Developing first-level leaders

Oil and energy corporation BP was well aware of the importance of its work group managers on the front lines. Their decisions, in aggregate, make an enormous difference in BP's turnover, costs, quality control, safety, innovation, and environmental performance. There were about 10,000 such supervisors, working in every part of the company-from solar plants in Spain, to drilling platforms in the North Sea, to marketing teams in Chicago. Some 70% to 80% of BP employees reported directly to these lower-level managers. Yet, until recently, the corporation didn't have a comprehensive training program--let alone an official name--for them. For their part, the frontline managers felt disconnected; it was often hard for them to understand how their individual decisions contributed to the growth and reputation of BP as a whole. In this article, BP executive Andreas Priestland and Dialogos VP Robert Hanig describe how BP in the past five years has learned to connect with this population of managers. After one and a half years of design and development, there is now a companywide name--"first-level leaders"--and a comprehensive training program for this cohort. The authors describe the collaborative effort they led to create the program's four components: Supervisory Essentials, Context and Connections, the Leadership Event, and Peer Partnerships. The design team surveyed those it had deemed first-level leaders and others throughout BP; extensively benchmarked other companies' training efforts for lower-level managers; and conducted a series of pilot programs that involved dozens of advisers. The training sessions were first offered early in 2002, and since then, more than 8000 of BP's first-level leaders have attended. The managers who've been through training are consistently ranked higher in performance than those who haven't, both by their bosses and by the employees who report to them, the authors say.     

Becoming the boss

Even for the most gifted individuals, the process of becoming a leader is an arduous, albeit rewarding, journey of continuous learning and self-development. The initial test along the path is so fundamental that we often overlook it: becoming a boss for the first time. That's a shame, because the trials involved in this rite of passage have serious consequences for both the individual and the organization. For a decade and a half, the author has studied people-particularly star performers-making major career transitions to management. As firms have become leaner and more dynamic, new managers have described a transition that gets more difficult all the time. But the transition is often harder than it need be because of managers' misconceptions about their role. Those who can acknowledge their misconceptions have a far greater chance of success. For example, new managers typically assume that their position will give them the authority and freedom to do what they think is best. Instead, they find themselves enmeshed in a web of relationships with subordinates, bosses, peers, and others, all of whom make relentless and often conflicting demands. "You really are not in control of anything, says one new manager. Another misconception is that new managers are responsible only for making sure that their operations run smoothly. But new managers also need to realize they are responsible for recommending and initiating changes-some of them in areas outside their purview-that will enhance their groups' performance. Many new managers are reluctant to ask for help from their bosses. But when they do ask (often because of a looming crisis), they are relieved to find their superiors more tolerant of their questions and mistakes than they had expected.     

Saving your rookie managers from themselves

Most organizations promote employees into managerial positions based on their technical competence. But very often, that kind of competence does not translate into good managerial performance. Many rookie managers fail to grasp how their roles have changed: that their jobs are no longer about personal achievement but about enabling others to achieve, that sometimes driving the bus means taking a backseat, and that building a team is often more important than cutting a deal. Even the best employees have trouble adjusting to these new realities, and that trouble can be exacerbated by the normal insecurities that may make rookie managers hesitant to ask for help. The dynamic unfolds something like this: As rookie managers internalize their stress, their focus, too, becomes increasingly internal. They become insecure and self-focused and cannot properly support their teams. Invariably, trust breaks down, staff members become alienated, and productivity suffers. In this article, coach and management consultant Carol Walker, who works primarily with rookie managers and their supervisors, addresses the five problem areas that rookie managers typically face: delegating, getting support from senior staffers, projecting confidence, thinking strategically, and giving feedback. You may think these elements sound like Management 101, and you'd be right, Walker writes. But these basic elements are also what trip up most managers in the early stages of their careers (and even, she admits, throughout their careers). The bosses of rookie managers have a responsibility to anticipate and address these problems; not doing so will hurt the rookie, the boss, and the company overall.     

Outcome effect, controllability and performance evaluation of managers: some field evidence from multi-outlet businesses

This field study provides evidence of the outcome effect in performance evaluations of managers in an organization. Specifically, in a retail chain, subjective evaluations of store managers by their supervisors were negatively impacted by unfavorable outcome knowledge. As expected, outcome determinants over which the managers have control influence their performance evaluations and environmental determinants of outcome over which they have no control do not influence their evaluations. However, unexpectedly, central management determinants of outcome over which the managers have no control also influence their evaluations. After these outcome determinants are considered, we find evidence of an outcome effect since failure of the store to meet its target outcome results in a more negative performance evaluation of the managers. Also, the extent to which store managers' evaluations are prone to the outcome effect is not contingent on the measure of the outcome used.     

The ambidextrous CEO

Although most managers publicly acknowledge the need to explore new businesses and markets, the claims of established businesses on company resources almost always come first, especially when times are hard. When top teams allow the tension between core and speculative units to play out at lower levels of management, innovation loses out. At best, leaders of core business units dismiss innovation initiatives as irrelevancies. At worst, they see the new businesses as threats to the firm's core identity and values. Many CEOs take a backseat in debates over resources, ceding much of their power to middle managers, and the company ends up as a collection of feudal baronies. This is a recipe for long-term failure, say the authors. Their research of 12 top management teams at major companies suggests that firms thrive only when senior teams lead ambidextrously--when they foster a state of constant creative conflict between the old and the new. Successful CEOs first develop a broad, forward-looking strategic aspiration that sets ambitious targets both for innovation and core business growth. They then hold the tension between innovation unit demands and core business demands at the very top of the organization. And finally they embrace inconsistency, allowing themselves the latitude to pursue multiple and often conflicting agendas.     

The new boundaries of the "boundaryless" company

In an economy founded on innovation and change, one of the premier challenges of management is to design more flexible organizations. For many executives, a single metaphor has come to embody this managerial challenge and to capture the kind of organization they want to create: the "corporation without boundaries." According to Larry Hirschhorn and Thomas Gilmore of the Wharton Center for Applied Research, managers are right to break down the boundaries that make organizations rigid and unresponsive. But they are wrong if they think that doing so eliminates the need for boundaries altogether. Once the traditional boundaries of hierarchy, function, and geography disappear, a new set of boundaries becomes important. These new boundaries are more psychological than organizational. They aren't drawn on a company's organizational chart but in the minds of its managers and employees. And instead of being reflected in a company's structure, they must be "enacted" over and over again in a manager's relationships with bosses, subordinates, and peers. In this article, Hirschhorn and Gilmore provide a guide to the boundaries that matter in the "boundaryless" company. They explain how these new boundaries are essential for both managers and employees in coping with the demands of flexible work. They describe the typical mistakes that managers make in their boundary relationships. And they show how executives can become effective boundary managers by paying attention to a source of data they have often overlooked in the past: their own gut feelings about work and the people with whom they do it.     

Cultural intelligence

In an increasingly diverse business environment, managers must be able to navigate through the thicket of habits, gestures, and assumptions that define their coworkers' differences. Foreign cultures are everywhere--in other countries, certainly, but also in corporations, vocations, and regions. Interacting with individuals within them demands perceptiveness and adaptability. And the people who have those traits in abundance aren't necessarily the ones who enjoy the greatest social success in familiar settings. Cultural intelligence, or CQ, is the ability to make sense of unfamiliar contexts and then blend in. It has three components--the cognitive, the physical, and the emotional/motivational. While it shares many of the properties of emotional intelligence, CQ goes one step further by equipping a person to distinguish behaviors produced by the culture in question from behaviors that are peculiar to particular individuals and those found in all human beings. In their surveys of 2,000 managers in 60 countries, the authors found that most managers are not equally strong in all three of these areas of cultural intelligence. The authors have devised tools that show how to identify one's strengths, and they have developed training techniques to help people overcome weaknesses. They conclude that anyone reasonably alert, motivated, and poised can attain an acceptable CQ.     

Power failure in management circuits

When one thinks of "power", one often assumes that a person is the source of it and that some mystical charismatic element is at work. Of course, with some people this is undoubtedly so; they derive power from how other people perceive them. In organizations, however--says this author--power is not so much a question of people but of positions. Drawing a distinction between productive and oppressive power, the author maintains that the former is a function of having open channels to supplies, support, and information; the latter is a function of these channels being closed. She then descriges three positions that are classically powerless: first-line supervisors, staff professionals, and, surprisingly, chief executive officers. These positions can be powerless because of difficulties in maintaining open lines of information and support. Seeing powerlessness in these positions as dangerous for organizations, she urges managers to restructure and redesign their organizations in order to eliminate pockets of powerlessness.     

Why change programs don't produce change

Faced with changing markets and tougher competition, more and more companies realize that to compete effectively they must transform how they function. But while senior managers understand the necessity of change, they often misunderstand what it takes to bring it about. They assume that corporate renewal is the product of company-wide change programs and that in order to transform employee behavior, they must alter a company's formal structure and systems. Both these assumptions are wrong, say these authors. Using examples drawn from their four-year study of organizational change at six large corporations, they argue that change programs are, in fact, the greatest obstacle to successful revitalization and that formal structures and systems are the last thing a company should change, not the first. The most successful change efforts begin at the periphery of a corporation, in a single plant or division. Such efforts are led by general managers, not the CEO or corporate staff people. And these general managers concentrate not on changing formal structures and systems but on creating ad hoc organizational arrangements to solve concrete business problems. This focuses energy for change on the work itself, not on abstractions such as "participation" or "culture." Once general managers understand the importance of this grass-roots approach to change, they don't have to wait for senior management to start a process of corporate renewal. The authors describe a six-step change process they call the "critical path."     

In praise of middle managers

Middle managers have often been cast as dinosaurs. Has-beens. Mediocre managers and intermediaries who defend the status quo instead of supporting others' attempts to change organizations for the better. An INSEAD professor has examined this interesting breed of manager--in particular, middle managers' roles during periods of radical organizational change. His findings will surprise many. Middle managers, it turns out, make valuable contributions to the realization of radical change at companies--contributions that go largely unrecognized by most senior executives. Quy Nguyen Huy says these contributions occur in four major areas. First, middle managers often have good entrepreneurial ideas that they are able and willing to realize--if only they can get a hearing. Second, they're far better than most senior executives at leveraging the informal networks at companies that make substantive, lasting change. Because they've worked their way up the corporate ladder, middle managers' networks run deep. Third, they stay attuned to employees' emotional needs during organizational change, thereby maintaining the transformation's momentum. And finally, they manage the tension between continuity and change--they keep the organization from falling into extreme inertia or extreme chaos. The author examines each of these strengths, citing real-world examples culled from his research. Of course, not every middle manager in an organization is a paragon of entrepreneurial vigor and energy, Huy acknowledges. But cavalierly dismissing the roles that middle managers play--and carelessly reducing their ranks--will drastically diminish senior managers' chances of realizing radical change at their companies. Indeed, middle managers may be the most effective allies of corner office executives when it's time to make major changes in businesses.     

Women and the labyrinth of leadership

Two decades ago, people began using the "glass ceiling" catchphrase to describe organizations' failure to promote women into top leadership roles. Eagly and Carli, of Northwestern University and Wellesley College, argue in this article (based on a forthcoming book from Harvard Business School Press) that the metaphor has outlived its usefulness. In fact, it leads managers to overlook interventions that would attack the problem at its roots, wherever it occurs. A labyrinth is a more fitting image to help organizations understand and address the obstacles to women's progress. Rather than depicting just one absolute barrier at the penultimate stage of a distinguished career, a labyrinth conveys the complexity and variety of challenges that can appear along the way. Passage through a labyrinth requires persistence, awareness of one's progress, and a careful analysis of the puzzles that lie ahead. Routes to the center exist but are full of twists and turns, both expected and unexpected. Vestiges of prejudice against women, issues of leadership style and authenticity, and family responsibilities are just a few of the challenges. For instance, married mothers now devote even more time to primary child care per week than they did in earlier generations (12.9 hours of close interaction versus 10.6), despite the fact that fathers, too, put in a lot more hours than they used to (6.5 versus 2.6). Pressures for intensive parenting and the increasing demands of most high-level careers have left women with very little time to socialize with colleagues and build professional networks--that is, to accumulate the social capital that is essential to managers who want to move up. The remedies proposed--such as changing the long-hours culture, using open-recruitment tools, and preparing women for line management with appropriately demanding assignments--are wide ranging, but together they have a chance of achieving leadership equity in our time.     

公司内部人具有交易时机的选择能力吗?——来自中国上市公司内部人卖出股票的证据

本文以内部人卖出股票的交易为对象,研究发现从短窗口来看,上市公司内部人卖出本公司股票时表现出很强的时机把握能力。回归分析发现,在卖出股票时,除董事长和总经理外的内部董事和经理的超常回报显著高于监事和独立董事,董事长和总经理的超常回报可能低于监事和独立董事;内部人本人交易的超常回报显著高于内部人直系亲属;小规模公司内部人的超常回报显著高于大规模公司内部人;国有控股公司内部人的超常回报可能高于其他公司内部人。本文经验证据表明,内部人的时机选择能力可能来自于其掌握的非公开信息,且受公司信息透明度影响。     

Leveling of the playing field and corporate financing patterns around the world

The level of parity between management of firms and their shareholders vary around the world. In many countries, the playing field is tilted in favor of management, which can withhold information or selectively choose when and how to release it. Self-interested managers may also expropriate from shareholders. The legal, judicial, and political systems are also often in favor of those with wealth and power, and interested parties with the resources to level the playing field may be absent or ineffective. These countries lack the monitors, from large institutional shareholders to financial analysts, to limit management's advantage over the shareholders.In this paper, we investigate how managers in these two regimes differ in their financing decisions. We posit that: a) when management has the upper hand, they will exploit their advantage by offering inferior or overvalued securities; and b) on the other hand, in countries wherein the playing field is more level, managers cannot expect to consistently gain against outside investors in rounds of financing. We find evidence in support of the hypothesis above. Firms in countries wherein management have the playing field advantage issue securities before a price reversal; i.e., at or near high. The same is not observed on a level playing field. Nevertheless, managers in both types could act behaviorally. Also consistent with the behavioral version of corporate financing, firms at times issue new equity in hot markets or when recent share prices are rising, regardless of the playing field.     

Is management still a science?

New technologies are transforming products, markets, and entire industries. Yet the more science and technology reshape the essence of business, the less useful the concept of management itself as a science seems to be. On reflection, this paradox is not so surprising. The traditional scientific approach to management promised to provide managers with the capacity to analyze, predict, and control the behavior of the complex organizations they led. But the world most managers currently inhabit often appears to be unpredictable, uncertain, and even uncontrollable. In the face of this more volatile business environment, the old-style mechanisms of "scientific management" seem positively counterproductive. And science itself appears less and less relevant to the practical concerns of managers. In this article, science journalist David Freedman argues that the problem lies less in the shortcomings of a scientific approach to management than in managers' understanding of science. What most managers think of as scientific management is based on a conception of science that few current scientists would defend. What's more, just as managers have become more preoccupied with the volatility of the business environment, scientists have also become preoccupied with the inherent volatility--the "chaos" and "complexity"--of nature. They are developing new rules for complex behavior in physical systems that have intriguing parallels to the kind of organizational behaviors companies are trying to encourage. In fact, science, long esteemed by business as a source of technological innovation, may ultimately prove of greatest value to managers as a source of something else: useful ways of looking at the world.     

Demand better results--and get them

This HBR classic, first published in 1974, asks and answers one of management's most important questions: Why do so few organizations reach their productivity potential? The answer: because most senior executives fail to establish expectations of performance improvement in ways that get results. They fail because making heavy demands involves taking risks and threatens those who have the demands imposed on them. It's safer to ask for less. To avoid facing the reality of underachievement, managers may rationalize that their subordinates are doing the best they can or that better performance requires more authority or greater resources. They may put their faith in incentive plans that don't need their personal intervention. They may actually set high goals but let subordinates escape accountability for results. To get out of these doldrums, executives have to be willing to invest time and energy; responsibility can be delegated only so far. The key to the recovery strategy is to set a specific, modest, measurable goal pertaining to an important problem in the organization. If this goal is met, management uses the success as a springboard for more ambitious demands, each one carefully supported by plans, controls, and persistence directed from the top. Resistance can be expected from many levels. But as the organization registers genuine achievement, consciousness-raising in the form of recognition transforms expectations into positive factors. The fact is, most people like to work in a results-oriented environment. In a retrospective commentary, the author writes that while companies today are more impressed with the need for performance improvement, the ability to establish high expectations is still the most universally underdeveloped managerial skill.     

MANAGEMENT FADS AND ORGANIZATIONAL ARCHITECTURE

This article applies and extends the three-part organizational framework used in the preceding article to a broad range of management innovations. After furnishing some interesting evidence of the rise and fall of management techniques such as TQM, Reengineering, Just-in-Time Production, and Activity-Based Costing, the authors raise and then attempt to answer a number of questions: What explains the popularity of these management innovations? Why do they often fail to produce the expected benefits? How can managers tell if a particular technique is right for them? What can managers do to increase the likelihood that an adopted technique will be successful? The persistent, and at times seemingly insatiable, corporate demand for management innovations is viewed by the authors as a “rational” economic response by senior managers to major changes in the external business environment—changes that in turn dictate changes in business strategy. For example, when confronted with external changes such as deregulation or heightened global competition, companies often find it necessary to refocus their efforts on improving product quality and operating efficiency. And such changes in business strategy tend to require a revamping of the three critical components of organizational architecture: (1) assignment of decision rights, (2) performance evaluation systems, and (3) compensation systems. As the authors argue, innovations such as TQM, outsourcing, Re-engineering, and JIT typically involve major changes in just one or two of these critical elements of the organization, but not all three. The failure to coordinate organizational changes in such a way that these three elements are mutually consistent and reinforcing is one important reason why management innovations can fail to meet expectations. The framework described in this article is designed to help managers considering one potentially valuable set of organizational changes to identify other facets of the organization that also require attention and perhaps complementary adjustments.     

Reputation management and the disclosure of earnings forecasts

In this paper, managers differ from each other in terms of the probability that they are ??forthcoming?? (and disclose all the earnings forecasts they receive) or ??strategic?? (and disclose the earnings forecasts they receive only when it is in their self-interest to do so). Strategic managers choose whether to disclose their forecasts based on both the disclosure??s effects on their firms?? stock price and on their reputation among investors for being forthcoming. Our findings include: strategic managers can build a reputation for being forthcoming by disclosing unfavorable forecasts; managers?? incentive to build a reputation for being forthcoming may be so strong that they disclose even the most negative forecasts; as managers become more concerned about their reputation: (a) the current price of the firm in the event the manager makes no forecast increases; (b) managers who have a high probability of behaving strategically (as forthcoming) in the future issue forecasts more (less) often in the present.     

JUST SAY NO TO WALL STREET: PUTTING A STOP TO THE EARNINGS GAME

CEOs are in a bind with Wall Street. Managers up and down the hierarchy work hard at putting together plans and budgets for the next year only to discover that the bottom line falls far short of Wall Street's expectations. CEOs and CFOs are therefore left in a difficult situation; they can stretch to try to meet Wall Street's projections or prepare to suffer the consequences if they fail.
All too often, top managers react by suggesting or even mandating that middle- and lower-level managers redo their forecasts and budgets to get them in line with external expectations. In some cases, managers simply acquiesce to increasingly unrealistic analyst forecasts and adopt them as the basis for setting organizational goals and developing internal budgets. But either approach sets up the firm and its managers for failure if external expectations are impossible to meet.
Using the recent experiences of Enron and Nortel, the authors illustrate the dangers of conforming to market pressures for unrealistic growth targets. They emphasize that an overvalued stock, by encouraging overpriced acquisitions and other value-destroying forms of overinvestment, can be as damaging to the long-run health of a company as an undervalued stock. Ending the "expectations game" requires that CEOs reclaim the initiative in setting expectations and forecasts so that stocks can trade at close to their intrinsic value. Managers must make their organizations more transparent to investors; they must promise only those results they have a legitimate prospect of delivering and be willing to inform the market when they believe their stock to be overvalued.     

Big hat, no cattle: managing human resources

When faced with business problems, managers naturally make identifying the trouble their priority. Once that is done, at least half the job is over; finding solutions is just a matter of time. This hasn't been so, however, with the human resources problem: how to motivate employees. Sixty years ago, the Hawthorne experiments revealed the issue, and ever since, managers, researchers, and consultants have been searching for the answer to the human resources problem. Why aren't employees as productive, loyal, and dedicated to their companies as their managers know they can be? The author of this article proposes four reasons why actuality has fallen so far below expectation in personnel management, namely, that managers' expectations have been too high in the first place, that the concepts staff professionals offer managers are frequently contradictory, that the corporate role of personnel has always been problematic, and finally, that managers hold assumptions concerning their employees that undermine efforts to motivate them.     

An empirical study of research and development top managers' perceptions of short-term pressures from capital markets in the United Kingdom

It is often argued that capital market pressures are increasingly directed towards short-term performance evaluation of managers and their operations. Whether these external capital market pressures actually exist or not, short-term pressures on firms are influenced by managers' own perceptions of these external pressures. If managers perceive the existence of these external pressures it is likely that this will lead to short-term behaviour on their part. The purpose of this paper is therefore to examine (a) research and development (R&D) managers' perceptions of short-term behaviour in capital markets in the UK, and (b) patterns of behaviour relating to R&D which may be influenced by these perceptions. The findings of this study indicate that approximately half of the UK research and development managers perceive capital markets as responsible for putting inappropriate short-term pressures on their companies' management. However, an even larger proportion report short-termist behaviour relating to R&D and its evaluation, suggesting that some at least of the problem of ‘short-termism’ is internally generated.