The (PAEI) Code
What are those roles and how should they be managed together? They are (P)roducing, (A)dministrating, (E)ntrepreneuring, and (I)ntegrating; or (PAEI). Let me begin by giving a brief definition of each.
The first role that management must perform in any organization is to (P)roduce results, making the organization effective in the short run. Why are people coming to you? Why do they need you? What is the service they want? The (P)roducer’s job is to satisfy this need. It can be measured by how many people come back to obtain your competitive products or services.
The second role, to (A)dminister, sees to it that the organizational processes are systematized: That the company does the right things in the right sequence with the right intensity. It is the role of (A)dministration to ensure efficiency in the short run.
Next, we need a visionary who can foresee the direction the organization is going to take, someone who can naturally pro-act in an environment of constant change and thus guarantee the company’s effectiveness over the long run. This is the role of the (E)ntrepreneur, which combines creativity with the willingness to take risks. If the organization performs this role well, it will have the services and/or products that its future clients will want and seek.
Finally, management must (I)ntegrate, which means building a climate and a system of values that will motivate the individuals in the organization to work together so that no one is indispensable, ensuring that the organization will survive efficiently in the long run.
A healthy organization is one that is effective and efficient in the short and long run.
In problem-solving, each role focuses on a different imperative:
The roles
Make the organization
To be
In the
(P)roducer results
Functional
effective
short run
(A)dminister
Systemized
efficient
short run
(E)ntrepreneur
Proactive
effective
long run
(I)ntegrate
Organic
efficient
long run
(P): What should be done?
(A): How should it be done?
(E): By when/why should it be done?
(I): Who should do it?
If all four of these questions are not answered before a decision is finalized, then that decision will be only “half baked.”
If you both (P)roduce the expected results and (A)dminister well, you’ll be effective and efficient in the short run. But you will be profitable for the short run only. (Why this is so will be discussed later in this book.) If you (E)ntrepreneur and (I)ntegrate only, you’ll be effective and efficient in the long run, but you will suffer in the short run. For a company to be profitable in the short and long run, it must perform all four roles well. In a not-for-profit business – for example, a government agency – then by capably performing the four roles you will achieve service, political survival, or whatever goal you seek.
Even parents have to perform these roles because a family is an organization and, thus, a system that requires all four roles to be performed. In the traditional family, the husband performs the (E) and (P) roles, building a career and bringing home the bacon. The wife is the (A) and the (I), transforming a house into a home and a group of adults and children into a family.
By contrast, look at what we call the modern, extended, two-career family. What could happen if the roles aren’t carefully divided and shared? Two (P)/(E)s – and a family that needs a maid to do the (A) housework and a family therapist to do the (I) work.
In any organization, technology, or culture, of any size, these four roles are necessary, and together, they are sufficient for good management. Any time one or more of these roles is not being performed, there will be a predictable, repetitive pattern of mismanagement – all over the world, regardless of culture, regardless of technology, regardless of the organization's size, or the organization's purpose.
Management and Mismanagement Styles
These four roles can codify many phenomena. When applied to managerial styles, the codification is a kind of shorthand for predicting a managerial “style,” determined by how well and in what combination the four roles are performed. If the combination is known, the style is predictable.
Most managers excel at one or two roles, are comfortable with them and tend to rely heavily on them in their behavior. Although no single person can excel at all four roles, good managers must have at least a modicum of ability in each.
It is these dominant roles and the deficient ones that I use to characterize a basic management style. For example, a manager may excel at (P)roducing while being merely competent at the other roles. I would “code” that manager’s style, then, as a (Paei) – the uppercase “P” designating excellence and the lower-case “a,” “e,” and “i” designating competence.
Another manager may excel at organizing – a (pAei); while a third – (paEi) – may be good at sensing future trends, and a fourth – (paeI) – at motivating. A manager codified for the basic archetype style is in most situations a (P)roducer, an (A)dministrator, an (E)ntrepreneur, or an (I)ntegrator.
Any permutation of the combined performance of these four (PAEI) roles, if each role varied from 1 to 100, yields a management style, and there are innumerable permutations – as many as there are people on earth: (PA--) for the slave driver, (paEI) for the Statesman etc. (see volume 2 in this series: Management/Mismanagement Styles op. cit.)
A “leader” is one who excels at two or more roles, one of which must be (I)ntegration, while also meeting the threshold needs of the other roles and there are many leadership styles too like the Small League Coach (PaeI), etc. Whether a leadership style is functional will depend on the task on hand.
The (PAEI) code can also be applied beyond codifying behavior or style. For example, the (PAEI) roles develop and decay in a predictable sequence in the lifecycle of any organization. Because not all roles are present and fully developed from start-up, and because over time some roles become more pronounced and other roles less pronounced, a typical pattern of problems will be created, which can be foreseen and prevented.
Knowing which roles will be missing or weak at any point in time allows us to predict which problems the organization is going to have and what it needs to do to accelerate its development or slow its decay. It tells us which roles will be needed in the next stage of the lifecycle, and thus which leadership styles will be most effective. There is a reason why certain leadership styles are preferred at one stage in the lifecycle of an organization and rejected in another.
In other words, once you understand the pattern, you practically have a crystal ball in your hands: The current problems indicate where your organization is in its lifecycle, and based on that you can predict your next generation of problems. You have a tool to identify what is normal and what is abnormal at each stage of the lifecycle. It’s analogous to the lifecycle of human beings: We expect a baby to cry a lot and wet itself, but if a 45-year-old person is doing that, we know we have a problem – unless he is a venture capitalist. (I once asked a VC who invested in dot.com companies: “How do you sleep at night?” “Like a baby,” he answered. When I expressed surprise, he explained: “Sleep for two hours, cry the rest of the night!”) For how the (PAEI) roles grow and change over the life cycle of an organization and thus how to predict your future problems today and what to do about it, please see the three volumes of Corporate Lifecycles: Volume 1: How Organizations Grow, Age, and Die; Volume 2: Why Organizations Grow, Age, and Die and Volume 3: How to Manage Balanced Growth and Rejuvenate Organizations (Published by Adizes Institute 2004, Third expanded edition of Corporate Lifecycles first published by Prentice Hall, 1999).
Over the years I have perfected tools that develop and nurture all four roles, enabling organizations to manage in periods of rapid and turbulent change while avoiding the dysfunctional and destructive managerial “diseases” that usually come with the territory. For example, if an organization is losing market share, that means it is being ineffective in the short-term, or lacks the (P) role. Once you know how to develop (P), you can cure the problem.
For thirty years, I have used these (PAEI) tools, among other tools that are covered in my other books, in my consulting work in companies around the globe, as have my associates, who are trained and certified in this methodology, and we have solved problems in companies worldwide. It is a tested methodology for analyzing and solving problems and predicting behavior, for leading sustainable, accelerated growth or organizational rejuvenation without destructive conflict. I have coached one company to grow from $12 million to $1.5 billion in sales, and another to grow from $150 million to $4 billion in sales — without diluting ownership.
Let’s talk about the four roles in detail and the four basic managerial styles that correspond to those roles.
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