Managing Performing Living E-Book

Fredmund Malik

• Herausgeber: Campus Verlag
• Kategorie: Fachliteratur
• Sprache: Deutsch
• Veröffentlichungsjahr: 2015

Seitenzahl: 666

Beschreibung

Whatever Fredmund Malik writes, carries weight. This book provides everything you need to know about effective management and day-to-day executive life - in terms that are concrete, practical and productive. The author answers the question of how executives can operate effectively and successfully and accomplish their organizational objectives. Now a classic among economics texts, this book contains the essential know-how for managers in both profit and not-for-profit sectors.

Leseprobe

Fredmund Malik

Managing Performing Living

Effective Management for a New World

Translated from German by Jutta Scherer(JS textworks – Munich, Germany)

Campus VerlagFrankfurt/New York

About the book

“Fredmund Malik has become the leading analyst of, and expert on, Management in Europe ... and a powerful force in shaping it as a consultant. He is a commanding figure – in theory as well as in the practice of Management.” Peter F. Drucker

Managing Performing Living is a classic in the field of management. Fredmund Malik reveals everything that all executives and experts in leading positions need to know, anytime and anywhere. He provides readers with the universal principles, tasks and tools of effective management and self-management.

His book ranks among the 100 best business books of all times. The new, completely revised and updated edition is tailored to a new generation of managers, to whom effectiveness is the key to success. It shows the way to turn knowledge, personal strengths, talent, creativity and innovative thinking into results. Managing Performing Living helps readers to cope with the “Great Transformation21”, as Malik calls the ongoing centennial change in business and society. It is a book on how to create functioning organizations in a viable society.

”Fredmund Malik is one of the most influential business thinkers in Europe.” Business Week

About the author

Prof. Fredmund Malik numbers among Europe's leading mangement thinkers. He is head of Management Zentrum St. Gallen, management training and consulting firm that maintains offices in St. Gallen, Zurich, London, Vienna, Toronto and Shanghai, and has roughly 220 employees.

TABLE OF CONTENT

PREFACE TO THE NEW 2014 EDITION

Right Thinking—Right Management

The Key to Success

The Great Transformation 21

How Effective Management Systems Are Built

What Right Management Can Accomplish

PART IPROFESSIONALISM

1. The Ideal Manager—a Wrong Question

The Universal Genius—A Stumbling Block

The Effective Person

No Accordance in Personalities

What Counts Is What You Do, Not What You Are Like

Misleading Surveys

2. False Theories, Errors, and Misconceptions

The Pursuit-of-Happiness Approach

Leadership and the Great Man Theory

Errors and Misconceptions

3. Management as a Profession

Constitutional Thinking

Professionalism Can Be Learnt

The Most Important Profession in a Modern Society

The Most Important Mass Profession

Elements of Effective Management

Sound Training Is Possible for Everyone

PART IIPRINCIPLES OF EFFECTIVE MANAGEMENT

Introduction

Simple but Not Easy

Useful in Difficult Situations

Not Inborn—Must Be Learnt

Ideals and Compromises

What Type as Role Model?

1. Focusing on Results

A Self-Evident Fact?

Misconceptions

What If People Cannot Accept This?

Pleasure or Result?

2. Contribution to the Whole

Position or Contribution?

Specialist or Generalist?

Wholistic Thinking

Contribution and Motivation

Contribution Instead of Title

The Consequence of Organization

3. Concentration on a Few Things

The Key to Results

Rejection Without Reason

Application Examples

4. Utilizing Strengths

Fixation on Weaknesses

Matching Tasks with Strengths

Should Weaknesses Be Ignored?

No Personality Reform

Why Focus on Weaknesses?

Learning from the Greats

How Can We Recognize Strengths?

Types of Weaknesses

Two Sources of Peak Performance

5. Trust

Creating a Robust Management Situation

How Can We Build Trust?

6. Positive Thinking

Opportunities Instead of Problems

From Motivation to Self-Motivation

Positive Thinking—Inborn or Acquired?

Freeing Oneself of Dependencies

Doing One’s Best

7. Synopsis: Quality of Management

PART IIITASKS OF EFFECTIVE MANAGEMENT

Preliminary Remarks

1. Providing Objectives

No Systems Bureaucracy

Personal Annual Objectives

The General Direction

Basic Rules for Management by Objectives

2. Organizing

Beware of “Organizitis”

There Is No Such Thing as a “Good Organization”

The Three Basic Issues of Organizing

Symptoms of Bad Organization

3. Making Decisions

Wrong Opinions and Illusions

The Decision-Making Process

4. Supervising

Supervision Is Indispensable

Trust as the Foundation

How Should We Supervise?

Measuring and Judging

5. Developing and Promoting People

People Instead of Employees

Individuals Instead of Abstractions

What Is Often Forgotten

6. Synopsis: What About all the Other Tasks?

PART IVTOOLS FOR EFFECTIVE MANAGEMENT

Instruments, Devices, Tools

1. Meetings

Reduce the Number of Meetings—Preferably to Zero

Crucial for Success: Preparation and Follow-Up

Chairing Meetings Is Hard Work

Types of Meetings

Meetings Are Not Social Events

Types of Items on the Agenda

No Item Without Action

Striving for Consensus

Are Meeting Minutes Necessary?

Meetings Without an Agenda

The Key: Implementation and Continuous Follow-Up

2. Reports

The Small Step to Effectiveness

Clear Language, Logic, and Precision

Bad Habits and Impositions

3. Job Design and Assignment Control

Six Mistakes in Job Design

Assignment Control

4. Personal Working Methods

The Joy of Functioning

Working Methods Are Personal and Individual

Working Methods Depend on Basic Conditions and Circumstances

Regular Review and Adjustment

Basic Applications of Working Methods

Managing the Unknown

Managing Line Managers and Colleagues

5. Budgets and Budgeting

One of the Best Tools for Effective Management

From Data to Information

Special Tips

Clean Documentation

6. Performance Evaluations

No Standard Criteria

No Standard Profiles

The Better Method: A Blank Sheet

The Best Method: Real-Time Evaluation

Where Is Cautious Standardization Appropriate?

How Do the Best Do It?

What About Those Who Refuse to Be Assessed?

7. Systematic “Waste Disposal”—Renewing the System

Largely Unknown but Essential for Transformation

From the Concept to the Method

The Key to Strategic Effects

A Quick Guide to Personal Effectiveness

What if Something Cannot Be Eliminated?

One Last Tip

8. Synopsis: An Acid Test for Professionalism

PART VMANAGEMENT SYSTEM: A THINKING AND ACTING SYSTEM

1. From an Art to a Profession

2. Understanding and Applying Right Management

Right Practice Versus Best Practice

Systemics, Content, and Form of the Management Systems

The Operating System for Organizations— the End of Babylonian Confusion

3. Standard Model of Effectiveness: The Management Wheel

Operational Tasks Are Completely Different from Management Tasks

Management—Always the Same, But Not Always of the Same Difficulty

Why the Management Wheel Doesn’t Need New Spokes

4. How to Generate Self-Regulation and Self-Organization

Applying the Standard Model to People Management

Applying the Standard Model to All Organizations of a Society

Outlook: Right and Good Management for a Functioning Society

Effectiveness and the Experience of Meaning

Responsibility and Ethics

EPILOG

Glossary

Endnotes

References

Index

PREFACE TO THE NEW 2014 EDITION

Managing Performing Living is one of the most important books I have written. It deals with people’s effectiveness in the increasingly complex organization setting of multinational corporations. The book addresses the kind of effectiveness that allows individuals to keep pushing their boundaries. Above all, it demonstrates that it is possible to learn to be effective—and it shows you how.

The book answers the question of what knowledge and what skills people need in order to be successful—both at work and in their private lives, both as managers and as experts in their fields. Managing Performing Living tells you what you need to manage yourself and others, at every organizational level and in every position, and thus to generate the right kind of performance that will enable you to lead a meaningful life. The much deplored work-life imbalance is thus dissolved.

Effectiveness means to do the right things and to do them right. This is the core competency of Right and Good Management: the profession of transforming resources into results and thus creating value.

In today’s world, factors such as knowledge, talent, personal strength, creativity, innovation, and intelligence have become even more important than conventional economic parameters; the same goes for emotional energy and commitment, social responsibility, and the courage to think and act in new ways. In themselves, however, these factors – including the economic ones - just are potentials. It takes effective implementation—that is Right and Good Management—to transform these potentials into meaningful results that meet a specific purpose. Also, the “leadership” so often talked about these days depends particularly on effective management: Without it even the best leaders would remain unsuccessful.

So what has changed since Managing Performing Living first appeared in 2000? I have two answers: Almost everything has changed “out there” in business and society, and these changes have been more fundamental than most people could have imagined. Even so, the essence of what constitutes right management has remained unchanged.

It was in response to this fundamental transformation and the resulting management needed that Managing Performing Living was originally written. Back in 1997, I had already described and analyzed the imminent social transformation in my book on corporate governance, in a chapter called “The Great Transformation 21.” It is no coincidence that the subtitle I chose for the first edition of this present book was “Effective Management for a New Era.”

Even back then, the stage was set for the deflationary debt and financial crisis that was to ensue; the revolution of science and technology (including digitalization) had begun; demographic and ecological change was inevitable, as was political and social instability. It was also plain to see that traditional management and existing organizations were less and less equipped to cope with the rapidly increasing complexity of their environment.

The Great Transformation of the 21st century has been underway ever since that time. It is affecting more and more spheres of life at ever-growing speed, and it is increasingly plain to see that what we are facing is actually more than a new era: A new world is on the rise.

In this new world, almost everything will be different. And yet there is no need to change anything about the theoretical foundations of Managing Performing Living. Effective management is not based on the economic and social sciences taught in conventional management training. Even though these are still needed, much more important are the three sciences of complexity—systems theory, cybernetics, and bionics—that have provided the theoretical foundations for my management theory ever since I embarked on my first research projects. Over the years these three fields of science have gained even more significance than when the first edition came out.

That is why in this new edition I have placed even stronger emphasis on the new application fields for management that this fundamental transformation generates. First and foremost, they include the exploding complexity of more and more tightly interconnected systems, as well as the increasing dynamics of global change and the resulting social, political, and economic turbulences. In a manner of speaking, these represent what is called “creative destruction” of the Old World and the birth pangs of the New World. To master the Great Transformation 21, virtually all societal organizations will need new, innovative tools and high complexity management systems.

At the heart of this new “functioning of organizations”—and the self-regulation and self-organization needed for it—is the effective individual. My cybernetic management systems offer the support needed to develop and unfold full effectiveness. They provide tools for the right thinking and acting that have been designed specifically for that purpose.

The new methods and tools I have developed, and which are described in my other books, help the homo effectivus (in my definition a counterpart to the homo oeconomicus) to achieve the enhancement in power and intelligence that is needed to master the new and complex challenges.

Complexity, when uncontrolled, becomes complicatedness. At the same time, it provides the raw material for organizational intelligence. Releasing this intelligence and making it effective is key to managing major change, and to ensuring the adaptivity and evolutionary functioning of any kind of organization. Hence this book also leads the way to exploiting the immense opportunities contained in the complexity of globally interconnected systems and in revolutionary technologies.

The focus of this book was initially on managerial effectiveness. Over the years, it has spawned an entire, universally applicable social technology for mastering complexity: the social methodology of effectiveness. My contention is that the societal significance of this technology is even greater, even more revolutionary than that of digitalization. Without this “effectiveness technology” it would be impossible, for instance, for the “Industrial Revolution 4.0” to really take effect. The same is true for the revolution of the life sciences, which is certain to happen.

It is also true for growing trends such as the circular economy, economic resilience, mindful economics, and meditative schools of thinking. The social methodology of effectiveness addresses the target outcomes of these movements and ensures they will become effective at all organizational levels. Hence, it is evident that old ways of thinking and conventional approaches no longer suffice for effective management in today’s world.

For having had the opportunity to develop and test these systems, methods, and tools and to put them into practice, I owe sincere thanks to the many executives I have worked with, some of them for years or even decades, either as a member of corporate governance boards or on joint projects dealing with corporate development, strategic leadership, and governance. Particular thanks go to all my friends, partners, colleagues, and staff, who have dedicated enormous amounts of innovativeness, enthusiasm, and energy to the creation of our present management solutions. I also extend cordial thanks to the team of Campus Verlag. Last but not least, my heartfelt thanks go to Tamara Bechter, Jutta Scherer and Annaliza Tsakona for incisive suggestions and judicious support in revising this manuscript.

Fredmund Malik

St. Gallen, February 2015

IntroductionRIGHT THINKING—RIGHT MANAGEMENT

Start with what is right, rather than with what is acceptable.

Peter F. Drucker

The Key to Success

The best and only way for people to be successful is through Right and Good Management—the profession of effectiveness. It is the key to effectively transforming potentials into results, and to implementing decisions taken. It is the only way to make organizations functional, and societies viable. ‘Right and good’ means effective and efficient. This book explains why this is so, and what the key prerequisites are.

Right, Not Wrong—Good, Not Bad

I have chosen these straightforward terms because, in the chaos of ever-changing fashions and errors in management I wanted to set a cornerstone for reliability and orientation: right management, so organizations can function reliably; right management, so that people can transform their strengths and skills into performance and success—allowing them to master their lives in an increasingly complex world.

Right management comprises both thinking and acting. That is why the management systems presented here are thought and action systems. Thought systems are needed for the proper organization of knowledge, and action systems are required for proper implementation. These systems comprise the principles, tasks and tools for right thought and action in organizations, as well as for the associated responsibilities. “Best practice” is not enough—what we need is “right practice.”

Perhaps it is impossible in a world dominated by the media to put an end to management fads and fashions. After all, they promise quick and easy wins, a notion many people cannot resist. We all want to be successful. Books of the “effortless success” variety were bestsellers even back in the 1970s when I was a university student. Not much has changed since then. Books promising that you can “learn fluent Spanish in just five lessons,” “become a manager in 5 minutes,” or “lose weight overnight” or explaining how Good Golf Is Easy still hold enormous appeal. Granted, almost anybody can be successful—but hardly ever does it happen this way. The key to becoming successful is making yourself effective.

Peter F. Drucker was the first to express this insight, as early as 1967, in his book The Effective Executive. He was the first to write about effectiveness, and to explain the difference between effectiveness and efficiency: “Effectiveness means doing the right things; efficiency means doing things right.”

Even the title of his book, which was so perfectly clear in English, was made to appear like a grave error in its poor German translation: What had been “The Effective Executive” was translated as “The Ideal Executive”—even though the author himself, in this very book, had given perfect reasons for why there can be no such thing as an “ideal” manager. It is a relief to see that a new translation has been provided where this is made clear in the title.1

Nevertheless, to this date the notion of the “ideal” executive blithely lives on and keeps popping up in HR systems and processes. I strongly suggest to every executive that they read Drucker’s work. He is often referred to as the one who “invented” management. Well, he did not actually “invent” it, but he was the first to recognize its significance for modern society and its organizations, and put it in comprehensible language.

In doing this, he created a clear, permanently valid terminology. In this book I have adopted many of his terms, and used them as a basis for my own considerations. Ever since we first met in the late 1980s, we have regularly corresponded and shared our thoughts—for instance, on questions such as: How can I become effective in an organization, and through an organization? How can I ensure I will do the right thing?2

New or Right?

After years of research in the field of systems-oriented management,3 from 1978 I headed the Management Zentrum St. Gallen, in addition to holding lectures at St. Gallen University. In this function, I gave a large amount of speeches and seminars on the subject of management every year. Participants were entrepreneurs and mid- to senior-level executives. Time and again they asked me what was new in management. My answer usually was, “I am happy to tell you what is new—but perhaps it would be even more interesting for you to know what I consider to be right?”

In almost 40 years as a management trainer and consultant, I have experienced new fashions in management every two to three years—a new guru, a new hype, a new wave of seminars, a new flood of books written overnight. For many media, these were irresistible topics. They needed content—and due to the authority of the printed word, they would rapidly disseminate what, in fact, was not much more than hot air. Two years later, the dust would have settled—but the next hype would follow. Meanwhile, tens of thousands of executives all across the country would have been sent—by well-meaning training officers—to multi-day seminars to acquaint themselves with these fashionable topics.

Especially executives with degrees in fields such as engineering, chemistry, physics, law, medicine, or economics often did not understand the use of such trainings as in many cases they were dealing with charlatanry. But how were they to know? Who was able to provide criteria for good or bad, right or wrong—as had existed for hundreds of years in other disciplines or professions?

In most university courses you will not find fashions, just hard-won progress—which has been made because scholarly criticism has uncovered and erased existing errors. In management, this motor of progress—well documented, systematic criticism—is almost non-existent. Other disciplines continually build on earlier insights. By contrast, most management authors consider it their noblest goal to create something “completely new”, without providing any reference to what has already been tested and proven.

In other disciplines, what matters is not the date of publication of a book but its content. The fact that Isaac Newton formulated his law of gravitation as early as in 1686 does not change anything about its relevance to physicists. A three-year-old book on management, however, is usually considered outdated.

Becoming Effective and Efficient

Apart from those who tend to choose ineffective means—that is, who try to learn how to ski or speak Spanish in three days, without practicing—there are also effective people: doers, implementers, performers.

However, effectiveness as such is invisible—just as management as a function is not visible. That fact alone explains many popular misconceptions. What we can see are the people who manage, as well as factories, offices, computers. We can also see the results of right management—but we cannot see the function of effectiveness required to transform resources into results.

It is almost like the substances we have in our organism, which, acting as catalysts, ensure that our metabolism becomes effective. If there is a lack of these substances, everything else in our organism is present—but nothing happens, or it happens slowly or poorly. When the “micronutrients” of effectiveness are missing, people and organizations become inefficient, poor performers, and unsuccessful. The “vital substances” of effectiveness then have to be added by way of qualification and training.

Some people achieve results that are visibly effective. Whatever they do, they do the right thing and they do it the right way. However, they are not necessarily the same people who had the right ideas. For instance, the steam engine was not invented by James Watt—as is generally assumed—but he was the one to make it effective so it could be put to industrial use. Ideas are one thing; their implementation is another. What we are facing is not a lack of ideas but, much more often, a lack of implementation. For every implemented idea there are thousands that are never carried through. Thus, grand and creative ideas are important, as are the so-called “great people” that fascinated me at an early age. But then I learned about the difference between creative and effective. From that point onwards, I was much more interested in effective people—ordinary people who have created extraordinary things—and the way they work. This book has been written to help people become effective.

The Great Transformation 21

Ever since its first edition, the subtitle to Managing Performing Living has been Effective Management for a New Era.

While I was writing this book I was already aware that conventional ideas about management and the tools used at the time were outdated. That the kind of management dated back to the previous century—and thus to a much simpler world was clearly less and less suited for the rapidly increasing complexity and dynamics of societies and economies that would form the future global systems. Above all, the financial world’s short-term thinking, which had quickly spread along with the shareholder value approach, would no longer suffice. Faced with the challenges of the ongoing centennial transformation, a management of that kind would be bound to fail. I had been describing the outlines of what I then called a “new era”—and which I now call a “New World”—in my monthly management letters since as early as 1993. Already in 1997 I summed up my views in my book Corporate Governance4 in a chapter5 entitled “The Great Transformation.” Managing Performing Living was first published in February 2000.

Only one month later—the millennium celebrations were still fresh in people’s memories—the financial markets suddenly began to collapse and the first major fall in share prices took its dramatic course. As share prices had not declined in 20 years, this came as a shock to many. Within two days, the major stock markets fell by up to 70 percent. Most never really recovered. The so-called New Economy, which had emerged in the early phase of the internet boom, was collapsing. At a time when in an ironic way the internet really began to take off.

So, even in that crisis it was possible to see the great opportunities that existed. Today, the New World, with its main features and patterns is already visible. Mastering the new challenges and exploiting the enormous opportunities is possible. In view of the complexity and speed of change, a maximum of effectiveness and professionalism is required to manage it. The key to success lies in the effective implementation of solutions. Managing Performing Living has been written to provide help in mastering this enormous change.

From the Old World to the New World

The economies and societies of almost all countries are undergoing one of the most fundamental transformations in history. What is going on “out there” by far exceeds the scope of a financial or banking crisis, an economic or Eurozone crisis. It is everything at once—and at the same time, it is something greater and completely different: something fundamentally new. We are witnesses to the fundamental transformation of the Old World, as we know it, to a New World of things yet unknown to us. A new order, a new way of functioning is emerging—it is a societal REvolution of a new kind. In just a few years, almost everything will be new and different. What we do, how and why we do it—how we build, transport, finance and consume, how we provide care, how we carry out research and how we innovate, how we share information, communicate and cooperate, how we work and live. And as a consequence it will also change: who we are.

Our societal mechanisms and structures are changing fundamentally, globally and irreversibly. Millions of organizations of all kinds and sizes will have to be reorganized in order to achieve viability and adaptability to the new conditions. Across generations, people will be required to rethink and relearn.

This once-in-a-century process of fundamental transformation is bound to change forms of government, the practice of democratic processes, opinion- and will-forming processes, and forms of communication, participation, and coordination, as well as the methods used to solve conflicts and problems. The change process will transform the business world and its organizations down to their capillaries, and it will also change people themselves the way they think and act, their purposes, goals and values, and the meaning of their lives.

Birth Pangs of a New World

Economic thinking alone does not suffice to understand this transformation, as it is much more than a financial or economic problem. Some of the main change drivers are demographic development, ecological issues, and the enormous potential for progress that sciences and their technological applications have today. Add to this the economic side, with the special and not-yet-fully-understood threat of a great economic deflation and depression as a result of several decades of excessive debt in the financial system. For all of 15 years, these facts were gravely misunderstood by mainstream economics, which thought it had hit upon a surefire way to wealth creation. In reality, what this approach created was a program for the greatest wealth destruction in history.

This 21st century transformation holds a danger not even imaginable to most people: the danger of a deep economic depression, the outlines of which are already visible all around the world—including the U.S. and Southern Europe—as well as, in part, a social disaster bringing the disintegration of civil order. At the same time, however, this transformation offers the chance of a new economic miracle and of flourishing societies with a new, stable basic order. The best way to understand this global, multidimensional transformation process in its entirety is to see it as the “birth pangs” of a new world. Figure 1 shows the universal pattern of the Great Transformation.

The Law of Fundamental Change

Historically, transformation processes such as this one have happened in regular yet very long intervals. Since they stretch over much longer periods than government officials’ terms in office or managers’ tenures, they often are not fully recognized or understood.

[Enlarge image]

Figure 1: The Great Transformation 21—profound change by renewal

In processes like these, the existing is replaced with the new. The technical term for this change is substitution. One historical example is the transition from the agricultural to the industrial society some 200 years ago.

Substitution processes also occur in smaller dimensions. Consider, for example, the horse carriage being replaced by the automobile between about 1890 and 1930 or, more recently, the substitution of landline telephony by mobile smartphone technology, or of analog photography by digital technology.

Processes like these have led to the irreversible collapse of prosperous, market-dominating business empires in short periods of time, but they have also caused new, even greater empires to emerge in their stead. Along the way, these substitution processes have fundamentally changed society. These were all effects of the implacable logic of an economy of innovative entrepreneurs, whom Joseph Schumpeter—alone among all economists to this date—included in his theories as essential economic drivers. The term he used for the substitution of the old by the new was “creative destruction.” Today—and this is something Schumpeter could not have foreseen—systematic innovation is considered to be one of the topmost goals of modern management, even though it is vastly ignored by economic theory.

Once again, it was Peter F. Drucker who managed to build the bridge. He disassociated Schumpeter’s theory from any elitist attitude (which might have been the result of a misunderstanding).6 There is a basic strategic pattern all successful enterprises follow: Always be ahead of change! They actively create change, rather than wait for it to happen, as so many others do. Instead of fighting the forces, they use this relentless law of the economy and of our entire social reality to reach a new dimension of performance. This way, they keep the initiative and they set the rules. To them, change is what they want, not what they have to do. The enterprise takes its decisions actively, rather than letting itself being overtaken by events.

The parallels between the processes mentioned here and the evolutionary processes we can observe in nature are astonishing. For instance, when a caterpillar turns into a butterfly. This is a case where we can nicely see the reversion of causality: The butterfly does not emerge because the caterpillar ceases to exist. Rather, it is the other way around: The caterpillar has to perish because the butterfly wants to live. The roots of the New World are encompassed in the Old World. Here, causality works from the objective, not from the cause.

Using the methods of bionics, a rather young science, we can now apply the strategies of evolution to the design of management and organizations, as well as to the architecture of social and political institutions. In the technical realm this is already being practiced, for instance with materials and construction principles.

Some organizations are already successful in applying operating principles of the central nervous system in system regulation, and insights from brain research are revolutionizing the efficiency of communication in large groups of dozens up to hundreds of individuals.

Mastering Complexity

The foremost characteristic of the global transformation process is the explosive increase in complexity. This complexification, which involves more and more areas of life, is a consequence of global systems becoming ever more tightly interconnected, as well as of the dynamics of technological and social change.

To cope with this complexity, we need the right management—right in terms of both thought and action—and the reliable ability to not only master but take advantage of and profit from proliferating complexity.

At the same time, complexity is also a source of organizational intelligence. We need right management to be able to understand global interconnections and to control this self-accelerating change. Millions of executives will face new challenges in their managing profession, and they will have to forget old things and learn new ones. Most steering and control systems will have to be fundamentally realigned and revolutionized.

As a result, the form and inner function of most societal organizations will be rigorously questioned. This is true of all kinds of institutions: of companies, banks and government agencies, of hospitals, schools and media houses, of parties, associations, courts of law, and, above all, of their interconnection and interaction. To increasing extents they become unable to serve their purposes, while at the same time—and precisely for that reason—they keep consuming huge amounts of resources, including money.

What is complexity? Complexity is diversity. Being a genuine characteristic of nature, complexity has its own laws and dynamics. To understand them and use them for innovative solutions, we need to familiarize ourselves with three new fields of knowledge at minimum, which I refer to as the “sciences of complexity.” These are systemics (the science of coherent entities and what keeps them together), cybernetics (the science of function and control) and, as mentioned, bionics (the science of applying evolutionary solutions of nature to the way organizations operate).

Complexity has two sides: It represents a danger and an opportunity. On the one hand, for those who do not understand it, it is a cause of increasing overstrain and eventually the stress-induced collapse of systems; on the other hand, if used expertly, complexity can provide a raw material for information, intelligence and creativity. At present, most organizations are poorly equipped to master the challenges of complexity—as has been clear to see in the example of banks. This is not really a surprise, as their structures and the way they operate date back to the relatively simple world of the past century. Due to their blindness to the process of complexification, many organizations have failed to proactively create the regulation and management systems they need to cope with current conditions.

Managing Performing Living has been devised to help master complexity (see figure 2): as a guide through the fundamental change occurring in the Great Transformation, to help take advantage of the immense opportunities the New World offers, and to achieve, above all the necessary managerial effectiveness.

[Enlarge image]

Figure 2: The Great Transformation 21: Optimal course of development

How Effective Management Systems Are Built

In designing my management systems, I have applied a set of logical and content-related design principles. They are particularly important for the model underlying this book: the Standard Model of Effectiveness—also referred to as the Management Wheel. As mentioned above, it serves as a guide through this book.

Profession and Professionalism

I understand management to be a profession which basically has to meet the same requirements as any other profession. Thus, professionalism comes into focus, along with anything that can be learnt for this profession.

Defining Selection Criterion

The selection criterion for those elements that make management a profession and above all ensure its effectiveness is the following: What do all people need, always and everywhere, to become effective and able to manage? Only those elements are included in the model.

Mini-Max Principle

I make a point of selecting the minimum possible number of elements to generate the maximum possible number of applications through combination. This helps to ensure economical learning and short learning paths. Once you have learnt good management, you will be able to apply it anywhere and any time. Its elements can be configured according to the specific situation. Also, the model and its application are capable of constantly evolving.

Distinction Between Operational Tasks and Management Tasks

Operational tasks must be strictly distinguished from management tasks. The former are job related, they result from the type of organization or its specific purpose and may include things like personnel selection, marketing, or research. Management tasks, by contrast, are universal and result from every organization’s need for design and control. They are used to guide and control the operational tasks. Along with this distinction between operational and management tasks, I also redefine the subject of organizational culture. More on the culture of effectiveness and functioning will follow later.

Effectiveness Follows from System Cybernetics

To master the immense complexity of the 21st century, completely different ways of thinking and acting are required. The foundations for them are provided by the sciences of complexity, in particular cybernetics: It is the science—of the reliable functioning of highly complex systems. Cybernetics is the science of effective, right and good control, regulation, direction, and development. Management is its right and effective application.

The key principle of right and good, or cybernetic, management is the following: Organize a complex system so that it will be able to organize itself, regulate itself, renew itself, and evolve further. The Management Wheel helps to establish self-organization in any kind of institution.

What Right Management Can Accomplish

Ability to Cope with Life

Right management concerns us all. It is the skill we need to cope with our own lives. It is essential for both those of us who are bosses and those who have a boss. Today, management knowledge and expertise is a prerequisite for being employable. The foundation for that is effective self-management. It provides a basis for the management of one’s bosses, one’s colleagues, and those reporting to you. For people in the 21st century, having a good command of the basic management skills is just as important as reading and writing have been since the 18th century.

Tools for Head and Hands

Right management requires both right thinking and right action. As a profession, management requires professionalism and experience in its application. Brain workers tend to down play the practical part. However, knowledge alone has little importance if it is not used to produce results. Management means transforming knowledge into results and value. For that a certain type of action is particularly important: the kind that leads to effectiveness and results.

Learnability

Right management can be taught, and its proper application can be learnt. People often ask me whether it is possible to learn how to manage. The right question, however, would be: What about management can be learnt? Not everyone can learn everything equally well. But one thing is certain: We can learn much more than most people believe. Some have better innate abilities than others. Some put more effort in and work harder on themselves than others to become better managers. Granted, there are people not suitable for the management profession, but I consider their number to be very small.

Orientation in the Midst of Uncertainty

Right management provides orientation especially when things are uncertain. Those who master it have a benchmark for comparison, which is independent of fashions and trends. It is the only way to reliably detect and debunk misconceptions and erroneous theories. This certainty saves us time-consuming and exhausting detours.

Universally Valid and Identical

Right and good management is universal, invariant, and independent of culture. That does not mean that cultural differences matter less; quite the opposite. But they matter for other reasons. Their influence on management and on the functioning of organizations is smaller than most people think. Around the world, all well-functioning organizations are managed in similar, even the same ways. Wrong management, by contrast, exists in countless varieties. This has been proved by numerous empirical studies, starting with Mintzberg’s book The Nature of Managerial Work.7 The same is true for many other things. For instance, there are countless ways to play golf poorly, to speak foreign languages badly, or to be a bad driver. But there is only one way to do things properly: the right way.

Empirically Normative

Right and good management has nothing to do with dogmatism. Rather, the claim to being “right and good” is based on a philosophy that belongs to the school of normative empiricism. If something functions well, it can be established as a norm based on the fact that it really works.8

Compatibility across the Whole Organization

I consider right management to be the “operating system” of any organization. A basic prerequisite for the functioning of organizations is that their management is compatible across the whole organization. This is ensured by using consistent terms and by following the logic of the model of effective management. This way, a consistent, common language will be established—which is a precondition for communication and joint understanding, thus helping to minimize conflicts. That alone will suffice to render 50 percent of all communication and conflict trainings superfluous.

Application in Various Degrees of Difficulty

There are not limits to the application of right and good management. It can be applied to any kind of organization, any kind of tasks, to known issues and new ones, to operations and innovations, to organizations and to individuals. The model and its elements are always the same. Its application, however, can present different degrees of difficulty, thus requiring more or less experience and skill, sometimes even virtuosity.

Culture of Right Functioning

Right and good management establishes an organizational culture of reliable functioning. An effective organization has to have a culture of performance, of professionalism, of trust and responsibility, of change and innovation, as well as a culture in which people can find meaning in life.9

These are invariant values of culture at the management level of an organization. For operational levels other values are more essential: those that are needed for the realization of the business mission, such as quality leadership, cost leadership, price leadership, and many others.

It Works!

There has been much talk about creativity, social competencies, and talent—and quite rightly so. However, all of these only count when they are applied effectively. This is exactly what effective management is needed for.

Much too often we seek solutions in the wrong places. If something fails, due to a lack of effectiveness, people call for more leadership, more social competencies, more talent—not more effectiveness. In most organizations, effectiveness is the weakest link. Management—thinking the right thing and doing it the right way—is effective implementation.

PART I

PROFESSIONALISM

1

THE IDEAL MANAGER—A WRONG QUESTION

2

FALSE THEORIES, ERRORS, AND MISCONCEPTIONS

3

MANAGEMENT AS A PROFESSION

Chapter 1THE IDEAL MANAGER—A WRONG QUESTION

One of the questions most frequently asked is: What should an ideal manager be like? What characteristics should he or she have?

There is hardly a discussion on management where this question does not pop up. It goes back to a conscious or subconscious notion: that of the ideal manager. As soon as they hear the word “management,” most people reflexively wonder: What is the ideal manager like? This question also dominates the literature on management, and most of the training programs offered for executives. Still, it is a question that is simply wrong.

The Universal Genius—A Stumbling Block

After more than 40 years of empirical research in this field, it is easy to answer this question today. Everything that could be researched in this field has been researched. As a result, we know the profile of an ideal manager in great detail.

Let me give you some examples: In a study, 600 of the largest companies in Germany were questioned on the management qualities they look for. The result was striking: entrepreneurial, a team-builder, communicative, visionary, international perspective, ecological and social focus, integrity, charisma, multicultural skills, and intuitive decision-making. Well, there’s not much we could find objectionable here.

In the bulletin of a large Swiss bank that operates globally, there was an article by one of its top managers on the “Twelve I’s of the Ideal Profile.” It told us that, apart from possessing other qualities, the manager of the future must be interrogative-integral, and an integrating intermediary as well as intercommunicative-instructive… Perhaps not quite the qualities we learn at school.

In a recent issue of the most widely distributed management magazine in the German speaking world, a piece called “The ABC of New Requirements” was published which listed a total of 45 “key qualities for the future manager.” These were divided into “personal qualities, management qualities and organizational factors”—a compendium of desirable skills. To make it seem more practical the piece was presented in the form of a test which could be taken and evaluated immediately. The fact that certain terms in the test—such as “communicative competence,” “empathy,” “future-mindedness” and “system integration”—are open to widely differing interpretations was casually overlooked. If you achieved a score between 1.0 and 2.5, you were told that presumably “you meet all the requirements in the new profile of a business virtuoso”…

Examples like these abound. They are typical and representative of a universal way of thinking that has gained ground not only in business but also in other social spheres. Peculiar requirements like these appear in most job advertisements, and a major share of management tools used in practice build on things such as performance assessment systems, potential analyses, recruitment and selection processes, remuneration systems, and many more.

I, too, learnt all of these things in university, and for the reasons given above I accepted them—almost. Why “almost”? Because I was lucky enough to have worked with colleagues and staff even before my university study, owing to my prior occupation. I had also collected experiences with bosses, good and bad ones. These were real people, as opposed to academic fictions. I knew how things worked in a company. That kept me from believing anything just because it was taught at the university—and often by faculty with little or no practical experience. Plausibility, or the fact that it is taught in universities or is the prevalent opinion, is no guarantee of the correctness of a concept. What type of idea is spread by these lists and catalogues of requirements? What is the basic type of manager that emerges here? It is the image of a universal genius. In some strange way, the idea has taken root that a manager, especially a top manager, should be a cross between a general from a bygone era, a Nobel Prize winner for physics, and a TV show host. Although this ideal type can be described and descriptions indeed abound, we cannot find such people in the real world. This basic error represents one of the main obstacles to a reasonable theory and practice of management.

These comments also entail some degree of criticism directed at academia. In essence, academia is doing what it is expected to do. It answers the questions about the characteristics and skills of the ideal manager. And its answers are correct and scientifically sound: Yes, the ideal manager could well be as he or she is presented in the studies. It is not the answers that are wrong—it is the question.

However, it is one of the duties of science to replace wrong questions with the right ones.

The Effective Person

I suggest giving up the question of the ideal manager altogether, as it has no practical relevance. Even if we assume—for now, and for the sake of argument—that there is such a thing as universal geniuses, statistically their numbers would not suffice to fill the many management positions we have.

I therefore suggest asking another question. Instead of: Who is an ideal manager?, we should ask: What makes an effective manager? This question is radically different from the first. Its starting point is not the genius, but the ordinary person—because there simply are not enough of the former.

So, with this different question, the fundamental problem of management is not: How can geniuses deliver ingenious results? Rather, the fundamental problem in the organized society is: How can we enable ordinary people—since we have plenty of those —to deliver extraordinary results? What I am referring to here, however, is not the much-cited quality of excellence. No one, not even the top manager, can consistently deliver peak performance. It is unrealistic to keep demanding excellence. It is also inhuman. Neither, however, is standard performance adequate any longer in today’s complexity society. We need more than that. This is a paradox of management nowadays, and one of the reasons we need management at all. What is available—at least in sufficient numbers—is ordinary people; but what competition worldwide calls for is extraordinary performance.

What are the people like who deliver outstanding performance over long periods of time, sometimes even for all their lives? In other words, what kind of people make effective managers? The fact of the matter is the following: There are such people, but whenever we compare them having this question in mind, we will quickly realize that there is not a single model or personality. These people are totally different from each other.

No Accordance in Personalities

Against this background, decades ago I started studying people who have delivered exceptional performance in the course of their lives—people we could call performers. So what do these people have in common?

Effective individuals are as different as human beings can be. What everyone is always looking for—commonalities—do not exist. What does exist, on the other hand, is the individuality of human beings—the very characteristics that make them different.

No two persons are alike. This is all the more true the higher the positions people hold. A person does not ascend to the higher positions and even the top of an organization by virtue of the fact that he or she is an indistinguishable copy of another person, a genetic clone almost. Their rise is more due to the fact that they are different from the rest.

In my long practice, I have met top managers who were highly intelligent—brilliant minds who had not one but two or even three university degrees, which may have helped them to climb the career ladder. Others were equipped with a rather standard intellect, but were just as successful in their jobs. Some managers conform to the required ideal image of a communicator: they are extroverts and find it easy to make new contacts, an ability that has probably made life easier for them in many situations. Many more managers, however, are rather introverted, some even downright shy, but are still just as good at their jobs. Some have the charisma so often demanded: they are what people call a great personality, and their presence is physically felt the moment they enter a room—which may have helped their success. Others have none of that: they are rather nondescript physically, never catching anyone’s attention, apart from those in their immediate organizational vicinity—but their achievements are just as impressive.

What Counts Is What You Do, Not What You Are Like

I could carry on like that for a long time. The essence of it all is this: Effective people share no common features apart from the fact that they are effective. And the “secret” to their effectiveness does not lie in the answer to the question: What should people be like in order to be eligible for a management position? It is not the personality or character, education or social origin—important as these factors may be in the individual case. Neither does the key to their effectiveness lie in their virtues, as is so often supposed. Desirable as these are, and as little as I would advise against being virtuous, I would, by the same measure, not invest all my faith in virtue when it comes to discussing management qualities. It is not what matters most for a manager’s effectiveness.

The key to effectiveness is not how people are—it is what they do, the way they act. As individuals, effective managers are vastly different. They do not conform to any requirement profile, or academic ideal types. Rather, there is a common thread—a pattern—that runs through all their actions.

The peculiar fixation on the question of what a person should be like is only encountered in management. In the case of surgeons, for example, no one would think of asking how they should be—only whether they are able to carry out a certain operation. Musicians for an orchestra are selected and evaluated based on how well they play their instrument. High jumpers must be able to jump high; long-jumpers must be able to jump a long distance. Nothing else is asked of them.

Why should the case of managers be any different? Of course, certain characteristic traits may play a significant role in deciding that a person cannot be considered for a certain post. However, this is due to the individuality of the person and the particular position, and is not rooted in a generalized ideal concept.

The common features we can find in effective people concern the way they do their work: They follow certain rules, principles and guidelines and—consciously or subconsciously—let them guide them, no matter what they do and where. They perform their tasks with particular diligence, and in their approach to work they follow the principles of professionalism and apply certain tools. These are the same elements we find in any profession. They are totally different from the lists of requirements discussed above. Those lists may even be inhuman since they lead us to demand things from people that they are unable to deliver. It is one thing to expound on requirements but quite another to at least furnish some evidence that they can be met. If this criterion were consistently applied, more than 80 percent of current management literature would not exist.

Misleading Surveys

It is striking that only a few effective people can describe the way they act. Many are not even aware of it. First, they have not explicitly learnt it, and second, their first and foremost concern is their actual work not the way they work. Therefore they cannot put into words how they do things correctly or even perfectly. .

The most problematic thing is what I call the principles, the rules that govern people’s actions. This is not unusual: Only very few of the people who are particularly good at something are able to describe it well enough. Being able to do something and being able to describe it are two totally different things. This is true not only in management but also in other fields such as art and sports. I have never heard of a violin soloist who could describe how she plays the violin. She is able to demonstrate it, but not to describe it.

That is why I decided quite early to stop asking managers about the secret of their effectiveness. Interviews, and other forms of questioning too, are hopelessly unproductive. Often I just get the answers people believe I want to hear. Some of them even instruct their assistants just before the appointed date to look up literature for what is in vogue at the moment. It is all the more remarkable that empirical research in this area is so starkly dominated by interviews and surveys. I consider them a largely useless tool in this context. In particular, descriptions of managers in the media are almost exclusively based on questions put to them. And the media are all too eager to publish anything passed off as a “study,” even if it is far from satisfying the standards of scientific research. However, because it is in the media, it will then greatly influence the public image of management and managers, or, to be more precise, of the caricature of management.

The best method by far is observation. Of course it is also the most difficult, demanding and time-consuming method. And it is only under certain circumstances that you will be able to meet the right individuals in crucial situations—situations that are relevant for the observation of their actions and effectiveness.

After all, the important thing is not what people say but what they do, and how they do it. That is something you can only determine by observing them in real situations, and by doing this in a way that will not affect the way they act. My professional practice has often provided me with such opportunities, and sometimes even created them, so over time I have seen a stable pattern of effective actions crystallize—a pattern that is largely consistent across cultures.

What made the difference for me, very early in my consulting career, was the extraordinary luck of being hired for a special assignment by a large corporation’s CEO. He asked me to accompany him for a whole week, wherever he went, then give him feedback. This proved to be invaluable for me not only for my professional career but also for my studies, because it provided a totally different basis compared to the mainstream method of sending out questionnaires.

Highly valuable insights also came from my intense studying of biographies, in particular those of great entrepreneurs and business dynasties, such as Andrew Carnegie, the Dupont family, John Pierpont Morgan, the German steel dynasties, and the automotive pioneers: Henry Ford and Alfred P. Sloan, Carl Benz, Gottfried Daimler, and Ferdinand Porsche.

I also found the biography of Pope Julius II to be very instructive, as well as those of people from politics and the military, including some of the Founding Fathers of the United States, such as Benjamin Franklin, as well as the biographies of generals from the American Civil War and from World War II. I gave particular scrutiny to the biography of George C. Marshall, Chief of Staff of the U.S. Army from 1939 to 1945, who then became Secretary of Defense and Secretary of State. He mastered three of the toughest challenges of the 20th century, and all of them in exemplary fashion.

Contrary to good biographies, I found large parts of management literature worthless. Biographies obviously have their own set of problems. First, reading them is very time-consuming. There are hardly any biographies which have fewer than 500 pages. Second, the working practices adopted by these people are usually just a side issue for the biographers. You can recognize good biographers by the fact that they pay attention to this aspect. Third, judgment must always be exercised to qualify the sometimes excessive and idealized portrayals in biographies. But I was keen to know how these people accomplished what they did.

In short, we need to study people—or even better: work with them and experience them— not only question them, if we want to learn about the way they act, and especially if we want to ascertain why they are effective and what makes them effective.

If the effectiveness and professionalism of people depend not on what they are but on how they act, a certain degree of optimism is justified with regard to the purpose of this book. While we may not be able to learn to be like another person, to a certain extent we can learn to act like that person. The common features of the way effective people act can be passed on—their nature, characteristics, or personality cannot.

Chapter 2FALSE THEORIES, ERRORS, AND MISCONCEPTIONS

The question about the ideal manager is not the only error that distorts our understanding of sound management. There are misconceptions and distinctly erroneous theories which contribute to confusion and undesirable developments, in particular by providing fertile ground for the spread of more and more fashions, trends and charlatanism.

Here, I will address two schools of thought, as, in a way, the two extremes of a continuum that I consider particularly illustrative in terms of wrong and harmful management views. Their most important elements can be found in numerous variations and shades across the entire current spectrum of management and its study. The first manifestation, in its most common form, can at best be called the pursuit-of-happiness approach; the second is the idea of the great leader.

The Pursuit-of-Happiness Approach

In its most extreme form, this approach suggests that the key purpose of organizations—in particular businesses—is to keep the people working in them satisfied and, if possible, even happy. Moderate versions of the pursuit-of-happiness approach have infiltrated most fields of management and influenced them to a considerable extent.

This way of thinking has many roots. Its strongest is the view that the state or society is responsible for people’s well-being—one of the prevailing ideas of the 20th century, and another centennial error. This approach merges at several points with the different movements on “well-being,” “concern,” “sensitivity” and “self-realization” and their whole variety of inexhaustible and incomprehensible forms, be they esoteric movements, New Age concepts, or shamanism.

At present, we find reports in the media which deal with nothing less than “feel-good management.” Even the flagships of public opinion carry these reports without even offering so much as a critical comment, even though there are clear signs that something is wrong here.

In management, pursuit-of-happiness ideas can be found in the human-relations movement; they appear in various forms as part of the demand for participation and democratization, as well as of motivation theories. They are a part of the discussion on management styles and on the ability to enable and empower people. Their clearest, if not the most “modern” expression is the work satisfaction theory, which has influenced human resources management since the 1950s. Its main thesis is: Ensure people are satisfied and they will perform.