As a new manager, how do you get to grips with your company, which may or may not be perfectly formed strategically? As consultants often do, we thought of creating a checklist of things that an incoming leader should do. Then we thought again.
‘Ask all the dumb questions. Because you can.’
Doug, Invester, Former Chairman and CEO, The Coca-Cola Company
We decided it would be much better to rely on our management interviewees to provide a guide to what a new recruit to that august group should focus on. Our colleagues excelled themselves and consistently homed in on a few very high value tips for the newcomers in their midst. While many were rather skeptical about the good old ‘Manager’s First 100 Days’ representing the be-all-and-end-all of what the managers should be doing about strategy, they had some very sound alternatives.
Meet the people
The most telling advice was:
Walk the corridors and meet the front-line people
‘When you go into a new company as a manager, most people have no clue what they are getting into,’ says Dean Finch, Group Chief Executive of National Express. ‘Talk to as many people as you can to find out what is really going on — the front-line people, not just the managers.’
With the best will in the world, your immediate team will not be able to give you the real picture. Instead, you should ‘talk to people who have less of a vested interest – your employees as well as stakeholders, advisors, consultants, and so on,’ suggests Paul Manduca, Chairman of Prudential.
You need to talk to as many of the true front-line workers as possible and try radical ways of gaining insight into just how good your company is. For example, phone your company’s helplines to see how customer-centric your new organization really is.
Jerry Fowden, CEO of Cott Corporation, suggests: ‘Use your first two to three months to visit your factories, customers, debt and equity holders and even the canteen. You’ll never have the opportunity again and it’s important to understand what is going on across the whole business and to start to get people “on side”.
‘Until the new manager has formed his or her own view about what is going on, the inbuilt filters that senior management naturally apply to all of the information flowing up inside organizations need to be put to one side. You need to discover whether the current business model is working or not. Charles Sinclair, Chairman of Associated British Foods, agrees: ‘Most companies don’t tap the extraordinary amount of valuable information in their junior people. Especially those who deal with customers.’
Talk to the stakeholders
Understanding the perspective of stakeholders – and, if possible, gaining their trust at an early stage – will be a valuable asset. This will pay dividends later, when you have to take them along the strategic journey with you. ‘We invest a great deal of time in structured dialogue with our shareholders,’ says Alexis Duval, President of Tereos. ‘As a result, decisions don’t come as a surprise to them, and we’re better positioned to make quick decisions when necessary.’
Arno Mahlert, former CEO and CFO of maxingvest, suggests that you can use the information you gather to improve the business. ‘Talk to a lot of people: employees, customers, suppliers, even competitors or people who know your competitors. Then act on any identified weaknesses, any blind spots that affect the way your company sees the market.’
Work out the fundamental business model of the current business
Most businesses at their core are very simple. The number of things that you need to get right is relatively small. Understanding the two or three things that will make the difference between success and failure will short-circuit a number of steps in the strategy process. It will also give you an early steer as to whether the business is sustainable, whether the essential factor for success is low cost, superior customer service, intellectual property or something else. Whatever it is, you need to identify it and come to a view as to whether it is robust enough to endure.
‘Know the mechanics of your industry.’
Cees ‘t Hart, CEO of FrieslandCampina, is certain that this is a critical element in the armory of the new manager. ‘You have to understand the dominant logic of your company,’ he says. ‘You need to challenge that logic, to find out whether it is still valid and applicable.’ Dr Kurt-Ludwig Gutberlet, Chairman and CEO of Bosch and Siemens Home Appliances, concurs. ‘You need to know the mechanics of your industry. A surprising number of companies behave in ways that show that they don’t understand the fundamental logic of their industry.’
A Manager Needs To Think Radically About the Business
‘You always have to ask yourself whether conventional wisdom is right,’ says Graham Mckay, Chairman of SABMiller. ‘Often it is not!’
Even if you ultimately confirm that the current business model is great and no change is necessary, at least you will have tested it to destruction. At this point, you can be confident that it is robust.
The new manager needs to find the sustainable differentiation and then understand how far to take it,’ says Claus-Dietrich Lahrs, CEO of Hugo Boss. ‘Without this, you are lost.’
Assess your people rigorously
We have argued earlier that having the right people in the right roles will make or break your strategy. So draw your co-conspirators close and check that they truly believe and are not just paying lip-service. As a new manager you need to check the quality of your team beyond the conspirators, too. The sooner you make people-related changes, the better.
Penny Hughes, a serial Non-Executive Director, advises, ‘Review the team early, be single-minded about what you need, get it right.’ It’s a lot less painful this way, too. ‘Get to know the top 75 and assess them well,’ advises John Brock, Chairman and CEO of Coca-Cola Enterprises. ‘Intuitive judgement is fine. You will almost always be right.’
Where you need to, don’t be reluctant taking in new blood and giving them the backing they need. ‘New guys almost always change the team,’ says James Lawrence, Chairman of Rothschilds North America. ‘They need to get the right support and capabilities.’
Guilherme Loureiro, former Head of Corporate Strategy at Unilever, Brazil, advises ‘A manager who cannot – or does not wish to – align with strategy needs to leave.’
Trust your judgement
‘Our strategy definition process is extremely basic,’ says Jean-Franqois Palus, Deputy CEO of PPR. ‘We tend to rely on convictions, on key people’s gut feelings.’ First impressions matter. Your first impressions are probably the same as other people’s.
‘Don’t always wait for more information, analysis, insight,’ says Bert Meerstadt, CEO of NS Dutch Railways. ‘Sometimes a manager needs to follow his intuition and dare to intervene when he thinks it is appropriate.’
Act rapidly and decisively
If something needs fixing or someone needs to be moved (even out of the organization) there is no upside to delay. Problems generally get worse with time not better. And you are more likely to be forgiven early on in your tenure as manager than later. Move faster, cut deeper, reorganize decisively. Remember, pace can be a competitive weapon.
‘You need to accept you are making business judgements in a fast-moving world with incomplete information,’ says former Logica CEO Andy Green. ‘The key things to remember are the need for nimbleness and good timing. Timescales are collapsing.’
Search for the purpose of the business
This is not the same as trying to identify the ideal strategy or business model.
What I mean by ‘purpose’ is this: the secret (actually not so secret) statement about the company that will motivate people, filling them with passion about the company and their role in it. As Frits van Eerd, CEO of Jumbo Supermarkten, points out, ‘Building a business requires a lot of passion, a lot of pride, and a lot of fighting and hard work. I’ve been working non-stop for more than a decade. It’s exhausting — so you have to believe in what you’re doing.’
‘Find out what the company believes in,’ agrees John Walden, CEO of Argos. ‘Simplify the story and then let people write themselves into the script.’
Be clear that you understand the culture and how it works
Depending on your objectives, the culture of the business may or may not be ideal. But you will still have to manage around it, or through it. Whether your corporate culture is an asset or liability, it is what it is.’ A manager has to understand the culture because it is the lens through which the organization will view strategy,’ says Jim Muehlbauer, former CFO of Best Buy. Understanding is a crucial first base to reach before any change can happen.
Focus, focus, focus
Lack of focus can suck resources away from the primary aim of the strategy. The world is full of opportunities. There is no shortage of things to do. But getting distracted from your core strategy will ultimately prove confusing (for those trying to implement the strategy) and expensive (in the sense that diluting the resources devoted to strategy implementation can only make success less likely).
Dr Rolf Kunisch, board member and former CEO of Beiersdort, points out that la company shouldn’t try to focus on achieving more than three to five things simultaneously. Less is more. This rule applies to strategy development, too.’
The rallying cry of the successful manager is focus and simplicity. Rob Templeman, Chairman of Gala Coral, suggests that the successful manager must ‘galvanize the team around a few things, delivered well, at speed’. It’s a sentiment shared by Claus-Dietrich Lahrs, CEO of Hugo Boss. ‘Strategy becomes simpler when companies focus on their core competences and divest non-core activities,’ he says. ‘In this context, do not shy away from unpopular decisions.’ Murilo Ferreira, CEO of Vale, echoes this sentiment: Simplicity and focus are mandatory for developing and executing a winning strategy.’
In summary, we have isolated a number of tips for incoming managers for every type of business, in every type of market. Walk the corridors and meet the front-line people, in every level and in every area, and do it early on after taking over. Talk to the stakeholders and try to understand all the different perspectives surrounding your business. spend time working out the fundamental business model of the current business; even if you decide it needs changing, you need to know how it works now.
Think radically about the business and assess the people rigorously – take nothing as a given and remember that everything is changeable, because nothing is static in the market around you. Trust your judgement and act rapidly and decisively. Search for the true purpose of the business and be clear that you understand the culture and how it works. Lastly, to carry out strategic change within this business, which may have a fully formed culture and entrenched set of purpose, you need to focus, focus, focus!
It is easy to make these sorts of checklists when you are ensconced in the warmth of your office and the comfort of your padded chair. We do not underestimate the difficulties of following these tips when your business is trying to find its way in a fast and unpredictably changing world.
On the other hand, all journeys benefit from periods of reflection and we hope that new manager will have a few moments to review this short list to see whether the advice of their more experienced brethren can help accelerate their careers and deliver highly valued, wealth-creating companies.