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Manager Redefined: The Competitive Advantage in the Middle of Your Organization
By Thomas Davenport and Stephen HardingPublished by Jossey-Bass, division of Wiley
October 2010
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.towerswatson.com 2
Manager Redefined: The Competitive Advantage in the Middle of Your Organization
Management and leadership have been with us since humans invented work. For most of the last two decades, however, the manager position has been under direct assault. It’s become a ragged conglomeration of pieces and parts, designed to do too many things and engineered to do none of them well. People both higher and lower in the organizational hierarchy question its value, resent the authority it confers, and criticize the competence of the people who do it.
In Manager Redefined, Tom Davenport and Stephen Harding look at the picture differently. They view supervisors and managers as centers of insight and influence, underappreciated in many organizations, but endowed nevertheless with the potential to make dramatic contributions to enterprise success. The authors challenge readers to consider the power embedded in their managers’ accumulated knowledge and experience. Building and unleashing that power is the authors’ aim in Manager Redefined.
Book jacket copy:
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About the Authors
Thomas O. Davenport
Tom is a senior practitioner in Towers Watson’s Talent Management and Organizational Alignment practice, providing consulting services on human capital strategy, employee and organization research and leadership strategy. In addition to Manager Redefined, Davenport is the author of Human Capital: What It Is and Why People Invest It (Jossey-Bass Division of Wiley,1999). Tom also leads the development of Towers Watson’s methodologies for improving the effectiveness of supervisors and line managers. He earned a B.A., magna cum laude, Phi Beta Kappa, from the University of California, Los Angeles, an M.B.A. from the Haas School of Business at the University of California, Berkeley, as well as a master’s degree in journalism from the University of California, Berkeley.
Stephen D. Harding
Stephen is a senior practitioner in Towers Watson’s Employee Surveys practice, with more than 20 years of experience managing organizational and employee research projects internationally. An experienced organizational psychologist, having spent the first decade of his postdoctoral career as a lecturer in psychology at several U.K. universities, Harding is also a frequent presenter at conferences on employee engagement, employer branding, organizations coping with change, and organizational values. In addition to Manager Redefined, some of his recent publications include Employee Commitment in Europe: Characteristics, Causes and Consequences, and Contrasting Values in Western Europe (Macmillan). Harding has a Ph.D. from the University of Sussex and a B.A. (Hons) from the University of Swansea. Stephen is also a fluent speaker of French and Italian.
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.towerswatson.com 4
Manager Redefined:The Competitive Advantage in the Middle of Your Organization
By Tom Davenport and Stephen Harding
“We view supervisors and managers as a center of power and influence.Unleashing that power is our aim with this book.”
Makes the case for the strategic importance of supervisors and managers Incorporates research findings from the Towers Watson Global Workforce
Study, 2010 Features case studies from Best Buy, Intel, Intuit, SAS and Southwest Airlines Presents a manager performance model that depicts how managers contribute
to sustainable competitive advantage
Published by Jossey-Bass, division of WileyBooks available for order at amazon.com and barnesandnoble.com
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.towerswatson.com 5
Chapter 1 – Do Managers Matter? Chapter 2 – Why Managers Have a Tough Job Chapter 3 – A New Model of Manager Performance Chapter 4 – Constructing the Manager Role Chapter 5 – Executing Tasks Chapter 6 – Developing People Chapter 7 – Delivering the Deal Chapter 7 – Energizing Change Chapter 9 – Authenticity and Trust Chapter 10 – Fitting the Pieces Together
Published by Jossey-Bass, division of WileyBooks available for order at amazon.com and barnesandnoble.com
Manager Redefined:The Competitive Advantage in the Middle of Your Organization
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.towerswatson.com 6
Manager Redefined:The Competitive Advantage in the Middle of Your Organization
Praise for Manager Redefined “Davenport and Harding bring a wealth of data and field experience to an often undervalued but
pivotal role, the middle manager. They make a convincing case for the untapped potential that lies within that role.”
— Dr. John W. Boudreau, Professor of Management, Marshall School of Business; Research Director, Center for Effective Organizations, USC
“In a world of constant change, this book will help you make sense of what’s important and tackle the challenges of being a manager in impossible times, with experience, wisdom, and research that will redefine your ability to lead. Buy it. Read it. Then do it!”
— Chester Elton, New York Times best-selling author of The Carrot Principle
“The authors provide a blueprint for resolving one of the most important and often difficult aspects of management motivating performance. Combining research on how companies operate with recent findings in psychology, they redefine managers as coaches who build autonomy and self-efficacy among team members while maintaining accountability for company goals.”
— Dr. Paul J. Zak, Professor of Economics and Director of the Center for Neuroeconomics Studies,Claremont Graduate University
“This is a must-read for anyone interested in understanding the critical role of talent in organizations. The authors challenge organizations to rethink their perspectives and consider how high-performing managers can become a tangible source of competitive advantage.”
— Alan Miller, Chairman and CEO of Universal Health Services
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.towerswatson.com 7
The recession has taken its toll on companies and employees alikeBut the effects play out differently…
Companies are… Tightly managing labor costs Conservative about staffing up (the
“jobless recovery”) Seeking a more flexible and scalable
workforce (offshoring, contractors, part-time workers)
Driving for productivity gains
Employees are… Thankful to have a job Disgruntled from pay decreases, or
no/smaller bonus and furloughs Less apt to have promotion
opportunities Survivors
Source: Towers Watson Global Workforce Study, 2010
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…and become two separate themes
Company theme: “Contingency”
“You have a job here…as long as customer demand stays strong, we can afford to keep you and
you perform well.”
(And even then…)
Employee theme: “Security”
“I’m glad to have this job even if it doesn’t meet all my expectations,
and I’m going to do everything I can to hold onto it, but I am not happy.”
(For now…)
Source: Towers Watson Global Workforce Study, 2010
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.towerswatson.com 9
…with managers caught in the middle
Company theme: “Contingency”
“You have a job here…as long as customer
demand stays strong, we can afford to keep you and you perform well.”
(And even then…)
Employee theme: “Security”
“I’m glad to have this job even if it doesn’t meet all my expectations, and I’m going to do everything I can to hold onto it, but
I am not happy.”
(For now…)
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Who wants to be a manager?
Do you want to be a manager?
Source: “Managers of Tomorrow: Setting a New Standard.” 2009 World of Work Topic Report, Randstad 2009. Study of 2,199 employees and 833 U.S. managers conducted in March and April 2009.
% among employees
49%51%
YesNo
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Why don’t people want the job?
Among employees who agree or strongly agree that they don’t want to be a manager
Source: “Managers of Tomorrow: Setting a New Standard.” 2009 World of Work Topic Report, Randstad 2009. Study of 2,199 employees and 833 U.S. managers conducted in March and April 2009.
82%
74%
63% 63%
Increased level ofstress
Handling disgruntledemployees
Increased paperwork Having to terminateor lay off employees
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Employees are generally skepticalabout the performance of their immediate managers
My immediate manager:Percent favorable —
global
Has enough time to handle the people aspects of the job 46%
Provides clear goals for the work of the team 55%
Helps remove obstacles to doing my job well 51%
Explains how our work supports execution of team goals 54%
Provides me with opportunities to develop my skills 50%
Helps me with career planning and decisions 39%
Makes fair decisions about how my performance links to pay decisions 44%
Is a trusted source of information about what is going on in the organization 52%
Acts with honesty and fairness 54%
Source: Towers Watson Global Workforce Study, 2010
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Effective managers get much higher scores
Source: Towers Watson Global Workforce Study, 2010
My immediate manager:
Percent who agree with survey item and who also:
Agree that manager is
effective
Disagree that manager is
effective
Has enough time to handle the people aspects of the job 66% 15%
Provides clear goals for the work of the team 78% 18%
Helps remove obstacles to doing my job well 74% 12%
Explains how our work supports execution of team goals 75% 16%
Provides me with opportunities to develop my skills 72% 17%
Helps me with career planning and decisions 58% 10%
Makes fair decisions about how my performance links to pay decisions 66% 11%
Is a trusted source of information about what is going on in the organization 76% 14%
Acts with honesty and fairness 80% 13%
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High potentials have more frequent managercontact than others, and rate their managers higher
Frequency of contactHigh
potentials OthersGlobal overall
Once a day/several times a day 75% 65% 69%
About once every few days/once a week 20% 23% 22%
About once every two weeks/once a month or less often 5% 11% 9%
Overall, my manager is effective 70% 54% 59%
Source: Towers Watson Global Workforce Study, 2010
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The paradox: For the employee population overall, more contactwith managers makes people feel more comfortable working with…
Source: Towers Watson Global Workforce Study, 2010
Percent who agree with survey item and who also:
Frequency of contact
Agree that manager is
effective
Disagree that manager is
effective
Once a day/several times a day 75% 62%
About once every few days/once a week 20% 24%
About once every two weeks/once a month or less often 5% 14%
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.towerswatson.com 16
…less manager contact
Source: Towers Watson Global Workforce Study, 2010
Percent who agree with survey item and who also:
Frequency of contact
Agree that manager is
effective
Disagree that manager is
effective
Once a day/several times a day 75% 62%
About once every few days/once a week 20% 24%
About once every two weeks/once a month or less often 5% 14%
I feel comfortable managing my work on my own, with little direct oversight
89% 68%
For the global employee population overall, having a better manager is related to
perceptions of effective autonomy
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Organizations should care about manager performance because managers influence many of the top drivers of attraction, retention and engagement
Attraction Drivers* Retention Drivers** Engagement Drivers**
Competitive base pay Career development Leadership
Challenging work Leadership Image
Convenient work location Pay and rewards Career development
Career advancement opportunities Empowerment Empowerment
Vacation/paid time off Supervision Goals and objectives
Organization’s reputation as good employer
Stress, balance and workload Customer focus
Flexible schedule Performance appraisal Values
Learning and development opportunities Benefits Strategy and direction
Competitive benefits Image Pay and rewards
Organization’s financial health Operating efficiency Quality
* Source: Towers Watson Global Workforce Study, 2010 — Global** Source: Towers Watson Normative Database — Global
Areas of significant direct and indirect influence by immediate manager
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Examples of performance category factors
Performance model category Survey item — my immediate manager:
Percentage who agree with the survey item and who also:
Agree that immediate manager is effective
Disagree that immediate manager is effective
Executing Tasks
Assigns tasks suited to my skills and abilities 81% 27%
Provides clear goals for the work of the team 78% 18%
Always knows how well our unit is performing its work activities 78% 22%
Source: Towers Watson Global Workforce Study, 2010
Developing People and
Delivering the Deal
Provides me opportunities to develop my skills 72% 17%
Helps me with career planning and decisions 58% 10%
Helps me to access learning opportunities outside my organization 57% 12%
Provides frequent recognition for a job well done 73% 17%
Makes fair decisions about how my performance links to pay decisions 66% 11%Energizing Change
Encourages new ideas and new ways of doing things 73% 17%
Keeps me informed about changes in my organization that affect my work unit 77% 17%
Is good at explaining the reasons for changes that happen in the organization 73% 12%Authenticity
and TrustRecognizes his or her own strengths and weaknesses 69% 14%
Listens carefully to different points of view before reaching conclusions 76% 15%
Acts in ways consistent with his or her words 85% 11%
Shows respect for my personal feelings and circumstances 79% 20%
Is a trusted source of information about what is going on in the organization 76% 14%
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The current environment calls for an offstage manager who excels in five categories
Authenticity and Trust
Developing People
ExecutingTasks
Delivering the Deal
Energizing Change
Source: Manager Redefined: The Competitive Advantage in the Middle of Your Organization, Jossey-Bass, A Wiley Imprint, 2010
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.towerswatson.com 20
Let’s start with the first requirement: Ensuring effective executionof tasks
Authenticity and Trust
Developing People
ExecutingTasks Delivering
the DealEnergizing
Change
Source: Manager Redefined: The Competitive Advantage in the Middle of Your Organization, Jossey-Bass, A Wiley Imprint, 2010
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.towerswatson.com 21
Burnout
Engagement
EXECUTING TASKS
Job Resources Autonomy Feedback Development Rewards and
recognition
Job Challenges Range of
responsibility Workload Urgency
Hindrance Demands Resource shortfalls Role conflict and overload Politics
This means balancing job resources and challengesand reducing hindrance demands
Burnout
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What’s different about this way of looking at managers?
EXECUTING TASKS
In the typical model, a good manager: In our model, a strong manager also:
Uses planning tools effectively Involves employees in planning Challenges own assumptions
Assigns work fairly Involves employees in crafting customized jobs
Treats employees equally well Understands subtle differences in individuals’ engagement drivers
Gets jobs done Configures work to build engagement
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The second area, developing people, is a key global engagement driver
Authenticity and Trust
Developing PeopleExecuting
TasksDelivering
the DealEnergizing
Change
Source: Manager Redefined: The Competitive Advantage in the Middle of Your Organization, Jossey-Bass, A Wiley Imprint, 2010
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.towerswatson.com 24
Strong managers do more than set SMART* goals
FAMIC goal setting: FITEMA feedback:
Few in number and focused Fairly determined
Aligned individually and organizationally Individual, not comparative
Mastery-building Task-focused, not person-focused
Incremental Error-tolerant
Controllable Matched with the cadence of work
Action-oriented
DEVELOPING PEOPLE
*Specific, measurable, agreed-upon (or attainable), realistic and time-bound
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What’s different about our way of looking at managers?
DEVELOPING PEOPLE
In the typical model, a good manager: In our model, a strong manager also:
Connects people with training Creates network of internal/external learning contacts
Coaches employees Coaches, teaches, counsels to reinforce autonomy and self-efficacy
Sets SMART goals Works with employees to define FAMIC goals
Gives frequent feedback Makes FITEMA feedback/dialogue a constant part of the job flow
Helps people develop Turbocharges engagement by creating and recognizing mastery
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Delivering the deal requires a partnership between managers and HR
Authenticity and Trust
Developing People
ExecutingTasks
Delivering the Deal Energizing
Change
Source: Manager Redefined: The Competitive Advantage in the Middle of Your Organization, Jossey-Bass, A Wiley Imprint, 2010
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.towerswatson.com 27
How two individualized deals might work
Elements Star Contributor Future Executive
Work design • Stimulating projects to work on• Membership on teams with smart
people• Challenges reflecting technical issues
and questions
• Growing responsibility for team or project leadership
• Challenges reflecting both team and relationships and project operations
Growth • Career-development plan focused on achievement of high-technical-contributor status
• Contact with network of senior experts in the discipline
• Career development plan focused on achieving executive rank
• Leadership responsibility for increasingly larger and more important projects over time
Recognition • Technical contributions acknowledged • Project success acknowledged, leadership potential reinforced
Rewards • Goals and incentives emphasizing commercializable contributions
• Goals and incentives emphasizing project success
Benefits • Flexible schedule/work location • Cubicle (eventually office) with a window
DELIVERING THE DEAL
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What’s different about our way of looking at managers?
DELIVERING THE DEAL
In the typical model, a good manager: In our model, a strong manager also:
Applies reward systems equitably Designs customized deals
Adheres to the organization’s pay-for-performance philosophy
Administers systems effectively
Knows that: Pay doesn’t always reinforce performance Ownership behavior does not follow financial
ownership
Deals with poor performers quickly and fairly Using FAMIC goal setting and FITEMA feedback Enables poor performers to improve or find
better options
Implements HR’s pay schemes consistently and efficiently
Goes beyond HR programs — creates an intrinsically rewarding portfolio of elements
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Change never stops — Managers must consistently build change capability
Authenticity and Trust
Developing People
ExecutingTasks
Delivering the Deal
Energizing Change
Source: Manager Redefined: The Competitive Advantage in the Middle of Your Organization, Jossey-Bass, A Wiley Imprint, 2010
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.towerswatson.com 30
What’s different about our way of looking at managers?
ENERGIZING CHANGE
In the typical model, a good manager: In our model, a strong manager also:
Encourages and supports innovation Builds employee adaptability
Helps people accept and respond to (difficult) change
Builds employee resilience
Provides performance support
Ensures employee well-being
Manages change Makes change a contributor to employee strength and organizational success
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Authenticity and trust form the foundation of the manager performance model
Authenticity and Trust
Developing People
ExecutingTasks
Delivering the Deal
Energizing Change
Source: Manager Redefined: The Competitive Advantage in the Middle of Your Organization, Jossey-Bass, A Wiley Imprint, 2010
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.towerswatson.com 32
What’s different about our way of looking at managers?
AUTHENTICITY AND TRUST
In the typical model, a good manager: In our model, a strong manager also:
Acts with integrity Develops and conveys a personal style based on authenticity
Demonstrates company values Understands and achieves the economic advantages of trust
Tests decisions against the three Ms: manager, media, mother
Is honest and consistent In every part of the performance model, demonstrates authenticity and builds trust
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Redefine the manager role to unleash greater potential
In our model, the best managers work offstage
Organizations often:
Define manager competencies by using existing or historic models and emphasizing process, not people
Construct manager roles to fail, by: Ignoring the implications of reporting
spans Making managers divide their time
among too many activities Promoting for the wrong reasons
Place too much faith in training and development to create competency or rehabilitate poor performers
With our help, they will:
Use our four-part performance model to define what managers need to do well
Define the manager role to Increase employee engagement Achieve specific economic goals Contribute to achieving and
sustaining competitive advantage
Have a more realistic sense of success requirements and come to better make/buy decisions
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The seven elements of the manager role system
Measure Manager
Performance
Redefine Manager
Role
Make ChangeHappen
Align Rewards
Define Critical
Competencies
DevelopManager
Capability
DiagnoseManager
Performance
Measure Manager
Performance
Redefine Manager
Role
Make ChangeHappen
Align Rewards
Define Critical
Competencies
DevelopManager
Capability
DiagnoseManager
Performance
Only by addressing each element in the system can an organization build a manager role that contributes to competitive advantage
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Examples of research and case studies
International beverage company Frontline supervisors directly influence eight of the top 10 factors
underpinning employee motivation Too much time on administrative work Not enough time coaching and developing their teams — current supervisor
model resembles the Widget Wizard Intervention Restructure the supervisor role
International IT company The organization has a complex matrix structure They want to introduce a multidirectional lattice/ladder career model Supervisors and managers must be more sophisticated to handle these
arrangements Intervention Define the manager of the future
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International bank Employee engagement has focused on macro indicators (BU leadership,
competitive position, corporate responsibility). Moving to formalize frontline managers’ assessment
Focus on performance support, providing managers with reports indicating issues that are obstacles to team performance
Intervention Aggregate scorecard information to give performance metrics for the manager population across the whole retail bank
Examples of research and case studies
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