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How to get great performance out of people
February 2012
Reading about the commitment of Apple’s
Steve Jobs to design quality, sometimes to the detriment of
engineering,
(i.e. putting too much focus on the look vs.
functionality or ease of manufacturing) reminded us of a book,
“Performance
Without Compromise, How Emerson Consistently Achieves
Winning Results, by Charles F Knight”, 2005.
Emerson is a diversified global manufacturing and technology company
offering a wide range of products and services in
the areas of
network power, process management, industrial automation, climate
technologies, and tools and storage
businesses. It is widely recognised for its engineering capabilities and management
excellence.
Charles Knight was CEO for 27 years, during which time Emerson was
continuously profitable. He formalised the
management process that
is described below. Since this formal process was adopted, Emerson’s
revenue has increased
from under S1 billion, to $15 billion in 2005,
and $24 billion in 2011. The company has continuously improved on
its dividends to shareholders for the past 55 years (Apple does not
pay dividends).
Knight’s successor, David Farr, has continued to
grow the revenues in 2009 and 2010; even though they were not immune
to the credit crunch and revenues dropped slightly. They did however
rebound in 2011.
It is interesting to compare a steady engineering company that has
performed consistently well over many years and
delivered value and
money to shareholders, to a design-based company that nearly went
bust, doesn’t pay dividends,
but generated a turnover of $43 billion
in 2011.
Emerson Management Process
-
Keep it simple
This is not as easy as it sounds. Growth and success bring
complexity. Good managers filter out the noise and concentrate
on the essential tasks. This requires intense focus, discipline
and energy. They set a few priorities and communicate them in
ways that all employees understand and support. (Apple only
focuses on a few products at a time.)
-
Commitment to planning
Formalising and committing to planning brings a number of
benefits – setting company direction, identifying where growth
will come from, understanding major trends that the company
needs to respond to, etc. (Interestingly, Apple
has not been a
good planner. Many of their
products have been delivered much
later than originally targeted.
Fortunately, the market has been
forgiving. Steve Jobs was known for his “reality distortion
field”. He would have unrealistic demands regarding time and
refuse to listen to other timelines. Inevitably, the delivery
dates were late.)
-
Strong system of follow-up and
control
No vision is achieved unless it is executed. Emerson takes
implementation seriously by rigorously and routinely following
up on
plans. (Steve Jobs would keep tight control of every aspect of
the new product. The only aspect he couldn’t fully control was
time!)
-
Action-oriented organisation
Effective leaders instil a sense of urgency in their
organisations. They make decisions quickly and take action to
remove barriers.
(Apple would only employ A-type people who
decide quickly, even if a product has to be delayed
due to poor
quality.)
-
Operational Excellence
Emerson defines the standards to which operational excellence is
judged.
(Apple also insists on excellence in everything.)
-
Creating an environment in which
people can and do make a difference
Charles Knight has formulated ten keys for business leaders to
aspire to:
-
Be committed to success
-
Set proper priorities
-
Set and demand high standards of excellence
-
Be tough, but fair in dealing with people
-
Concentrate on positives and possibilities
-
Develop and maintain a strong sense of urgency
-
Pay attention to detail
-
Provide for the ability to fail
-
Be personally involved
-
Have fun
If an organisation has leaders that follow the above, then its
people will flourish.
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