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Management's Dirty Little Secret

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48 pointsalanthonyc23 comments

I was once told that the purpose of a business is to make money. I don't believe that any more. Now I believe that the purpose of a business to to make its employees happy.

It is pretty much a necessary condition, then, that you do make money, but making money does not, of itself, make your employees happy.

I'd rather have a company that makes its employees happy, and makes money becuase it's a necessary condition, rather than to have, purely as my business goal, to make money.

Management similarly. People think the role of management is to get people to do work. It isn't. It's to make people happy. If you do so without them doing any work then it won't last, so getting them to do work is necessary, but that's not the true goal.

(Note: I don't actually believe the extreme position as stated, but it is the mindset I strive for and occasionally achieve.)

There is a less extreme formulation that is pretty well accepted in academia - namely that the purpose of a business is to "satisfy all stakeholders."

If that's true that the purpose of a business is to make its employees happy, then my employer is an abject failure. I don't think I've ever heard one of my co-workers say they like their job.

On the other hand, the company does make money hand-over-fist though, so I don't expect anything to change anytime soon. Sigh.....

Which people are management supposed to make happy? Because it certainly isn't the employees here.

I think that the purpose of a business should primarily be to help people and do good, and secondarily charge only what they reasonably need to ensure their continued operation in the long term. (I guess that is "make what people want" and "create wealth" in pglese.)

Conversely, it seems to me currently that businesses are here primarily to make money, and then secondarily help people and do good only up to the extent that reasonably ensures their right to continue charging -- often more and more -- money.

Note: I don't mean the business owner shouldn't prosper nor should pay as low salaries as he can. Quite to the contrary, actually. But making money is the wrong baseline reason to run a business. If people, including the business owner, can afford to not have everything, to not rip as much as to themselves that they possibly can, there will be plenty for everyone.

If the business is just to make money, it doesn't give out more to the community than merely what it takes back from them. The business will run in an endless fear of not making enough money and not having enough, and that will inevitably govern all its activities. That is missing the creation part of creating wealth.

Conversely, it seems to me currently that businesses are here primarily to make money

A corporation is a machine for making money. The corporation doesn't "own" the money - the owners of the company do. Similarly the corporation doesn't "want" to do anything with the money - the owners (who may also be the employees) of the company have wants, as they're not machines, they're people!

Unix philosophy says "a tool should do one thing well". Well a corporation is a tool that takes raw materials on STDIN and emits money on STDOUT and you pipe that to whatever you want, be that a roof over your own head, or vaccinating the entire population of a third world country.

I think this vision is overly romantic. I would say the Purpose is to make money. And if making employees happy is a way to achieve it, then they'll do it.

I don't think employee happiness always necessarily equals more productivity. may be true in creative work.

An anecdote is not proof, but I personally went from hating my job to loving my job, while working for the same company and doing mostly the same work for the same pay.

The difference? I went from working alone under a manager who seemed indifferent to my creative ideas and hard work, to working with a team under a manager who said "that's awesome" when I showed him my work.

Guess when I got more cool stuff done?

Great article, key points:

o In a world of commoditized knowledge, the returns go to the companies who can produce non-standard knowledge.

o Success here is measured by profit per employee, adjusted for capital intensity.

o What matters is its relative "share of customer value" in the final product or solution, and its cost of producing that value.

o The greater your share of differentiation is the greater your bargaining power with business partners is.

o The lower your cost to produce that value is, the bigger your profits are.

First the facts:

> Here’s what the researchers discovered: barely one-fifth (21%) of employees are truly engaged in their work, in the sense that they would “go the extra mile” for their employer. Nearly four out of ten (38%) are mostly or entirely disengaged, while the rest are in the tepid middle.

Now the unwarranted conclusions:

> There’s no way to sugarcoat it—this data represents a stinging indictment of the legacy management practices found in most companies.

It does? Why? Maybe without the managers, employees would be even less engaged.

The conclusions are supported toward the end: that 86% of employees love or like their job, and that they have serious problems with management:

  Only 38% of employees believe that “senior management
  [is] sincerely interested in employee wellbeing.” Fewer
  than 4 in 10 agree that “senior management communicates
  openly and honestly.” A scant 40% of employees believe
  that “senior management communicates [the] reasons for
  business decisions,” while just 44% believe that “senior
  management tries to be visible and accessible.” Perhaps
  most damning of all, less than half of those polled
  believe that “senior management’s decisions [are]
  consistent with our values.”

Calling that a "stinging indictment" seems warranted.

Missed that. Thanks.

This amusing reflection strikes me: Said managers may likely have the exact same feelings, e.g. "barely one-fifth (21%) of managers are truly engaged in their work, in the sense that they would go the extra mile for their employees. Nearly four out of ten (38%) are mostly or entirely disengaged, while the rest are in the tepid middle."

I disagree with the base assumption that a manager's job is to make employees engaged or inspired. A manager's role is to cause work to be done (by other people). Effectiveness of management is measured by productivity, not surveys.

More generally, there's a tendency to conflate management and leadership. Management is about operations and efficiency and production. Leadership is about inspiration and engagement. The two are related, to be sure, but distantly. Certainly, if I'm engaged, I'll work harder. But inspiration alone isn't going to streamline workflow, or increase accountability, or acquire the right tools, or choose the correct problem to be solving in the first place. It's not even going to do that great a job at keeping people on task and in scope.

To be sure, engagement is a useful quality. But first, it's not a necessary one, and second, it's not the role of management. If it's anyone's role, it's the role of executives. The ones with vision making bold statements and sweeping changes, not the ones down in the weeds doing the tactical work of maintaining the metaphorical tubes of work in the plumbing of productivity.

I believe what you describe is the traditional view of management, one that is possibly on its way to being outdated.

I think that going forward, management and leadership will have to be the same thing. If either one needs to drop by the wayside, it will be the management portion. In today's world of greater efficiencies and flow of information, the traditional "manager" becomes a bottleneck, in much the same way that traditional newspapers have become bottlenecks in the transmission of news.

I strongly disagree. "Manager" is short for something longer like "Project Manager". It grates on my nerves when someone talks about their "boss", because that's exactly what a manager is not (although many happily exercise power that's not theirs to exercise).

I agree though that it's dubious to think that a manager is going to inspire. The best a manager or executive can do is to refrain from exercising power (at least as long as we have pyramidal power structures), since a lot of damage is caused by people feeling intimidated or withholding opinions.

Perhaps if a manager can be fired by non-managers as easily as a non-manager can be fired by a manager, things would be different. That's a world that I'd love to see.

I agree that a manager's role is to cause work to be done. I think the point of the article, though, is that there are different ways of accomplishing this. You can cause work to be done by inspiring your workers, giving them a comfortable, fun place to work where they feel free to experiment and do good work. You can also cause work to be done by telling people what to do, making it clear what the consequences are for not completing work, and restraining people. In the last year, I've basically worked under both types of managers, and I can say that, generally speaking, my productivity is much higher, and therefore more work gets done, when I feel engaged and that my thoughts and ideas are valued and that I'm helping drive the success of the company, vs. being told what to do and feeling like my opinions and ideas aren't very valuable.

I think what's difficult is that this stuff isn't very cut-and-dry; there are times, as a manager, when it might be easy to give your workers a ton of freedom and to really trust them with responsibility. There are other times when it may not be a good idea. As a manager, you can't always be "inspiring"; sometimes you just need to get stuff done.

Personally, I believe that if I'm involved and responsible for big decisions, I'm inherently more engaged because I'm directly involved with the success/failure of the decision.

Dan Pink has a great talk about motivation on TED.

http://www.ted.com/talks/dan%5Fpink%5Fon%5Fmotivation.html

perhaps 79% of management are also disengaged from their work. The alienation of labor is pretty much complete, even for management. Most jobs are about paying the mortgage, nothing more.

I thought this part was insightful: "three things that are critical to engagement: first, the scope employees have to learn and advance- are there opportunities for them to grow; second, the company’s reputation and its commitment to making a difference in the world- is this a company that deserves the best efforts of its people; and third, the behaviors and values of the organization’s leaders- are they people employees respect and want to follow?"

Actions speak louder than words. And it's a two way street.

Engagement may be a valid measure (if somewhat abstract). But I've heard an awful lot of lip service paid to it, by the same people who are saying no not just to pay increases but to upgrading that three year old computer or otherwise providing an environment conducive to actually getting the work done.

When you're young, you try hard because the prevailing social message (at least in the circles I traveled) is that hard work pays off. After you see enough with your own eyes, you may either "check out" or learn to be much more discriminating about where and when you apply your effort.

I've had a few genuinely good (to/for me and my work) managers. Unfortunately, sooner or later, they all seemed to end up fighting the tide. That may be a reflection of the macro-economic changes going on in the U.S.

My one bit of advice is not to stay in such circumstances. If you can afford to, walk away. To the extent you can, try to keep your life structured so that you can afford to do so when needed.

Management is the aggregation of work effort. If bad management can't attract any work effort, it will die off. Another reason to avoid monopolies -- so that they cannot set themselves up as the only game in town.

Most corporate managers are fighting the last generation's war, operating under a mentality that is outdated, but pervasive at all levels of corporate America.

If you're running a plantation or a coal mine, the work is physically difficult and the rewards are minimal, so you have to be either (a) generous or (b) brutal in order to get people to work. Historically, the latter option was more popular.

Thus, we end up with the entrenched (but increasingly wrong) idea that people have to be intimidated into working, or they'll shirk: "Theory X", in management parlance. It works if you're running a coal mine; not so much for a software shop.

Of course, most bosses would rather be "Theory Y" (nurturing, encouraging) than X. Few people want to be assholes. The problem is that a manager who's permissive and nurturing will be regarded well by his subordinates, and held in good regard during good times, but if something happens outside of his control, he's likely to take blame from above for having been "too soft". Follow the ladder high enough, and at some point you're likely to encounter someone with the old mentality (or an egomaniac, or an asshole).

My understanding is that both "Theory X" and "Theory Y" have largely been superseded by "Theory Z," also known as "a bit of both."

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