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How to get great performance out of people

February 2012

Reading about the commitment of Apple’s Steve Jobs to design quality, sometimes to the detriment of engineering,
(i.e. putting too much focus on the look vs. functionality or ease of manufacturing) reminded us of a book, “Performance
Without Compromise, How Emerson Consistently Achieves Winning Results, by Charles F Knight”, 2005.

Emerson is a diversified global manufacturing and technology company offering a wide range of products and services in
the areas of network power, process management, industrial automation, climate technologies, and tools and storage
businesses. It is widely recognised for its engineering capabilities and management excellence.

Charles Knight was CEO for 27 years, during which time Emerson was continuously profitable. He formalised the
management process that is described below. Since this formal process was adopted, Emerson’s revenue has increased
 from under S1 billion, to $15 billion in 2005, and $24 billion in 2011. The company has continuously improved on its dividends to shareholders for the past 55 years (Apple does not pay dividends). Knight’s successor, David Farr, has continued to grow the revenues in 2009 and 2010; even though they were not immune to the credit crunch and revenues dropped slightly. They did however rebound in 2011.

It is interesting to compare a steady engineering company that has performed consistently well over many years and
 delivered value and money to shareholders, to a design-based company that nearly went bust, doesn’t pay dividends,
but generated a turnover of $43 billion in 2011.

Emerson Management Process

  • Keep it simple
    This is not as easy as it sounds. Growth and success bring complexity. Good managers filter out the noise and concentrate on the essential tasks. This requires intense focus, discipline and energy. They set a few priorities and communicate them in ways that all employees understand and support. (Apple only focuses on a few products at a time.)
  • Commitment to planning
    Formalising and committing to planning brings a number of benefits  – setting company direction, identifying where growth will come from, understanding major trends that the company needs to respond to, etc. (Interestingly, Apple
    has not been a good planner. Many of their products have been delivered much later than originally targeted.
    Fortunately, the market has been forgiving. Steve Jobs was known for his “reality distortion field”. He would have unrealistic demands regarding time and refuse to listen to other timelines. Inevitably, the delivery dates were late.)
  • Strong system of follow-up and control
     No vision is achieved unless it is executed. Emerson takes implementation seriously by rigorously and routinely following up on plans. (Steve Jobs would keep tight control of every aspect of the new product. The only aspect he couldn’t fully control was time!)

  • Action-oriented organisation
    Effective leaders instil a sense of urgency in their organisations. They make decisions quickly and take action to remove barriers. (Apple would only employ A-type people who decide quickly, even if a product has to be delayed
    due to poor quality.)

  • Operational Excellence
    Emerson defines the standards to which operational excellence is judged.
    (Apple also insists on excellence in everything.)

  • Creating an environment in which people can and do make a difference

Charles Knight has formulated ten keys for business leaders to aspire to:

  1. Be committed to success
  2. Set proper priorities
  3. Set and demand high standards of excellence
  4. Be tough, but fair in dealing with people
  5. Concentrate on positives and possibilities
  6. Develop and maintain a strong sense of urgency
  7. Pay attention to detail
  8. Provide for the ability to fail
  9. Be personally involved
  10. Have fun

  If an organisation has leaders that follow the above, then its people will flourish.