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Updated Jun 22, 2023

Management Theory of Stephen Covey

Improve your business using Stephen Covey's seven habits of highly effective people.

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Written By: Sean PeekSenior Analyst & Expert on Business Ownership
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Table of Contents

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Whether you’re starting a new business or looking to make changes to your existing business, it can be hard to figure out your management style. But even if it seems difficult and other tasks feel more urgent, identifying your management style and keeping it up to date is paramount to running a successful business. 

You don’t have to discover it on your own, though. You can draw from a rich history of management theories, such as the one developed by Stephen Covey. Here is a breakdown of Covey’s ideas and how you can use them to improve your company overall. 

Management theory of Stephen Covey

Through his uplifting and straightforward guidance, Covey exhibited a lifelong dedication to helping others control their destiny. His 1989 book The 7 Habits of Highly Effective People is one of the most influential business books of the 20th century. 

Covey’s seven habits of highly effective people are among the most widely used management innovation strategies in recent years. The Covey model is an “inside-out” philosophy, which means that change starts inside each of us and works its way out. He considered a person’s character to be a collection of habits that consist of skill, knowledge and desire. Covey claimed that to be “effective,” people should follow these seven important habits:

  1. Be proactive. Instead of simply reacting to something that happens, proactively choose how to respond. Covey encouraged people to take the time to think through their feelings and figure out the best way to react. This forethought and proactivity can empower people and minimize conflict.
  2. Think of the future. Covey said to “begin with the end in mind.” Even though setbacks and unanticipated challenges will undoubtedly occur, you need an overall sense of what you are working toward and what to expect. Having a clear goal makes it easier to navigate the unexpected.
  3. Prioritize. Identify the most important tasks, and do them first. This step may require you to cut out distractions that feel urgent but aren’t actually helping you achieve your goals. 
  4. Consider everyone’s needs and desires. This allows you to develop “win-win” situations. It’s easy to get stuck in your own perspective, but that isn’t the best way to operate as a member of a community. When you set aside your own directives, you can find creative, new solutions that benefit you and the people around you.
  5. Listen and understand. Covey’s theory asks you to “seek first to understand and then to be understood.” This habit cuts down on reactivity and instead encourages thought and patience. By listening and understanding, you de-prioritize your own needs and become more open to new solutions. 
  6. “Synergize” for creative cooperation. Instead of trying to do everything yourself, work with others to get things done. Whether you’re working on projects together or just benefiting from shared knowledge, solving problems in a collaborative environment helps relieve pressure on the individual and leads to more success.
  7. Allow for self-care. Continue to develop and learn as you “sharpen the saw” with Covey’s theory. Along with monitoring your progress, this habit focuses on self-care and self-improvement. Care for your physical, emotional, spiritual and mental well-being to be your best self. 
TipBottom line
Use real, meaningful rewards to motivate your employees. Merit-based bonuses and raises and time off are ways to inspire your employees to do their best work.

How to implement Covey’s management theory

Now that you know the basics of Covey’s management theory, it’s time to put it into action. Follow these steps to implement the seven habits of highly effective people.

Educate your employees on Covey’s habits.

Encourage your employees to read Covey’s 7 Habits, and discuss the book over lunch or a workshop. See what they think about the book, and answer any questions they may have. Talk together as a group about what those habits would look like in your workplace. How can your employees be proactive about completing tasks? How can you organize tasks and projects to start with the end in mind? What does each employee need to feel like they have “won” in a situation? What’s the best way for your team to communicate? 

Grow from dependence to independence.

Covey believed that our actions are the result of past conditioning and that we must change our habits, and who we are, in order to succeed. Those steps are also necessary when your company incorporates a new management style. We start our lives dependent on others; similarly, we begin jobs reliant on our colleagues to show us the ropes. 

The initial three habits of Covey’s management training take you from dependence to independence. The first habit calls on managers to be proactive, rather than reactive, and to take control of their environment. Instead of dealing with problems as they arise, managers should figure out how to lead their teams in a way that minimizes opportunities for disruption. 

The second habit requires managers to think of the future, always keeping in mind the desired outcome. With this sense of direction, they can cut out distractions and unnecessary tasks to lead their team to achieve the ultimate goal. The third habit means that managers must not forget to manage themselves, implementing activities that accomplish the second habit. By allowing for self-care and self-improvement, managers will understand the significance of each habit and establish credibility with their team. 

>> Learn more: Management Theory of Joseph Juran

Become interdependent.

Once you accomplish the first three habits, the next three habits allow you to become interdependent. In other words, managers become just as dependent on their staff as their staff is dependent on them. Everyone in the workplace should understand that they operate together as a team; each team member is necessary for the business to succeed. 

To be successful at interdependence, you must communicate well with others to develop positive relationships, as the fifth habit means you try to understand others before you get them to understand you. Conversations are not battles to be won or lost. Implement healthy communication habits that reduce blame and encourage generous listening. The sixth habit says everyone should work together to achieve mutual goals.

Did You Know?Did you know
Having clear boundaries and impartiality in the workplace — a principle stressed in Max Weber's management theory — allows team members to feel safe, comfortable and valued.

Continuously strive to improve yourself.

Habit seven, “sharpen the saw,” means that you continually learn from your experiences in order to make yourself a better person. Do not consider the job done once you have “completed” all seven steps with your company; plan ahead for methods of reflection and renewal. How often will you use the habits to reevaluate your practices? How will you incorporate new employees into the seven-habits system? This roadmap is crucial to prevent backslides and stagnation.

In 2004, Covey added an eighth habit, which allows you to go “from effectiveness to greatness” on personal, leadership and organizational levels. Doing so requires us to act with integrity and inspire others to do the same. This motivation is excellent for your whole team to keep in mind, as it can help to inspire your employees. Lead by example, and bring your best self to the workplace every day.

Once you decide to implement Covey’s seven habits of highly effective people, growth and innovation are sure to follow.

author image
Written By: Sean PeekSenior Analyst & Expert on Business Ownership
Sean Peek co-founded and self-funded a small business that's grown to include more than a dozen dedicated team members. Over the years, he's become adept at navigating the intricacies of bootstrapping a new business, overseeing day-to-day operations, utilizing process automation to increase efficiencies and cut costs, and leading a small workforce. This journey has afforded him a profound understanding of the B2B landscape and the critical challenges business owners face as they start and grow their enterprises today. In addition to running his own business, Peek shares his firsthand experiences and vast knowledge to support fellow entrepreneurs, offering guidance on everything from business software to marketing strategies to HR management. In fact, his expertise has been featured in Entrepreneur, Inc. and Forbes and with the U.S. Chamber of Commerce.
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