The things that the proponents of “management audits” talk about—integrity and creativity, for instance—are better left to the novelist.
The “bottom line” measures business performance rather than management performance. And the performance of a business today is largely a result of the performance of management in years past. Performance in management, therefore, means in large measure doing a good job of preparing today’s business for the future. The future of a business is largely formed by present-management performance in four areas:
- Performance in appropriating capital: We need to measure the return on investment against the return expected.
- Performance in people decisions: Neither what is expected of a person’s performance when he or she is put into the job, nor how the appointment works out, is “intangible.” Both can be fairly easily judged.
- Performance in innovation: Research results can be appraised, and then projected backward on the promises and expectations at the time the research effort was started.
- Strategies versus performance: Did the things that the strategy expected to happen take place? And were the goals set the right goals in light of actual developments? Have they been attained?
ACTION POINT: Perform a management audit of yourself and the people who report directly to you. The criteria should include whether you/they made good people decisions, whether you/they have had any innovative ideas, and whether your/their strategic expectations came to pass.
Managing in Turbulent Times
* Source: The Daily Drucker by Peter F. Drucker