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Wednesday, October 31, 2012

7 The Theory Z Manager

The concept of management style was introduced in Lecture 3 where Theory X, Theory Y and Theory Z styles were mentioned but not defined. Now we define and contrast them in hopes that the advantages of the Theory Z style are made clear. This lecture is short but the concepts are fundamental so do the exercise carefully. Much of the material in this brief lecture is shamelessly borrowed from Management in Action by William Hitt, See page 12.
Management styles can be grouped by the two parameters that measure a manager’s concern for productivity and for people. A convenient way to examine Theory X, Y, L and Z managers is to compare their concerns for people and productivity as shown in figure 3.
 Figure 3 Two Measures of Managers’ Style are Their Concerns for Productivity and for People
Few managers fit in the same box all the time and for all situations but examining managers with this simple approach is instructive. The Theory L manager doesn’t need discussion as it should be obvious that a manager that has little concern for either people or productivity isn’t an effective manager. A simple view of Theory X managers is that they believe workers:
•           Are lazy
•           Must be controlled and punished when things go wrong
•           Prefer to be directed
In contrast Theory Y managers believe workers:
•           Accept and seek responsibility
•           Will exercise self-direction and self-control
•           Have intellectual potentialities only partially utilized
Is either of these theories all right or all wrong? No, in fact a few workers do fit the Theory X manger’s views. However, ~95% of workers closer fit theory Y manager’s view and if saddled with a Theory X manager are likely to respond with low effectiveness (even though their productivity may appear acceptable) because their needs for safety, belongingness and self-esteem aren’t being addressed. They may even change jobs, if that option is available. This leaves the Theory X manager with more and more workers that fit the 5% description, thereby making this manager’s organization less and less effective over time.
A problem with Theory Y managers is that most workers, while fitting the Theory Y expectations in general, need leadership to perform at the level of their capability. The Theory Y manager’s lack of focus on objectives allows his people to underperform.
According to Hitt Theory Z managers have as much focus on productivity as Theory X managers but Theory Z managers believe teamwork is essential to productivity and therefore their beliefs are:
•           People are basically good
•           Treat people as persons, not objects
•           People are “works in process”, not static
•           Value individual differences
•           Value the individual as a whole person
•           Prize openness and honesty
 These beliefs lead Theory Z managers to:
•           Foster trust
•           Deal with differences of viewpoints
•           Take planned risks with people
•           Emphasize cooperation
Thinking back to the previous lecture we see that the behavior of a Theory Z manager helps workers move from left to right on Maslow’s hierarchy because their needs for safety, belongingness and self-esteem are being addressed. In time a Theory Z manager’s trust in people results in a returned trust in the manager. When mutual trust is achieved the workers are ready for being empowered by the manager to have more and more control over their work processes. If the workers are properly trained for their jobs and in process improvements techniques they can handle empowerment properly. Empowerment facilitates self-actualization and results in the highly motivated workforce needed for a highly productive organization.
If you are familiar with well know business leaders of the past 25 years answer the following questions. If not, Google the managers mentioned below to see if you can learn their styles (X, Y, L, or Z) before answering the questions.
1.         Where would you classify Jack Welch in the ‘70’s & 80’s? in the ‘90’s?
2.       What personnel practice of Jack Welch resulted in high organizational effectiveness but introduced     competition between employees that limited the effectiveness from being as high as it could have been?
3.         Where would you classify the infamous Al “Chainsaw” Dunlap?
4.         Where is your boss?
5.         Where are you?
6.         Where would you like to be?
7.         What actions should you take to get to where you would like to be?
8.         Compare these steps to the draft plan you prepared in the previous exercise and modify your plan as you believe necessary.

If you find that the pace of blog posts isn’t compatible with the pace you  would like to maintain in studying this material you can buy the book “The Manager’s Guide for Effective Leadership” at:
or hard copy or for nook at:
or hard copy or E-book at:

Wednesday, October 24, 2012

6 B Maslow’s Theory of Needs Continued

Self-actualization- Achieving an organization with 80 percent or more of the workers need for self-actualization fulfilled is the objective effective leaders strive for. The result is hard working and happy workers. The manager has to spend very little time on discipline problems, suppressing false rumors and similar non value added work. One key to satisfying the self-actualization need is, first, ensure that all subordinate needs are satisfied (Maslow’s first argument) and then empower workers to have control over the processes involved in their job. This is not as simple as it sounds. If a manager just says to workers that they are empowered they have far different definitions of what this means than the manager intends.
Effective empowerment required that workers be trained in process improvement techniques because otherwise empowered workers make changes in their work processes that are likely to be counterproductive, as is discussed in later lectures on process improvement. Effective empowerment also requires careful definition and effective communication of the boundaries of the empowerment. These boundaries are likely to be process and perhaps even worker dependent. It takes some experience to get them right and it is better to start with tighter than necessary boundaries and loosen them as time and results indicate that looser boundaries are warranted. The objective is to provide sufficient empowerment that the workers feel they have adequate control to implement changes that make their jobs easier, improve the quality of their work products, reduce costs or otherwise improve the processes they control. The later lectures on process improvement will help students understand more of the issues involved in defining boundaries for empowerment.
Assuming workers are empowered and functioning as intended they make significant improvements in their job processes over time. They naturally expect to be rewarded for this good work. Ataboy’s are necessary and sufficient up to a point but eventually workers expect and deserve more. In today’s flat and lean organizations there are not many promotions available to reward good work. The effective leader must be creative in developing career paths that are rewarding for workers and beneficial for the organization. Expanding job scope and lateral moves are positive for both the organization and worker as long as proper training is provided to prepare the worker for new responsibilities.
Empowerment, effective career planning and fair pay increases are necessary for self-actualization but not quite sufficient. Workers need to feel that their work is important and that their organization’s mission is worthy of their efforts. Workers understand that most organizations have a goal of making profits but they expect broader and more meaningful missions. Defining an organization’s mission is a strategic issue and therefore typically not within the job description of the people studying this course. Low and mid-level managers can make sure they understand the organization’s mission and communicate it to their workers.
There are a variety of worthy missions that inspire most workers. For example, it’s easy for space and defense organizations or health care because most people are inspired by being part of a major space project, supporting the defense of their country or improving health care. Consumer goods and service organizations need to provide their workers with the opportunity to participate in a meaningful way in worthy missions such as environmental improvements, social issues or community services. This is becoming easier as awareness grows that business organizations can contribute in ways that are win-win, i.e. win for the organization and win for society. An article by Tim Simmons of the Raleigh News & Observer quotes Rich Leimsides, director of the Center for Business Education in New York. Leimsides says that there is a noticeable increase in the number of executives who see a link between environmental practices, social issues and bigger profits. Obvious examples include saving energy and thereby reducing costs while helping with global warming; reducing wastes saves money and helps the environment. Major manufactures like Ford and GM are now investing in buildings that meet green standards and save money.
If you are unfortunate enough to work for an organization that does not have a mission that is inspiring then you need to define objectives for your group that are compatible with the overall organization’s mission and offer inspiration to your group. Remember that you need to involve the group in defining new objectives. Otherwise they are not likely to feel the inspiration you expect. You need your management’s approval for any budget or company time that is to be invested for environmental, community or social issues. You should be ready to defend why you think it is important to have your organization involved in a broader mission and why it makes sense to the overall enterprise. Make sure you introduce your plan in a way that the workers feel you are giving them an opportunity not an obligation. Single working parents are likely fully committed and may lose their feeling of belongingness if they feel they are being coerced to join in some volunteer activity that they don’t have time for.
An important thing for managers is to “walk their talk” with respect to missions. It is demotivating to employees to listen to their boss say great things about the organization’s commitment to the environment or to a social issue and then watch the boss ignore obvious opportunities to act on the commitment.
Pay as it relates to Maslow
Pay increases impact several needs ranging from safety to self-actualization and therefore require significant management attention. Few low and mid-level managers have control over the budgets available for pay increases. However, these managers do influence the relative increases given to their subordinates. This task is one that can have negative or neutral results. It isn’t likely to result in all workers being happier no matter how hard the manager works on achieving fairness. The best way to avoid negative motivation and achieve at least neutral results is to be as fair as possible. This isn’t easy because the manager simply doesn’t have enough information to be absolutely fair. This is because work performance is the convolution of the workers’ efforts and skills with the quality of the work processes, which can be good or bad independent of the skills or efforts of the workers.
I’ll discuss three approaches but I can’t claim any of these are completely fair or provide sound arguments for one over the other. A good source of further study is chapter 14 of Brian Joiner’s book Fourth Generation Management.
Two principles to follow in planning pay increases for workers are avoid de-motivators and avoid judgments based on only one year’s work or one job assignment. Brian Joiner calls rankings, ratings and forced distributions great demoralizers. People don’t believe these actions, which always have winners and losers, are fair, especially if their personal ranking, rating or distribution results in their receiving a smaller pay increase than coworkers they know.
If you work in a large enterprise your human resources department likely has curves of pay vs. time (years of experience or time in grade) for the enterprise’s various salary grades. An approach I have used in such cases is to give pay increases that keep people on the appropriate curve as best you can with the budget you are allocated. This approach avoids ratings, rankings and forced distributions and it keeps pay close to the prevailing market assuming the enterprise’s curves are based on the market. The primary flaw in this approach is that each person receives an arbitrary increase, which the manager perceives as fair but the fairness is not always apparent to workers that receive smaller increases than their coworkers. If your enterprise does not have such curves you can develop them yourself, a difficult task, or use an alternate approach to allocating pay increases.
An approach recommended by some management experts is to divide the workers into three groups. Admittedly this is a forced distribution but minimally arbitrary. One group contains the few workers who have consistently demonstrated outstanding work in their last three or four assignments, typically over more than one year. Another group contains the few who have consistently demonstrated unsatisfactory work in their last three or four assignments. The idea is that over sufficient time the quality of the work of an individual can be separated from the effects of the system influencing the worker. One assignment or even one year is usually not enough for a manager to be able to make a fair assessment of a workers performance independent of the system.
The remaining workers, which should be most of the workers in the organization being evaluated, are in a middle group. The group consistently demonstrating outstanding work receive promotions, increases in pay grade and/or a larger than average share of the available budget for increases in pay. The group consistently demonstrating less than satisfactory performance receives no or less than an average share of the available budget for increases in pay. The middle group shares the remaining budget equally by percentage increases with the objective being to keep workers’ pay competitive with the market for their education and experience. The belief is that those consistently demonstrating unsatisfactory work know their performance is less than desired and understand why they receive little or no pay increases.
The three group method is reasonably fair but has flaws in addition to being a forced distribution. First it does not address pay discrepancies that exist from history. It is not unusual to be managing an organization made up of individuals of different ages, different education, different years of experience and different job experience as well as different job performance. These collective differences often lead to people with similar backgrounds and capabilities receiving quite different pay. This obviously isn’t fair and eventually people learn of such unfair situations and are demotivated. The effective leader does the analysis to reveal such situations and works with the personnel department to eliminate them. Sometimes this can take a few years but it is necessary to prevent workers being demotivated due to unfair pay discrepancies.
A second flaw is it does not address the senior person who has been in the same job for a long time and has reached the maximum market rate for that position. If the person does not warrant a promotion or desire a transfer to a higher paying position then that person should receive less pay than most others in order to keep within the bounds of competitive pay for the position. These cases must be dealt with on an individual basis.
A third flaw is that the few individuals receiving less pay due to unsatisfactory work over several assignments are demotivated, which is likely to lead to even less satisfactory performance. Some would argue that it is better to give the same increases to the unsatisfactory workers as to most other workers to avoid demotivating the unsatisfactory workers. This is the third approach and it isn’t a perfect solution either as workers that are performing satisfactorily are likely to see it as unfair to them. I do not have the data or experience to argue which approach is best

Exercise 1

1.     How is need fulfillment correlated with effectiveness?
2.     Which needs are satisfied with money?
3.     What are the effects of individual rewards? Team rewards?
4.     What is the effect of excessive job stress?
5.     Define the likely problems experienced by a worker that is not moving forward in Maslow’s hierarchy for each stage of the hierarchy.
6.     Define a management strategy or action that is likely to help a worker move from each stage to the stage on its right.

Exercise 2

1.   Pick at random four of your direct reports or peers that are typical of your organization. Assess each one against Maslow’s hierarchy of needs by determining the highest need that you believe is fulfilled for that individual. This gives you another measure of the health of your organization. If three or four have achieved self-actualization then your organization is most likely nearly as productive as it can be except for improving work processes. If two or more have safety or belongingness needs unfulfilled then your organization is not healthy and is most likely not nearly as productive as it could be.
2.   If your results show less than three out of four with self-actualization needs fulfilled then write down a draft plan on what you need to do to improve the motivation of your organization. Reread the lecture if you don’t have ideas on what to do. You don’t need to start working on your plan yet but keep the plan handy so that you can review it later as part of developing a more comprehensive action plan.

If you find that the pace of blog posts isn’t compatible with the pace you  would like to maintain in studying this material you can buy the book “The Manager’s Guide for Effective Leadership” at:
or hard copy or for nook at:
or hard copy or E-book at:

Thursday, October 18, 2012

6 A Maslow’s Theory of Needs

Now let’s examine how management philosophy can motivate employees. To do that we examine Maslow’s famous “Hierarchy” of needs. Maslow defines motivation as feeling desire, want, yearning or that something is lacking. (see p.22 of Toward a Psychology of Being by Abraham Maslow) Maslow defined five levels of needs in his hierarchy.
Physiological (air, water, etc.) >Safety>Belongingness>Self-Esteem>Self Actualization
Maslow argues that:
1.   To realize a need on the right all the needs to the left of it must be satisfied first.
2.   Workers that are moving to the right are happier and more productive compared to workers that are not moving, or moving to the left.
For each of the needs there can be organizational or management problems that the effective leader can often solve. A few examples illustrate this point.
Need                                         Problem                                  A Solution
Physiological needs                Job stress                          Stress management
Safety                                  Not knowing what’s              MBO, fix unsafe
                                        expected, fear, anxiety              conditions
Belongingness                     Anxiety, cynicism,                  Participative
                                             despair, stress                         management
Self-esteem                         Meaningless work                Change job assigned,
                                                                                           job enrichment
Self-actualization                 Boredom, lack of                      Empowerment,
                                            opportunity                          career development

Maslow’s second contention shows us that our objective as managers is to enable our workers to satisfy their need for self-actualization. If we achieve this they are happier and motivated to be the most productive that they can be. This would be relatively easy if all we had to do was to empower them or show them that their careers are important to the organization and being managed fairly. Maslow’s first contention shows why it isn’t that easy. Managers have to satisfy workers other four needs before they are enabled to realize self-actualization. Let’s briefly examine some things managers can do to satisfy the needs of their staff.
Physiological needs- Most basic physiological needs like air, water, food are satisfied outside of the manager’s influence but there are others that managers must address to achieve motivated workers. Today many workers are multitasked, worked long hours and constantly pushed to do more with less. These working conditions can lead to stress or just plain overwork. To minimize such effects it is necessary for the manager to put extra emphasis on demonstrating fairness to all staff members, communicating clearly why the job environment is the way it is and what management is doing to improve the environment. Ignoring workers concerns leads to stressed workers, disgruntled workers and the best employees seeking other job opportunities. All of these effects result in lower organizational effectiveness due to under productive workers.
Most workers are willing to work extra time or extra hard if they understand the management is being fair, that there is good reason for the need to work extra hard or long and that management is doing what is necessary to correct the problems leading to the need for such working conditions. Corrections may mean adding new equipment, improving work processes, adding temporary or permanent staff, subcontracting work or a similar means of reducing workload. Managers that accept that such working conditions are just part of today’s work environment and believe they don’t have to do anything about it will find that their best employees eventually leave so that they are left with a less productive staff. Effective leaders search for creative ways to improve working conditions and keep their staff fully informed.
Managers that don’t take care of obvious job problems create unsatisfied physiological needs in all workers, not just the workers with the problems. Sometimes a worker needs to be disciplined or even fired. Managers that do not take prompt and fair action when disciplinary action is called for lose the respect of all workers and cause lower productivity due to the unsatisfied need for an environment that treats workers fairly. Putting up with bad workers isn’t fair to the good workers.
An organization’s policies can cause unsatisfied physiological needs if the policies are aimed at the 5 percent of employees that abuse rules rather than at the 95 percent that follow rules. Effective policies are covered in more depth in a later lecture.
Safety- Safety is an often overlooked need. There are at least two dimensions to the need for safety. There is physical and psychological safety and both are important in organizations. There are legal, ethical and sound business reasons to ensure the physical safety of all workers. About the worst thing that can happen to a manager is having to tell the family of a worker that the worker was injured, disabled or killed at work. If your reaction to the previous statement is “that’s not me job, other people take care of those things” then you need to think more deeply about it. Even if your organization has a health, safety or health and safety department it is still the manager’s responsibility to make sure that his or her workers are informed, are encouraged to report any safety or health concerns and follow the safety guidelines of the organization. Health and safety personnel cannot eliminate hazards and reduce injuries without the active cooperation of managers and workers. If your reaction is that physical safety issues relate to factories or mines but not to an office environment you need to rethink again. Office environments are the source of many repetitive stress injuries, back problems, exposure to electrical hazards and fingers caught in copier machines. It’s your responsibility to make sure your workers are not at risk of such injuries. Again, this is done by ensuring that the environment is safe, that workers are informed, are properly trained and feel comfortable reporting any safety or health concerns.
Psychological safety is more complex. It is easier to understand if you think of it as fear. Workers that have fear are not at their most productive because they spend time and energy thinking about the sources of their fear rather than their work. Fear is so important there is an entire lecture on fear later. Here I address fear resulting from insecurity about job loss, promotion, annual reviews, acquisitions and mergers, layoffs, new assignments, new managers etc. Almost anything that causes or might cause instability can result in insecurity. Lack of knowledge about an organization’s goals and plans also leads to insecurity. The effective leader satisfies this need with open, frequent and factual communication with the workers. If the leader practices good communications and has an “open door” policy so that workers can come to the leader with their concerns than the leader minimizes workers’ insecurities. It is often impossible to eliminate insecurities but effective communications and an open door policy can reduce insecurity so that it has minimum effect on job performance.
Belongingness- Humans are social. They need to be part of a group. Therefore workers need to feel that they are a valued member of their organization. This means that they have some input into the organization’s activities and are treated fairly by the organization. The cliché “no input, no buy in” is critical to effective leadership. Leaders should make the decisions but effective leaders seek the opinions of their workers and consider the workers’ opinions before making decisions. If workers are convinced their views were heard and considered then most buy in to decisions even if the decisions aren't what they wanted.
There are lots of positive “team building” actions that contribute to satisfying the belongingness need. Group lunches, after work drinks, weekend golf outings and similar activities can be positive if they are inclusive of the entire group. If not then they lead to hurt feeling on the part of those left out. It takes few positive actions to satisfy the belongingness need but one negative takes many positives to correct. The effective leader thinks through team building actions carefully to ensure they are inclusive and positive.
Rewarding workers is a dangerous activity. Group awards are usually positive. Individual rewards, especially money based awards, risk alienating more people than they motivate. Workers evaluate rewards with a sensitive scale and if they perceive there is any unfairness they are offended and demotivated. In general personal recognition is more effective than money awards as long as it is inclusive of all who contributed to whatever is being rewarded.
Some managers believe they can improve productivity by encouraging competition between workers. The highest productivity results from cooperation and teamwork among workers. Competition often inhibits cooperation and can lead to workers undermining each other and thereby limiting the effectiveness of the organization.
Competition and monetary rewards are not always counterproductive. An example from my experience of effective competition and monetary reward involved training workers in health and safety requirements for their jobs. The manager of Health and Safety gave worker teams a list of health and safety questions relating to their job. Teams that were able to answer every question correctly were eligible for a drawing. The drawing was held at monthly all hands meetings and the winning team received about $5 per worker. Teams would go to great lengths to get answers to complex questions, including contacting state health officials. It wasn’t the $5 reward that motivated these workers. Rather it was the pride in their team being eligible for the public drawing. Note that in this example there was cooperation and teamwork within the teams and the teams believed the competition was fair.
Self-esteem- Workers with high self-esteem are more productive than workers with low self-esteem because they do not waste their energies worrying about their perceived inadequacies. Workers with high self-esteem tend to direct more of their energies toward their work thus they can be more creative and more productive than low self-esteem workers. Achieving high self-esteem in individuals is the result of recruiting people whose education, experience and interest match the job requirements, providing them any special training necessary to do the job properly, explaining clearly what is expected of the worker and interacting with them frequently so that both the worker and manager have a good understanding of how well the work is getting done.
If a worker is performing at or above expectations the manager should let the worker know with encouraging comments. If there are problems with the quality or quantity of work the manager should focus on the work process and discuss with the worker what can be done to make the job easier or to eliminate process problems. Eighty percent of the time the problems are with the work process rather than with the worker. This means that if the worker is criticized for poor performance four times out of five the manager is wrong and the worker’s self-esteem is lowered as well as possibly reducing the workers feelings of belongingness and safety.
If the manager and the worker interact frequently then the manager can eventually correctly determine those situations where the work processes are ok but the worker isn’t right for the job. In this event the manager should take responsibility for putting the worker in the wrong job and set out to find a better job fit for the worker. Effective leaders know that if a job isn’t being done right the fault is theirs. They have picked the wrong worker, not adequately trained the worker, not adequately explained the job or the job process is defective. Other workers know this and lose confidence in managers that blame workers for poor job performance.
Managers that wait for the annual review to discuss job performance with workers are ineffective managers. Effective managers interact informally with workers on a daily or at least weekly basis and make it a point to have more formal discussions on a monthly or at least quarterly basis. It is wise to have the more formal discussions over lunch or breakfast so that the confrontational aspect of the dreaded annual review is removed. If you are lucky enough to have control over the annual review process then eliminate it and replace it with less formal monthly or quarterly discussions. In my forty years of experience I have found no value in annual reviews. Both managers and employees hate them and there is no value in the documentation collected in the personnel files. Every time I have had to fire a worker I have found it necessary to build and document the case after the decision to fire has been made because there has never been anything useful in the worker’s personnel file.
Do not conclude from my experience with worker’s personnel files that the answer is to make sure files contain documentation of any disciplinary actions and other negative stuff that can be used against workers if necessary. Such actions destroy psychological safety and ensure demotivated workers. If it is within your authority make sure workers files contain only information required to comply with labor laws and make sure your workers know there will never be negative stuff in their files. Discipline up to and including firing can be handled effectively without such files.
You are likely familiar with the phase “management by walking around”. Effective managers use this technique to interact informally with workers. Five or ten minutes with a worker two or three times a week is usually enough to keep up with what the worker is doing and to identify any problems that require additional management attention. To be effective these brief interactions must focus on the worker’s tasks, i.e. what the worker is doing and how well the task’s processes are working (the quality and timeliness of the task output). It’s ok to briefly ask about social issues but don’t let this time be spent discussing the previous night’s sporting event or some other social activity.
The work of up to 20 subordinates can be monitored in this manner and still leave 20 hours per week to work on fixing problems and executing the other tasks that are the manager’s job. Most managers have only five to ten direct reports and can usually keep up with their direct reports’ work by spending only an hour or two each day. If the manager finds there isn’t enough time to spend five or ten minutes two or three times per week with each employee then enough of the managers other tasks should be delegated in order to free up adequate time for this critical activity.
I know that in today’s flat and lean organizations there are managers with far more than 20 direct reports who are also expected to be workers as well as managers. If you are one of those managers you are forced into a triage approach. Limit the time spent with each of the 80% of workers that are doing fine to weekly checks so that you still have time to check with each of the other 20% two or three times per week.
If you are in an environment where you are required to conduct formal annual reviews you must still interact informally enough with your workers that you and they know before the review what the results are. If the review has any surprises for an employee then you have not been doing your job and the employee’s self-esteem need is less fulfilled than it could be.

If you find that the pace of blog posts isn’t compatible with the pace you  would like to maintain in studying this material you can buy the book “The Manager’s Guide for Effective Leadership” at:
or hard copy or for nook at:
or hard copy or E-book at:

Thursday, October 11, 2012

5 Motivating People for Organizational Effectiveness

The topics that address motivating people include:

        Effective philosophy of management
        Maslow’s theory
        Theories X,Y, L & Z
        Knowledge workers
        Listening for understanding
        Effective organizational policies
        Fear on the job
Lecture 5 is brief and only covers the first bullet because the associated exercise takes some time and is critical to your eventual success in improving your organization’s effectiveness.

Requirements for an Effective Philosophy of Management

An Effective Philosophy of management should, according to Management in Action by William Hitt, p.13:
       Be the foundation stone for the organization
       Include a clear statement of values, goals and strategies
       Be internally consistent
       Demonstrate an awareness of a larger environment
       Be operational (This means it can be interpreted and put into practice easily.)
       Be internalized by all members of the management team
       Be communicated to all employees
       Be self-renewing
You can easily test the effectiveness of your organization’s management philosophy. Ask yourself do you know what the philosophy is without looking it up? Do all of your staff members know the philosophy well enough to know how the organization ranks the following seven parameters in relative importance:
1.     cost,
2.     schedule,
3.     quality,
4.     safety,
5.     customer satisfaction,
6.     environmental issues and
7.     involvement in and support of community activities?
If not then your organization’s management philosophy isn’t effective or isn’t being communicated effectively. At this point we aren’t addressing what constitutes a good or bad philosophy. The point is that even a good philosophy isn’t effective if it isn’t understood and practiced by all employees. As a manager it’s your job to make sure your organization’s management philosophy is communicated, understood and practiced in your organization.
Often serious problems are caused by individuals acting outside the organization’s philosophy of management with the intent of helping the organization. That is one reason it is essential to make sure every employee working for you understands your organization’s management philosophy and knows that the organization does not want to be “helped” by actions inconsistent with the philosophy. It is cheaper to pay for avoiding problems up front than to try to cover up or fix problems that are not ethical or consistent with the management philosophy. All employees will not act consistently with the organization’s philosophy unless it is made crystal clear.
 One example of such unwanted “help” is time charges. Some employees think they are helping the organization by shading their time charges toward direct charges to some project or client rather than accurately recording indirect time. This results in management not knowing the true indirect costs and inhibits them from finding and fixing problems that are causing unnecessarily high indirect charges. Employees must be trained that management wants accurate time charges, not only because this is a legal and ethical requirement but because management cannot do its job if it gets inaccurate data.
1.     Review your organization’s documentation on management philosophy and determine how the seven items listed above are ranked in importance by this documentation.
2.     Reflect on how you and other managers behave in interacting with subordinates. Are your actions consistent with the stated philosophy of management? For example, if the documentation says customer satisfaction is number one do managers always place customer satisfaction ahead of cost, schedule and quality?
3.     Ask three or four of your direct reports or peers to write down the rank order of importance of the first five items on the list and compare the results. Do all of the lists match? Are the lists in agreement with the documented philosophy of management?
The results of this exercise tell you how much work you have to do to build the basic foundation of an effective organization. If your behavior matches the documentation and if your subordinate’s lists are consistent and also match the documented philosophy then your organization has communicated its management philosophy effectively. If not then you and other managers have work to do. You cannot be an effective leader nor have an effective organization without an effective philosophy of management as defined above.
A goal of this course is to help students develop their leadership capabilities and ultimately their organization’s capabilities to the point that the workers can be empowered to control their own processes without micromanagement. This cannot be achieved if the workers have not internalized the organization’s philosophy of management. Think for a minute what would happen if an organization empowered workers that each has a different opinion of what is most important to the organization. Conflict and chaos would result.  If you find that your management philosophy is not effective then the first step in your leadership action plan must be to correct this deficiency. There is no need to document this step in your leadership action plan; just do it.
For the purposes of this course I assume there is a documented philosophy of management for the student’s organization. Further, I assume that students are at a level in their organization that changing the documented philosophy is not within their control. Therefore the primary task for students that finds their organization’s philosophy of management fails the effectiveness test in the exercise above is to ensure that everyone in their organization knows and understands the documented philosophy. The best way to accomplish this is to hold several group meetings to discuss the philosophy. It is not sufficient to distribute copies and ask people to read and follow the philosophy. People will have questions on why the philosophy is what it is and they will interpret it differently. Holding group discussions can bring people to a common understanding and a better appreciation of why they need to be aware and follow the documented philosophy. If the student has the authority and available budget then holding off site meetings is well worth the extra effort and cost for discussion of philosophy of management. People are better able to think objectively about topics like management philosophy when separated from the concerns of immediate work.

If you find that the pace of blog posts isn’t compatible with the pace you  would like to maintain in studying this material you can buy the book “The Manager’s Guide for Effective Leadership” at:
or hard copy or for nook at:
or hard copy or E-book at:

Thursday, October 4, 2012

4 Additional Background on Management Principles and Functions of Managers

This lecture provides some background on the development of process improvement methodologies, discusses why sound management techniques aren't more widely used and introduces six functions of managers. The course material is presented in the context of these functions that all managers perform.
Many good ideas have been advanced since 1980 but the earlier theories are the foundation that a manager needs to understand before taking on newer concepts and strategies. In fact some of these newer ideas are incorporated in this course, e.g. ideas on learning organizations from the 1990's and on knowledge workers that emerged after 2000.
Attempting to study post 1980 concepts without a foundation in the principles would be the equivalent of taking graduate level courses without an undergraduate degree. It would be rote learning without having the in depth understanding necessary to judge good ideas from bad ideas. Often, new management ideas are narrow in scope and need to be understood in the context of the basics covered here to be useful. The reason for new work often being narrow is that much of it comes from academics that have to specialize to be recognized in academic culture. Managers do not have the luxury of being able to focus on specialties. They have to work within the broader context of their work environment and business culture. Understanding the basics discussed in this course enables a manger to critically study newer materials and have the understanding to separate useful new concepts from fads and ineffective ideas.
The process improvement principles developed primarily in manufacturing organizations and were intended to make products cheaper and better quality. After WW II there was a large demand for new products in the USA and other nations due to the limited production of consumer items during the war.  USA manufactures could sell nearly anything since the manufacturing infrastructure of the rest of the industrialized world was essentially destroyed. Therefore USA manufactures focused on producing as many goods as fast as possible with limited regard to quality or the cost of poor quality. Process improvement was pushed aside and forgotten in this environment.
Manufacturing in post WW II Japan started with such poor quality that “made in Japan” was interpreted as junk in the rest of the world. W. Edwards Deming and others introduced process improvement principles to Japan so that Japanese manufactures could improve their product quality. Japanese manufactures were good students and by the 1970’s “made in Japan” came to signify high quality.
US industry responded by reintroducing quality improvement methods in the 1980s to stay competitive. The US manufactures found catching up is very hard because Japan continues to improve. The US efforts to improve quality led to growth in quality improvement gurus and consultants. These knowledgeable people soon realized that the principles behind process improvements apply to any organization. Quality improvement then spread to health care, education, service organizations, and government organizations. In spite of the many demonstrated successes of implementing modern quality improvement methods many organizations still do not practice effective continuous process improvement.

If these principles are so effective why aren’t they more widely adopted?

        Managers are typically promoted from effective worker positions without training for their new positions
        Untrained or poorly trained managers typically follow their boss’s and their organization’s cultural practices
        Organizational cultures are firmly entrenched –it’s hard for new managers to change the culture or behave contrary to the culture
        Organizational change is extremely hard to achieve
        Many organizations look for instant results (“fad of the year”)
In your organization, does every manager get thorough management training before being given management responsibility? Not likely. It’s more likely that many get promoted on the basis of good job performance in a non-management position. Our society doesn’t allow plumbers, electricians, doctors or lawyers to work without proper training but we often promote workers to management positions with no preparation. Is it any wonder that many organizations have ineffective leadership and our government agencies are burdened with ineffective bureaucrats?
Untrained new managers do what they have seen bosses do because that is the only “experience” they have. As a result organizations tend to develop management cultural practices independent of the effectiveness of these practices. Many times the practices are a continuation of the practices of some earlier revered leader who may or may not have been truly effective. It’s easy to see why new managers who have little understanding of management theory just do what their supervisor does. It would be nearly impossible for them to introduce something new without the knowledge or experience to justify it.
In cases where new managers have the knowledge and experience to introduce more effective practices the organizational culture often works against any change. Studies have shown that it takes three to five years and an expenditure of about ten percent of payroll to change an organization’s culture. (See Corporate Culture, by Terry Deal and Allan Kennedy) You can choose to conclude this means it’s too hard to change your organization’s culture or you can conclude that, although it will be hard, it only takes about two percent of payroll per year for five years so it can be done and it will be well worth it. If you take the optimist’s view you may want to study methods of change. Good sources include:
Changing Ways-A Practical Tool for Implementing Change within Organizations by Murray M. Dalziel and Stephen C. Schoonover
And Our Iceberg Is Melting-Changing and Succeeding Under Any Conditions by John P. Kotter, Holger Rathgeber, Peter Mueller, and Spencer Johnson
A warning is needed here to encourage you to resist the fad of the year, which will be available and you may even be pressured to consider it. Dalziel and Schoonover, in their book cited above, warn that there are many people offering quick fixes for organizational problems and these people make generalizations and claims for success that are unwarranted. It is always tempting to believe there are simple solutions but if there were there would not be so many organizational problems.
What Dalziel and Schoonover, and this course, encourage is to follow proven “best practices” even though it’s hard work. Finally, some managers argue that their organization is unique and therefore a more effective management style or continuous process improvement doesn’t apply. This is a lame excuse and is simply not correct so don’t let yourself fall into this trap.


        Identify candidate objectives to improve the effectiveness of your organization
       e.g. reduce (), improve (),
       try to be specific, identify the process that needs to change
        List the objectives
        Choose one objective that you believe is the highest payoff
        Determine if achieving your objective is worth your investment in this course
        Estimate cost of course: study materials + your time at $(your wage)/hour (include study time for the lectures and 50 hours of self-study for one year)
        Add any capital investment and training costs if you think it is likely to be necessary to achieving your objective
        Estimate the savings each year for five years if you achieve your objective.
        Calculate the internal rate of return (IRR)
        Is the IRR greater or less than what you might expect from other opportunities for your time and money?

Evaluate Your Answer

        Was the IRR satisfactory?
        If yes, proceed
        If not, did your goal assume at least a 20% improvement in the effectiveness of your organization?
        If you assumed less, recalculate with an assumed bigger improvement.
        If the IRR is still  unsatisfactory you need to consider a more ambitious objective
Functions of Managers
This section lists the functions of managers, discusses those functions important to implementing the management strategies central to Effective Leadership. The functions of managers are a good introduction to the remainder of the course because it is organized according to these functions.
There are six management functions as shown in Figure 2. This course emphasizes motivating, staffing and controlling. Organizing is not addressed and communicating is addressed only lightly. Planning is addressed only by an example related to controlling. This is based on the premise that most of this course’s students are workers or middle and first level managers and their superior managers do most of the planning and organizing. Middle and first level managers have planning and organizing functions that are derivative of those that flow down from above. Communicating is an overarching function that is critical to the success of all other functions. Communication takes place upward and downward. Communications downward to your staff is the most important function necessary to effectively implement the processes and methods included in this course. This communication includes your behavior as well as what you say and write. Faced with believing what a manager says or reacting to how he or she behaves, almost all employees choose to ignore what is said and interpret the manager’s behavior.
Figure 2. Communicating underlies all other functions of managers
Communicating is addressed lightly in this course not because it is less important but because there are numerous self-help books and courses on how to communicate effectively. It is absolutely essential to learn to speak and write effectively for your type of organization. You must not assume that because you got good grades in college English or speech that you know how to write or speak effectively for your type of organization. If you haven’t mastered these skills begin to work on them at once. You can do this in parallel with this course because it takes study, time and practice to be an effective writer and speaker.

If you find that the pace of blog posts isn’t compatible with the pace you  would like to maintain in studying this material you can buy the book “The Manager’s Guide for Effective Leadership” at:
or hard copy or for nook at:
or hard copy or E-book at: