Managing, by Harold Geneen
Harold Geneen was a longtime CEO of ITT, a huge conglomerate. His book, concisely named 'Managing', details his thoughts on running a business.
I've jotted down some main more important points from his book- for long term reference.
Management Theories
...No Theory X, Y, or Z will give us simple answers to complex problems...
The men and women with whom I have worked have been whole, rounded, complex
persons with a wide variety of good and bad qualities. I could never fit
them into any convenient psychological pigeonhole. The only way I knew how to
judge people at ITT was by the test of performance....
All the computers, reports, surveys, and staff analyses provied us with only
one thing: Information- factural information and sometimes, misinformation.
When it came time to make a decision, I would ask one, two or several people,
"What do you think?" From the interchange of ideas, one sparking the other,
based upon the facts at hand, we would reach a decision, for better or worse.
We learned as we went along; our bank of experience grew richer; we became
quickerand more sophisticated in handling more complex problems; we became
more self-confident of our abilities. But we never reduced the art of
management to a formula. We could never be sure we were right on any one,
specific decison.
Many people, young and old, have asked me from time to time for the secret
of my success in business. Usually I avoided giving any answer. Now I can
reveal it- The secret of how to succeed in business or in life is that there is
no secret. No secret at all. No formula. No theory.
A Three Sentence Course on Business Management- You read a book from the
beginning to the end. You run a business the opposite way. You start with
the end, and then you do everything you mut to reach it.
You decide what it is that you want to do, then you start doing it.
Selling
Never make your sales pitch right away. Offer the client a cigarette, sit
down, and talk to him about the advantages of your product. Listen to
what he says. Don't interrupt him. Pick out his main objection or doubt
and focus your sales talk on that. Finally, before you leave, don't forget
to ask for the order.
Departing
Strong doubts and misgivings besieged me right up to the evening that I left
the plant. It had been my first real postwar job, a happy, good place to
work, with responsibilities that had challenged my abilities. Looking back
from the parking lot to the light still burning in my office, I wondered
whether or not I should turn back. But I could not turn back. No one can
turn back, not successfully. One makes a decision to go forward, for better
or worse, and you go forward, with the feeling and faith that if you succeed
at one task, you have every reason to believe you will succeed at your next,
bigger one. There are no guarantees, of course, but the risk must be taken,
if you are going to live with yourself thereafter.
Solving Problems
One by one, we would go through each of the monthly reports. Not only I
but anyone else at the meeting could say anything, question anything,
suggest anything that was pertinent... With the figures on the screen,
we could all see how each profit center measured up to its budget commitments,
its last year's performance and wahterver, in sales, earnings, etc...
When problems arose, as they always did, we could deal with them and
perhaps even solve them on the spot... Often, we would deal with a problem
of one company that was similar to if not a replica of a problem faced by
several other companies. Men learned by learning to the woes of others.
It was at times almost group therapy. Often, the manager of one company
could suggest a solution that worked for him that would help another manager
with a similar problem in his company... I asked questions based upon the notes
I had made on their monthly operating reports. Why were the sales down?
Was he sure of the reasons? Had he checked it out? How? What was he doing
about it? What did he expect in the month or two ahread? Did he need help?
How did he plan to meet or outdistance the competition?
Oftentimes, as we explored a situation, we found that the reason for a
problem was not as expected, but something entirely different. I did not
come to those meetings with all the answers. We explored and we tested out
alternatives. The minds of many men dealt with the problem at hand. When
I felt the man needed help, I assigned a team of staff man to help him.
And I explained that we were all there to help the man in trouble; we were
all one team, one company, and I was interested in solving the problem at
hand, not taking action against the man personally.
I brought this point home at a General Managers Meeting early in my reign
at ITT when the man in charge of our Latin America operations reported that
he had failed to sell our newest, multimillion-dollar telephone switching
system to the government of Brazil. I probed for quite a while into the
efforts that had been made, the presentation given, the facts of the
situation. He told me of all the avenues he had explored.
"Who makes the final decision there on whether or not they buy our system",
I asked.
"President Kubitschek."
"Did you see him?"
"No."
"Why not?"
"Because... really makes the decision. He recommends the decision and
the President follows his advice," he explained, adding, "Besides, I don't
think I can get in to see Kubitschek."
"Well, why don't you try? You have everything to gain and nothing to lose."
The following month, he returned to announce with a sheepish grin on his
face that he had seen the President of Brazil and had sold the ITT system.
It went over quite big. The men in the room applauded him.
Experience has taught me what I came to call the inverse ratio of time to
veracity. It has long seemed to me that the lower you are in the corporate
hiearchy, the more time you have to verify the facts upon which you were
acting... and the higher you rise and the greater your responsibilities,
the less time you have to check your facts, and the more important it is to
do so.
Leadership
Leadership is the ability to inspire other people to work together as a team,
following your lead, in order to attain a common objective, whether in
business, in politics, in war, or on the football field. No one can do it
alone. Others must want to follow the leader. I don't particularly subscribe
to the theory that there are natural born leaders. Leadership is learned,
although I cannot explain entirely how it is learned. The ability to lead
and inspire others is far more instintual than premeditated and it is acquired
somehow through the experiences of one's everyday life, and the ultimate
nature and quality of that leadership comes out of the innate character and
personality of the leader himself.
I wanted to create that kind of invigorating, challenging, creative
atmosphere at ITT. I wanted to get the people there to reach for goals
that they might think were beyond them. I wanted them to accomplish more
than they thought were possible. And I wanted them to do it not only for
the company and their careers but also for the fun of it. I wanted them
to enjoy the process of tackling a different piece of business, solving it,
and going on to bigger, better, and tougher challenges. I wanted them to
do this, not for self-aggrandizement, but s part of a greater team effort,
in which each player realised his own contribution to the team, knew that
he was needed and appreciated, and took pride and self-satisfaction from
playing a winner game. My job as a chief executive, as I saw it, was to
unlock wahtever inhibitions or fears bound these people in chains of
insecurity. The way to do that was to create at ITT a climate of growth
and opportunity, a climate in which each fellow would want to carry his
own share, and would be driven to excel not only because I pushed him
but because of peer pressure and pride.
The best hope of achieving that, given my own sense of leadership, was
to jump in the boat, grab an oar, and start pulling along with the other
men. I suppose you might call it participatory leadership. I didn't want
to be the captain sitting in the back of the boat, exhorting his men to do
all the work while he sat there doing nothing. Nor did I want to be like
the master of a galley, frightening his slaves half to death with the giant
whip in his hands. I worked as long and as hard as any man at ITT and they
knew it...I did set an example, an honest example, which traveled down
the ranks of management and, to an extent, established a standard of
performance for the whole company. After all, if I could do it, so could the
next man- if he had any measure of pride in his own ability.
The person who heads a company should realise that his people are not
really working for himl they are working with him for themselves.
They have their own dreams, their own need for self-fulfillment. He has
to help fill their needs as much as they do his. He has to prove to them
that he is working as hard as they are, that he is competent in his role
as chief executive, that he will not lead them over the cliff and jeapedise
their livelihoods, they he can be relied upon to reward them properly
and fairly, that he is willing to share the risks as well as the rewards
of their enterprise.
Meetings
We cut through layers of fat in our management ranks by putting all the
people in one room so they could talk with one another, face to face,
regardless of rank, and an honest assessment of any situation could be based
upon the facts which emerged...People could disagree with me or with anyone
else... I tried to welcome criticism. Naturally, no one likes to be
criticized. One's first instinct is to be defensive and fight back. But
that is the kind of defensiveness one should try to keep under control...
I always wanted someone to point out where I might be heading for a mistake.
I never batted down such a man. I listened and we exchanged views.
Sometimes I was clearly wrong; sometimes he was mistaken. Not infrequently,
it was a little of both. Almost always new facts and new ideas emerged and
our exchange would reveal a better course of action which neither of us
had envisioned before... Being open to criticism usually pays unexpected
dividends. People were free to come to me or to anyone else and ask
honestly for help, and they would get it, again without fear of diminution of
status, rank or whatever. We were all in the same lifeboat, all pulling
toward a single goal. That was our underlying philosophy.
Delegating
...He delegates this and he delegates that. He delegates just about everything
he can, saying that his shop is well organized and that he runs a tight ship.
But I have to ask- Organized for what? Tight in what way?
If he delegates everything that crosses his desk (and leaves it clean), has he
not reduced his function o that of a traffic cop? What he is really doing,
whether or not he realizes it, is directing the flow of paper and giving the
go-ahead or stop signal to decisions made by others. There is nothing wrong
with being a traffic cop, but should he be paid the salary of a top corporate
executive? One can hire a business administrator at a fraction of the salary
and bonuses paid to top management.
The real danger in turning over responsbility and authority for a job, without
knowing the details of what is involved, is that the manager who receives the
responsibility might fail. If that happens, the chief executive does not know
enough to resuce the situation. All he can do is to hire someone else to do
the job. Therefore, beneath the facade of his title, the size of office, and
the quality of his desk, is he incompetent.
On the other hand, if all his vice presidents do their own jobs superbly,
it won't be long before someone discovers that they don't need him as the
chief executive at all. Any one of his subordinates would be happy to take
over.
More prevalent are the professional money managers who give other reasons
for their tidy desk tops. One type freely admits that he worked hard to get
to the top and now, presumably safely enscounced, delights in having others
do the work for him. He won't last long, in my estimation, with that false
sense of security. Even more prevalent are the men who persuade themselves
that they are now above the mundane, nitty-gritty aspects of the day-to-day
problems of running the business. They say they have to keep their desks
and minds clear for the deeper, long-range strategies that will guide their
companies to new wondrous heights in the world of tomorrow. They are planning
for the future, they say, looking far over the heads of the mere mortals on
the operating lines of the company. They sincerely believe it, too.
Managing
The key, essential element in all good business management is emotional
attitude. The rest is mechanics. As I use the term, management is not a
collection of boxes with names and titles on the organizational chart.
Management is a living force. It is the force that gets things done to
acceptable standards- high standards. You either have it in a company or
you don't. Management must have a purpose, a dedication, and that dedication
must be an emotional commitment. It must be built in a vital part of the
personality of anyone who is truly a manager. He or she is the one who
understands that management must mange.
The attitude is a self-fulfilling one, too. The man who says, "I must do
this," will stay at his task until all hours, trying again and again and
again, until he finds a satsifactory answer. The answer must be, above all,
satisfactory to him. And he will know it. There may be seventy-eight ways
to do something and only ten of them with satisfactorily good answers. The
manager will continue to probe and to seek for one of those ten answers.
It may not be the best of all answers. But he won't settle for anything lower
than one of those ten. The next time he will strive for yet a better answer,
higher on the list, learning something new all the time, and achieving better
results as he goes along. He will work this way because of his emotional
attitude, more than anything else, and that attitude inevitably will be
emulated by those who work with him, so that it becomes a way of life in that
organization. The urge to do what must be done is powered by deep-seated
emotion, not logic. He might not be able to explain why he works the way
he does, or why he makes this choice and not the other one. He does it because
he 'feels' that it is right. That feeling is transmitted to others who work
for him or with him. They know his emotional commitment includes them as well
as the goals of the enterprise. They are willing to follow his lead because
of that 'feeling' which makes him the kind of person he is.
If the manager is to accomplish his objectives, he absolutely has to get the
information necessary to make the right decisions. The steps along the way
define themselves as he goes toward his objectives. To surmount each step,
he needs solid facts so that he can recognize the realities of situations.
His decisions, if based realistically upon reliable information, will not be
all that difficult. Facts are power. They are crucial to good management.
In order to get the straight facts in any situation, the manager must ask
straight questions, and to do that he must do his homework so that he has a
deep understanding of what he is encountering. If he has a good record of
making the right decisions, he can help people around him to be effective
and successful in their own areas, so that their total accomplishments is
greater than the sum of their individual parts. That is leadership.
And if the leadership is successful, it creates a momentum in the enterprise
which enriches the participants with such a feeling of pride and energy
tha they produce results, short-term and long-term results, which they
themselves never thought possible. I've separated the elements here, but
in practice, they all move along together, en masse, nourishing each other
like the fusion in a nuclear reactor, creating the fire, the pressure, and the
power which produce energy. All this is the critical emotional content
of good management.
This is the emotional horsepower that drives people to do things, drives them
to keep at it because they feel they must get the answer, drives them to push
on until they get results that are satisfactory to them. Of course, you don't
always succeed in every effort. But then you recognize it early on, and
you get out of that situation. You cut your losses and go on to something
else. If you are a manager, you don't drift.