Management Audit Project

PURPOSE

The purpose of this Management Audit is to provide a view of the management capability within XXXX and
equip the senior management team with the material needed in order to plan and initiate an effective
Management Development Programme.

AIMS

The aims of the Audit include the following:

 To create a profile of current management strength and depth, and of the potential for improvement in
all-round management effectiveness

 Assist each manager to clarify and project their views of the current quality of management performance
in order to make an effective contribution to its development

 Assist each manager to identify what they would seek to gain personally from any investment in their
own development

 Stimulate thought and discussion in additional subject areas which may not be addressed at present
through the organisation's established procedures

 To harness the professional expertise and input of Mitchell Phoenix in relation to the effective design,
content, structure and implementation of a development programme

PRESENTATION OF RESULTS

The results of the Audit are presented in the form of a SWOT Analysis (Strengths, Weaknesses, Opportunities,
Threats) of the executive management team and its approach.

These have been derived from 2 principal components:

 The responses and comments of managers during their interviews with Kevin Yates and James
Donnelly

 The interpretation by Mitchell Phoenix of these comments and responses, taking into account the
current strategic direction and requirements of the organisation

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PARTICIPANTS IN THE AUDIT

Members of the divisional management team and selected vertical cuts down the organisation in the three lines
of business were chosen to participate.

This enabled observations to be made on perceived and actual management practice, strategic integration
down the organisation, succession, and management strength and depth.

PARTICIPANTS:

Divisional Management

Lines of Business

XXX

XXXX

XXXX

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BACKGROUND TO AUDIT QUESTIONS

The questions asked in this audit were designed to elicit an overall picture of the present situation in relation to
the management thinking, focus and level of understanding of good management practice within the
organisation.

Seven key areas of current thinking were targeted:

 Context

 Strategic Awareness

 Growth

 Personal Influence

 Financial Understanding

 Motivation

 Learning

All the responses to the questions in each section contribute to the conclusions made in the SWOT analysis.

Context

This section provides background to the individual’s career with the company and their future aspirations.

Strategic Awareness

The questions in this section sought to establish what was understood to be the strategy and how deeply that
understanding permeated the management levels.

This section was also designed to reveal individual’s understanding of the strategy, where their role could
contribute more, and the common qualities perceived as being necessary for the organisation to possess in the
future.

Growth

This section explored the impact of organisational growth on both the individual and the group. It further
uncovered the extent to which change is actively pursued.

Personal Influence

The extent to which a management group can influence its company’s success is determined by the collective
ability of individuals to influence strongly both within the organisation and externally. This section was designed
to establish responses that created a view of overall quality of influence and potential for the future. Attitudes
towards personal development were explored and set against the opportunities provided for such development.

Financial Understanding

The questions relating to financial understanding were designed to establish the level of commercial awareness
of respondents and where contributions to the business planning process were currently being made.
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BACKGROUND TO AUDIT QUESTIONS (continued)

Motivation

Current management understanding of motivation and personal responsibility can reveal opportunities to
strengthen and build upon existing management practice. The questions in this section help establish levels of
awareness and sophistication.

Learning

This section was designed to highlight what managers felt was the most likely route towards their own further
development and to establish what was the present culture in this area.

CORE PRINCIPLES/QUALITIES

The personal and corporate qualities that underpin much of the management thinking and behaviour can be
identified from the responses made by managers during the audit. These qualities are clearly visible in the
strengths, weaknesses, opportunities and threats identified on the following pages. Those most commonly
shared are listed below:

 Loyalty to the Lines of Business

 Optimism about the future

 Technical confidence and competence

 Value of teamwork

 Resilience

 Under-development

 Pressure

 Interest in the business

 Conservatism

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SWOT ANALYSIS

STRENGTHS

 Talented Senior Group

High degree of intellect and energy at the top. Multi-talented

 Loyalty

Staff display high levels of loyalty to the business, providing strength in the face of perceived adversity

 Experience

High technical skill and capability. Most experience specific to this business. Most ambition remains
within technical fields

 Awareness of the need for change

An understanding that changes in management style, strategic direction and organisation are required to
capitalise on recent progress

 Goal Orientation

The completion of projects is more important than the route taken

 Camaraderie

Team orientation to the achievement of goals. Belief in themselves

 Customer Focus

Interest beyond technical solutions towards adding value to the customer

 Systematic

Analytical in approach to problems. Strength in process driven management

 Resourcefulness

Willingness in the face of lack of resources

 Resilient

In the face of both internal and market driven pressure

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STRENGTHS (continued)

 Training

Skills training, coaching and mentoring is promoted. Receptivity and interest in developing management
skills

 Optimism about the future

Keen interest at all levels in the potential of the business in the future

 Mobile Management

Willingness to move and work - internally, within the division, and externally, world-wide

WEAKNESSES/VULNERABILITY

 Thinking

Management are generally unprepared mentally for growth. This is reflected in the maintenance of
survival thinking and culture, and the lack of preparation of the environment for expansion. The focus is
still on fire-fighting and the day-to-day. Gaps exist between the Managing Director’s thinking and that of
the remainder of the division

 Little strategic thought

Scant understanding of the terms related to strategy or their application. Mostly tactical thinking.
Strategic direction and values not widely articulated or understood

 Communication

Historically, communication of both strategy and tactical planning appears to have stalled at the level
below Managing Director. Now, tends to be focused on tactics and events. A lottery

 Management style

No consistent management style or language. Resistance to move from historically comfortable,

hierarchical style; amorphous, responsive management style is superficial

 Under-developed management

Little development of management (beyond technical skills) has taken place or demand for it existed;
consequently a low level of sophistication exists. No cohesive long-term people development process or
plan. There is potential here to unlock greater management effectiveness

 Low level of recognition

A style of praise and recognition for successes was notably absent from most managers agenda.
Individuals do not feel valued or adequately rewarded (salary, environment, quality of life)
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WEAKNESSES/VULNERABILITY (continued)

 Energy

Emotional numbness and low energy levels are prevalent beyond technological interest. Low motivation
and morale counter the strength of optimism

 Cohesion - No Plan

The Lines of Business lack cohesion upwards and between themselves, at the same time as not having
real independence. There is potential for remedying this through common management language and
strategic direction

 Caution

Managers appear to have been ‘burnt’ in the past. Initiative is not widespread, creativity is not nurtured,
thinking is entrenched. Decision-making lies principally at only the top two levels of management

 Financial Awareness

A low level of awareness of the financial impact of decision-making exists below the top management

 Steeped in the Past

The impact of past pain lives on and over-influences present thinking

OPPORTUNITIES

Greater security for the Division can be achieved now and in the future through:

 Redefining core values

And the opportunity to reflect them in the choice of the environment

 Providing strategic direction

Great opportunity exists to involve more of the management in the business planning. Potential to
create a stronger link between sales and production

 An art of management

To move beyond processes, systems, and models to create an art of management as well as a science

 Creating an action culture not information exchange

Greater focus, better use of time, motivation, and clearer goals

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OPPORTUNITIES (continued)

 Generating greater success orientation - recognition/praise systems

Move beyond passive acknowledgement. Develop management styles which encourage praise and
recognition and which are based on a greater understanding of the value of motivation. Gain greater
commitment from staff

 Structuring the people development

To capitalise on modern management practices in order to raise the effectiveness of people who are
already capable in their technical fields. Create a greater commercial/financial awareness, particularly
at lower levels of management

 Improving the quantity and quality of delegation

Through the development of better management practices, free up senior management to be more
strategic in thought and action

 Generating common management understanding and consequent approach on key issues

Develop core principles and values to support a change in management practice

THREATS

 Low understanding of strategic direction

No clear long-term view of the future articulated by management

 Responding to the challenges of growth

Not taking risks, delaying decisions, under-investing. Continued perception that growth and change
equals pain. Risk of losing quality people. Risk of being left standing in the market

 Management style

No common management style. Low level of understanding of what makes up good management style

 Decision-making

Holding on to decision-making. Stunting the development of individuals in the short-term, the

organisation in the long-term

 Image

Old fashioned thinking, attitudes and environment. Inability to retain or attract the people needed to
sustain rapid and competitive growth

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THREATS (continued)

 Controlling too deeply in the organisation

In the face of rapid change, being too interested in the route, limiting decision-making lower down the
management scale and effecting the speed of decision-making

 No management development

Limiting the future capability of the organisation. As the business grows, so must the management
capability

 Over-optimism

Inability to say no - lose quality, burn-out people

 Attitudes

Where the past is continually re-examined, forward thinking will be inhibited

 Disillusionment

People no longer sustained by their ‘dream’

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A VIEW OF THE LINES OF BUSINESS AND THEIR MANAGEMENT

XXX

 Able technically
 Intelligent
 Realistic
 Without long-term direction - no plan
 Under-utilised
 Under-resourced
 Lack of cohesion
 Dependent on a few key individuals
 No contribution from operational levels
 Commercial awareness too low
 Not enough demand for wider contribution
 Great potential

XXXX

 Confident
 Technically competent
 Willing
 Developing team orientation
 Under-resourced
 Desire to protect success of LOB
 Frustrated
 Without a divisional strategy
 Developing common management language
 Growing focus on people development and succession
 Great potential

XXX

 A start-up phase
 Visionary
 Planning - focused on strategic issues
 Under-resourced

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DISCUSSION

From the responses of managers during the audit, it was interesting to note that there was no consensus on
what style of management exists in the organisation. A commonly held view of the management culture and
language is missing.

A polarisation of ideas and attitudes was revealed in the Division - on one hand a visionary perspective of a
different style of company to the present form, and on the other, a more cautious, established view reflecting
that which currently exists. The camp to which individual managers gravitate appears to be a function of
position and pedigree in the company.

XXXXX’s leadership approach exudes energy and dynamism. His vision for the style of management of the
Division demands high levels of understanding, self-confidence and strategic direction within his managers.
Those working most closely with him (and those recently recruited by him) appear easy with these ideas; others
are not.

This gap in understanding between him and managers in the different Lines of Business is partly historical - the
latter group tending to have been with the company for some time, with limited external exposure, and partly
through the lack of strategic direction from the centre and good internal communication. The result is low
morale and energy levels, inhibited creativity, and a resignation to further pain resulting from growth and the
increased demands of the future.

If there is to be a difference in the future, something must change and the lead must come from the top. More
of the same is likely only to retrench further the staff whose resilience has already been stretched. There is
thus great potential for a re-channelling of the energy at the top to encourage greater participation from staff.
The style in which this is done will be critical to future corporate success. Strategic direction, decision-making,
motivation, and communication will all need to be on the agenda.

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RECOMMENDATIONS

It is recommended that XXXX commits to the further development of its management capability through the
establishment of a coherent, durable and structured programme for all levels of management. This should be
treated as a strategic requirement, starting with and being led by the most senior management.

XXXXXX

One-to-one consultancy with Kevin Yates, Mitchell Phoenix in advance of any line management development.
A provisional estimate for this phase would be 6 half-day off-site sessions over a 3 month period (which may
include the management team as appropriate) with a view to:

 Reviewing management style and approach in order to develop synergy between personal energy and
motivational leadership

 Redefining corporate values and qualities which will be the core of future growth and security

 Developing a strategic communication plan for the dissemination and integration of these values
throughout the Division

Line Management

Based on the earlier consultancy with XXXXX, participation of the core management team in a development
programme tailored to XXXX, its corporate strategy and the ability levels of participants. The issues to be
addressed might include:

 Strategic integration
 Tactical implementation
 Leadership and management
 Recognition and reward
 The appraisal and mentoring processes
 Organisation of responsibilities
 Time/decision-making

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