Aubyn Hill
WHEN IT COMES TO THE MANAGEMENT of organisations, there are two things that the public and the press highlight. First, they highlight the pay, perks and successes of the CEO or his senior colleagues and, second their failures are first whispered about and then trumpeted in headlines. What both sets of headlines and the content of most of the accompanying articles will generally fail to tell is how difficult it is to manage the business. The size of the business hardly matters when looking at the difficulties. A start-up has different challenges from a small business that is fighting its way to establish itself in the marketplace with barely enough, or not enough, capital and difficult lenders who wait far too long to make a decision on whether to lend to a small or medium-sized company. Larger established companies have to deal with the issues of size (how to get efficiency out of a sprawling organisation), geography (how to get everyone and all the required resources to move in the same direction), the marketplace - how to stay ahead of the competition - as well as corporate and social politics.
PROFITS IN PERPETUITY
A company operating in a globalised world yet dependent on the goodwill and custom of a local community has to subscribe to a number of important objectives. Probably the most compelling of these objectives involves getting the company to a place where it is profitable and keep it profitable in perpetuity so that the company can continue to survive in the long term. I see excellent management as the pulling together of different (and in a large company disparate) resources, and using an effective team of executives and staff to make the most strategically beneficial and practically efficient use of these resources to delight customers everyday, thereby producing above average and sustainable profits as a reward to investors and other stakeholders. This definition makes it clear that CEOs, as well as managers and supervisors at many levels below them, have to juggle a great many variables in any single day - and get the juggling. If and when any of those variables becomes jumbled or falls to the ground delighting customers may be botched and the lifeblood of the business, profits, in all likelihood, will fail.
DEALING WITH FAILURE
It does not matter how good a manager an executive may be, at some time he or she is going to have to deal with failure. This perennial devil takes the form of a failed project, the slipping away of a deal that was your company's to the competitor, the appearance of an obstacle from hell that was not in your business plan and one that threatens the profitability of your company for the entire year, or the 'thanking' of a project that is so prominent in the public's eyes that the embarrassment to the company is palpable.
Executives have to deal with large and small failures on a fairly regular basis and must possess the fortitude, sometimes the political skill and all the time the public relations savvy and insight to save the company from a financial and public relations disaster, while keeping the nerves of team members calm enough to begin to look for new successes. Sometimes a natural outcome of failure in an organisation is the need to discipline executives or staff members or sometimes to separate the person who is most closely identified with, or most clearly accountable for the failure. How well a business manager deals with this delicate, emotional and touchy issue will help decide whether he or she is an excellent manager.
First time failure will invariably require counselling and guidance to those involved or responsible for the failure by the most senior executive in the division or in the company. Repeat failures by an individual will require an executive to move to separate that individual from the company. If the first time failure is big enough to cause serious public relations damage to the company, or increase costs to the company, or reduce revenues to the company, or cause the company's stock price to fall, or all of the above, the most senior executive with responsibility over the executive who has caused this failure and embarrassment to the company will have to move to separate that executive from the company. In Jamaica this is a slow process and much hand wringing and avoidance techniques are brought into play. Those senior executives who fail to act on the separation issue send a clear message that failure and mediocrity are well accepted in the company. It is a recipe for more failure.
Former West Indies captain Brian Lara has been sent the wrong message by the cricketing authorities. - DELLMAR PHOTO
MANAGING A STAR PERFORMER
With world cup cricket at our doorsteps, when the issue of a star performer is raised a very talented Brian Lara has to come to mind. His achievements are many, outstanding and soon-to-be iconic. At this stage Mr. Lara's place in cricketing history is assured. His behaviour as a star, in many minds, is less than iconic, however. Many believe that when he refused to go to South Africa from Bangladesh and effectively undermined the leadership of the cricket team and the position of the West Indies Cricket Board, he should have been fired. Many management thinkers and courageous practitioners would have seen Mr. Lara's behaviour as leaving them no choice but to separate him from the team, at least for a while.
In a business environment, when a star is clearly an outstanding performer but his or her behaviour puts the overall affairs of the business at risk, he or she has to be separated from the company. Excellent managers try every method to guide and encourage a star performer to avoid the self-destructive belief that he or she is completely indispensable to the company. Eventually, the best managers adopt the 'drop-dead approach' whereby one asks the question of oneself what will happen if the indispensable 'star' were to have a heart attack. Even non-Christians answer that question with the popular refrain "when Moses died God found a replacement".
SUCCESS BRINGS ITS OWN REWARDS
Those managers and supervisors who face and tackle the multiplicity of issues that cross a their desks on a daily basis - from the mundane operational ones through to the complex personnel, political, and financial ones - and handle them with success on a continuing basis, week after week, year after year for a long time deserve to be called excellent. Jack Welch's iconship, a man whom Business Week called the best manager in the past 100 years, was burnished at General Electric Company of the U.S.A. over more than two decades at the top of the institution. Excellence in management takes time and is difficult. But at the best companies it is also most rewarding. Boards of directors will not keep outstanding CEOs unless they are appropriately rewarded and I believe that reward should be linked to the increase in shareholders' wealth. A well thought out profit-share plan or equity, or near-equity, arrangement that is well aligned with shareholders' benefit is the kind of reward that an outstanding CEO should receive. As a company gets wealthy, the best managers and performers should get wealthy as well. Success in the difficult business of management must bring its own rewards - or the successful will move elsewhere.
Aubyn Hill is the CEO of Corporate Strategies Ltd., a restructuring and financial advisory firm. Respond to: writerhill@gmail.com.
