Managers face a constant challenge as they are asked to deliver results through working with others. Conventional wisdom holds that managing others requires managing what people do – their activities – and the connection between what you do and the results you create. This is not a challenge with small workgroups and enterprises as they are able to see the fruit of the labor.
Modern management is activity management
However, as enterprises scale and an individual becomes a group of teams, management concerns shift towards managing activities as enterprise systems become too complex making no one group clearly accountable for realizing results. IT provides an example as it has grown into a complexity, interrelated discipline producing complex solutions and results.
The result is that management attention and resources are directed more to the work being done rather than the results the work creates. Disciplines such as project management, program management, portfolio management, financial management and the like all focus on managing the work rather than results.
Management of tasks and activities is more than 300 years old. In modern times, activity management started with Adam Smith and his division of labor. It gained ground in the industrial age through the time and motion studies of Frederick Taylor and business process re-engineering. It is one of the things at the root of the ideas behind Kaplan and Norton’s balanced scorecard/strategy maps.
The quasi-mathematical basis behind activity management
The logic behind activity management rests on the assumption of a quasi-mathematical relationship that involves adding up individual tasks until they equal something that becomes a business result. This calculus goes hand-in-hand with the development of mechanized manufacturing and industrial processes where processes are engineered and re-engineered to enable their automated or robotic like execution.
This form of management mathematics involves decomposing complex processes into smaller tasks and activities to make them more ‘manageable.’ However decomposition destroys information as executives organize like things and lose sight of the interactions required to create results.
Financial management systems, budgets and accounting hide the information lost in decomposition by giving executives a degree of mathematical certainty and a false sense of security. Its true that a $100 budget divided evenly across five teams will give each a budget of $20, but it is not necessarily true that the activities of these five teams will add up to value in excess of the $100 budget. That is part of the reason why finance sees the business so differently from line executives.
The factors eroding the value of activity management
Activity management and decomposition form the basis for the modern corporation. This system worked well as long as customer demand exceeded the productive capacity of the economy, or customers faced limited choices. However, executives need to recognize the need to switch emphasis as soon as that relationship inverts either because of new entrants into the marketplace, or decreased demand due to industry transformation.
That transformation has happened in industries ranging from automotive to music/entertainment to supply chain and logistics. In each of these cases executives need to transform their management approach from an almost exclusive focus on activities to one that balances activity management with managing for results.
Activity management for the back office
Activity management works well in stable environment where low levels of volatility and uncertainty raise the power of flawless execution. While that predictability remains for back office staff functions – which sometimes include IT – this is not the case for the front office capabilities that generate and fulfill demand.
Activity management in front office capabilities face real limitations as business focus on establishing working relationships with customers, suppliers and other trading partners. While these capabilities require flawless back office execution, not making mistakes is insufficient to create sustainable value.
Results are the basis for front office relationships and value
Relationships are based on results not activities. What you achieve together matters; it builds the context and trust that generates repeat business, innovation and collaboration. Think of social interactions like dating and you get the idea – your significant personal relationships are based on shared experience (results) rather than execution of a prescribed plan.
The difference between two is can be summed up in a phrase I picked up from Richard Suttner when I was working with him on the adoption of quality management techniques in software.
“Just because there is nothing wrong, it does not mean that anything is right.”
Activity management ensures that nothing will go wrong. Results management concentrates on making sure that something right is happening.
Suggestions for moving to results management
Moving from managing activities to managing results requires managers and executives to give up control in favor of collaboration, coaching and consulting behaviors. Here are a few suggestions:
• Stop hiding information regarding the end objectives or what success looks like, revealing things only as you need to know about them. People can only do a good job when they know what “good” is. People will collaborate when they can see what the objective is and how they play a role in creating that result.
• Start discussing the issue from the perspective of the result- what you want to happen, then you can talk about causes that are making the result difficult, finally stay away from discussion what happened as hindsight is 20/20 and not helpful.
• Stop obsessing on what you did to get here, it's a blame assigning game that robs creativity, commitment and obscures the truth. As a friend told me once “we are where we are” the more important issue is where do we go from here. Moving forward is the essence of effective coaching.
• Stop managing what people do and start asking them how what they are doing will create the results you all agree to. Give them greater responsibility for the means and they will be more accountable for the results. They are open to new ideas when they know what they are responsible for a result but may not know exactly how to achieve that result.
• Start measuring results; keep them visible, front and center. Measure processes to, but use these as diagnostics not definitions of effectiveness or value. This is the essence of “I did my job, but the company went bankrupt” argument – process is important but results are critical.
• Start defining people’s jobs/value/performance in terms of results rather than responsibilities. Consider evaluating people on a ‘piece work’ basis in terms of what they produce. That sounds like a return to the sweatshop, but its really tying people’s work to the results that create value for both.
• Start paying more for performance and less for responsibility. Organizational pay scales are often inverted – give more money to people who are far away from the value creation process. Its fine to pay executives well – particularly those who lead teams to create results, but don't forget that your front line producers are just that producers.
Results are the essence of small workgroups where everyone can see the end and people pitch in to create the result. That does not mean that results are exclusive to small companies. In fact, every team, division or organization can manage for results once they give up their addition to activities.
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