The Ultimate Question in Management

November 3, 2011 Author: James Heskett http://hbswk.hbs.edu/item/6788.html Executive Summary: Forum Open: Is there one key to management success, an ultimate question that needs to be answered? Jim Heskett has a nominee. What's yours? James Heskett is a Baker Foundation Professor, Emeritus, at Harvard Business School. The publication this month of The Ultimate Question 2.0 (revised from an earlier edition) provides us with an opportunity to ask ourselves just what is the ultimate question in management. In their book, Fred Reichheld and Rob Markey remind us of the simplicity of the Net Promoter Score (NPS). It's the product of answers to one question, "How likely is it you would recommend us to a friend?" The NPS has become so popular that, as a customer, you quite likely have been asked that question in the past couple of months. Those replying with a 9 or 10 (the most positive) on an 11-point scale (0 to 10) are "promoters"; a 7 or 8 labels you as a "passive"; and anything from a 0 to a 6 makes you a "detractor." Subtract the proportion of detractors from the proportion of promoters and you get a "net promoter score" that can range anywhere from +100 to -100. And that's it. Tracking the net promoter score, according to the authors, can lead to improvements in both management and performance. As managers and students of management, we have a tendency to want to simplify things. Evidence of this is the plethora of management books with single word titles such as Accountability, Transparency, and Teamwork. We search for the one key to management success. Based on recent research, I have my own candidate for that "one key thing:" trust. (There's precious little trust in government, Wall Street, and business in general these days.) I found a strong correlation between trust, loyalty, engagement, and "ownership" among employees in a sample of organizations I examined. Respondents in the study made a convincing case that trust was absolutely essential to the successful implementation of policies and practices necessary to implement any strategy. For example, several managers testified to the importance of the relationship between trust and the ability to achieve speed in getting things done. It's a topic that Stephen M. R. Covey wrote persuasively about several years ago in his book, The Speed of Trust. So for me one candidate "ultimate question" would be "Do you trust your manager?" or "Do you trust your organization?" My study led to an exploration of the underpinnings of trust, as suggested by related survey data. One major determinant is whether a manager or the organization does what it says it will do, whether it lives up to "the deal" on things important to an employee, whether it meets that employee's expectations. So another "ultimate question" might well be "Does your manager do what she says she will do?" or "Does your organization do what it says it will do?" What is the ultimate question in management? Or do you object to playing this game?--The Net Promoter Score certainly has its detractors. All of these are efforts to provide simple guideposts in a very complex process. Performance measurement can be a confusing process, leading to inaction or, worse yet, inappropriate action. Can an "ultimate question" have a useful management function? If so, what's yours? What do you think? To read more: Stephen M. R. Covey with Rebecca R. Merrill, The Speed of Trust: The One Thing That Changes Everything (New York: Free Press, 2006). Fred Reichheld and Rob Markey, The Ultimate Question 2.0 (Revised and Expanded Edition): How Net Promoter Companies Thrive in a Customer- Driven World (Boston: Harvard Business Press, 2011). Jim Heskett's latest book,The Culture Cycle, was published in September.