Drucker and Peters agree on CEO compensation

Forgot to post on an article that I saw this past weekend (Investor’s Business Daily… sorry no direct link available).   It had a brief note that

…Peter Drucker once warned that CEOs who receive 25 times more compensation that the average employee’s salary undercut the teamwork demanded by successful enterprises.

… Tom Peters…, recently urged boards to clamp down on bloated CEO pay.

I’m more of a “Druckerite” than a “Peterist”, but it is interesting that both agree.  Ideologically I have difficulty with imposed caps.  However, given the bubble has just burst, it is hard to believe that the ROI claimed by highly-paid executives was anything more than bubble-driven.


Necessary vs. Unnecessary Change

When it is not necessary to make a change, it is necessary not to make a change.    — Lord Falkland               

Just a thought, but sometimes we get so caught up in the cult of the new or the need to make a splash that we forget that sometimes the best thing to do is nothing, to leave well enough alone.  When we follow the change management literature blindly, we end up trying to create a sense of urgency about everything, we see innovation resistance everywhere, and we evangelize everyone remorselessly.

I point the finger at myself as well.  Mine is not an essentially conservative nature.  There’s more than a bit of the revolutionary in me, so I need to remember to choose my battles.  Driving one or two key priorities — Peter Drucker suggested adding a second to prevent boredom with the first — has been far more effective than a scattershot strategy.

Besides, when everything is urgent, then nothing is.

Mis-using Management by Exception

Mike Chitty’s post on “Whack a Mole Management” (here) prompted me to think about how I position and coach on management by exception.

Whack-a-mole is an arcade game in which you try to hit ‘moles’ that pop up randomly on a board using a rubber mallet….  Whack-a-mole management is based on the same principles.  The challenges are the ‘moles’. As each challenge presents itself to managers, they hit it hard and fast with the hammer of position and conventional wisdom.  It’s exhausting, but fun.

Management by exception can quickly turn into “whack-a-mole” management.  Many inexperienced managers fall into the trap of thinking that MBE means only working issues, when it is really a principle for empowering line managers.  This article is a few years old, but I like the way it summarizes the approach (here), especially these five tips for avoiding the pitfalls of MBE:

  1. Combine MBE with MBWA (management by walking around).
  2. Clarify the level of authority for each newly delegated responsibility. Level A might be, “Do it. You don’t have to tell anyone.’ Level B, “Do it. Then let me know about it.’ Level C, “Do it only after checking with me.’
  3. Make sure lower-level managers are comfortable with their expanded authority. Review policies, practices, and procedures.
  4. Enlarge the definition of “exceptions’ to include favorable variances that should be reported to higher management.
  5. Use coaching and guidelines to encourage those who have received new authority. Higher management should show patience when they goof and express appreciation for their successes.
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