MANAGEMENT MYTHS REVISITED
from PURSUIT OF PRIME by Dr. Ichak Adizes,
1996, Knowledge Exchange, Santa Monica
MANAGEMENT MYTH 1: Companies don‘t thrive under autocrats.
That is not always true. Companies in their Infancy, or in deep trouble as we have seen, require a strong arm to keep them on course. A participative management approach at this early stage may be inappropriate. Teamwork, by definition, calls for delegation of tasks. Delegation requires capability and sufficient experience to articulate what to do and what not to do. In Infancy it is too early for the founder to achieve this level of articulation.
The founders during the Infancy stage usually don’t yet know whether they will see the realization of their dreams or their nightmares. In the early stages, founders learn from their experience. For that reason, when someone challenges them, founders raise their voices and even get upset. They may well retort, “Just do what I tell you.”
Those people who too frequently pose challenges to their authority become irritations, and many founders try to get rid of such pests. Delegation without control is abdication, but you cannot control until you can systematize what you want and what you do not want.
It is too early to delegate in Infancy. But be aware: If you don’t delegate in Go-Go, you may face disaster. Autocratic, centralized decision making gets Go-Go companies into trouble.
Autocratic leadership is again desirable should a company find itself in Recrimination. That’s when it needs leadership that imparts a sense of certainty and security, galvanizes the company, and unites efforts to eliminate waste.
Infant companies cannot progress swiftly without directed leadership. What all infant companies need is more, more, more: more sales, more production, more new markets, more products, more services. Everyone in an infant company must be action oriented, with an unquenchable thirst for results. But results don’t come easily.
Leaders—the founders who are struggling to transform their visions into realities—need to control their experiments or they will lose interest and abandon their creations to die from neglect. They have to be the people who hire, train, motivate, and coach their sales teams, which they usually lead since founders know their products, markets, and customers better than anybody else. They must visit customers frequently and let their people know what they have to do to keep those customers happy.
They cannot delegate because they do not yet know how, and if they did know how, they would need better people than themselves. At this stage of their companies’ development they can’t afford people who are better than they are. They must make every major decision until the company stabilizes with repeat sales, positive cash flow, and predictable demand. That’s when they can articulate and systematize their companies’ experience. And, then, they should start delegating: first the producing functions, followed by administrative functions, and eventually the entrepreneurial functions.
When they delegate the entrepreneurial role, they are no longer delegating. They are decentralizing, and that should occur only when companies reach Prime.
Autocratic management does not mean being obnoxious and disrespectful. It means being strong, decisive, and fair.
Leaders of infant organizations have to learn how to persuade, order, explain, cajole, or command employees to get the job done. During Infancy, founders are like the wagon masters who led the pioneers across dangerous, uncharted territories to reach the West.
Committees, teams, and groups can take the place of founders only if they are so committed to one another that they are one, and they act like one. Like the suffering children of parents who bicker, companies languish when their leadership disintegrates. Team decisions and consensus building are better left to companies in the more advanced stages of the corporate lifecycle.
MANAGEMENT MYTH 2: Every meeting should have a strict agenda.
Some should not. If every meeting adhered to a strict agenda, how could participants explore the future of their companies, dream about new markets and products, and build common values?
At their best, meetings bring together employees from disparate functions to discuss common goals and share the information participants need to do their jobs well.
In their Go-Go stage, companies hold meetings that follow no set format. They can address any topic that strikes their founders’ interest. For the most part, these meetings are impromptu, taking place almost anywhere: in corporate corridors, at water fountains, on production floors, in the company lunchrooms over vending-machine coffee and doughnuts. Meeting subjects range across the entire spectrum of company affairs. Usually there is no single subject under discussion, and every participant has the authority to introduce new topics as long as the CEO finds it interesting.
As companies grow older, they have a tendency to formalize the structure of their meetings. In Prime, meetings take on lives of their own. They become the working ground of middle managers: They provide arena for resolving major issues through liaisons with peers and others who can help them.
Formal agendas, for more mature organizations, are de rigueur. Those agendas spell out not only what will be discussed, who will participate in the discussions, and how much time will be allotted to each topic, but also the anticipated results. Attendees conform to established dress codes. They take their places in accordance with the recognized pecking order.
Such oppressive atmospheres asphyxiate initiative. The meeting protocol (who says what, how he or she says it, and to whom it is dressed) snuffs out the possibility of give and take. Managers, too scared to depart from established procedure, toe the line. For them the above principle is a myth that needs debunking.
Meetings like those accomplish very little except the sharing of information, and they are usually boring. Even before the meetings convene, managers know what to expect. The cleverest managers carefully shape outcomes by conducting informal discussions beforehand with other managers. Anyone who dares depart from the agenda risks being tagged a troublemaker, a corporate pariah whom other managers studiously avoid. Form crushes function.
What, then, is the answer? Should organizations shun or require strict meeting agendas? It all depends. In Infancy there are usually no formal meetings. People see decisions being implemented before they even hear that there has been a decision. In Go-Go—stage companies, the decision-making process, dominated by the CEO, is extremely fluid and unpredictable, and there is scant accountability. Go-Go companies must have formal meetings with agendas just to counterbalance the ad-hoc attitude that permeates the company.
Meetings in companies that have left Prime grow increasingly structured and impotent. Those companies should set time aside for meetings with a general topic, no strict agenda, and no prepared overheads. Such meetings should supplement, not supplant the formal meetings.
A Prime company has both types of scheduled meetings: blue-sky and formal meetings, in the right balance.
MANAGEMENT MYTH 5: Marketing and sales should work hand in hand.
Well, yes, but the question is how. Marketing’s job is to create opportunities: to explore the possibilities of new products and services. Marketing defines niches competitors have not yet discovered or that have not yet been truly satisfied. By identifying distribution channels, advertising, and promotional opportunities, marketing expands customer receptivity and interest. Marketing uses brand management to enhance product-line profits.
The job of sales is to respond to opportunities. Its managers take marketing’s niche information and sell. Marketing plans; sales executes. Marketing, you might say, is the thinking part of the selling process, deciding what to sell at what price and through which distribution channels. Sales is producing. Sales carries out marketing’s plans and contributes information that indicates the effectiveness of those marketing plans. That feedback contributes to a continuously self-adjusting marketing strategy. Sales is a source of marketing information and the execution arm of marketing.
It is clear, then, that the two functions need to cooperate. But since marketing’s function is to locomote change, and sales’ function is to deliver that change, marketing and sales often clash. Their styles are incompatible.
The conflict is not evident at the beginning. Infant organizations have neither a sales nor a marketing orientation. These companies, simply struggling to survive, are in the order-taking business. Sales happen when orders arrive. Marketing is what the founders dreamed about when they started their companies. The conflict is not evident because, for all practical purposes, people ignore both functions in Infancy. They are busy making the product work and finding “who is on first.”
In Go-Go, the strong sales orientation is frequently called marketing, but the founder or CEO actually fulfills the marketing function. The company in Go-Go is opportunity driven: It chases every opportunity that looks promising whether or not it fits the so-called marketing strategy. Opportunities without a strategy are distractions, and companies in the Go-Go stage are riddled with distractions. Again, the conflict is not evident because the organization does what the CEO wants it to do, and the CEO monopolizes the marketing function.
In Adolescence, companies need to institutionalize and depersonalize the marketing function by moving it from the creative founder to a marketing department. That, of course, is easier said than done, particularly for those companies that enjoyed Go-Go success because of their founders’ marketing talents. The source of earlier successes becomes the cause of future failures.
The founders refuse to release their holds. They refuse to give up their discretionary powers. They refuse to give up making decisions as they please. They want their babies always to continue admiring them and emulating them. They do not want to lose the pleasure of having a dependent entity responsive to their dreams. They clutch their babies even though those babies are now 40 years old. They are like overly possessive mothers who keep their adult sons from dating women who might marry them and change their habits. Several of my clients come to mind. The struggle to transfer marketing authority from the founder to another person can take a lifetime, and I mean a lifetime: Everyone says, “It won’t happen until the old man (or the old lady) dies.”
If the transition occurs and the entrepreneurial roles (marketing, process or production engineering, finance, design or developmental engineering) are institutionalized, the company has moved to position itself in Prime. But will it stay there? Marketing and sales may bicker and fight. Marketing will campaign for a change, but sales will resist, saying, “You guys without the responsibility to execute speak with great authority. You don’t understand the repercussions of your recommendations.”
CEOs, especially if they come from the ranks of the bean counters, do not want to get in the middle of those arguments. Their response is to unite the two functions under one vice president with the title vice president, sales and marketing. Notice that the position is not called marketing and sales. This is no accident. As a consequence of uniting those two roles, it is usually the marketing function that is suppressed. The company stops making waves and the short-term pressures of sales dominate.
More than 30 years ago, the American economist Herbert Simon postulated that when confronted with the choice of doing a long-term or short-term task, people almost invariably postpone the long-term task. As a matter of fact, a continuous stream of short-term pressures can postpone the long-term assignment indefinitely. When marketing and sales report to the same vice president, I find that marketing degenerates. It becomes sales support. No longer making waves, marketing is used to helping sales ride the waves. That is when the company starts its departure from Prime.
Conclusion: After Adolescence make sure to have independent—but cooperative and communicative—sales and marketing vice presidents.