I meet a large number of executives who actually don’t trust their subordinates.
This isn’t just a conclusion I draw by looking at the types of controls put in place to stop truly independent action — a lot of that could be explained away by pointing to the demands in compliance audit reports — but in the actual words people express to me. “If I don’t stay on top of him” (‘him’ being a Vice-President) said one CEO, “he could get us in a lot of trouble.”
From my point of view this notion of control works against solid company performance.
Years ago I built a framework for understanding business challenges called “Managing in Turbulent Times”. At its centre was the notion of “organizational overload”
Nowhere does this show up more than when a senior executive holds to him- or herself a large portfolio of decisions.
Each of us has but a limited number of hours in the day. Each of us needs the time to reflect on where we are going and what we need to do to achieve those goals.
Asking one person to carry a wide-ranging decision load is asking that person to give a tiny fraction of time to each decision, and with no time to think about the context, the bigger picture or how these decisions add up into a larger direction the firm is now taking.
No wonder we make such poor use of information! We have no time for it.
The transition of decisions upward has been masked by an apparent speed-up in communications. Moving from memoranda and forms delivered in inter-office envelopes to workflows and decision indices in a back office IT solution, from phone message slips to email, and from having to be reached in the office to being able to send a note to someone’s Blackberry has given the impression that there wasn’t a real issue here.
Couple that with the over-the-top reaction of twenty-first century compliance (e.g. Sarbanes-Oxley provisions and the way these are interpreted by compliance auditors) and it is no wonder decisions have migrated to the hands of those who are held liable. Still, it is a strategy that is choking the organization, denying it flexibility and insight.
More than ever before — for the whole notion of a bad decision by a subordinate being a form of education for that subordinate is hardly a new one (it is the essence of the practice of true delegation) — executives must focus on the bigger picture.
To do this, there will be a few key items that must be followed up. These are what the executive should want to hear about from a subordinate; everything else they get should be new information that results from the subordinate’s (and his or her organization’s) decisions to act.
Only then will the executive be getting new input to guide their own strategic thinking.
There are two other interesting (and not always obvious) findings from years of watching organizations at work:
First, financial measures are seldom at issue here.
Most of your reporting managers will be on top of their budgets in any event — and unless you’ve worked to create some financial capability to follow up opportunities there’s little manoeuvring room there (the budget was fully committed).
Far more important would be as to whether investments made in that manager’s domain are being achieved.
What does the actual profile look like relative to the business case that was approved to fund the activity? Are you likely to see benefits flow on schedule?
If implementation has occurred, what are the actual results?
Focusing on these sorts of issues not only make for managers who are far more likely to produce results, they also leave room for further development, as they do not prescribe courses of action.
Second, operational matters are seldom a crucial point: if they are, you have a different sort of decision to make.
But development of your human capital should be a top management concern.
What is your subordinate doing to identify potential talent, to develop that talent, to promote innovation and creative thinking and so on? Or are they constraining the operation to “make the numbers” and, in the process, cutting off the future?
The notion that human resources is where human capital is acquired, accumulated, developed and put to work (which may not be what’s on paper but is often an unstated assumption we see organizations live by) is dead wrong.
Individual managers develop the organization’s primary resource: its people and their useful knowledge. This should therefore be of prime interest to the top executive.
Your focus on the essentials, and your expectation that your reporting management team will actually make decisions and supply you with results, is far more important than that you have “your finger on the pulse of everything” — which is the implication of the compliance regime we have been regulated into.
Perhaps it is beyond hope that anytime soon that environment will change for the better, but there is no excuse for allowing it to take over.
Clear your desk, stop sweating the details (you hired people to do that), and help your organization grow and prosper by insisting on what matters — and, from you, no more.