No Significant Differences between Stars and Average in Intelligence, Problem-solving or Technical Skills

So it was with some anticipation that I read through Robert E. Kelley’s  How to Be a Star at Work: 9 Breakthrough Strategies You Need to Succeed (Three Rivers Press, 1999).  This book is based on research at Bell Labs in the 1980s, and 3M a bit later, on the differences between “stars” and average managers.  . Learning to be an effective manager is a multi-disciplinary-multi-modal effort. Clearly an important step is to understand what constitutes the approaches, practices, and skills of an effective manager. Based on work with hundreds of managers, Kelley found that there was no significant difference between “star” and average managers in their raw intelligence, problem solving skills, and technical skill attributes.This may seem surprising until you remember that accomplishing real results in the business world is not a based on individual performance but on the collective efforts of a whole organization. There are almost no significant business problems (or technical ones, too) that can be solved by a single individual. In fact, it is the job of a manager to bring together all of the resources required to achieve real results, focus them on the task and push, pull, inveigle, cajole, lead, or any other verb that describes the persuading that goes on to organize groups in action to achieve real results. Viewed from this perspective it seems less surprising that being a “star” manager has more to do with attributes other than raw intelligence, problem-solving, and technical knowledge.

Better Strategies and Skills in nine areas

What Kelley did find was that the stars has better strategies and skills in nine areas:

1. Initiative – working the white spaces of the organization
2. Networking – knowing who knows what in the company’
3. Self-management – managing your whole life at work
4. Getting the big picture
5. Followership – checking your ego at the door and leading in assists
6. Teamwork
7. Leadership – doing small-”l” leadership in a big”L”world
8. Organizational savvy
9. Show-and-Tell: persuading your audience with the right message

There is some overlap among these nine strategies. For instance Followership, Teamwork, and Small “l” leadership are clearly interdependent ideas. But I do not want to quible here. If you compare this list with the attributes of high performance organizations you will find useful correlations and synergies.

This book is widely available through your local library and from bookstores local and online.

1. see Henry Mintzberg, Managers Not MBAs: A Hard Look at the Soft Practice of Managing and Management Development, 1st ed. (Berrett-Koehler Publishers, 2004) for more on this.

For every startup the development of a business plan is a  required first step. It is so obvious – business schools have course on writing the business plan and it is impossible to get funding without one. Teams coalesce around the labor. So, every startup has a business plan.

For the going concern, the ones that are now three or so more years old, the business plan (also called strategic plan -really the same thing) is forgotten, only stumbled on when a move forces someone to pick it up and wonder, “Should I just relegate this to the dumpster?”

This is not a good situation. A business without a plan is like a boat sitting in a pond just waiting to sink to the bottom for nature to compost it. Or, if it has the fate to be afloat in a stream, it will be carried along willy-nilly until it bumps into a stone or dead branch or reaches the ocean where nature will also send it to the big composter.

Every business exists in a world that is changing and filled with opportunities and threats. Your business plan is your set of oars to provide the means to pull in the direction you want to go in, to avoid the rocks. You might even row to shore and portage around the falls, to move to an entirely new river.

But, many people, even accepting the wisdom of having a plan, find it a painful exercise, all too easily avoided. This may be driven by the idea that a business plan involves dozens of pages of writing, lots of spreadsheets with numbers they really don’t believe (sometimes don’t understand). Business plans, strategic plans, these are just the exercises one does in business schools. Or it may be the folk wisdom that business plans are not a useful part of managing and they always end up on the shelf or hidden in a file cabinet only dusted off for display when in search of a bank loan.

However, shift your thinking to view the process of building a plan as a value in and of itself, and adopt a simpler more flexible business plan model you will find that building that set of oars for your little boat is fun and productive.

The Business Plan Model

Lets talk about the business plan model first. Since we are developing a business plan for our internal use it does not need to look like or contain everything that bankers, MBAs, venture capital funders expect. This is a working document to help us move the business in a definite direction.

First, I have found that setting an arbitrary limit of 12 pages focuses the mind and edits out all the useless boilerplate that populates many plans. Second, if you and your team prefer not to write a paragraphed narrative, use an outline, PowerPoint approach. Third, get out your most recent Income and Balance Sheet statements – these will be the starting point for the financials. Fourth, establish an outline of the topics that you feel must be covered and keep to it.

Basically, the plan will include these twelve topics.

1. Describe why you are in business – what value are you delivering to which customers. An important corollary to this topic is to identify why customers buy from you and not someone else?
2. How do you find customers? Who are your current customers? List the big ones and their share of your business
3. How do you produce the service or product?
4. How do you make money by making your customers happy?
5. What are your objectives for growing a larger customer base, adding a new market segment, new products or services, or other growth strategy?
6. What are the external obstacles to accomplishing these objectives and how do you intend to get around them? This is where you might look at competition, SWOT and PEST analysis and apply other analysis tools.
7. What resources do we need to put in place to achieve the growth? Money, people, technology….?
8. What strategies are we going to apply to achieve our objectives over the next year to three years? This should be limited to three to five strategies. State clearly what the objectives are for each strategy – how many new customers, new products, dollars of sales, profits, etc? When will these happen?
9. What key tactics are needed for each strategy? Who is responsible, what resources do they get, when will the accomplish the tasks and what results are you looking for?
10. Build a financial model. The spreadsheet should be not more than 25 rows with columns containing quarterly projections for three years. Starting numbers must link to existing financial statements.
11. What is the schedule for follow up business review sessions where you will examine progress on the plan and take required actions to revise and push the plan forward. The first meeting should be one month after you kick off the new initiatives. The, not less than quarterly.
12. How does all of this fulfill the management team’s personal objectives? The answer to this is not money?

The Planning Process

Now, how do you actually develop the plan?

Four to six two to three hour working sessions with all members of the management team present usually suffices. Some homework will be required between the sessions, typically a  couple of hours. You might imagine a month to six weeks as a useful window of time.

Who should be in the room? Every significant stakeholder – owners, chiefs of marketing, sales, operations, technology or product development, finance, and HR. In small companies this sometimes means that one person has to cover several functional areas. Do not let the group get larger than six to eight people. More than that and you can not have good, deep interactions – the work sessions will be more like a conference or convention. Two or three is fine as long as every key stakeholder in the business is present.

These work sessions are more important, in many ways, than the plan itself. During these sessions, the team will talk out loud and write things down. Arguments, discussions, innovations, deletions, new agreements about the business emerge. These flow out of the group and the whole team understands and owns these discussions and the conclusions.

In my experience, if the management team represents all of the key elements, all of the facts and concepts about the business are sitting in the room. Some people think that business planning is a research project. But, with a team, the process is more a sharing around the table of the facts, consensus building about the situation, goals, and strategies to get to the goals. The most powerful outcome of the planning process is that it arms the management team to convert the strategies into actions to reach the goals.

You Need a Consultant

All of this seems quite straight forward. You may be thinking, “Well, I am the Owner, the CEO. I am a seasoned veteran.  I can lead my team through this planning process.” Resist this line of thinking and here is why, and I say this despite the obvious self-serving nature of what follows.

A good strategy consultant who knows how to lead groups through a planning process will do the following, much of which you as the Owner, the CEO can not do just because of the fact of your position. First, the consultant stands outside of the actual business discussions, runs the sessions, and keeps the team moving forward. Second, the consultant establishes an environment in which the team is a group of equals for the purposes of the planning. This assures that one person will not dominate, that the less forceful personalities, who frequently have significant contributions to make, will be heard and participate. This increases the breadth and depth of the team ownership of the plan. Third, the consultant can bring up the elephants in the closet that no one wants to talk about. Overcoming the baggage of history can be difficult and painful. The consultant can drive the conversations to confronting the facts of the business situation. Fourth, the consultant will bring appropriate analytical tools to the table. The bag of strategy tools is enormous. All of this liberates the Owner, the CEO from the burdens of running the work sessions to focus on the content of the process. This is where their highest value is.

How Do You Convert the Plan Into Action?

For most strategic plans and business plans the end is the document itself. This is the critical moment and here is where Step 11 above, that asks about the schedule of review sessions, converts the plan into action. This is where the Owner, the CEO must take the lead. Otherwise the plan is just a plan and is not converted into action. If you have done a good job of establishing the tactics you will know who is responsible, what the success metrics are and the timetable for action. By tying the planning to the existing financial reporting system, you will be able to measure results directly. The review sessions are not designed to be dull reports, but opportunities to understand where the difficulties lie and where new opportunities pop up. A review session brings together the management team to work on the most important strategic activities of the firm.

Summary

Let’s wrap up this discussion.  A business plan is the result of a process in which the management team comes to a common understanding of:

• • the business situation
  • the value the business provides to customers
  • strategies to achieve new goals
  • obstacles to be overcome or avoided along the way,
  • tactics to bring the strategies to life – this includes who is responsible, resources available, timeline, and results expected
  • schedule of review meetings to take corrective action and make course corrections

The business plan is converted into action through the tactics identified supported by active supervision and follow up by the Owner, the CEO. The plan also provides a common language about the business and a platform to communicate the business’s goals beliefs, and values to everyone involved, employees, vendors, and customers.

More information is available on the strategic planning process in our white paper: Introduction to the Strategic Planning Process here

This article was the subject of an earlier podcast of the same title. It is available here.

Think of meetings as dramas. Meetings should follow the basic shape of almost all dramas and movies. Act One sets the scene and hooks us into the action, introduces the characters, tells us what the drama is about, provides us with all of the information that allows us to participate. The Act Two is conflict. Discussions break out, issues parsed, pruned, and analyzed. The Act Three is resolution. The culprit gets his comeuppance, the love interest is played out, and so on.

In the world of organizations, the resolution, Act Three,  is usually a set of tasks.  Those accountable are clearly noted, deadlines set, resources committed, metrics for success defined, and the date for follow-up put on the calendar.

In a business drama, every formal meeting needs to have an objective, an agenda, time, place, leader, and participants. All of this must be made available to everyone involved before the meeting takes place. This provides the participants with time to review the agenda, gather information, think about the problem, in short, get ready to participate and not just appear at the meeting.

The leader of a meeting needs to think through each act. A key element of Act One is the hook. Everyone must understand very early in the meeting that something significant is at stake. This draws them into the meeting and gets them ready to participate vigorously.

Once you have applied this dramatic model to your formal meetings, think about how you can apply this to the informal meetings. Frequently, in contrast to formal meetings where Act One is crtical, informal meetings fall down on Act Three, the resolution. How often do you walk away from a casual conversation about a project problem and wonder “What was that about and who is really responsible for bringing closure to the problem?”

First things first – most meetings should not take place.

Any meeting that is about the status of, or problems with, a regular business process or activity is an indicator that you should solve the process problem. Good processes provide status indicators that can be seen by whomever needs to know, without a meeting. Recurrent problems should be eliminated, not treated as a moment for management to rush in to save the day. If you are in charge of, or have influence over a process that is producing meetings, then take those meetings as a directive for you to get to work on fixing the process.

Now is a good point to note that meetings don’t just take place in conference rooms. When a person in your department stops you in the hallway, or props themselves up outside your doorway, and says, “Can we talk about the Big Bonanza Project?”, you are about to have a meeting. When there is a flurry or emails and instant messages about a project, customer, or whatever, you are having a meeting.

Beware of meetings that you as a manger generate. Ask yourself whether your meetings fall into the categories noted above. Be disciplined about any meeting where the key outcome is to “keep you in the loop”.

No matter where you are in the food chain, meetings are critical to success as a manager. It is important to know how to initiate, lead, and participate in meetings. This series of Management Notes on meetings addresses some basic concepts and skills.

But, first, lets start with some discussion of exactly what a meeting is and how meetings function in our organizational lives.

Meetings come in many forms: meetings in conference rooms, in the hallway or parking lot, or over lunch. Email, especially the emails with lengthy lists of recipients and responders, those seemingly endless threaded discussions, present a new form of “meeting”. Instant messaging and, more frequently in dispersed organizations, video conferencing are new forms of meetings.

Meetings can range in size from two people to thousands.

Meetings can be formal with agendas, moderators, chairpersons, and written rules of conduct. Meetings can also be informal, impromptu, and fluid.

Meetings serve a wide range of functions in an organization. Formal meetings may be just for the dissemination of organizational news, policies, or procedures. Formal meetings may also be information gathering, problem-solving, and task setting events. Formal meetings are frequently regular opportunities for teams to check the status and critical actions required to keep a project, business unit or whole organization on track.

Informal meetings provide opportunities for exchange of views on the state of the organization, queries for information, requests for comment, critique, new ideas, challenges to the existing beliefs about the organization, and so on.

In every case the culture of the organization is being displayed, exercised, and critiqued in meetings. Meetings display clearly what is valued and prized by the culture. The way in which people conduct themselves displays how the organization values people and the way in which people should interact. Meetings also are the key arena for the robust dialogue that keeps every organization faced towards the reality of its performance, its customers, the changing environment, and the competition. Meetings require candor and honesty to be effective.

This suggests that managers must pay close attention to how they personally perform in meetings, meetings of all types, and, perhaps, especially in the informal meetings.

This suggests further that effective managers understand how important it is to have meetings that are productive and carried out in a manner that reflects the most positive interactions between people.

Effective managers also see meetings as an opportunity to diagnose the health of business processes as well as the culture and an opportunity to change behavior and achieve better results.