Feb 072011

The Three Functions of a Management Team

The Three Functions of a Management Team

After my quarterly Return Path exec team offsite last week, my team and I were rehashing the day’s conversation over dinner.  Was it a good day or a bad day?  An upper or a downer?  We concluded that the day was as it should have been – a good mix of what I will now articulate as the three main functions of a management team.  Here they are with some color:

  1. Create an environment for success:  Do people like to come to work every day?  When they get there, do they know what they’re supposed to do, and how it connects to the company’s mission?  Are people learning and growing?  Are you building an enduring organization beyond you as a leader?
  2. Nip problems in the bud, or prevent them entirely:  Are you spending enough time thinking about your business’s vulnerabilities?  Do you go into a dark cave of paranoia once in a while and make sure you’re cognizant of all the main potential threats to your livelihood?  What can you do to spot smoke as an early warning detection of fire?
  3. Exploit big opportunities:  Do you know the top 5 things that will make your company successful?  Are you constantly on the lookout for signs that it’s time to invest more heavily in them?  Are you nimble enough to make those investments when the time is right…and have you developed the intellectual or infrastructural underpinnings to make those investments matter?

I’m not sure there’s any order or weighting to these, at least not over the long haul.

Feel free to pick up this post, discuss it, debate it.  I may be missing some huge swaths of territory as a result of where our company and our team are at this particular moment in time.  But after reading this over a few times, it feels right on a more enduring (e.g., a “hit ‘post now’”) basis.

  • http://www.jonathanmarks.com Jonathan Marks

    I'm in the content production business. I support your idea of focussing on the three points above. In my kind of work we phrase it as Creating a culture for success and innovation. Too many people think Innovation is a department, whereas it only works if it is culture from bottom to top.

    I summarize point 2 as advice to Continually Look Sideways. if you snooze you lose. Your team needs to listen, reflect and decide all the time.

    • Matt Blumberg

      I like the concept of looking sideways – sometimes we phrase that as looking around corners.

  • JLM

    I like your blog very, very much. Great thoughts. Thanks.


    • Matt Blumberg

      Thanks, JLM – glad to have you reading and commenting.

  • michael sippey

    This is a great post. I love the multilayered thinking in point #1 — that creating an environment for success is about making it possible for the team to succeed, connecting mission to strategy to tactics, and making sure that everyone knows (a) what to do and (b) how what they do supports the overall objectives. Thanks for this, Matt!

    • Matt Blumberg

      It’s all about having the best employees as motivated and aligned as possible.

  • paulcarneyjr

    Great post, Matt. Number 1 is so true, but the person who is *not* a good leader will hardly ever recognize it. Any ideas on how to get past that?

    And #3 brings up that overused word "pivot", but that is what you are describing. The biggest issue I have seen, especially for a start-up, is how much energy to spend chasing new avenues. We are taught (and learn the hard way) that focus and discipline win the game, but this concept lends itself to distraction. Do you have ways that you have balanced the focus and distraction?

    • Matt Blumberg

      On the first topic, a bad leader ultimately delivers poor results unless he or she happens to be riding a tiger.  But that’s what management teams and boards are for – to either spot and fix, spot and remove, or support a leader, depending on his or her level of quality.  The best way to get past a bad one is to have a rigorous performance management system in place – yes, even for the CEO.In terms of balancing out focus and distraction…that’s the story of a startup’s life.  It’s not easy.  The larger the company gets, the more “distractions” the organization can tolerate – if they’re at least somewhat cordoned off so the whole company doesn’t go careening in different directions.  Early on in a company’s life, things have to be more focused and deliberate.

  • Adrian Meli

    Matt, interesting post, I am curious how you think about number 1 and make sure you foster an "environment for success." Do you track this in any way and see how it changes over time or do you just rely on anecdotal evidence of how the firm is operating/happiness levels. There are some amazing cultures out there from early stage startups to Netflix and it seems hard to keep number 1 going as a lot of these companies scale… – Adrian Meli

    • Matt Blumberg

      I’m not sure we systematically track #1 by data – but we are getting large enough now (225 people) that we are starting to do that.  There are more HR/people metrics available than one usually thinks, so we’re starting to gather them.  Not just things like attrition, either – things like performance over time, by manager, is one example.

  • Daniel

    Hi Matt,

    I would certainly vouch for bullet point #1. Creating and maintaining an environment that encourages people to give their best voluntarily is extremely difficult; a real art.

    I have seen numerous companies – made up of brilliant people – that fell apart scarily quickly due to the CEO's inability to maintain a positive, constructive environment. My experience is that once you go down the spiral, it is extremely difficult to recover. Consequently, ensuring a working environment for success cannot be stressed enough.

    • Matt Blumberg

      Thanks for the comment, Daniel – but the important thing about this post is that it’s not just about the CEO – it’s about the entire management team!

  • JKM

    When you see these big opportunities for investment do you have a formula for how much funds you put into them? Is there always a certain amount that you hold back?

    • Matt Blumberg

      The formula, to the extent we have one, is “let’s put as little into it as we can get away with to see if it’s a real opportunity or not…then let’s not forget that we should either kill it or really fund it after we learn (as opposed to just letting it limp along).” 

  • Guest

    I'm shocked that none of your points mention either products, or actually creating value for customers. Or are you making the point that management is not actually in the business of creating value for customers, but rather creating an environment for other people to create value?

    This would align with Joel Spolsky's post on how (software company) management maintains the ship to give the illusion to the programmers that they can simply say, "Go thence!"

    • Matt Blumberg

      Actually all three points do.  The first is about setting an environment where the whole company can create value.  The second and third are about making sure you are creating the right products and maximizing value.

  • http://hirethoughts.blogspot.com Donna B White

    Great post.

    Especially like #1 and would imagine that it's in the right order on the list. Without this, the rest becomes irrelevant in the long run.

    Thanks for the cogent word.

    • Matt Blumberg

      Exactly.  Employees first.  Customers second.  Investors third.

  • Neal

    A good thought provoking post. My only suggestions is customers. Employees and organizations that obsess about customers – current and future needs – tend to outperform. That is always my #1

    • Matt Blumberg

      Yes…but poorly motivated employees will never get to do that!

  • Alexis d

    Could point two and three be the same management function – awareness? Thus management must be aware of problems and how to solve them; management must be aware of opportunities and how to exploit them. Taking it a step further, is one key management function awareness and another execution?

    By the way, I've had the pleasure of spending a fair amount of time recently in Return Path's NY offices and I can vouch for the fact that Matt and his team have created an environment for success.

    • Matt Blumberg

      Thanks, Alexis! There's probably a 2×2 matrix of vulnerability/opportunity vs awareness/execution, but that's more than I could simply blog!

  • mathiasmilne

    I think there is a key element to all 3 of the functions, and without it all 3 perish. I believe that the key element is communication. Effective, two-way, open, and active communication makes all three functions able to function.
    As some of you are management, CEO's, etc please tell me what you think and if I am wrong. I am just a "support staff" where I work, but many departments require my job to be done effectively and in concert with many others so that the entire team can win, and I have found that a lack of, or failure to, communicate ends badly for everyone in most cases.

    • Matt Blumberg

      Mathias – you are so right.  Communication is the lifeblood of a good organization and management team.  No question about it.