The management process used at Emerson can be found in Knight’s new book entitled “Performance Without Compromise: How Emerson Consistently Achieves Winning Results
,” published by the Harvard Business School Press. Over coffee with AMA’s editor, Knight shared the core process that has enabled Emerson to address and overcome challenges that ranged from intensive global competition to major technological shifts. A Tight Operation
Chuck Knight pointed out that he “devoted more than half of his time each year to strategic planning.” If he didn’t make such a major commitment, he observed, the organization as a whole wouldn’t have done so. And the time was well spent. An Emerson executive told a reporter that the process of preparing for planning and the meetings themselves made the top team realize things about the business that they wouldn’t have found out in any other way.
Such strategic planning may have made it easier for the organization to achieve its goals but it also helped Knight run a tight operation. As CEO of Emerson, he was demanding, but Knight saw it as a means to meet Emerson’s brand promise: to bring together technology and engineering to create solutions for the benefit of its customers. An Emerson press release observes:
“For businesses around the world, the Emerson brand represents global technology, industry leadership
and customer focus. For the investor, the Emerson name symbolizes our proven management model, successful growth strategy and strong financial performance. For employees, the Emerson experience means opportunities to grow, prosper and make a difference.”
Given the importance that Knight places on Emerson’s management process, what is it? According to Knight, the six key elements of that management process are:
- Keep it simple. Knight doesn’t see this as a platitude and neither do Emerson executives. As Knight observed, the ability to keep things simple demands that an organization set only a few clear priorities and communicate them so that employees will support them.
- Commit to planning. Knight disagrees with those who believe that Emerson spends too much time on this aspect of management. In his opinion, it not only sets the company’s direction but also identifies sources of growth and profit that will move the organization forward.
- A strong system of control and follow-up. This is the reason for Emerson’s achievement of its plans. “If external issues stand in the way of achievement of goals,” said Knight, “the organization can address the situation through its annual planning process that enables it to make modifications to ensure successful implementation.”
- Action-oriented organization. Knight clearly doesn’t believe that problems, left untended, often disappear on their own. As he pointed out, “Strong organizations take timely action to address barriers.” In his book, he said, “We operated at the corporate level without a published organization chart because we wanted people to communicate quickly in terms of plans and problems, not along organizational lines.” According to Knight, the organization plan is annually reviewed in the same detail as the annual business plan to ensure that the right people are in place to implement plans.
- Operational excellence. This might not sound unique until you hear that Emerson has a global plan that spells out the actions the organization will take to ensure that it outflanks the competition by better satisfying customer needs. The organization conducts competitive analyses not within the firm but rather with global competition, undertaking a very rigorous analysis. Part of the end result is effectively managing assets to ensure that they remain productive over the long term.
- Creating a positive work environment. Knight ties this to the issue of leadership which he defines as “creating an environment in which people can and do make a difference.”
Knight as Leader
Reading Knight’s book leaves you with insights into many of the actions that Emerson took during Knight’s leadership. There are also numerous management and leadership axioms that are very much a part of the culture of Emerson. The book is worth reading for these alone. Example: “You can only get productivity through people."; “Your career depends on luck, timing and leadership."; “If it’s not on your chart, it’s not in your heart."; and “Top-line growth is the most difficult challenge.” Each of these axioms is supported with action plans that Emerson put into practice and that make Knight’s book well worth reading by corporate leaders.
Excerpted, by permission of the publisher, from the Winter 2006 issue of MWorld, AMA's quarterly journal for members.