Last month’s column explored one of Peter Drucker’s masterworks, “The Effective Executive.” This column analyzes additional insights to improve organizational effectiveness.
Drucker noted that poor job design impedes effectiveness. Jobs that defeat multiple executives in succession should probably be redesigned. Organizations should not have to recruit superheroes. Good processes enable ordinary people to do extraordinary things.
Jobs that are too small in scope tend to demoralize good executives. In a competitive marketplace, narrow subspecialties can quickly become obsolete. Managers should deploy personnel according to their strengths and aspirations. Workers who feel unappreciated or underutilized will leave the organization in search of seemingly better opportunities. Executives should be able to grow with their jobs and adapt to the demands of the marketplace.
Drucker harshly criticized annual job appraisal practices. Frequently, after a significant period of time, workers who thought they were doing a satisfactory or superior job are informed that their work is unsatisfactory.
In “Out of the Crisis,” W.E. Deming classified annual reviews, performance evaluations, and merit ratings as a “deadly disease” that afflicts most companies in the western world. In Dr. Deming’s red bead experiment, he demonstrated that forces beyond a worker’s control can produce large differences in their performances. Success or failure could be the result of good or bad fortune, but nevertheless, workers tend to be ranked or evaluated upon it.
Workers who seek advice from managers may view them as mentors. Thus, managers who search for those workers’ faults tend to erode trust among people who seek to improve. In Six Sigma, processes (such as DMADV and DMAIC) rely on continuous feedback to improve performance. Constructive criticism and feedback are important, but negative annual reviews tend to harm relationships.
Drucker believed that appraisals should focus on strengths, identify weaknesses that interfere with those strengths, and identify methods to accentuate the positive and eliminate the negative. He suggested a simple, alternative method of appraisal. It asks:
What can one do well?
What is one likely to do well?
What must one learn to harness the full benefit of those strengths?
If I had a child, would I let him or her work
for this person?
Drucker believed that it was more important to staff based on strength rather than to avoid weakness. The absence of character and integrity, however, were weaknesses to be avoided at all costs because they fault everything else.
Drucker believed that “indispensable” executives are likely incompetent, bolstering a weak superior, or being used to delay addressing a serious problem. If an executive cannot adequately handle a job, it erodes the morale of the subordinate who must compensate for him. The superior may be fit for a different job. Workers who are best qualified to perform a job should be promoted in spite of arguments that they are indispensible, unacceptable, too young, or inexperienced.
Resources should be directed towards the best opportunities. Many organizations waste time and resources bailing out unproductive decisions from their past. If the organization would not again embark on a problematic project, it should curtail the activity.
Executives require an effective decision-making process. First, they must determine if the situation is generic or an exception. Most problems are generic and can be solved through policies or rules. Few problems are exceptional. Sound policies reduce the number of decisions executives must make.
A non-recurrent problem is rare for an individual or organization but common within a large population. For example, a company’s business model may become unsustainable. A business may go bankrupt once, but companies go bankrupt all the time. Attorneys and turnaround managers can address such matters where the company lacks expertise.
To adequately address a problem, one must clearly define its “boundary conditions” and determine how a solution will satisfy those specifications. Then, a decision must be implemented. This could be time-consuming. Feedback tests the validity of the decision and process, which may then be modified accordingly.
Practicing effective behaviors makes them habitual. It enables organizations to better serve customers, increase revenue, decrease costs, and increase long-term profitability.
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