Managers should be able to give good leadership, to know their position, where they are going and how to get there as quickly as possible ideally in a context of inspiration, mobilization, appreciation and reflection.
In this article, Daan van Beek argues why it may be wise to consider at least doubling the number of managers in your organization. You may have too few. This statement may be somewhat incongruous because the general perception would be that there are actually too many managers. The major companies of this world are supposed to be populated with them. So why this statement?
The manager & the system administrator
There is still debate over the question of whether management is a profession. Not for nothing are jokes made about managers. So a man got lost in a hot air balloon. He asks a man on the ground where he is. He replies, “You’re in a hot air balloon hovering about fifteen metres above the ground. You are located at a latitude of between 31 and 32 degrees north and a longitude of between 48 and 50 degrees west.”
The man in the hot air balloon says, “You must be a system administrator”. “So I am” the other man says, “but how did you know that?” “Well”, says the man in the hot air balloon, “Everything you told me is technically correct, but I cannot do anything with that management information. And all in all I am still lost.” The man on the ground looks up thoughtfully and says, “You must be a manager?” “That’s right”, says the man in the hot air balloon: “but how did you know that?” “Simple. You have no idea where you are. You certainly do not know where you’re going and you expect me to solve your problem.”
The manager & the employee
While we are arguing that you should double the number of managers in your organization, please be clear that we do not mean the type that is portrayed by the system administrator above. This type of manager usually reigns from an ivory tower – or hot air balloon – and enjoys having many meetings with other managers, preferably with the help of a projector and PowerPoint. They think, ‘it is cold outside and it is warm inside’ and rarely come into contact with what is happening in the workplace or outside. A doubling of this type of manager is two times zero and that remains zero, or rather: two times minus five is minus ten. The performance of your organization will decrease.
What kind of managers do we mean? The answer is just as simple as it is difficult to achieve: competent managers, employees who take responsibility, have a good management information system, have excellent analytical and interpersonal skills and know where they have to get to and have or get the skills that this requires.
An example: The Housing Director of a large housing corporation in the Netherlands sees on her dashboard that the performance of the Commercial Real Estate (CRE) division has been getting worse in the last few months. The line responsibility for all rentable units and therefore also of CRE lies with the regional managers of the various regions. They do CRE and other areas of attention more or less as an extra and it seems they basically have their hands more than full with the normal real estate. The Housing Director decides to appoint a CRE manager. Initially, this is not entirely to the liking of the regional managers, who feel that their responsibilities are being taken away or that their chair legs are being sawn off.
Characteristics of managers
Let us go back a little bit in time. According to observations by Mintzberg in the seventies of the last century, managers always have a large amount of work to do. Their other characteristics are:
- the work is varied, fragmented and they handle it in a short period of time;
- they are often interrupted and disturbed in their work;
- they have a preference for liveliness and action;
- they thrive in a more or less chaotic environment;
- they seem be crazy about “soft” information such as gossip, rumours and speculation;
- they consider problems as a network of links that are connected to each other.
You have to repair the roof before it starts raining
I think that the above observations are not incorrect, but they are of their time, influenced to a large degree by the relatively large span-of-control that managers then had or had to have and the hierarchical structure of the organization. Today, this phenomenon is still present, that type of structure is dominant, which means that in many organizations important issues remain unresolved or impending problems may not be tackled properly, as in the case of the housing corporation above. Often this also has to do with the fact that there is (more than) enough money available. However, as the Dutch saying goes: “you have to repair the roof before it starts raining”.
Perform well on all fronts
However, organizations are increasingly being asked to perform well on all fronts, to achieve a minimum level of quality (quality management) and to know how to estimate and control the risks well (risk management). This is done in a social responsibility context, but also because customers are becoming more vocal and regulation is increasing. That means that not only must the core business of the organization be managed well (in the case of the corporation these are houses), but also all kinds of cross-divisional peripheral activities such as ancillary products and processes (CRE, parking spaces, social real estate, etc.). In many cases, however, the organizational structure is focused on the management of the core business from a functional hierarchical view and not the process, where core business, customer and peripheral activities meet.
Figure 1: the core business of the organization is often well managed; there is still much to gain in the peripheral activities.
How big the periphery is varies by organization. Whether it is worth it to place managers there depends on the potential earning volume. In the case of the housing corporation, it was about a loss of rent which increased by more than twenty thousand euros in a few months. An amount that could increase to over two hundred thousand on an annual basis. A manager who knows how to bring that back to the original amount or knows how to halve it would quickly pay for himself. The question is whether such a manager should be given a permanent appointment; a temporary ‘project’ manager can also suffice in certain situations.
The cross-over points created by the peripheral activities may often require additional management information, knowledge and experience, which may differ significantly from what is required within the core business. The question is how we can organize this knowledge. One way is business intelligence.
One of the goals of business intelligence tools is to help create a comprehensive picture of the business operations and the customer. Data about processes and customers is normally stored in different systems, making it difficult to obtain a complete and clear picture. With business intelligence, we ensure that this data is periodically siphoned off and stored in a standardized format, for example in a data warehouse, with summaries (see the cube in the figure below) that are quickly retrievable. The number of customers, number of compensation claims, or the revenue loss can therefore be quickly displayed against the dimensions of time, customer group, product group and region.
Figure 2: a cube can quickly show where problems (may) arise in the centre and the periphery of the organization.
In that way, you can further optimize your organization. For each cross-section, you can see where problems and opportunities arise and appoint a (temporary) manager based on that management information. It is conceivable that if the multidimensional principle is implemented, you will need twice as many managers as before.
Some considerations and questions
The managers of the periphery will start to ‘interfere’ with things for which the responsibility was previously in the centre. This may lead to collisions, especially if the current management is hung up on the hierarchy of the organization. For each situation, it must be considered whether the organizational structure still fits the management task that is currently required. New manager roles can go right across the organization and the question is whether and how we can (still) combine integrated management and decentralized entrepreneurship with more central management on one specific element (periphery).
Business intelligence should be role-based and not be designed in a hierarchical and functional way. Dashboards for new roles such as a CRE manager should be able to be created in a short time. The principle of inheritance is thereby essential. Indicators with corresponding visualizations of organizational roles need to be able to be viewed with a new cross section. For example, a dashboard for the CRE manager should be able to inherit from the North east regional manager, but with a different filter set, not a specific region but a specific type of rentable unit, namely CRE. Read more in our article: “Business Intelligence must be more flexible, faster and cheaper”.
Doubling the management capacity can affect performance in a positive sense, but it only makes sense if you are already satisfied with your management, a potential that is already focused on collaboration, involving process management, and managing together. You should also have a role-based and enterprise-wide business intelligence system.
Suppose that no new managers are appointed but the overall responsibility for the centre and the periphery remains where it was. What does this mean for the analytical skills and capabilities of the current management? Are they in fact able to take on ‘everything’ in the periphery? Do temporary ‘project’ managers offer a realistic option? Should there (not) be much higher demands made on a management position? This will need to be determined for each organization.
These are questions that have impact. We would like to discuss these with you. Leave your opinion below.