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Chapter One. Why bother?
The majority of the definitions will be given in the following chapter, but at the beginning of the book, we still have to agree on what we understand as "management." We often use this word in everyday life, while hardly even thinking about how we might explain the concept clearly.
Task 1
In your opinion, what is management? Try to come up with a definition for this concept.
Stop! Dont skip this first task, or any of the ones that follow it. Im certain that you dont like theoretical work all that much, and you might even complain about how much hot air and how little practical material is in most management and leadership books. But heres the practice you wanted, and it will allow you to make sense of your own management. Please dont ignore this task; stop and do it honestly, and only then go on reading. Believe me, Im insisting on this for your own good.
Management a meaningful action that leads to a necessary and expected result.
So now we come to management. In the general sense of the word, were always talking about a certain meaningful action that leads to a necessary and expected result. The simplest example: when we drive a car, obedient to every movement of the steering wheel in our hands and pedals under our feet, nobody has any reason to doubt that were not controlling it. That management has certain limitations related to the physical capabilities of the car, which cant speed up past a certain point or stop instantaneously. But we can clearly distinguish this situation from another, where we might say that driver lost control of the car: when turning the wheel or any manipulations of the pedals dont have any result, as the car is being carried in a direction where we have no desire to go. I believe that the exact same thing can happen in any other situation: when we get an undesirable result over some length of time and cant do anything about it, we have to honestly admit to ourselves that we arent controlling that situation. There are two options here. Either were in a case like with the car, where we have lost control and can first formulate, then organize the necessary conditions for returning that control or we never actually controlled the situation in the first place, and the fact that it was in some way advantageous in the past is in no way connected to any actions of our own.
I stopped and devoted so much attention to these seemingly obvious things because right now, the majority of readers will face a serious battle with themselves. Im going to assert things that are so sad, your subconscious will start trying to convince you of practically anything under the sun anything to avoid believing these realities. Then mechanisms of self-deception, refined by all of your accumulated life experience, will come into play: well, of course youre right, and not the author at all. Whats more, how could he possibly compare if hes in a totally different job, or region, with different people, all in a different industry And who is this author anyways, and why is it worth listening to him?! No matter what regalia and qualifications I might have, they wont be weighty enough to warrant listening to; my experience wont be suitable, and my education will seem insufficient. Therefore, I wont even bother talking about them; instead, reader, I ask the following of you.
Task 2
For some time, turn off your inner critic and remember someone who held a great deal of authority in your eyes, whose words you always listened to, at the very least; imagine that that person is the one telling you all of these things, and then read the text in their voice.
I think youll agree that over the entire course of the 20th century, the very best leaders on our planet tried to create a certain kind of autopilot within their individual companies, all in the hopes of achieving the optimal result. But a cursory overview of business statistics would show you that nobody ever found this "sorcerers stone": companies both large and small, from around the world continue to run themselves into the ground, which we can hardly call a desirable result of their management strategies. Ill go on to bring in examples of negative phenomena in your organization: those that you know and dont like, but cant influence in any way, shape or form. How do I know about them? Theyre everywhere! For me, this means one thing in particular: leaders in companies have lost control, just like in the aforementioned example with the driver and the car. I understand that this is really hard to accept: after all, others judge us by how well we manage, and you probably measure your own success by the very same criteria. We spend lots of time and energy on this, and if were not the owners of a company, then we even get paid for this management! But how can we admit here that we dont do this? Still, I ask you to judge yourself not by the amount of time spent or how tired you are, but by the results of your actions. So lets look at what we have in the following categories.
Span of control: the average number of subordinates underneath a single manager.
Management expenses
A traditional system of management resembles a pyramid, where the chief executive is at the very top, and rank-and-file workers make up the foundation. Between them lie many layers of sub-managers. Their quantity depends on the size of the organization and its span of control: the average number of subordinates underneath a single manager.
Once you know the number of employees in a company and its span of control, you can always count the number of levels and the number of managers on each of them. For example, with a span of control of 5 and 156 employees, we have:
125 rank-and-file employees;
25 middle managers;
5 upper managers;
and one chief executive.
What might the expenses of managing such a system be? In order to compare companies amongst themselves, it would be best to use the percentage of total expenditures on managers out of total payroll. For example, if a manager in our example company earn on average twice as much as their subordinates, then:
125 rank-and-file employees receive 1 salary each = 125 base salaries;
25 middle managers receive 2 base salaries = 50 base salaries;
5 upper managers receive 4 base salaries = 20 base salaries;
1 chief executive receives 8 base salaries = 8 base salaries.
In total, all of the managers in this company receive a total of 50 +20 +8 = 78 base salaries, which makes up 78 / (78 +125) = 78 / 203 38% of the companys overall payroll which is a considerable line item of expenses for any company! Whats more, the bigger the organization, the more levels of management and managers, which means a higher percentage that their salaries make up out of the overall payroll, even though they do not create any of the added value for the client. Doesnt sound too inspiring, does it? But this is the most insignificant problem in a classical system of management.
Constantly overloaded management
In my consulting days, I thought that many managers didnt want to start the projects that their companies obviously needed due to their insufficient competency and lack of desire to admit as much in order to start studying the topic at hand. The reality turned out to be far more banal: extremely competent, hard-working, knowledgeable and industrious managers are in constant time trouble: they dont even have enough time to finish with the current routines being imposed upon them, like an avalanche in the mountains. All this happens, Ill remind you, because of the classical management system, where problems are escalated from the bottom up. As a result, the higher a managers level, the more subordinates they have and the more problems end up on their plate.