Masterly Management

Don Gray wrote this post about management style entitled Managing in Mayberry. I thought that it was insightful. When I thought about the example he used, though, it was about a stable state system. It was managing to the status quo. Manager as remover of difficulty.

Where is manager as practice improver? Certainly the masterly manager will have to do this at times. Waiting and watching, allowing others to propose, building consensus – all good. But facilitating practice improvement requires decision making, and sometimes those decisions are not universally popular. How would the masterly manager deal with individuals that “go passive” or outspokenly negative about the improvements? How would the masterly manager deal with practice improvements that require cooperation with customers, or other departments.Continue Reading

One Size Fits All (Not!)

Often I have railed against the stupidity of management, when designing one size fits all “round hole” policies. It is the single most abused policy anti-pattern in my experience.

Policy Structure:
For the purpose of this discussion, any policy can be divided into three components:

 

  • Benefits (why I need a policy at all)
  • Means (How we will get the benefits)
  • Measures (How we will know the policy is working).

Policies are often not “free”, in that there is some cost to implementing the policy. Policies often have “side effects” that are changes not specified in the benefits. These side effects can be positive or negative. Usually, the side effects of policies appear as we have to adjust business processes and practices to comply with the policy. These adjustments are evidence of “square pegs”, or gaps in the policy that do not contemplate the essential complexities of the business model.

The old aphorism – “if the only tool you have is a hammer, then every problem starts to look like a nail” derives from this type of anti-pattern.Continue Reading

Local Optimization

I am clearly aggravated. I have been for a while, and I finally understand why.

In the world of systems thinking, it is called Local Optimization. That is where, in a multivariable system I optimise for one variable at the expense of other variables, and subsequently reduce the overall output of the system.

In more understandable business terms, I am optimizing one or more of the means, without regard to the “ends”. As my seventeen year old son put it I am maximizing one benefit without regard for the overall goal.

In organizational management, in a business with multiple business entities or sub-units – we are trying to maximise the profit of each entity, rather that maximising the profit of the whole. In process optimization, we talk about optimising throughput of one subprocess, without regard for the throughput of the whole.

Here are some examples that should resonate with everyone:

1) I spend so much time working to earn money, that I don’t have time to enjoy my wealth.
2) I build an educational system optimized for a specific metric (standardized tests) but have not taught my students how to learn independently.
3) I construct a business enterprise optimized to grow the stock price quarter by quarter, but do not produce anything of value.Continue Reading

Competency Vs. Excellence

We can train people to be competent, but excellence is a result of an individual being given the freedom to make mistakes, to learn, and truly incented to grow without fear of retribution – not without accountability but without loss of reputation. Excellence develops when an individual recognizes his own adequacies and inadequacies, and is willing to grow by following, learning, and failing.

If “Failure is not an option!” – then the best you will get is competence.
If you must “prevent them from making mistakes” – then the best you will get is competence.
If the following the process is more important than developing the people – then the best you will get is competence.

Enough (as a damping mechanism)

In a recent post, Esther Derby describes a tendency of organizations towards oscillating between centralized or decentralized controls – I thought it was a brilliant insight in that she exposed that at the extreme reaches of the pendulum in either direction, there are evidence of lower performance, but for different causes. I have experienced this myself, but really never thought up the food chain to where these decisions get made, only about the local effect, and my own efforts to locally mitigate said effects.

In the article, it is suggested that centralizing controls tends to squelch innovation and creativity, slowing down decision making and reducing ability to maximize opportunistic growth, while decentralizing controls can allow decreased visibility, subunit goals to trump larger organizational goals and decisions that do not align with the mission of the organization. Both of these extremes tend to lead to lower performance, and so in reation to the downside of one extreme, we tend to lurch towards the other extreme.

Esther went on toward the need for feedback loops which would allow managers/management to detect and react to the pendulum and adjust to reduce the periods of lower performance induced by the swing.

What Esther is describing is a damping mechanism, like a shock absorber in your car. The damping factor is based on a target range of motion, and the further out of range the motion, the greater the damping force. As I thought about this, what is needed is a conversation about enough (a definition of sufficiency will be required) centralization or decentralization, and perhaps some discipline on sticking close to the definition of enough. Enough is the target range of motion we want to contain any oscillation between enough decentralization to prevent the loss of performance from those causes, and enough centralization to prevent loss of performance on the other extreme.

So the questions that management must be required to ask is:

1) How much decentralization of control is sufficient to prevent the loss of innovation and creativity in our workflorce?

2) How much centralization of control is sufficient to prevent the abandoning of corporate strategic vision for more localized goals?

I also think that this is a matter of establishing policies, aligned with rational management incentives backed by meaningful measures. This is where management usually falls down from my experience. Here are some management anti-patterns that tend to interfere with this process:

1) No measurement process is established, therefore the policy must be written in absolutes.
2) Policy is written and implemented in a “one size fits all” paradigm, which fails to contemplate how the policy might be implemented differently in different contexts to achieve a similar net effect.
3) Incentives do not go far enough down or up the management hierarchy, so the desired behavioral changes are not properly incented at the point where they are necessary.
4) Incentives do not align with the policy, creating a paper tiger – a policy that has no teeth – one that is paid lip service, but limited effort is applied because there is no perceived benefit to behaving differently. Draw a correlation between policy and compensation and you will see behavioral change.

Once we have overcome the management anti-patterns, then and only then do the feedback loops become important – because the necessary constraints and enticements are in place to ensure appropriate action when the feedback is delivered.

Esther promised a future post about feedback loops, and I am keen to read it, because she is typically very insightful.