Few leaders have embodied the principles of effective management like Jack Welch, former CEO of General Electric. While General Electric received acclaim publicly, the internal systems Welch inherited in 1981 were anything but admirable. From unorganized processes and poor communication to falling stock value, Welch knew that company growth would only come by changing the bureaucratic structure completely.
So that’s what he did. As the new CEO, his first order of business was to change the systems radically. He called for fewer meetings, decreased layers of management and oversight, and more focus on employee growth and empowerment. Welch even cut about 100,000 GE employees to help streamline roles, earning him the nickname of “Neutron Jack,” according to the New York Times. Despite seeming rash at first, Welch’s management approach worked, and within 20 years, GE grew from a $14 billion company to a $400 billion company.
In Winning, Welch says: “Before you are a leader, success is all about growing yourself. When you become a leader, success is all about growing others.”
By building others up as leaders, demonstrating authenticity, and making purposeful decisions despite external criticisms, you begin to embrace the true power of the functions of management. Welch’s style wasn’t popular at the time, but he maintained his grit and determination to lead GE to unprecedented success. For this, he was named “Ultimate Manager” and “Manager of the Century” by Fortune, according to his obituary.
Analysis from Gallup shows 70% of the variance in employee engagement and investment is a result of management functions. This means that the level to which your employees are invested and engaged largely depends on how well the functions of management are practiced. An excellent manager, for example, will cultivate a great corporate culture, which attracts and retains top talent and builds stronger relationships. On the other hand, a manager who doesn’t perform the functions of management well can become a toxic boss who no one wants to work for.
However, if you practice the core functions of management, follow your passion, and model successful leadership qualities, your team will follow you.
Key Insights on the Functions of Management
- The functions of management were established in 1908 from the theories of French engineer Henri Fayol.
- Today, the functions consist of four phases: planning, organizing, leading, and controlling.
- Poor management is what drives 50 percent of employees to quit their jobs.
- Business success increases when the four functions of management intersect with servant leadership.
The Core Functions of Management
Productivity is never an accident. It is always the result of a commitment to excellence, intelligent planning, and focused effort.paul j. meyer
In 1888, Henri Fayol became the managing director of a French ironmaking company called Boigues Rambourg. The company at that time was on the verge of bankruptcy, but under Fayol’s management, the business turned around. By 1900, it had grown to become one of the country’s most significant steel and iron producers.
Fayol observed many management problems during his time at Boigues Rambourg, especially at the organizational level. He studied the issues and posed solutions that would prove effective. Then, in 1908, he published his theories and what he had learned to share his knowledge with the world. His theories attracted global attention and respect, earning him the nickname, “The Father of Modern Management.”
Fayol’s theories included five original functions of management: planning, organizing, command, coordination, and control. Today, these functions of management are four phases: planning, organizing, leading, and controlling. These four functions are the foundation for effective and successful management practice. As Fayol began demonstrating in 1888, integrating these functions of management into your company can save your business.
Gain more insight into the four functions of management by learning more about how each one of these works below.
Breaking Down the 4 Functions of Management
Planning means both to assess the future and make provision for it.henri fayol
This stage involves identifying overarching company goals and forming a plan to achieve them. What are the primary thresholds to meet? What is the timeline for completing these thresholds? Which human and physical resources will be needed?
Once these answers are determined, it’s time to craft a strategy. Who will do what tasks? What stages are those tasks broken down into? And what is the priority level of these tasks? These questions are all examined during the planning phase.
Fayol describes four components of planning:
- The desired result
- The action
- The stages
- The methods
Example: A manager is hired to run a new restaurant. One of his goals is to staff the restaurant adequately while remaining financially efficient for overhead and profit. In the planning phase, the manager identifies how many servers, kitchen staff, hostesses, and bussers are needed when the restaurant is open. The manager will consider busy times, like evenings and weekends, and slower times, like mid-week lunch, to form his plan.
Three types of planning:
- Strategic: With a time frame of usually three years, strategic planning looks at overall company threats and the environment. It examines competition, outliers, consumer markets, and other variables that can help reveal areas of strength and weakness.
- Tactical: Tactical planning focuses on one specific department, like production, human resources, or food and beverage. This kind of planning focuses on tactical goals that will take less than a year to achieve.
- Operational: This planning type leverages tactical planning to conduct strategic planning. By putting a goal defined in strategic planning into practice operationally, a whole company can work towards achieving that goal together.
To organize means building up the dual structure, material, and human, of the undertaking. To command means binding together, unifying and harmonizing all activity and effort.henri fayol
Once the planning is done, the next function of management is organizing. This phase is about delegation, processes, and expectations. A manager’s job at this stage is to coordinate teams, assign tasks to qualified employees, and set clear expectations. The purpose of organizing is to set your employees up for successfully executing the goals established during planning.
In the organizing stage, it’s also vital to set contingency plans. Tasks and projects don’t always go as planned. Anticipating potential problems and working through a plan to avoid them ahead of time is key. This will help you and your team stay on track even when things go awry.
Example: The new restaurant manager organizes human and physical resources to help the company run smoothly. For instance, they might have their top servers working weekends. Additionally, they schedule prep work in the early morning to avoid long customer wait times during dinner service. They clearly communicate what time people should show up for work, when they can take breaks, how operations run, which tasks should be completed, and who is doing what.
The manner in which the subordinates do their work has incontestably a great effect upon the ultimate result, but the operation of management has a much greater effect.henri fayol
Once a team has clear goals, priorities, processes, and timelines, the following required function of management to ensure success is leading. Leading is inspiring and motivating your team to perform at their best. It means giving praise and constructive criticism—when warranted—so your team knows how they are doing and how they should pivot. Managers who demonstrate a strong sense of direction and clear vision command the most buy-in from their employees.
Leading is also about modeling empathy, showing support, and providing encouragement. Your team members aren’t robots—they’re humans. They have lives, worries, and other things outside of work that affect them. Recognizing this and showing compassion will not only strengthen your relationship with your team but will lead them to do their best work.
Example: One of the restaurant manager’s servers received excellent reviews for their service on Saturday night. Because of this, the manager takes time to give praise to the server. Additionally, another one of their staff members had a family emergency and had to leave during a busy time. Instead of getting angry, the manager practices servant leadership and covers the remainder of their shift. After work, they also check in on them to make sure everything is okay.
To be a good manager of people requires both fairness and bluntness.james cook
The last function of management is the controlling phase. With the controlling phase, the goal is to identify areas of concern and make necessary adjustments. For example, who is performing well or not so well? What areas of weakness or concern are there? Are there any tasks that are off-track? These are all questions managers should ask at this point.
Under the controlling phase, make any tweaks and pivots necessary to make sure the work done in the planning, organizing, and leading phases are all being honored. This might look like meeting with employees who are struggling and assigning them tasks that are better suited to their strengths.
Example: The restaurant manager reviews the previous quarter’s sales, reservations, and losses. They know examining these areas is key because it reveals potential problems and areas to work on. With this knowledge, they can make decisions and changes to improve during the next quarter. For instance, they realize the business actually loses money by remaining open on Mondays, so they decide to keep the restaurant closed on this day.
Where Leadership and Management Intersect
Management is doing things right; leadership is doing the right things.peter f. drucker
Bad management can cost a company big time. In a recent poll from GoodHire, 82% of employees said they’d consider leaving their company simply because of a bad manager. Furthermore, according to Gallup, 50% of U.S. employees actually do quit their job because of their boss.
While the two terms are often interchangeable, leadership and management are different. You can be a good leader but not necessarily a good manager, and vice versa. What many managers lack, and why their employees are disengaged, de-motivated, and uninvested, are good leadership qualities. Traits like emotional intelligence, communication, empathy, passion, and balance are reflective of someone both leading and managing effectively.
Once the functions of management—that is, planning, organizing, leading, and controlling—intersect with these leadership traits, real business success can occur.
Continue advancing your management knowledge and expertise with How to Excel at a Manager’s Job.