The Purpose of Management

By Jonathan T. Scott

(All rights reserved. The following material is copyrighted.)

Drawing on a study based upon thirty years of research and the input of millions of employees, author David Sirota (et al) explains in his book, The Enthusiastic Employee, that most people, when they are hired, are excited, hopeful, ready to work, and eager to contribute to the business that has just hired them. Unfortunately, all too often something goes horribly wrong – and that something is usually management. According to the Bureau of Labor Statistics, seventy-four percent of employees complain that their boss treats them disrespectfully. Over half state that at one time or another their manager has publicly humiliated them. Added to this are the more than a million acts of workplace violence reported each year (Lorenz, 2005). Is it any wonder so many businesses fail to reach their potential – or that the hundreds of entrepreneurs I studied for a book published in 2009 (The Entrepreneur's Guide to Building a Successful Business) stated ‘poor management’ as one of the major reasons why businesses fail?

The Management Bottom Line
The purpose of management is to serve customers. Yet if one looks through most management books, or even a dictionary, for a definition of management, ninety-nine point nine percent of the time the word customer will not be mentioned. This is astonishing because serving customers in order to obtain a profit is the crux of every business organization. Equally as remiss is the fact that most definitions neatly filter out service in their descriptions of management. Instead, when it comes to explaining what management is about, words and terms such as leading, controlling, planning, organizing, and setting goals and objectives are used. Let’s face it, aseptic words and terms are great for dictionaries and academic tomes, but they fall terribly short when it comes to explaining, warts and all, the full scope of what management entails. So how can the art and science of management be summed up in a few succinct words? Well, the truth be told, it can’t because management is about more than leading, controlling, planning, organizing, and setting goals and objectives. A lot more.

Perhaps the best way to present a richer and more accurate concept of management is to look at what good managers do – or are supposed to do – in the course of a typical working day. Good managers constantly streamline their organizations toward making a sale. In other words, good managers keep their organizations on track by ensuring that everything that’s being done is ethically geared towards providing what customers want. In this regard, a good manager is responsible for reducing waste and ambiguity, keeping costs down, and motivating others to do the same. In the same vein, good managers regularly take educated risks and exercise good judgement (the basis of entrepreneurship). These risks include trying new things, successfully adjusting to constant change, developing subordinates (good managers aren’t afraid of letting other people shine - in fact they encourage it), and improving their own skills.

Since most managers are responsible for more work than one person can normally perform, a good manager delegates and integrates his or her work (or the work of others) by acting as a clear channel of communication within the business that he or she serves. Good management is therefore also about rising above the often monotonous grind of a working day and injecting motivation, creativity, discipline, and enthusiasm into areas in which they either don’t exist or they’re not wanted. Management entails doing difficult and time-consuming tasks the manager does not want to do in order to get the results he or she wants. And while all that’s going on, the ups and downs of life in general have to be dealt with including fear, insecurity, births, deaths, romances, divorces, physical injuries, bad hair days, bad-manner days, personal failings, and attitude problems to name a very few. Again, I’m talking about good managers. These are the people who face problems, put in long productive hours, set a good example, and have an inherent knack to create something from nothing. Good managers work well with others (including those they don’t like) and can be counted on to be honest and upstanding. They concentrate on goals and results rather than showing who’s boss because the creed they live by is integrity, responsibility, and maturity. This means financial figures aren’t manipulated and production numbers aren’t fiddled with. That’s not to say that good managers always score; they most certainly do not. But when good managers don’t succeed the first time, they pick themselves up, brush themselves off, learn from what happened, and then score. In other words, good managers create value; they don’t make excuses or blame others, they produce results.

Sound like a tall order? Well, it’s not so high that it can’t be reached. The truth is that there are tens of thousands of good managers in this world quietly going about their work and performing admirably. That most of them don’t attract attention to themselves, in part, shows their management acumen and the dedication they have for their craft. Good managers understand that their title isn’t merely a rank it’s a responsibility, and they more often than not let their work, and the work of others, speak for itself. They don’t need to be charlatans, actors, or showmen. Yes, a little bit of flashiness sometimes goes a long way in business; nevertheless prioritizing showmanship is not the mark of a good manager.

So what constitutes a bad manager? According to too many downtrodden employees, bad managers are loud, insecure, overbearing bosses who spend obscene amounts of time proving that they are in charge, manage to instill fear instead of respect in others, disappear when the going gets tough, and maintain the status quo when opportunities abound. At an administrative level, bad managers tend to see their profession as only a game of acquisitions and mergers or act as though their task involves only numbers.

Being called a manager doesn’t make you a manager in the same manner that cooking dinner doesn’t make someone a chef, penning a letter doesn’t turn the writer into an author and going jogging doesn’t make a person an athlete. Management is not a glamorous profession and placing the word ‘manager’ on a door or a business card isn’t an invitation to a gold-encrusted club and a bottomless expense account. Most management positions, particularly those in small to mid-sized businesses, aren’t alluring and don’t come with perks. A business’s resources are best spent serving customers – not managers – and this involves rolling up one’s sleeves and working with everyone in an organization. Management is not about the person carrying the title. It’s about serving others.

In my capacity as a lecturer, I often tell anyone who’ll listen that although managing a business isn’t the easiest thing to do in the world, many teachers and students try to make it as complex as brain surgery. Certainly management, like so many career choices, can be made as complicated as you wish, but the truth of the matter is that management needn’t be complex. It isn’t a philosophical debate nor is it dry and boring. In most cases it’s fascinating – or at least it should be. It’s based on the study of human nature and of doing something – and who among us isn’t intrigued by the tools, outcomes, and emotions that are involved in producing results (e.g.: money, influence, passion, achievement, success, failure, greed, good deeds, weaknesses and strengths)?

Suffice it to say that all this combined with planning, organizing, leading, and controlling is a tough, relentless and time-consuming job that demands regular assessment, constant improvement and the ability to give more than is taken. In other words, the same strange mix of concrete and ethereal qualities that enables entrepreneurs to do their ‘thing’ also fuels the very attributes that enable good managers to do theirs. And that, in part, is what makes management so difficult to define – let alone do.

Managerial Competencies
To become competent in management, two sets of distinct, yet general skills are needed. These are classified as:
General Management Skills, which include:

  1. Conceptual Skills - the ability to comprehend complex situations
  2. Interpersonal Skills - the ability to work with, understand and motivate other people
  3. Political Skills - the ability to network as well as gain allies and gather power
  4. Technical Skills - the ability to understand and apply specialized knowledge or expertise

and Specific Management Skills, which involve:
  1. Exercising Good Judgement - the ability to plan and prepare for the future, respond to change, be held accountable, and stay focused on objectives
  2. Organizing and Coordinating - the ability to organize tasks and interdependent relationships
  3. Handling Information - using and communicating information
  4. Fostering Personal Growth and Development - for both the manager and his or her employees
  5. Handling Conflict - understanding the need for, and potential destructive force of, conflict

Take a look at these two lists again. Note that the emphasis of being a good manager is placed on what a manager can do rather than what a manager knows. Yes, having a specific expertise is a precious commodity, but most good managers don’t need to have a higher grade point average or more engineering experience than their subordinates. The ability to serve others, produce results, and get employees to do the same is what matters most.

The Management Trap
In his book, How to Succeed in Business by Breaking All the Rules, author Dan Kennedy relays a true story about one of the biggest misconceptions managers have – thinking their job is to exert their will, rather than produce results. As Kennedy describes it, a few years ago a Fortune 500 corporation bought a profitable company and hired a consultant to investigate how it could make even more money. The consultant duly finished his study and reported back to the corporation, telling its administrators how disorganized, inefficient, and undisciplined he thought this highly successful company was. In particular, he described how the company’s top salesman showed up some days at seven o’clock in the morning and other days at ten o’clock. This same man read the racing forum and called his bookie during office hours. He took a coffee break after every call, wasted incredible amounts of time wandering around joking with everyone, and even took naps. What the consultant did not mention, of course, was that this employee was the highest producer in the business. He rarely lost a sale and his monthly sales average beat that of every other employee by four to one. So what happened? Rather than investigate further, the Fortune 500 bigwigs dutifully dispatched one of their top managers, a former military officer, to whip the company into shape by laying down the law, giving everyone strict new schedules to adhere to, and so on. The result was that the top salesperson left. Ninety days later, sales dropped by over one third. Shortly thereafter, the corporation had no choice but to sell its new acquisition for less than half of its original price. The moral of the story? By concentrating on showing everyone who was boss instead of making money, management prevailed – and the business lost.

Management Styles
For many managers, power is mostly wielded through trial and error. The style that worked well enough in the past is then dragged out and used again. And again. The number of management styles that exist are probably too numerous to list, however, acclaimed management researcher Charles Handy has classified six of the most used ones as follows:

  1. Using force or fear may achieve immediate results, but the results could be short-lived and lead to high employee turnover.
  2. Rules and procedures can effectively control behavior, but often drain a workplace of creativity, spontaneity, and morale.
  3. The exchange method can prove to be a good motivator, but what happens when everyone expects some type of reward in exchange for doing a task? The result can be expensive, time consuming, and/or produce a lack of respect for management.
  4. With excessive use of the ecology method, managers might be seen as opportunistic or conniving.
  5. As for magnetism, well, as the expression says, ‘you can fool some of the people some of the time …but not all of the people all of the time.’

Management Means Learning and Doing What is Best for Your Business

Management theories tend to ebb and flow like tides (indeed, dozens have been documented over the past fifty years), but one of the best, and one which I and others interviewed for this book have personally used to great effectiveness, is known by the acronym MBWA (Management By Walking Around). The idea behind MBWA is simple: to reduce the distance between management and employees and strengthen the relationship (and understanding) between the two. Just as the name suggests, MBWA demands that a manager gets out of the office to walk around the shop floor. As author Richard Pascal explains, the point is not to interfere with employees, but to draw management into reality (or, as he puts it, get grounded). Too often management lives and operates within its own perceptions of what is right or wrong, rather than in what is real. The result manifests itself into various forms of misunderstanding, miscommunication, anger, and resentment. However, when contact between a manager and an employee is void of fear and apprehension (which happens when the two get to know one another), communication is strengthened. The result for the manager is a clearer understanding of what best motivates the employee. MBWA also tends to reduce managerial arrogance as well as generate experience in influencing others – and it allows managers to see what’s going on in their business without having it filtered by someone else. If what is seen by a manager is far enough out of line with what he or she previously believed, then he or she will be forced to update his or her thinking. That’s when progress is made. MBWA is not designed as a means of constantly looking over an employee’s shoulders or becoming ‘the man who came to dinner’. The idea is to facilitate cohesiveness, communication, cooperation, and constant improvement.

Scott’s ‘Two Choices of Management’ Theory
How does a manager know what to do when faced with a work-related question or problem? In most instances, by understanding that only one of two choices can be made. This is not an exaggeration. There are no shades of gray here and there is no middle ground.

The first choice is to serve the business’s customers (both external and internal). Serving external customers (paying customers) involves finding out what they want (as well as how, when, and where they want it) and then moving heaven and earth to provide it. Serving internal customers means finding good people (including employees, suppliers, contractors, and other stakeholders), educating (training) them, and giving them what they need so that they know the requirements of the business, the business knows their requirements, and the two can serve each other (which is to serve paying customers). The end result, if all goes well, is that everyone associated with the business prospers.

The second choice a manager has is to serve himself or herself, which means allowing insecurity, incompetence, ego, or greed – or a combination thereof – to prevail. For example, if a customer approaches a manager with a good idea and he or she immediately says ‘no’, the manager is probably serving his or her ego (saying no immediately shows who is the boss). If the manager says ‘no’ because he or she is not sure how or if the idea will work, the manager is probably serving his or her insecurity (a major part of any manager’s job is to find out how or if new ideas will work). If the manager says ‘no’ because implementing the idea will involve additional work (as ideas often do require in their initial stages), the manager is serving his or her incompetence. Lastly, if the manager says ‘no’ because the idea will allow someone else to shine (or says yes to a bribe or kick back), the manager is serving his or her greed (which is always the case with those who lie, cheat, and steal).

Serving the Manager
What is it that prompts so many otherwise intelligent people to lose sight of the reason why they are in business? Perhaps the negative side of the human element is to blame. Fear, insecurity, ego, incompetence, greed – any one of these can cause a good person to drift off course.

A Case Study
In the summer of 2005, a woman who had recently been named as the director of a large international children’s charity invited me to a dinner party at her home. Seated at the table was a long-time friend of hers, a man from a prominent family who owned a successful marketing firm. During the meal he mentioned that he loved to make donations to charities. ‘Whatever you need I’ll be happy to provide it to your charity for free,’ he said to the hostess. ‘I love doing pro bono work for good causes.’
‘No thank you,’ the hostess replied, ‘that’s not the way we do things where I work.’
A moment of stunned silence followed. Here was a charity being offered tens of thousand of dollars worth of expertise (possibly more), with no strings attached, which could easily be used to promote and help alleviate the plight of the world’s starving children, yet the director of the charity had turned it down flat. Even today, this astonishing display of thoughtlessness and incompetence still has the power to render me speechless.

It is obvious that my hostess was not serving the world’s starving children (her customers) by turning down an offer of help. Make no mistake, she is a lovely person, highly intelligent, university educated, a joy to be around, and honest to a fault. Similarly, the donation she was offered was genuine and sincere. So why did she let her business and her customers down - and what part of herself was she serving by doing so (greed, ego, insecurity, or incompetence)?

Knowing this person fairly well, it is safe to say that she is not greedy. Therefore, greed can be eliminated as a possible motive. If she had said ‘yes’ in order to conduct an act of embezzlement, than she would certainly be guilty of greed. Likewise, if she had said ‘no’ to prevent someone else from taking credit for the decision, then her action could be interpreted as a greedy one.

Was her ego responsible? Perhaps. When making a decision, particularly in the case of new managers, fewer words show power and authority more than the word ‘no’. Saying ‘no’ immediately demonstrates who is in charge – and is therefore a quick and easy way to feed a hungry ego.

Is she incompetent? Obviously, she didn’t know how to handle the donation (perhaps because she had never been offered one like it before), which is a fair enough mistake for any manager to make. Unfortunately, since she didn’t bother to find out how the donation could be put to use before making her decision, her action typifies incompetence. A manager’s job is to learn how to do old things in new ways as well as to explore new ways of doing things in order to serve customers better.

Is she insecure? Probably. She was new to her job and she admitted during dinner that she was having difficulty learning the responsibilities associated with it. Therefore, she said ‘no’. Insecure managers often say no to untried suggestions that are put to them. The reason for this is that they are unsure of the outcome if they say ‘yes’ - so they play it safe by saying ‘no’. At other times, saying ‘no’ to a good idea prevents the decision-maker from having to do more work, which new ideas and suggestions almost always initiate. Avoiding hard work is a sign of insecurity and incompetence.
Putting off decisions, constant shouting (or threatening others), hiding away from reality, and taking credit for the hard work of others... all are examples of insecurity, lack of competence, a bruised ego, and/or greed. None will serve your business interests and all will eventually come back to haunt you. Do yourself a favor and serve your business, not yourself. You'll end up way ahead of the game.

The Weakness in the Theory
There is no question that the Two Choices of Management Theory contains a few inherent weaknesses. For example, not all customer-oriented decisions are the right ones – especially if customers aren’t involved in the decision-making process. Take, for instance, the story of Monsanto. In the 1990’s, the Monsanto corporation developed a bold new vision of providing sustainable agricultural products that could resist pests and diseases without the use of chemicals. The company’s goal was to aid the environment and provide a level playing field for poor farmers around the world who can’t afford expensive fertilizers and pesticides. Unfortunately, Monsanto jumped straight into the development of genetically modified seeds to achieve its aims without asking its customers what they thought about this practice. The resulting violent reaction to the products the company developed shook the globe, caused the company’s stock price to collapse, forced the CEO to publicly apologize, and resulted in the company being bought out by another business. In other words, by giving their customers what the company thought they wanted, rather than what they really wanted, Monsanto lost its way (Hart, 2005).

A second weakness in the Two Choices of Management Theory is that deciding which of the two choices to take is reliant upon honesty, candor, and a high level of self-awareness – traits that many people find difficult to draw upon.

Once Last Time: Management is about Service
Good managers usually produce results by concentrating on two over-riding factors: 1) ethically providing for the needs and wants of internal and external customers in terms of quality, cost, and service, and, 2) the ability to get the most from employees. Management is not about showing everyone who is boss. It is not about shouting. It is not about domination. It is not about wanting to see others crawl or maintaining the status quo or covering up (or ignoring) wasteful habits – nor is it about being a friend to everyone. Managers exist to serve the needs of their customers and to streamline their ideas and their business toward making a sale. Period.

Advice from Successful Managers on Management

  1. Every business is an accumulation of the decisions it makes. Allow your paying customers (the ones who ultimately pay your salary and bills) to be the reason for your existence by catering to their needs.
  2. If your business starts to grow beyond your expectations, consider hiring an experienced manager. This does not mean handing over all your authority and power. It means hiring experience.
  3. Don’t be a one-size-fits-all manager. Different situations require different managerial approaches.
  4. Admit your mistakes early. Facing errors, apologizing for them, and rectifying them, does not make you look foolish or small. Instead, it makes you look like a very good manager.
  5. Serve your customers well and your customers will serve you well.

Handy, Charles, Understanding the Organization, Penguin Books Ltd., London, 1993.
Hart, Stuart, Capitalism at the Crossroads, Wharton School Publishing (Pearson Education), New Jersey, 2005.
Katz, R.L., ‘Skills of an Effective Administrator’, Harvard Business Review, Sept.-Oct. 1974, pp. 90-94.
Kennedy, Dan S., How To Succeed in Business by Breaking All the Rules, Dutton (Penguin), NY, 1997.
Lorenz, Kate, Desperate Co-Workers; True Tales of Office Animosity,, 21 March 2005.
Luthens, F., & Kreitner, R., Organizational Behavior Modification, Scott- Foresman, Glenview (Illinois), 1975.
Matteson, M.T., ‘Some Reported Thoughts on Significant Management Literature’, Academy of Management, June 1974, pp. 386-391.
Pascale, R. T., Managing on the Edge, Penguin Books, New York, 1991.
Scott, Jonathan, T., The Concise Handbook of Management, Haworth Press, New York, 2005.
Sirota, David & Mischkind, Louise A. & Meltzer, Irwin, The Enthusiastic Employee: How Companies Profit by Giving Workers What They Want, Wharton School Publishing (Pearson Education, NJ), 2005.
Wren, D.A., The Evolution of Management Thought, John Wiley & Sons, New York, 1994.

(Note: The material in on this page is a compilation of original research material and published work and is covered by a Creative Commons 3.0 copyright license. For more information and explanations see Managing the New Frontiers (2008) and The Entrepreneur's Guide to Building a Successful Business (2009). Both book are by Jonathan T. Scott)