Business 141
9 April 2018
Skills of Successful Managers
Every business needs successful managers, but what skills define a successful manager? In Management Fundamentals by Robert Lussier, Lussier discusses the integral management skills being decision-making skills, interpersonal skills, and technical skills. I have explored the management skills of great managers including Sam Walton (founder of Wal-Mart), Tony Hsieh (CEO of Zappos and found of Link Exchange), and Howard Schultz (CEO of Starbucks Coffee).
What qualifies Sam Walton, Tony Hsieh, and Howard Schultz as successful managers? The unique management styles implemented by Walton, Hsieh and Schultz helped define their respective industries – even inventing new paths to growth profit. .
Walmart ranks number one in the retail sector, but it was Walton's innovation in small, second-tier towns that propelled a new model of shopping and buying discount retail. Under Walton's direction, Walmart grew to gross more than 26 billion dollars in sales. But it was Walton's rules of management that fostered his company's growth and success.
Howard Schultz started with a single coffee shop in 1992 and expanded Starbucks to be not only a coffee destination, but also a social destination with more than 27 thousand stores across the world. Starbucks ranks number one in the food and beverage industry. Under Schultz's management, Starbucks has nearly tripled its annual revenue. It was Schutz's compassion and understanding of the interaction between employee and customer that led to Starbucks becoming the premier coffee destination.
Zappos leapt into the internet space and stepped into success. His online company sold shoes to the tune of two billion in annual revenue. The CEO of Zappos, Tony Hseih, is a newer, more experimental manager. Hsieh piloted the company Zappos with Nick Swinmurn which sold to Amazon for $940 million in stock and cash. Zappos was also named one of the top 100 companies to work for. After Amazon's acquisition of Zappos, Hsieh still remains the CEO of Zappos. It was Hsieh's belief in creating an environment of happiness, innovation and creativity that propelled his company to lead the online retail space.
Sam Walton
In Sam Walton, Made in America, Walton discusses his path to creating his empire, Wal-Mart. In Walton's book, he outlines ten rules that helped him succeed. Rules two, four, five, six, seven, nine, and ten reflect skills that Walton had as a successful manager.
Rule two: Share your profits with your associates and let them share in your success. Walton says, "The more you share profits with your associates — whether it's in salaries or incentives or bonuses or stock discounts — the more profit will accrue to the company. Why? Because the way management treats the associates is exactly how the associates will then treat the customers. (Walton)" Employees are the foundation of any company. While Walton does not focus on micromanaging his employees, he believed that treating his employees well was one of the secrets to success. Walton believes that the employees are what makes Wal-Mart able to outperform it's competition. It is so important to Walton that he is compassionate to his employees. Being compassionate and empathetic towards employees has many benefits. According to a study conducted in 2011, compassionate leadership promotes better productivity, better customer service, and better employee retention rates (Lilius 27).
Rule three: Motivate your partners. It is very important to make sure the business has motivation. In discussing rule three, Walton displays the importance of being a good motivator. Having motivational skills is a very important skill for a manager to have. According to Lussier, proper motivation will result in better performance.
Rule four: Communicate everything you can to your partners and associates. Walton believes that communication is important because the more people know the more people care. While, this may be true for his integration of communication skills in Wal-Mart, according to a study conducted in 2015, the effects are far greater than what Walton outlines. The study concluded that effective communication from management will result in better understanding, increased trust, a good work environment, motivated employees, better team coordination, increased productivity, and congenial relation (Luthra and Dahiya, 47).
Rule five: Appreciate everything your associates do for your business. Appreciating the hard work that takes place within a business is a key to success. In Management Fundamentals, Lussier discusses the importance of praise. Praise motivates employees because it meets the employee's needs for esteem/self-actualization, growth, and achievement. In order for the employees to continue to perform at their highest level it is important to meet their needs and motivate them properly.
Rule six: Celebrate your success and find humor in your failures. Walton lead his business with a positive attitude. He was able to learn from and move past his failures. Lussier discusses the importance of organization behavior. Lussier says that attitude is a major factor in how well an employee or manager performs. He also says that attitudes are contagious. Walton's ability to lead with a positive attitude made it possible to encourage his employees to have a good attitude. This is called the Pygmalion effect. Because of the Pygmalion effect, employee's performance will increase and so will their job satisfaction.
Rule seven: Listen to everyone in your company and find ways to get them talking. Listening allows a manager to further understand the customer's and the employees in the business. Without being able to listen, manager's will likely not be able to meet the needs of their clientele and their associates. Lussier describes this broadly as an interpersonal skill.
Rule eight: Control your expenses and control them better than your competition does. Finding the competitive advantage is very important. Being able to make good decisions in business is important. Walton talks about the importance of being efficient. He says even if you make mistakes it is important to find your business's competitive advantage and make sure the operations are not inefficient. Walton is displaying good decision-making skills.
Rule ten: Swim upstream. Go against the current. Experiment. Rule 10 displays Walton's creative and innovative skills. He thinks outside of the box which is one of the ways he was able to be so successful as a manager. Creativity is what leads to great problem solving. Lussier says, "creativity is the driver that leads to innovation." Creativity is what made managers like Steve Jobs so successful.
In summary, Sam Walton displayed the following skills in his management career: creativity, compassion, positivity, listening, motivational, communication, and decision-making skills.
Tony Hsieh
In Delivering Happiness, Tony Hsieh outlines his path to success as the founder of LinkExchange and CEO of Zappos.
The skill that is most evident in Hsieh's management career are his interpersonal skills. Hsieh puts a very large emphasis on the company environment. Hsieh has ten core values within his company, Zappos: Deliver WOW through service; embrace and drive change; create fun and a little weirdness; be adventurous, creative, and open minded; pursue growth and learning, build open and honest relationships and communication; build a positive team and family spirit; do more with less; be passionate and determined; be humble. These core values reflect the importance he holds over creating a positive work environment for his employees. Hsieh's book is titled Delivering Happiness; the title of his book is no coincidence. Hsieh wants to create an environment of happiness that isn't based on money for his employees. Lussier says that if the compa
ny does not have the right environment then it cannot achieve its mission. A manager is responsible for insuring that the company achieves their mission. Hsieh's ability to empathize and be compassionate towards his employees has catapulted his success which led to him being able to stay true to the company's mission.
Another skill that Hsieh possesses is creativity. Hsieh has shown creativity through his management style. He often wants to test how the work place runs and conducts "experiments" within his company to try to redefine management. Hsieh eliminated direct management roles within his company which forced employees to self-manage. Hsieh's creativity creates a fun and open environment for his employees.
Hsieh also puts an emphasis on the importance of good and honest communication. One of the ten core values is to build open and honest relationships with communication. Hsieh says that communication is so important because it allows everyone to understand the role that they play in trying to accomplish the company's goal.
Howard Schultz
In Pour Your Heart Into It, Howard Schultz discusses the road to creating his successful company, Starbucks Coffee.
Starbucks was founded by Gordon Bowker, Jerry Baldwin, and Zev Siegl. Schultz came into the picture after visiting a retail store when all they sold were coffee beans. Schultz was mesmerized by the detail and care in the craft of coffee making. He quickly became involved and helped Starbucks become the empire it is today.
How did he start innovating? Schultz went to Italy and discovered espresso. Due to Schultz's determination and outside of the box thinking, he expanded the Starbucks menu and was able to expand to offer on the go drinks outside of brewed coffee – a first-to-market mass offer in this sector. Before Schultz's reinvention of Starbucks, there was a need for quality beverages. In the past, your only option for coffee was driving hours to a Peet's Coffee store for brewed coffee or instant coffee grounds from the supermarket. Schultz created a whole new market. His willingness to expand and explore new ideas within his company allowed Starbucks to blossom into the success it is today.
In his book, Schultz heavily discusses the importance of compassion towards his employees. He takes pride in the fact that Starbucks was one of the first companies to offer full health benefits to both full time and part time employees. He also takes pride in the pay consideration. Great managers need to have good employee retention. Lussier says that productivity suffers if company turnover is high. Schultz's emphasis on job satisfaction is one of the reasons that Starbucks is such a successful company. Schultz says, "Our mission statement about treating people with respect and dignity is not just words but a creed we live by every day. You can't expect your employees to exceed the expectations of your customers if you don't exceed the employees' expectations of management. That's the contract. (Schultz)" Schultz creates a great environment for his employees to succeed.
Another great skill that Schultz possesses is his ability to communicate effectively. Schultz actually graduated from Northern Michigan University with a degree in communication. Schultz even took classes in interpersonal skills while he attended college. This gave Schultz a great foundation for success as a manager. Schultz is able to be a successful leader for his company because he communicates so well from the top down.
Conclusion
Sam Walton, Tony Hsieh, and Howard Schultz are all very successful managers. They grew their businesses to be very profitable. These great managers shared a common skill; They all had great interpersonal skills and understood the importance of the employee's impact on growth and innovation.
Interpersonal skills are one of the three overarching skills that Lussier says a manager should possess. He defines interpersonal skills as "the ability to understand, communicate with, and work well with individuals and groups through developing effective relationships.(Lussier 4)" Within interpersonal skills more specifically, Walton, Hsieh, and Schultz all create great environments and relationships with their employees. This is key to giving proper motivation and having good employee retention. They also all demonstrated great communication skills. Good communication helps the operations of a business run smoothly and more productively. Walton, Hsieh, and Schultz's emphasis on having good interpersonal relationships is what led to their success today.