01-Why are we talking about solidifying management fundamentals now?
Not long ago, I had discussions with two clients, and they both mentioned the same thing: the environment and development stage have changed, business growth has slowed down, and the importance of organization, culture, and management, which are considered slow-moving elements, has risen in terms of ROI ranking. They emphasized the need to use organizational certainty to address environmental uncertainty.
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In the previous phase of rapid economic growth, some companies relied on marketing-driven, extensive growth, thriving on the dividends of scale and capital, and they appeared to not need much management. However, high-speed business growth masked many issues, and even if they had excellent management from the beginning, their growth might have been even faster.
Now, as we enter a new stage, it’s time to focus on operational capabilities and management efficiency. There’s a saying in the movie “Infernal Affairs”: “If you walk the path for long enough, you will eventually meet karma.” With no more dividends, no more burning cash, and growth slowing down, it’s time for these companies to pay the price for their previous rapid but reckless growth. Continuing with the same unrefined management practices won’t sustain the business, so smart companies are collectively starting to strengthen their management fundamentals.
Among the numerous privately-owned startups and rapidly growing businesses we serve, the leadership tends to be quite young. They’ve been “ripened” rapidly due to the swift growth of their businesses, and they are often “driving a big car with a young driver.” They generally haven’t received solid management training and have learned and accumulated experience by making mistakes along the way. Except for a few exceptionally gifted individuals, many of them lack a solid foundation in management. There are typically two types of behavior:
The first type is what I call the “hands-off boss.” They often set goals without clear explanations of how those goals were established, distribute tasks without considering specifics, and disregard their team members’ capabilities and willingness. There’s no feedback or guidance during the process, but they’ll evaluate performance afterward. If the goals aren’t achieved, they give a C or D performance rating, and if things don’t improve, they replace team members.
The second type is the “kind-hearted manager.” They have strong personal capabilities and, even as managers, tend to do everything themselves, always putting out fires. They believe that teaching their team members and clearly assigning tasks are slower than doing it themselves, and as a result, they end up exhausted, and their team members don’t grow. They’re always amiable but resort to “central planning” when it’s time for performance evaluation. The most concerning aspect of these individuals is that they can lead to the expulsion of good team members, as excellent individuals may leave due to perceived unfairness.
02-Is “management” outdated?
When it comes to management, I’ve observed a phenomenon where some people look down upon management and even “hate” professional managers.
I once heard a business founder say with great seriousness, “In this era, how can professional managers ever find jobs?!” There are two possible reasons why some people might think this way:
The first possibility is that they have encountered “bad actors” and have been hurt by them. They may have experienced or been poorly managed by individuals like the “hands-off boss” and the “kind-hearted manager” mentioned earlier. However, just as you can’t judge all men based on the existence of a few bad ones, this isn’t a reflection of all management or professional managers. It simply means they haven’t encountered good, high-level managers.
The second possibility is that they believe the times have changed, and young people, especially knowledge workers, don’t like or need to be managed. Some may even believe that the goal is to eliminate managers altogether. This perspective is rooted in the idea that each individual should manage themselves, be self-motivated, and have an entrepreneurial spirit. It’s not that they think management fundamentals are bad; rather, they disagree with a “discipline and control-oriented management style” and hope for more employee initiative and self-motivation. Organizations with this mindset require “empowering and inspiring” management fundamentals, not a complete absence of management.
03-Different Flavors of Management Fundamentals
Management fundamentals can be innovative, and their implementation can evolve with advancements in people and technology. However, every organization, regardless of how advanced its technology is or how young its employees are, faces issues related to aligning goals and still requires management fundamentals.
Fayol’s principles of management are not outdated; the five functions of management are still planning, organizing, commanding, coordinating, and controlling. They are always used to efficiently allocate resources through managing tasks, capabilities, and thoughts.
You can actively choose different degrees and methods of implementation, but the three dimensions of tasks, capabilities, and thoughts cannot have structural deficiencies.
Due to differences in underlying values, different companies may have different flavors of management fundamentals.
The most typical ones are three types: enablement and inspiration type vs. discipline and control type vs. incentive and attraction type (excerpted from the Chief Organization Officer’s Nine Types of Talent System, which is consistent with the types of management fundamentals).
Different flavors of management fundamentals have different underlying values, and there is no absolute good or bad.
The enablement and inspiration type believes that people are the key to success. They believe that talent is selected, cultivated, and inspired. They use empowerment to stimulate creativity, develop competence, enhance employee capabilities and self-confidence, and achieve performance and quality. Furthermore, it may involve self-organization, where employees autonomously set roles and even co-create missions.
The discipline and control type believes in managing situations by managing people. They use discipline to promote coordination, standardization, and continuous improvement. They believe that talent is managed and shaped, focusing on goal decomposition, performance evaluation, bottom-tier elimination, SOP, etc.
The incentive and attraction type believes that situations are stronger than people, and people succeed by facing challenges. They use various incentive methods to provide recognition and motivate desire. They believe that under the promise of rewards, there will always be brave individuals willing to take on challenges.
Certainly, different flavors of management fundamentals require different tools, mechanisms, scenarios, processes, and approaches to match them.
04-How to Strengthen Management Fundamentals?
Some people, even if they recognize the importance of management fundamentals and the different types, may not have the right approach to practice them. There are primarily three misconceptions:
The first misconception is individual learning. It’s either following whatever is trending in management practices at the moment or relying on personal talent and self-study. Some may learn one set of management techniques one year, another set the next year, and so on. This can lead to a situation where everyone in the same company has their own set of tools and thinks they are the best. With a multitude of techniques and a competitive atmosphere, it can result in low efficiency, counteracting each other’s efforts, and failing to build collective strength.
The second misconception is fragmented learning. There is an abundance of videos, live streams, information, and knowledge available, and learning without a systematic approach can lead to contradictions and problems. Some individuals might learn a particular concept and immediately apply it without considering prerequisites or whether it’s suitable for their current stage, leading to even more significant issues in other areas. For example, someone might learn about the “2-7-1” rule and then proceed to lay off 10% of their team without considering the company’s reputation, staffing levels, or inability to hire replacements. Another common mistake is adopting popular management practices like OKRs without understanding the specific industry context and without a deep understanding of the business.
The third misconception is tool-focused learning. During internal training sessions in companies, participants often say, “We have these tools, but we don’t use them effectively.” Going through the motions without genuine understanding or integration into the business can be futile. For example, OKRs can be a powerful management tool, but if they are not closely aligned with industry insights, lack depth, lack firsthand experience, or are not grounded in customer perspectives, they will not yield good results. Management tools need to be tightly integrated with business scenarios, established as part of a mechanism, and aligned with the company’s culture; otherwise, they will be used incorrectly.
So, how should one go about strengthening management fundamentals?
In other words, the correct way to enhance management fundamentals is to establish and collectively practice a set of management fundamentals that are roughly unified across the company. This involves transitioning from individual learning to collective learning, from fragmented learning to systematic learning, and from tool-focused learning to scenario-focused learning.
The first management fundamental is writing weekly reports. At TAL Education, the unique aspect of these weekly reports is that superiors write them for their subordinates, using them to help align and even crowdsource the achievement of goals. The template includes sections on last week’s accomplishments, next week’s plans, customer feedback, personal learning, and reflections. In these reports, praise and feedback for colleagues can be given, individual goals and work priorities can be synchronized, and leaders can set an example by embodying the company’s culture.
The second fundamental is conducting performance evaluations. There are two categories: first, managers serving as judges in others’ performance evaluations (such as probationary reviews and promotions). This serves as an excellent feedback and coaching opportunity and helps align talent standards. Second, superiors conducting performance evaluations for their subordinates. For instance, the CEO conducts two performance evaluations for all employees each year, outlining the company’s vision, assessing progress toward goals, and setting objectives and strategic priorities for the coming months.
The third fundamental is performance management. It involves understanding each step in the cycle from goal setting to performance evaluation. For instance, performance discussions should be structured to include 20% reflection on past achievements and 80% focus on future development for high performers, while for low performers, the conversation should be 80% focused on addressing issues and jointly developing improvement plans, with 20% addressing expectations.
The flavor of these management fundamentals at TAL Education is that of empowerment and inspiration. The underlying assumption is one of openness, equality, and transparency, treating employees as customers.
05-Management fundamentals can become a strategic organizational capability.
For instance, in industries where many companies have highly homogeneous business strategies, and competitors can quickly mimic products, services, and market actions, the opportunity for rapid growth through a simple model is limited. In such cases, having stronger management fundamentals can enable a team to work more effectively together, achieving similar results with lower costs, higher efficiency, and greater quality, making the company more competitive.
In situations where a company’s business strategy is unclear, organizational work becomes more valuable. This is often seen in companies where the “direction is roughly correct, but the organization is full of vitality.” Management fundamentals serve as an organizational capability, particularly for companies in the integration strategy formation phase and business strategy iteration phase.
Management fundamentals are a repository of a company’s best management practices and experiences. They can transform the management skills and wisdom of outstanding individuals into the company’s standards, mechanisms, and processes. This enables young managers to be empowered by the company, saving them time in rapidly improving their management abilities. At the company level, it produces a continuous stream of competitive managers, leading to a strong pool of talent.
To turn management fundamentals into a company’s strategic organizational capability, the company must have the right DNA and be willing to invest in in-depth research and long-term commitment. This DNA includes the industry’s characteristics, the leadership style and values of the top executive, and the current developmental stage of the company. In-depth research and long-term commitment involve defining and selecting management fundamentals that align with the company’s culture, productizing and contextualizing management fundamentals, having dedicated individuals responsible for this, and establishing a culture and support mechanisms that align with this commitment.