Management development is any attempt to improve managerial performance by imparting knowledge, changing attitudes, or increasing skills. The ultimate aim is, of course, to enhance the future performance of the company itself. The general management development process consists of (1) assessing the company’s strategic needs (for instance, to fill future executive openings, or to boost competitiveness), (2) appraising the managers; current performance and then (3) developing the managers (and future managers).
Some development programs are companywide and involve all or most new (or potential) managers. Thus, new MBAs may join management development programs and rotate through various assignments and educational experiences with the dual aims of identifying their management potential and giving the breadth of experience (in, say, production and finance). The firm may then sort superior candidates onto a ‘fast track’ a development program that prepares them more quickly for senior level commands.
Other development programs aim to fill specific positions such as CEO. This usually involves succession planning, Succession planning refers to the process through which a company plans for and fills senior level openings. For example, GE spent several years developing, testing and watching potential replacements.
The typical succession planning process involves several steps: First anticipate management needs based on strategic factors like planned expansion. Next, review your firm’s management skills inventory (data on things like education and work experience, career preferences, and performance appraisals) to assess current talent. Then, create replacements chats that summarize potential candidates and each persons’ development needs. As in an earlier example, the development needs for a future division vice resident might include job rotation executive development programs to provide training in strategic planning and assignments for two weeks to the employer’s in-house management development center. Management development can then begin, using methods like managerial on-the-job training, discussed below.
Managerial on-the-Job Training: On-the-job raining is not just for non-managers. Managerial on-the-job training methods include job rotation, the coaching/understudy approach, and action learning.
Job rotation, means moving management trainees from departments to department to broaden their understanding of all parts of the business and to test their abilities. The trainee often a rent college graduate may spend several months in each department. The person may just be an observer in each department, but more commonly gets fully involved in its operations. The trainee thus learns the department’s business by actually doing it, while discovering what jobs he or she prefers.
Coaching /understudy Approach: Here the trainee works with a senior manager or with the person he or she is to replace; the latter is responsible for the trainee’s coaching. Normally, the understudy relieves the executive of certain responsibilities, giving the trainees a chance to learn the job.
Action learning programs give managers and others released time to work full time on projects, analyzing and solving problems in departments other than their own. The basics of a typical action learning program clued: carefully selected teams of five to 25 members; assigning the teams real world business problems that extend beyond their usual areas of expertise; and structured learning trough coaching and feedback. The employer’s senior managers usually choose the projects and decide whether to accept the team’s recommendations.
Pacific Gas & Electric Company (PG&E) uses an approach it calls Action Forum Process. The idea of the Action Forum Process is to focus on relatively narrow issues that the employees already know most about. The program has reportedly been a success. In three years, PG&E hosted almost 80 Action Forums and saved more than $270 million as a result of them.
The Action Forum Process has three phases: (1) a framework phase of six to eight weeks—this is basically an intense planning period during which the team defines and collects data on an issue to work on; (2) the Action Forum itself – two to three days at PG&E’s leaning center discussing the issue and developing action-plan recommendations; and (3) accountability sessions, when the teams meet with the leadership group at 30,60, and 90 days to review the status of their action plans and to make any necessary changes.