Fact: culture stems from manager MAP (mindset, attitude, philosophy™).

Fact: there are two basic, unconscious attitudes that underlie MAP.

• “TaIk to me, I don’t know everything;” or
• “Shut up and do what I say; my vision, my way.”

Know which you are — brutally honest inside your head.

If you are the first then it should be a critical factor when hiring (easy to confirm when checking references).

If the second applies be prepared for higher attrition.

It’s your choice.

Image credit: Grace Keogh

Non-compete agreements are the bane of workers, especially those whose skills are industry-specific and don’t travel well — such as semiconductors — and whose employers answer to state laws other than California’s.

And it’s easy to understand employer paranoia regarding proprietary information, trade secrets, customer lists, etc.

Intel’s legendary Andy Grove built its culture on the idea that “only the paranoid survive,” but Jeff Bezos’ paranoia makes Grove look like Mister Mellow.
That paranoia really shows up in the 18 month non-compete clause for hourly and seasonal workers.

“[Workers can not] engage in or support the development, manufacture, marketing, or sale of any product or service that competes or is intended to compete with any product or service sold, offered, or otherwise provided by Amazon (or intended to be sold, offered, or otherwise provided by Amazon in the future) that employee worked on or supported, or about which employee obtained or received confidential information”

Even more bizarre is the definition of “competitors,” which include physical retailers, publishers, e-commerce retailers, media companies, payment processing and information/computing storage.

Granted, it’s never been enforced and the company says they are removing it, but it certainly gives a window on Bezos’ paranoia.

And while it could be the product of an unconstrained law department, but given Bezos’ well-known micro-focus that’s doubtful .

Image credit: Tambako The Jaguar

There are two types of managers, those who believe that productivity improves through constant oversight and those who don’t.

And for those who do there is an abundance of new technology that fosters increased worker surveillance.

Until now it’s been more of a philosophical argument, but new research is working to quantify it and so far it seems that less is more.

Trusting workers to help each other, be creative, solve problems and find better ways of doing things has typically been the province of knowledge workers.

But Ethan S. Bernstein, an assistant professor at the Harvard Business School, did his initial research with workers at a giant factory in China and the results were surprising.

The small amount of privacy the experiment created yielded a 10-15% percent productivity hike against other workers in the same factory.

“Creating zones of privacy may, under certain conditions, increase performance.” The right degree of privacy, he added, can foster “productive deviance, localized experimentation, distraction avoidance and continuous improvement.”

Bernstein’s research will only get more interesting and relevant to higher-level employees.

Since the factory project, Mr. Bernstein has conducted research studying the privacy-transparency trade-off in other settings, including biotechnology labs and service businesses. That research is not yet published, but Mr. Bernstein said the results so far point to “larger effects” than in manufacturing.

This isn’t rocket science to good managers, but it’s always nice to have your methods validated by Harvard research.

What it boils down to is that you should give your people all the information, authority and support necessary to do their job well and then get the hell out of the way and let them do it—often more efficiently and with better results than expected.

Flickr image credit: laurawashere95

I am republishing this post, because it speaks to the recent questions of several entrepreneurs.

The problem is that entrepreneurs often read something like this and discard it as applying to larger companies or those further along in life or revenues.

They are wrong.

Sure, the information might not fit like a glove, but it can be tweaked; and the underlying philosophy fits any enterprise, large, small or micro.

Accounting Tools a Part of Corporate Culture

Gavin Cassar, a Wharton accounting professor, tested the prevailing wisdom of whether accounting techniques, such as budgeting, sales projections and financial reporting, would, in fact, help prevent business failures. In surprising results, he found that some accounting tools may actually lead them astray.

But he found the culprit not to be the tools, but rather the MAP (mindset, attitude, philosophy™) of those using them.

I sent the article to a long-time CEO who was s serial entrepreneur (now retired) and thought you would find his comments interesting and useful. I’ve changed names to keep the examples he mentions anonymous, but note that Corp A was part of a Fortune 500 company and Corp B was public with sales of several hundred million and a CEO who had been around the block numerous times.

There’s only one important accounting problem described in this article.

The other problems discussed are really problems in human psychology, such as being guided by hopes instead of realistic considerations and ignoring (widening) gaps between plans and results.

But the serious accounting problem described is the failure to collect and publish accurate and timely accounting information.

If you have a carefully worked out budget, unless the monthly accounting figures are available quickly and are correct, the budget is useless as a planning tool because it’s impossible to really judge whether the company is on plan or not.

To some extent, both Corp A and Corp B suffered from this.

Accounting was not held to high enough standards. Expenses were misclassified and weren’t posted in the months in which they were actually incurred.

Managers initially tried to sit down with accounting and straighten out the discrepancies. But it was impossible, either because of poor accounting tools or probably just gross incompetence.

After a time, managers stopped trying to correct the internal financial reports. They thought it was just wasting their time.

They also stopped trying to control their expenses. Why bother? The financial reports were so inaccurate they didn’t show up even large and willful expenses outside budget limits.

This, of course, led to increasing attempts by higher management to exert personal control over expenses.

At one point, the Corp B CEO was signing all expense reports. You had to receive his personal permission to go on a trip or to even take a client to lunch.

The budget meant nothing. And there was a line of managers outside his office asking permission to buy essential test equipment or fly an applicant in for an interview.

Stuff that should have been decided instantly by the managers concerned was delayed, frustrated and often cancelled altogether.

The Corp B example is very close to what is going on with one of the entrepreneurs mentioned at the beginning.

He is micromanaging every dime spent in his fast-growing startup.

So far, his impulse to exert control has cost his company two excellent recruits and two of his senior staff are in revolt.

He needs to let go, trust his people and give them the authority to do their job.

If he doesn’t there probably won’t be a company for him to micromanage.

Think about it.

Flickr image credit: Paul Downey

See all mY generation posts here.

Image credit: Tony the Misfit (taking a break) on flickr

Now take a look at the perfect vacation

Your comments—priceless

Don’t miss a post, subscribe via RSS or EMAIL

Image credit: maurice.heuts on flickr

Dan Erwin has a great guest post about delegation over at Slacker Manager. I strongly urge you to take a moment and click over, read it, print out his Three Keys to Effective Delegating and use them.

Dan accurately touched on one kind of control issue in his post, but my reference is in terms of politics,  MAP and abuse.

Political power stems from control.

The only two things worth controlling are money (obvious) or information (not so obvious).

Managers frequently control both, whereas non-managers are limited to information.

It’s pretty obvious how controlling of money gives someone power, but what about information? These stories are true—

The new engineering VP didn’t like a top performing manager. He cut the manager’s budget, but didn’t reduce his objectives. The manager was forced to lay-off, couldn’t meet his objectives and was fired for poor performance at his next review.

The damage from controlling information is more insidious and in some ways worse. It’s the ultimate micromanagement and destroys people a little at a time by undermining and tearing them down.

A VP of Marketing forced his marcom manager to come to him each time she needed competitive or marketing information, but worse, he berated her constantly for being over budget—but wouldn’t tell her what the budget was. He also complained to the rest of the senior staff about her “neediness” and how she couldn’t manage her budget to the point that they all lost confidence in her. She finally resigned, but not before a lot of damage had been done.

Although it’s more common for managers to use to on their people, I’ve seen non-managerial people wield it against their colleagues, often with devastating effect.

X has information that Y, or even the whole team, needs to do their share of a project. Y asks for the info, but rather than giving it all X gives as little as possible forcing Y to return over and over. Often when responding X uses the opportunity to make subtle comments about Y’s ability, undermining his confidence; X might even start rumors about Y’s competency to do the work.

Over the years I’ve used these and other examples with managers guilty of their own version of information control; some were horrified and worked hard to change their own action—and usually succeeded, but others saw nothing wrong.

It didn’t happen often, but it happened enough that it made me realize information control isn’t always an overt political move or even subconscious insecurities coming to the fore.

Sometimes information control is based in a malicious attitude that permeates the person’s MAP.

MAP can change, but the individual has to desire it and they don’t.

The fact that they spread pain and destruction every place they work doesn’t preclude them from promotions and if they find a position in a dysfunctional culture they thrive.

I call them destroyers.

Image credit: flickr

By Wes Ball. Wes is a strategic innovation consultant and author of The Alpha Factor – a revolutionary new look at what really creates market dominance and self-sustaining success (Westlyn Publishing, 2008) and writes for Leadership turn every Tuesday. See all his posts here. Wes can be reached at www.ballgroup.com.

They’re everywhere!  They’re everywhere!

The best opportunity in decades to create growth is being squandered.

Yep, it’s happened… just as it does every time there’s a fearsome economic downturn.  The cost-side micro-managers are back in force.

Forget about creating demand, because everyone knows that as soon as money gets tight people stop spending money.  Forget about inspiring the entire company to work toward a common goal of building long-term strength and market dominance.  It’s time once again to cut everything in sight and micro-manage every decision from top to bottom.

It’s nothing new.  But it is amazing that, despite decades of research that proves that companies who invest in demand-creation during downturn fair better during the downturn and much better afterward, the first thing that happens in most otherwise smart companies is to cut, cut, cut and manage, manage, manage.

It’s happening from the Fortune 100 all the way down to small regional companies.  And it is killing the future potential of those companies.

I just witnessed the most appalling and extreme example of my 30 years in the business world.  The holding company that owns a medium-sized, internationally dominant company fired all of the company’s top managers due to the economy.  We’re talking chief executive, head of international sales, head of international marketing, plus several others.  In their places, they put one cost-side micro-manager to “whip things into shape quickly.”  There’s no real need for much in between, because he is going to be dictating the limited strategies that everyone else will carry out.

I wish I owned one of their competitors who have wanted to overtake their long-term brand dominance, because this is the best time in their history to accomplish that goal.  Employees are demoralized.  They don’t dare try to make any decisions or suggest anything strategic.  All the brilliance that was the reason for their being hired is of no apparent value.  This is a plum ripe for the picking.

Now, this is obviously an extreme example, but the Wall Street Journal is full of examples of just this kind of thinking, as top executives pull back into a cave of cost-side micro-management.  Cari Tuna wrote an article last Monday in the Wall Street Journal about the damage done by micro-managers.  As she notes in a quote from one interview, “Who wants to be in a company where you are not allowed to think?”  She observes rightly that there is a complacency among employees of micro-managers.  But that only touches the surface of the damage done.

Such managers are the antithesis of leadership.  By taking charge to fix everything in sight, they not only demoralize the smart people they paid so much to employ, but they also make the company vulnerable to attack from a broad range of competitors who might never have believed they could effectively knock them out.

We just watched Starbucks decline dramatically even before the worst of the economic downturn was revealed.  That happened due to cost-side micro-management combined with a lack of understanding of what customers had actually been buying from them.

Magnify that exponentially, and you have what we are about to see in the marketplace.  Well-known companies and brands are going to be micro-managed into such weakness that we will see a very different set of leading brands in many product categories in five years.

How can you survive the economy and still maintain your strengths, so you have a bright future 6, 12, or 18 months from now?

1. Don’t lose sight of what your customers really have been buying.  That may take some new research, because most companies don’t really know why their customers buy from them.  Here’s a hint: if you think it’s due to your price, your product’s performance, your quality, your availability, or any other “functional” factors, you are wrong.  Managing those factors will only make you weaker at a time when you need to enhance the ego-satisfaction fulfillment of your customers.  In a downturn, people want to feel better about themselves (I call that “self-satisfaction”) and to believe that other people think better of them (I call that “personal significance”).  Miss those and you are imminently vulnerable.
2. Charge more than you think you can.  Almost every company out there believes they have to charge less than customers are actually willing to pay… even in a time of recession.  Every research study we have conducted (and that is tens of thousands) has shown that most companies in a category are over-delivering on price (meaning they could be charging more).  That’s a lot of money thrown away.  And remember: it takes an average of three dollars in gross income to generate one profit dollar lost.  So every dollar you don’t get is actually worth three that you have to generate later.
3. Stop measuring outcomes; measure causes.  Very few companies measure or track changes in the causes that drive the final outcomes they desire.   By only looking at final outcomes, it is impossible to know how to improve those outcomes.  You must understand and measure changes in the factors that drive greater demand and profitability and customer loyalty in order to affect sales, net profit, stock price, and all the other final outcomes corporate executives are held responsible for.

I say it every time I can.  This is the best opportunity in decades to grow dramatically and to come out on top in the 6 to 18 months a recession typically takes to cycle out.  Don’t allow fear to drive you into cost-side micro-management and undermine your chances to achieve that goal.

What steps is your company taking to remain strong and not become vulnerable?

Your comments—priceless

Don’t miss a post, subscribe via RSS or EMAIL

Image credit: Ball Group