Managerial literature

Publishing house & Bookshop

www.motivpress.cz

.

Dedicated to all the people at Motiv

to have inspired me since 1996.

.

František Hroník

MANAGERIAL INTEGRITY

Chief Editor: Martin Moravec

Translation and language revision: Alfa CZ

Technical editor, typesetting and cover: Jiří Mičkal

Published by Motiv Press s. r. o.

Řehořova 14, Brno 618 00 Czech Republic

e-mail: info@motivpress.cz

Tel.: +420 777 668 472

www.motivpress.cz

Number of pages: 152

First English edition

Brno, 2014

© František Hroník, 2014

© MotivPress, 2014

ISBN epub 978-80-87981-10-8

ISBN mobi 978-80-87981-11-5

Praise for Managerial Integrity

I was fascinated by the book. To me, it is a truly absorbing read about business and HR, one of the best I have ever read. Theory and practice are combined well, it is easy to read and hard to put down. This book has my utmost respect and praise.

Dušan Gábor, Director of Human Resources at a leading Business Service Company

Managerial Integrity is a thought-provoking book on how to manage successfully in today's complex work environment. Each chapter contains valuable insights and I particularly identified with the lessons on trust and trustworthiness – essential elements that are too often missing in corporate life.

David Lambert, author of Smarter Selling: How to Grow Sales by Building Trusted Relationships

Dr. Hronik has masterfully integrated and synthesized scientific research, stories full of wisdom, and his vast experience to create a guidebook for managers in how to lead ethically and create a culture of integrity within their organization.

Dr. Paul Marciano, Author: Carrots and Sticks Don’t Work.

The business world today places considerable demands on performance, results, and profit. Managers must resist the pressures that come while finding a way to succeed. Maintaining our integrity is challenging and when we lose our integrity, we lose our trustworthiness. This outstanding and unique book is a practical tool to help the reader maintain moral integrity while producing excellent results!

John G. Miller, author of QBQ! The Question Behind the Question and Outstanding! 47 Ways to Make Your Organization Exceptional

No book can make a manager. This one, however, will move you far forward in your quest to become a true leader. It will help you realise the importance of acting in accord with yourself, with others and with your company’s long-term benefits. If you long for your staff to say, “It was an honour to work for him/her”, then František Hroník’s book Managerial Integrity is the one for you.

Radovan Musil, Senior Director, Software Engineering, Red Hat Czech

As has been the case with František Hroník many times before, I was astonished. I was astonished by the view from above with which the issue of integrity can be understood. How contemporary integrity is. The way in which integrity is connected to other “managerial terms”, such as performance, motivation, corporate culture. None of the chapters were simply dry theoretical views. Instead they were captivating reading, illustrated by up-to-date, “in” examples from the world today, from contemporary life, reading in which the author brings together that which would seem incompatible in a very compact whole. And so it is that you find Welch alongside Kipling, the film Braveheart, footballer Patrik Berger and much more.

Ondřej Slabý, HR Director at Coca-Cola HBC

I say what I think. I do what I say. This has perhaps always been the way I work. The modern manager comes face-to-face with many situations every day, situations in which it is hard to find your way and when you need an imaginary North star to point you in the right direction and help you decide. For me, this has always been integrity, the chiming of my values and conscience with my actions. František Hroník’s book describes connections that were entirely new to me very understandably, using plenty of examples and analogies, helping me better understand many aspects, and within a wider context. Stories, intelligent and understandable graphs and even a poem explain how important it is never to deviate from your North star. I would recommend the book to all those who believe that work is not just a duty, that trust accelerates relations and that values are the foundation of a company.

David Vrba, CEE, 3M

The book of Fr. Hronik, Managerial Integrity, is listing and explaining a portfolio of managerial competencies, ranging goals, values, emotions and communication, to commitment, conflict, control, performance, decision making and moral integrity, among others. The text is higly motivational, interspersed with illustrating stories, compiled from a number of well-known authors and books from different cultures and circumstances. The book is especially useful for top managers who wish to motivate their employees with well-selected statements requiring not only their brains but also emotions, heart and empathy.

Prof. Milan Zeleny

Foreword

The integrity question mark

I never really thought about integrity in its own right. It always seemed something of a matter of course. Another reason I did not think about it was that I never had the feeling that something had changed in me or that I was doing something I did not myself believe in or that would not be important and good for those around me.

I began having questions about integrity when I became part of a work mechanism that wanted to and had to work in a particular way. By this I mean the team I work within and the management role I decided to take responsibility for. I always see integrity within the context of how much I believe in what I am doing, whether I am being myself and whether I act accordingly; whether others too believe in what I believe and whether it moves things forwards, towards the expected results we want to achieve as a team.

I always notice integrity when deciding between what I think it is right to want to achieve and what others think. I have found myself in various situations that are “on the edge”. When taking a decision, it has always been important to me to find a common intersection of principles. If you are leading a team (is there any other way of working these days than as a team?), there are times when you all have to identify with a particular decision. Such identification can come about for a variety of reasons, whether individual or shared. Only in this way can the whole team work towards the same objective, achieve something together and individually at the same time. I find it encouraging that the longer I work in my profession, the more I am aware that integrity is important to me and that it is just as important to most people around me. It is not simple, however. When you are overly convinced of being right, it is harder to find those common points of intersection – they are, of course, all the more reliable for it; you attend to them and appreciate them more.

The old adage of “practice what you preach”, of not drinking wine when you preach water, would seem to sum up the essence of it all.

However, does this mean that if you drink wine, you are lacking integrity? I am not sure if it is a contradiction, but if it is a way to make sure everyone is pulling in the same direction to achieve a common objective and you are still able to drink a glass of pure water, you have a chance. I am certain that František’s book will answer this question for many of us.

Anetta Gergeľová, Head of HR Department, Novartis s.r.o.

Foreword to English edition

I was honoured to be given the opportunity to write a few words about František Hroník’s book about managerial integrity. Before I opened the book and began reading, I thought to myself for a moment.

What is integrity? Do I understand what it means? How many forms can integrity take in practical life, in working and personal life? What makes managerial integrity specific? Things from my life began coming back to me and I reflected on how I am when it comes to integrity myself. I remembered situations from my own managerial experience and my private life in which I was not sure at all that I was acting with a sense of integrity.

I brought my rumination to a close by asking the question of how engagingly and convincingly a book about integrity can be written in this day and age. At a time that is dynamically fast, when morals are pushed to one side all too easily for the needs of short-term goals objectified in material packages, perhaps in the shape of annual bonuses.

Then I opened the book and began to read. And as has been the case with František Hroník many times before, I was astonished. I was astonished by the view from above with which the issue of integrity can be understood. How contemporary integrity is. The way in which integrity is connected to other “managerial terms”, such as performance, motivation, corporate culture.

After getting an initial feel for the book as a whole, I went back to look at individual chapters. None of them were simply dry theoretical views. Instead they were captivating reading, illustrated by up-to-date, “in” examples from the world today, from contemporary life, reading in which the author brings together that which would seem incompatible in a very compact whole. And so it is that you find Welch alongside Kipling, the film Braveheart, footballer Patrik Berger and much more.

My many years of experience at several multinational companies mean that I have come across various approaches to corporate codes of morals and ethics. František’s consideration of examples of the ethical principles of major corporations (General Electric, ČEZ) and other organisations (Motiv P) provides this area with a bit of humanity and reduces the formality and unreadability of documents themselves.

If I had to conclude with one idea or response that I take from reading the book, it would be the issue of “managerial maturity”, an issue that is seldom touched on. We often ask in our managerial work if this or that candidate is mature enough, senior enough, ready for such or such a task or role. Thanks to Managerial Integrity, I get the feeling that the word “maturity” has found deeper content and clearer connection to values, trust, morals and authority; meaning integrity.

Enjoy reading …

Ondřej Slabý, HR Director at Coca-Cola HBC

About the Author

František Hroník, PhD

You have in your hands the most celebrated work of one of the most prominent personages in the field of the psychology of work in the Czech Republic and Slovakia. Dr. Hroník has twice been nominated for manager of the year (2008 and 2012), and in both cases was a competition finalist.

He is a qualified and practising psychologist, who has been operating within a company environment since 1996, when he founded his own educational company, known for its e-learning products (virtual courses, psychology tests, e-360° feedback, etc) and innovative approach to creating systems for education and the creation of tailor-made developmental programmes. He works primarily as a consultant and coach for top management and a lecturer in tailor-made programmes for management for large multinational companies, including AHOLD, BAYER, Commerzbank, ENEL, GE Money Bank, GlaxoSmithKline, Novartis, Philip Morris, Red Hat Czech, Siemens Czech Republic and UniCredit Bank.

He is the author of 11 publications for management and human resources, and lectures on the subject of Managing People on MBA courses. He lectures at professional conferences, and publishes in professional journals. He holds inspirational educational events for managers, at which he presents innovations from various fields (primarily HR and management). Dr. Hroník also successfully creates programmes for conferences, featuring presentations by eminent managers, and the conferences are renowned for their connection with themes “from outside” – from the fields of sport, medicine and art.

Introduction

My colleague Michael Chytrý often teased me after the publication of my book Tales of Management that it was the first of my books that you could read – the others you had to study. He mentioned this once and it was mentioned, just by the way, by Mrs. Hana Krbcová, a true lady among personnel officers, that she had no books about managerial integrity that you could read. Could I not, perhaps, write one? So the very next day I began writing down everything such a book should include. This came at a time when I was involved in some inspiring discussion of integrity in practice with Milana Hrubá, a lady of clear and precise insight into a wide range of managerial situations. I met her at a company that had integrity defined as a competency and that was also the workplace of Anetta Gergeľová, whose will, application, and conscientiousness simply embodied managerial integrity in my eyes. I was also able to discuss values in business and in politics, where interests often win at the expense of values, with David Mack, an incredibly learned man, who introduced me to Lubomír Mlčoch, author of The Economics of Trust (original title: Ekonomie důvěry). There were, of course, other inspiring people that I was able to get to know better. I apologize for not naming them all. Among them are colleagues from Motiv that were my inspiration in a host of ideas. This book I dedicate to them. It is a book to be read and one that offers an understanding of my view of management. There is one other member of the Motiv team that I should mention, a person I have worked with for many years now. We began, in fact, before Motiv even existed. That person is Jana Dorazilová, who has the ability to read other people’s integrity with incredible speed.

I am delighted that I could again write a book that is not about methods. That in itself, though, would not be enough. I am aware that many people – managers being no exception – long for manuals, instructions that will work. We live at a time when the method is sometimes given more importance that the purpose or principle. One example here is the ever-developing concept of individual coaching. One authority urges us to check a company or person that offers individual coaching to find out whether some element of management is not concealed beneath their coaching. A person having completed a certified coaching course will say that a coach need not actually know anything about the business of the company where his charge works. This is confusion of language and thought. The method is placed above the purpose. There are many ways (methods) of reaching the destination and I will choose the most appropriate.

We are now faced with the most diverse range of situations and there is no universal guideline to deal with them, no single, correct method. We are, however, capable of understanding what is going on, what has always been here and what is simply a mark of the times. We can grasp principles and use these to find or create an approach, a way, a method to take us towards the objective. The need to find a stable point within ourselves is even greater in the world today, when all around us there is speed and uncertainty, when we move around an environment that is unstable. Managerial integrity is essential kit for a managerial environment that is particularly notable for its turbulence.

My hope is that Managerial Integrity is an inspiration and puts us in mind of the supporting principles of management. The book is not a story, so I am unsure of whether it will require study. It is not written for the reader to devour in one gulp – it will hopefully provoke some thought.

I will close here on a personal note. I thank my family, Jana and the children, for the patience they show when I am writing and cannot be with them.

Let’s begin with a word about principles.

“It is impossible for us to break the law. We can only break ourselves against the law.”

Cecil B. DeMille on his film The Ten Commandments.

Stephen R. Covey differentiates between principles and values.

He contends that principles are the territory or the compass and values are the map: “… the map provides description, but the compass provides more vision and direction.”

(Covey, S.R.: Principle Centered Leadership)

I have created a slightly different image of principles for myself. Different routes can be found to different destinations on the interactive map. Obstacles, places of danger and places where you can recharge the batteries all appear along the way. You can also change the destination. Perhaps you will not change the meaning and sense you attribute to the path. Nor will you change the principles.

The principle is that when you go uphill, your center of gravity is in front of you, whereas it is slightly behind you when you go downhill – otherwise you risk taking a tumble, even though you might move forward more quickly.

This change of your center of gravity might be a principle.

I also talk in the book of the thoughts of people I have unfortunately not met or spoken to face to face. All the writers quoted and presented in the Literature section were of inspiration to me.

I would, however, like to mention a few in particular: W. Bennis, S. R. Covey, P. F. Drucker, F. Fukuyama, C. Handy, J. F. Kennedy, J. Kotter, G. Lipovetsky, J. Magretta, K. Nordstrom, C. K. Prahalad, J. Ridderstrale, P. Senge, J. Sokol, R. Sprenger, H. and A. Toffler and J. Welch.

All these writers make you reflect on things and think them through. Each of them has a strong opinion.

Each is a “king” or a “lion” and I will talk about The Lion King in the chapter about Courage. I had to learn about them all, but how did it work out? Judge for yourself

The fundamental role of management

There have been managers since time immemorial. Just as there have been sawbones, doctors if you like. Not much has changed in those years, centuries, and millennia. In terms of objectives, that is. For the sawbones, the objective was to cure the patient. The tools of the job might have changed, but the objectives remain the same.

Managers transform the expertise and abilities of others into the effectiveness of the whole. The word “transform” sounds almost spiritual. For it to be such, we need to go further. A simple chart is not enough. We must ask the question,

“How do managers transform the expertise and abilities of others?”

They mainly use locomotive forces and cohesion. These are the two forces without which transformation cannot occur. This complicates the original chart a little, although it remains technically correct.

Other variables have a crucial influence on effectiveness in addition to the competency of experts and the two strengths of managers: principally mindsets and shared values. Their inclusion changes a relatively static diagram into one that is dynamic.

We will consider mindsets and shared values later.

Effectiveness and efficiency

Many authors distinguish between effectiveness and efficiency, claiming that effectiveness itself is not enough. Charles Handy sketches out this difference quite clearly, saying that our passion for effectiveness itself leads to deformation. If we cannot look at effectiveness from the right angle, it might happen that we find ourselves in a position in which we work so hard on effectiveness that we forget the original sense of our actions. Effectiveness is not always synonymous with efficiency. Electronic and voice mail are excellent additions to business life, incredibly effective in terms of fast personal communication. They are so effective, in fact, that the manageress of one large consultancy group once complained to Handy that her staff spent so much time listening to and answering the messages they receive that they had completely stopped thinking. Is this effective? Yes. Is it efficient? Handy is not so sure.(Adapted from Handy, C.: The Hungry Spirit)

The three types of effectiveness

Robert Kuttner (in Charles Handy, The Hungry Spirit) defines three different types of effectiveness. Each of these is named after the economist that corresponds to that effectiveness:

> Smith effectiveness

> Keynes effectiveness

> Schumpeter effectiveness

SMITH EFFECTIVENESS

Smith effectiveness makes sure that products are made in the right place at the right cost and are sold at the right price (a competitive price). Having Smith effectiveness means keeping nothing in reserve. That is why it is accompanied by a cost strategy and, where appropriate, a strategy for expansion or expansive retention of market share. Smith effectiveness ceases to be effective when there are “too many dogs fighting over the one bone”. To be effective, you need to have a finished product, to improve processes, and to respect the rules of the game.

KEYNES EFFECTIVENESS

If an organization, or an entire economy, is “operating” at a level below its possibilities, the opportunity exists to launch its turnaround by stimulating demand. Workers, for example, are “kept in supply”, “stockpiled”, are supported in different ways so that they are available when required. This leads to debts that are then paid off by later results.

SCHUMPETER EFFECTIVENESS

Schumpeter effectiveness is the most commonly stressed these days because it requires more than a sprint along a marked-out track (Smith effectiveness); it requires the search for new paths. Here there is time to think about how to do things differently. Only in this way can an advantage be maintained in the long term. Schumpeter effectiveness is accentuated in books such as Blue Ocean Strategy by W. Chan Kim and Renée Mauborgne. It is linked to the strategy of differentiation and the culture of friendly experiments. To apply Schumpeter effectiveness, you need to have sufficient resources.

We expect the manager that works at an organization that practices Smith effectiveness to behave differently to one at a company that applies Schumpeter effectiveness. Different types of effectiveness are more or less effective with regard to the situation. Individual cases of effectiveness are not contrasting in principle and so the manager should look at a situation through different glasses, always using the right tools and methods.

Increasing the effectiveness of an organization

Regardless of whether our organization is more Smith or Schumpeter, the following two areas exist for us to apply our approach:

> the effectiveness of processes;

> the effectiveness of people.

The x and y axes are not dependent on each other. It is impossible to maintain the effectiveness and sophistication of processes if you have ineffective (unmotivated) people. And vice versa: you will not keep highly effective and motivated people in routine work.

A manager is expected to be able to manage the effectiveness of people and processes to the maximum possible extent and with balance.

We have thus far concentrated mainly on the effectiveness of people and this is how we aim to continue. I mentioned the effectiveness of processes for the sake of completeness and to provide an understanding of contexts.

To see the whole picture and capture the entire area in which a manager must operate, I use a diagram with four different fields, marked out by the axes of processes – people and strategy – ad hoc routine operations.

All managers, including managers in the front line, operate in all four quadrants. It is highly likely that the focal point of activity of the general manager will fall within the 1st quadrant (strategy and processes), whereas a foreman will mainly operate in the 4th quadrant. What is more, what quadrant 1 actually involves, the content, will differ for the general manager and the foreman. To the foreman, for example, it might involve, “What do I want to improve in the running of the whole cycle I am in charge of?”

I should add a short comment in explanation of the diagram: The 1st quadrant mainly signifies a notion, a system. The 2nd quadrant involves transferring notions into the heads of other people so that they take them on as their own. Quadrant 4 (if we go clockwise) means the everyday application of the shared notion. Quadrant 3 focuses on appraisal, feedback, and specifying or adjusting the whole procedure. We get things moving (locomotive force) by passing clockwise through the quadrants.

The performance-oriented culture

It might seem inconceivable that a commercial organization could have any culture other than one that focuses on performance. We even expect managers at non-commercial organizations to put in a performance that has a recipient at the end in the shape of an internal or external customer.

A movement sometimes appears to protest against the culture of performance and conformity. The last such movement of any note was that of the Hippies in the 1960s. It was an outpouring of the views of the generation, of people not wanting to live the same way as those before them. The thing was, though, that Lennon, the Beatles, the Rolling Stones, and other bands became factories, out-and-out companies. We have been living in a culture that focuses on performance for centuries now, with only a few periods of interlude. A culture that is fully focused on performance asserts the management of excellence. Do you know who won the gold medal in the men’s 100-metres at the Olympics in 2008? It was a few years ago, but many people know that it was Usain Bolt. Few have any idea who came second. Similarly, we can all name the first man on the Moon, but might have problems remembering the second. One motto at General Electric says “today’s record, tomorrow’s standard”. This places pressure on performance. However, our outlook cannot end with performance, even in a performance-oriented culture. We need to ask questions about the sense of our business so as not to fall into a trap, like a mouse that runs itself to death on its wheel.

So, is making profit the sense of it all?

I have a provocative response to questions of this sort: the sense of doing business is not to generate profit. Profit is required and without it we would be hard pushed to fulfill the basic task of any organization; meaning to effectively serve the people it should serve. These people come from outside the organization and so the sense of an organization cannot be within – it does not exist for itself alone.

All organizations exist for their customers, to whom they bring value or use. To be able to provide this value or use, they must create profit and relationships of trust. Profit and trust, however, are a means within an organization as opposed to the objective. Trust, by contrast, is an objective in a natural group like the family.

We have simplified the world of cultures and strategies to provide a certain level of clarity. We can now add various concepts of effectiveness to this world.

The tough guy culture is an individualistic culture in which everyone competes with everyone else and there is nothing older than yesterday’s success. This was what it was like at Welch’s GE. In contrast to this is the culture of friendly experiments, a team culture, an innovative culture (adapted from Deal, T. E. and Kennedy, A. A.: Corporate Cultures: The Rites and Rituals of Corporate Life). NOKIA, whose market share significantly outstrips the competition, is one company with such a culture. The play-it-safe culture might look different depending on the strategy. The main points in both forms are not to make mistakes and to have good quality “brakes”. Most companies in the automotive industry (suppliers to the motor industry) have a culture that involves the strategies of safety and cost.

The typology of corporate culture according to T. E. Deal and A. A. Kennedy is based on how the external surroundings create the internal environment in which the manager and his staff operate. Strategies act in the same way. Why, though, am I talking about this in a book about managerial integrity?

A manager needs to know how to read the environment he operates in. To understand it. To respect it. He can then forecast what will happen, adjust accordingly and change.

What, then, is the fundamental role of management, of the manager?

We have come up with the following so far:

Managers transform the expertise and abilities of others into the effectiveness of the whole.

I illustrated this sentence with several examples, in most of which the function of locomotive force is evident. Managers understandably put things in motion. This is not enough, though – they need to bring people together and create cohesion.

When applying locomotive force, the role of the manager is often a differentiating one; in the case of appraisal and reward, for example. However, it is an integrating role when creating cohesion.

End of excerpt

Table of Contents

Title page

Copyright

Praise for Managerial Integrity

Foreword

Foreword to English edition

About the Author

Introduction

The fundamental role of management