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What Makes an Executive Effective: Drucker's Three Jobs For Achieving the Right Results

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Important strategic (what-to-do) decisions made with confident rationality and swiftness occur mostly in the manufactured constructions of managers out for instant plaudits (or yo-yo nods) from senior-level executives…  typically afflicted with historical amnesia and/or lack of knowledge/experience about what it will really take to achieve success in the situation presented.

All strategic plans must be accompanied by a realistic tactical (how-to-do-it) work plan complete with thoughtful and thorough work assignments… deadlines for performance… a realistic financial budget to turn strategic/tactical plans into operational reality… and the right organizational structures for administering the selected strategy.

Without a realistic tactical plan, a strategic plan is just a hope or good intention.

(In a future article/online program, we will detail a proven, tested strategic marketing planning approach that equivalently forces executives to ask and systematically answer the right questions about the above factors including markets served and not served, the competitive situation, buyer behavior characteristics and much, much more).

A Scary Time for Status-Quo Management

Today's pandemic environment has put the spotlight on many high-paid executives who, in the past, were able to coast a long time on the courage, work and vision of earlier executives.

Every executive has three distinct jobs–namely: an administrative job, an economic job and an entrepreneurial job. All must be done simultaneously. However it is realized a given executive's strength may be strongly weighted toward just one of the required jobs.

In brief, the economic job requires asset management, that is, maximizing the productivity of the assets (e.g., monies, people, physical assets) within an executive’s sphere of responsibility.

The tactics involved in this task require determining what to abandon and how to abandon things that don't work, never worked and have lost their ability to significantly contribute to performance and results.

The entrepreneurial job requires systematically identifying and exploiting clearly identified opportunities through a variety of mechanisms including, once again, organized, systematic strategic marketing planning.

The world has changed in the past five months. Status quo management is no longer acceptable. Every organization needs leaders capable of both the economic and the entrepreneurial jobs to craft the right kind of strategies and tactics to thrive and survive in today's business climate.

In many instances, those ill-prepared to cope with today's new realities seem to exhibit what might be termed self-defeating behavior and a preference to learn from making costly mistakes rather than studiously learning from what the truly successful have done to achieve extraordinary results.

This type of behavior, in the final analysis, eats cash. No organization has infinite resources. Solutions to this ever-growing problem in many organizations include very carefully designed (and very practical) management/leadership development programs accompanied by seasoned executive mentoring of the highest caliber.


Job #1 in Coping With the Impact of COVID-19

The first step in surviving and thriving in today's new business environment, for those organizations hardest hit by the crisis, is to find out what is working in the current business and to build on it. Even in a very damaged organization, there are always islands of strength.

Said Peter F. Drucker: "Of 29 stores in an ailing department store chain, for instance, 25 were hemorrhaging… Four stores, however, were doing well… But no one had paid attention to them… Everyone dismissed their performance as an 'accident' or an 'exception'…

… But the four stores performed because they had–knowingly–repositioned themselves on a new business theory (model) that was in line with market realities…"

The point? An ailing company needs to become opportunity-focused instead of problem-focused. Internal benchmarking best internal practices might be the best term to describe what needs to be done–fast and successfully.

Take-home message: Formalized procedures requiring data-driven analyses, disciplined observation and more enable executives to find out what's really working and innovatively imitate what the successful within their organization and competitive organizations are doing to achieve enviable results.


Easy To Say. Hard as Nails To Do

Identifying what's really working and doing more of it is easier to say than do.

Agility is not just a buzzword; It's now a survival requirement. Transforming into a new business for a new future needs direction, method and purpose, yet today's managers/executives might not be up to the job.

Why? Because they're seeking a return to normality. And normality, typically, is yesterday's reality.

But it goes deeper. Here's a short list (only two of more than a dozen) of the self-imposed restraints of many not-good executives that prevents true success in today's business climate from happening.

  1. Concern with costs alone, which results in smothering very accomplishable new opportunities. This preoccupation with costs yields to the temptation of adding on additional executive/manager responsibilities which inevitably violates the Drucker principle that managers "must concentrate their efforts on the smallest number of products, product lines, services, customers, distributive channels and so on to produce the largest amount of revenue."

    We cannot emphasize enough that "concentration" is often the key to success. For example, attempting to have salespeople dedicated to two different product lines is typically fraught with risks and high failure rates.

    Why? Typically, straddling two product lines is the wrong compromise. In the words of Drucker:

    "...There are right compromises and wrong compromises; each is captured by an old saying. The right compromise is expressed by the proverb 'Half a loaf is better than no bread at all'…

    … Half a loaf still quenches hunger for one day, and it still enables a person to work or a soldier to fight for one day, even though it is only half of what an adult needs for a day's nutrition…

    … The wrong compromise comes from the biblical story of the Judgment of Solomon: 'Half a baby is worse then no baby at all'.…

    … Half a baby is a corpse and not half of a growing, living child…"


    In other words, by not dedicating two different groups to selling two different product lines, in most situations, leads to a corpse divided in half.

    This is a well-known decision-making concept. Yet the not-good manager, thinking of themselves as economical violate this "no no" and equivalently wrap themselves up in a cocoon of non-results and tend to waste their energies attempting to explain how much better things are than they seem, and what bunch of things are now being done to improve the situation.

    That explains their tenure, but in most instances by not addressing the real problem of concentration, things go downhill quickly–producing a corpse divided in half.

    In most situations when this occurs, newly appointed experienced/seasoned executives assigned to produce a turnaround usually achieve that turnaround through the guiding principle of concentration of resources.

  2. Spending too much, by spending too little. Costs do not exist in a vacuum. To yield results costs must be viewed in relationship to the results achieved. The costs/results ratio is the chief metric, not costs alone.

    By spending too little in order to achieve one's objectives, failure usually follows. In other words, what was spent "on the cheap" is lost.

    In today's environment, organizations need managers who understand what the business of the right size really means in terms of meeting required fixed costs and variable costs. Stated differently, executives must determine what kind of capital investment is required to achieve desired results and if the return on investments are promising enough to justify the expenditure.

Take-home message:Warren Buffett's famous quip "Only when the tide goes out do you discover who is swimming naked" has never been more applicable.

Yet, for reasons we cannot fully explain, all the tell-tale signs of an impending future disaster due to what might best be termed "the not-good manager" tend to be overlooked by those who should know better.


More to Worry About

Strong and accomplishing executives in-charge of successful strategic business units when put under the command of a "not-good manager" tend to be viewed as irritants and threats, however useful they otherwise are to profitability and future growth in today's rapidly changing business environment.

Furthermore, high-performing executives will not long tolerate working with or for not-good managers. In short, a brain drain is inevitable if the situation is allowed to continue.

Simply put, extraordinary performers or those with the capability of strong performance get out. What is left organizationally is an organization stripped of its ability to sustain market leadership and distinction.

Why are many senior-level executives duped into believing a bad manager is a good one? Results are conditioned by numerous factors including the common consequence of mistaking good times for good management.

Years ago, famed Harvard professor Ted Levitt said: "The general rule may be… bad performance reflects the existence of bad management…

… That is especially so in the case of bad relative performance that remains relatively bad… But since it is management's job to manage for the right results, regardless of circumstance, no such excuses can be warranted."


Picking the Right People To Lead in Rapidly Changing Times

Drucker observed many years ago that job descriptions may last a long time but when a random, irregular occurrence occurs that completely destabilizes an organization, the job description must be changed to fit the new realities.

Drucker provided us with the following examples:

“When putting a man in as division commander during World War II, George Marshall always looked first at the nature of the assignment for the next 18 months or two years…

… To raise a division and train it is one assignment… To lead it into combat is quite another… To take command of a division that has been badly mauled and restore its morale and fighting strength is another still…

… When the task is to select the new regional sales manager, the responsible executive must know what the heart of the assignment is: to recruit and train new salespeople because say, the present salesforce is nearing retirement age?…

... Or is it to open up new markets because the company's products, though doing well with old-line industries in the region, have not been able to penetrate new and growing markets?…

… Or, since the bulk of sales still comes from products that are 25 years old, is it to establish a market presence for the company's new products?… Each of these is a different assignment requiring a different kind of person…"

Summary & Conclusions

Managing in today's environment requires real understanding of the business, the required skill sets to begin making the future today, the ability to create the right organizational structures to maximize identified opportunities and the know-how to convert into operational reality the right ideas for business survival.

Stated differently, executives not fully versed in what we term strategic marketing, in all likelihood, will spend too much by spending too little, fall back on yesterday's no longer applicable success formulas and experience a brain drain due to lack of leadership skills.

It's quite likely that not-good managers/executives will blame others for their chronic underperformance and will underperform by almost all applicable standards.

Worse, these managers will resort to "hasty hatchet" cost-cutting rather than the hard job of abandoning the unproductive and the obsolete and reallocating those resources (monies and people) to clearly identifiable high-yield result areas–which exist in most organizations through experience, analytics and disciplined usage of strategic marketing planning.

Tough times are ahead. If savvy senior-level management does not step up to the plate, that is, abdicates their responsibility for much-needed governance, the organization will lose distinction and leadership–and all that will remain is big-company overhead.


Related readings on what and how to abandon, reallocating resources to the right results and spending too much by spending too little:

 


Imagery:  "X Marks The Spot" by Rich Renomeron is licensed under CC BY-NC-ND 2.0


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