LESEPROBE

Fredmund Malik

Tasks of Effective Management

LESEPROBE

www.campus.de

Outline

Management is no matter of ideology, nor is it a question of fashion. Management is a craft – the universal and most important discipline of the 21st century. Fredmund Malik, the leading expert in the field of general management, provides you with the knowledge it takes to be a successful executive and manager, in any position, within any organisation.

Fredmund Malik draws a clear distinction between job-related tasks and management task. The latter being the key tasks, their fulfilment largely determines the success of any organisation. Fredmund Malik shows the knowledge and abilities that are vital for the fulfilment of these management tasks. However, while factual and special knowledge generally varies according to the purpose and activity of an organization, and the managers role in it, the key management tasks are universally the same.

Fredmund Malik’s theory is system-oriented and can thus be applied regardless of time or place. It is designed to work in all areas and industries of any society, irrespective of changing trends or national and cultural differences. Taking as his point of departure the consistent traits displayed by complex systems – phenomena that executives and managers are likely to address on a daily basis – Malik sets the standard for sound management in a knowledge-based economy.

Read more about the Malik Management Systems:

Management Is a Craft

Principles of Effective Management

Tools of Effective Management

The Malik Management System and Its Users

Information about the author

Prof. Dr. Fredmund Malik is a university-level professor of corporate management, an internationally renowned management expert and the chairman of Malik Management, the leading knowledge organization for wholistic cybernetic management systems, based in St. Gallen, Switzerland. With approximately 300 employees, a number of international branch offices and partner networks for cybernetics and bionics, Malik Management is the largest knowledge organization, offering truly effective solutions for all types of organizations and their complex management issues. Thousands of executives are trained and advised about wholistic general management systems. Fredmund Malik is the awardwinning and best-selling author of more than ten books, including the classic Managing Performing Living. He is also a regular columnist for opinion-leading newspapers and magazines and one of the most prominent thought leaders in the management arena. Among numerous other awards, he has received the Cross of Honor for Science and Art from the Republic of Austria (2009) and the Heinz von Foerster Award for Organizational Cybernetics from the German Society for Cybernetics (2010).

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|9|Preliminary Remarks

Principles are the first element of effective management. The second are the tasks carried out by managers. They are the subject of the following section.

What we are discussing here is not managers’ activities as such. Hence, I am pursuing a totally different objective from the Canadian management writer, Henry Mintzberg, who attracted attention several years ago with his assertion that managers’ actual activities have little or nothing at all to do with what they are said to be in certain management literature, such as that by Peter Drucker. On one hand, he is right; on the other hand, this completely misses the main issue.

This section of the book will not deal with what managers actually do for the entire day, but what they should or must do if they wish to be effective as managers. The daily routine of managers includes, and in this I am in agreement with Mintzberg, much that has little to do with management or its effectiveness. Among other things, this routine includes commitments related to carrying out, or sometimes even supposedly carrying out, job-related tasks such as dealing with correspondence, negotiations, business meals, covering for others, reading the newspapers, etc.

A distinction must be made between job-related and management tasks. In the following five chapters, I will cover those tasks that I believe essentially determine the effectiveness of management, and they do so in such a crucial way that they must occupy center stage in our discussion of effectiveness: managing objectives, organizing, decisionmaking, supervising people, and developing people. Without adopting a craftsmanlike, professional approach to carrying out these key tasks it will not be possible to achieve results in any organization.

|10|What is important with relation to principles of effective management is also applicable to these tasks and the tools that will be discussed later: The what of management is the same everywhere; the how can and must occasionally be very different. If this is overlooked, there will be confusion about the content and also its inherent logic.

Due to their very nature, carrying out management tasks requires not only a knowledge of management, but also factual and special knowledge. While management tasks are the same everywhere, the factual knowledge required to carry them out is very different. What factual knowledge depends on a number of factors, for example: the purpose and activity of an organization; the industry; the geographical area in which a person is working; the size of an institution; and, last but not least, the manager’s level in the organization. All this should be obvious, but it is frequently overlooked in treatises on management, and in the general understanding of management.

For the sake of clarity here are a few examples. The first of the management tasks to be discussed is “managing objectives”. This task must be carried out in every organization. However, the substance of the objectives in a company dealing with aluminum differs from those ina pharmaceutical company; the administrative body of the Ministry of the Interior has different objectives from those of the Ministry of Defense or the Ministry of Foreign Affairs, and a non-profit organization that helps young people to beat drug addiction has objectives that differ from one that looks after old people in need of care.

The same applies to the different organizational levels. It is obvious that at the top level of a company, for example, which deals with strategic issues and therefore also has strategic objectives, different factors have to be taken into consideration and, consequently, the factual knowledge required at this level differs from that required at the level of a foreman in the same company who deals with very different issues.

Another question is whether the management tasks suggested and dealt with here are sufficient in principle. I would like to leave this issue open for now and discuss it at the end. For most social institutions and typical cases, the answer is yes. However, the intention here is not to create something new. Strictly speaking, the tasks that are necessary |11|and sufficient for management are well known. The efforts of certain writers to constantly invent something new are not amusing, they are annoying. The emphasis must be on a clear and precise understanding of the elements of each management task and not the creation of an endless string of new, meaningless words.

This is particularly important for the growing number of organizations that have information and knowledge as their most important resources. Even though their employees, compared to more traditional industries, have different and new types of professional tasks to carry out that also require different knowledge relating to their methods and content, the management tasks are basically the same. A change that is almost universally underestimated or ignored has taken place: In information and knowledge organizations management must be mastered as a virtuoso. What is required is not a different management buta more precise, almost perfect management. Traditional industrial and commercial organizations were, to a great extent, impervious to management mistakes; however, the new types of organization are very sensitive and only in the rarest of cases are management mistakes forgiven.

Basic knowledge of a manager’s tasks and a certain amount of experience are required to understand the following section. For each individual task there are only a few aspects that really matter. I am tempted to talk about “secrets”. However, if I am to remain true to my principles, I will have to refrain from doing so. There are no secrets. Nevertheless, this knowledge is not generally known either. The contents of this section are those practices that can be learnt from effective people – who carry out the same tasks as others, but their methods of carrying them out are different.

|12|First Task: Managing Objectives

The first task of effective management is managing objectives. Immediately, an almost ideological question arises, which I do not want to answer just yet, namely whether objectives are to be stipulated or agreed upon. This question is by no means as important as is generally assumed to be. The management task is to ensure that there are objectives. The way in which they are set must be subordinate to the task itself.

Management by objectives was one of the first management tasks to be recognized and written about. As far back as 1955, Drucker’s first book on management referred to it to a limited extent1; the idea had appeared even earlier in papers on military leadership. The basic principle of “Management by Objectives” is, by and large, not disputed. In numerous companies, particularly very decentralized ones, it is the only way to manage. Nevertheless, Management by Objectives (MbO) actually functions rather poorly in practice. Why is this?

There are several reasons. The first reason is that Management by Objectives is often considered to be a method of managing a company or an institution as a whole (which, of course, is part of it) and less as the task of each individual manager. The general objectives relating to the whole are, of course, necessary but they are useless if the organization does not operate according to the same principle at the level of each individual manager.

The second, probably more important reason, though banal, is that carrying out this task involves a lot of work if it is taken seriously. Management by Objectives is not really difficult to understand in principle. Neither is it normally particularly difficult to devise sensible objectives in the intellectual sense. It is, above all, labor-intensive to consider, |13|work out, discuss, and to make those objectives so precise that they are really practical and can fulfill their function.

Perhaps an analogy to music will help to illustrate this. If a company’s mission and strategy is equated with the theme of a symphony, working out objectives can be compared to writing notes on paper. The theme may require genius, but writing the score is very mundane and, above all, laborious. However, even the greatest of geniuses have to go through this drudgery, and they have to do it themselves. No one can give someone else the task of writing down what he has in his mind and what he may not be able to explain in detail. Managers, too, must do this themselves. Certain things cannot be delegated.

The third reason why Management by Objectives does not usually function well is the subject matter of this chapter: There are a few practices that, though not widely known, have a crucial impact on the effectiveness of Management by Objectives.

No Systems Bureaucracy

One mistake, which explains much of the ineffectiveness so often observed, is to make a complicated, bureaucratic program or system out of a sensible and very simple principle. This means a time commitment and a paper war for the manager. Far worse, it usually results in form replacing content, with the system counting for more than the substance. What is required are the right objectives; an MbO program or MbO system can be dispensed with.

Therefore, what should be demanded of managers, especially line supervisors, is that they follow the principle of Management by Objectives. Incidentally, I am using the word “demand” deliberately. There are some things that are not open to discussion and in which people are not cooperative. Furthermore, the staff and systems experts must be prevented from turning it into a bureaucracy which may be well meaning but has damaging effects.

|14|Personal Annual Objectives

Organizations, especially companies, have several widely differing types of objectives. They differ in the period of their effect (long, medium or short-term), their content (strategic objectives, operational objectives), their area of application (general objectives, departmental objectives, personal objectives, etc.), and how specific they are (broad objectives, concrete objectives).

Therefore, when we talk about “Management by Objectives” the phrase must be clearly understood in every organization. My suggestion is that “Management by Objectives” should be understood to mean management by personal annual objectives. Thus, I restrict the use of this phrase “MbO” to a particular type of objective. This is a decision taken for the sake of precision. This chapter primarily refers to Management by Objectives in this sense. In a figurative sense, however, it also applies to other types of objectives.

The General Direction

We frequently neglect to adequately inform the employees who are to be managed by objectives about the basic intentions, the “general heading” in principle, for the next period. We can hardly expect people to set themselves good objectives or assist in their implementation if they are not informed.

Therefore, key employees must be informed briefly and succinctly about the basic direction in which the enterprise, organization, division, profit center, etc. is to proceed. Doing so verbally has its advantages but it can also, as in large companies, be done in writing. In any case, after receiving the instructions verbally the employees should also be given them in writing. The verbal method is more effective and motivational; the written is more precise, not only at that point in time but also later, because it can be reconstructed and is thus less susceptible to arbitrary interpretations.

|15|Basic Rules for Management by Objectives

Irrespective of how objectives are set in individual cases, I suggest that particular note be taken of the following.

Few Objectives – not Many

We almost always take on too many things that are also very different in nature. Setting objectives is one of the most important applications of the principle of concentration, one of the six principles of effective management.

Objectives, particularly the personal annual objectives referred to here, are, along with the task to be carried out, the most important means of making people in an organization, beginning with ourselves, concentrate, focus on something; or to put it very simply: of managing them.

Anyone who is interested in effectiveness and wants to see results at the end of the year must do the exact opposite of what the majority of managers do with regard to objectives. Instead of “loading the car” with more and more, ensure that people take on few objectives. This question should always be asked. Is this really important? What happens if we do not do it?

I would like to touch on priorities in this context. Contrary to what we always hear, setting priorities is not particularly difficult, unless we have no experience to speak of. Anyone, who is familiar with an organization and has some practical experience, can usually specify quite accurately what is really important. On the other hand, what is difficult and is usually ignored is preventing the opposite of priorities – we could call them posteriorities or simply non-priorities – from throwing a spanner in the works. By posteriorities I mean all those things that only appear to be important and take up a lot of space on our desks or computers. These must be brought under control and kept under control.

It is appropriate here to remember what the past master in this field, |16|Peter Drucker, said. “Effective executives do first things first and second things –?” Not “second” as most people reply when asked to complete the sentence, an exercise I have tried out many a time. Not “second”, but “not at all!”.

According to my personal experience as a manager and leader of hundreds of seminars which I have held on this topic, and where this question is discussed time and again, this is perhaps the “bite of the apple of (management) wisdom” which is most difficult to digest. Managers find it quite unpalatable. I myself had to chew on it fora long time; nevertheless, it is the most important.

We must accept this without reservations, I am tempted to say with childlike faith, otherwise we will always experience difficulty in being effective. Too much, too different, all fleetingly touched upon, nothing really completed, nothing but compromises and half measures – this will be our situation at the end of a year. Why is it so difficult? Perhaps because it goes against the prevailing work ethic in some countries. People still believe that a lot is good. This is wrong. What is good is doing the right thing and doing it right should be the maxim. However, the more important reason, of course, lies in the everyday situation in organizations with their frenetic pace, which is mistaken for dynamism, with their bustling activity, which is confused with effectiveness, and with their rituals, which are taken for substance.

There is yet another, a third reason. Of course, we have to deal with many things that have little or nothing to do with the really important objectives and which, in reality, stand in their way. All of this, the posteriorities, the daily odds and ends, must somehow be disposed of. Effective people are, of course, not exempt from these tasks. However, they get rid of these things as quickly as possible and with a minimum of effort and time; they spend the first two or last two hours in the office doing this or do it over lunchtime so that they can then devote themselves to the really important priorities. They do not assess themselves – remember the first principle, which is focusing on results – according to the work they have done but rather according to what they have achieved, and these achievements are not related to day-to-day activities but to one, two or three important objectives.

|17|Few but Big Objectives

Taking on less does not necessarily mean, as is occasionally assumed, working less, being lazy and “hanging around”. The maxim is: Few but big objectives – ones that are significant and count for something when they are achieved.

As I shall explain in a subsequent chapter, people develop by carrying out the big tasks. These are the ones that motivate them and stretch them to their limits. This principle should not remain abstract but rather should be reflected in the objectives every year. Where, if not here, will this ever be effective?

Most people have too many small tasks. This is detrimental for them; they become stunted, they dissipate their energies, and while they may indeed have a lot of work they have no results to show for it. Therefore, they do not experience any success, which is why they need to be “motivated”. This vicious circle must be broken, not through sophistic “development programs” but through big objectives. The task, the job, the objective should guide the people, not the boss. The objective should be the source of authority, direction and supervision, not a superior.

What Is no Longer Relevant?

Even this third point, like the previous two, is inconsistent with prevailing opinion. Usually, we determine our objectives with the question: What should I, must I do, or do I want to do? However, effective people turn the question around and ask: What should I stop doing, and what do I no longer want to do?

First, we must get rid of the rubbish and systematically abandon previous habits, activities and tasks. Setting annual objectives not only provides the focus but also the best opportunity to systematically purify the organization, make it lean, “detoxify” it from the inside out, clear away the accumulated rubbish and make room for the new. The |18|practical implementation of this idea affects special tools of effective management.

I would suggest that employees be encouraged to write down the most important of these things. To stop doing something is as much an objective as doing something extra. Abandoning what has previously been done often has far-reaching consequences for the organization, and, therefore, some support measures may be required for this to succeed, such as providing appropriate information to others, as a minimum. More important, however, is the fact that, unless they are written down, these will remain nothing more than vague resolutions and good intentions; nothing concrete will actually be done.

Quantification – but not Dogmatism

Wherever possible, it should be obligatory for employees to quantify their objectives. This must always be followed up and insisted upon. There is much more that can be quantified than most people believe. This is because they have never learnt to do so systematically, excluding people with strong scientific or technical training. Most give up too quickly, they barely make an effort to consider the possibilities and use a little imagination; many believe that creativity and quantification are diametrically opposed to each other. The opposite is the case. Successful quantification of something that has never been quantified is the perfect example of a highly creative achievement. The absolute minimum is a quantification of time, i.e. there should be no objectives without a deadline.

I am deliberately talking about quantification and not simply measurement. The English cyberneticist Stafford Beer put it aptly: “There is more to quantification than numeration.” We should go as far as is possible with quantification, at any rate, beyond the point where we usually stop but, and this is an important qualification, we should not be dogmatic about it.

The dogma to which we can fall prey is this: Anything that cannot be quantified is not important – and, therefore, requires no attention. |19|This would be extremely hazardous for a company or any other kind of organization. It is an error that results from misunderstanding quantification, and is the consequence of an apparently scientific approach, which is completely misunderstood and is known in philosophy as “Scientism”.

Experience shows that the more important the objective for the organization, the less it can be quantified in the narrow sense of the word. Sales, market share, productivity, cash flow, and many other things can now be quantified (this was not previously considered possible). But what is the situation like in the case of quality, customer benefit, customer satisfaction, innovation, etc.? The fact that non-quantifiable things are much more important than those that are quantifiable is true to a much greater extent in the case of non-commercial organizations.

It is like walking a tightrope. There should be as much quantification as possible, but not to such an immoderate extent that it distracts our attention from other things that are equally important but cannot be quantified. There is no general formula that can help us to find the right balance. However, in an individual case, when the circumstances, situation, product, market, technology, and, above all, the people are known, we can often quite accurately state how far we can and should go with quantification.

In any case, we must demand the maximum possible precision. This is also possible where quantification in its narrow sense is no longer feasible. What do we base our assessment and evaluation on at the end of the next period in order to determine whether we have come closer to our objective? This must be the key question. Therefore, we must train people to describe the desired final outcome as precisely as possible. A small trick is to demand the future perfect tense in the linguistic formulation of objectives. The question should not be: What do we want to achieve? but What will have been achieved? The masters of linguistic precision are good lawyers, even if they sometimes use their skill to create confusion.

|20|Contradictory Objectives

In textbooks we can read: Set non-contradictory objectives! This sounds plausible, but it is too good to be true. The more important the objectives, the more contradictory they are (unfortunately). We must learn to live with this.

Setting good objectives always requires the skill of balancing and weighing the pros and cons. In this regard, Peter Drucker wrote2: “There are few things that distinguish competent from incompetent management quite as sharply as performance in balancing objectives. There is no formula for doing the job. Each business requires its own balance – and it may require a different balance at different times. Balancing is not a mechanical job. It is risk-taking decision.”

Unfortunately, there are no formulae for this, and consequently we cannot delegate this task to our staff or a computer. It remains one of the elementary management tasks, and one that requires experience and not just knowledge.

Objectives or Measures?

In textbooks we can also read: Set objectives and not measures! This rule is correct as such but unfortunately it cannot always be followed. We should not be dogmatic about it either. There are cases in which we cannot determine a sufficiently precise objective but we can determine a measure that we assume from experience will take us in the right direction. Therefore, in such cases, we should adopt measures instead of objectives. What is important is not theoretical purity but practical effect. Whatever helps me to get closer to my objective is useful and acceptable.

That is one aspect. However, there is a second aspect that makes it important to concern ourselves with measures. Measures can be illegitimate, even if the objectives are not, they can be disputed on ethical or social grounds or be incompatible with the image of the organization. |21|Therefore, we cannot simply exclude measures from the determination of objectives.

Resources

Textbook purity frequently also prevails in how we deal with resources. It is always correct to differentiate between objectives, resources, and measures as concepts. This does not mean that they cannot be dealt with together. On the contrary, I believe that they must be dealt with together on principle. This does not mean that certain secondary problems cannot be solved as part of a separate planning process.

I would propose that we should not only ask employees for the objectives but they should also state the most important resources they are likely to require to achieve them. Firstly, this will improve their understanding of the business or activity of the organization and its internal workings. Secondly, this corresponds with holistic and entrepreneurial thinking. There are no entrepreneurs, at least none that successfully survive, that do not simultaneously think about all three elements: objectives, resources and measures. And thirdly, it is the only way to not only set objectives but also to set realistic objectives, which is what is really required.

Defining objectives is not an art, provided we do not have to think about how and with what they are to be achieved. The most dangerous aspect of the discussion on vision, which has been carried out at great expense in the last few years, and one of the essential reasons for my rejecting it is that it is often far removed from reality.

Napoleon was a master of resource planning: Every time his generals submitted grand offensive strategies he leant back in his chair and inquired about such issues as how many horses were required for these strategies. Usually the generals had not given enough thought to this question. However, the question of resources cannot be left to subordinates, the “fortunes of war” depend on it.

|22|People not Groups

Every objective must have a person’s name on it. Effective objectives are personal objectives. Whether the person responsible for the objective then requires a group, a team, etc. for its implementation is another issue. This can often be decided by the people in charge, if they are sufficiently competent to make the decision. However, one person should be in charge and not a group. One of the most important functions of objectives in an organization is to individualize responsibility. It is precisely because organizations are collectives that responsibility must be personalized as much as possible.

If, for some reason, this is not possible (and I do not wish to rule out the possibility that this can happen in principle), and if even after serious effort, we cannot appoint an individual instead of a group, we should be very skeptical about the chances of successful implementation and entertain only modest expectations. As a result, we must keep a close eye on such cases, “stay on the ball”, and take action at the slightest indication that the issue is “straying off course”.

All Employees or only Selected Ones?

In management issues people are unfortunately far too inclined to havea concept of equal treatment that is not properly understood. The fact that everyone is equal in the eyes of the law is indeed an important constitutional principle and it signifies progress. But this does not mean that everyone should or can be equal in the eyes of their boss. It has been my experience time and again that the common belief is that if it is useful for certain employees to have objectives, the same must be true of all employees. Thus, there is a compulsive search for objectives to be set for doormen and part-time staff. This usually leads to absurd situations, which render the whole principle of Management by Objectives ridiculous and without any credibility.

I do not, of course, rule out situations in which a doorman can have sensible objectives, such as when new security systems are installed |23|which he must learn to operate. However, he will not usually require any objectives to carry out his duties well.

Therefore, careful consideration must be given to the issue of which employees should have objectives and which should not. This is a genuine management decision, which will keep changing from year to year.

Individual Application

A second type of individualization is more important, namely the individual application of Management by Objectives. This idea applies to almost everything in management.

Experienced staff cannot and should not be managed in the same way as the inexperienced. In the case of the inexperienced, whether they are too young to have gained experience or are new to the company, the manager must thoroughly check the objectives they intend to achieve, what they perceive to be their priorities, and what they consider of secondary importance. Great stress must be laid on precision and quantification. The manager must discuss their objectives with them thoroughly and examine in great detail their analysis of the relevant resources. Objectives are a useful means, perhaps the best vehicle to find out mutual expectations and ideas.

On the other hand, experienced people who the manager has known for the last eight or ten years, and of who he knows how they react and particularly how they work, require much less management. In such cases the manager can be content with less precision and also with less discussion. Therefore, there should be no unnecessary egalitarianism! For an experienced employee it is very demotivating, even insulting, to be subjected to the same procedures as young and inexperienced employees. After all, they have already proved their capabilities, and also that they can be relied on.

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|29|Second Task: Organizing

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|39|Third Task: Decision-Making

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|65|Fourth Task: Supervising

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|80|Fifth Task: Developing People

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|96|Synopsis: And what about all the other Tasks …

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|106|Notes

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