Building Business

Self-Taught MBA: Developing Executive Thinking

comments (0) November 1st, 2012 in Blogs

Fernando Pages Ruiz, contributor

Like most builders, I came into the business as a manager, with an intimate knowledge of the trades and a good handle on running a job site. From the beginning, I was fortunate to work for bosses and with partners that had a different set of skills. They had learned to make something out of nothing by using their imagination to see an opportunity, envision how to develop it, and then gather the resources (people and money) to do it.

The most difficult step for any manager moving into leadership is to allow others to manage. Once you have assigned good, skilled people to take over the details as you train your focus on the big picture, you have made the transition from manager to executive.

Like most builders, I came into the business as a manager, with an intimate knowledge of the trades and a good handle on running a job site. From the beginning, I was fortunate to work for bosses and with partners that had a different set of skills. They had learned to make something out of nothing by using their imagination to see an opportunity, envision how to develop it, and then gather the resources (people and money) to do it.

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Warren Bennis, a distinguished professor of business administration and founding chairman of the Leadership Institute at the University of Southern California, developed a list of differentiating characteristics that he described in terms of the contrast between management and leadership. I don't want to alter Bennis' words--they are too good as is--but you could substitute the word executive for leader and come to the same conclusion:

– The manager administers; the leader innovates.

– The manager maintains; the leader develops.

– The manager focuses on systems and structure; the leader focuses on people.

– The manager asks how and when; the leader asks what and why.

– The manager has his or her eye always on the bottom line; the leader's eye is on the horizon.

– The manager imitates; the leader originates.

– The manager accepts the status quo; the leader challenges it.

– The manager is the classic good soldier; the leader is his or her own person.

Although I agree with Bennis that leadership comes at all levels, including the management level, I also know how important it is to have good managers in a construction company and regard this as a separate job from the executive, as in CEO. I prefer the words manager and executive because they describe two different organizational roles. Whichever concept you prefer, executive or leader, the difference in thinking between a manager and an executive is an important distinction. You don't want to contemplate a business decision with the same criteria as an operational one; in other words, you don't want to think like a manager when performing executive functions.

Getting back to my friend's original question, on how to become a builder or developer rather than an employee or a subcontractor, the answer is in getting to know the community, the real-estate market, and the needs and wants of the people living in your area. Gathering this information is part of an effort to figure out what the market in your area will want in two or three years when you're ready to put whatever you constructed up for sale or rent. This sounds simple enough, but it takes more than switching hats. It entails developing a new aspect to your personality.

For example, a manager takes a break when he stops for coffee; an executive works at the highest intensity then. He's thinking and listening, looking for hints of opportunity in the casual conversation, taking advantage of the break from operational considerations to work on strategic ones. A manager clocks out when he leaves the job site and heads home; an executive never clocks out, even when on vacation. The manager comes home and works on scheduling, estimates, and bookkeeping. This is why it's important for you not to overwhelm yourself doing accounting and estimating at night; the 24-hour manager is not an executive. The executive must have the time to do executive work, and this work is done first in the office of your imagination. You need time to do research to see if your ideas prove out. Then, through good communication, you inspire others with your vision and gather the resources needed to make it come about. All of this requires time, and the most difficult step for any manager moving into leadership is to allow others to manage. Once you have assigned good, skilled people to take over the details as you train your focus on the big picture, you have made the transition from manager to executive.

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