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The Management Challenge

By: Dr. Gerry Faust

Editor's Note:

In 1970, the musical group The Moody Blues popularized the phrase "A Question of Balance".

The management of fitness facilities also requires a balance across seemingly divergent management roles. All of us are guilty of addressing the urgency of the moment and keeping a keen eye on today's bottom line results.

On the one hand, the entrepreneur/founder must give way to process so that other may run the club in a consistent manner.

On the other hand, it's entrepreneuring that will produces the fresh ideas that will steer around market changes and impact a future bottom

Dr. Faust talks to the PAEI balancing act.

The challenges of management are many. Not the least of these is trying to balance the different roles that management has to play if it is to be successful over time. An analysis of this challenge reveals four roles that are critical if organizations are to grow and prosper over the short term and long term. These are:

Produce Results (P)

The organization must know what results to produce (e.g. become properly positioned in the market place and management must ensure that the organization is constantly focused on those results and is driving to produce them). Of the many results an organization must produce the most basic and most important are those that ensure it serves the needs of its clients.

Administer (A)

The organization must be efficient and consistent in its production of the appropriate results. It does this by getting organized and establishing system processes and procedures which it follows.

Entrepreneur (E)

No organization can survive doing the same old thing. It must proactively adapt to changing markets and environments. The entrepreneurial role represents a focus on tomorrow, the empowerment of new ideas and sometimes taking strides to position the organization for a more successful tomorrow. Today's E is tomorrow's P.

Integrate (I)

Successful organizations are born twice. Once generally as the outgrowth of one person's vision and commitment and a second time as a team. This role creates shared vision, teamwork and synergy.

The P and A roles ensure short-term effectiveness and efficiency; the E and I roles ensure effectiveness and efficiency over time. Any organization can be analyzed in terms of the relative strength of these four roles. Young organizations fighting to survive are often high on P with a little of everything else (Paei), while rapidly growing organizations are generally a combination of P and E with a little A and I (PaEi). An aging organization may be having trouble producing results or coming up with new ideas, but heavy in systems and policies and loyalty to the people in the organization (pAeI).

When any role is underplayed the organization will be predictably mismanaged. For example, low E means danger tomorrow, little creativity, and opportunity for competitors. Low A means lack of control, inconsistency of results and possibly too much risk.

Using this model you can analyze any organization or part of an organization. What might your organization profile be? What does it mean? What changes might be needed? Although only a tool for understanding an organization the language of PAEI helps us discuss organizations, their development, their challenges, their structure and needed changes.

A Case Study: A successful established organization assessed itself as pAeI and realized that since today's E is tomorrow's P it needed to work today to create more E in the organization. It did this in a variety of ways:

They launched a strategic planning process that involved many of their people in collecting data about customers and their needs. Competitors, potential new markets, etc. The strategic planning focused on the positioning of the organization and major thrusts for the coming year.
They had each department identify one or two key areas for improvement which were believed to have significant potential for improving the company's performance and assigned teams to work on them.
Managers began an active process of asking for input and suggestions before they gave "answers" ("What would you suggest we do?" became a common question to people who brought up a problem).
They separated sales (P) and marketing (E) functions and hired a new head of marketing.
They realized P dominates A, which dominates E, which dominates I. That is P is observable, often measured or evaluated, is often urgent, hits the bottom line, and impacts peoples' compensation; A is system and process based and hard to avoid, (I'll get to them tomorrow). E and I are hard to measure, have more long-term effects and are easy to avoid. Therefore with sales and marketing run by the same person they realized marketing often got put on the back burner for more urgent and productive sales maters. This effectively delivered more P and less E to the company.

Through these and other ways the company put more focus on E. People got excited, new ideas rolled in, the company launched new products in new markets, profits and sales rose and everyone lived happily ever after.

About Gerry Faust