In more than 25 years advising bank chief executive officers, I have concluded there is really only one secret to outstanding management. I call it "holistic management" or management "by the whole."
Most CEOs seem unaware of this notion. Almost all run their businesses discretely or sequentially: by function, by issue, by crisis, by the "squeaky wheel," or by the latest management fad.
While none of these approaches are inherently wrong, they may be inadequate to generate the kinds of results CEOs strive for.
Managing by the whole typically brings the following benefits:
*A cohesive organization that accepts challenge.
*Corporate energies focused on key objectives, not distracted by tangential issues or management fads.
*Highly motivated, enthusiastic employees who work well in teams and have a clear view of what must be done to optimize their bank's market position.
How many banks can claim this level of excellence? Not many.
And why does managing sequentially generally fall short of superior results?
Adopting techniques, approaches, or solutions piecemeal can dilute their benefits and usher in new problems.
Strategic plans formulated by a broad cross-section of the organization at considerable cost can end up gathering dust. Lines of communication become clogged. Innovation, calculated risk-taking, and creativity are suppressed. Sensitivity and responsiveness to client needs and expectations are blunted.
Multiple interpretations of the corporate vision can lead to contradictory projects and programs. Downsizing improves short-term results but can leave the bank no longer able to build its business or capitalize on new opportunities.
To harness the power of holistic management, here are five steps every CEO can take:
Step back and take a good look at your bank. What are its greatest strengths and apparent weaknesses? How is it viewed by customers, prospects, and competitors, and how does that compare with its self-image? What kind of corporate culture does it have? Is it good at risk-taking? Is it innovative? Is it proactive and responsive?
Consider the forces of change in the needs of customers and prospects, in the evolution of competition, and in the impact of deregulation. How do we take advantage of the current wave of consolidation? What can we realistically achieve in size, financial returns, scope of our business, and product range and diversity? How do we best accomplish our goals?
(Answering these questions should involve getting comments from all parts and levels of the organization and objective outside sources: customers, prospects, industry specialists, and market research.)
Now consider all the management initiatives at your disposal. Think of yourself as an entrepreneur. How would you act if you were starting a business and trying to find a viable, new market niche? (You can bet that at least some of your competitors are thinking this way!)
Solicit employee opinions. Since they are closer to the firing line than management, your lieutenants can provide a different but equally valuable perspective.
Reevaluate your corporate vision, taking into account every area of the organization. Are you satisfied with your current strategic plan?
Mr. Powers is chairman of Boardroom Advisors Inc., a management consulting firm based in Tampa.