Read an Excerpt
Introduction
‘‘If your actions inspire others to dream more, learn more, do
more, and become more, then you are a leader.’’
—JOHN QUINCY ADAMS
Welcome to the new world of business! We have gone
through a watershed in business activities and operations
since 2008, and things will never be the same again. What you
are dealing with today is the ‘‘new normal.’’ The good old
days are gone forever.
Because of shrinking markets, increased competition, demanding
customers, and a never-ending shortage of highly
qualified, productive people, you will have to do more with
less, and get better results from limited resources, more than
ever before.
One of the interesting outcomes of these challenging economic
times is that companies are producing more with
fewer resources. They have laid off millions of people and
downsized in almost every area. But the level of productivity,
performance, and output per person has actually gone up.
Companies are maintaining or increasing their levels of productivity
and quality with fewer people, but with people who
are better selected, better organized, and better managed.
This must be your goal as well.
As a manager at any level, you are essentially the operator
of your own personal business unit. You have revenues and
expenses, inputs and outputs, production requirements and
measures of performance. Your profit-and-loss statement reflects
your ability to combine people and resources to get
results—especially financial results—that are in excess, and,
ideally, greatly in excess, of their total costs.
Increasing Your ROE
The measure of business success is largely determined by how
well the managers of the business achieve a high and consistent
return on equity (ROE). The purpose of strategy, planning,
tactics, and operations is to organize and reorganize the
people and assets of the business in such a way that this return
on equity, which is the return on the actual capital that
the owners have invested in the business, is the very highest
possible in any market, and especially in comparison with
competitors in the same business or industry.
As a manager, your job is to achieve the highest ROE as
well. Only ROE refers to the ‘‘return on energy’’ of the people
who report to you. Your central focus should be to achieve
the highest possible return on human capital—the physical,
emotional, and mental effort—that your people invest, or are
capable of investing, in achieving the results for which you
are responsible.
According to Robert Half International, the average person
works at about 50 percent of capacity. Because of unclear
job assignments, lack of priorities, poor management and direction,
and lack of feedback, the average employee wastes
50 percent or more of his time in activities that have nothing
to do with the job.
This wasted time is consumed in idle chitchat with coworkers,
extended lunches and coffee breaks, employees
coming in late and leaving early, surfing the Internet, and engaging
in personal business and other time-filling activities
that represent virtually no return to the company on the
amount of money invested in paying people’s salaries, wages,
and benefits.
But, as Napoleon said, ‘‘There are no bad soldiers under
a good general.’’ A good manager with a clear vision can
quickly organize a group of average performers into a peak
performance team that is capable of achieving tremendous
results for the company. You just need to learn how to do it.
The good news is that all the answers have already been
found and are readily available. As the result of decades of
research and millions of hours invested in personal and organizational
performance, we now know exactly what you need
to do, and to stop doing, to get the very best out of your people.
Since 65 to 85 percent of the cost of operating a business
(aside from cost of goods sold) is consumed in salaries and
wages, your ability to tap into the unused 50 percent of this
investment, owing to employees working at half speed, and
channel the human energies of your staff into higher levels
of productivity and performance, enables you to make a real
difference in your position, whatever it is.
Learning What You Need to Learn
Another thing we know is that every excellent manager today
was once a poor manager. Everyone starts at the bottom with
no managerial skills at all, no matter what a person’s title. My
personal experience is a good example. I remember when I
was first promoted from a top salesman to a sales management
position with more than thirty salespeople under me. I
was convinced that this was a great opportunity for me to
demonstrate my leadership abilities.
Having no management experience, I immediately began
giving orders, telling people to do certain things and to stop
doing other things. I lectured to both individuals and groups
to demonstrate my superior knowledge and competence in
our business. I criticized people for mistakes or lack of productivity
and threatened to fire people who didn’t smarten
up and fly right.
I ignored the sullen looks and brooding faces, dismissed
the silence that greeted me whenever I walked into the room.
I was oblivious to the small groups of salespeople who were
joining together and complaining among themselves about
my behavior and the way I was treating them.
A week after I was promoted into this management position,
I arrived at the office one morning to find it empty.
Everyone was gone. They had cleared out as if there had been
a bomb scare. The only person left was the secretary, who
told me that the top salesman in the company, a man who
was very popular and influential among the other salespeople,
had quietly organized the group and then made an
offer to a competitor to bring the entire sales team over, along
with their customers, to sell a similar product for the rival
firm. Because of the way I had been treating them, and some
peer pressure thrown in, the whole group walked out.
Taking Stock
My reaction was shock and disbelief. I knew that when my
boss heard about it, I would be fired and put back out on the
street, exactly where I had started some years before.
Not knowing what to do, I called on a wiser, older businessman,
told him what had happened, and asked for his advice.
Because he had been through a similar situation early in
his career, he told me exactly what had happened, the mistakes
I had made, and what I needed to do immediately to
turn the situation around.
First, I had to be willing to accept that I had personally
made a major mistake, and that I was responsible for rectifying
it. The next key to solving this problem was the top salesman
who had spearheaded the massive defection. If I could
get him to come back, before the group had settled into the
rival company, I could turn the situation around.
Making Up
His name was Phillip. I called him right away and arranged a
meeting. He showed up with three other top salespeople, like
a mafia sit-down, and asked me what I wanted. I immediately
apologized for my behavior, promised never to treat the
salespeople poorly again, and asked him what it would take
to get him to come back. After some private conversation
with his consiglieres, he told me what I would have to do.
His demands were simple. I would appoint him assistant
sales manager and work through him as a liaison to the entire
sales force. I would henceforth treat each person with respect,
and if I had problems, talk with him before criticizing
or complaining in public. I agreed, and the next day the entire
sales team reappeared at the office, ready to work.
From that learning experience, I went on to build sales
forces in six countries, recruiting, training, staffing, then
appointing managers and helping them to manage their operations
successfully. Each of the sales teams was soon producing
excellent results for the company. I had learned a
valuable lesson and I never forgot it.
