SECOND RULE OF MANAGEMENT

The first rule of management is that successful management is actually more about how you manage yourself rather than being about how you manage others (see “First rule of management” posted June 25, 2012).

The second rule of management is that the key to your own success is totally dependent on the success of your people. To borrow from Bill Clinton’s successful US Presidential campaign against incumbent George Bush in 1992, It’s all about the people, stupid.

There is no question that you have to have good products, and it is a wonderful competitive advantage to have great products, as has been shown to a remarkable degree by Apple in the last few years, and having wonderful customer service can give you an even more sustainable market lead, as shown by Asian airlines such as Singapore and Cathay over the last two decades.

But how long can these advantages last ?

Apple is increasingly under attack from competitors, and so far in 2012 in smartphones, for example, Android devices have outsold the Apple iPhone by a factor of 4 to 1, and at the same time Middle Eastern Qatar Airlines beat out all the Asian airlines to be named best airline in the world in 2012.

Author: blakeburris; CC BY 2.0 license; via Wikimedia Commons


The problem with basing competitive advantage on product superiority is that it doesn’t last forever as there will always be someone, somewhere who can either copy your time-based advantage or come up with an even better idea, meaning that having a wonderful product advantage is not sustainable on its own.

A culture and reputation for great customer service will sustain you longer, but again may not be enough.

If product superiority was the only critical element for success, companies like IBM would have disappeared a long time ago, and companies like DEC, WANG and Sun Microsystems would all have survived, as they all had leading edge products and technologies in their time, and even drove dramatic change in IT landscapes and in the way we worked.

Author: Jainux (own work); CC BY-SA 3.0 license; via Wikimedia Commons


I do understand that there are other criteria involved in success and failure of an enterprise, such as founders outliving their usefulness (DEC), missing critical technology trends (WANG) and general arrogance (Sun), but in their zenith all three had no troubles attracting great people. What they all overlooked was that to be successful in the long term you also had to retain them, inspire them, grow them and have them fully engaged, loyal and committed to the continued success of the company. The problem was that when all these companies started to lose their way, their people deserted them in droves for companies with “sexier” products.

Your people are the only real sustainable competitive advantage … if you let them !!!

I am surprised at how many companies appear to have not learned this lesson, as I continue to encounter organisations which seem to believe that extensive product development can overcome dysfunctional behaviour in their people. One only has to look at the disastrous state of our banking industry to see that the combination of lax management, highly saleable, but toxic, products and a general culture of greed and self-interest can not only destroy companies but also national economies.

In the same way that a great teacher can inspire generations of students with a love for learning, great management can inspire teams to take merely adequate, but useable and serviceable products to great heights. The small cadre of early adopters may all be running around looking for the next brightest geegaw, but most of us just need products that will do the needed job, supported by services that meet our expectations … we rarely need to be amazed or delighted, we just want to be satisfied with what we buy. The simple fact that “people buy from people” is enough to make companies highly successful if they have good products made even better by great people who are well trained and skilled, enthusiastic and dedicated, and who are natural evangelists for their company.

Skilled professional management with integrity (what we think, is what we say, is what we do) are at the heart of business long term success, as they will build organisations on values that will sustain them for the long term (“People join companies, but leave managers”), and they will attract, inspire, grow and retain the people needed to effectively support and sustain the product and service strategies.

The challenge is to get the values and culture right in the start-up phase and then sustain it as the organisation grows. Not easy to achieve as most companies will dilute and bastardise these with growth, but if it can be accomplished will help to create an organisation that can compete and succeed over the decades, rather than just through a technologically limited lifespan.

If the culture and values are strong, it doesn’t take many great people to get it started.

In the words of Nelson Eddy, American singer and actor (1901-1967) …

“Give me some men who are stout-hearted men who will fight for the right they adore
Start me with ten who are stout-hearted men and I’ll soon give you ten thousand more.”

Author: Sweethearts trailer; via Wikimedia Commons


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2 Responses to SECOND RULE OF MANAGEMENT

  1. Massimo says:

    Les another great post.
    I do believe though that there is an intrinsic difficulty in one of the steps.
    Getting the culture right and then letting it develop sounds easy is but it isn’t.
    The major issue I have seen with this is that the ethos of a business (which i believe you refer as culture in your blog) is not always something that can be written down in black and white and is full of intrinsic intangibles. So many times actually managers believe that the winning characteristic of their business is what they as individual think is important, whilst actually it isn’t. They start then a mission to propagate those behaviours that they think underpin success and they actually even get it done. However that was not the real ethos of the business in the first place. People naturally tend to see what is convenient and not always what is true because that may not be directly in their interest. The business then gets dilute not in virtue of a deliberate error by because of incompetence and convenience

  2. Thierry says:

    Good thoughts. I was particularly receptive to the quote “People join companies, but leave managers”. I wonder though what values make Goldman Sach such a successfully company and how to communicate the General Electrics values of separating themselves from the lowest deciles ?

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