Tuesday, April 14, 2009

New management skills.

Skills in the following areas will be critical in enabling senior managers to work together successfully in the future.

* See the big picture at all times.
Research indicates that top managers typically spend almost 80% of their time in fragmented conversations with peers in other units who work nearby. A high percentage of these contacts are spontaneous, half last less than nine minutes and most deal with current issues.

To help acquire a longer-term, big-picture perspective, Lou Gerstner, when he was IBM’s chairman and CEO, spent 40% of his time with customers, often chatting CEO to CEO to learn what was going on. He not only listened, he acted on what he heard. When he heard customers complain about IBM’s high prices for mainframe software, he quickly ordered pricing cuts of 30%. In addition to finding out what they wanted, Gerstner saw his job as a translator, building trust and building bridges with his customers, CEO to CEO. And he insisted that his direct reports spent much of their time visiting customers, partners and suppliers as well.

In today’s business world, you can’t get into the fray and succeed unless you can stay above it. No one person knows enough to figure it out all by themselves.

* Learn how to learn together.

When Raymond Gilmartin was appointed the CEO of Merck & Co., he put together a 12-member management committee and took them away for the first in a series of three-day shirtsleeve retreats. These meetings were designed to break down barriers and build mutual confidence in a traditionally rigid hierarchical company. In these retreats, what went on during the breaks, dinners, lunches and over cocktails was as important as what went on in the meetings.

As one of its first tasks, the management committee composed a mission statement affirming that Merck would remain a research-driven pharmaceutical company and was not interested in diversification. As a result, Merck quickly shut down a generic drug operation and in the next two-years sold off more than $1 billion in assets, including Calgon Vestal Laboratories and a managed-health-care mental health unit.

A non-scientist, Gilmartin subsequently gave his top executives considerable autonomy in leading their business units. He created worldwide business strategy teams, each one focused on a key disease. These teams brought together senior executives from areas as diverse as finance, research, manufacturing and marketing to mount a coordinated global strategy to attack the disease. They had unfettered access to the management committee, which helped this committee make better research, manufacturing and marketing decisions.

Gilmartin continually encouraged his managers to air problems and debate issues without regard for hierarchy and without getting personal. He said, “Where you wanted the contest was not among people but among ideas. So, it was important for people to be able to be very open. We wanted them to be ‘knowledge navigators’ to each other.”

Experience has shown that executives learn best through interaction with their peers, testing new ideas, reflecting on the outcomes together, and digesting the feedback. Experiential learning in uncertain environments places less emphasis on knowing the right answers and is more concerned with exploring the right questions. Here, a broad base of knowledge is more useful than advanced expertise in a single specialty.

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