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Fred Hassan, who led high-profile turnarounds as CEO at Schering-Plough Corp. and Pharmacia-Upjohn, says the key to bringing about change was to plunge down into the corporate hierarchy and systematically connect with front-line managers.
"The managers most responsible for a company's success or failure happen to be the ones with whom the CEO spends the least amount of time," he writes in Harvard Business Review. Here's what he says you need to know:
The first-level target
The shop-floor supervisors, sales team leaders, managers in restaurant chains and their equivalent in myriad businesses head the first level of operations. In large companies, Mr. Hassan suggests there might be 1,000 to 10,000 such managers - making up 50 to 60 per cent of the management ranks and directly supervising as much as 80 per cent of the work force. "It is the front-line managers who must motivate and bolster the morale of the people who do the work - those who design, make, and sell the products or deliver services to customers," he declares.
Meet one-on-one
The first step is to make time for regular interactions with selected front-line managers. The numbers may make the task seem Herculean, but he says routine interactions can be folded into what a chief executive is already doing. Most CEOs spend a significant chunk of time visiting company operations, so meeting with front-line managers must become a priority on those visits. Mr. Hassan supplemented his meetings with local general managers and their teams by also holding "CEO dialogues" with first-level managers, communicating his vision and seeking their perspective and concerns.
Be serious about the 'trivial'
For this strategy to be effective, the CEO must delve into the nuts and bolts of the operation. Otherwise the front-line managers will sense you are out of touch, and may call you on it. The dialogues may take you into areas that at first glance seem unworthy of a CEO's time. "Don't let that stop you. You'll learn that what seem like trivial issues or problems often turn out to be incredibly important," Mr. Hassan stresses.
He figured he had bigger issues to worry about than the complaint from front-line sales managers at Schering-Plough's Russian operations about how long it took to gain corporate approval to assign a company car to a sales rep. But taking the train or subway was hindering productivity for those sales reps, and encouraging them to move to competitors who would supply a car.
Go deep when it's critical
All front-line managers are important, but sometimes a specific group is critical to resolving an immediate crisis or implementing a new strategy. They may require more than occasional routine interaction. At Schering-Plough, Mr. Hassan's U.S. sales force, which was generating half of total revenues, wasn't meeting targets and was embroiled in finger-pointing. They became his prime target for mentoring, teaching and coaching, getting buy-in for his new vision and helping the front-line sales managers to model the new behaviours he was seeking.
Make their voices heard
It's vital that the front-line perspective be heard in senior decision making. At Schering-Plough, which had been hit with massive fines for inadequate quality management just before he came on board, Mr. Hassan scheduled a recurring meeting (the "CEO biweekly"), whose 15 members included the company's top manufacturing executives, plant managers from the four U.S. manufacturing sites, and middle managers overseeing the quality effort. But to keep everyone honest, he also often brought in the first-level managers who ran the production lines.