Great coaches stress fundamentals—the essential skills and plays that make a crew a constant winner. Nice general managers do the same thing. They know that sustained superior performance can’t be constructed on one-shot improvements like restructurings, large cost reductions, or reorganizations. Certain, they’ll take such sweeping actions if they’re in a situation where that’s obligatory or desirable. But their priority is avoiding that kind of situation. And they do this by focusing on the six key tasks that constitute the foundations of every general manager’s job: shaping the work environment, setting strategy, allocating resources, developing managers, building the organization, and overseeing operations.

This list shouldn’t be shocking; the basics of a general manager’s job should sound acquainted after all. What makes it important is its standing as an organizing framework for the vast mainity of activities general managers perform. It helps you define the scope of the job, set priorities, and see important interrelationships among these areas of activity.

Shaping the Work Environment

Each company has its own particular work setting, its legacy from the previous that dictates to a considerable degree how its managers reply to problems and opportunities. But regardless of the environment a general manager inherits from the past, shaping—or reshaping—it is a critically essential job. And that’s as true in small- and medium-sized companies as it is in giants like General Motors and General Electric.

Three parts dictate a company’s work setting: (1) the prevailing efficiency standards that set the tempo and quality of people’s efforts; (2) the enterprise ideas that define what the corporate is like and the way it operates; and (three) the folks concepts and values that prevail and define what it’s like to work there.

Of these three, efficiency standards are the single most essential component because, broadly speaking, they decide the quality of effort the group puts out. If the general manager units high standards, key managers will usually follow suit. If the GM’s standards are low or obscure, subordinates aren’t likely to do much better. High standards are thus the principal means by which high general managers exert their affect and leverage their skills throughout the entire business.

For this reason, unless your company or division already has demanding standards—and only a few do—the one biggest contribution you may make to instant outcomes and lengthy-term success is to raise your efficiency expectations for every manager, not just for yourself. This means making conscious decisions about what tangible measures constitute superior performance; where your organization stands now; and whether or not you’re prepared to make the robust calls and take the steps required to get from here to there.

Clearly one of the most necessary standards a GM units is the corporate’s goals. The perfect GMs establish goals that power the organization to stretch to achieve them. This doesn’t mean arbitrary, unrealistic goals that are certain to be missed and encourage no one, however somewhat goals that won’t permit anybody to neglect how robust the competitive enviornment is.

I vividly remember one general manager who astonished subordinates by rejecting a plan that showed good profits on a good sales gain for the third year in a row. They thought the plan was demanding and competitive. However the GM told them to come back with a plan that kept the identical volumes however cut base cost ranges 5% under the prior year’s, instead of letting them rise with volume. A troublesome task, but he was satisfied the goal was essential because he anticipated their chief competitor to chop costs to regain market share.

In the course of the subsequent few years, the corporate dramatically changed its value construction through a sequence of revolutionary price reductions in production, distribution, purchasing, corporate overhead, and product-mix management. Consequently, despite substantial price erosion, it racked up file profits and share-of-market gains. I doubt the company would ever have achieved these outcomes without that tangible goal staring management in the face each morning. The same kind of thinking is clear in the comments of a prime Japanese CEO who was asked by a U.S. trade negotiator how his firm would compete if the yen dropped from 200 to the greenback to 160. «We are already prepared to compete at one hundred twenty yen to the greenback,» he replied, «so a hundred and sixty doesn’t fear us at all.»

High standards come from more than demanding goals, of course. Like top coaches, military leaders, or symphony conductors, prime general managers set a personal example by way of the lengthy hours they work, their apparent 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 lengthy-winded, poorly prepared plans and «bagged» profit targets instead of complaining but accepting them anyway. Their managers need to know the details of their enterprise or perform, not just the big picture. Marginal performers don’t keep lengthy in pivotal jobs. The perfect 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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