A New Dimension in Evaluating Companies: WHO MaX !
By Dr. Wolfgang Knödel, Gilching
Cause and effect are often confused when a company is evaluated: The rise and fall of a company on the EuroStoxx and stock markets and figures representing shareholder value show the effect of management decisions. They are not, however, the cause for them. Management decisions are made by those who run a company, those whose task it is to combine existing resources with their own personality in order to generate entrepreneurial – and corporate – success. We sometimes place too much emphasis, however, on the results a company has achieved when we should be paying closer attention to its potential for success. This potential is determined by the qualifications of its managers. Even today, when teamwork is a core value for most companies, it is the mangers themselves who, in the final tally, either succeed or fail in making a company successful. The WHO MaX is a benchmark for this.
The Task of Management?
A manager – according to the generally accepted definition – is the guiding force of a company, the person responsible for combining competence-specific goals and decisions and delegating tasks in such a way as to bring a company success. It follows that, in addition to traditional qualifications such as training and experience,new qualifications such as social, communicative and cultural competencies are in demand. Social competencies include, among others, the ability to lead and coordinate tasks and to set examples. Communicative competencies are understood to include alertness and the ability to compile, analyze and distribute information, while partnership, loyalty and environmental awareness can be cited as examples of cultural competencies.
How can we evaluate the quality of planning, leading, organizing and monitoring as management functions?
This question arises at nearly every job interview, and many head hunters would undoubtedly pay a lot for a clear-cut answer. Can manager biographies provide such an answer?
Management value can be defined as:
The maintenance and promotion of an appropriate corporate culture.
The development of strategic goals and the implementation of successful strategies together with key managers.
The achieving or surpassing of intermediate and ultimate goals.
The bolstering of important customer contacts.
Finally, the time- and cost-effective implementation of individual measures.
Experts have cited several keys to successful management so often that we now think of them as the cornerstones of successful management. They are: quality of education, business intelligence, quick comprehension and reaction, a dynamic style, the willingness to make decisions, the courage to take risks, willingness to go the extra mile, experience, vision, endurance, motivation, respect and acknowledgement, and ethical and moral behavior. A manager’s biography will no doubt give us insight into one or more of these qualities.
But just as certain is the maxim that the best managers go their own way. They monitor the leading companies in their field, but then try to differentiate their own company, to be one step better. For these managers, there is no secret formula of success, but rather good, healthy common sense. And implementing common sense is often the most difficult thing to do in a large organization. Let’s take a look at the key qualities mentioned above individually and try to rank them in terms of importance.
Quality of education is partly a measure of schools and degrees. The length of study isn’t as decisive as the international reputation of a school or university, the content of the curriculum and the marks achieved. Though you’d be hard pressed to find a personnel director that doesn’t swear by his or her own university – and can back it up with clippings from various ratings in industry publications – such ratings often lag behind changes in the quality of education. How close a match a candidate will be for a job can easily be found out by looking at his or her thesis work and internships.
As a yardstick for business-oriented intelligence, the success in implementing new organization structures for innovative international products, branches, manufacturing sites, subsidiaries and joint ventures can be used.
The ability to comprehend and react quickly can be measured by how long change management tasks have taken. How long do restructuring processes take? How many months has a takeover taken? How long has it taken to implement organization structures worldwide? When are new CI concepts adapted to differing markets, and m? The speed with which American companies pinpoint and eliminate weaknesses is seen as a benchmark for managers in Europe.
In short, this quality can be determined by a quick glance at a company’s development over time under its varying managers.
A dynamic style and the willingness to make decisions can be viewed similarly in evaluating a manager in that not only positive results are looked at. As flops, too, are taken into account, the emphasis here is on doing, not necessarily success, with the cave at that too many changes with respect to employees and investors are viewed critically.
Many analysts view the courage to take risks as the ability to make the right decision for a company at the right time, and for the right price. In many cases, it takes months or even years before a decision can be judged fairly. DASA, for example, was reaping accolades for its plans to produce the new Super Airbus in conjunction with Aerospatiale of France and CASA of Spain, though it had been a source of anxiety for many an investor since it began hatching its plans back in 1972.
Willingness to go the extra mile can generally be evaluated by looking at the “additional activities” section of a manager’s biography. Academic positions at universities or training centers; publication in special interest journals and magazines; appearances at trade fairs, industry conferences and international symposiums; and, of course, participation in both national and international trade associations are all examples of such activities.
Experience can be ascertained from the length of time spent in management positions in a given company or related companies and the type of work done there. Education and age are, of course, also indicators.
Vision is recognizable through a manager’s publications, membership in clubs, associations, councils and political parties and the recognition he or she has received for turning vision into reality.
By asking “How have management flops been corrected?” and whether such slip-ups represent a decisive downturn or a springboard for recovery, we can tell whether a manager holds fast to his vision.
Endurance can be evaluated in terms of the time structure of a manager’s career at a given company. Of course, a considerable length of time spent in one position can also indicate that he or she has been “forgotten” there. Being recalled, however, to a former position is often a sign of a good capacity to endure.
A manager’s motivation is often evident from many of the qualities already mentioned. Additional indicators, however, are those that fall under the heading “Quality of Life”: membership in the local rotary club, interest in hobbies and sports, ties to the “top manager circuit,” etc. But there are also managers who prefer to concentrate on family life as a way of dealing with the stress of the job. For them, the home is a place of refuge after business trips, conferences and meetings. You should also note whether a manager gives his private address or not. Many managers in Germany are reluctant to do so because they wish to have their peace and quiet. In Anglo-Saxon countries and in Scandinavia, however, attitudes often differ. Homes are not kept secret because managers there no the value of having good relations with their neighbors. For many communities, it is often easier as well to respect managers as fellow citizens when they know them as private citizens.
On the other hand, notoriety can present problems for children, on whom unjust demands and expectations are sometimes placed solely because of the position of their mother and/or father. Often, such children soon find themselves isolated, perhaps because they don’t ride their bike to school but are driven instead. In situations like this, children suffer from an excess of attention and recognition given to their parents. With such families, it is not just important, but essential, that they are treated normally. Perhaps this is why they so often lead such private lives.
One important component of management ethics is what is often called “fair play.” This applies to employees and colleagues, customers, job applicants, opinion makers, the press and political, social, environmental and business groups. The willingness to sit on a council is one example of the application of ethics. Important questions from both customers and employees concerning management should be answered. Contact with the media – which includes investor and public relations – should be given priority. One measure of success at this is the number of positive mentions of a company in the press. An active commitment to dealing with environmental issues and participation in public debate are others.
Closely connected with ethics is moral behavior in business. In general, it isn’t the private sphere that interests us here, but the corporate sphere, where slogans like “What’s good for General Motors is good for America” are a good indicator. If we think of moral behavior in terms of straightforwardness and consistency as part of a positive overall life philosophy, every manager biography has something to say about the moral behavior of a manager.
Where do you find manager biographies?
The collection and publication of the biographies of well-known personalities was begun in England in 1849 – by Who’s Who. The colorful history of Who’s Who reflects not only the ever-changing and sometimes turbulent history of Europe in the last century and a half, but the different approaches taking by publishers of biographical reference books over that period. Over the past decades, FAZ has accordingly likened such publications to “lexicons of vanities” and noted that, for some, appearance in them is akin to “being dubbed a knight.” WHO’S WHO Edition Business and Industry, which since 1984 has been published in English and which contains thoroughly researched biographies of all Europe’s top managers, distances itself from such descriptions by using clearly defined criteria. It lists the top companies in each country, compiled each year from business and economic publications, according to size, turnover, branch and other categories. And WHO’S WHO provides the biographies of the managers of these companies, both in book form and on CD-ROM, in important business databases and worldwide on the Internet. Because it believes that the course a company steers is above all determined by its management.
In addition, WHO’S WHO is about to embark on another important project: the creation of WHO-MaX, an attempt to make manager performance comparable using a few carefully selected criteria. The idea isn’t to create a business equivalent of the Michelin Guide, with sleeping caps instead of chef’s hats, but to assign concrete values to relevant criteria in order to reach an objective evaluation of manager performance. The goal is to create a basis for at least rough comparison. To do so, managers will be given a point value of between 0 and 9 in the following categories:
Age (between 35 and 55)
Levels of higher education completed, including international study
Long-term management positions held abroad and languages spoken
Number of management positions held in companies within the relevant branch or related branches
More than five years spent in current position
How dynamic has the company been over the last 10 years? (in terms of growth, market quotation and market position)
Publications and participation in international associations and other organizations
Activities in the press and public relations in terms of corporate identity
Hobbies and family
This index will, of course, contain a number of more specific criteria and will be developed and perfected over the next several years. Two things are certain, though: an attempt at evaluating and ranking management performance must be undertaken; and more background information is needed so that the facts and data we do have can be competently analyzed and evaluated.
© Knödel, Gilching, February, 2014
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