such as
insufficient resources—explains the problem. Whatever the causes of performance gaps, the act of
finding them through the appraisal process is the first step toward eliminating them. On the other hand,
you may find that the employee has exceeded her goals. It's important to understand the causes of good
news, too. Is the improvement a one-time fluke, or is there something other department members can
learn from Susan's achievement?

"Susan, we asked you to decrease costs in your area by 15 percent this year. Congratulations! You
achieved a 23 percent decrease! How did you accomplish that?"

A Six-Step Process

Busy managers seldom look forward to the annual employee appraisal. It's a chore that eats up time—
especially when they have many direct reports— and it puts them in the position of passing judgment
on others, which many people find uncomfortable when deficiencies exist. Though positive appraisal
reports produce good things for their subordinates (raises, bonuses, promotions, and goodwill), they
know that their unfavorable appraisals may result in negative financial and career consequence for
people they've gotten to know on a personal basis.

One way to take some of the time and discomfort out of performance appraisal is to follow a systematic
and objective process. We offer one here. It has six steps:

Preparation

The appraisal meeting

The identification of performance gaps or opportunities

Planning to close gaps

Recording the appraisal


Periodic follow-up

The process works best when both the manager and subordinate are involved in each step.

Preparation

Busy people are tempted to "wing it" as they enter the appraisal process; they schedule a meeting time,
look through the employee's file fifteen minutes ahead of the meeting, and take it from there. This
casual approach will not produce good results. The manager's preparation should begin at the start of
the appraisal period with direct and regular observation of the subordinate's work. Does he appear to
be having trouble? Is her work completed on time and up to standards? Is he collaborating with
coworkers, and so forth? It's a good idea to record those observations in the employee's file as they are
made. Since we all tend to remember recent events and impressions more than those experiences in the
distant past, the manager who revisits observations recorded over time is less likely to base his overall
judgment of employee performance on what he observed in the previous week or month.

The employee being appraised should prepare in a similar fashion, making notes on what he or she has
done well or poorly, what resources (such as training) would lead to better future performance, and so
forth.

Shortly before the appraisal meeting, the manager should obtain any relevant up-to-date statistics from
an accurate and neutral source: sales data from the financial system, error rates from shop floor
records, and so forth.

The appraisal meeting

The appraisal meeting should be held in a setting that will make both parties feel comfortable and
encourage dialogue. It's usually best to begin by encouraging the employee to express his or her views.
"Please tell me how you feel about your work over the past year. Do you feel you've done well relative
to the goals we set this time last year?" Then, give your full attention to the response.

In fact, the employee should do most of the talking in this conversation; you should focus on listening
and try to talk less than a fourth of the time. You need to hear the employee's version of reality. Avoid
the temptation to jump in if you hear something with which you disagree; instead, make a quick note of
it. Demonstrate your attention through verbal cues, such as, "I see" or "How have you developed good
rapport with your teammates?" Ask questions to learn more. For example, "One of your goals was to
develop productive relationships with our key customers; how do you feel that you've done in that
area?"

When assessing performance, point to successes and failures—and don't fixate on the failures if doing
so would give an unbalanced view of the employee's performance during the year. Also, avoid
unsupported generalizations, such as "I don't think you've done a very good job in supporting our
customers." If you have a complaint, document it in some way and be sure to explore causes: "Our
annual survey of your customer accounts showed a 20 percent reduction in post-sales service
satisfaction. What's going on here? "

Throughout the meeting, keep the focus on goals that you and your subordinate agreed to during
previous appraisal session. The tips in Exhibit 8-2 will help you keep the meeting on track.

Identification of performance gaps or opportunities

Performance can exceed expectations, meet expectations, or fail to meet expectations. If you keep the
focus on goals, and if those goals are specific and measurable as we discussed in Chapter 6, you and
your subordinate can have a productive conversation about performance. You should discuss and praise
positive results: "You exceeded your goal of new client acquisition by 30 percent. That's fantastic. Tell
me how you did that?" You must also identify and point out performance gaps and their causes: "But
you fell short of your sales quota by 18 percent this year. What accounts for that shortfall?" Listen
carefully to what your subordinate says about his or her performance shortfalls, as you may learn
something that will help the two of you get things back on track. You may discover, for example, that
you are part of the problem: you haven't given the person sufficient time or resources to complete her
tasks; or your directions may have been ambiguous. You may also discover that the person has had
insufficient training. Listening can help you identify opportunities to improve the performance of this
employee and others in your organization.

Exhibit 8-2: Tips for Conducting an Appraisal Session

--------------------------------------------------------------------------------

Be professional, serious, and focused on performance issues.


Listen to the employee.

Acknowledge good performance before you move to areas of weakness.

Don't generalize. Provide specific examples of performance that concerns you.

Keep your subordinate involved in the discussion.

In the end, summarize your assessment and any improvement plan the two of you have agreed to
follow.

Restate the person's goals going forward. Secure your subordinate's agreement on those goals.

--------------------------------------------------------------------------------

If performance gaps are apparent, be sure that the subordinate recognizes them. You don't want that
person to leave the meeting thinking that everything is fine and that her performance meets
expectations.

Planning to close the gaps

Once you've discovered the cause of performance gaps, you and your subordinate will be in a position
to eliminate them through coaching, formal training, or other means. The subordinate must be fully
involved in any plan to improve performance, otherwise you are unlikely to get the desired results. So
give your subordinate the first shot at planning the solution. "Okay, we have both acknowledged the
problem. So tell me, what in your view is the best way to fix it?" If his or her solution appears sound,
defer to it in your action plan. The subordinate is more likely to take the action plan seriously if he or she
thought of it and proposed it.
A good action plan for performance improvement will have specific goals, a timeline (including any
intermediate steps), and the employee's formal agreement. Set that plan in writing, put it in the
employee's file, and give the employee a copy.

Recording the appraisal

An appraisal session should always end with a look forward to the coming year. The appraisal meeting is
the time to revisit assigned goals and discuss them with the employee: Are those goals still appropriate?
Is it time to set the bar of performance a bit higher? Can the employee "stretch" to a new level of
performance? Discuss goals with the other person and, if a change is appropriate, get his or her
agreement.

Most companies have a standard performance appraisal process administered by the human resources
department. Formal performance appraisals, such as the type we've described here, are typically
recorded in writing and signed by the manager/supervisor and the employee, with the original going to
the employee's personnel file in HR, and a copy given to the employee. That record becomes the basis
for promotions and demotions, changes in compensation, and in the worst cases, discipline or
dismissals. Many company human resources departments have a standard form for making and
recording performance. If your company does not have one, consider the material in Exhibit 8-3.

Exhibit 8-3: Grading Performance

--------------------------------------------------------------------------------

As you record your appraisal of employee performance, focus on quality, quantity, timeliness, and cost-
effectiveness.

Quality is a measure of the accuracy, effectiveness, or usefulness of the employee's work. If you've
made goals specific and measurable, you can use error rates, customer satisfaction, and other metrics to
assess quality.
Quantity. How much work did the person produce? Did the quantity equal, exceed, or fall short of goal?

Timeliness. Were assignments completed on time?

Cost-effectiveness recognizes the employee's contributions to cost savings or control—reducing the cost
of each unit of output, eliminating waste, and so forth.

Characterize each category of the employee's performance in terms of a rational scoring system:
Excellent, fully successful, adequate, minimally successful, and unsatisfactory. These are roughly
equivalent to the A, B, C, D, F letter grades that people already understand.

--------------------------------------------------------------------------------

After the meeting, record the date of your appraisal session, make a note of any disagreements you and
the employee have about his or her performance, and describe the new goals the employee will pursue
during the coming year, if any. If a performance improvement plan is part of your appraisal, attach a
signed copy of the plan.

Periodic follow-up

Action plans intended to improve performance count for nothing unless people execute them effectively
and with real dedication. As a manager, you cannot put your subordinate's performance improvement
plan in the file and think that your job is done. You must monitor compliance with the plan, meet
periodically with the subordinate to ask how things are going, and check progress against the plan's
goals and timeline. If progress is falling short, your intervention will be required.

A manager should also follow up on the progress from time to time. Don't wait until the annual
performance review to find out that the employee did not understand the objective, or that the
objective is not realistic. Use informal meetings to ask, "How are you progressing with the goals we set
during our last appraisal session? Are you having any difficulty? Have we given you adequate resources
to reach your goal?" Most people are reluctant to tell their boss that they're falling behind, so probe
beneath the surface of their answers for evidence that things are in fact on track, and listen for any
muted appeals for help.

Exercise 8-1: Preparing for a Performance Appraisal

--------------------------------------------------------------------------------

Consider one of your subordinates.

What are that employee's goals for this appraisal period?

_____________________________________________________________________________________
_______________________________________________________

_____________________________________________________________________________________
_______________________________________________________

Check your files for notes you have made during the course of the year on accomplishments, problems,
and the feedback you gave the employee at the time.

_____________________________________________________________________________________
_______________________________________________________

_____________________________________________________________________________________
_______________________________________________________

How will you measure performance? Do you need to obtain any data?
_____________________________________________________________________________________
_______________________________________________________

_____________________________________________________________________________________
_______________________________________________________

Has this employee exceeded your expectations in any areas? Are there areas of needed improvement?

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If there are gaps, have you discussed them in ongoing reviews?

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360-Degree Appraisal

Managers have traditionally evaluated subordinates' work performance in terms of what they observe,
and how they (the managers) personally view progress against goals. Unfortunately, a manager sees
only a fraction of a subordinate's workplace performance. The person's coworkers, internal customers
(other departments served by the subordinate), and those who report to the subordinate may see a
different reality. One survey conducted in a west coast hospital found that several middle managers
received extremely high performance rates from their bosses, the hospital executives. The peers and
subordinates of these same managers, however, gave the managers failing grades, rating them as poor
leaders, weak communicators, bad teammates, and inept managers.

This type of situation has generated interest in 360-degree appraisal, a performance assessment tool
that gathers information about an employee's performance from many people who work with or
interact with the person on a regular basis. These observers may be higher, lower, or equal in rank to
the person being evaluated. The goal of 360-degree feedback is to gain a more accurate assessment of
an employee's contribution to the organization and its work, and to avoid the kinds of perceptual errors
found the hospital case.

A 360-degree feedback is expensive. Each of the appraisers (generally four to eight) must spend roughly
an hour completing a questionnaire, and someone else must analyze and collate all their ratings and
remarks. Nevertheless, it has become part of performance appraisal in many organizations, especially
for managers and executives.

FEEDBACK

Feedback is communication that provides information about how well a person is performing against
expectations. Feedback helps subordinates and managers better understand mutual expectations,
celebrate successes, address workplace problems, and seek improvement. It is a two-way conversation,
and is most effective when the parties trust each other and when both are good listeners and
explainers.
The term feedback refers to the process by which information about a system's output returns (is "fed
back") to its source so that future output can be regulated or adjusted. In your car, for instance, there is
a feedback link between the radiator and the engine temperature gauge on the dashboard. That gauge
asks, "How hot is the engine?" and a sensor in the radiator feeds back—that is, communicates—that
information. If the gauge registers abnormally high engine temperature, the operator is alerted and can
take corrective action. Exhibit 8-4 is an example of a "feedback loop," showing a signal or
communication going out from A to B, and then being fed back to A.

Exhibit 8-4: A Feedback Loop

The annual performance appraisal described in the first section of this chapter is used, in part, to
generate feedback between managers and their subordinates. That is a formal approach to feedback.

Giving Effective Performance Feedback

Performance feedback used to be called "constructive criticism," but that only captures a small part of
what feedback means. Constructive criticism is something that can be communicated by feedback—and
it's a large part of what supervisors and managers do—but it represents a one-way street in which the
listener learns something (usually negative) and the speaker learns nothing. So, as you develop your
feedback skills, remember that you must give equal attention to your capacity to give and receive
information.

Effective feedback in a workplace setting has several important characteristics:


It is descriptive, not judgmental.

It focuses on modifiable, not unchangeable behavior.

It deals with specific, not general, observations.

It is well-timed.

Let's take a closer look at each of these characteristics.

Be descriptive, not judgmental.

Effective feedback does not judge or criticize. It describes. For example, a boss trained in giving feedback
won't say, "You can't handle the job." Instead, he will describe what he observes: "I've noticed that
you're not entirely familiar with using Excel spreadsheets to report sales results." Though a sensitive
person might hear a note of criticism in that statement, the boss is really describing what he observed.

Feedback should not go beyond what is observed and it should not make a judgment of the person's
motivation. To comment on motivation ("You aren't interested in what we're doing here") would be, at
best, guesswork. Judgmental feedback creates defensiveness that prevents the listener from gaining real
improvement pointers from the interaction. So when you provide feedback, give concrete examples of
the behavior you observe. Focus on the observed problem, not on the person. Compare these two
examples.

Open table as spreadsheet Judgmental

Descriptive

George, when are you going to get your act together and get in here on time for a change? It seems like
you are always late. Don't you even care about your job?
George, before September you clocked in on time almost every day. But according to the time records,
you have been 10 or more minutes late 14 times in the last month. That's more than half the workdays.
What's changed?

The descriptive example is clearly less judgmental and more likely to get results. Note that effective
feedback usually takes longer to articulate and it begins with the positive and then moves to areas of
performance that need improvement.

Even positive feedback should follow the "descriptive" rule. After all, it is the objective results that are
important. But do add your congratulations when you convey positive feedback.

Open table as spreadsheet Judgmental

Descriptive

At last you've made it in on time

George, ever since we adjusted your schedule to accommodate your child's new school bus pickup
you've had a perfect on-time record. I'm glad we addressed that issue before it became a problem for
both of us!

Exercise 8-2: Expressing Feedback Descriptively

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Think of a performance gap you want to address with one of your subordinates.

Express that performance problem here in a judgmental fashion:


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Now express the same issue in a descriptive manner. Remember to start with positive information.

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Address modifiable behavior, not unchangeable traits.

Effective feedback focuses on things that can be changed. Most people want to improve their work, and
if they are given ideas in areas they can change, they will at least try them. But to be told that you could
be better in a particular task if you were taller, for instance, or had a different personality type, is both
insulting and useless. Thus, feedback should concentrate on aspects of job performance that are within
the power of the listener to change and improve.

Consider the following examples. Which of these two examples focuses on modifiable behavior?

Example 1: Sharon, we need to talk about a couple of aspects of the new operating procedure. Based on
the data I am receiving from your workstation, you are entering data meant for an existing customer file
and creating a duplicate file. You can avoid this by conducting a search before entering data to see if the
customer file exists before assuming you should open a new one.

Example 2: Sharon, how many times do I have to explain this operating procedure to you? Everyone else
caught on weeks ago. I'm beginning to wonder if you have the intelligence for this position.

Open table as spreadsheet Unchangeable Behavior

Modifiable Behavior

Intelligence level

Process steps

In the second example the manager is criticizing something the employee cannot change, calling her
intelligence into question, whereas the first example allows Sharon to alter an aspect of her job
performance that is changeable. Focusing on how coworkers can improve areas within their control is a
notable feature of effective feedback.
Be specific, not general.

Terms such as always or never are seldom true and are too general for the individual to know where to
start in improving job performance. For a supervisor to say "You're always leaving early" is probably not
accurate. Saying "I've noticed that you've left 15 minutes early every Tuesday and Wednesday for the
past month" is both more accurate and specific, and leads to another useful question. "What's
happening on Tuesday and Wednesday that is making you leave—a transportation problem, picking up
your kids at childcare?" Feedback that focuses on a specific incident or set of incidents, preferably
recent, will be much less personal and more accurate, thus increasing the chances of getting to the root
cause of the problem.

Positive feedback should likewise be specific. Saying "That was a terrific presentation" communicates
very little useful information to the listener. Saying "Your slides and the pace of your delivery were both
very effective" provides much greater information value. The listener doesn't have to guess at which
part of her presentation was so effective. Which of the following feedback examples is more useful?

Open table as spreadsheet General

Specific

You're great, Silvia. I can always count on you.

Silvia, the sales numbers were just what the board needed to see. Accurate, broken down by division,
charted out nicely, and delivered a day early so Joe could copy them for the meeting without spending
the night here. Thanks!

Which of these examples of negative feedback is not specific?

Example 1: You're always late with these calculations, Matt. And when you do finally get them in, you
are never accurate. I always have to recheck them.

Example 2: The calculations you brought in are two days late, Matt. For the past four months you have
been, on average, two or three days late. Your calculations are 82 percent accurate, which is good but
not good enough. To make it better, you need to recheck the calculations for our accounts in the South
region. They can be tricky. Meanwhile, let's talk about a time-management plan to help you get these
figures in on time.

The first feedback example is very general and offers no concrete evidence for the obvious irritation the
speaker feels. In the second example, Matt is more likely to leave the discussion with a clear picture of
where his performance needs improvement and how to go about improving it.

Choose your timing carefully.

In most things in life, timing is everything. As a rule of thumb, feedback should be delivered soon after
the incident or set of incidents has occurred. This is because the passing of time causes at least two
things: memories become inaccurate, and emotions "rewrite" the incident the way a person felt it
happened rather than the way it really happened. Emotions can also get in the way if you give feedback
too soon after a particular event. More details on how to gauge appropriate timing appear later in this
chapter. Now, which of the following two examples exhibits good timing?

Lloyd, do you have a minute? Good. Do you remember early last month when we were working together
on the proposal for Tri-State Electric? Well, you had figured the specs in a way they wouldn't
understand, and then you didn't let them drill down on the specs in the Q&A after the presentation. No
wonder we lost that bid!

Frank, is this a good time to talk? Good. Something happened in the team meeting this morning that I
wanted to ask you about. Remember when Maria was offering her idea about how to market our new
product? Well, you interrupted her five or six times. And even when she told you she would get to your
questions, you didn't let up. That got her off track and affected the rest of her presentation. Is that your
recollection of the situation?

In the example of well-timed feedback, the person giving feedback isn't referring to something that took
place a month earlier. As you can see from these examples, timing involves at least two dimensions:
giving feedback soon after the incident(s), and making sure the other person has the time to talk.

Exercise 8-3: Your Experience


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You have probably received feedback many times, either in the workplace or in school or other
environments. Think back to one memorable example—preferably one that occurred in the past week,
so that your memory is fresh. In the space provided, briefly describe the nature of that feedback (say, an
annual performance review). Then score the feedback giver, on a scale of 1 to 5, on each feedback
characteristic (1 = lowest). Follow each score with a brief comment on what was good, bad, or how it
could have been done better.

Nature of the feedback:

Characteristic Score (1-5) Comment

Descriptive/not judgmental

Addresses modifiable behavior

Specific/not general

Well-timed

More feedback Tips

Choose the Right Environment

Remember the old adage: Praise in public, criticize in private. Generally speaking, any feedback you give
to another person that has even a hint of negativity ("Your presentation came across as a monotone")
should not be given within earshot of others. Doing otherwise is likely to create hostility or a sense of
humiliation in the person with whom you are communicating. So, as a basic principle, seek a private
setting to give feedback that is less than flattering.

Stay Focused

One of the biggest mistakes people make with communicating feedback is trying to cover too many
things at once. This is often true of supervisors giving feedback to their subordinates. When you hear
something like "And another thing you do wrong around here is …," you know that the supervisor has
lost focus and is simply "piling on" all the things that have been bothering him.

Keep in mind the feedback concept of specific incident(s). Focus on one issue—the primary one—and
support it with evidence from a recent and significant incident. When you begin with the recent and
significant incidents, the other party is better able to see the point. Use the secondary evidence if your
listener is unconvinced of the problem or begins to minimize the issue.
It is always possible that the person who's getting feedback about performance may try to switch to
another topic as a way of getting off the "hot seat" or, in the case of a colleague, of turning the tables. In
those cases you can say pleasantly, "Those are good points, and I'd like to talk about them at another
time. Can you help me see how they are relevant to the topic at hand?"

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Think About It …

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Are you a manager or supervisor? If you are, take a minute to think about opportunities you have in
your typical day to provide feedback—positive and negative—to your people. List three of those
opportunities you've had in the past week. Did you take advantage those opportunities? If you're not a
manager or supervisor, list three recent situations in which you wish that your boss had provided some
informal coaching or feedback.

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To summarize, here's a list of Dos and Don'ts for sharing feedback.

Do …

Keep the topic and wording task-oriented, even if the other person tries to personalize it. For example,
you might say, "Each of the last two project reports was a week late." The response might be: "So you're
saying I'm disorganized." You can then respond, "No, I said that each of the last two projects were a
week late. They were well done, but late."

Invite the other person's perceptions. For example, you might ask the person who's been late in
submitting work, "How do you see the situation?" Or, "Have I overloaded you with assignments?" Pause
and wait for a response before saying anything more.

Explain the consequences of the problem you are discussing with the other person. "Being a day or two
late with those project reports wouldn't matter if you and I were the only ones involved. But the
marketing group can't begin its work until they've received your report. So, if you're late, that creates
problems for them. Do you see what I mean?" Wait for an acknowledgment from the other person.

Listen to the answer and clarify any misunderstandings if needed.


Encourage the person to suggest a solution if you're discussing a performance gap. If a subordinate
offers an acceptable solution to a performance problem, she'll be more likely to implement that solution
than one imposed on her.

Offer a suggestion if the other person has none of her own. "One way to resolve this would be to put a
reminder on your daily 'to do' list a week or two in advance—then you can give a few hours each day to
the project rather than trying to crank it out right at the deadline." Then ask for feedback: "How does
that sound?" Again, wait for a response.

Gain commitment to whatever resolution you and the other person agree on. Restate how much you
value the person and her work. "So you will block out two or three hours each day to get the next
assignment completed by the end of the month? That's great. You know, Helen, I really appreciate the
quality of your work and our working relationship. This is the first time I've felt I needed to raise a
concern. Thanks for hearing me out."

Don't

Don't compare the person to others. Avoid saying, "If only you were as organized as Anne—she always
gets her assignments completed on time."

Don't put a judgmental "spin" on your feedback. Avoid something like, "This is just another example of
how disorganized you are. You have no timemanagement skills." Instead, stick to the problem.

Don't indicate that there are other problems too; deal with one thing at a time. Talking about other
problems will overwhelm the person receiving the feedback and reduce the chance that the current
problem will be addressed. Don't say, "And while we're on the topic of these reports, they aren't very
well designed. The typeface isn't attractive at all. I think it needs a design overhaul." Instead, say, "I'd
like to talk about how we can improve the report's timely delivery."

Receiving Feedback
Always remember that feedback is a two-way street: giving and receiving information. Your
effectiveness as a manager will not be complete unless you master both. You must be ready and willing
to receive feedback, even when it takes the form of constructive criticism of your own work or the
manner in which you are managing others. This does not mean you should become a doormat or a
scapegoat for everything that goes wrong in the office. It means that you should be open and
approachable to people who may have something valuable to say. People who are good at receiving
feedback:

Give the speaker plenty of time to talk; they understand that they learn nothing when they are doing all
of the talking.

Give the speaker their full attention; doing so is the only way to capture what they have to say.

Demonstrate responsiveness to what they hear; if you invite feedback, you have an obligation to
respond.

Ask for specifics. For instance, if a subordinate complains that your instructions are too vague, ask "can
you give me an example of when I've done that?"

Exercise 8-4: Your Feedback Experience

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Look over your weekly calendar. Are you anticipating a meeting or situation in which you will receive
feedback? What feedback would you find most helpful? What criticism do you anticipate? How could
you best respond to that criticism? Jot down your answers in the space below.

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Closing the Feedback Loop

Remember the definition of feedback? It is the process by which a system's output (information) returns
to its source so that future output can be regulated and improved. The whole purpose of giving and
receiving feedback in the workplace is to change behavior so that performance improves. You can help
the process along by providing the necessary tools and by checking in periodically to assure that
improvement is being made.

Provide the necessary tools.

Be sure that the person receiving feedback has everything needed to change the desired behavior.
Perhaps additional training is necessary, or a more flexible work schedule, or the assistance of another
employee. So, if you're giving feedback, make sure that the other person is equipped to act on your
input. If you have received feedback, don't say, "Thanks for the suggestion—I'll do that" without first
checking to see that you have the resources needed to follow through.

Check in periodically.
The next time the task or function under discussion is performed, check to see if any problems have
been addressed. If you were the recipient of the feedback this will ensure that you understand in
concrete terms the problem and how corrective actions are having an effect. This further shows your
willingness to improve your workplace performance.

checking in also provides an opportunity for both parties to solve any unforeseen glitches in the new
method. For instance, let's say that you were the manager in the previous example. Your subordinate
has told you that you don't always give her enough time to complete assigned projects. A week has gone
by and you have two new reports you want her to take on. Once you've explained the reports, you
might say something like this as a way of "checking in."

"I know that you've had some concerns about the amount of time I've given you to complete reports like
these. We talked about that last week. So I'm wondering about these. Ideally, I'd like the first drafts of
these reports two weeks from today. Does two weeks seem reasonable given your other duties? Tell me
what you think."

COACHING

Coaching is a process through which managers help their subordinates develop skills, prepare for new
responsibilities, or eliminate performance problems. Good managers look for opportunities where
coaching can improve performance:

Janis's boss asked her to plan and organize an interdepartmental meeting. Never having done such a
thing, she didn't know where to begin. Observing her confusion, her boss offered some advice: "Try to
break the job down into its major parts: locating the best time and place for the meeting, creating an
agenda, inviting the right people, and so forth." The boss offered to provide feedback on her progress as
she planned the meeting.

Bill had just been promoted to a supervisory position. One of his first problems was dealing with two
difficult employees. One of these individuals was chronically late to work; the other spent more time
gabbing with others than working. Both were argumentative whenever Bill spoke to them about their
problems. "I'm spinning my wheels with these two," Bill confessed to his manager. "They're taking up
time that I should be spending on other things." Bill's boss understood the problem and agreed to show
him methods for handling problem employees. "You're bound to encounter people like these
throughout your career," he told Bill, "so you'd better learn to deal with them now." They agreed to talk
for twenty minutes every Tuesday afternoon for the next month.
Exercise 8-5: Which of Your People Needs Coaching?

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List each of your subordinates (up to five) in the left-hand column. In the right-hand column indicate
how these individuals would benefit from coaching by you. (If you're not yet a manager, play the boss's
role in this exercise and list yourself and your coworkers. What are their coaching needs?) The first row
has been completed to serve as an example.

Subordinat How Coaching Would Improve Performance


e

The Coaching Process

Many coaching opportunities can be handled on the spot without planning or preparation. Consider the
following example:

Samantha's subordinate, Charlie, has stopped by to drop off a report he was assigned to write. "This is
my first draft," charlie said. "You asked to see it before I finished it off and sent to the corporate staff."

"Right," Samantha replied as she scanned the draft.

After a moment, she gave her assessment—and some advice.


"You're off to a good start here, charlie. You've covered all the key issues. It's very thorough. But let me
give you a tip: Most of the corporate people will be looking more for your conclusions than the details.
They only have time to scan these reports."

"So what should I do in the final draft?" Charlie asked.

"Give them what they want. State your conclusions up front, in summary form, and move some of the
nitty gritty to an appendix. That way, the CEO and his people can get what they need quickly, and the
few people who need the details can find them in the appendix. Do you see what I mean?"

"Gotcha."

In this case Samantha provided on-the-spot, informal coaching aimed at improving Charlie's
performance. No preparation or planning was necessary.

Other coaching situations require planning. These situations may involve the manager's observation of a
serious performance gap, as recorded in the subordinate's performance appraisal. Or the employee may
request coaching to develop new skills to move up to a promotion. In any case, manager and
subordinate must consider how they will approach the matter, perhaps even working with the human
resources department. Together they can develop a coaching plan that lists the objectives of the
coaching relationship.

Once the performance problem or learning opportunity has been identified, formal coaching follows a
four-step process that involves both the coach and "coachee":

Discussion between the two parties. The manager and subordinate discuss the situation and how they
might best address it.

Agreement and commitment. They agree on an action plan with achievable goals; both commit to
executing the plan.
Active coaching In this step the manager provides one-on-one guidance or instruction. Alternatively, the
manager may delegate the coaching role to another qualified person. For example, if the subordinate
needs help in making an effective sales presentation, the manager may ask a top sales person to take
the subordinate along on a day of customer calls. In either case, there should be plenty of feedback
between coach and coachee during this step.

Follow-up. The manager must check back later to assure that the subordinate has had the opportunity
to practice new skills and hasn't gone off the tracks. For instance, if you've helped someone develop his
meeting planning skills, check back with him periodically. Has he planned any meetings, and were they
successful? What can he do better next time? Reinforce what was learned and assure yourself that the
person is using his new skills correctly.

RECAP

Performance management is a set of activities that managers use to measure and improve the
effectiveness of their subordinates. These include performance appraisal, feedback, and coaching.

Performance appraisal is used to assess how well individual employees measure up to unit standards
and/or their assigned goals. Appraisal findings are used for pay and promotion purposes, as well as
employee development. Formal appraisals follow a process that includes preparation, the appraisal
meeting, the identification of performance gaps and their causes, planning to close performance gaps,
and periodic follow-up. The appraisal process works best when it is objective and when the appraised
employee is actively engaged in the process.

Workplace feedback is communication that provides information about how well a person is performing
against expectations. Feedback helps subordinates and managers better understand mutual
expectations, workplace problems, and solutions. Workplace feedback is most effective when it is
descriptive, not judgmental; focused on modifiable behavior; based on specific, not general,
observations, and well-timed. If managers give feedback to their subordinates, they must be prepared to
receive it as well.

Coaching is a process through which managers help their subordinates develop skills, prepare for new
responsibilities, or eliminate performance problems. Good managers look for opportunities where
coaching can improve performance. Most of those opportunities can be handled on the spot, without
planning or preparation. More formal coaching, like formal appraisal, follows a multistep process that
includes discussion, agreement and commitment, active coaching, and follow-up.
REVIEW QUESTIONS

1. To be successful, formal coaching requires:

a monetary incentive.

commitment by the coach and subordinate to an action plan.

agreement on unit strategy.

assistance from the human resources department.

1. (b)

2. Which of the following is a characteristic of effective feedback?

Descriptive, not judgmental

Negative in tone

General in nature

Intuitive

2. (a)

3. Which of the following steps is common to both performance appraisal and coaching?
Behavior change through example

360-degree feedback

Follow-up

Rewards

3. (c)

4. The starting point for formal performance appraisal is:

previously stated individual goals.

corporate strategy.

peer review.

future goals.

4. (a)

5. Performance management is:

an approach to disciplining subordinates.

a discipline used to determine employee goals.


a set of activities that managers use to measure and improve employee effectiveness.

based on academic theories of human motivation.

5. (c)

Chapter 9: Making Sound Decisions

OVERVIEW

Learning Objectives

By the end of the chapter you should be able to:

Identify the steps of a rational decision-making process.

Define the problem or decision correctly.

Consider the context of the decision.

Create and evaluate feasible alternatives.

Make the decision.

Implement the decision.

Which job applicant should you hire?


How should your department's budget be spent?

Who should be in charge of the upcoming trade show?

Should we adopt a new technology now, or wait until we can better gauge its performance?

Should you buy or lease three new delivery trucks?

Managers make many decisions like these in the course of the day and are responsible for their
outcomes. You could reasonably say that the workaday life of an organization is nothing more than a
series of activities initiated and controlled by decisions. You can also say without contradiction that the
wellbeing of an organization depends on the quality of its decisions—especially the big ones.

Many decisions can be made on the spot and with little or no input from others. All important decisions,
however, should be handled through a rational, fact-based process.

This chapter describes a rational decision-making process that you can apply to all types of important
workplace decisions. That process has five steps and involves collaboration among the
manager/decision-maker and other appropriate parties. Those steps are: frame the issue or problem,
consider the context of the decision, consider and evaluate alternatives, select the best choice, and then
implement the decision. This process is rational in the sense that it emphasizes facts and evidence,
leaving little room for power politics to creep in and spoil the result. The decision process offered here,
however, provides no guarantee of a good outcome. Decisions, after all, involve the future, about which
there is no certainty. Thus, even a well-made decision can produce a disappointing result. However, a
solid decision process can put the odds of success on your side. It can also shield you from second
guessing and criticism that often follow a poor outcome.

Before discussing the right way to make decisions, consider the wrong way, as described in the following
scenario.
Hans is the Vice President of Research and Product Development for a consumer products company. The
job of his unit of scientists and engineers is to develop and launch pet food products that address
customer wants and needs, as determined by the company's market researchers and field salespeople,
and with the approval and funding of top management.

The company's market research people had become quite excited about a new dog food product
concept: a one-day ration shaped like a bone. Market surveys found that dog owners were attracted to
the idea of giving their pets a single meal in a treat-like form that would satisfy all the dog's nutritional
needs for the day. No such product was available. To meet this need, one of Hans's people suggested
creating a bone-shaped, bone-tough product. "We could make it hard and very dense, like a bone. And
we could cram an entire day's nutrition into it." Customers invited to a focus group loved the idea, and
further market research indicated that it would be favorably received by dog owners, who would switch
from dry and canned food to "Daily Dog Bone Ration," as they called it. So Hans estimated the resources
he'd need to develop and manufacture the new product, and requested funding from management.

As proposed by Hans, the project seemed like a straightforward decision with plenty of market and cost
data: Spend $1 million to create a complete product design, another $2 million to develop a process for
manufacturing it, and another $2.5 million for promotional test marketing in four major metro areas
around the United States. If responses from those tests were favorable, manufacturing would be
ramped up at a cost of some $5 million for a nationwide product roll-out. Hans anticipated quick
approval by management, but he hadn't counted on Jennifer, the Vice President of the canned dog food
division.

Jennifer had learned of Project Dog Bone a month earlier. Fearful that its success would cut into her
division's canned food sales (and her annual bonus), she began lobbying Ray, the company's fiscally
conservative and cautious chief financial officer (CFO). "Ray, they're talking about pouring $10 million
into a risky venture that, if it's successful, will cannibalize our canned food sales. We can't afford that."

Ray took it all in.

Jennifer also used her weekly luncheon with the CEO to subtly pour cold water on Hans's project. "I
understand that Hans and his R&D people are working on some type of far-out dog food experiment.
Food shaped like a bone," she said disparagingly while munching her salad. "Our chain supermarket
customers are very conservative. They probably won't go for that. And I think that Ray is concerned
about sinking millions into a risky idea when so many other parts of the business are starved for cash."
By the time Hans obtained a hearing from the company's New Products Committee, Jennifer had
managed to sow seeds of doubt. Both the CEO and CFO were on the committee, as was Phil, the VP of
Marketing. Phil had seen the positive market research on Project Dog Bone but he didn't want to
advocate for it, especially if his two more powerful colleagues, Ray and the CEO, were set against it.

During the ensuing discussion, Hans had to champion his idea, just as a lawyer would defend his client
before a judge and a panel of jurors: by presenting his data and arguing for a favorable verdict. As head
of the canned pet food division, Jennifer participated in the meeting. She played a prosecutor-like role,
arguing against the project and its funding. "Yes, we have some positive market surveys," she said, "but
they only involved a small sample of potential customers. And the risks are very high. We could lose
millions." Hans countered with his projected costs, and sales revenues forecasted by the marketing
department. "Where did those revenue forecasts come from," Jennifer parried, "out of a hat?"

In the end the executive committee was split 2-to-1 against Hans. And so the Daily Dog-Bone Ration
concept died an early death.

What was wrong with this decision process? The most obvious problem was Jennifer, who used her
influence to poison the water for the new dog food product by exploiting peoples' natural aversion to
risk. Phil, the marketing vice president, also did his part to undermine the decision by playing office
politics; he didn't want to oppose the CEO and CFO. All of them—even Hans—were guilty of accepting a
yes or no situation. No one offered an alternative to the proposed new product or the plan for
marketing it.

This is not an unusual example of decision-making in organizations, from the boardroom to the shop
floor. Management often approaches key decisions as "We'll either do this or we won't," with no
discussion of alternative choices. Powerful individuals apply influence in ways that do nothing to
produce a good decision. People in the know often hold back because they don't want to oppose
someone who might have something to say about their bonus or future promotion.

In order to win in this environment, a person must be a strong advocate and present the good parts of a
proposal while remaining silent about any deficiencies. In order words, he or she must sell the idea to
the decision makers. This is not a good way to make important decisions. The process you'll learn about
in the rest of this chapter is far superior.
Exercise 9-1: A Recent Key Decision

--------------------------------------------------------------------------------

Consider a key decision made within the past year by your boss or by your company's senior
management. Now answer these questions:

Was the decision based on a systematic evaluation of the facts?

_____________________________________________________________________________________
_______________________________________________________

_____________________________________________________________________________________
_______________________________________________________

Did anyone apply his or her organizational power to shape the decision? If yes, explain.

_____________________________________________________________________________________
_______________________________________________________

_____________________________________________________________________________________
_______________________________________________________

What uncertainties did the decision maker(s) wrestle with?

_____________________________________________________________________________________
_______________________________________________________
_____________________________________________________________________________________
_______________________________________________________

With the benefit of hindsight, did this decision lead to a good outcome? If not, what went wrong?

_____________________________________________________________________________________
_______________________________________________________

_____________________________________________________________________________________
_______________________________________________________

A RATIONAL DECISION-MAKING PROCESS

The process described in this chapter is a simplified version of one developed in the early 1980s by
Strategic Decisions Group, a Palo Alto, California-based strategy consulting firm (Matheson and
Matheson, 1998). It is based on principles of decision science and has been applied in one form or
another over the years by firms in the auto, aerospace, pharmaceutical, energy, motion picture, and
information technology industries. It is effective in that it involves the right people, and requires them to
step back from what might be the obvious decision choices and to develop alternative choices that may
prove better.

The process involves five steps:

Define the issue or problem correctly.

Consider the context of the problem or issue.

Create and evaluate feasible alternative choices.

Make the decision.


Implement the decision.

At every step of this decision-making process, which is diagrammed in Exhibit 9-1, it is important to get
the input of key stakeholders.

Involve the Right People

When simple choices must be made, a manager may have all the information needed to make a good
decision. Decisions on big, complex, and costly issues, however, require more information and the
knowledge and insights of many people. A rational process therefore involves three sets of people—the
"right" people:

The actual decision makers. These individuals have the final say in the matter. They also have the
organizational authority to make the decision stick and to allocate the resources needed to implement
it.

Individuals with relevant knowledge or insights. These might be staff personnel, market researchers,
salespeople with close contacts with customers, engineers who understand the technical issues,
financial experts, and so forth.

Employees who will implement the decision or have a stake in the outcome. Decisions produce
consequences. In many cases, the ultimate decision makers are far removed from those consequences
and lack information that is critical to successful implementation. People who must implement a
decision or live with its consequence often have insights that decision makers lack.

Involving the right people may be the single most important part of the decision process. You want to
bring in people with relevant information and experience, with open minds, and an ability to deal with
data and with the uncertainty that goes hand in hand with every important decision. Further, you want
these people to work together, to share ideas, and to create back-and-forth dialogue. The decision
makers must be part of that dialogue from the start. If you are the decision maker, the worst thing you
can do when a complex issue is at stake is to have your subordinates do all the framing, generate all the
alternatives and evaluate them, and discuss all the assumptions and risks without your involvement. No
matter how carefully the group tries to report its deliberations, too much is lost in that approach. When
the time comes to make the decision, you will be lacking key information.

Exhibit 9-1: A Rational Decision Process

STEP 1: DEFINE THE PROBLEM OR DECISION CORRECTLY

The first step in a rational decision-making process is to correctly define the issue, the problem, or the
opportunity. Doing this isn't always simple, as different people often bring different mental frames to a
situation.

A frame is the mental window through which we view the world or a particular problem or issue
(Harvard, 154). A frame influences how we see, hear, and interpret the world around us. Have you ever
heard the expression, "If your only tool is a hammer, everything looks like a nail?" That's an example of
framing in action. In our previous example, Hans, the R&D manager, probably envisioned Project Dog
Bone largely as a technical matter: "How can we pack a day's worth of nutrition into a hard, bonelike
product that will appeal to dogs?" Ray, the cautious CFO, surely saw the decision as a budgeting issue:
"Where will we get $10—$12 million for this new project when so many of our current initiatives are
begging for investment capital?" For her part, Jennifer saw the decision as a product-line issue: "This is
one more product thrown into our current mix of canned and dry pet food; it's bound to take sales away
from our other lines."

Because of their different training and professional responsibilities, each of these characters in our story
approached the matter with a different frame of reference.

Communication among participants is the best way to overcome the framing problem. Each participant
should explain to the others how he perceives the issue and why. The others should listen and learn
from what is said. As each party to the decision learns about the perspectives of his colleague, he will
form a more complete and realistic understanding of problem, issue, or opportunity. Had this been done
in our story, the various participants probably would have developed a broader, more nuanced
understanding of the decision that Hans brought before them. It was, in fact, a technical, financial, and
product-line problem. They would then have to determine whether the technical issues could be
overcome, whether the new product would be financially successful, and what that success would do to
their product-line strategy. The answers to these questions would inform the final decision.

STEP 2: CONSIDER THE CONTEXT OF THE DECISION

Once you've defined the problem or decision correctly, the second process step is to consider its
context. What is driving the problem or decision? Is it part of a larger issue? For instance, in the Project
Dog Bone case, decision makers should inform themselves of the broader business surrounding Hans'
proposal:

Is the market for dog food declining, stable, or growing?

What are the key competitive factors?

How profitable is the company's current line of dog foods?

Is the dog food business strategically important to the company's future?

Once they understood the context of the proposal, participants would be in a better position to ask
probing questions:

Does Hans have the human resources needed to take on this project?

If he began work on Project Dog Bone, would another project, perhaps of greater importance, have to
be pushed to the sidelines?

Would success in the project open the door to other opportunities for the company?

The answers to these and similar questions would provide context for the decision.
Exercise 9-2: The Context of Your Decisions

--------------------------------------------------------------------------------

Identify one important decision that either you or your work team must make in the near future. Then
list four to five questions you would ask to create a context for that decision.

Describe the
decision:______________________________________________________________________________
____________________________________________

Q 1.
_____________________________________________________________________________________
__________________________________________________

Q 2.
_____________________________________________________________________________________
__________________________________________________

Q 3.
_____________________________________________________________________________________
__________________________________________________

Q 4.
_____________________________________________________________________________________
__________________________________________________

Q 5.
_____________________________________________________________________________________
__________________________________________________
Do you see how answers to these questions would create a context for a rational decision-making
process?

STEP 3: CREATE AND EVALUATE FEASIBLE ALTERNATIVES

Have you ever proposed something to your boss or a friend and had that person come back the next day
to tell you that, "I like your idea. It got me thinking about a different way to approach the same
problem—one that may work even better!" This is an example of creating alternatives.

Alternatives enrich possibilities for decision makers. Decision makers always have a minimum choice:
they can say "yes" to a course of action, or say "no" and continue with the status quo. But yes and no
are limited possibilities. Possibilities can often be expanded when the "right" people, as described
earlier, put their minds around a problem or decision. Informed people and people with a stake in the
outcome can often find alternatives that are superior to the initial proposal. In the Project Dog Bone
case, for example, someone in the company's pet food manufacturing unit might have altered the
proposal by suggesting that production be outsourced to a contract manufacturer, thereby lowering the
capital cost of the project and its risks to the company. Ray, the CFO, would surely see this as a superior
alternative. Likewise, Jennifer's concerns about resistance from supermarkets might be allayed by an
alternative that produced "private label" versions of the product for big supermarket chains operating in
different markets.

Think About It …

--------------------------------------------------------------------------------

Think back to the decision that you described in Exercise 9-1. What alternatives to that problem or
choice are available? In your view, are these worse than, equal to, or superior to the initial decision
choice?

_____________________________________________________________________________________
_______________________________________________________

_____________________________________________________________________________________
_______________________________________________________
_____________________________________________________________________________________
_______________________________________________________

_____________________________________________________________________________________
_______________________________________________________

--------------------------------------------------------------------------------

Your goal in this step should be to create a manageable set of feasible alternatives. By manageable, we
mean few enough in number that process participants will have time to fully evaluate them. In most
cases that would be three to six alternatives. By feasible, we mean realistic possibilities—within the
capabilities of the company.

Brainstorming as a Method

One of the best ways to create a manageable set of feasible ideas is to bring the right people together to
brainstorm the issue. Brainstorming is a method of soliciting ideas from a group of individuals in rapid
fashion. It doesn't challenge participants to be logical or fact-based, nor does it examine ideas as they
emerge. It's an opportunity for people to generate lots of ideas quickly. Out of this collective idea dump,
good decision or problem-solving alternatives sometimes emerge.

Brainstorming participants should observe four basic rules:

Seek quantity. What you want here is lots of ideas. Out of many ideas a group is bound to generate
some very good ones. Worry about that later.

Don't criticize. Criticizing will make the stream of ideas dry up. Besides, at this stage, who can say if a
top-of-the-head idea is good or bad?
Welcome even far-out ideas. Face it, real change comes from far-out ideas, not ideas that are marginally
different than the ones you have now.

Find ways to combine and improve ideas. This is the last part of the process. You want to combine
similar or complementary ideas into a manageable set. More on this later.

Here's how a brainstorming session generally works. A session leader, or facilitator, asks people to
suggest the ideas or problem solutions that occur to them at the moment. As each idea is contributed
from the floor, the leader writes it on a flip chart, or a sticky note that gets pasted to the wall, or some
other medium of recording. The leader should courteously thank each contributor but avoid passing
judgment on individual ideas in any way, such as, "Come on Frank, you can do better than that." Nor
should the leader disqualify any offered idea, "Thanks but no thanks for that one, Judy." Judgmental
comments like these will reduce the number of ideas volunteered from the floor.

Once people run out of ideas, the session facilitator asks participants to help her group submitted ideas
into clusters of similar ideas. This is one of the reasons that sticky notes are so handy in these sessions;
they can be moved around readily. Only after grouping ideas do people get down to evaluating the
merits of each.

Evaluation

This is another key information-gathering phase of the process, in which ideas are "fleshed out" with
information. Let's suppose that by brainstorming, the Project Dog Bone team came up with the
following set of alternatives:

The initial concept: a one-day dog food ration shaped like a bone.

A package containing two smaller bone-shaped meals, one for breakfast and one for dinner.

A package containing one small bone-shaped meal for breakfast along with a sealed bag containing soft,
chew "kibble" for the dog's dinner.
Small bone-shaped portions packaged in a 20-pound bag. "That way," says its advocate, "we won't have
to produce and inventory separate small, medium, and large dog versions. One bone would constitute a
small dog's daily ration, two would satisfy the medium-sized dog, and three or more would take care of
the dogs over 70 pounds."

Do nothing. The status quo is almost always a feasible alternative—one against which the pros and cons
of other alternatives can be measured.

Once the set of alternatives is selected, participants should do a thorough evaluation of each option. In
order to make a sound decision, the decision criteria must be discussed and agreed on by the
participants. Using criteria helps the group make an objective, well-thought-out decision, and provides a
rationale for why the decision was made. The ability to rationally explain your decision helps you win the
support of those whose approval you need. Examples of criteria include cost of implementation, return
on investment, resources required, percentage of needs met, and so forth. In the case of Project Dog
Bone, the final alternative, "do nothing," might seem to require no evaluation, but it should be
examined with the same rigor as the others. For this project, the team should provide the following
information for the key decision makers for each alternative:

A list of assumptions—a "must have" for decision makers whenever estimates of future outcomes such
as sales and costs are forecasted. The assumptions may well be the same for all the alternatives: size
and trends of dog food market, percentage of pet owners who work full time, shop in pet stores, and so
forth.

The estimated cost of implementation.

Forecasted cash flow and accounting profits from the project.

Likely pricing of the new product.

Return on investment.
Resource requirements (people, capital, and equipment).

The likely strategic impact—for example, how will the new Dog Bone product affect the sales of the
company's canned foods? Will the new product open a new market?

Likely competitor responses if the proposal succeeds—for example, would a competitor launch similar
products? How long would it take them to launch knock-off products?

Risks (of technical failure, of market rejection, of not gaining store shelf space, for example).

Some decision teams attempt to produce worst-case, best-case, and most-likely case scenarios for their
alternatives. However they do it, the point is to provide decision makers with objective information and
estimates for each alternative.

Evaluation should draw on the thinking of all the "right" people—people who know from experience
what resources will be needed to implement the decision, people who have a good idea of what
customers will pay for the resulting dog food, people who know how to estimate implementation costs
and risks, and so forth.

Risk

Risk is a natural companion of every decision because its consequences unfold in the future, about
which there can be no certainty. As a manager, every one of your decisions involves risk: Your decision
to open a branch office in New Orleans in 2005 was backed by thorough research; who would have
anticipated the disaster created by Hurricane Katrina? The new person you just hired has a great résumé
and stellar recommendations, but only time will tell how successful she will be in the unique
environment of your company. Every new hire is an experiment to some extent.

Decision makers must pay particular attention to risk. If the decision team has done its job, the risks
involved in every alternative will have been spelled out in detail.
Those risks can then be factored into the final decision. As Admiral Chester Nimitz told the commander
of the outnumbered U.S. Navy task force he sent to the decisive Battle of Midway in June 1942, "Take
calculated risks. That is much different than being rash." Taking "calculated risks" means accepting an
alternative whose potential up-side benefits exceed its potential down-side costs. In other words, its
potential rewards should exceed (at a minimum) any potential loss. The absolute worst alternatives are
those with high risks and low potential rewards.

Make a list of every risk you can think of for key alternatives, then consider how each risk can be
avoided or its impact reduced if it comes to pass. For instance, a new product often carries some risk of
a personal injury lawsuit. That risk can be offset through insurance; the insurer assumes the liability risk
in return for a premium payment. If the decision involves hiring a new employee, risk can be reduced by
making continued employment contingent on good performance during a probationary period.

Because risk is always present, make it part of your evaluation of every alternative. Try to measure the
probability of desired outcomes against the probability of something going wrong.

Exercise 9-3: Risk Reduction

--------------------------------------------------------------------------------

As a new manager, one of your first decisions was to hire an outside firm to develop and install a new
website for your company. You recognize three risks: the site might not be reliable (that is, it crashes
repeatedly), it might not be up and running on schedule, and it might go over the budget of $75,000.
Indicate two things you might do to reduce any of these risks,

_____________________________________________________________________________________
_______________________________________________________

_____________________________________________________________________________________
_______________________________________________________
_____________________________________________________________________________________
_______________________________________________________

_____________________________________________________________________________________
_______________________________________________________

STEP 4: MAKE THE DECISION

Let's see what happened to the Project Dog Bone team when Hans got a second chance to present his
product idea, after a disappointing drop in cat food sales and a surge in dog adoptions by two-income
families.

Hans first selected the "right people" who would have to be involved in all the steps. In addition to the
members of the New Product Committee, Hans involved Greg from Manufacturing, Jorge from
Packaging, Toni from Store Relations, and Susan from Market Research. Hans got a commitment from
the New Product Committee members to participate in the discussions, not just rely on the research
team to provide synopses of their work.

Then Hans worked to define the decision. After thought and discussion with his advisors, he realized
that, like many decisions, this one was really several separate but related decisions. First, should the
company introduce the Project Dog Bone product? If that decision was yes, then further decisions would
need to be made about the possible outsourcing of manufacturing, packaging, and sales channels.

Next, Hans and the team considered the context, especially the growing pet food market and the
shopping behavior of pet owners. As the team began to generate alternatives, people who had
participated in the earlier exercise were in for a surprise. Because this time the decision had been
framed as "Should we pursue a single-meal bone-like dog food product?" the alternatives had changed.
This time, the alternatives were: Go with Hans's original idea of a bonelike meal product; rethink the
bone-like product as a dog snack; redesign the product concept as a "healthy teeth and gums" diet
supplement; and do nothing." (The variations on the product idea would be relevant only after the
overall idea got approval.)

This time, the decision makers on the New Product Committee had enough information to make a
rational, nonpolitical decision. Information on the context—the pet food market, the competitive
landscape—led the team to evaluate the alternatives differently. They now understood that competitors
would capture market share if the company did nothing. A new product offering would increase sales
and could be positioned to minimize cannibalizing current sales. Of all the potential new product ideas,
Daily Dog Bone Ration was the most promising.

Hans was thrilled when the New Product Committee came back with the decision to pursue Project Dog
Bone and granted his team access to $1 million for the next stage of development.

STEP 5: IMPLEMENT THE DECISION

Though implementation is a different subject, it must nevertheless be part of any decision process.
Decisions that approve a particular change or course of action should also include a plan for
implementation. One of the virtues of the process described here is that it includes people who must
live with the decision through its implementation. Their inclusion provides some assurance that an
effective implementation plan will be developed and that the people who will execute the plan will be
more committed to it.

Think About It …

--------------------------------------------------------------------------------

Every successful decision includes an implementation plan. Indeed, the first step after reaching a
decision is often to create an implementation plan. Hans's implementation plan for Phase 1 included
creating a budget, assigning designers, conducting further market research, and creating a project plan
with milestones for reporting to the New Product Committee and securing funds for Phase 2.

Think about a decision being considered in your organization. If the decision is made to proceed with the
project, what must the implementation plan include?

_____________________________________________________________________________________
_______________________________________________________

_____________________________________________________________________________________
_______________________________________________________
_____________________________________________________________________________________
_______________________________________________________

--------------------------------------------------------------------------------

As stated in the beginning of this chapter, the five-step decision process described here cannot
guarantee a good outcome. Decisions, to a greater or lesser degree, involve uncertainty. Thus, it is very
possible to make a good decision yet have a bad outcome. For managers, this is a fact of life and need
not be a sign of poor performance, especially if the risks have been considered in advance. What is a
sign of poor performance is a bad outcome that follows a bad decision—that is, a decision that was
badly framed, that failed to include available information and the insights of the knowledgeable people,
and that did not consider or evaluate feasible alternatives and their risks.

RECAP

The well-being of an organization depends on the quality of its decisions. As a manager, you make many
decisions and are responsible for their outcomes. All important decisions should be handled through a
rational process that emphasizes fact finding and evidence gathering and leaves little room for power
politics to exert influence. Though a good outcome cannot be guaranteed, a solid decision-making
process can improve the odds of success and guard against second guessing and criticism in the event of
a poor outcome.

Step 1, define the problem or decision correctly, ensures that the issue, problem, or opportunity being
considered is presented in the proper frame of reference.

Step 2, consider the context of the decision, examines what is driving the problem or decision and
reveals if it is part of a larger issue.

Step 3, create and evaluate feasible alternatives, provides for alternatives that enrich possibilities for
decision makers. Informed people and people with a stake in the outcome can often find alternatives
that are superior to the initial proposal.
Step 4, make the decision, follows when the issue, problem, or opportunity has been properly defined;
information on the context has been evaluated thoroughly; and a range of alternatives has been
considered.

Step 5, implement the decision, requires that a plan for implementation be in place for decisions that
involve a particular change or course of action. Including those people who must live with the decision
provides some assurance that an effective implementation plan will be developed and that the people
who execute the plan will be more committed to it.

Generating alternatives and reducing risk are two other important components of effective decision-
making.

REVIEW QUESTIONS

1. A decision team should create:

winning arguments.

a manageable set of feasible alternatives.

fall-back positions.

rational and irrational choices.

1. (b)

2. Which is a natural companion of every decision?

Complexity

Confusion
Conflict

Risk

2. (d)

3. Decisions that approve a particular course of action should also include a plan for:

customer feedback.

pay raises.

risk enhancement.

implementation.

3. (d)

4. When complex decisions are being made, people with _____________________ should be involved:

advanced degrees

relevant information and experience

no personal stake in the outcome


a personal agenda

4. (b)

5. Good decisions are made through a(n) ________________process.

intuitive

preferential

rational

aligned

5. (c)

Chapter 10: Handling Difficult People and Situations

OVERVIEW

Learning Objectives

By the end of the chapter you should be able to:

Describe the difference between useful and unproductive conflict in your workplace.

Describe a two-step process for dealing with difficult employees.

Describe the challenges and solutions for dealing with high-value customers and difficult bosses.
If you've ever worked for yourself and had no employees to worry about, you have probably been as
close to a conflict-free working environment as you will ever experience. No egos bumping up against
one another. No workers complaining about their pay or peers. Sure, there is an occasional irascible
client to deal with, but overall the level of conflict experienced by the independent consultant,
tradesperson, freelance writer, and so on is pretty low and easily managed.

Unfortunately, individuals working alone face certain limitations. Big jobs—designing an office building,
providing broad-based medical services, manufacturing, and similar activities—require many hands and
minds working together. And that's where the trouble begins. When you bring a dozen people together
to do a job, you may get a dozen opinions on how the job should be handled. Among those same twelve
people, there's also bound to be some personal friction that reduces collaboration and performance.

In many respects an organization is like an engine with many moving parts. Moving parts naturally
generate efficiency-robbing friction (conflict), and some parts may be defective (a poorly performing
employee). One of the manager's jobs is to minimize the conflict-driven frictions that prevent the
organization from fulfilling its productive potential.

Dealing with conflict and difficult employees absorbs a significant portion of the typical manager's day,
and is usually the least favorite part of his or her job. As one business owner told the authors, "My job
would be ideal if it weren't for all the people problems." This chapter will not immunize you to those
annoyances, but it will give you ideas for dealing with them more effectively.

WORKPLACE CONFLICT

Conflict is a state in which the ideas, interests, plans, goals, egos, and agendas of individuals clash. A
clash of interests between sovereign states and the federal government contributed to the American
Civil War. In Spain, conflict between supporters of conservatism and the supporters of liberal and
socialist ideas spilled over into civil war during the 1930s. Organizations do not break down into
shooting wars, but conflict over ideas, interests, plans, goals, and individual egos often impede
performance. Here are a few examples:

Winner take all. The Vice President of Sales for a nationwide company plans to retire soon. Two
powerful regional sales managers are vying to replace him. One will win and the other will lose in that
contest. Both have large egos. Their contentious jockeying for position is undermining collaboration
among the sales management team and hurting morale.
Not good for me. The CEO appointed a cross-functional team to study the pros and cons of purchasing a
multimillion dollar "enterprise management" software system. The finance representative on the team
is pushing for the system, seeing it as a major time-saver for her department. The information
technology person on the team is following his boss's line in opposing the new system. "We don't have
the resources to implement and debug a system that big," he complains. "It will be a nightmare for us."
The engineering person on the team is also opposed, believing that the millions spent on a new system
will starve his department and others of resources. To the annoyance of everyone else, the engineering
representative has been secretly lobbying against the system among senior management.

Turf warfare. The Vice President of Corporate Marketing and the General Manager of the Consumer
Products Division have locked horns in a turf war over which of them will control the Division's
advertising budget. "We're in a better position to balance ad spending across the entire corporation,"
says the marketing VP. The division GM sees a serious loss of control in that idea. "He's just trying to
build a little empire for himself," he says dismissively of his colleague in marketing.

It's personal. Nancy and Brett are both subordinates of Helen, a newly appointed manager. The two
were recently romantically linked but now avoid speaking with one another, even though their work
cubicles are adjacent to one another. If Nancy has something to share with Brett, she either does so via
email or has it delivered by a coworker. No one understands the exact nature of their conflict, but it has
made work within the small office difficult for everyone and generated an unhealthy level of gossip.

Do any of these conflicts seem familiar? chances are that you will have to deal with conflicts like them
sometime during your management career.

Exercise 10-1: Conflict Where You Work

--------------------------------------------------------------------------------

Identify one case of conflict you have observed in your workplace, then answer the following questions:
Who is involved in this conflict?
_____________________________________________________________________________________
___________________

_____________________________________________________________________________________
_____________________________________________

_____________________________________________________________________________________
_____________________________________________

What is at issue in this conflict (for example, fighting over scarce resources)?

_____________________________________________________________________________________
_____________________________________________

_____________________________________________________________________________________
_____________________________________________

What effect is this conflict having on work performance, if


any?_________________________________________________________________________________
_______________________________________

_____________________________________________________________________________________
_____________________________________________

_____________________________________________________________________________________
_____________________________________________
--------------------------------------------------------------------------------

Not Always Bad

Some level of conflict is inevitable whenever people are brought together. Conflict, however, is not
always a bad thing. Consider its opposite: unanimity, a state in which everyone is in agreement. At first
blush, you'd probably say, "What's wrong with everyone being in agreement?" Well, consider the bad
things that happen when leaders surround themselves with like-minded people who will not or cannot
say, "I think that's a bad idea. I know of a better alternative." People use the term groupthink to
describe these situations. People afflicted with groupthink generally have a strong team identity and
strive for consensus and conflict-avoidance. As a result, dissenting ideas are suppressed, and dissenters
are excluded ("She wasn't a team player"). People often make big mistakes when everyone thinks the
same and when conflicting ideas are suppressed. President Kennedy's decision to support the ill-fated
Bay of Pigs invasion by anti-castro cuban exiles is often described as a classic case of groupthink.
Kennedy's advisors were all in agreement and did not invite dissenting views. Similar forces are common
in the workplace, where people often share a common view of the customer and the competitive
environment.

Sarah is a new editor of a leading magazine for people who like to cook. At the meeting to discuss
possible articles for the September issue, she had some ideas. "How about a feature on tailgating?"
"Ha!" snorted Esmé, the editorial director, "Our readers aren't interested in tailgating! They want
elegance!"

"Yes," piped up Rolando, "It's simply not what our readers care about."

"How do we know that?" asked Sarah.

"It's simple," responded Esmé. "As the most prestigious cooking magazine in the country, we tell our
readers what they need to know. They trust us to identify what is important. We have not selected
tailgating. Now let's see, we need an international feature, a vegetarian feature, and who wants to take
on this month's new and unusual ingredient?"

Heads nodded around the room. Years of pre-eminence in the market niche assured that employees
agreed on many things—the infallibility of Esmé being foremost among them. Sarah volunteered for the
equipment feature. In October, the magazine's main rival scored big newsstand sales and free publicity
for its cover article: "Knock Their Socks Off! Haute Cuisine Meets the Tailgate."

A controlled level of conflict is an antidote to groupthink because conflict can raise important issues and
people must grapple with them. Consider the example described earlier in which a team of people
representing different corporate units were studying the pros and cons of an expensive software
system. Conflict within that group served a valuable purpose: alerting management to the potential
problems of the system, and the fact that some units might benefit while others would suffer.

Conflict between the VP of Corporate Marketing and the Division General Manager is also useful in the
sense that it raises a question of interest to management: Which entity is in the best position to deliver
cost-effective advertising for the Consumer Products Division?

Of the four conflict examples presented above, "winner take all" and personal conflicts may be of zero
positive value. Conflict between the two competing sales managers does not appear to help their
organization. If one is chosen to become the new Sales VP, the other may be bitter or may even leave
the company. As for hard feelings between Nancy and Brett, no good can come of their conflict, which is
simply making work more difficult for them and their peers.

Exercise 10-2: Valuable Conflict

--------------------------------------------------------------------------------

Return for just a moment to the workplace conflict you identified in Exercise 10-1. Do you see any value
to the organization in that conflict—that is, has it forced people to debate important issues? Please
explain:

_____________________________________________________________________________________
_____________________________________________
_____________________________________________________________________________________
_____________________________________________

_____________________________________________________________________________________
_____________________________________________

_____________________________________________________________________________________
_____________________________________________

--------------------------------------------------------------------------------

Dealing with Conflict

Conflict is an inevitable feature of organizational life. Your job as a manager is to:

Recognize when conflict adds value and when it does nothing but impede performance.

Determine the cause of the conflict.

Eliminate unproductive conflict.

Keep useful conflict from getting ugly, and eventually resolve it in a manner that maximizes satisfaction
for the conflicted parties.

Follow up.
Each situation is different, so you must rely on your judgment to determine which conflict adds value
and which does not. Unlike useful conflict, which raises important issues, unproductive conflict typically:

Diverts attention from important tasks.

Damages morale.

Polarizes people into hostile and opposing camps.

Reduces cooperation.

Leads to inappropriate behavior.

Does not lead to a beneficial end.

Unproductive conflict, such as the personal rift between Nancy and Brett, should be quickly eliminated.
In these cases, communication is often the best remedy. The manager of these individuals might speak
with each separately and frankly, pointing out the negative impact of their conflict on the department
and their peers. If neither party will change his or her behavior, then the manager must lay down the
law. If that fails, someone must be moved out of the department.

A manager may also work to resolve conflict through communication and negotiation. You should, for
instance:

Ask each conflicted party to express their concern or complaint in a calm and rational manner. Others
should listen without commenting until each party has had their say.

Paraphrase the core of each side's concern or complaint, then ask clarifying questions. "So if I
understand you correctly, you think that shifting responsibility for the division's advertising to corporate
marketing will reduce your sales effectiveness. Is that your position?" Once the person confirms that you
have it right, dig deeper. "What makes you think that shifting responsibility for advertising would
weaken your sales?" The goal here is to get a clear picture of the problem as each side understands it,
and to make sure that the conflicted parties understand each other.

Get people talking about their interests. Interests are often hidden beneath expressed concerns or
positions. For example, referring back to the dispute about buying and installing an enterprise
management software system, the IT department's interest may be fulfilling its mission of providing
timely and reliable IT services to internal customers. That essential mission may be undermined if its
personnel must divert their attention to the huge job of installing and debugging the new system.

Encourage people to set aside debate over their concerns or "positions" and to begin talking instead
about their true interests. Each party should understand the interests of the other.

Once everyone's interests are on the table, you have an opportunity to find a solution that
accommodates each person's interests.

Look for Win-Win Opportunities

There are generally two types of solutions to conflict: win-lose and win-win. A win-lose solution is one in
which all value gained by one party is obtained at the expense of someone else, which is why it is often
called a "zero sum" game. For example, if two people are competing for a single promotion, the person
who gets it wins at the expense of the other, barring some other arrangement. Win-lose situations
assume that the value at stake is fixed: if there is only one promotion available, it cannot be divided or
shared.

Some disputes are, in fact, zero sum games. But never make that assumption. Instead, look for a win-
win solution, one that benefits all parties. You can often find a win-win solution when both parties talk
openly about their interests. Dialogue about interests often uncovers opportunities for value creating
trades, the basis for conflict resolution in many cases. A value-creating trade is one in which Party A
gives something of little value to himself to Party B, for whom that "something" has important value.
Party B, in return, gives Party A something that she values very little, but which A values greatly.
Consider this example of a value-creating trade:
Alyssia and Jack had been feuding for weeks over 600 square feet of office space that would soon be
vacated. Each wanted that space for his or her own department. Eventually, they brought their dispute
to their mutual boss, Ralph, who would eventually decide how the space would be used. Each made a
case for why they had to have the space, and why they were more deserving of it than the other. Ralph
listened until each had their say.

It appeared to be one of those situations where the value at stake was fixed (600 square feet for floor
space). "Well," said Ralph, "what if we divided the space into two equal parts? Would that work for
you?"

"Not at all," Alyssia insisted. "I need 550 square feet to handle the orders for the year-end holiday and
the Easter and Mother's Day crunch. Nothing less will do."

Jack was almost as uncompromising. "We must have at least 400 feet to assemble and pack the semi-
annual sales kits."

Faced with the dilemma, Ralph tried to think of ways to expand the value at stake and satisfy each party.
"You both have a valid point," he remarked, "but is there any way that each of you could have the entire
space at a particular time?"

"You mean swap times?" asked Jack.

"Right," said Ralph. "Since your tasks are somewhat countercyclical, you would take over the space
during those months when you need extra space, and Alyssia would do the same in the months leading
up to major holidays."

"I'm not sure that would work out," Alyssia said reservedly. "We'd have to check our annual
departmental work schedules."

"Yes, do that," Ralph suggested. "Sit down together with a calendar and see how you could
accommodate each other in using this new space. Then let me know what you've found out."
By ceding the space in the spring, when he did not need it, Jack offered Alyssia something she valued at
no cost to himself. Alyssia did the same when she let Jack used the space during her off season. This
example is contrived, but it makes the point: When people understand their interests and those of
others, it's sometimes possible to create conflict-resolving trades that satisfy everyone.

Think About It …

--------------------------------------------------------------------------------

Think for a moment about one or more situations in which a value-creating trade led, or could have led,
to an agreeable conflict resolution.

Briefly describe the conflict:

_____________________________________________________________________________________
_____________________________________________

_____________________________________________________________________________________
_____________________________________________

What were the real interests of the parties?

_____________________________________________________________________________________
_____________________________________________

_____________________________________________________________________________________
_____________________________________________
What trades eventually satisfied, or might have satisfied, the conflicted parties?

_____________________________________________________________________________________
_____________________________________________

_____________________________________________________________________________________
_____________________________________________

--------------------------------------------------------------------------------

Another problem that managers have to address is dealing with difficult people. Although it's tempting
to blame conflict on the personalities of the people involved, this is usually not the reason for office
disturbances. Perfectly nice and reasonable people can find themselves in both productive and
unproductive conflict with others. And the most "difficult" people that managers deal with may not
overtly cause conflict—although their antics can wreak havoc on any organization. Instead, difficult
people bring their own challenges for the manager.

DIFFICULT PEOPLE

Every manager eventually runs into difficult people. They are that small minority of customers who are
always complaining or insisting that they be given special treatment or favors—more than you're
already giving them. They are the under-performing subordinates who act as if the company owes them
a living. Difficult people also include high performers who use their contributions to the company to
justify bad behavior. Their behavior can be rude, malicious, or just strange. Your boss may also be a
difficult person. As a manager, you must be prepared to deal with a range of difficult people.

No one looks forward to confronting a difficult person. It's an unpleasant task. Conflict avoidance is
much easier and more comfortable. But avoidance is unlikely to cure the problem. In some cases, failing
to confront a difficult person may cause serious financial problems for your company. Consider the
following example, as described to the authors by the CEO of a small private company:

Harvey was our top salesperson. My predecessor had hired him away from a competitor.
Harvey was a selling dynamo. He brought in orders we never would have gotten without him. But he
was also a big headache, insisting that our warehouse fill orders to companies that should have been on
credit hold because of receivables 60 days or more overdue.

When our office manager objected, he would threaten to quit, which scared the former cEO, who
always backed down. Harvey also lorded over some of our people, telling them that they would be out
of work were it not for his sales performance.

When I took over the first thing I noticed was the $260,000 in past due payments owed by one of
Harvey's key customers. After a little digging, I discovered similar, though smaller examples of pastdue
accounts. The former cEO wouldn't confront Harvey. I knew that I had to do it, otherwise he might drive
us into insolvency.

This CEO eventually confronted his star salesperson, insisting that Harvey collect his customer's past due
receivables and begin following the company's credit rules. This was a painful conversation for the cEO.
Harvey responded by leaving—taking many of his customers with him. "It took us almost two years to
recover our receivables and to fill the sales gap that Harvey created when he left," reflected the cEO.
"But it had to be done."

--------------------------------------------------------------------------------

Are You a Conflict Avoider?

Everyone avoids conflict to one degree or another, if only because conflict makes them uncomfortable.
How low is your discomfort threshold? Do you change the subject when faced with conflict? Do you give
in when faced with an opposing view? Do you verbally agree to things that you have no intention of
doing? Do you typically put up with a bad relationship rather than change it or leave it?

If you answered yes to these questions, you're a conflict avoider and you'll have to change if you want to
be a successful manager.
--------------------------------------------------------------------------------

A Two-Step Process

Yes, confronting difficult people is stressful, but it's something you must do for yourself and your
organization. If you have any reluctance, or experience a sudden attack of "conflict avoidance," the
following process may help you move forward.

Step 1: Prepare

Preparation will put you in a stronger frame of mind. Preparation involves forethought and making
notes to yourself:

Make a written note of the behavior or issue you need to discuss with this person. As with other
feedback discussions, it is important to focus on behavior, not character traits. Be very specific: "Late to
work ten times in the past four weeks."

Write down the negative consequences that result from this behavior or issue: "Other people on the
team cannot get started until you're there."

Indicate what must change. You should have in your mind the ideal outcome: "Always on time and ready
to work at 9AM."

Anticipate what the other person is likely to say and prepare a counterpoint: "Unreliable bus service
might be a valid excuse for being late to work once in great while, but not ten times in four weeks. You
know when our business day starts. If the buses are chronically late, take an earlier bus. It's your job find
a way to be here on time."
Be prepared for diversionary tactics. Difficult people don't always cooperate by sticking to the issue at
hand. "I've worked here 14 years and the old boss never had a problem with my schedule. I think I'll just
ask my Uncle Paul, the CFO, what he thinks about it."

Have a plan for change. Being the source of the problem, the other person should usually have the first
opportunity to create a plan for change. But have a plan of your own in case he or she is uncooperative
or needs a suggestion.

Step 2: Set up a meeting

Call or email the person. In a businesslike manner, briefly state your purpose: "I'd like you to meet me in
the first-floor conference room tomorrow at three o'clock. It's about your arrival time at work. I'll see
you then." If you do this on the phone, do not entertain any discussion beyond your statement. "I don't
wish to discuss this over the phone. We'll take it up tomorrow at three."

This type of planning will raise your confidence, stiffen your backbone if that's needed, and put you in a
much better position to deal with the difficult person.

When you finally meet, do so in a business-like setting. Stay focused on the problem. Listen well and
patiently, but hold firm to the result you insisted on in your plan.

Another kind of difficult person doesn't cause performance problems directly, but somehow manages to
sow the seeds of unhappiness with her colleagues. This conversation can be more challenging, because
you don't have the performance issue to hang your hat on, and the employee may be careful to be on
good behavior in your presence.

"Samantha, several people have told me that you think the company's sales bonus plan is unfair. Can we
talk about the plan now?"

"Who's been tattling on me this time? Welcome to the police state—a person can't even state an
opinion without having it turn into a big deal!"
"I'm sure you know the plan was carefully designed to increase sales by rewarding successful
salespeople, so I'd like to understand your concerns. If we've missed something in the plan design, it's
probably more useful to share your concerns with me than with your colleagues—at least I might be
able to do something about them."

As a new manager, don't be surprised if these difficult conversations unsettle you and drain you of
energy. But once you've gotten through a few of them successfully, they will become less and less
stressful.

DIFFICULT PEOPLE: SPECIAL CASES

When you deal with problem subordinates, you have something they lack: organizational authority. If
you stay within the scope of your authority, your boss and company will back you up, and you will be
able to enforce the outcome you see as necessary. The same method can be applied when dealing with
your peers, even though you lack the leverage of organizational authority. But you'll need to alter your
approach a bit in dealing with two very special classes of people: customers and your boss.

What's the Customer Worth?

Customers are the source of revenue for the vast majority of enterprises, so you need to treat them
with special care, especially if you're in a business with high customer acquisition costs.

Think About It …

--------------------------------------------------------------------------------

Have you ever noticed how hard magazine publishers work to get you to renew your subscriptions?
They send repeated letters (YOUR SUBSCRIPTION IS ABOUT TO EXPIRE—ACT NOW!), drop the
subscription price, and sometime offer gifts just to get you to sign up for one or more additional year.
They make that effort because the cost of replacing defectors is much, much higher than the cost of
getting people to renew. Credit card companies and commercial lenders face the same high customer
acquisition costs.

What about your business? Is the cost of capturing a customer high or low? Explain:
_____________________________________________________________________________________
_____________________________________________

_____________________________________________________________________________________
_____________________________________________

_____________________________________________________________________________________
_____________________________________________

Your answer will have an impact on your dealings with "difficult" customers. Whether they demand
extra services, pay their bills late, or complain about the products or services they purchase, some
customers cost your company more than others. Which ones are worth it?

--------------------------------------------------------------------------------

Some companies are ferocious in their dedication to winning customers and keeping them happy. As a
marketing executive of an entrepreneurial company told one of the authors, "We always say yes to our
customers. Then we go back to the office and try to figure out how we can make good on our
commitment." That's an extreme approach, but one that has enriched that particular company and its
shareholders.

Most customers are fair-minded in their relationships with vendors. They recognize that both parties—
you and they—must benefit. A few, however, can be difficult, and those few can eat up a lot of your
time. It's likely that the 20/80 rule applies to difficult customers: namely, 20 percent of customers
consume 80 percent of your customer-tending time. But some of these difficult customers are worth the
trouble. One of the authors recalls a particular customer, Frank, who frequently asked for more than he
paid for. He would call the office periodically to ask for some favor that went beyond the terms of the
customer-vendor agreement—free overnight shipping when the delay was his fault, a rush delivery of
printed materials, or special treatment for one of his friends. The office staff hated this and routinely
complained about Frank. "What a pain this guy is," they would say among themselves. "Frank calls here
every week or two with something he wants us to do for him—as if we have nothing else to do." As the
company's main contact with Frank, the author had a different attitude toward this customer. He
respected Frank's professional accomplishments and he saw the problems Frank caused as minor
relative to the value he contributed to the company. Of the company's several hundred active
customers, Frank alone accounted for almost ten percent of all company revenues and almost 15
percent of gross profits. "We should all be very happy with Frank," he liked to remind the office staff. "I
wish we had ten more difficult customers like him!"

Not every difficult customer, however, is as valuable as Frank. Dealing with some difficult customers
costs money and saps people's energy—to the point of making them profitless to serve. So you must
decide how far you'll go in catering to these difficult customers.

Exhibit 10-1: Customer Lifetime Value Analysis

One method for making your decision is customer lifetime economic value analysis. This method
estimates the present value of all net cash flows from the customer over a period of years. As shown in
Exhibit 10-1, the company experienced an initial cost in acquiring a particular customer. In each
subsequent year, serving this customer resulted in a mix of revenues and costs. The net of these cash
flows (revenues less costs) were approximately zero during the first year, but increasingly positive (that
is, profitable) as time went on—a pattern that every company hopes for in its customer relationships.
This customer is a gift that keeps on giving—and worth working hard to keep.
Contrast the positive cash flow of this customer to the situation shown in Exhibit 10-2. Here we have the
case of customer who is unprofitable to serve—roughly breakeven on a year-to-year basis. If this
unprofitable customer is also a difficult person, you should ask yourself, "Do I want to knock myself out
dealing with him?" Unless you anticipate a major change in the value of this customer, you'd be better
off parting ways with him. Doing so will reduce stress and give you more time to spend with customers
of real value.

Whether you're dealing with a valuable customer you hope to retain or with a valueless customer you'd
like to "fire," observe these guidelines:

Exhibit 10-2: Customer Lifetime Value Analysis

Be thoroughly professional.

Be in command of the facts.

Be totally conversant with your company's policies regarding discounts, payment terms, and so forth.

Understand the customer's interests and your own.


Listen carefully. The customer may have a valid reason for being difficult.

Seek a win-win solution.

Think About It …

--------------------------------------------------------------------------------

Can you turn a "difficult" customer into a source of ideas for your company? The extra services and
special product tweaks that "problem" customers request can give you a glimpse into your customers'
needs—and maybe valuable new market opportunities. Furthermore, almost everyone likes to be asked
for advice and input. Listening to your problem customer may help you turn him into a champion.

--------------------------------------------------------------------------------

Your Boss

Your boss is probably the most important person in your work life. Consequently, if he or she is difficult,
you need to find a way to alter the situation for the better.

The problem of difficult bosses is so widespread that a website (badbossology.com) has arisen to
provide solace to the multitudes who suffer under them. How do people feel about their bosses? A
Badbossology.com survey with 1,118 respondents found that 48 percent would fire their bosses if they
could; 29 percent would send their bosses for psychological assessment; and 23 percent would enroll
their bosses in a management training course. Another of its surveys found that the majority of
employees spend 10 hours or more each month complaining about or listening to others complain
about bad bosses, while nearly one-third spend 20 or more hours in boss-bashing. Just how reliable
these data are is open to question; nevertheless, they underscore what everyone in the working world
knows in his bones: there are a lot of difficult people in management positions. Hopefully, you're not
one of them.
What makes a boss "difficult"? consider these causes:

Doesn't communicate. This is a typical cause of bad-bossdom. Direct reports don't know their boss's
priorities or his expectations of them. The boss provides no feedback. People are kept in the dark about
management's plans. Lots of hard work is wasted when the boss complains, "That's not what I wanted.
Do it over."

Fails to respect subordinates and their contributions. People feel devalued, and that is taking a toll on
morale. Failing to get respect, the boss's direct reports return the favor, creating tension.

Fails to develop subordinates' skills and careers. Good managers provide coaching and give their direct
reports important, career-enhancing assignments. They are happy when their best people are promoted
into more important positions. The bad boss does not want subordinates to grow professionally—that
would only encourage them to leave for a better job.

Creates a bottleneck. Nothing can be undertaken or decided without this boss's okay, making her a
bottleneck in the flow of work. Since she's seldom available to make routine decisions, uncompleted
work piles up.

Micromanages. Either through a lack of trust, an obsession with control, or a need to let everyone know
that she's the brightest person in the room, this boss has to be involved in everything and make all the
decisions. Competent subordinates feel suffocated.

Is highly political. Everything this boss does is done to advance his career. He will blame others for his
mistakes and take personal credit for their accomplishments. He will also lie and withhold information
when doing so furthers his ambitions. He will not support his people if doing so involves a political risk
for him.

If you spend enough time in organizations, you're bound to encounter a boss with one or more of these
bad characteristics. Working for any one of them is bound to be difficult—though a useful object lesson
in how not to manage people.
Though there are a few personally flawed characters in this list of bad managers, most of them are good
people who just haven't learned how to communicate or deal effectively with the human resources
entrusted to them. Perhaps they had no managerial training. Perhaps they learned the ropes of
management from a boss who had one or more of those bad habits. Perhaps they are simply buckling
under the pressure of their jobs. Whatever the case, if your difficult boss is a fair, well-intentioned
person, there's a good chance that the two of you can develop a productive and mutually beneficial
working relationship.

How you build a good working relationship with a difficult boss should be determined by the situation.
Much will depend on the nature of the person you're dealing with and his or her openness to change.
The first step, however, is always communication. Even if your boss is closed-mouth and a poor listener,
you must find a way to get through. And the most important thing for you to communicate is your
interest in helping him or her to be successful. That kind of offer is irresistible to every rational boss—
good ones and bad ones alike. Above all:

Frame your conversations in terms of his or her interests and responsibilities, and how you can help.

Be very aware of top management's priorities and concerns, and how your unit, working through your
boss, can address them.

Neither of these actions, however, will solve the problem of the difficult boss who is irrational,
incompetent, or lacking integrity. In that case, you have two choices: (1) quit or make a lateral move
within the organization, or (2) minimize contact with your toxic boss until such time as he or she is
forced to walk out. Truly terrible bosses are eventually fired or retired. While you wait for that happy
day, build support for yourself within the wider organization:

Build a strong and supportive network within the company.

Develop a mentoring relationship with a respected manager or executive who outranks your boss.

Resist whining about your boss; remain professional at all times.


These actions will provide a measure of employment protection and, very possibly, open the door to a
new and better job within the company.

You

Yes, you! The most important factor in keeping employees engaged is a positive relationship with their
boss. Look again at the list of behaviors that characterize bad bosses, and honestly assess yourself
against them.

Exercise 10-3: Becoming a Good Boss

--------------------------------------------------------------------------------

The "flip sides" of the traits of a bad boss are all good habits to practice. Rate your own behavior from 1
to 10, with 1 being "rarely" and 10 being "always."

I communicate information, expectations, and feedback in a timely and positive fashion._________

I respect my subordinates and let them know that I value their contributions._________

I work with my subordinates to develop their skills and careers._________

When my input is required, I provide it in a timely way._________

I delegate appropriately and avoid micromanaging._________


I try to be fair and make decisions based on the merits of the case, not on favoritism or office
politics.___________

--------------------------------------------------------------------------------

Being a good boss is an important part of becoming a successful manager. These actions, as well as the
other tips and advice found throughout this book, will serve you throughout your career.

RECAP

Conflict is a state in which the ideas, interests, plans, goals, egos, and agendas of individuals clash.
Workplace conflict can be destructive. Examples of unproductive conflict include: the winner-take-all
scenario, where one individual or department wins and another loses, undermining collaboration and
hurting morale; the not-good-for-me scenario, in which an individual or a group advances or blocks an
agenda based solely on their own interests, without regard for the overall health of the organization;
turf warfare, where parties battle for control of resources and influence; and the it's personal scenario,
which develops when personal conflicts spill over into the workplace. Controlled conflict can also be
valuable, bringing new ideas to the table, improving discussion, and ensuring that management hears all
sides of an issue.

Difficult people can take up a lot of a manager's time. When dealing with difficult employees, use a two-
step process to address the issue. Step 1 is to prepare by making notes on the behavior or issue, noting
negative consequences, indicating what must change, anticipating the response, preparing for
diversionary tactics, and making a plan for change. Step 2 is to set up a meeting by phone or e-mail to be
held in a business-like setting. At this meeting you will listen carefully, while holding firm to the result
you outlined in your plan.

When the difficult person is a customer, analyzing his value to your organization will help you determine
how best to handle him. One method for assessing a customer's value is customer lifetime economic
value analysis. In dealing with all difficult customers, regardless of value to the organization, you must
be professional; in command of the facts; well informed about organizational policies on discounts,
payment terms, and so on; understand both the customer's interests and your own; willing and able to
listen carefully; and ready to seek a win-win solution.
Perhaps the most challenging "difficult" relationship is the difficult boss. When this is the case, frame
your conversations in terms of his or her interests and responsibilities, and how you can help. Be very
aware of top management's priorities and concerns, and how your unit, working through your boss, can
address them. The characteristics of bad bosses—poor communication, lack of respect for others, not
developing staff, being a bottleneck, micromanaging, and acting politically—can all be studied as ways
to be a better boss.

REVIEW QUESTIONS

1. Which is a typical characteristic of a difficult boss?

Is too open with subordinates

Doesn't communicate

Has a process orientation

Delegates challenging tasks

1. (b)

2. In dealing with a difficult customer, you should give some thought to this customer's:

personal feelings.

relationship with your employees.

interest in competing products or services.

lifetime economic value to the company.


2. (d)

3. John has given Bernice a file cabinet he doesn't need. This helps

Bernice immensely. In return, John asks if his people can use Bernice's photocopier

periodically. "Sure," says, Bernice, "it's idle half the time." This is an example of:

process sharing.

a value-creating trade.

an even trade.

conflict resolution.

3. (b)

4. A manager should work to eliminate:

all conflict.

unproductive conflict.

conflict over the best way to achieve a unit goal.

time spent on discussing differences of opinion.

4. (b)
5. Conflict serves a useful purpose in an organization when it:

pits competing employees in winner-take-all situations.

allows managers to exercise their organizational authority.

forces people to raise and debate important issues.

divides employees along loyalty lines.

5. (c)

Afterword

You've come to the end of our course on Becoming a Manager. The ten preceding chapters have
examined many of the key challenges you will face and have offered practical solutions for overcoming
them.

Mastering the material in this course will get you off to a good start on your managerial career, but
there is much more to learn. Because of space constraints we have either excluded or given cursory
treatment to many important topics, including: managing teams, motivating subordinates, project
management, negotiating, aligning rewards with goals, budgeting, strategic planning, organizational
structure, and managing cultural diversity—to name just a few. There are, in fact, enough facets to the
study of management to engage an entire lifetime of learning. We recommend that you continue your
management education through the many books, articles, and training course currently available.
Learning—and the application of what you learn—will help you master your profession.

Start today.

Bibliography

Cohen, Allen and David Bradford, Influence Without Authority. New York: John Wiley & Sons, 1989.
These management scholars introduce the metaphor of currencies, a kind of IOU that managers can use
to expand their workplace influence. Currencies, according to the authors, are the resources and favors
that managers offer to others in exchange for cooperation. The book is filled with practical examples of
people placed in situations where they must manage without sufficient authority.

Delpo, Amy, and Lisa Guerin, Dealing with Problem Employees. Berkeley, CA: Nolo, 2001. Every manager
encounters problem employees. This book explains how to handle them—without creating legal
liabilities for yourself and your organization.

Hersey, Paul, Kenneth Blanchard, and Dewey Johnson, Managing Organizational Behavior, Ninth Edition,
Englewood Cliffs, NJ: Prentice Hall, 2007. The authors apply behavioral sciences findings to modern
management and issues of motivation, situational leadership, and change management.

Herzberg, Frederick, "One More Time: How Do You Motivate Employees?" Harvard Business Review,
January 2003. A classic article on motivating in the modern workplace. What works and what doesn't?
Herzberg will help you figure it out.

Hill, Linda, Becoming a Manager: Mastery of a New Identity, 2nd edition. Boston, MA: Harvard Business
School Press, 2003. Hill, a professor at Harvard Business School, studied the transition of 19 young
individual contributors to the ranks of management. The difficulties they experience and personal
transformation they underwent are well described, often through the words of the subjects. Any new
manager would benefit from skimming this book.

Labovitz, George and Victor Rosansky, The Power of Alignment. New York: John Wiley & Sons, Inc., 1997.
"Alignment is the essence of management," says FedEx founder Fred Smith in this important book. All
managers understand the important of clear goals—for themselves, their units, and their subordinates.
Alignment of effort, and the rewards that support it, is the centerpiece of performance. This book
explains both the importance of aligning individual and unit goals with the strategic goals of the
enterprise, and how to do it.

Luecke, Richard, Business Communication. Boston, MA: Harvard Business School Press, 2003. This short
book offers readers a clear and comprehensive overview on communicating effectively. The emphasis is
on written and presentation formats.
Luecke, Richard, Power, Influence, and Persuasion. Boston, MA: Harvard Business School Press, 2005.
Part of the Harvard Business Essentials Series, this book takes a broad look at how managers and
employees can impact the decisions and actions of their organizations, stressing the very necessary role
of power, influence, and persuasion in organizational work.

Maslow, Abraham H., editor, and Deborah C. Stephens, The Maslow Business Reader. New York, John
Wiley & Sons, Inc. 2000. This volume collects some of Maslow's most important essays, including his
seminal thinking in "A theory of human motivation," (the hierarchy of needs).

Matheson, David and Jim Matheson, The Smart Organization. Boston, Harvard Business School Press,
1998. The authors describe the "smart" organization as one that routinely makes good decisions. They
describe the decision process developed by Strategic Decisions Group, of which they were principals
when the book was written.

Mintzberg, Henry, "The Manager's Job: Folklore and Fact," Harvard Business Review, March-April 1990,
164. A classic article based on Mintzberg survey research of how executives actually spend their time.
The fragmented chaotic picture he draws stands in dramatic contrast to the orderly process of
management described in most college textbooks.

Oncken, William Jr., and Donald L. Wass, "Management Time: Who's Got the Monkey?" Harvard
Business Review. Boston: Harvard Business School Publishing, 2000. Are you feeling overwhelmed by
work? Are you always short of time? Do you delegate duties to subordinates only to have them put the
"monkey" onto your back? If these are your problems, order this classic article, which contains plentiful
good advice about effective delegating.

Schwartz, Andrew E., Delegating Authority. New York: Barron's Business Success Series, 1992. Delegating
is a method you can use to develop the skills of subordinates and get them accustomed to taking
responsibility and accountability. Schwartz's guide will help you delegate using five steps: goal setting,
communication, motivation, supervision, and evaluation.

Tannenbaum, Robert and Warren H. Schmidt, "How to Choose a Leadership Pattern," Harvard Business
Review (1958). A landmark article on situational leadership and picking an appropriate style of
leadership, it can be purchased online and downloaded from HBR's articles archive at
www.hbsp.harvard.edu.
Watkins, Michael, The First 90 Days: Critical Success Strategies for New Leaders at All Levels. Harvard
Business School Press, 2003. This author focuses on the perilous transition that so many corporate
managers face: taking on a new position or a new major initiative. This research concludes that the first
three months in those positions are critical. He offers practical strategies for success in those months. If
you're looking for a short-cut, read an online interview with the author on this subject at
http://hbswk.hbs.edu/item/3771.html.

Weber, Max, Theory of Social and Economic Organization. Translated by A. R. Anderson and Talcott
Parsons, 1947.

Online Resources

Managers and supervisors who want to learn new ideas for doing their jobs can find lots of useful
information on the Internet. So, if you'd like to learn more, surf the following sites, which we've listed
under key topics. Some of the URLs are long and complex, so copy the URLs that interest you, then paste
them into the address line of your Internet browser. That way you'll avoid spelling errors. NOTE: These
URLs were live when this course went to press. Some may have been taken down since then.

Communicating with Offsite Employees

Many work teams are geographically dispersed. Telephones, email, and video conferencing help these
team members communicate. Here's an online article with more about how you can use those
technologies to keep in touch with people you seldom see in the office.

http://www.sideroad.com/Business_Communication/communicating-with-offsite-employees.html

Language and Culture Differences

Though language and cultural differences were beyond the scope of this course, the management
implications and challenges of those differences are very real in the U.S. and many other locations. Here
is a source of information on these subjects.

http://www.beyondintractability.org/essay/cross-cultural_communication/

Persuasion

Persuasion is one of the most valuable tools that any manager can cultivate. Each of these sites has an
essay listing three or more things you can do to be more persuasive.

http://www.sideroad.com/Sales/persuasive-communication.html
http://www.sideroad.com/Business_Communication/persuasive_communication-business.html

Communicating with Difficult People

Chapter 10 discussed the handling of difficult people. You can learn more at this site.

http://www.sideroad.com/Business_Communication/communicating-with-difficult-people.html

Sometimes the problem isn't the other person; you're simply dealing with a sensitive or difficult
matter—a "difficult conversation." The following link will take you to an article that explains how to
engage in those difficult conversations. It is written by a certified mediator.
http://www.mediate.com/articles/persingerT7.cfm

General Information

Harvard Business School operates a very useful free site called Working Knowledge. Every week it has
new, practical articles by business scholars on different aspects of business and business management.
Older, archived articles are easily found and retrieved. Most articles can be downloaded online.

http://hbswk.hbs.edu/

Not wanting to be outdone by Harvard, a major rival, the University of Pennsylvania's Wharton School of
Business has a similar site, Knowledge@Wharton, found at http://knowledge.wharton.upenn.edu. It too
has hundreds of practical, current articles on all aspects of business, including the issues that matter to
newly appointed managers. To find appropriate articles, go to the home page, then click the subject
areas of interest, or type a keyword into the site's search engine.

Another general help site is http://www.managementhelp.org. It contains short, practical advice on a


broad spectrum of management issues: how to run a meeting, staff a department, develop future
leaders, and so forth. Just go to the main page and click the subject that interests you.

Meetings

Nobody gets a bill at the end of a meeting, but meetings do have a cost. At a minimum that cost is the
sum of the salary and benefits paid to all attendees during the length of their meetings. Have you ever
speculated about the cost of meetings you attend? If you go to
http://www.effectivemeetings.com/diversions/meetingclock.asp, you will find a free downloadable
calculator that can help you make an informed cost estimate.

Glossary
Numbers

360-degree feedback

A system that provides employees with feedback not only from their managers, but from other
employees with whom they interact in the course of their duties—primarily their peers and
subordinates.

A-F

Action plan

Subset of an operational plan. Action plans break down the activities cited in the operational plan into
their component parts.

Activity log

In time management, a detailed record of how a person spent his or her time over the course of a day or
week.

Alignment

A condition in which all operating goals and activities of the organization are linked in support of its
topmost goals.

Benchmarking

The act of comparing business processes, time cycles, or outputs to some standard, usually other
examples in the same industry.

Body language

Nonverbal communication that includes gestures, postures, and facial expressions.

Business process

A set of activities, or steps, that transforms inputs into outputs that customers value.

Coaching

A process through which managers help their subordinates develop skills, prepare for new
responsibilities, or eliminate performance problems.

Command and control

A model of management in which information relative to customers and operations flows upward
through the chain of command to the top, where decisions are made; directives based on those
decisions are then communicated downward through the same chain of command.
Conflict

A state in which the ideas, interests, plans, goals, egos, and agendas of individuals clash.

Conflict avoiders

People who are so uncomfortable with conflict that they will alter their behavior or position in order to
avoid unpleasantness.

Contingency plan

A plan that identifies actions that can be taken if another plan doesn't work or if some undesired
outcome occurs.

Continuous process improvement (CPI)

A management philosophy that continually reexamines business processes in an effort to find and
eliminate steps and/or activities that add time, cost, and errors. CPI results in gradual, incremental
improvements that make processes faster and cheaper, and increase output quality over time. Called
kaizen in Japan.

Control

A basic function of management. Control involves mechanisms that monitor activities and compare
them to previously set plans. Management intervenes when it observes variances between plans and
actual performance. Standards, schedules, and budgets are key control tools.

Cycle time

The amount of time required to complete a business process.

Delegation

The assigning of work, and responsibility for that work, by one person to another.

Employee empowerment

A workplace culture that gives subordinates substantial discretion in how they accomplish their
objectives.

Feedback

Communication that provides information about how well a person is performing against expectations.
Feedback helps subordinates and managers better understand mutual expectations, celebrate
successes, address workplace problems, and seek improvement. It is a two-way conversation that is
most effective when the parties trust each other, and when both are good listeners and explainers.

Fishbone chart
As used in process improvement, a diagrammatic way of working backward from an effect to its root
cause.

Flexible leadership

A leadership approach that presumes that different situations and different subordinates call for
different styles.

Frame

In decision making, the mental window through which we view the world or a particular problem or
issue. A frame influences how we see, hear, and interpret the world around us.

I-T

Influence

A person's ability to alter or affect the behavior of others without recourse to the power to command.

Kaizen

See Continuous process improvement.

Leading

The act of influencing others to voluntarily accomplish a mission.

Manager

A person who gets things done through people and other resources.

Mentor

Someone who volunteers to help someone else, usually a younger person, master his trade, develop his
career, and negotiate the politics of the enterprise.

Nonverbal communication

The transmitting and receiving of messages without words, but with body language.

Open-ended question

A question that cannot be answered with "yes" or "no."

Operational planning

A process for assuring strategy implementation. Operational planning determines the concrete activities
that the company's different operating units—marketing, product development, manufacturing,
logistics, and so forth—must implement to make the strategy a success.
Paraphrasing

Stating in your own words what you have just heard from a speaker.

Performance appraisal

A management practice that aims to assess how well an individual measures up to unit standards and/or
his or her assigned goals. Its findings are used for pay and promotion purposes, as well as employee
development.

Performance management

A set of activities that managers use to measure and improve the effectiveness of their subordinates.
Those activities include performance appraisal, giving and receiving feedback, coaching, rewards,
employee training, and career development.

Persuasion

A communication process through which we alter or affect the attitudes, beliefs, or actions of others.

Planning

The act of deciding how the organization should accomplish its goals: what should be done, how, and by
whom.

Process mapping

An activity that defines, in graphic form, the pathway through which inputs are turned into value-added
outputs. A process map records the entire sequence of activities, the exact inputs, who does what, who
has responsibility, and the measures of successful output.

Span of control

The number of people reporting to a manager in an organization.

Strategic planning

Planning that defines how the organization will achieve its goals.

Team-based work

Work performed in a coordinated manner by a set of employees, often individuals with very different
skills.

Thought leaders
People to whom others listen when important matters are on the table. These "centers of influence"
may have organizational authority—a supervisor or manager— technical expertise, or just the kind of
good sense that commands respect from others.

Time management

The allocation of a limited resource—available time—to its highest use.

Trust

A condition wherein we have reliance or confidence in the character, ability, or truthfulness of someone
else.

V-W

Value-creating trade

A trade in which Party A gives something of little value to itself to Party B, for whom that "something"
has important value. Party B, in turn, gives Party A something in return that it values very little, but
which A values greatly.

Virtual team

A team of geographically separate members who work toward common goals across time, space, and
organizational boundaries; members seldom meet face-to-face, but depend heavily on communication
technologies.

Win-lose solution

A solution in which all value gained by one party is obtained at the expense of someone else. Also called
a "zero sum" game.

Win-win solution

A solution in which all parties benefit.

Post-Test

Becoming a Manager

Course Code 96023

INSTRUCTIONS: Record your answers on one of the scannable forms enclosed. Please follow the
directions on the form carefully. Be sure to keep a copy of the completed answer form for your records.
No photocopies will be graded. When completed, mail your answer form to:
Educational Services

American Management Association

P.O. Box 133

Florida, NY 10921

If you are viewing the course digitally, the scannable forms enclosed in the hard copy of AMA Self-Study
titles are not available digitally. If you would like to take the course for credit, you will need to either
purchase a hard copy of the course from www.amaselfstudy.org or you can purchase an online version
of the course from www.flexstudy.com.

To make a good decision, begin by:

correctly defining the issue or problem.

identifying sources of support.

narrowing the focus to a single alternative.

analyzing the data.

Which process do managers use to assign formal authority, responsibility, and accountability for work
activities to subordinates?

Promotion

Process improvement
Delegation

Teamwork

A key function of management is:

financing.

persuading.

influencing.

planning.

_______________________ are the starting point for effective time management.

Promotion opportunities

Time motion studies

Delegated tasks

Goals
Decisions on big, complex, and important issues require:

top-down control.

the knowledge and insights of many people.

a plan for allocating outcome responsibility.

an enlarged role for legal and accounting specialists.

Which is a managerial tool for providing feedback to subordinates?

Brainstorming session

Quarterly report

Balanced scorecard

Annual performance review

Which is a management approach that seeks to improve output and reduce errors and cost through
many incremental steps?

Continuous process improvement

Command-and-control
Process innovation

Kaizen

In resolving conflict, one should look beyond people's stated positions to their:

attitudes.

interests.

organizational skills.

educational background.

Communication through which we alter or affect the attitudes, beliefs, or actions of others is called:

dialogue.

debate.

contingency planning.

persuasion.
In the workplace and in other settings, our dependence on others (subordinates, peers, and bosses)
gives them some measure of:

authority.

freedom of action.

influence.

responsibility.

repeatable activities, or steps, that transform workplace inputs into outputs that customers value is
called a(n):

chain of causation.

operational framework.

matrix operation.

business process.

A state in which the ideas, interests, plans, goals, egos, and agendas of individuals clash is:

equilibrium.
insolvency.

conflict.

quiescence.

Difficult bosses may:

praise performance too publicly.

take credit for the accomplishments of others.

delegate challenging tasks.

insist that employees take training classes.

A manager should give feedback to a subordinate:

in public whenever possible.

only during the annual performance review.

always in writing.

soon after the incident of interest has occurred.


A person responsible for getting things done through people and other resources is called a(n):

individual contributor.

manager.

subordinate.

freelancer.

A person who aims to give effective feedback should focus on:

positives and negatives equally.

only those things that the other person is prepared to hear.

negative behaviors that reduce team performance.

modifiable behaviors, not unchangeable ones.

Which of the following become(s) less important as one rises through the ranks of management?

Interpersonal skills
Ability to communicate

Technical skills

Peer networks

Which provides a means of altering the behavior of others without recourse to the power to command?

Groupthink

Attitude alignment

Control

Influence

The assignment of work, and responsibility for that work, by one person to another is called:

expanding the span of control.

downloading.

delegating.

multitasking.
You may find that the most important thing you can do as the manager of former coworkers is to:

celebrate your promotion.

maintain the same relationships you previously had.

demand full compliance with company policies.

recognize that your relationship has changed.

______________ defines how the organization aims to achieve its highest goals.

Alignment

Strategic planning

Matrix management

Optimization

Which of the following should a new manager seek as a workplace mentor?

His or her current boss


An executive coach

A human resources specialist

A former boss or other respected executive

A personal quality that sets leaders apart from ordinary people and makes them appear endowed with
exceptional powers or qualities is:

charisma.

self-confidence.

intelligence.

communication skill.

Which is an element of performance management that assesses how well an individual measures up to
unit standards and/or his or her assigned goals, and is used for pay and promotion purposes, as well as
employee development?

Feedback

Employee development

Career counseling
Performance appraisal

Which activity do managers use to help their subordinates develop skills, prepare for new
responsibilities, or eliminate performance problems?

Formal performance appraisal

Coaching

Behavior modification

Motivation

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