Nice coaches stress fundamentals—the basic skills and plays that make a workforce a consistent winner. Nice general managers do the same thing. They know that sustained superior efficiency can’t be constructed on one-shot improvements like restructurings, huge cost reductions, or reorganizations. Sure, they’ll take such sweeping actions if they’re in a situation the place that’s crucial or desirable. However their priority is avoiding that kind of situation. And they do that by specializing in the six key tasks that constitute the foundations of each general manager’s job: shaping the work environment, setting strategy, allocating resources, growing managers, building the organization, and overseeing operations.
This list shouldn’t be surprising; the fundamentals of a general manager’s job should sound familiar after all. What makes it essential is its status as an organizing framework for the vast majority of activities general managers perform. It helps you define the scope of the job, set priorities, and see essential interrelationships amongst these areas of activity.
Shaping the Work Setting
Each firm has its own explicit work setting, its legacy from the previous that dictates to a considerable degree how its managers respond to problems and opportunities. But whatever the environment a general manager inherits from the past, shaping—or reshaping—it is a critically important job. And that’s as true in small- and medium-sized firms as it is in giants like General Motors and General Electric.
Three elements dictate a company’s work setting: (1) the prevailing efficiency standards that set the pace and quality of individuals’s efforts; (2) the business ideas that define what the company is like and the way it operates; and (3) the people ideas and values that prevail and define what it’s like to work there.
Of these three, efficiency standards are the single most vital factor because, broadly speaking, they determine the quality of effort the organization places out. If the general manager units high standards, key managers will often comply with suit. If the GM’s standards are low or obscure, subordinates aren’t likely to do a lot better. High standards are thus the principal means by which high general managers exert their influence and leverage their abilities across the whole business.
For this reason, unless your organization or division already has demanding standards—and only a few do—the only biggest contribution you’ll be able to make to immediate outcomes and long-term success is to lift your performance expectations for each manager, not just for yourself. This means making aware choices about what tangible measures constitute superior performance; where your company stands now; and whether you’re prepared to make the robust calls and take the steps required to get from right here to there.
Clearly one of the most important standards a GM sets is the company’s goals. The most effective GMs set up goals that pressure the organization to stretch to achieve them. This doesn’t mean arbitrary, unrealistic goals which are sure to be missed and motivate nobody, however somewhat goals that won’t enable anybody to forget how tough the competitive arena is.
I vividly remember one general manager who astonished subordinates by rejecting a plan that showed nice profits on a great sales gain for the third yr in a row. They thought the plan was demanding and competitive. However the GM told them to come back back with a plan that kept the same volumes but reduce base cost ranges 5% under the prior yr’s, instead of letting them rise with volume. A tricky task, however he was convinced the goal was essential because he expected their chief competitor to cut prices to regain market share.
Throughout the subsequent few years, the company dramatically changed its value construction via a collection of modern price reductions in production, distribution, purchasing, corporate overhead, and product-combine management. In consequence, despite substantial price erosion, it racked up file profits and share-of-market gains. I doubt the corporate would ever have achieved those outcomes without that tangible goal staring administration in the face each morning. The same kind of thinking is clear in the feedback of a high Japanese CEO who was asked by a U.S. trade negotiator how his company would compete if the yen dropped from 200 to the greenback to 160. «We are already prepared to compete at a hundred and twenty yen to the dollar,» he replied, «so 160 doesn’t worry us at all.»
High standards come from more than demanding goals, of course. Like prime coaches, military leaders, or symphony conductors, prime general managers set a personal example when it comes to the lengthy hours they work, their obvious commitment to success, and the constant quality of their efforts. Moreover, they set and reinforce high standards in small ways that quickly mount up.
They reject long-winded, poorly prepared plans and «bagged» profit targets instead of complaining but accepting them anyway. Their managers need to know the main points of their business or operate, not just the big picture. Marginal performers don’t stay long in pivotal jobs. The best GMs set tight deadlines and enforce them. Above all, they are unimaginable to satisfy. As soon as the sales or production or R&D division reaches one standard, they raise expectations a notch and go on from there.
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