Uncluttered Management Thinking E-Book

Fredmund Malik

• Herausgeber: Campus Verlag
• Kategorie: Fachliteratur
• Sprache: Deutsch
• Veröffentlichungsjahr: 2011

Seitenzahl: 199

Beschreibung

Clear language is always also an instrument of clear thinking. By the same token, the clearest sign of wrong thinking - and thus, ultimately, wrong management - is language that lacks clarity. The use of carelessly defined terms can do a lot of damage; the wrong use of certain terms can lead to wrong, sometimes even risky management actions and wrong management decisions. Fredmund Malik points out the psychological, management, and economic errors managers tend to make, and explains how these errors can be avoided; for clear language is a key to right and good management. "Fredmund Malik is the leading expert in the field of management in Europe. He is the most important voice - in theory and practice of management." Peter Drucker "Malik demonstrates how, in extreme cases, the wrong use of fashionable terms can even lead to entrepreneurial disaster." Wirtschaft & Markt "Malik is listened to because management knowledge has never been more important. (…) Malik incessantly cautions against the money-mindedness at those corporations where ›stock speculators, boasters, bluffers, and sometimes even criminals‹ call the shots." Süddeutsche Zeitung

Leseprobe

Fredmund Malik

Uncluttered Management Thinking

46 Concepts for Masterful Management

Translated from German by Jutta Scherer, JS textworks (Munich, Germany)

www.campus.de

Outline

Clear language is always also an instrument of clear thinking. By the same token, the clearest sign of wrong thinking – and thus, ultimately, wrong management – is language that lacks clarity. The use of carelessly defined terms can do a lot of damage; the wrong use of certain terms can lead to wrong, sometimes even risky management actions and wrong management decisions.

Fredmund Malik points out the psychological, management, and economic errors managers tend to make, and explains how these errors can be avoided; for clear language is a key to right and good management.

»Fredmund Malik is the leading expert in the field of management in Europe. He is the most important voice – in theory and practice of management.« Peter Drucker

»Malik demonstrates how, in extreme cases, the wrong use of fashionable terms can even lead to entrepreneurial disaster.« Wirtschaft & Markt

»Malik is listened to because management knowledge has never been more important. (…) Malik incessantly cautions against the money-mindedness at those corporations where ›stock speculators, boasters, bluffers, and sometimes even criminals‹ call the shots.« Süddeutsche Zeitung

Information about the author

Prof. Dr. oec. habil. Fredmund Malik is widely known for his clear and precise language. As scientist, author, consultant, and management trainer he has provided guidance for executives of all levels, organizations, and industries for more than 30 years. Based in St. Gallen, Switzerland, Professor Malik is also an entrepreneurand the owner of Malik Management, with approximately 250 employees in St. Gallen, Zurich, Vienna, Berlin, London, Shanghai, and Toronto. His latest English book published by Campus is Management. The Essence of the Craft.

Imprint

The original edition was published in 2010 by Campus Verlag with the title Richtig denken – wirksam managen. Mit klarer Sprache besser führen. All rights reservedAll rights reserved. No part of this publication may be translated, reproduced, stored in aretrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior permission of Campus Verlag GmbH.Copyright © 2011 Campus Verlag GmbH, Frankfurt am Main All rights reserved.Cover design: Hißmann, Heilmann, HamburgTypesetting: Publikations Atelier, Dreieich

Konvertierung Koch, Neff & Volckmar GmbH,

KN digital – die digitale Verlagsauslieferung, Stuttgart

ISBN Print: 978-3-593-39365-0ISBN E-Book: 978-3-593-41143-9www.campus.de

Contents

Foreword

Psychological Errors

Charisma

Enthusiasm

Job Hopper

Talent

Potential

Making Mistakes

Challenge

Trust

Motivation

Praise

Performance Limits

Burnout and Stress

Identification

Risk Appetite

Fun

Management Errors

Management Style

Leadership

Images of Man

Staffing Decisions

Teamwork

Vision

Emotion

Focus

Managerial Compensation

Knowledge Management

Top Management Teams

Coaching

Innovation

Culture

Customer

Growth

Economic Errors

Shareholder

Stakeholder

Inflation and Deflation

U.S. Management Superiority

EBIT, EBITDA

Stock Options

U.S. Economic Miracle

Corporate Success

Value

Sustainability

Globalization

Profit

Interest Rate Cuts

Doing Business

Rationality

Notes

References

|7|Foreword

An IT specialist will do anything to keep his hard disk clear of viruses. Everyone knows how dangerous they are. But how to prevent mental “viruses” – dangerous ideas – from getting into people’s heads? That is at least as important as virus protection for computers: wrong concepts, theories, and ideas are the root causes of wrong management, and the words used in an organization play a crucial part.

The recent economic misdevelopments and excesses were largely due to a general confusion of speech and thinking. It is not some kind of hindsight know-it-all attitude that makes me adopt this critical position; rather, I have been advocating and publicizing this view since the early 1990s.

Without the confusion of language there would have been no such nonsense as the New Economy, which was supposed to arise from what was naïvely described as the miracles of informatization and digitalization (without any material value being added); nor would we have been haunted by the specter of shareholder value, which resulted in one of the gravest misallocations ever of economic resources. There would have been none of the outrageous balance-sheet tampering, nor would a wave of startups and IPOs have been confused with real innovation. How such a thing as “cash burn rate” could ever become a respected |8|term in the evaluation of companies is beyond me. It is a question that ought to be answered by mass psychologists1, in particular those specializing in stock market hysteria. Without all that language confusion, the mirage of the U.S. economy’s worldwide superiority – which was eagerly and uncritically disseminated by the media – would have been an outright impossibility. Last but not least, the global financial and economic crisis we are in has resulted from psychological and management errors.

Clear language, an instrument of clear thinking, would have created the differentiation and skepticism that are indispensable for aligning both the business world and society as a whole with reality.

What George Orwell could only sketch out roughly in 1984 has been carried to the extreme in neoliberal media society, during the decade that marked the transition into the third millennium. The result is a serious, perhaps tenacious “virus infection” of one of society’s most important organs: management. And even if that disease is cured some day, when a new generation of managers will have come of age, it will take many years until the harm it has done will be remedied and its effects will be overcome.

Clear Language as a Basis for Good Management

Anyone wishing to manage a company or any other institution correctly and effectively ought to pay special attention to the issue of language. Some terms are best avoided entirely; for others, their proper use should be clearly specified. How far this should be taken depends on the individual case. Some people may have good reasons to keep using certain “dangerous” |9|words, despite all reservations. They should, however, always be aware of the risks associated with those words – risks of misunderstandings and, more importantly, of wrong decisions.

For instance, the CEO of a leading bank had the courage to ban foreign words. That may be taking it a bit too far, but it isa brave move and helps enhance clarity, comprehensibility, and successful communication. What is more, it is an effective guard against bluffers and boasters. Such a ban does not represent an infringement of basic rights, such as the right to freedom of expression: any member of staff can and should express his opinions freely, of course – all that is required of him is that he do so using intelligible language.

In this book, I will deal with a series of words the use of which, in my view, is a bad habit and in some cases even dangerously misleading – such as “vision” and “leadership”. Some of them are terms for which a misguided usage has developed over time (e.g., “staffing decisions”) or an entirely wrong concept has emerged (“U.S. management superiority”). They are all words that have been used so often in recent years that they have become standard terms of management and their meanings have turned into widespread (and erroneous) beliefs.

In some cases, the words in question are the manifestation and result of temporary fashions. Management in general is strongly infiltrated by fads, more than any other field. As long as something is in fashion, it is usually asserted dogmatically and even with inquisitorial zeal, in particular by those who shape those fashions – often consulting firms for which they constitute the foundation of their business. However, quite a lot of the words discussed here also result from poor management training, in that people fail to recognize fashions for what they are. |10|Many managers have never had the opportunity to acquire sound expertise in corporate management. All they have is rather superficial knowledge, which, as we know, is often more dangerous than having no knowledge at all.

It is a clear sign of good management if counter-measures are taken against such developments. Achieving effective communication and real understanding in an organization is difficult enough as it is, one reason being the rather limited linguistic skills most managers have. If matters are made even worse by the use of wrong and misleading terms, good communication almost impossible.

The danger of the terms discussed here lies not only in this general difficulty of communication; what is even worse is that they cause errors, thus misguiding the thoughts and actions of managers and employees. They convey concepts of how to manage companies, how to deal with employees, and how to treat customers, which are detrimental to companies’ interests and sometimes even cause their demise.

The terms I rate as “dangerously misleading” serve many purposes. They are used to shape opinions, policies, and businesses, to pursue interests and to legitimize status. They are also used in an attempt to impress others.

Impressing others is the strategy of a certain type of intellectual and expert. Making an impression is the most important basis of their existence; indeed, it is the only one. They will therefore do anything to maintain semantic appearances – as pseudo-scientists, as éminences grises in their organizations, in staff functions and committees, as consultants, experts, therapists, and gurus. Their preferred tools are clouds of language, pompous terms and fancy catchwords.

|11|Good managers do not let themselves be impressed, at least not permanently.

More Than Just Linguistic Subtleties

I am not talking about linguistic subtleties here or about matters of style or taste, but about the right way of thinking and about effective communication. These “dangerous” words are a source of misunderstandings. They hamper effective communication and give rise to misguided expectations, and as a result, they cause employees to act the wrong way. In extreme cases they even make an organization unmanageable.

What is at stake here is clarity, comprehensibility, and professional precision. Clear and accurate terminology is one of the hallmarks of a highly developed science or discipline. Mastery of its terms is an indispensable ingredient to professionalism and competence.

For instance, no one would be taken seriously in engineering or natural sciences if he did not know how to distinguish velocity from acceleration. A lawyer unable to tell the difference between ownership and possession, or between renting and leasing, would not only be considered incompetent but even a danger to potential clients. He could not be entrusted with a property law case. When it comes to fine but significant distinctions, clarity and precision are all the more important.

Much the same happens in management, not as an exception but regularly. We are far from having achieved the accuracy that has long become natural in other disciplines. In almost every discussion with managers I cannot help but realize that, as professional |12|as they may be in their respective fields, they lack clear positions in management terminology.

Mere definitions and etymological clarifications are not what I have in mind. Each of the words discussed in this book represents a wrong theory, a widespread and influential yet misleading management concept. My chief concern is to put them right, thus providing a basis for better and more responsible management.

|13|PsychologicalErrors

|15|Charisma

We need charismatic leaders! is a demand which has been made for some time now, and with increasing urgency.

Unquestionably, it is not enough for managers to be able to read and write and be human beings of average decency. They have higher requirements to meet. But does that warrant going to the other extreme? Somehow the idea has sprung up thata manager, in particular one at the top, ought to be a mixture of Albert Einstein, Alexander the Great and Bob Hope – a universal genius … a one-man band of business.

People have learnt to put up with a great deal of nonsense on the subject of management. Now charisma, on top of everything else? That makes the nonsense dangerous. After all the experiences of the past century, should we not be a little more cautious and, perhaps, think before we speak? Was not the 20th century the epoch of charismatic leaders? Do the names Hitler, Stalin, and Mao Tse Tung ring a bell?

Significantly, it is always the English word “leader” that we use in German-speaking regions. No one dares call the thing by its German name: Führer. In some cases it may be better, due to translation issues, to stick with the English term – but for “leader” there is a very simple, accurate and crystal-clear German translation. However, it is a term that may get in the way of |16|fantasizing and romanticizing about charisma. A brief glance at the dictionary or at Max Weber’s sociological work would also help avoid the worst of the nonsense.2

In our much-invoked knowledge society, real knowledge seems to be the commodity least in demand when it comes to the subject of management.

Historically, charismatic leaders have almost always produced catastrophes – in every field. True leaders do not need charisma. They lead by self-discipline and example, not by grand slogans and shouts of hooray. Their capital is not charisma but trust.

I am not denying that charisma has an effect on people. That, however, is the very reason why the crucial point is not whether we are led but to where. The effect that leaders have is important but it has to be controlled by responsibility and by the kind of goals that are set.

Charismatic leaders are dangerous because they do not stick to the rules. They are unpredictable, they consider themselves the masters of the universe, they pursue utopian ideas. They are convinced they are right in everything they do, they become inflexible, and this is precisely why they soon come to follow the wrong course. They are not leaders but misleaders. A theory of leadership that has no place for this distinction is worthless.

Some highly effective leaders of the 20th century had no charisma at all, among them Dwight D.  Eisenhower, George C. Marshall, and Harry Truman in America or Konrad Adenauer and Kurt Schumacher in Germany. And in the 19th century there was hardly anyone with less charisma than Florence Nightingale, Abraham Lincoln, or Henry Dunant. All these people are prime candidates for the accolade of true leadership, though in very different fields.

|17|Charisma – and this is something that can easily be demonstrated – is neither necessary nor desirable for true leadership or right management. Of course, it cannot be ruled out that charismatic personalities may occasionally be good leaders or managers as well but, because of their effect on people, they are always exposed to major hazards and great temptations. And they are always a risk.

It may be true that, as is so often claimed, the 21st century needs leaders. However, after the disasters of the 20th century it would be advisable not to tolerate a concept of leadership that is so blind to history.

|18|Enthusiasm

A leader must be able enthuse people.

That, or something to the effect, is what magazines and books are full of; it is a popular opinion and something that comes up in virtually every discussion. Statements of this kind are standard features in the tools applied by headhunters and assessment specialists – selection and evaluation processes, as well as the expert opinions based on them – and they are standard criteria in competence tests.

People assume a positive relationship between enthusiasm and performance: the more enthusiastic someone is abouta given task, or so the argument goes, the better he will perform. It certainly seems perfectly plausible – but where is the proof?

There is none. Apparently nobody has noticed so far: there is not a single study that has even brought up the issue, let alone provided evidence of that relationship.

Possible studies would fail due to the simple fact that enthusiasm can be neither measured nor operationalized, nor can enthusiasm be created for the purposes of an experiment. It is true that the proposition about enthusiasm sounds “somehow” convincing, but as a matter of fact it is sheer superstition. There are two opposing propositions I would like to make:

|19|The more enthusiastic someone is about something, the less he typically knows about the subject and the more questionable are therefore his abilities and performance.

Real performance – and in particular peak performance – does not require any enthusiasm; on the contrary: enthusiasm tends to be a hindrance. What is needed are expertise and experience.

These two propositions may sound rather daring at first, but there is plenty of evidence to support them. We all know people who ski or play tennis with great enthusiasm, albeit very poorly. And most of us know others who master those sports to perfection – but they do so with little enthusiasm. They may enjoy their sports, but usually only as long as they pursue them as a hobby. Anyone who has made a profession of them – say, as a skiing instructor or a tennis pro – is driven much more by a sense of duty and professionalism, perhaps also by the need to meet contractual obligations, by ambition, or by greed, than by enthusiasm. Even the most exciting occupation cannot evoke enough enthusiasm to last a lifetime. No one can be enthusiastic permantently; enthusiasm fades over time. It is not something that craftsmen, laborers, teachers, waiters, nurses, doctors, or managers in business need to do their jobs – nor is it of any use to them.

If you look for peak performance, consider sports, in particular pro sports and the challenges associated with it. Before a difficult competition, an experienced athlete will be anything but enthusiastic; he or she would not even know how enthusiasm could be helpful.

What does help is the certainty to have trained adequately, to master the discipline, to be in peak form. I have experienced this |20|myself innumerable times in mountaineering, and all the trip reports ever written about difficult to extreme ascents only prove my point. Only for easy ascents is there such a thing as enthusiasm. And even if there is some enthusiasm when preparing for or starting an expedition, it never lasts long enough to get anyone to the summit. Different things are needed for that. There may be enthusiasm once the summit has been reached, but the performance has already been delivered then. Also, enthusiasm will only materialize if the climbers are not faced with a long and difficult descent, as in that case they will need to deliver even more performance – quite frequently of the more difficult kind. No, enthusiasm is not a category preceding or enabling performance. Enthusiasm comes afterwards.

|21|Job Hopper

During the boom years, people were virtually taught and led to bluff – in fact, even forced to. All that prattle about ego marketing, the “war for talent”, the recruiting events at certain firms, the fashion of self-publicizing – all these things in combination more or less forced those not normally inclined towards such behavior to play along.

It usually becomes obvious at a young age who tends to rely on bluff and appearances, and who aims for substantial values and true performance. Clearly more than half of my students and our younger training attendants – both within and outside our firm – were and are disgusted with having to grandstand in order to get anywhere. They even perceive it to be a form of prostitution. This nonsense has created a stage for the wrong people – the “lightest-weight” experts – and has won them the attention of a certain kind of media.

One of the most important and also most difficult tasks ina company, no matter what its size, is selecting the right people for vacant positions. How to separate the wheat from the chaff, the bluffers from the true performers?

These days it is more critical than ever to know what to look for.

|22|Positions or Achievements

In business and politics alike, a certain type of manager has often ascended to senior and top positions. This type is extraordinarily skillful in concealing his true incompetence; he masters rituals and small talk; he knows whom and how to flatter; he manages to get the ear of those who matter.

Today’s society – or rather, widespread errors in staffing decisions – often make it easy for him to gain influence, as people will pay attention to positions rather than achievements

I want to call particular attention to this type of manager. We encounter him quite often, as a result of misguided staffing policies and misunderstood concepts of career-making: It is the job hopper.

Job hoppers are people who collect positions – transitory positions – rather than achievements. Their CVs are highly impressive at first glance: they contain lengthy lists of previously held positions, often with important-looking titles like “Executive Assistant”, ”Coordinator”, “Representative of”, “Member of”, or “Contributor to”. To European ears, all those titles sound particularly impressive in English. If someone’s business card says “Chief Group Coordinator”, no one will dare ask that person what he actually does for a living.

At closer analysis, there are two things you will not usually find in a CV: the person’s responsibility and achievements – specifically, his being held responsible for what he has achieved (or failed to achieve). That, however, is the only thing that really matters in business.

More often than not, people with long lists of positions are not effective managers but careerists. In their resumés you will |23|find plenty of things, in their life only one: an unerring instinct for when they had better move on. And they invariably choose to leave just a few months before their lack of achievements – or, in some cases, the mess they are going to leave behind – starts to show.

Job Rotation

In many large corporations, the disregard of people’s achievements is actively promoted: through poorly understood job rotation.

Its purpose, of course, is a perfectly correct one: to ensurea maximum of practical training and experience for promising employees. There is nothing to be said against the principle as such – only it needs to be applied correctly. Job rotation can only unfold its positive effects if tangible results are achieved at each station.

The fact that there is such a thing as an excessive amount of time spent in one position is generally accepted. The opposite seems less clear: an increasing number of executives – in particular the younger ones – hold their positions for much too shorta time to achieve results. They often rotate on to the next job before the work is done and results materialize.

Job rotation is good and important for people in their twenties, and it is needed again for those reaching forty-plus. The critical age group, however, are those between thirty and forty. These people must be given an opportunity to achieve what is most important in life – the very source of confidence, self-assuredness, self-respect, lifelong self-motivation, and, above all, |24|credibility and natural authority. These spring from one thing alone: visible, convincing results. Not from positions.

There are no absolute numbers for the optimal tenure ina position, and thus for job hopping – but there is a straightforward criterion: A person needs to stay in a position long enough to achieve results that are visible and convincing to others. I am not denying that this can sometimes be done in a year and a half or two, but there are not very many serious tasks for which tangible results – results that truly matter – can be achieved within 24 months. Viewed realistically, it will take longer in most cases.

Anyone who has held more than three or four positions between the ages of thirty and forty will have to be prepared to answer a few questions. And he will be well-advised to think carefully about the answers, in particular when talking to a capable personnel manager.