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MAXIMUM
PERFORMANCE
This book is dedicated to the visionary pioneers who
created the world we now live in; and to those who are
creating the world we will inhabit in the future.
MAXIMUM
PERFORMANCE
A practical guide to
leading and managing
people at work
Nick Forster
Professor at The Graduate School of Management, University of
Western Australia
Edward Elgar
Cheltenham, UK • Northampton, MA, USA
© Nick Forster 2005
All rights reserved. No part of this publication may be reproduced, stored in a retrieval
system or transmitted in any form or by any means, electronic, mechanical or
photocopying, recording, or otherwise without the prior permission of the publisher.
Published by
Edward Elgar Publishing Limited
Glensanda House
Montpellier Parade
Cheltenham
Glos GL50 1UA
UK
Edward Elgar Publishing, Inc.
136 West Street
Suite 202
Northampton
Massachusetts 01060
USA
A catalogue record for this book
is available from the British Library
ISBN 1 84542 000 4 (cased)
Typeset by Cambrian Typesetters, Frimley, Surrey
Printed and bound in Great Britain by MPG Books Ltd, Bodmin, Cornwall
Acclaim for Maximum Performance
‘In my experience a major shortcoming of most “how to” books on leadership
and management is that they purport to offer “Silver Bullets” – magical solutions that, once revealed, will enrich and transform the reader and his or her
organisation. Regrettably, business life is not that simple. Rather, it is characterised by uncertainty and lack of precedent and complicated by the different
wants, needs and motivations of people. Nick Forster’s practical book,
grounded in many years of leadership and management development and
MBA education, recognises this complexity and the folly of “one-size-fits-all”
solutions. It is a valuable source book, packed full of useful ideas for current
and aspiring business leaders.’
– Mr Michael Chaney, Australian Businessman of the Year 2003 and
former CEO of Wesfarmers – the Australian Financial Review’s
Company of the Year 2002. Mr Chaney becomes Chairman of the
National Australia Bank in June 2005.
‘Maximum Performance delivers what it promises. It is practical, useful and well
grounded in up-to-date research findings from across the globe. Nick Forster
writes well, with a lively voice and has peppered the text with rich examples
and case studies. The diagnostic skill exercises and inventories offered
throughout are especially helpful. The book meets the needs of both managers
and students alike, across a wide span of experiences. Well worth the investment.’
– Professor Barry Posner, Dean of the Business Faculty at Santa Clara
University, California and co-author, with James Kouzes,
of The Leadership Challenge
‘Maximum Performance is an essential read for all business owners, managers,
consultants and key decision makers. It is an outstanding and comprehensive
insight into the broad range of managerial and leadership issues which
confront business people today. It is practical and littered with excellent case
study examples and illustrations. Its unique style is easy to read, thought
provoking and demystifies concepts that are easily misunderstood outside an
MBA course. Grasp and digest this book quickly because it’s the smart thing to
do.’
– Barry Smith, Managing Director, the General Management
Consulting Group
‘Nick’s book is an energetic and down-to-earth exploration of the many dimensions of this enigmatic thing we call leadership. It is a distillation of much
knowledge, experience and insightful observation. There is refreshing and
satisfying clarity of discussion; with comment on many management theories,
explanations of evidence and research and the consequences of their applications in organisations. The pages are brimming with examples, keeping the
messages real, practical and always interesting. Maximum Performance is
thought provoking, and the reader is constantly challenged to assess his or her
own knowledge, experience, attributes, perceptions and behaviour. It is a
wonderful resource for those beginning their endeavours, introducing them to
the complexities of leading people, and a delightful summary of instantly
recognisable experience to those who are well on the journey. It is hugely valuable to all, whether for new knowledge or a welcome refresher. And, there is
just a touch of irreverence, adding an enjoyable balance to a serious subject.’
– Dr Penny Flett, CEO of the Brightwater Care Group and
Telstra Australian Business Woman of the Year, 1998
v
vi
MAXIMUM PERFORMANCE
‘We all seem to know when we are receiving good or bad leadership, yet for
many of us being a good leader seems to be so elusive. Why is this so? The fact
that we are human and sometimes trapped by our wants, needs and motivations inevitably gets in the way, and leadership within Local Government is
fraught with complex problems and competing forces both internally and
externally. Maximum Performance will be an extremely useful aid for all who are
looking for a practical, sensible and thought provoking insight into management and leadership issues. Nick provides an excellent insight into the mysteries of management and leadership with this very practical and useful book that
I am sure will be a great resource for current and emerging leaders.’
– Ricky Burgess, CEO of the Western Australian Local Government
Association and the Australian Institute of Management
Business Woman of the Year, 1997
‘As consultants working with small to medium sized businesses, we are
always searching for practical resources to recommend to our clients that can
help them put their activities into a broader perspective, and help raise their
understanding and expectations of what their businesses and employees are
capable of. Maximum Performance is such a resource. Not only does it demonstrate the true value of good leadership, people management skills and the role
of organizational culture in developing, motivating and retaining good staff, it
also juxtaposes these with broader issues such as managing change, creativity
and innovation, managing employee knowledge and intellectual capital, and
the impact that emerging technologies will have on business and organizations
in the near future.’
– Philip Watson, Director and Principal Consultant,
the General Management Consulting Group
Contents
List of figures
List of tables
The author
Acknowledgments
Preface
viii
ix
x
xi
xiii
1
The foundations of leadership and
people management
2
Personal performance and stress
management
3
Communication at work
4
Employee motivation, empowerment
and performance
5
Leading and managing teams
6
Doing it differently? The emergence of
women leaders
7
Managing power, politics and conflict
8
Leading organizational and cultural
change
9
Innovation and organizational learning
10
Managing employee knowledge and
intellectual capital
11
Leadership and people management in
high-tech, networked and
virtual organizations
12
Leadership and business ethics
Conclusion: leading and managing people
at work
Appendix 1
Appendix 2
The business case for emotional
intelligence
The benefits of health and wellness
programmes
Bibliography
Index
vii
1
57
92
160
201
224
276
298
347
396
429
487
536
548
551
556
576
Figures
1.1
3.1
4.1
6.1
6.2
8.1
9.1
11.1
11.2
Would you invest in this company?
The spider
Content theories of motivation
compared
Male and female brains
Masculinity and femininity
Kolb’s learning cycle
Picture puzzles
The exponential growth of computing,
1900–1998
The exponential growth of computing,
1900–2100
viii
38
131
166
237
248
316
356
434
434
Tables
1.1
1.2
3.1
4.1
4.2
5.1
6.1
7.1
9.1
10.1
11.1
12.1
12.2
12.3
The origins of our ideas and beliefs
about leadership
Desired leadership qualities compared
Communicating with the whole mind
The satisfaction–dissatisfaction
process
Semco: tore up the rulebook in the
1980s
Team rules
Confidence in women
The two faces of power and politics
Linear and lateral thinking
Knowledge assets
Out with the old and in with the new
Perceptions of occupations’ ethical
standards
Top five performing ethical
investment trusts in Australia, 2001–2
Transparency International corruption
perceptions index, 2003
ix
21
45
133
171
196
220
244
280
352
408
454
507
508
523
The author
Professor Nick Forster is based at the Graduate School of Management
(GSM), The University of Western Australia. He has been involved in
postgraduate management education since 1991 in the UK, Australia
and Singapore. At the GSM, he has taught on the Organizational
Behaviour, Management of Organizations, and Social, Ethical and
Environmental Issues in Organizations units on the MBA programme,
and the Managing Strategic Change unit on the Executive MBA. He
has also received ten MBA-nominated commendations and awards for
teaching, and was chosen by his peers as a nominee for the 2000
Australian Universities’ National Teaching Awards ceremony in
Canberra, attended by the Australian Prime Minister John Howard.
He has published four books, written more than 70 articles in a variety
of international academic and professional journals, and has produced
several research and consulting reports for organizations in Australia
and the UK. He has been a regular contributor to WA Business News,
and was also a guest management columnist for Corporate Relocation
News, the biggest selling corporate relocation magazine in the USA,
from 2000 to 2002. Outside the GSM, Nick has been involved with the
Australian Institute of Management (AIM) Leadership Centre in the
delivery of leadership and management training workshops to several
of WA’s largest companies and public sector organizations, including
the Office of the Premier and Cabinet and the City of Perth Executive.
From October 2003 to March 2004, he was a Principal Facilitator for
WesTrac and the Water Corporation in AIM’s Action Learning
Programs, run in conjunction with the Harvard Business School. He
has also collaborated in numerous research and consultancy projects
with UK and Australian companies, and was on the national judging
panel for the 2003 and 2004 Australian Human Resource Management
Awards (for further information, see www.wamcg.com.au).
Nick has lived in several countries and worked in a variety of other jobs
in his younger days, as a barman, waiter, house-renovator, safari park
warden, professional musician, music studio engineer and part-time ski
instructor. His leisure interests include alpine skiing, mountain biking,
scuba diving, white-water rafting and, occasionally, bungee jumping.
x
Acknowledgments
I’d like first to express my gratitude to all those people, past and
present, who have helped to shape my understanding of leadership
and people management in contemporary organizations. These are, in
no particular order, Alistair Mant, Barry Posner, Jay Conger, Edgar
Schein, Edward ‘Weary’ Dunlop, Jeffrey Pfeffer, Penny Flett, Ricky
Burges, Michael Chaney, Fons Trompenaars, Daniel Goleman, Nelson
Mandela, Confucius, Tsung Tzu, James Kouzes, David Carnegie,
Martin Luther King Jnr, Ray Kurzweil, Bill Hewlett and Dave Packard,
Ricardo Semler, Richard Teerlink, Charles O’Reilly, Tom Peters,
William McKnight, Germaine Greer, Joan Kirner, Moira Rayner, Jack
Welch, Winston Churchill, Scott Adams, Paul Robeson, Henry
Mintzberg, Abraham Lincoln, Franklin D. Roosevelt, Edward de Bono,
Andy Groves, Herb Kelleher, Gordon Bethune, James Collins, Jerry
Porras, Fiona Wilson, Charles Handy, Amanda Sinclair, Peter Drucker,
Gary Hamel, Nicolò de Machiavelli, Aristotle, Plato, Socrates, Anita
Roddick, Peter Senge, Ari de Geus and last, but not least, John Cleese
in his Video Arts days. Their insights about effective leadership and
people management can be found throughout this book.
During an academic career spanning 16 years, I’ve been privileged to
be involved with hundreds of able, motivated and creative MBA and
Executive MBA students in the UK, Australia and Singapore. The
contents of this book have been influenced by their anecdotes and
stories about the leaders and managers they have worked under, as
well as their personal experiences of leading and managing others. All
the materials, exercises and self-evaluation exercises contained in this
book have been extensively ‘road-tested’ with well over a thousand of
these men and women and many other groups of professionals and
managers, so their contribution to this has been significant. I’ve also
had a number of high-profile guest speakers on MBA programmes in
recent years. They too have shaped my understanding of what successful leadership and people management is really all about. I’d like to
thank both groups for their influence and inputs to the book.
I’d also like to thank Fenman Limited, the Financial Times and PrenticeHall, MCB University Press, McGraw-Hill, Pearson Education, Alan
and Barbara Pease and Ray Kurzweil, for their permission to make use
of the following materials.
xi
xii
MAXIMUM PERFORMANCE
Chapter 3: N. Forster, S. Majteles, A. Mathur, R. Morgan, J. Preuss, V.
Tiwari, and D. Wilkinson (1999), ‘The role of storytelling in leadership’,
Leadership and Organization Development Journal, 20(1), 11–18, and N.
Forster (2000), Managing Staff on International Assignments: A Strategic
Guide (pp. 47–9).
Chapter 6: ‘The Brain Wiring Test’ from A. Pease and B. Pease (1998),
Why Men Don’t Listen and Women Can’t Read Maps (pp. 64–72).
Chapter 8: N. Forster (2002), ‘Managing excellence through corporate
culture: the H-P way’, The Management Case Study Journal, 2(1), May,
23–40.
Chapter 10: ‘Does your organization have a knowledge management
culture?’ and ‘The Knowledge Network’, from B. Bagshaw and P.
Philips (2000), Knowledge Management.
Chapter 11: N. Forster (2000), ‘The potential impact of third-wave technologies on organizations’, Leadership and Organization Development
Journal, 21(5), 254–63; ‘The exponential growth of computing
1900–1998’; ‘The exponential growth of computing 1900–2100’, from R.
Kurzweil (1999), The Age of Spiritual Machines.
Conclusion: N. Forster (2000), Managing Staff on International
Assignments: A Strategic Guide (pp. 153–4).
Last, but not least, I’d particularly like to thank Edward Elgar for his
belief in this book’s potential, Francine O’Sullivan, Joanne Betteridge,
Karen McCarthy and Caroline McLin for their patient guidance and
assistance throughout the editing and formatting process and the
submission of the manuscripts for the book, and Madeline Tan for her
help with the graphics and diagrams.
Nick Forster
Perth, Western Australia, September 2004
Preface
Walk into a large bookstore in any city of the world, stroll through the
bookshops at international airports, visit university libraries or browse
e-booksellers’ websites and you will find dozens of books on leadership and people management. These will range from highbrow academic discourses to books written by management consultants, from the
autobiographies of well known political and business leaders to satirical works on modern organizational life, like those of Scott Adams or
Dennis Pratt. What can one more book add to this extensive and wideranging literature?
First, all of the materials, self-evaluation exercises and questionnaires
contained in this book have been extensively ‘road tested’ in the UK,
Singapore and Australia, over a ten-year period, with more than one
thousand Master of Business Administration (MBA) and Executive
MBA students, on multi-award winning postgraduate management
courses. They have also been tried and tested in dozens of leadership
and management development courses over the last decade. Only those
materials and exercises that have worked for busy managers and professionals, or have passed ‘The MBA Test’, are included in this book.
Hence it is particularly suited to people enrolled on MBA programmes,
as well as those who may want to update their leadership/people
management skills but are unable to take time off work to attend expensive (and often ineffective) ‘management training’ courses.
Second, many publications overlook essential elements of present-day
leadership and management, particularly those relating to self-awareness and integrity, personal values, personal performance and stress
management, and vision and creativity. This book is comprehensive in
its coverage of all the elements of leadership and people management
that professionals now need to be aware of. This includes traditional
topics, such as employee motivation and performance, communication
skills and leading and managing change, as well as more modern
issues, such as business ethics in a global economy and leadership in
high-tech and virtual organizations. It also looks at how leaders and
managers can create cultures that promote essential modern organizational competencies such as innovation, the effective dissemination
and use of knowledge and intellectual capital, and creating systemic
intelligent learning capabilities amongst employees.
xiii
xiv
MAXIMUM PERFORMANCE
Third, this book integrates several perspectives on leadership and
people management, including those of real-life leaders, business
commentators, management consultants and academics – with a fourth
dimension: what we’ve already known about effective leadership and people
management throughout the ages, and yet seem to have to ‘reinvent’ with each
new generation. The book also synthesizes materials from more than 700
books, articles, professional journals, newspapers and websites. What
appears here represents a distillation of the best practical ideas about
leadership and people management of recent times, condensed into a
form that busy managers and professionals can assimilate and make
immediate use of at work, in large, medium-sized or small organizations, and in the public or private sector.
Fourth, the book demystifies leadership and people management. It
highlights not only the ‘hard-wired’ traits we may inherit at birth, but
also the ‘soft-wiring’, that is the kinds of leadership competencies and
people management skills that we can all learn to develop and improve
throughout our working lives, given self-belief, time and commitment.
To this end, the book will systematically review the attributes, skills,
qualities and competencies that are most often associated with successful leadership and people management, and how these can be developed and enhanced. These include the following:
•
•
•
•
•
•
•
•
•
•
•
self-awareness and self-discipline,
competence and credibility,
a mixture of several kinds of intelligence,
great self-motivation and the capacity for hard work, combined with
a good understanding of their physical and psychological limitations,
exceptional two-way communication skills, combined with an ability to lead, direct and focus dialogues with others,
the ability to engage with the minds and hearts of others and, as a
result, a capacity to motivate and inspire their followers,
the capacity to question ‘common-sense’ ways of doing things
combined with the ability to make fast practical day-to-day decisions with incomplete information or knowledge,
an ability to learn and unlearn quickly, while not discarding good
leadership and people management practices that have stood the
test of time,
the ability to use power effectively, based on an understanding of
the art of organizational politics,
increasingly, a hybrid blend of what have been traditionally regarded
as ‘male’ and ‘female’ leadership and people management styles,
self-confidence and resolve in adverse or uncertain situations, without resorting to autocratic or domineering behaviour,
PREFACE
xv
• the ability to think beyond the present and envision the future,
• the capacity to initiate, lead and manage the complex processes of
perpetual organizational change, innovation and learning, without
becoming reactive ‘fad-surfers’,
• an appreciation of the role that employee knowledge and intellectual capital now play as key drivers of organizational success and
profitability,
• an understanding of both the potential and the limitations of new
and emergent technologies in organizations, and an awareness of
the profound impacts these will have on the management of organizations during the first two decades of the 21st century,
• high ethical standards, combined with a pragmatic understanding
of doing business in the real world.
Fifth, the book takes into account the fast-changing worlds that leaders
and managers now work in, and the new skills and qualities that are
required to succeed in these often chaotic environments. The last two
decades of the 20th century were characterized by rapid change and
this period was variously described as ‘The Age of Surprises’, ‘The Age
of Uncertainty’, ‘The Age of Chaos’ and ‘The Age of Blur’. These
surprises and uncertainties included the challenges of globalization,
political upheavals, the threat of global terrorism, regional economic
instabilities, corporate rationalization and downsizing, merger-mania,
the breathtaking pace of technological innovation, a number of spectacular corporate collapses, the end of ‘jobs for life’ for almost all
employees, the continuing redefinition and realignment of the roles
and activities of organizations, employers, trades unions and employees throughout the world, and growing ethical and ecological challenges for organizations operating in the global economy.
The first two decades of the 21st century will be characterized by even
greater change and uncertainty. Global economic forces, new technologies and the information revolution are driving the fastest period of
change in human history and in the world of business. ‘Future shock’,
‘chaos’ and ‘blur’ are now permanent features of life in many organizations. Corporate longevity is getting shorter each year, with the average
life expectancy of a typical large or medium-sized company falling in
every decade since World War II. The domination of traditional large
bureaucratic organizations, since the dawn of industrial capitalism in
the early 19th century, is being challenged as new Third-Wave organizations emerge. These developments mean that all organizations have
to think faster and smarter just to keep up with the competition.
Individually, we walk faster, talk faster, sleep less, consume more information and work more than ever before. We may have three or four
different part-time jobs or be employed on a succession of short-term
xvi
MAXIMUM PERFORMANCE
contracts. Jobs for life are rare and job insecurity is a fact of life for
many professionals. Employees can now expect to work for between
five and ten employers in a lifetime. But, as the industrial age’s hegemony is challenged, there are also opportunities for entrepreneurs and
for anyone who is willing to challenge conventional management
thinking and embrace, as Tom Peters suggested in the early 1990s,
‘Crazy Ways for Crazy Days’. In the information age (if we have good
ideas, knowledge, energy and persistence) we can become business
pioneers (and, maybe, millionaires) overnight.
The ability to manage the uncertainties that arise from these changes,
developments and trends is now an integral part of the repertoire of
successful modern business professionals, and this book is designed
for leaders and managers working in this demanding, complex, stressful and fast-changing world. As intellectual capital, continuous innovation, organizational learning and new technologies become the main
drivers of organizational success, leader/managers must not only be
able to understand these, they must also find new and more effective
ways of enabling their followers to cope with these new organizational
realities, help them perform to their maximum potential and to aspire
continually to ever-higher levels of performance and achievement.
Getting the most out of this guide to leadership
and people management
Teachers open the door, but you must enter by yourself.
(Old Chinese saying)
This may appear to be a very strange thing to say at this point, but I
don’t believe that leadership and people management skills can be
learnt from books. You might now be thinking, ‘What’s the point of
buying this one then?’ Well, books – particularly the right kind – do
play a vital supporting role in the learning process. When learning
anything new, there is no substitute for a supportive mentor or an
inspirational teacher, but they may be hard to find or may not always
be available for help and advice. Even then, in any organizational,
work or educational setting, they only form part of the learning equation. The main part is what you bring into these. This includes
•
•
•
•
your personal aptitudes, abilities and experience,
the leadership and people management skills you already possess,
an awareness of your existing strengths and limitations, and
knowing what you want, and how you are going to achieve this in
the future.
PREFACE
xvii
The purpose of this book is to support your side of the learning equation, and it does this on three levels: the theoretical, the practical and
the personal. Because you are reading this book, either you are going
to become a manager/leader in the future, or you may already have a
lot of work experience but want to learn about alternative ways of leading and managing people at work. Either way, you’re interested in
personal growth and improving your skills, and open to new ideas and
change. You care about your career and want to equip yourself for the
challenges of the future. In order to develop these skills further, this
book can also be used as a guide to your personal development and
learning, and will show how quite simple changes to the way we all
‘manage’ people can help us to become more effective leaders and
managers of others. Throughout the book, there are a series of optional
questionnaires and self-evaluation exercises that will help you to
develop a unique leadership/management style, and enhance the way
you lead and manage your people at work.
However, it is important to emphasize that this is not a book that sells
instant ‘fads’ or ‘quick-fix’ solutions. Those who claim that you can
become a better leader/manager in just a few days or weeks are
misleading you, or want to sell more copies of their books, or get more
bums on seats at their training workshops. If anyone tells you that you
can become a really successful and effective leader or manager in a
short period of time they are being dishonest. This requires self-belief,
time and commitment. This means that you’ll need to spend some time
working through this book, perhaps try out the self-evaluation exercises, actively reflect on your own leadership and people management
practices, be prepared to unlearn old habits and beliefs and, maybe,
learn some new ones. This is not a ‘self-help book’; it is a guide to
personal lifelong learning and self-development.
By the end of the book, you should have acquired a comprehensive
‘tool-kit’ that you can dip into as and when needed, regardless of the
circumstances that you find yourself in, the quality of the people you
are leading, or the type of problems you are dealing with at work. Of
equal importance, you will be in a better position to decide if you need
to discard old or redundant leadership and people management practices that no longer work effectively. You will be able to evaluate what
does and does not work for you at present, and decide which new
skills you may need to acquire to enable you to become an even more
effective and successful leader/manager in the future.
This book also contains hundreds of suggestions and opinions, from
business and political leaders, consultants and academics, about how
leadership and people management skills can be developed and
xviii
MAXIMUM PERFORMANCE
enhanced. However, that is all they are and you should not view this
as a one-way process, whereby ‘the experts’ tell you what you ought to
be doing with your life. Treat this as an active, two-way process that
allows you to reflect on your current practices. In addition, some of the
suggestions in this book may not be directly applicable to your particular occupation, work setting or organization at the moment. And, if
you know ways of leading and managing people that are better, or
work more effectively, then use these instead (and, if you have time,
please send me an email to let me know what they are!).
The only way to really improve as a leader/manager is to embrace
active self-learning and development. While ‘training’, in a generic
sense, may have its uses, it all too often falls victim to the well-documented ‘halo effect’, where people may emerge re-energized and
refreshed from leadership or management development programmes,
only to find that newly acquired knowledge and insights fade away
over time, as they find themselves falling back into old and ineffective
patterns of behaviour at work. And, as has often been pointed out,
‘training’ is for circus animals and dogs, not human beings. In effect,
this means that none of the ‘experts’ in this book can teach you
anything. Unless you are motivated and committed to learn how to
become an even more effective leader/manager, little will be gained
from this book. Self-directed learning and learning-by-doing are now
becoming the dominant modes of personal improvement and professional development. This is because lifelong learning is now the name
of the game, not possessing pieces of paper with ‘BA’ or ‘MBA’
stamped on them (Botsman, 2002). This means that you can only
improve your leadership and people management practices by
• actively reflecting on what you currently do as a leader/manager,
• comparing this knowledge with the supermarket of information and
ideas in this book, and identifying areas where changes or improvements might be made,
• developing strategies to improve your leadership and people
management skills on a weekly and monthly basis,
• putting these into practice at work, by treating this environment as
the principal ‘training ground’ for your development as a
leader/manager.
There are two ways to approach this book. The first is on a need-toknow basis, where you simply dip into it and have a look at areas of
interest, or review topics that you would like to discover more about.
The second and more rigorous method is to start and maintain a
personal diary. In this, you can reflect on your understanding and
practice of leadership and people management, and compare what you