19th April 2018

The Role of Management

Times are changing and inevitably as we live in a time of ever quickening change some things get left behind. I think that the art of selling is something which is much rarer now than it was before, as is the art of conversation. Not all of this is regrettable and it is not all desirable either.

I have recently started to read some of Peter Drucker’s original writings. Look up Peter Drucker on Google or Wikipedia and you will find he was a management consultant who lived from 1909 to 2005 and has been described as “the founder of modern management”. If you are a student of business, management or humankind you are probably aware of Peter Drucker. To me one of the interesting things I am noticing about his writings is his strong assertions about the ‘Role of Management’. How we organise and run businesses has changed in the 50 or 60 years since he wrote this particular piece, but human nature hasn’t changed that much, although we can argue that expectations and the context have changed. What is still an abiding but perhaps forgotten fact is the role of management. He asserted the first function of management is economic performance stating that the ultimate test of management is business performance. That is still true.

“Management has to manage” he writes “And managing is not just passive, adaptive behaviour; it means taking action to make the desired results come to pass”. We don’t seem to talk about this much these days but that is still the fact and if an enterprise fails to perform we will replace the boss, not the workers.

One of the biggest challenges for the entrepreneur on his scaling up journey is that what got him started may well have been a technical skill set but the skill set that will get him to the next level and beyond is a managerial skill set. I will guarantee that there was probably no structured development of that skill set before. The entrepreneur that would scale needs to develop the necessary skills, quickly and well.

Very often, I find, we are unaware of the value that effective management can bring. I was very fortunate to be afforded a unique insight when many years ago I ran a successful business. The owners decided not to formalise my position as MD and to achieve my own ambitions I left and moved to another part of the country taking on a failing business so that I could become MD. Thanks to a great team we turned that business around and as a consequence, bizarrely, I was headhunted back to the original business I had left 2 years earlier. On returning as MD what I found astounded me. The same people, in the same location, with a much improved product and market had gone from a profitable, award winning, vibrant, fun, business to a broken loss making somewhat toxic shell of its former self. Within a year the rabble had become a team again and were back making money, riding high and having a blast. If ever I needed proof of the value of effective leadership and a cohesive team (and the two go hand in hand) this was it.

I often tell this story to remind people (and myself) of the importance and the value of effective leadership. The role of the leader is different to the role of the founder and for the business to scale a transition has to be made. As Jack Welch observed, before he was a manager it was all about what he could do. The minute he became a manager it was all about what he could enable his team to do. To scale up we all need to learn what we need to do to enable that to happen.