Good and bad managers

Mar 04 2005 by Robert Heller Print This Article

Every manager should possess firm and well-informed opinions on the subject of management itself. Everybody has been unfortunate enough to work for a bad manager but hopefully also experienced a good one.

So what are the criteria in judging 'good' and 'bad' management?

The CEO cult has it that, against all evidence, that the fate of the entire organisation depends overwhelmingly on one man at the top who takes all the decisions and governs all strategic management. However, in reality an organisation's success or failure must depend on the strength of management at every level.

Turnarounds obviously provide a tough test of a manager's character and prowess, but the standards of comparison are by definition low. Also, the methods employed for turnarounds are essentially one-off: make sharp staff and business cut-backs and bring in a new chief financial officer. The much harder management tests come later when the turnaround boss has to stand up against the best of the competition rather than their failed predecessors.

At Nike, the turnaround man goes even further. The founder, Philip Knight, was responsible for the concentric management that took Nike soaring past Reebok but then hit trouble when the company's Third World labour practices resulted in highly adverse and damaging criticism.

However, he managed to identify the faults and acted decisively to resolve the problems. He managed to 'revamp management and brought in key outsiders to oversee finances and apparel lines' and also 'devote more energy to mundane details such as developing top-flight information systems, logistics, and supply-chain management'.

At the age of 66, Knight has recognised his years by appointing a new CEO back in November. However, the new man comes from a completely different background (Johnson's Wax) and at 57 is perhaps too near to both retiring and Knight. Also, Knight will remain in the capacity of chairman, maybe risking a power struggle.

Among the most instructive tests of a manager is the performance of their successor

Among the most instructive tests of a manager is the performance of their successor. However, most characteristics of good management are subjective. They might sound OK Ė like finding great successors Ė but greatness is only proved by results. But which results do you choose to use?

In general, goodness is judged by the sales figures, the profit and loss accounts and the investment returns. From one point of view this seems fair as the investor cares about financial results and above all the share price.

However, the price is far from perfect as a measure of financial worth as it is not within the direct control of any management. It is basically short term but the success of the company can only be judged over the long term. Worst of all, putting the financial cart before the horse can lead to short cuts. Fiddling the figures is a characteristic of the very worst managers.

The best managers make sure they have financial and other data calculated as accurately and honestly as possible, and they consider the financial outcomes, which take in their own options and bonuses, as a product of their achievements and not as achievements on their own.

In addition, they accept that management is fluid rather than fixed. A great deal of businesses are cyclical and every manager has to adapt and correct mistakes. The skill is to make the most of the upturns and limit the damage of the downturns.

Most importantly, great managers, unlike bad managers, have the attribute of objectivity. They consider corporate performance the top priority and put their own rewards second, therefore putting their personal performance ahead of their egos.

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About The Author

Robert Heller
Robert Heller

Robert Heller, who died aged 80 in August 2012, was Britain's most renowned and best-selling author on business management. Author of more than 50 books, he was the founding editor of Management Today and the Global Future Forum. About his latest title, The Fusion Manager, Sir John Harvey-Jones wrote: "The future lies with the thinking manager, and the thinking manager must read this book".