Few senior executives really know how they spend their time. They may tell themselves--and others--that they spend their days reviewing business-unit strategies, developing future leaders of the company, devising new organizational architectures or figuring out ways to squeeze costs from the system. They may even believe that they are devoting sufficient time to the longer-term issues of how to add value to the company. But the realities and the consequences of how they actually use their time are often quite different. As the pace of business quickens, successful companies will be the ones that are best able to utilize their senior management teams most effectively.
This is not hyperbole, nor should it be taken lightly. In this era of business, when competitiveness is everything, the scarcest and most important resource--the resource most critical to the success of the overall enterprise--is the productive use of each senior executive's time.
A study conducted by a Booz-Allen & Hamilton team of senior executives illustrates the problem. The executive was a major business line C.E.O. whose responsibilities spanned several continents. Our analysis of how he used his time covered a period of almost two years (see chart). We found that over one quarter of the executive's time was spent in transit. By transit, we mean the time he spent on planes and on the way to and from airports, rather than at final destinations. On average, for this executive, one out of every four days was essentially lost, notwithstanding any attempts he made to work en route. Part of the problem was structural; the executive had to divide his time between two offices. But a large part was managerial and, therefore, subject to his control.
The executive was convinced that most of his travel time was spent doing work with customers or learning about new markets. Our study revealed something different. A large percentage of the executive's trips included visiting major company-owned operations or facilities. These visits often included time-consuming performance reviews. As a result of these demands, the time the executive actually spent during travel interacting with the market in one form or another was relatively modest, amounting to only about 13 percent of his overall time during the two-year period.
When the executive saw our study, he was surprised, to say the least. Though he was a perceptive and well-qualified manager, he did not fully realize the toll traveling took on his time.
What this study-of-one illustrates is the extent to which senior executives frequently find that day-to-day matters encroach on time that is better utilized for strategic thinking. These encroachments come at a significant cost to the organization, since too much time spent on day-to-day details can jeopardize future growth. They also come with an implicit tradeoff, since day-to-day matters are also crucial to a company's survival.
It should come as no surprise that competing demands fight for each second of an executive's time. We all experience those tensions. In companies with extensive geographic reach, either in terms of operations or major customers, travel is perhaps the biggest time-thief of all. But travel takes its toll in another way too. High levels of travel also increase the risk of executive burnout--a significant destroyer of executive capacity. Yet travel is not the only thief.
The growing demand for the time of senior executives is fueled by the increased pace of business, the quicker movement of information, new organizational structures, the desire to get to know customers and suppliers better and the trend toward decentralized decision-making, with its attendant problems of managing risk. The new, de-layered organization may be more responsive, but it is also more complex. And it is more demanding. Today's senior executives are often caught in the temporal equivalent of a pincer maneuver: more claims are made upon their time precisely when they have less of it to give.
Recapturing lost time could yield tremendous returns. But to do so requires changes in the way executives add value to the enterprise. These changes are most effectively addressed to the executive team as a whole. As a consequence, fixing the time problem involves rethinking the model for running the company. That means reassessing the roles of the executive team, the business units and the supporting corporate functions to pursue growth more effectively. Beyond changing roles within the corporation, we see three promising avenues to follow to gain greater amounts of available time:
Staff Support--put it where you need it.
Technology--make it work for you.
People Interactions--be selective.
So what can be done to gain more ground in the time wars? What follows are some suggestions that we have to offer:
In today's environment, companies must go beyond the limitations inherent in either of the traditional models of centralized staff functions at headquarters or decentralized staff functions resident in the business units. We view these traditional headquarters functions as "core functions" in that they can be located anywhere and can still serve their purpose. We believe they are most effective when distributed, that is, located in different geographic areas as needed. By distributing and networking core functions, the company has real-time interactions in important time zones and can provide support for executives anywhere.Core functions can be located anywhere and still serve their purpose.
Use electronic means (video, voice, data) as the primary vehicle for interactions within the company. That is the way Bill Gates runs far-flung Microsoft and it is a way that works. To do this requires substituting technology for travel and lengthy meetings. It requires a mindset that makes technology work for people, not the other way around. One promising tool is video conferencing. A good executive information system is another way to help recapture time. But good information systems do not come off the shelf. They must be built around the way the company really works. Even then, the full value is only realized when they are implemented effectively.
People interactions should be disciplined and used primarily for those instances when face-to-face contact is best. To a large extent, direct face-to-face interactions should be weighted more toward those outside the company--customers, partners, government officials--than inside. Time, as a scarce resource, should be spent on key issues--for example, growing the business, coaching future leaders, maintaining strategic alliances--and not just visiting people. Managing by walking around--when you are global-- is just not possible.
Telling executives that they must make better use of their time may not seem like the moral equivalent of Einstein's Special Theory of Relativity. It is also not new. After all, Peter Drucker, in "The Effective Executive," devoted an entire chapter to time management, and that was in 1966. But the importance of effectively using time has only increased since then. To become efficient at using their time, executives must rethink and restructure the way they work. And, while these changes involve the how, where, and by whom of work, they also involve rethinking the model for how the business is managed and run.