University of Sydney MBA

By John Shields, Professor and Associate Dean (Postgraduate), University of Sydney MBA program

So you think it can never happen again – the global financial crisis, I mean. Well, have I got news for you. Today’s senior management echelon – that is, the tribe to which most self-respecting MBAs aspire to belong – continues to display many of the fallibilities that were present prior to the last big melt-down: too much professional ‘will’ and too little personal ‘humility’; too little skin in the game (compared to shareholders); too many ‘hard’ professionals on boards (law, finance, maybe accounting) and too few ‘softies’ (marketing, HR, org psych).  The underlying problem, I’d suggest, is that too many top management team ‘players’ still think it is all JUST about ‘managing the business’ – about cash flow, NOPAT, first mover advantage, etc. What rubbish! Sustainable management practice is just as much about being able to (a) manage yourself and (b) manage others. Indeed, if you can’t manage (a) and (b), then you are deluding yourself if you think you can manage the business beyond the next reporting season.

This is precisely why we, in the Business School, believe that a genuinely transformative MBA should be built around the precept of ‘Me, first’. This definitely doesn’t mean you ‘uber alles’ – you above all other stakeholders. It does mean attending to your own chemistry and capabilities first, before you seek to lead from the front.

These days, by the time they hit their late ‘20s, virtually every early career professional is also a line manager with HR responsibilities; responsibilities for hiring, firing, developing and performance managing other staff.  These HR responsibilities don’t recede as you ascend the organisational hierarchy; they become deeper and more complex.  Yes, to be an effective and successful business leader you do need to be able to read a P&L and understand cash flow, ROA, ROI etc. etc. But you also need to understand and manage yourself and those around you.  And this is why we are offering our MBAs the opportunity to sharpen their self-awareness and others-awareness via core content in experiential leadership and the elective unit ‘Coaching and Performance Management’.

Now I know that our current students have already encountered coaching practice in the MBA core – and see its relevance to self-concept and self-management – so let me try to persuade you that a solid awareness of performance management best practice is also a career plus – in terms of being much better placed to manage others.

I’ll bet you’ve heard a thousand and one self-proclaimed experts contend that performance management is just not worth the trouble and that it can safely be shunted off to the ‘drones’ in HR.  “Damn it, I don’t expect HR to fix my business unit’s revenue problems so why should they expect me to waste my time on HR matters!” Anyway, performance management is a bureaucratic distraction and we all know that trying to measure staff performance is fraught with inaccuracy and causes discontent all around. Besides, we know that variation in individual performance is a chimera. Surely, staff performance is system-driven such that over time one-off variations in performance ‘regress to the mean’.

In my view, these are problematic propositions. It is true that performance measurement is difficult to get right. It is all too easy to focus just on what is easy to observe and measure. But it is also true that failure to monitor and measure staff performance is tantamount to ‘the blind leading the blind’. What you see is all there is. What isn’t seen doesn’t get measured and is forgotten.

The truth is that performance management is essential to organisational effectiveness: to validating hiring decisions, to role clarity, to meaningful feedback provision, to reducing the risk of adverse litigation outcomes. It is easy to do badly and hard to do well. It is also imperative that you know how to do it well – and, above all else, this means understanding and applying the principles of measurement validity and reliability and administrative fairness. These principles are simply too important to be left to the HR back office.

In order to manage themselves and others – and, hence, to manage the business – every aspiring organisational leader needs to be well versed in the precepts and practices of coaching and performance management. Managing the human factor is very, very different to managing other organisational resources. Sustainable business practice is as much about managing people as it is about managing profitability – and they are anything but mutually exclusive ends.