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The Management Challenge


Chapter 1 The Management Challenge: Critical Skills for the New Workplace Characteristics of the New World of Work Today s Organizations Hierarchies are flatter. – PowerPoint PPT presentation

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Title: The Management Challenge

Chapter 1
  • The Management Challenge
  • Critical Skills for the New Workplace

Characteristics of the NewWorld of Work
The New World of Work
Todays Organizations
  • Hierarchies are flatter.
  • Deadlines are shorter.
  • Teams are pervasive.
  • Employees must manage themselves.
  • Technology is transforming the nature, pace, and
    possibilities of work.

Demands of the Modern Workplace
Attention to Ethical Behavior
Demands of the Modern Workplace
Management Skills and Company Success
  • One study of manufacturing firms showed managers
    ability to be three times as powerful in
    explaining company profitability as all other
    factors combined.
  • A study in the United Kingdom revealed management
    weaknesses to be the primary cause of
    insolvencies, with poor management being cited in
    more than 80 percent of cases.
  • These and many other studies of large and small
    firms are consistent in pointing to management
    skills as critical to firm success.

Some Management Success Stories
  • Management success stories are abundant, cases in
    which management skills have created or
    transformed organizations in remarkable ways.
  • Among the many examples of management success
    stories to be examined in future chapters are
    such well known ones as
  • Herb Kellehers development of a successful
    culture of fun at Southwest Airlines
  • Mary Kay Ashs inspirational leadership at Mary
    Kay Cosmetics
  • Jack Welchs transformation of GE
  • Others well consider, such as Aaron Feuersteins
    humane management decisions at Malden Mills, are
    less visible but no less dramatic.

Web Wise The Top 25 Managersof the Year
  • Business Week annually selects its Top 25
    Managers of the Year.
  • The Top 25 Managers in 1999 were a diverse group,
    including Minuru Arakawa of Nintendo America,
    Steve Jobs of Apple Computer and Pixar, Timothy
    Koogle of Yahoo!, Jenny Ming of Old Navy, Martha
    Stewart of Martha Stewart Omnimedia, and Jack
    Welch of GE.
  • http//

Critical Skills Across Business Functions
  • A study of financial staff found that, in
    addition to financial leadership, strategic
    thinking, effective communication, and leadership
    were identified as critical skills.
  • A survey of chief information officers found that
    more than three-fourths believe that more
    widespread use of technology will require IT
    workers to communicate more effectively and
    articulately. With more frequent information
    exchange, skills such as communication,
    diplomacy, and problem solving will grow in

Critical Skills Across Business Functions
  • A study of Sales Management Competencies for the
    21st Century identified eight critical
    competencies for top-performing sales managers,
    including providing strategic vision, assembling
    teams of skilled employees, sharing information
    with employees, coaching, diagnosing performance,
    negotiating, and selecting high-potential
  • The American Institute of Certified Public
    Accountants Core Competency Framework identified
    communicating, handling personal relationships,
    and facilitating learning and personal
    improvement among the skills and competencies
    accounting professionals will need for success in
    the future.

Skills Training in Organizations
  • American corporations spend more than 64 billion
    annually for the training of their workforces,
    about 85 of it in the area of management skills.
  • Dana Corp. requires all its employees to complete
    40 hours of education each year. The company has
    three Dana University schools.
  • Merck Co. spent 3.5 of its 1999 payroll, or
    about 100 million, on employee skills
    development programs.
  • Abbott Technologies provides its employees with
    tuition reimbursement of up to 7,000 for
    undergraduate studies and 9,000 for graduate
  • General Electric spends about 1 billion annually
    on education and training programs.

Focus on Management Skills Training at ATT
Wireless Services
  • ATT Wireless Services is fighting to maintain
    its leadership in the face of intense competition
    and technological changes.
  • It is using a process called Managing Personal
    Growth (MPG) to help employees identify key
    competencies or critical skills, develop them
    with resources available through the company, and
    translate them into day-to-day decisions and
    actions that help the company meet its goals.
  • Employees must take responsibility for developing
    those critical skills on an ongoing basis
  • Once employees have gone through a process of
    deciding what new competencies they want to
    acquire, employees talk with their supervisors to
    develop an individual plan for their development.
  • Employees job security is grounded in what they
    know and the value they can create around

The Status of Skills Training
  • A survey by the Conference Board showed that a
    full 98 reported that their skills training
    reaped significant economic benefits for the
  • Still, many companies are failing to develop key
    managerial skills. For example, studies show
  • just 21 of companies were able to identify where
    employees want to be in terms of skill
    development in a year
  • 58 of managers had received no leadership
    training, 72 had received no training on giving
    feedback on performance, and 87 had received no
    training in stress management
  • As such, you cannot assume that every company
    will help you develop needed skills.

The Need for Management Skills
The Need for Management Skills
Managerial Skills and Hiring
  • Companies are hiring for skills, including
    management skills.
  • A report released in 2000 by the U.S. General
    Accounting Office provided succinct advice for
    organizations Hire, develop, and retain
    employees according to competencies. Identify
    the competencies -- knowledge, skills, abilities,
    and behaviors -- needed to achieve high
    performance of mission and goals, and build and
    sustain the organizations talent pool through
    recruiting, hiring, development, and retention
    policies targeted at building and sustaining
    those competencies.
  • Many companies go further, by tracking skills
    acquisition in their workforce and tying pay to
    skills attained, even if the skills are not used.

The 16 Basic Skills Employees Need (Figure 1-1)
  • Knowing How to Learn
  • Reading
  • Writing
  • Mathematics
  • Listening
  • Oral Communication
  • Problem Solving
  • Creative Thinking
  • Self-Confidence
  • Motivational Goal Setting
  • Personal and Career Development
  • Interpersonal Skills
  • Negotiation
  • Teamwork
  • Organizational Effectiveness
  • Leadership

Ranking of HR Managers Perceptions of Criteria
for Evaluating Business Graduates (From Figure
BLS Prediction
  • The Bureau of Labor Statistics predicts that the
    average 22-year-old college graduate in the year
    2000 will have more than eight different
    employers before he or she reaches the age of 32
    that is a change of employers every 15 months.

Managerial Skills in the New Work Environment
Managerial Skills and Career Success
Managerial Skills in the New Work Environment
Demand for Managerial Skills
Hiring for Competencies at Merck
  • When Merck and Company needed to fill a large
    number of field representative positions, it
    decided to focus specifically on competencies.
  • Hiring managers were asked to identify the
    specific traits, skills, and behaviors most
    critical to job performance.
  • A process was then developed to screen for those
    competencies at various steps of candidate
  • Each candidate was then scored on the criteria to
    give a rating of his or her potential.
  • The process was more efficient than previous
    approaches, yielded greater consistency across
    regions, and increased diversity.

Managerial Skills and Life Success
Managerial Skills Sets
  • Technical skills include knowledge about methods,
    processes, and techniques needed to carry out
    some specialized activity as well as the ability
    to use tools and equipment related to the
  • Human skills deal with human behavior and
    interpersonal processes, communication,
    cooperation, and social sensitivity.
  • Conceptual skills include analytical ability,
    creativity, efficiency in problem solving, and
    ability to recognize opportunities and potential
  • Thus, the typology distinguishes between
    abilities to deal with things, people, and ideas
    and concepts.

Management Skills Needed for Success by
Organizational Level (Figure 1-3)
Top-Level Managers Middle-Level Managers First-L
evel Managers
Differences Between School and Business
School Success andCareer Success
  • A wide range of studies show that success in
    school does almost nothing to predict subsequent
    career success.
  • It is the growing evidence of this very weak link
    that has led many educators and managers to call
    for a greater emphasis on skills in the learning
  • The authors of a major study of management
    education sponsored by the American Assembly of
    Collegiate Schools of Business concluded that,
    The challenge of how to develop stronger people
    skills needs to be faced by both business schools
    and by corporations and firms in their
    management development activities

The Knowing-Doing Gap
  • Simply knowing -- recognizing or understanding
    what to do to manage an organization -- is not
    enough for an individual to become a successful
  • Jeffrey Pfeffer and Robert Sutton became
    intrigued by the large number of managers and
    executives that they worked with who knew what
    needed to be done but failed to implement it.
  • They referred to this phenomenon as the
    Knowing-Doing Gap.

Causes of the Knowing-Doing Gap
  • Knowledge management efforts emphasize technology
    and the exchange of codified information this
    does not address how the information can be used
    to make better decisions to enhance work-unit or
    organizational effectiveness.
  • Knowledge management tends to treat knowledge as
    a tangible thing, as a stock or quantity, and
    therefore separates knowledge as a thing from the
    use of the thing.
  • Formal systems cant easily store or transfer
    tacit knowledge. Tacit knowledge is information
    that is important for doing something effectively
    that cannot be captured, measured, or codified by
    formal knowledge systems in organizations.

Causes of the Knowing-Doing Gap (Continued)
  • The people responsible for transferring and
    implementing knowledge management frequently do
    not understand the actual work being documented.
  • Knowledge management tends to focus on specific
    practices and ignore the importance of
    philosophy. This refers to the tendency for
    people to want to know what to do to solve
    problems they face in organizations. If the
    knowledge acquired by the manager or business
    professional is merely a collection of practices
    without a coherent, overarching philosophy, then
    it becomes difficult to implement these practices.

Bridging the Knowing-Doing Gap
  • Why before how Philosophy is important. Make
    sure that all members of an organization
    understand and are committed to the way of
    thinking about how to achieve given business
  • Knowing comes from doing and teaching others how.
    Teaching through apprenticeships, coaching and
    mentoring helps organizational members how to do
    the right things.
  • Action comes before elegant plans and concepts.
    The key is to focus on the bottom line of taking
    action and to ensure that talking about what to
    do is always coupled with specific actions.
  • There is no doing without mistakes.
    Organizations that bridge the knowing-doing gap
    are able to learn and become smarter based on
    their successes and failures in the marketplace.

Bridging the Knowing-Doing Gap (Continued)
  • Fear fosters knowing-doing gaps. So drive out
    fear. Manage must create a value system,
    organizational culture, and policies and
    procedures that do not punish individuals for
    doing the right thing even if the results are
    less than optimal.
  • Beware of false analogies. Fight the
    competition, not each other. Management must
    promote a cooperative work environment where
    everyone is committed to working together to
    achieve the same business objectives.
  • Measure what matters and what can help turn
    knowledge into action. Management should
    identify a handful of critical measures of
    success for the organization and track them on an
    ongoing basis.
  • What leaders do, how they spend their time, and
    how they allocate resources, matters.

The Social Learning Perspective(Figure 1-5)
Pre- Assessment
The 4 As of Skill Learning
Skills Assessment
Steps in the 4 As of Skill Learning
  • Skills Assessment.
  • The first step in skill learning is to get
    baseline measures on important skills and to
    foster interest in those skills.
  • Skills Awareness.
  • This step includes discussion of important
    background material, such as why the topic is
    important, key approaches to mastering the skill,
    and other relevant information.
  • Skills Attainment.
  • Here, through a variety of experiential methods,
    you develop the skill.
  • Skills Application.
  • This final step involves life application, such
    as using the skills in case analyses, life
    situations, and field projects.

The Bottom Line Mastering Management Skills
Take Baseline (Pre-Test) Measures of the Target
Web Wise Futurework
  • On Labor Day 1999 the U.S. Department of Labor
    issued a report titled Futurework Trends and
    Challenges for Work in the 21st Century. The
    report sought to outline three major challenges
    for the 21st century workplace and workforce
  • The challenge of being skilled, not stuck in the
    new economy.
  • The challenge of flexibility and family as
    employers seek more flexibility to compete in the
    global marketplace and workers pursue more
    opportunities to spend time with their loved
  • The challenge of destiny and diversity as
    employers hire from a more diverse pool of
    workers in the future.
  • http//

Global Perspective Skills in the Global Labor
  • Firms and their management are becoming
    increasingly global.
  • A record number of foreign CEOs are now running
    major U.S. companies.
  • The number of international assignments is
    expected to accelerate in the next five years.
  • Many people fail in international assignments,
    and almost half say they would not work abroad
  • This all suggests that employees often lack the
    skills needed to succeed in international

The Management Skills Framework
  • Our management skills framework focuses on human
    and conceptual skills.
  • We classify the skills as primarily
  • personal (such as self-management and critical
  • interpersonal (such as communicating and
    resolving conflict)
  • managerial (such as leading, motivating, managing
    teams, strategic planning, and creating a
    positive work culture)
  • The framework also considers three levels of
    effectiveness -- employee, work unit, and

Management Skills Framework(Figure 1-7)
Action Planning and Implementation
  • Action planning refers to the process through
    which a manager formulates the specific steps
    that will be taken to address business problems
    and challenges.
  • The action plan becomes a blueprint or roadmap
    for actual implementation.
  • Guidelines for developing and implementing
    effective action plans include
  • The process must be systematic and actively
  • Action planning requires a layering approach in
    which action steps are translated into specific
    supporting actions in relation to each employee
    who will be involved in implementation.
  • There must be ongoing and systematic evaluation
    of the results achieved after implementation of
    the action plan.

The Bottom Line Action Planning and
Identify Key Problems
Lighten Up Performance!
  • Companies are finding creative ways to develop
    their employees skills, and many are turning to
    literature, music, and the arts.
  • When management consulting firm McKinsey
    Company wanted to develop its employees
    abilities to inspire, it hired outsiders to help
    the firms consultants and partners write and
    stage an opera in three days.
  • At Sears, Lockheed Martin, and Bristol Myers
    Squibb, a conductor and symphony orchestra
    rehearse Brahms to bring alive issues of
    leadership and teamwork for aspiring top
  • Kodak, Arthur Anderson, and Boeing have brought
    in poets to foster employees creativity, and
    others are using Shakespeares Henry V as a case
    study on vision, strategy, and leadership skills.