HUMAN RESOURCES

The High Price Companies Pay for Mediocre Managers

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The smartest executives know that the most competitive market they operate in each day is not the market for their product; it is the market for the best employees for their company. In a global economy that continues to race along as if fueled by an unending supply of double cappuccinos, companies are finding it more and more difficult to attract and retain talented employees. Human resources executives and consultants search for ever more generous pay packages to hold on to the best workers at every level.

In their bestseller, First, Break All the Rules: What the World's Greatest Managers Do Differently, Marcus Buckingham and Curt Coffman of the Gallup organization conclude that focusing on pay and perquisites is misguided. A company can offer employees generous compensation, benefits, and wonderful perks such as health clubs and daycare centers, and still lose their best workers. What many otherwise excellent companies miss, according to the authors, is that one mediocre manager can wreak havoc in even the best organization and send the most talented employees running for the exits.

The two researchers gathered information from more than 80,000 managers in more than 400 companies. They found that the single biggest stumbling block to corporate success is bad management in a company's middle levels. Buckingham and Coffman don't dither: "The manager was the critical player in building a strong workplace." Their findings fly in the face of the long-accepted nostrum that as long as a company has a strong leader at the top, creates an attractive corporate campus, complete with a health club and concierge, and provides generous pay and benefits, it will have no trouble attracting, motivating, and retaining talented employees. Wrong, say the Gallup duo. Employees want excellent management at every level.

Companies, according to the authors, have overlooked the "manager" issue. Senior managers in companies are guilty of the same omission: They have failed to train staff to be effective managers, and they have failed to supervise managers' performance effectively. Companies are awash in information, performance metrics, and statistical analyses of products and markets. But, asks the duo, what is top management doing to capture information about the effectiveness of their managers and the impact the managers are having on their direct reports? Far too little, they conclude.

Buckingham and Coffman observe that each manager creates a culture within his or her department. The end result is that a company has as many cultures as it has managers. That culture may be positive and strong or it may be destructive and at odds with the culture top management is trying to create. Companies need to recognize the fact that each company is a collection of cultures. One significant benefit of this finding, the authors stress, is that the company does not have to go outside the organization for best practice assessment. They've got best practice somewhere within their own organization. They just need to find it and then learn from it.

The best manager will focus on helping his or her workers answer the following key questions with vigorous affirmation:

1. Do I know what is expected of me at work?

2. Do I have the materials and equipment I need to do my work right?

3. At work, do I have the opportunity to do what I do best every day?

4. In the last seven days, have I received recognition or praise for good work?

5. Does my supervisor, or someone else at work, seem to care about me as a person?

6. Is there someone at work who encourages my development?

These are fundamental questions, but the authors argue that too many businesses miss the mark because they stray from the fundamentals. They aim too high and forget about building a strong foundation. Executives tend to run past the basics as they stampede to the latest book, the newest theory, or the hottest guru.

Buckingham and Coffman found that the best managers work each day to create heroes in every role. These managers level the playing field and help each employee discover how best to grow within the organization. Outstanding managers are adept at "holding up the mirror" when they give performance feedback. They meet with their direct reports on average once a quarter to talk not only about the quarter just ended, but more important, to set new goals and objectives for the next quarter. The focus of these meetings is on the future. The great manager sees herself or himself in partnership with each worker.

This does not mean that great managers are soft. Indeed, they are firm believers in tough love. Employees who do not excel don't last long. Great managers believe in excellence and create an environment in which anything short of excellence is not tolerated for long. But the key distinction between great managers and others is that great managers understand that employees who underperform do not do so because they are stupid, inept, or uncooperative. Rather, the manager realizes that the person has been miscast and put in a position where his or her strengths do not match the skills needed to excel.

Buckingham and Coffman conclude that exceptional managers want to set up their employees for success. They want to help employees become more of who they already are. They want to treat each employee with dignity and respect. They recognize that they cannot change a person's nature or characteristics; they can only facilitate. Great managers focus on the basics, which, as the authors point out with no small degree of distress, flies in the face of conventional wisdom. The first step, therefore, to developing great managers within a company is, as the title of this insightful book tells us, to "break all the rules."

All materials copyright © 2000 the Wharton School of the University of Pennsylvania.

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Last updated: Feb 16, 2000




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