Who is it about?..
As far as a manager’s duties are concerned, top managers are responsible for the development of the company as a whole and they have a right to use its resources independently within the sphere of their responsibility.
In recent Gurkov I.B. research of international management practices it was concluded that top-managers need a budget (a certain percentage of turnover) which a top-manager can use without reporting back; a contract with a description of top-management duties (through goals and indices); and a description of corporate duties that support the top-manager’s main functions (through the volume of allotted resources).
In Russia the word “top-manager” is used in different ways. In some companies not only the first two level of managers are called top managers, but also the third level managers such as regional directors, directors of different departments and branches belonging to big holding companies.
In this article we present top-managers’ work aimed at achieving the companies’ goals of reaching a higher level, where the decisions that are made by top-managers are tactical as well as strategic. In terms of organizational structure we will use the appellation “top-manager” for managers of the first two levels: this includes General Manager, deputy directors, and directors responsible for different functional spheres of work (finances, marketing, sales, business development, production, logistics, personnel, etc). The main feature of a top-manager is a responsibility for making decisions on a company-wide scale or having a responsibility for its key functions.
 What is the team for?
According to research (Adizes I. Managing Corporate Lifecycles. - Paramus, N. J.; 1999; ) on company development, it is known that the firm is a kind of expression and continuation of the founder’s personality: it is his/her favorite child, a toy and a playground at the same time. In this case the concept “team” is rather a united working group in which all the efforts are coordinated in the headquarters, led by the founder.
Centralization relates to the dynamic and flexible business style with its informal ways of making decisions.
Initiative and coordination
Initiative is required at the early stage of development; and it is the owner who has this. Intuitive decisions must also be present at the next stage of professional management. It is necessary for the management to use the “administrative turbine” to accelerate business and to turn organic company growth into rapid growth. Whilst growing, the company approaches a kind of fork in the road, a situation of strategic choice where there is a need for important personal decisions: for owners it arrives at the time when they must hand over to a new administration and lose some control, for managers it is time to decide whether to accept a new strategy or to leave the company.
It often happens that the administrative people do not aspire to work the company to its maximum potential as this is often followed by a very intense and difficult situation for top-managers. It is not surprising that an active owner is worried by the lack of initiative among top-managers, particularly in the case administration where there are just a group of grumbling and conflicting executives.
If there is no drive for coordination the top-team turns into a group of people working separately. Initiative without coordination does not allow the team to develop synergy. As a result the owner-manager must constantly interfere to coordinate the separate managers’ work.
Without aligning goals, top management cannot be effective
I once worked as a consultant with a top-team. The owner spoke about them, sighing: “It takes long to make a decision and for them to carry it out. It takes managers a long to solve routine problems…” As a result the owner interfered in operative decisions. “I want to hire a psychologist to reduce conflicts.”
During the working session, top-managers learnt one of the strategic management models (M.Treacy, F.Wiersema. The Discipline Of Market Leaders. Reading, 1995) that consists of three variants of development strategy that can be presented as an equilateral triangle. I asked every manager to draw a triangle and to put a dot in a place the company is situated now in his/her opinion and another dot showing the direction the company should move towards during the coming year. Then two dots had to be connected by an arrow. Then I collected the drawings, analyzed them and summarized them as follows (see the figure).
 What is the team for?..
As we can see there is a discrepancy between the conflict of managers’ and owner’s positions and interests. It does not mean that managers are not hard-working enough and they need to be changed. Managers can work hard and be responsible for their area of working, but they still can hamper business development without realizing it. “We could have opened a minimum of two new plants if the managers’ decisions had not been hampered by constant discussions…” – said one general manager and owner. – “But these are the only directors I have and it would hardly help business if I change the team.”
The difference of the owner’s and the managers’ interests is based on the nature of business development and strains in case of rapid growth.
We got used to thinking that we are living in a unique country inhabited by mysterious people and everything is different from the world of perfect corporative management, with its perfect relations between the owner and the managers which makes it impossible to apply these schemes in our work. In real life these “perfect models of business” fail, for example, Enron and Worldcom.
What to do with top-managers?
In practice there are usually two basic solutions.
The first one is to change the team... but (leaving ethical problems and personnel possibilities) if you do it there is no guarantee that new top-managers will be any different.
The second: to leave everyone and to teach them to work differently… But is it possible to let people who are stereotypes of operational managing make strategic decisions?..
There certainly is a mixed variant. Some managers can be replaced, some of them can be re-taught.
Top-team upgrade
The most difficult and the most clear way for the owner is to cultivate the initiative in making strategic decisions and management coordination in a team of competent top-managers. It is not an easy to carry it out as the owner must be ready for long-term, hard work; however an advantage is that decisions are made with the help of the same managing instruments which managers are learning to use. The decisions are carried out through internal project mechanisms
| 
en.jpg)
