Management Competencies: Do You Have What It Takes? - Principles of Management

To fulfill the roles that were just described, managers need to have the “right stuff.” They must possess several competencies —skills, values, and motivational preferences—that allow them to perform their jobs effectively and become proficient at planning and strategizing, organizing, controlling, developing, and leading. We might be gifted with some competencies at birth, but most are developed through upbringing, education, and experience. No single set of competencies represents the perfect combination for successful management. Instead managers can be equally effective with different combinations of these personal characteristics.


Management is a challenging and complex task, and performing it effectively requires a variety of skills. These skills are organized into three categories: conceptual, technical, and human.They apply in varying degrees of importance to managers at all levels in an organization. Conceptual Skills When 3,600 managers at 250 companies in several regions of the world ranked the importance of 24 competencies for midlevel managers, two of the top five categories in every culture studied were “analyze issues” and “sound judgment.”

These categories fall under the domain of conceptual skills —the ability to see the “big picture,” understand how the various parts of the organization affect each other, and conceptualize how those partscan be organized to improve the performance of the overall organization. In other words, conceptualskills are the foundation for strategizing and organizing.

A common misunderstanding is that conceptual skills for managers are all about the capacity for structured analysis. Rational, logical thinking is certainly important; but managers also require conceptual skills to think outside the box. Many issues on managers’ desk are exceptions with no existing solutions. Thus managers must be able to creatively figure out the real problem (or opportunity), the variety of options available to solve that problem, and the best choice in the context of that novel situation.

Managers at all levels require conceptual skills, but they are paramount in top management positions. This makes sense because CEOs and vice presidents have more scope to understand. They also face more novelty and uncertainty, which require plenty of creative thinking. In general, managers further down in an organization, such as frontline managers, face narrowly focused tactical issues as opposed to bigger strategic issues, and the problems they confront tend to be routine rather than exceptional.

Technical Skills Technical skills enable managers to perform specific activities involving methods, processes, or techniques. These skills include mastery of specific equipment (such as configuring intranet servers) or correctly following procedures (such as conducting an accounting audit). Frontline managers work directly with employees with technical expertise, sothey typically require some of this expertise themselves to monitor employee performance, provide meaningful feedback, and help employees solve unusual problems.

As an example, call center managers spend up to half of their time monitoring customer calls and giving employees feedback about how to improve their dialogue in the future. These managers would be ineffective in this mentoring role if they lacked sufficient knowledge about the product and the correct procedures for handling customer calls.

The general rule is that technical knowledge and skills are more important for frontline managers than for more senior management positions. The reasoning is that managers in the lower part of the hierarchy work directly with technical staff, whereas managers further up the hierarchy work more with other managers. Studies of management careers report that managers need to shift away from reliance on technical skills to more reliance on conceptual skills as they advance within an organization. The breakpoint occurs when a manager is responsible for people across functional units, such as managing a plant where employees have various forms of expertise.

Although the demand for technical skills diminishes as a manager is promoted up the hierarchy, they remain important for managers at all levels. In fact, higher-level managers usually requiretechnical knowledge and skills across a broader spectrum of functional areas (marketing, production, accounting, and so on) than is necessary for lower-level managers operating withinone functional area. For instance, consider Ed Dunlap, the chief financial officer of Wild Oats Markets, a health food supermarket chain based in Boulder, Colorado.

Dunlap had acquired considerable financial expertise throughout his career and retained many of those technical skills as chief financial officer. However, Dunlap’s promotion to chief operating officer required him to learn technical skills beyond finance and accounting, such as in-store operations. “One thing I still need experience in is merchandising, so I’m working very closely with our merchandising staff to develop an eye for that side of the business,” says Dunlap. “That starts to give me all the pieces to take on even greater responsibility if it’s presented to me.”

Human Skills Star employees are often promoted into management jobs due to their technical prowess, but many soon get into trouble because they lack the requisite human skills. Several years ago this began to emerge as an endemic problem at Microsoft, where great software programmers, once promoted into management positions, often exhibited poor human skills.

Many subordinates complained that their managers had poor communication skills and organization capabilities, that they engaged in micromanagement, that they could be abrasive and arrogant, and that they demoralized rather than motivated team members. To fix this problem, for more than a decade Microsoft has devoted a great deal of attention to training its new managers, teaching them how to be more effective in their new role.

The human skills that managers need include the abilities to communicate, persuade, manage conflict, motivate, coach, negotiate, and lead. Effective managers understand the needs of their subordinates and act on this knowledge to improve employee well-being whilealso achieving organizational objectives. Human skills include working with other units, not just with employees within the manager’s own unit. In other words, successful managers use their human skills to reconcile the needs and goals of their own team members with people in other work units, as well as with the needs of customers, suppliers, and others outside the organization.

Human skills go beyond interacting effectively with others. They include the manager’s self-awareness and self-management. Good managers know how to manage themselves, which lets them manage others more effectively. They are mindful of their own needs, emotions, and impulses and can control or apply them at appropriate times and places. After all, managers are role models, so they must manage their emotions, words, and deeds accordingly. They must be able to lead by example.

Human skills are important whether you are a night manager at a 7-Eleven store, a development manager at Microsoft, or the chief executive officer at Bank of America. This makes sense when we recall that, by definition, managers accomplish organizational goals through others. You cannot get employees to work together toward common goals if you lack the ability to manage yourself and others.

A recent study of thousands of managers at IBM, Lucent, PepsiCo, British Airways, and hundreds of other diverse organizations revealed that human skills are more important than technical and conceptual skills for managers across a wide range of levels.35 The analysis showed that people get promoted into management, and promoted from lower to higher levels of management, by demonstrating acceptable levels of technical and cognitive skills. However, these skills are secondary to human skills when it comes to distinguishing between successful and mediocre managers

Another important characteristic of successful managers is the values they hold and the strength of those values. Values are stable, evaluative beliefs that guide our preferences for outcomes or courses of action in a variety of situations. They are perceptions about what is good or bad, right or wrong. Values tell us what we “ought” to do. They serve as a moral compass that directs our decisions and actions.

People organize the dozens of values that exist into a hierarchy of importance. Values at the top take priority over values further down the hierarchy. Some individuals value new challenges more than they value conformity. Others value generosity more than frugality. We are referring here to the values that actually guide behavior ( enactedvalues ), not what people say is important to them ( espoused values ).

Values have gained a lot of respect in business circles over the past decade. Top executives in most Fortune 500 companies have carefully identified the core values that they believe employees should embrace in the workplace. These shared values —values held by several people—are important because they create a sense of collective purpose, which increases loyalty and satisfaction within the team and organization. Equally important, when employees embrace and follow shared values, their actions are more consistent with team or organizational objectives.

This point brings us to the two reasons why values represent an important characteristic of successful managers. Across all levels of the organization, managers are ultimately responsible for forming, strengthening, and, where necessary, reprioritizing the shared values of their staff. To accomplish this, they must personally hold the values that steer the team and organization in the right direction.

“You can’t lead other people unless you have a strong set of beliefs,” advises former New York mayor Rudy Giuliani. 39 Managers who act by their values are more likely to instill those values in others. Thus the personal values of middle and frontline managers need to echo and amplify the values that top management wants to spread throughout the organization.

The other reason why values represent an important characteristic of successful managers is that they stabilize and guide managers through ambiguous circumstances. Managers are constantly buffeted by many forces, some of which are strong enough to steer them toward ineffective or unethical results. Values serve as beacons that keep managers steadfastly on course under these conditions.

“I’ve always thought that values are a core part of leadership,” says Richard Brajer, CEO of LipoScience, a diagnostic testing and analytical company headquartered in Raleigh, North Carolina. “Why? … Because, quite frankly, the stresses of a leadership role are very strong. You need to have a solid foundation.” The stabilizing effects of values not only steer managers clear of bad decisions; they also improve the consistency of their decisions and actions. Through this consistency, employees learn that managers have integrity and can be trusted.

Managing with the Right Values Managers don’t just require strong values; they require the right values. What are these? The answer to this question has two parts. First, managers need to embrace values that are consistent with the situation in which they work. If precision and accuracy are critical, then managerial values should emphasize conformity and tradition more than stimulation and change. If the company’s success is threatened by a shortage of talent,then managers need values that place employee well-being near the top of the priority list.

The second part of the answer is that all managers in all situations must always engage in ethical behavior, so they must embrace ethical values. Ethical values are values that societyexpects people to follow because they distinguish right from wrong in that society.

These values are unwavering across time and, according to various studies, are similar across most cultures. For example, when 70,000 respondents located on six continents were asked what values theylook for and admire in a leader, well over 80 percent included honesty in their lists. Honesty remained the most often identified value in three sets of surveys over 15 years. It was also at the top of the list in most cultures and was in the top four traits (out of 225 traits) in others.


Along with the right combination of managerial skills and values, truly great managers also possess needs that motivate them to manage others effectively. Several specific managerial motivations have been discussed over the years, but the four discussed here stand out.

Desire to Compete for Management Jobs Managers are more successful when they are motivated to compete for their jobs. Even in collegial firms, managers vie for promotion to positions further up the hierarchy. These tournaments are so pronounced for top-level jobs that we often read about executives leaving the company because they lost the fight. For example, Jeffery Immelt, the current CEO of General Electric, was one of three managers groomed by Jack Welch to succeed him as CEO.

When Immelt won the competition to become CEO, the other two managers left GE. Effective managers thrive rather than wither in the face of this competition. The desire to compete for managerial jobs is so important that one expert warns that if this motivation declines, the United State could face a shortage of high-performance leaders in the future.

Desire to Exercise Power Successful managers are motivated to seek power. However, they don’t want this power for personal gain or for the thrill they might experience from wielding power over others (called personalized power orientation ). Instead good managers have a socialized power orientation . They do not seek power for its own sake; rather they accumulate power to accomplish organizational objectives.

Management theorist Jeffery Pfeffer has argued that organizations are political entities characterized by differentcenters of power and influence. To get things done in such a setting, Pfeffer argues that managers need to accumulate power and use that power in a constructive way. 46 Power comes not just from formal authority: It also comes from personal traits, such as ability to influence others through communication; from a network of allies; and from control over crucial information or resources. According to Pfeffer, the wise and constructive use of power is an important characteristic of successful managers.

Desire to Be Distinct or Different Successful managers need to be—or at least feel comfortable being—different from the people they lead. Why? One reason is that managers need to broker the interests of many stakeholders, so the need to be distinct or different from others allows them to act neutrally. This is consistent with studies reporting that effective managers have a moderately low need for affiliation —they have less concern about being liked and are less sensitive to the pressure others impose to conform to their wishes.

The other reason for the need to be different is that managers need to take center stage to communicate and symbolize the organization’s or work unit’s future direction. Employees look to managers as guides and role models of future behavior. Managers who feel uncomfortable with standing out from the group have difficulty leading people in new directions.

Desire to Take Action One of the most important challenges for managers is to create momentum— motivating employees (as well as suppliers and other stakeholders) to achieve the organization’s ambitions for the future. A recent survey of 3,600 bosses identified the “drive for results” as one of the five most important competencies of effective managers. This evidence is backed up by Larry Bossidy’s experience leading thousands of managers.

“When assessing candidates, the first thing I looked for was energy and enthusiasm for execution,” says the former CEO of Honeywell and Allied Signal. Bossidy says that this bias for action is so important that “if you have to choose between someone with a staggering IQ…and someone with a lower IQ who is absolutely determined to succeed, you’ll always do better with the second person.”

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