The editorial cartoon in today’s WSJ shows a meeting about to begin, and the chairman asking everyone to first hug the person next to them. Collaboration and teamwork are fine as far as they go, but they should have their limits.
Consider this item, also from today’s WSJ, which asks if a company can be run as a democracy. The article highlights a firm that uses a sort of representative democracy as its management system, and it values staff as whole persons, not merely as employees. Indeed, before beginning meetings, attendees are encouraged to “check-in” with an update on their personal situations – one used this opportunity to report some lingering soreness from a tetanus shot. Perhaps hugs will find their way into this company’s formal meeting agenda before long, as well.
The practices of this company are contrasted with a few others that have not gone quite so far: one hosts periodic town hall meetings to discuss important plans with employees, another holds weekly sessions where staff get to question executives; still another encourages its staff to participate in planning and strategy-setting meetings with the help of financial data about the company that is widely shared with them.
All of these are better examples of effective management than the representative democracy system. Representative democracies, after all, are rightfully expressed by people who share in the sovereignty of the jurisdiction, and employees do not generally, and almost never exclusively, fall into this category. Only owners should have the authority to provide direction to a company, or to determine to what extent execution of that direction can be delegated beyond the top management they hire directly to accomplish that.
Top management should remember that it is awarded certain contractual responsibilities and the authority to execute them, but only the authority – not the responsibility – can be delegated. The idea that decision-making becomes more effective when everyone “owns” the decision is not merely post-modern kookiness, it is a disorienting misdirection of fiduciary duties that can only harm the long-term health of a company on many of the levels it is intended to help.
Owners have every right to engage in these experiments. Many do, such as the company highlighted in the WSJ article, and the more famous and intriguing example of the Brazilian manufacturer SEMCO. But hired management doesn’t have this right and would be quite wrong to assume it. Neither the imperial – nor the fully egalitarian – CEO is the answer to today’s management challenges.
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Technorati Tags: WSJ, democracy, representative democracy, effective management, SEMCO, Boards, CEOs, Corporate Governance, Management Trends
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2 Comments
Jim,
As I look back, I think the “everyone owns the decision” was one of those sound ideas that was turned into craziness. I attribute that to the “sound bite” study of management.
I think the original urging was to get people involved in decisions if they were close to them, especially in the implementation. The intent was two-fold:
a. Bring people into the decision process who really knew how things worked and could be helpful.
b. If those people were involved, they’d understand the “why” behind the “what” when the ultimate decision was made. It would cut down the time needed to explain the decisions and, through involvement, boost the commitment of the implementation group because they were part “owners” of the process. But the decision was still made, for the most part, by a manager at some level.
It seems to me that a lot of sound ideas are corrupted by lack ofunderstanding through an eagerness to latch on to the “next great thing.” Shake-and-bake management, if you will.
And many are the product of an underlying post-modern social agenda that creeps, or is legislated, into the workplace.
Thanks for another thought-provoking post.
Hello Steve,
I think your concise history of the expansive approach to decision-making is right on the money. The method can be looked at as another manifestation of the Hawthore Experiments effect – pay attention to me and my productivity improves. In particular, as you say, consider my input and not only does my morale improve, but my productivity is further accelerated by my intimate relationship with the decision – even if it went partially or fully against my input.
Moreover, the desire to simplify the packaging of messages like this can help others obscure the lineage of the thinking that gave rise to them, further permitting their central message to become distorted and their application to become perverted – both without resistance because of the brushing away of the logical audit trail.
“Shake and bake” management – that is a perfect description of much of what passes for management teaching today – and we should remember that it results not only from simplistic offerings by consultants and authors trying to fast-track their way to the best-seller list, but from managers and aspiring CEOs seeking simplistic solutions to help them fast-track their way to the top.
Thanks for this lucid and insightful contribution!
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