Vol. 11 Issue 5
Google Reveals the Secret of Management
People Management - A Key to Effectiveness Growth
In my last issue, I tendered the proposition that we redefine the concept “If you’re not growing, you’re dying”. My contention is that in a new economy where sales growth is hard to attain, defining “growth” as revenue growth will leave a lot of business owners believing they are in the “dying” category. Instead, I proposed that we should define growth as growing effectiveness, capability, and profitability.
So it was with great interest that I read in the New York Times of March 13 an article concerning Google’s internal research on what qualities made the best managers and led to the best management results (i.e. employees being productive, innovative, and satisfied). After a fairly substantial mining of their employee data base, they came up with some startling conclusions. What the employees really wanted were managers who would listen to them, work with them one-on-one, and help them work through problems themselves rather than dictate answers. What they did not want were managers who were technical savants – those who had shown themselves capable of providing technical problem solving and innovation – but were lacking in people skills.
According to the author, this came as quite a surprise to Google management. Allegedly the company’s policy had been to focus on technical capability as the prime requisite for management advancement and take a fairly passive attitude toward the skills associated with managing people.
Why Does Business Leadership Have So Little Interest In People Management?
I don’t have any direct information to confirm or deny the article’s assertion. But my own experience with the privately owned business owner space is that people management is just about the last part of a business where owners are willing to invest. People management is one of the areas where owners have the least amount of self-satisfaction. I have heard on many an occasion an owner tell me they would love their business if they just didn’t have to deal with their employees!
What a statement. Think about it. The primary asset of their business, their people, is the asset they least like to deal with! Why is this?
Entrepreneurial Capability and Managerial Capability – Not the Same Thing
My observation is that this is because the human traits that are found in successful entrepreneurs are not usually those found in great people managers. With each of our clients, we poll the owners on the types of roles they enjoy and don’t enjoy doing at work. We correlate those answers with what we find are strengths and weaknesses in their businesses. One of the strongest correlations is in the area of management. Most owners like the higher level roles, big picture roles. They are less fond of roles that require more hands-on work with people. Evaluating the business, on-the-other-hand, we find most are weak in personnel management, accountability, understanding of key performance indicators, etc. Coincidence? I don’t think so. What you don’t like, you don’t work on.
The person who can build a business from scratch has a certain set of behavioral characteristics. The willingness to take on risk and to work hard enough to build something from nothing puts him or her in a different category than those of an employee. There are reasons why most people will never leave employment and run their own businesses. So, it should be no surprise that there is this discontinuity between owners and employees or between owners and professional managers who typically are not entrepreneurs but come from the ranks of employees.
But Will the Owner Be Willing to Change and Even if They Want To Can They Change?
That is the million dollar question. My experience is it is unpredictable. For the most part, I would say “no – most owners will not or cannot change”. But it is not a hundred percent conclusion by any means.
So what is an owner to do? Here are some things that owners can do that will improve their situations.
- Self-awareness is the first step. An owner must first recognize if he or she has a weakness in the area of people management.
- If yes, he or she has to accept this weakness…without personal recrimination or blame. We all have strengths and we all have weaknesses.
- Third, the owner must decide if he or she wants to try to change and develop greater personal capability in the area of people management. This is not a light question. Addressing personal change at our core level is never easy. Even with the best of intentions and greatest of effort, it will take time before one sees results. I advise owners to balance any attempt at change against the time horizon they have for the goals they want to achieve. If the timeframe is too short, I advise against attempting a personal change strategy.
- Finally adjust business strategy and tactics to acknowledge either the change that will be attempted or the decision to not change.
Case History – The Business Services Company Owner and His National Expansion
My client was a business services company with a footprint in a number of markets. The home market was the strongest part of the business with over 50% of company revenues. The remaining three cities accounted for the rest. When we met the owner, he complained of the amount of time and money he had sunk into his expansion efforts and the relative lack of return on investment he had received. Doing our assessment, I found the owner had a distinct dislike of management. I found also that he had had a lot of turnover in his branch operations and there was not much in the way of systems or accountability.
The Truth Uncovered
I suggested to the owner that we go to a second level of evaluation on the owner himself. This consisted of the owner undergoing a battery of behavioral profiles. When the owner went over the profiles, he had an “ah-hah” moment. One of the findings pointed out that his behavior tended toward impatience with those who “didn’t get it” and that behavior trait very likely alienated people who worked for him. The owner immediately recognized this as a core problem with his retention of people. I discussed with the owner the types of training that he could do to strengthen this weakness.
Simultaneously, I was doing personal business transition strategy with the owner. The owner had a seven-year time horizon for substantially reducing his time involvement in the business. We discussed what it would take for him to undertake the training to change himself, the amount of time necessary to implement that training, realistic timeframes for seeing results, and the time necessary to get a return on investment from all the above. My estimate was about a year of training if he truly committed himself, at least two years of implementing the training including recruiting new personnel, followed by approximately a four to five year payback period. This assumed everything worked without problems – in my opinion not a likely scenario.
Pragmatic and Heartfelt Decisions
Ultimately the owner decided the risk was too high. Rather, we revised his business model away from a branch strategy and focused on leveraging certain market niches that could be exploited nationally primarily by himself without a branch system. This owner decided that the change was too difficult and too risky compared to the timeframe he had for pulling out of his business. He was very content with his decision and his new direction. He has executed it vigorously.
Everything to Gain and Little to Lose
Maybe you don’t want to look in the mirror. Maybe you don’t want to analyze what you, the owner, the boss, could do to change. But that’s just your ego talking. In fact, there is little to lose and a lot to gain. If people management is a weakness, strategies can be devised to optimize your return on investment regardless of the choice to address it or not address it…as long as you know it.
The Podolny Group Can Help You!
The Podolny Group has been helping owners to confront difficult decisions such as the people management question for 15 years. Our methods help you to make balanced decisions and build plans that allow you to profit regardless of the direction you chose.
Listen to Michael Podolny discuss what has changed about selling businesses and what you can do about it!