MODULE L EADERSHIP: P ERFORMANCE-BASED M ANAGEMENT

T OPIC O VERVIEW This topic covers key leadership issues: Designing a performance-based management action plan Identifying and overcoming resistances to the plan –including negotiating the implementation of the plan Identifying factors that enhance the success of an action plan

INSTITUTIONAL REFORM PROCESSES We will look at a hypothetical case study: Leading change at ‘State TV’ - Core, 4-step SWOT analysis

Our aim is to help State TV make a profit, consistent with achieving social objectives (Suppose old-style senior managers dominate State TV too much, making State TV’s programmes less attractive to the viewing audience.) – We need to improve the performance of such managers.

A SSUMPTIONS Let’s assume that: the products that State TV currently sells are of low quality, and audience numbers in a key market segment are low State TV is losing money A reform-minded official seeks your advice on how to reform State TV

THE PROFILE WHAT is State TV: monopoly, state-owned company losses funded by govt managed by govt staff, suffers the heavy hand of the broadcasting Minister in some daily operations

WHO are the stakeholders: Govt (as owner) sets multiple objectives for State TV Minister (accountable to Govt to ensure govt objectives are met) State TV staff (manage, promotion based mainly on seniority) Customers (act as revenue source) SKY TV (an international competitor that may enter the market)

WHY change: State TV is making losses Govt budget problems Govt is thinking about a privatisation program (to reduce govt debt) WHEN to reform: ASAP HOW to reform State TV: You will consider three options –Commercialisation, corporatisation and privatisation

4-STEP SWOT 1. Conduct basic SWOT (SWOT 1) 2. Cut some less important elements in basic SWOT, if possible (SWOT 2) - avoid leadership overload 3. Link elements in SWOT 2 to build map of cause-and-effect relationships: (+), (-)

4. Identify key support & blockage points in the map that impact on your action plan; act on & report the risks

1. SWOT 1 Analysis To get an early idea of how useful each of the options are, we’ll undertake a preliminary SWOT analysis (SWOT 1):

Our initial SWOT analysis has identified the specific, key strengths, weaknesses, etc. But it hasn’t told us: –How serious or important each of these specific factors is –How the factors might link to each other So we need to dig deeper. Suppose we do more interviews with stakeholders and find:

Audience mainly 55+ years old, not so many Largest potential audience (18-40 y.o.) not watch much State TV. Have spending power, seek quality Managers Senior – always follow orders from the Minister, unimaginative, inflexible with subordinates, old fashioned programming ideas Middle – most understand the market well, innovative, but have little power. Some very unimaginative, rigid Minister Currently following Govt’s multiple objectives, but is gradually starting to realise that there is a problem

2. SWOT 2 Based on this new, deeper information (and the earlier How, When, Why,.. info), now revise your SWOT 1 results to cut out any less important elements SWOT 2 (reduced version of SWOT 1) –Retain only the most important elements from SWOT 1 & modify any of the retained elements in line with the new info:

CLASS SYNTHESIS OF SWOT 2 S MONOPOLY STAFF (middle) W STAFF (senior & middle) O AUDIENCE (advertising) MINISTER SKY TV GOVT BUDGET PROB. T MULT. OBJECTIVES MINISTER SKY TV GOVT BUDGET PROB.

3. LINKAGES IN SWOT 2: Map Eg: Sky TV disciplines the managers of State TV to perform better –Show directional arrow –Assign a (+) or (-) sign

Senior Manager Performance ↑ Another Example: Govt budget problem + Minister ? (reform)

4. IDENTIFY HOT POINTS Identify key areas in the map that may support or block your reform plans Assess the risks from any: –Blockages Individual decision-making biases from above Information filtering as plans go to higher levels Group decision-making biases –Changes in your assumptions

Dealing with Hot Points Eg: Will the Minister support the reform? Assessment: The Minister’s input or support will depend on: –Position (the stance that the Minister will take) –Salience (the importance of the issue to the Minister) –Clout (the Minister’s power or authority)

Do we need to change the Minister’s input? –How to change the probability that the Minister will support you? –Assess probability of winning & effort needed Finally report the risks.

SUMMARY Work backwards (imagine the solution and then work backwards to see the steps/elements that must be in place for the solution to be reached). Consider multiple paths to reach your objective –Brainstorming, … Investigate enabling elements or inputs Note time horizons in the risks Consider the elements of leadership that would help you

Since our profiling (How, when, what,…), SWOT 1 & 2 analysis, and linkage maps have given us a good background feeling for the issues, we’re now ready to start digging much deeper into our reform options (commercialisation, corporatisation & privatisation)

L IMITS OF C OMMERCIALISATION Bias towards political and bureaucratic control remains –Govt interference in daily operations –Low, govt-controlled prices might remain to reduce the profits of State TV Weak monitoring Weak incentives to perform better

So might need to move to next step – CORPORATISATION – to raise the performance and profitability of a state enterprise via: –Changes in ownership structure and incentives –Corporate governance structure, emphasising performance standards –Much stronger focus on commercial and financial performance

GROUP DISCUSSIONS 1. How to reduce the staff at State TV, while also increasing efficiency? (‘Produce more with less’) - The best ways to do it? - How to change the work styles and ways of thinking of the managers? - Reform fast or slow? 2. Which State TV activities should be subsidised by the Govt, and which should have cost recovery?

3. How to measure staff performance in State TV? 4. How do you cope with a co-worker who is a slacker? (A person who wants to work as little as possible) 5. State TV is a monopoly. Can devolution of decision-making be harmful to some stakeholders? How could we reduce the problem?

6. Should State TV have multiple objectives or a single objective?