Growth tips 30 seconds to business enlightenment.
The 3 essentials of good management
18-Nov-2010
A survey of over 10,000 firms in over 20 countries, found 3 key success
practices associated with top performing companies that every good
manager should strive to follow. The best practice firms were
associated with a 3% higher return on capital, 26% higher market
valuation, and 70% faster growth.
Here is our take on the 3 key findings of the survey:
Rigorous performance measurement.
Firms that collect, measure, and exploit information are beating firms
that do not. The best practice firms are very effective at collecting
data and managing their key processes. They evaluate their key
performance indicators regularly, and take immediate action to address
any performance problems they find - or use the data to seek out and
exploit opportunities. Sadly, other research shows that 92% of
organizations do not effectively measure performance - nor do they take
effective action. (See here for more information on key performance indicators)
Challenging targets.
Best practice firms set challenging short-term and long-term numerical
targets. Great firms have daily, weekly, monthly, quarterly, yearly,
and even 5-yearly targets. This provides employees with a visible
staircase of what good performance looks like now - and what it will
look like in the future as the firm grows and improves. Setting
numerical targets is something that needs to be well thought out.
Targets should be challenging, but also realistically achievable - so
your people can engage with them and take ownership for their
achievement.
Consequences for performance.
The best firms diligently measure and evaluate the performance of their
people. Business Execution Software makes this easy. They acknowledge and reward their top performers with a range
of bonuses and incentives. Under-performers are rapidly identified and
provided with training and support. If efforts to improve their
performance are not successful, they are quickly moved out of the firm.
(It is a common management trap to spend too much time trying to “fix”
under-performers. See here for more information on how to hold people accountable).
How well does your company rate in these 3 key areas?
Yes – we are very familiar with the writings of Clay Shirky and Dan Pink – and support any concepts based on sound research.
Yes – we agree with Dan Pink that people are motivated by:
Autonomy: People want to have control over their work.
Mastery: People want to get better at what they do.
Purpose: People want to be part of something that is bigger than they are.
Yes we agree with Clay Shirky – about the importance of collaborative effort.
Please note that the research referred to in this article was conducted on over 10,000 firms and looked for common themes – i.e. what really works – what the most successful firms actually do.
1. Challenging targets
2. Rigorous measurement
3. Consequences for performance
We have worked with thousands of firms over the last 15 years and fully agree with these findings - but we also feel they can be implemented in a way that is mutually compatible with the works of the 2 authors you mention.
You are welcome to disagree with the research. Many people feel threatened by the words “targets”, “performance measurement”, “accountability” – but in our experience these are essential elements in winning firms.
At RESULTS.com our clients want to be winners. Our clients pay us good money to give them better results – and we will go with what really works.
Regards
Stephen Lynch
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| Date | 21-May-2012 |
