What firms should know about scaling up management productivityBy Jeremy Han
Productivity in Singapore has fallen again.
While a myriad of factors contributed to this, as a management coach and business strategist, I wonder how management practices affect productivity across the whole company.
Organisational culture and practices do influence productivity, and management can lead their organisations to be more productive by the way they behave. So leaving aside the hard side of productivity because it varies across industries e.g. manufacturing vs. service sectors, I want to focus on how management practices can drive or kill productivity.
In 2013, the Ministry of Manpower reported that better management practices is the key to boosting productivity levels in Singapore companies. I tried to find a follow-up study to see if there were changes to its findings in more recent years but there is no subsequent report. However, I believe that what it says hold true – management quality is co-related with company performance.
To quote Minister Tan Chuan-Jin, who was interviewed in the study, "Therefore, improving the quality of management is just as important as undertaking other productivity improvements in order to entrench a productive culture. It is against the backdrop of economic challenges that it has become more pressing, locally and globally, for SMEs to step up and review their business and management models."
So what are some management practices that raise productivity? Besides the usual focus on processes adopted from manufacturing, I want to focus on processes less concrete, but has consistently been a management weakness across companies both big and small. I want to talk about a culture of executing strategy relentlessly, and how to run meetings effectively.
Recently, I met a business owner who used to work for an international bank before taking over a Singaporean business. When we talked about execution and its importance to an organisation's performance, she laughed and told me that is the problem with big organisations – everyone in the corporate hierarchy wants to be strategic but nobody wants to be executing.
So how can management practices, in particular, strategy execution, be improved? After all, according to the Harvard Business School, 90% of strategy fails because of poor execution. Firstly, management needs to understand that execution is culture. It does not happen automatically, or as we expect people to 'just do their job'. Executing strategy has to be very intentional, if not people fall back into fire-fighting mode. So how do we create an execution culture?
We first have to understand that culture is made up of two things – beliefs and behaviours. What does management in your organisation believe about execution? Is it micro-management? Is it laborious? Or is it dirty work for those below them? They maintain the 'helicopter view' while others do the work?
Or worst, is management focused on short-term results to drive bonuses before leaving for greener pastures, thus letting their successors come and clean up the mess they made by crashing the system in the pursuit of results in an unsustainable way? Or are they willing to invest in building sustainable processes that drive results?
Next, how does management behave when it comes to executing strategy? Do they have a consistency to it? Are they intentional or haphazard? Do they measure, test, and revise? How do they know if strategy is working or not? Do they invest in the process and therefore make the organisation stronger as it pursues results?
I have met several consultants who are very good at helping companies develop thick and complex strategic plans, but inevitably, these complicated strategic plans fail because there is almost no systematic way to execute. Yet, companies who crack the code on building a culture of execution change beliefs and behaviours, and start to see results and scale up.
There are three things that I build with customers as a Gazelles International Business Coach. Gazelles International is founded by world-renowned business guru Verne Harnish, whose business system has been used by more than forty thousand companies across the world, with several scaling up many times. The three things are Priorities, Metrics, and Rhythm.
The first is to break strategy into priorities. What are priorities? Mahatma Gandhi said that priorities are best manifested in action. Strategy is often big, so it has to be broken into actionable pieces with a shorter time frame. So priorities are best described as critical actions that must take place in order to contribute to the development of a goal. But the difficulty therefore is to know which action is a priority.
Thus priority has to be laid out across the management team and sized through a process I call Priority Sizing Exercise. By the end of the exercise, what needs to be focused on for one year to the next three years would be clearly spelled out and agreed upon. This is an important exercise because it lays out the priorities objectively, thus cutting out a lot of drama that comes from every department asserting that their priorities are the most important.
Next would be to develop the right metrics. This is where every organisation I worked with, from international banks to conglomerates to SMEs, share the same problem – focusing on the 'wrong' KPIs. KPIs are often set as Results e.g. sales target, percentage growth, etc. There is nothing wrong here except that when we focus on it too much, we lose sight of the process of achieving the results.
Results do not occur in a vacuum; it is the result of a process. Focusing on the results will usually lead one to being blindsided by events i.e. by the time the results are out, it is too late to make changes. However, if we focus on the actions that lead to the results and track the actions taken, we have time to change actions if it is not leading to the results. Thus management productivity can be better achieved if focus is placed on what we call Lead KPIs – KPIs that lead you to the results.
The last thing is to establish a rhythm of execution. This piece is the most important but also the most difficult because it involves hard work and commitment of the management to drive the rhythm. In other words, it means change. It is a new way of holding meetings that focuses on the Lead KPIs and Priorities identified, and followed through with a well-developed dashboard capturing accountability.
Meetings are a boon to most executives because they are long, boring, status presentations, and dramatic outbursts. What if we can cut away the fuss and get strategic work done and problems solved? Meetings run properly also build a culture i.e. belief that management productivity is important, encourage behaviours that demonstrate high accountability and are solutions-focused.
A client I had cut their weekly management meetings from fourteen hours a week to one and a half and saw much change to productivity and culture. Having healthy meeting rhythms drive productivity, raise motivation, and change behaviour towards execution. It also makes people look forward to meetings because they get strategic work done there.
At the heart of all these, the piece that joins all together is people. Execution is culture, and culture is people. Organisations need leaders who are executors of strategy, who focus on the process of execution. They are not micro-managers but people who are prepared to invest in the process of getting results without burning the organisation out.
By improving management productivity, the leaders build the culture and eco-system of productivity, and hopefully that will encapsulate every level of the organisation.