• Dick Lam

Getting the most from Senior Staff & Management

Updated: Jun 19, 2019



Few managers have the talent to achieve excellence”.

This was the claim made by the Gallup Business Journal published on the 25th of March 2014 (*1).


It found that management accounted for 70% of the variation in employee engagement – which leads to employees staying and taking initiative. Ie. Good managers engage and poor ones do not.


This is a longer but practical article on my observations on different management promotion or hiring models and alternative views on developing a manager. 


Model 1 – Promote the good worker


It is common to promote one of the ‘senior’ people to manage.

It is workable. Not always profitable.


They continue to do the job and help the less experienced people, whilst earning respect.


But what is often missing is good management, running the whole area and improving performance.


They might get bogged down in admin and unfamiliar work, in knowing exactly how to manage and engage people.


New tricks are hard to learn if you don’t know what they are.


I remember being asked to address the profitability in an area that was underperforming and falling behind competitors. The head of the area was an engineer (like a builder) by trade, nearing retirement. – let’s call him Bob. Bob ‘knew’ the most about ‘doing the job’.


I worked to understand the business and identified how the profitability could be improved quickly without changing normal operations and Bob’s day to day work. But I also worked with the person who would replace him - Angela.


And when Bob did retire, Angela was able to step the changes up further. Once initiated, management find strategic management relatively easy. It becomes part of their thinking.


It was operating at around a 5% loss (to revenue) at the time. Today, under greater price pressure and competition, it trades at around 10% profit to revenue in a low margin industry with prices under contract for some years.


Now all the senior staff – Arnold, Schwarz, Helen and Keller (made up if you don't realise it) are thinking in this new way. It’s amazing how a thought change at the top translates down into the culture of the team.


But the change is not just ‘right now’. It is a thought change.


Sometimes new managers need to be coached.


Model 2 – Get a Manager


The alternative is to get someone who is a manager, rather than within the team.

The risk is they don’t learn quickly enough and they don’t perform, thereby not earning the respect of the team.


The key however, is to select that person correctly. The Gallop Business Journal article above (*1) noted that 82% of the time, we fail to find the right talent. There is not enough training on hiring correctly.


A study articled on Forbes on April 5, 2012 (*2) indicates that external hires, whilst getting on average 18% more pay than internal hires, are 61% more likely to be fired from those new jobs. They tend to have more education and more experience.


But what these figures don’t show is that new hires can truly change an area, particularly in management.


I observed someone step into a manager position – call him Alan. Within 2 months, Alan changed the complexion of the department. It had more energy and there was a way of deciding things based on strategic direction. Good staff suddenly got better. Yes, a few people did leave, but perhaps they were not the better ones. Within 6 months you started seeing the dollars.


If they promoted Bill (the good worker) instead, Bill could still do his old job well and train the newbies. He wouldn’t be fired, but the department wouldn’t transform either. But Bill thrived under Alan and would I’m sure make a good manager in future. I’ve seen plenty of Bill’s promoted and the department move along mildly without drama, but without improved performance.


My personal observation is these external hires go wrong when one hires on wrong selection criteria – such as experience and education.


There is a simple analysis (found in several philosophies) that I have found useful in explaining this.


BE – “A manager”

DO – “Manager a team or area”

HAVE – “More profits, better KPIs, Happy Productive Team”


If you know they can deliver results (‘HAVE’), they can ‘DO’ management and can ‘BE’ a good manager.


Checking experience and education is an attempt to estimate if they can DO the job. It is simply an attempt to minimise risk without knowing how to choose.


Behavioural interview questions are a little like this.


Compare these 2 potential questions:


“Tell me a time you worked under pressure?”


vs.


“Tell me a time you made/or saved the company millions of dollars?”


If someone answers the 2nd question well, you might not care about the first one. You probably worked through plenty of pressure and wasn’t even thinking about it.


My observation is that around 50% of external management hires really do transform an area. Specific industry experience is not crucial, in fact, often a hindrance - just like McDonalds doesn't take Franchisees with Restaurant Experience.


So the challenge is to hire correctly. If you find out you hired wrong, get rid of them quickly before your good people get too frustrated and leave.


And therein lies the problem – if you brought in Alan and he was no good, he probably talked well enough to bamboozle executives for a while whilst the team fell apart.


Side Case – moving new management to smaller businesses or area

There is a side case where perhaps a company is acquired and the larger company sends a manager to ‘manage’ it. Or we send an ‘aspiring’ manager to a smaller area to test them. This will be listed in a separate article as it has special rules.


2nd Side Case – Manager bringing in their own team

A common instance is a manager being able to bring in their old team.

This is more common at the Executive level, but also has application in areas such as sales – where they bring in other sales people.


I have found sometimes what happens is that it doesn’t always mean the team brought in is better, they are just more loyal and used to working with the manager (the manager doesn’t look as bad if they can’t work with the current team). After ‘sign on’ fees and redundancies are taken into account, I have found it only works out better in half the cases or less. It only reliably works if that person can ‘attract’ better people into the team (without upsetting the better performers in the current team). Where the person does not – beware – the better people might have shunned them and only the poorer performers moved to follow. So you get the worst of all worlds – a poor manager bringing in a poor team.


Model 3 – Hiring Potential


A common practice is to hire based on ‘youth’ or ‘qualifications’ or ‘potential’.

Attitude, communication skills, energy as well as keenness to progress – are used as indicators. They may have a contemporary name like Chris.


This is different from just promoting a Bob who might be technical but can’t learn new tricks. Chris may or may not come from the same team or company.


Chris learns the job, but is young enough and might have done additional study. It is a promotion of sorts for Chris because of potential - a new dog to learn new tricks.


This person is often identified in age as well – very late 20’s to mid-30’s.


Chris might take time to work out the job. You suffer the extra salary with slightly lower results for a year, maybe 2. After that, Chris might be worth it.


If they come good, you run the risk of Chris leaving for a better offer. Remember, they might have muddled around for a year or 2. But statistically for the newer generations, 2 years is a long time and you will lose your investment.


Or perhaps Chris never comes good and you are hoping for the next ‘restructure’ to let them go.


You guessed Chris’ ‘Potential’, but you didn’t have the science to know for sure.


I remember a large organisation that promoted a Chris to manage a different area.

First impressions were good, but one started to feel that Chris was better at ‘selling themselves’ than delivery.


That highlighted perhaps the most dangerous type of promotion – a Chris who sells themselves well but the team has to compensate for their issues. It may go on for months until the good staff leave and you are left with the rest.


Chris might lack the respect of the team and may in fact, destroy it (highlighted also in the 2nd side case above).


This is the compromise between hiring an old dog that can’t learn new tricks    vs     the new dog that runs away    or    a new dog that doesn’t grow up.


A new management world


There is a concept in the project management world called Agile.


This is not to propose Agile in any way, but there are concepts to take out in relation to selecting and developing a manager.


The Agile world focuses on products rather than processes.


For example - You want a new way for customers to order online. You decide to build a website and an app. You give a project team 9 months and 2 million dollars telling it to put your catalogue online and let them browse, have a great visual experience and purchase without visiting a store.


After 9 months you might find the original brief was bad and the customer really didn’t like what you gave them. Nobody buys much online. But it cost you 9 months and $2 million.


An agile environment might instead do this:


The company tells the team the idea.

The team builds a rough version and tests it.

They get some feedback and find out the original version sucked.


Build another rough version, maybe trying a new feature.


Test it and get more feedback.


Decide the original idea was way off the mark and people don’t want a website with all your products at all. Customers only want 25% of them because nobody would buy the other stuff online or even look at it.


But you spend all the money adding video, extra features and online chat to help customers before they buy - all tested over time to add, delete or improve.


You create payment portal designed to get loyalty and rather than compete with existing stores or branches, allow them to order online after visiting a store or branch – and give a first timer discount and a loyalty program which would be hard to explain in-store.


In the end, you only put 25% of the original product online but spent all the $2 million. You took turnover away from stores but actually increase overall closing rates for store visitors because more later ordered online after seeing it in the shop. You also found a new market for online shoppers who would have hated your original online concept.


It was flexible and allowed you to adapt and be ‘agile’ in catering for requirements.

The same attitude can apply to ‘developing’ a good manager.


Remember Bill in Model 2 – the senior guy who got bypassed by Alan? If he got promoted to manager instead of Alan, you might think he did alright. But no big improvements happened.


But because you brought in Alan, Bill learned how to be a good manager. So if Bill gets the chance, he will become a much better manager.


He learned what he didn’t know and developed accordingly. Just like you develop a product from what you don’t know initially.


A Consultant Advisor Model


I have found (and observed) success with a Consultant Advisor model.


A manager will not readily confess they need management training. Bill probably thought he would be pretty good until he went under Alan. You probably couldn’t tell Bill beforehand he needed help in management.


But most managers will often get help in other things. Financial analysis and budgeting. Hiring from HR. Systems and software from IT and maybe Operations.


Sometimes people see this as Business Partnering. But a Business Partner is often looked at as subordinate. You don't get coaching from a Business Partner.


And if the help comes in the form of a consultant rather than a subordinate – then they will be able to do 3 things.


  1. Deliver something valuable the manager would struggle to do.

  2. Coach thinking towards more forward thinking strategy instead of day-to-day.

  3. Bridge communication – advise on the health or issues with the team and help communicate with upper management.


The key thing is that the ‘help’ is at a sufficient level. Below is a table that illustrates what happens at various levels of help.


If I look at helping Bob in model 1 – teaching an old dog new tricks – this is what happened – from a more senior finance consultant view.


It resulted in:


  • Immediate help on Profitability

  • Advice on structure, individual performances, profitability, pricing on contracts – shifting the team to a more strategic focus

  • Help in selling initiatives to the board and senior staff.


Key Skills & Traits


Your best manager is most likely a good coach for their team, strategic in their thinking and has the communication skills to work up, sideways and downwards.


But it is not the manager that creates the results. It is the team.


The difference between a good ‘worker’ and an average one might only be 20-50%.

In different fields and professions and levels, it is much higher.


In software for example – Bill Gates(*3) suggests that the difference between a great and average software writer is 10,000 times. Steve Jobs(*4) in suggests it is 50 times, perhaps 100 times. Imagine if you had a bad manager above these stars or future stars?

The difference between a good and bad manager? It has a multiple effect. A team feeds off each other and manages each other.


Organisations often talk about how they develop managers but I have found that they mostly do not. The manager is left to develop themselves.


But if you take the consultant advisor model, the following traits are key:


  • Ability to deliver results quickly in the area they specialise in from a high position.

  • Very strong communication and rapport up, across and down.

  • Big picture business awareness and strategic thinking – including awareness of the team – but in a position  they can be heard.


As a package this is somewhat rare. But imagine if you had this type of help in finance, HR, Operations and/or IT. The ability to deliver quickly and create super managers with super teams.


This is, after all what the stellar organisations have isn’t it?


(*1) based on 12 years of data including 2.7million employees – 30% engagement of employees in US (12% outside US) with little movement over those 12 years -http://www.gallup.com/businessjournal/167975/why-great-managers-rare.aspx


(*2) by Matthew Bidwell from the University of Pennsylvania -http://www.forbes.com/sites/susanadams/2012/04/05/why-promoting-from-within-usually-beats-hiring-from-outside/#7c46475c3fb2


(*3)“A great lathe operator commands several times the wage of an average lathe operator, but a great writer of software code is worth 10,000 times the price of an average software writer.” – Bill Gates


(*4) “In software—and it used to be the case in hardware too—the difference between the average and the best is 50 to one. Maybe 100 to one.” – Steve Jobs – the Lost Interview 1995 (before his return to Apple).

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2019 Dick Lam