Stop Wasting Valuable Time.docx

Stop Wasting Valuable Time.docx

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StopWastingValuableTime

Title:

StopWastingValuableTime.（coverstory）

Authors:

Mankins,MichaelC.1mmankins@

Source:

HarvardBusinessReview;Sep2004,Vol.82Issue9,p58,8p,1chart,2c

StopWastingValuableTime

Companiesroutinelysquandertheirmostpreciousresource--thetimeoftheirtopexecutives.Hereareseventechniquesthatwillhelpyourmanagementteammakebetterandfasterdecisions

AFEWDAYSBEFOREAnyCo'sbiweeklytopmanagementteammeeting,theCEO'sassistantsendsoutane-mailaskingattendeestosubmitagendaitems.Ahodgepodgeofsuggestionscomesback.TheheadofHRwantstoupdatetheteamonanastyagediscriminationlawsuitthat'sabouttogototrial.TheexecutivevicepresidentfortheEuropeanbusinessdivisionwantstodiscussdisturbingcompetitivetrendsinherregion.TheCIOasksforafewminutestoreviewplansforSarbanes-Oxleycompliance.ThemanagerofthelargestNorthAmericanbusinessunitneedstopresentamajorcapitalinvestmentproposalforafactoryautomationprogram.Themarketingseniorvicepresidenthastoshowsomealternativesforabigprint-advertisingcampaign.AndtheCEOhimselfwantstokickoffanefforttorevampthecompany'sannualplanningandbudgetingprocess.

Theassistantcreatesadraftagenda,listingtheitemsintheordertheyweresubmitted,allotsabestguessofthetimeneededforeach,andrunsitbytheCEO.Hereorderstheagendaabit,puttingtheroutine,operationalitemsupfronttoensurethatthebulkofthemeetingisfocusedonstrategicissues.

Butwhenthemeetingtakesplace,hisplangoesawry.Thegrouphasalong,drawnoutdebateaboutthelookandfeeloftheadvertisingcampaign,andthediscussionofSarbanes-OxleyturnsintoagripesessionabouttheITdepartment.Theexecutivesendupwithlittletimetodevotetothedeeperbusinessissues.Theygivethefactoryautomationplanagreenlightafteracursoryexamination--totheCFO'sgreatdiscomfort.TheyputoffconsiderationofEuropeancompetitionforafuturemeeting.AndtheyhaveanunfocusedandultimatelyinconclusivediscussionabouttheCEO'snewplanningprocess.Whenthemeetingbreaksup--anhourlate--peopleleaveinasourandcynicalmood,complainingtothemselvesaboutanotherwasteofvaluabletime.

ThescenarioI'vejustdescribedisplayedoutonaregularbasisatalmostanycompanyyoumightname,including,mostprobably,yourown.Foralthoughtimeismescarcestresourcemanycompany--afterall,noamountofmoneycanbuya25-hourday--thesadrealityisthatfewtopexecutiveteamsmanagetheirtimeatallwell.Aswe'llseeinthefollowingpages,thetypicalcompany'sseniorexecutivesspendlessthanthreedayseachmonthworkingtogetherasateam--andinthattimetheydevotelessthanthreehourstostrategicissues.Moreover,inmyexperience,thosethreehoursareseldomwellspent:

Strategydiscussionstendtobediffuseandunstructured,onlyrarelydesignedtoreachgooddecisionsquickly.

Thepriceofmisusedexecutivetimeishigh.Apartfromthefrustrationsthatindividualmanagerssuffer,delayedordistortedstrategicdecisionsleadtooverlookedwasteandhighcosts,hastilyconceivedandharmfulcostreductions,missednewproductandbusinessdevelopmentopportunities,andpoorlong-terminvestments.

ButasIwillalsoshow,drawingontheexperiencesofmyfirm'sclients,afewdeceptivelysimplechangesinthewaytopmanagementteamssetagendasandstructuremeetingscanmakeanenormousdifferenceintheirefficiencyandeffectiveness.Andoncethemembersoftheleadershipteamgetthebasicsright,theycanmakemorefundamentalchangesinthewaytheyworktogether.Strategymakingcanbetransformedfromaseriesoffragmentedandunproductiveeventsintoastreamlined,effective,andongoingmanagementdialogue.Forcompaniesthathavedonethis,managementmeetingsaren'tanecessaryevil;they'reasourceofrealcompetitiveadvantage,enablingtopexecutivestomakebetterdecisionsandtomakethemfaster.

HowValuableTimeIsSquandered

Averyrealconstraintonthefinancialperformanceofmostcompaniesistopmanagement'scapacitytoreachgooddecisionsquickly.Bothqualityandpaceareimportant.Obviously,poordecisionsmadetooquicklywillleadtoactionsthatdestroyshareholdervalue.Butgood--evengreat--decisionsmadetooslowlycandepresscompanyperformanceaswell.Unfortunately,researchshows,fewcompaniesmanageexecutivetimeinadisciplinedorsystematicway.

Inthefallof2003,myfirm,MarakonAssociates,collaboratedwiththeEconomistIntelligenceUnittoconductasurveyoftopmanagementteammembers（theCEO,COO,CFO,businessunitpresidents,managingdirectors,andsoon）from187companiesworldwidewithmarketcapitalizationsofatleast$1billion.Wewantedtounderstandhowtheseteamsinvesttheircollectivetime.Specifically,wewantedtoknowhowmuchtimetopmanagersspendtogetherasateamand,whentheymeet,howtheysetpriorities,howtheymanagethetime,andhowsuccessfultheythinktheyareatreachingimportantdecisions.

Eventhoughthecompaniessurveyedcompeteindifferentgeographicmarketsandindisparateindustries--rangingfromtelecommunicationsequipmenttowholesalebankingtoconsumerfoods--topmanagerswereremarkablyconsistentintheirviewsofhoweffectivetheirexecutiveteammeetingsare.Ourfindingssupportwhatmanyexecutiveshavelongsuspected--namely,thattheyspendtoomuchtimediscussingissuesthathavelittleornodirectimpactoncompanyvalue.Evenworse,theirmeetingsoftenfailtoproduceboththequalityandquantityofdecisionsrequiredtodrivesuperiorperformance.Specifically,here'swhatwediscovered.

Topmanagementteamsspendrelativelylittletimetogether.Executivesatthecompanieswesurveyedspentanaverageof21hoursamonthtogetherinleadershipteammeetings.Moreover,thetimetheyspentinanyonemeetingwasrelativelyshort,seldommorethanfourhoursatastretch--andlessinbiggercompanieswhosemanagementteamswerewidelydispersedgeographically.Giventheimportanceofthetopteam'sdecisionstocompanyvalue,it'sclearlyimperativethatsuchlimitedtimeisusedwisely.Sadly,thatwashardlythecase.

Agendasettingisunfocusedandundisciplined.Athalfthecompaniessurveyed,topmanagement'sagendawaseitherexactlythesamefrommeetingtomeetingoradhoc.Infact,whenaskedhowtheysetmeetingpriorities,mostexecutivessaidtheyweredrivenbythecrisisofthemoment（"WehaveaproductionprobleminUnitA;therefore,thismonthwewillfocustopmanagementonUnitA"）;historicalprecedent（"EveryNovember,wereviewourhumanresourcepolicies"）;oregalitarianism（"Everyoneintheroomwillgethisorherchancetospeak"）.

Inmanycompanies,theproblemiscompoundedbythefactthatnooneisexplicitlyresponsibleformanagingtheleadershipteam'sagenda.Sotheprocessforgettingimportantmattersinfrontoftopmanagementcanbeinefficient,evensloppy.Onefirminoursample,forexample,settopmanagement'sagendathroughwhatitdescribedasa"firstin,firston"process--where（asinourhypotheticalexample）theCEO'ssecretarysettheagendabyaddingtopicsastheywerephonedinbyexecutiveteammembers.Notsurprisingly,toomanyitemsfrequentlyendedupontheagendaand,consequently,theteamoftenranoutoftimebeforeitcouldaddresskeyitems.

Lessthan5%ofsurveyrespondentssaidtheircompanyhadarigorousanddisciplinedprocessforfocusingtopmanagement'stimeonthemostimportantissues.Theresultsarealltoopredictable.Theurgentcrowdsouttheimportant,andmeetingsendlate,frustratingteammembers,or--worseyet--endontimewithoutreachingimportantdecisions.Ineffect,topmanagementdelegatesmanyofthecompany'smostimportantissuestolowerlevelsintheorganization--toindividualsillequippedtodealwiththeproblems'underlyingcomplexityandpoorlyplacedtoseethelargerramificationsoftheirdecisions.Suchdecisionsoftenconflict,asastrategychosenbyoneunitworksagainstthestrategychosenbyanother,slowingexecutionandunderminingperformance.

Toolittleattentionispaidtostrategy.It'sprobablynotsurprising,giventheadhocwaymeetingprioritiesaresetatmostcompanies,thattopmanagementspendslessthanthreehoursamonthdiscussingstrategyissues（includingmergersandacquisitions）ormakingstrategicdecisions.Infact,ourresearchreveals,asmuchas80%oftopmanagement'stimeisdevotedtoissuesthataccountforlessthan20%ofacompany'slong-termvalue.Atoneglobalfinancialservicefirminoursurvey,forexample,aseniorlineexecutivereportedthattopexecutivesspentmoretimeeachyearselectingthecompany'sholidaycardthandebatingthebank'sstrategyfortheentirecontinentofAfrica（wheretheyhadmadesignificantcapitalinvestments）.Theyarehardlyexceptional:

Theexhibit"WheretheTimeGoes"givesadetailedbreakdownofhowatypicaltopmanagementteamspendsitstime.

Topmanagementmeetingsaren'tstructuredtoproducerealdecisions.Mostleadershipteammeetings（morethan65%,accordingtoourresearch）arenotevencalledforthepurposeofmakingadecision.They'reheldfor"informationsharing,""groupinput,"or"groupdiscussion."Themeetingsthatdofocusonstrategyaremostcommonlyoff-sitebrainstormingsessions--typicallyamorphouseventsthatproducefewtangibleoutputs.Asaconsequence,veryfewexecutivessurveyed（only12%）believedthattheirtopmanagementmeetingsconsistentlyproduceddecisionsonimportantstrategicororganizationalissues.

Whenleadershipteammeetingsdoproducedecisions,manyorganizationshavedifficult