Small Business

Practice What You Preach


By David H. Maister Financially successful companies share a number of characteristics not the least of which are high standards set by their managers. In Practice What You Preach, David H. Maister spells out what an effective manager must believe, be, and do in order to create financial success for a company.

In the book, Maister presents the results of a survey of 139 offices of 29 firms in 15 countries in 15 different lines of business. His findings: The most financially successful businesses do better than the rest on virtually every aspect of employee attitudes. Attitudes drive financial success. But he doesn't stop there. He drops responsibility for these attitudes firmly on the shoulders of the managers. The skills and behavior of managers drive employee attitudes -- and employee attitudes drive financial success.

For two decades, Maister has been a consultant for a broad range of professional service firms. A former faculty member at the Harvard Business School, he uses statistical explanations of his survey, case studies, and his own conclusions to outline what managers can do to create a high culture of achievement. He also addresses why managers need to do more than develop a strategy, vision, or mission -- they must make sure their plan is implemented.

Maister's book is at once theoretical and practical. Even the busiest small-business owner or manager will be able to find tips on how to energize employees, the intention being to create first-rate client services and overall financial success. What follows is drawn from the book's introduction:

Conventional wisdom is right in saying that quality and great client service get results. However, what conventional wisdom forgets is that great client service is itself a product of other things. To get great client service, it turns out, you must first energize your people to deliver it. And that brings us to what may be the prime mover of this entire chain of effects: the skills and behavior of the manager in creating and driving everything else.

Of all the goals that businesses say they have (make money, please clients, attract and develop talented staff), the least well done are those related to managing people. To be weak in this area (as so many firms are) is akin to shooting yourself in the foot. The study produces very specific (and nontrivial) findings. We shall see that the most financially successful operations share a number of characteristics:

-- Management is seen as operating in accordance with the firm's overall philosophy and values. They practice what they preach, and there are no disconnects between the walk and the talk.

-- Management is trusted by those they manage. Individual managers act in the interests of their group, not just to advance the manager's personal interests.

-- People's personal potential is being fulfilled and realized, according to the people being managed.

-- There is a high degree of loyalty and commitment, again driven by individual managers.

-- Compensation systems are equitably managed.

-- Firms do not compromise their standards in hiring simply to meet a capacity need. People quality is seen as high.

The evidence shows that these are high standards that few managers (or management teams) reach consistently. They are not easy to achieve. They require courage, an ability to confront difficult situations, and an ability to take a long-term perspective when many pressures cry out for much earlier gratification.

The standards are not commonly achieved, but when they are, we can now show that they cause (yes, cause) a demonstrable, measurable improvement in financial performance (including growth rates as well as profits).

The standards are tough. They do not say, gently, "We encourage teamwork." They say things like "We have no room" for individualists. The message is that management must have the guts and courage to enforce the standards it frequently preaches.

David Maister

The list of key profit drivers revealed here represents a balanced package. There is no one secret to success. We shall see that you have to do well on a combination of client relationships, compensation-system fairness, skill building, and other factors. Robert Kaplan and David Norton wrote a wonderful book, The Balanced Scorecard, about the importance of paying attention to a well-chosen mix of performance areas. This book can tell you precisely what that balanced scorecard needs to be.

Most of the findings confirm what other writers (and I) have been advocating for years. What's new here is that this study presents substantial evidence. Some of the conclusions are new. Among the top factors predicting profitability are the issues of trust and respect. These were not introduced by my personal theories. They were the result of cold statistical analysis. The study shows that where trust and respect between management and employees are high, financial performance predictably goes up.

Surprising? Maybe. But we are rarely (if ever) taught how to win, earn, or give trust and respect in our formal education. This book will show you how. It reaffirms the importance of personal character in leading a firm to greatness. On a related point, the book shows that success in management is less a property of firms (the systems of the business as a whole) but, instead, is mostly about the personality of the individual manager within the operating unit. Success is about personalities, not policies.

In spite of presenting extensive data and statistical analysis, the core of the book is not the numbers. It is the interviews, anecdotes, stories and personal experiences of the managers who got the best results in this survey. I report on the paragons that were able to achieve truly stellar financial results, while also energizing, enthusing, and exciting their staff. What, precisely, do they do?

Although they asked to remain anonymous (a condition of taking part in the research), these superstar managers gave permission to reveal their concrete secrets. The findings will challenge you. How well, it will ask, do you pass the tests of trust, respect, and integrity? Are you seen as practicing what you preach? I will show that if you can't pass these tests, you will make less money!

How does this apply to you?

If you are not in the marketing-communications business, I suspect that, throughout this book, you will ask yourself, "Does any or all of this apply to me?"

Let's start with the obvious: This study does not include accounting, law, architecture, financial services, executive search, engineering, or a host of other businesses and professions. So, we don't have direct data here for those (or many other) businesses. On the other hand, we do have a great deal of diversity. We have businesses ranging from premium-fee consulting operations to low-fee, high-volume, execution-intensive businesses. We have businesses with immensely high leverage and those staffed almost entirely with senior-level counselors. We have businesses that deal only with the client's executive suite, and others that have to work through purchasing directors.

Some of these businesses have ongoing relationships that last for decades, while others have to compete every time for every individual project. Some are large, global operations while still others are tiny, regional operations working far from major financial centers or other big cities. And many national differences are covered in the database.

As a result of all this diversity, any lessons we can glean that seem to apply across all these businesses have a good chance of being lessons that should be taken seriously by businesses not explicitly included here.

That's my hypothesis, but you be the judge. From "Practice What You Preach - What Managers Must Do to Create a High Achievement Culture" by David H. Maister. Copyright 2001 by David H. Maister. Reprinted with permission of The Free Press, a division of Simon & Schuster Inc.


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