Released by: The Edge
Date: 30 April 2007
"Management means, in the last analysis, the substitution of thought for brawn and muscle, of knowledge for folkways and superstition, and of cooperation for force. It means the substitution of responsibility for obedience to rank, and of authority of performance for the authority of rank."
Peter Drucker
There is talk and there is rhetoric but there is no substitute for clear tangible evidence of performance and results.
Now for the first time in the history of Asian management, the Association of Asian Management Organisations (AAMO), comprising a consortium of national management organisations from 15 member countries, has initiated a landmark study on management capability using the Management Capability Index (MCI) developed by the New Zealand Institute of Management. The objective of the MCI survey is for
each member organisation of AAMO to ascertain its own national management capability and compare it with those of the other member organisations.
New Zealand was the first country to conduct the MCI survey in 2003. India, under the auspices of the All India Management Association (AIMA), conducted the same survey in 2005, followed by Malaysia in the third quarter of last year under the Malaysian Institute of Management.
Management capability is demonstrated in business/organisational performance and is a result of management leadership and competence in the key management practices that lead to sustainable business performance and growth. Of course, there are other factors that also influence business/organisational performance, and they include competition, globalisation, government policies and labour markets.
All of us possess knowledge, skills, abilities, personal attributes and competencies. But are we able to apply them to deliver superior business performance in the organisations we lead?
When the environment gets really tough, highly capable managers are able to deliver results despite it. The best managers are capable of applying their competencies in different environments under challenging circumstances, and producing superior results. They are adept at overcoming or "taming" the environment and growing their organisations.
Composite assessment index
The Management Capability Index or MCI is a composite assessment index comprising eight major drivers of management capability that deliver profitable business growth:
- Visionary and strategic leadership;
- Performance leadership;
- People leadership;
- Financial management;
- Organisation capability;
- Application of technology and knowledge;
- External relationships;
- Innovation - products and services;
- Results and comparative performance.
These nine factors are given varying degrees of importance or weighting. For each of the nine factors that constitute the MCI, CEOs were asked to assess what they consider to be their organisation's current position in terms of capability. The index is then computed from the responses and becomes a useful indicator of how capable an organisation, group, sector or even country is against the set
criteria. Thus, the MCI enables useful comparison or benchmarking between individual CEOs, organisations, sectors or even countries.
How Malaysia stacks up
The 2006 Malaysian Management Capability Index is derived from 110 companies that responded to the research survey. The survey shows that Malaysian management is performing at 71% of its potential capability, which is regarded as mediocre. "External relationships" ranks the highest and "organisation capability" came in the lowest.
How well did Malaysia fare against New Zealand and India which carried out the same survey? The preliminary report shows the Malaysian index to be higher than that of New Zealand's but lower than India's.
The findings of the inaugural Malaysian MCI reveal specific management competencies that need improvement and recommend some relevant development programmes to address areas that Malaysian management are weak at.
By constantly keeping a measure of our own Malaysian organisations, we can keep track of their performance and trends in their management capability in order to identify areas for improvement. This will help boast Malaysia's management capability.
The MCI allows Malaysia to benchmark itself against other countries in terms of management capability. Malaysian organisations can also compare themselves with other players in their own industries or outside and benchmark themselves against the national MCI to gauge their own performance and areas for improvement.
Knowing and understanding the MCI implications can give you valuable insights to enable you to be a cutting-edge force in your management leadership, organisation and industry performance.
The 2006 Malaysian Management Capability Index Report was launched by Datuk Seri Rafidah Aziz, Minister of International Trade and Industry Malaysia on April 24.
Dr Wilson Tay is CEO of the Malaysian Institute of Management, the national management organisation of Malaysia. MIM invites companies and professional managers to be members. Contact MIM Membership Support and Outreach at (603) 2164 5255; fax (603) 2165 4681; e-mail: enquiries@mim.org.my or visit www.mim.org.my.
