Towers Watson Manager Redefined Presentation

© 2010 Towers Watson. All rights reserved.

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:


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.


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


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




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


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


…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…)



…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…)


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


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


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%



Effective managers get much higher scores


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%


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%



The paradox: For the employee population overall, more contactwith managers makes people feel more comfortable working with…



Frequency of contact


effective


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%


…less manager contact



Frequency of contact


effective


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


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


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%


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%


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


Let’s start with the first requirement: Ensuring effective executionof tasks


Developing People

ExecutingTasks Delivering

the DealEnergizing

Change



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


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


The second area, developing people, is a key global engagement driver


Developing PeopleExecuting

TasksDelivering

the DealEnergizing

Change



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


What’s different about our way of looking at managers?

DEVELOPING PEOPLE


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


Delivering the deal requires a partnership between managers and HR


Developing People

ExecutingTasks

Delivering the Deal Energizing

Change



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



DELIVERING THE DEAL


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


Change never stops — Managers must consistently build change capability


Developing People

ExecutingTasks

Delivering the Deal

Energizing Change




ENERGIZING CHANGE


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


Authenticity and trust form the foundation of the manager performance model


Developing People

ExecutingTasks

Delivering the Deal

Energizing Change




AUTHENTICITY AND TRUST


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


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


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


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


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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Towers Watson Manager Redefined Presentation

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