General Managers

John P. Kotter

• Publisher: Free Press
• Year: 2010
• ISBN:
  9781451625950
• Topic: Business
• Subtopic: Management
• Index: Business

In this unprecedented study of America's leading executives, John Kotter shatters the popular management notion of the effective "generalist" manager who can step into any business or division and run it. Based on his first-hand observations of fifteen top GMs from nine major companies, Kotter persuasively shows that the best manager is actually a specialist who has spent most of his or her career in one industry, learning its intricacies and establishing cooperative working relationships. Acquiring the painstaking knowledge and large, informal networks vital to being a successful manager takes years; outsiders, no matter how talented or well-trained seldom can do as well, this in-depth profile reveals. Much more than a fascinating collective portrait of the day-to-day activities of today's top executives, The General Managers provides stimulating new insights into the nature of modern management and the tactics of its most accomplished practitioners.

1

Introduction

FOR MOST OF HUMAN HISTORY, people have depended upon themselves, farmers, craftsmen, traders, and landlords for the goods, services, and employment they needed. This is no longer true. Today people in the developed countries depend primarily on managers.

Virtually all the goods and services we need for our existence and for our enjoyment are produced by organizations that are controlled by managers. This was far from the case as recently as 150 years ago. Today, almost all “working” adults spend half of their nonsleeping lives being directed by managers. One hundred and fifty years ago, less than 10 percent did so. A century ago, many if not most people could reasonably say that the world’s business managers did not really affect their lives in significant ways. Almost no one can say that today. In his discussion of modern management in the Pulitzer Prize-winning book, The Visible Hand, Alfred Chandler writes that “rarely in the history of the world has an institution grown to be so important in so short a period of time.”¹

Yet despite the importance of modern managers to our present and future, because they are such a recent development, we know relatively little about them—about who they are, what they do, and why some are more effective than others.² And what we do know, or think we know, very rarely comes from the systematic study of real managers in any depth.³ This is particularly true for higher-level business managers—those charged with most of the responsibility for running an enterprise. Incredibly, there have been only two really in-depth studies of a group of top-level business executives, one by Sune Carlson in the late 1940s⁴ and one by Henry Mintzberg in the 1960s.⁵ And Mintzberg recently noted that his pioneering book, The Nature of Managerial Work, “exposes perhaps one percent of the proverbial iceberg.”⁶

This book attempts to chip away at another piece of that iceberg. It seeks to do so by reporting and discussing the implications of a study of a group of executives in generalist or general-management jobs: that is, individuals who hold positions with some multifunctional responsibility for a business (or businesses).⁷ Conducted between 1976 and 1981, this investigation employed multiple methods to look in depth at fifteen general managers from nine different corporations spread out across the United States. Although modest in scope by many standards, this is nevertheless the largest study of its kind ever conducted.⁸ (A description of the specific objectives and the research process itself can be found in Appendix A.)

The Participants in the Study

The people selected to participate in this inquiry were general managers in a number of different corporate and business settings (see Figure 1.1). Brief résumés on all of them can be found in Appendix D, which has been designed to help the reader keep track of individuals as their names reappear throughout the book.

Because of the significant amount of time and effort involved in studying each person—typically, almost a month of my time spread over the course of a year—the inquiry was limited to fifteen individuals.⁹ The specific participants (and companies) chosen were selected with three criteria in mind: (1) each had to have a GM job; (2) there had to be some evidence that they were performing well in those jobs; and (3) the overall group had roughly to mirror the very diverse pool of corporate settings from which it was drawn.

The participants ranged in age from thirty-six to sixty-two. The average age was forty-seven. Seven had bachelors’ degrees (only), the rest had masters’ degrees. All were U.S. citizens, although one was born in Europe. Most major religions found in the United States were represented in the group, but there were no women or blacks. (As of this writing, less than 1 percent of all general managers in the United States are women or blacks.) The GMs were spread across the United States: five were in New England, two in New York, four in the Midwest, one in the South, and three in California. All were married or engaged, and all had children.

FIGURE 1.1. A profile of the participants, the businesses for which they were responsible, and the corporations for which they worked

Although all fifteen GMs had jobs with considerable responsibility—the average 1978 compensation (salary and bonus) was about $150,000 per year—there was a wide range in the scope of their domains. A few people had over 10,000 employees reporting, through others, to them. Some had only a few hundred. A few dealt with budgets of over $1 billion, while one controlled a budget of only a few million dollars. The most typical job title was “Division President,” but even here there was considerable diversity. Only one of the GMs was actually the overall head of his company; most were “divisional general managers”.

The companies for which these men worked ranged from young (started in the 1950s) to old (250 years), and from big (yearly revenues of $10 billion) to small (yearly revenues of $10 million). All of the companies were moderately successful; none was on the verge of collapse. But some were much more profitable and growing much faster than others.

The industries these companies were in included: auditing and consulting; commercial finance; consumer small appliances; copiers; department-store retailing; investment management; magazine publishing; newspaper publishing; printers and plotters; pumps; retail banking; rubber and chemicals; specialty retailing; television; and tire and rubber. Many of the major aspects of the American economy were in some way represented.

Because of this range of people and GM jobs, it is hard to talk about the “typical” participant. Nevertheless, a brief description of a few of them can give one a flavor for what these participants are like. (A detailed description of these people and their jobs will be found in Chapters 2 and 3; brief résumés are in Appendix D.)

A Few Examples: Gaines, Thompson, and Richardson

Chuck Gaines¹⁰ was the president of one of three major divisions of a very large midwestern manufacturer. He was responsible for revenues in the billions of dollars and had a salary above $150,000 per year. Although he did not have all his business functions reporting to him, he was responsible for coordinating all of them. His title was “Executive Vice President and Division Manager.”

Chuck was born in a large, eastern U.S. city, the youngest of three children. He was raised outside the United States, but attended high school and college in the East. He began working for his current employer immediately after service in the Coast Guard and was married shortly after that. His career had taken him to three countries outside the United States, in addition to a number of locations inside this country. In 1979, he lived with his wife and eighteen-year-old son (a daughter was in college) a short distance from his corporate headquarters.

At age fifty, Chuck was a large and athletic-looking man. He gave the impression of being determined, forceful, ambitious, hard working, and cool under fire. More than most executives I’ve known, he clearly seemed both very powerful and very willing to use that power.

John Thompson was the head of the commercial finance division within a large eastern bank. His title was “Senior Vice President,” and he was responsible for about 500 employees. John was located at the bank’s headquarters and relied on corporate staff services in addition to his own people. His 1979 income was a little under $100,000.

John was born into a Methodist family in 1930 and raised along with his older brother in a small eastern city. After college and the army, he worked for ten years with one large manufacturing firm, then switched to his current employer. In 1979, he lived with his wife of seventeen years and two children (ages fifteen and twelve) in a rural suburb about twenty-five miles from work.

John was a bright, energetic, and well-organized executive who had an unfailing good sense of humor. He did not appear to be aggressively ambitious or forceful as Gaines. But like the others, he obviously enjoyed his job and was well thought of by his employer.

Michael Richardson was the president and chief executive officer (CEO) of an investment management company. This corporation employed about 200 people, many of whom had graduate degrees. Michael’s 1979 income was over $150,000.

Richardson was born in 1934, the fourth of six children in a Catholic family. He was educated at Ivy League schools and started work in the investment management field immediately after receiving his MBA. In 1961, he and four other people founded his current company. After working as a portfolio manager and a vice president of marketing for fifteen years, Richardson became president and CEO of that firm. In 1979, he lived with his wife and two children in an urban location a short distance from his office.

I found Michael to be an intelligent, sensitive, and sophisticated individual. Like Gaines, he worked long hours and was very ambitious. Like Thompson, he had a broad sense of humor and was extremely well organized.

The Findings and Their Presentations: Some Initial Comments

The Organization of the Book

The patterns found in the comparative analysis of the data on these general managers are presented in the following chapters. Roughly, these chapters answer the following questions in this order:

• Chapter 2: What are general management jobs really like? How much and why do they vary in different situations?

• Chapter 3: What kinds of people become general managers? How are they similar and different, and why?

• Chapter 4: In what ways do the GMs behave similarly? What common patterns exist in how they approach their work and what they do each day?

• Chapter 5: In what ways do the GMs behave differently? What causes these variations?

• Chapter 6: In light of the main findings in the study, what are the key implications for corporate selection, development, and staffing practices? For managing general managers? For the role of formal management education? For management theory and research?

Because some of the GMs in the study were performing better than others (see Appendix E for a detailed description of how performance was measured), throughout the book we will also address questions such as: Why do some of the GMs perform better than others? How much do differences in performance relate to differences inherent in the jobs and their business contexts? How much do performance differences relate to the different personal characteristics of the GMs? How much do performance differences relate to behavior?

Also throughout this book you will find about a half-dozen recurrent themes. These themes relate to size and scope, variety and diversity, specialization and fit, history and development, a necessary lack of “professionalism,” and understandable complexity. In many ways, these themes represent the key findings from this study.

The Major Themes

One is struck when looking at the information gathered in this study by the sheer magnitude of many things. The demands associated with the GM jobs (discussed in Chapter 2) were usually severe by most standards. Even the “smallest” of the GM jobs presented the incumbent with significant intellectual and interpersonal challenges and dilemmas. Likewise, the number of personal assets (discussed in Chapter 3) that the GMs brought to their work to help them cope with those demands was very large. There is no evidence that it was only (or mainly) due to drive, or interpersonal skill, or business knowledge that these GMs were successful. Instead, a large number of motivational, interpersonal, temperamental, cognitive, and other factors seem to have been important. In a similar vein, there is no evidence that any single thing that they did was of central importance by itself. Rather, they all did a lot of things in their approaches to their jobs and in their daily behavior (discussed in Chapter 4) that helped them mobilize their considerable assets to cope with significant job demands.

One is also struck in looking at the information from the study by the great variety and diversity. Despite the fact that all fifteen individuals were in GM jobs in U.S. business corporations, the differences among these people and their situations were in many ways greater than the similarities. The key demands associated with their jobs, the personal characteristics of the GMs, the way they approached the work, and what they did each day, were sometimes radically different. As such, two GM situations that look very similar on the surface in reality can be very different. And two very successful general managers can be very different in terms of their personal characteristics and behaviors. We will examine in some detail an example of two very different GMs in Chapter 5.

A third theme that emerges in the data and is found through-out this study relates to specialization and “fit.” The GMs tended to think of themselves as “generalists.” Many felt they had the skills to manage nearly anything well. Yet in reality, they were all highly specialized in many ways. They had specialized sets of interests, skills, knowledge, and relationships. These specialized personal assets allowed them to behave in ways that fit the demands of their specific situations. It appears that this specialization and fit was central in helping them to perform well despite very difficul...

Table of contents

• Cover
• Title Page
• Copyright Page
• Contents
• Preface to the Paperback Edition
• Preface
• 1. Introduction
• 2. The General Management Jobs: Key Challenges and Dilemmas
• 3. The General Managers: Personal and Background Characteristics
• 4. General Managers in Action: Part I—Similarities in Behavior
• 5. General Managers in Action: Part II—Differences In Behavior
• 6. Summary, Discussion, and Implications for Increasing GM Performance
• Appendix A: The Study
• Appendix B: Interview Guides
• Appendix C: Questionnaires
• Appendix D: Rèsumès for The General Managers
• Appendix E: Appraising GM Performance
• Notes
• Bibliography
• Index