Management excellence is the deep, driving, constant pursuit of greatness in a business. It is an aspirational state of being always slightly beyond the current state of management practice providing fuel for learning, adaptation, and growth.
It is also a phrase like many in business that defies easy definition or concise description. Ask ten executives to define leadership or strategy and I guarantee you a fascinating set of different responses. Ask this same group to describe what management excellence means and be prepared for some long, rambling perspectives. The purpose of this article is to put some substance on the lofty-sounding idea of management excellence and perhaps along the way gain some new devotees to this noble pursuit.
Inspiration for the Pursuit of Management Excellence
As an MBA student in the 1980s, it was impossible to avoid the book that practically defined the business book category, “In Search of Excellence,” by Thomas J. Peters and Robert H. Waterman, Jr. These two McKinsey consultants set out to define and describe the characteristics that made some companies excellent while peers languished in mediocrity.
In the process, they launched a still-running quest for management thinkers, practitioners, and academics in search of how to decode the formula for sustained business greatness. Their use of the McKinsey 7-S framework: structure, systems, style, staff, skills, strategy and shared values, was a regular subject in our advanced management courses.
The work of researcher Jim Collins added to the discussion with the books, “Built to Last” and “Good to Great.” Both of these works extended the discussion initiated by Peters and Waterman, applying fresh eyes and new research to why some firms sustained superior performance while comparison companies (competitors) struggled. New ideas were put forth and the next generation of MBA students and practitioners tackled Collins’ work to decode the formula for greatness.
Continuing Research on Management Excellence
Jim Collins continues his research in this world today, building upon his earlier findings and theories. And the team at McKinsey extended the study of what enables success in business with the concept of organizational health put forth in: “Beyond Performance: How Great Organizations Build Ultimate Competitive Advantage.”
The studies are larger and the research techniques arguably more rigorous than the earlier attempts, and some (Beyond Performance authors) go so far as to suggest a causal relationship between certain behaviors and superior performance. While the results are encouraging, they are still not much of a guide for the manager or senior executives striving to promote excellence in their firms. They point in a direction but do not offer specifics on the management behaviors necessary to pursue and approach a state of excellence.
The following is my attempt to help managers move a bit closer to a unifying view of the behaviors that make up this idea of management excellence. The input is highly biased based on my lifetime of exposures, and I am certainly not attempting to suggest statistical rigor. I am however suggesting that the rigor gained from the experience in three-plus decades studying and striving for a state of management excellence in my own firms offers ammunition and ideas for managers everywhere.
11 Characteristics of Management Excellence in Action
- Management Excellence starts with values. The people in the firm display a fierce commitment to shared values and the exhibition of those values in everyday activities large and small. From talent selection and development to programs, policies and key decisions, the values are always on display. The values are self-policing, and those who ultimately do not share the values are voted off the island.
- Learning and continuous improvement drive the daily work. Learning and refining processes and approaches are what people do every day. And innovation is not a program, but an outgrowth of the most powerful behavior in the firm: learning via experimentation.
- Robust debate leads to unified actions. No punches are pulled in the professional but brutally clear discussions around direction and investments. Along with a culture that encourages debate, it calls for quick, fact-based or best judgment decisions to move ideas into action and start the learning process. Once a decision is made, it is everyone’s decision.
- Strategy is everyone’s business. And everyone is involved in strategy. Front-line and customer-facing colleagues provide perspectives on reality. Individuals at all levels work to decide on direction and execution on strategic initiatives is immediately absorbed into the operating routine and learning cycle of the organization. Every person in the firm understands the strategy and helps support its ongoing evolution.
- Time travel is required. A firm exhibiting management excellence operates in two-time horizons: the here and now and a far-away future where everything that once worked is likely no longer relevant. Both time horizons are part of the planning process, and one is not sacrificed for the other.
- The Field-of-View alternates between the immediate scene and far away industries and technologies. In our world of volatility, the firm displaying management excellence maintains an intimate view of customers and the forces impacting the industry, while simultaneously monitoring faraway markets and technologies for threats and opportunities.
- Life in this organization is a verb phrase. To the outside observer, the firm and employees are in perpetual motion refining and improving, while experimenting and innovating. The firm’s culture abhors standing still or running in place. As a result, it is accepted and expected that the firm operates in perpetual reinvention mode.
- No lip service allowed for employee development. Every member of the firm is supported by development as both a leader and a follower. From the top of the organization to the front-lines, participation in new and different opportunities is part of what it means to be a part of this opportunity.
- The functions exist to support the firm and strategy, not themselves. There are experts in various disciplines, but their report-to accountability is the firm, not the function. The same goes for infrastructure and systems.
- Financial results are viewed as important outcomes of the firm’s collective actions. They are neither the end-goal nor dismissed as unimportant. There is balance around the view to the numbers.
- The pursuit of greatness is the secret sauce that drives every participant. Few forces are more powerful than a group of individuals who believe they are contributing to the creation of something great.
The Bottom Line
The characteristics above are generalizations of sets of idealized behaviors. Inherent in these behaviors is the belief that the firm’s senior leaders commit to forming and framing an environment where this style of working and engaging emerges and flourishes.
The behaviors define a new job description for leaders and a new measuring stick for leadership effectiveness. And while cynics might dismiss these behaviors as idealistic and impractical and a firm displaying the characteristics of management excellence as implausible, if you capture the hearts and minds of a group of people you can achieve anything. Now, the challenge is once excellence is realized, how is it sustained?