Saturday, June 22, 2013

Do Managers Know How to Manage?

Normally, when we want to know the state of the nation’s economy we go to the numbers. Until recently, the numbers have been fairly good.

The stock market had soared. The bond market had been tamed. Unemployment had been coming down.

All in all, it was sufficient to get Barack Obama re-elected. And it made Ben Bernanke look like a wizard.

Yet, things were not as they seemed. Mort Zuckerman, among others, has been exclaiming that we must look beneath unemployment numbers. When we do we discover that labor force participation is anemic and that underemployment is becoming increasingly common.

Something was rotten at the core of the great economic recovery.

Of late, the bond market has signaled that the Bernanke/Obama recovery is in trouble. When your nation is in debt up to its eyeballs a crashing bond market is the last thing you need.

For years, Bernanke was fighting the bond market by printing money. Of late, it seems that he is going to lose the fight. The bond market has been refusing to play with Ben’s funny money.

Of course, there’s more to life and to an economy than numbers. Whatever you think about the blizzard of numbers that quantify the employment situation, it is useful from time to time to ask yourself how real people feel about their jobs.

Are American workers committed to their jobs? Are they dedicated to their companies? Are they doing their best to produce the best products and provide the best services?

Or, are American workers discontented, disgruntled and disaffected to the point of not really caring about anything more than getting off work?

Gallup recently did a survey and discovered that, beneath the numbers the American worker was in a foul mood. Clearly, it has been damaging business and the economy.

Timothy Egan summarized the results:

Among the 100 million people in this country who hold full-time jobs, about 70 percent of them either hate going to work or have mentally checked out to the point of costing their companies money — “roaming the halls spreading discontent,” as Gallup reported. Only 30 percent of workers are “engaged and inspired” at work.

And also:

Gallup’s current survey, covering two years, is a follow-up to an earlier poll that found much the same level of passive discontent from 2008 to 2010. Even in an improving economy, people are adrift at work, complaining about a lack of praise, with no sense of mission, and feeling little loyalty to their employer.

The numbers are staggering. If most American workers hate their jobs and are merely going through the motions, then the economy is dysfunctional in ways we do not appreciate.

Many serious thinkers believe that the problem lies in the disconnection between executive salaries and worker salaries. The gulf between the two has never been wider.

Egan entertained this explanation:

You would think the usual suspects were to blame for this sea of seething in the cubicles of America. While productivity per worker has soared over the last two decades, pay has remained flat or gone down. The gulf between those at the very top and those who do all the heavy lifting has never been greater. Too many corporations, especially in a tight job market, promote a view that everyone is replaceable; the workers are mercenaries with bottom-of-the-bin benefits. Take it or leave it.

Those who accept this analysis believe that the problem can be solved by confiscatory taxes on the rich and more labor unions.

Yet, the people surveyed by Gallup did not complain about wage inequality and social injustice. They hated the way they were being managed. They hated being treated as cogs in a machine and not as human beings.

Egan explained:

But here’s the surprise: the main factor in workplace discontent is not wages, benefits or hours, but the boss. … The survey said there was consistent anger at management types who failed to so much as ask employees about their opinion of the job. Ever.

“The managers from hell are creating active disengagement costing the United States an estimated $450 billion to $550 billion annually,” wrote Jim Clifton, the C.E.O. and chairman of Gallup.

Regular praise, opportunity for growth, and the occasional question from a higher-up of a lower-down about how to improve things would go a long way toward getting the checked-out to check back in, the study found. Among those who loathe their jobs most, 57 percent said they were ignored at work, and 41 percent said they couldn’t even say what their company stood for. As such, there’s no mystery why customer service is so bad, or being farmed out to robots.

Let’s see. The country is awash in management gurus. The nation’s business schools all teach courses in management. All companies rely on management consultants.

And yet, almost nobody knows how to manage human beings.

For all I know the management courses are so completely quantified that they do not teach the essentials of good management. They do not explain the importance of productive relationships, of face-to-face conversation, of praise and recognition.

I find it hard to believe that business schools fail to teach the importance of informing all employees of the company mission, of helping them to understand how their work contributes, of asking them for their suggestions about how everyone can do a better job.

If they do, then students have clearly missed the point.

It’s also possible that relationships between people in American companies are so completely regulated by bureaucracy and the threat of lawsuits that no manager dares treat his staff as human beings.

Whatever cause, the problem needs to be addressed.


George Boggs said...

I also found the Gallup report interesting. If one looks at the top ten "engaged" states, every single one of them is a right-to-work state.

Looking at the lowest ten "engaged" states, eight are heavily unionized, and Indiana only became right-to-work in the last few years.

Direct management is much more difficult in a unionized environment, (which is more-or-less the point, actually). Management issues are often settled in acrimonious venues.

Unions affect engagement in other ways. For example, Gallup suggests a major factor in engagement is selecting the right people. Because employee selection is not a perfect process, this necessarily implies that some selections go wrong, and people must be let go to open a space for a person who is a better fit. This can be extremely difficult under some union contracts.

flynful said...

Political correctness not only makes workplace communication dangerous (who knows if an innocuous bit of praise or criticism will be deemed harassment to the person spoken to or anyone in the area?), it leads to cautious (and less than free) conversation (see the prior post).

Nick said...

I took a job in Wyoming in a oil rig repair bay. My manager\supervisor ruined it completely.

From Day 1, I was being screamed at and demoralized by this angry, angry man and I couldn't figure out why he hated me so much.
10 hour days too, not fun getting screamed at at 6:00 AM. HR wouldn't really do anything either even when he started to get physical. There was no possible way for me to work with enthusiasm, and he seemed to like it that way. Make all of his workers miserable cogs.
I curse his name to this day.

Anonymous said...

Making the numbers has become a way to "game the system" for those at the top of organizations. They do not care much about customers or employees, they care about the bonus and salary that comes from "making the numbers."

If you cannot compete with compassion, you compete without compassion. There are no other options!

David Foster said...

I do think that the quality of management has generally declined, though there are obviously huge differences between companies and between groups within companies.

A lot of the problem has to do with organizational chaos. All the emphasis of "flat organizations" and "de-layering" and the inherent evil of hierarchies had led all too often to environments in which it is virtually impossible to get anything done.

David Foster said...

See also my post Management Education and the Role of Technique:

Larry Sheldon said...

The question nobody wants to look at, it seems: Are managers ALLOWED to manage--especially the managers on the front line?

Or are they bound by regulation minutia from "corporate" and government, by union "work" rules, by political correctness, by myriad legislation and law-suits, by the unwillingness of the next level to allow any boat-rocking, and on and on and on down an almost infinite list?

Larry Sheldon said...

I was hoping for a discussion.

The silence continues.

David Foster said...

Micromanagement: again, there are wide differences among organizations, but in general this is a serious issue. See my post Mindless Verbal Taylorism for thoughts on micromanagement and customer service:

One factor in micromanagement is the growth and misuse of information technology. Just as in warfare improved communications had allowed higher-authority micromanagement in details that previously HAD to be left to local commanders, computerization has allowed similar micromanagement in business. An example is a chain retailer where all reordering is done by a combination of information systems and product managers at corporate HQ, with the local store manager having NO control over what products his store carries, when reorders happen, or what quantities are reordered. On occasion this lead to phenomena such as snow blowers being carried at stores in south Florida.

The current vogue for "big data" has the potential of making this situation even worse.

David Foster said...

Also: in the late 1700s, a Spanish naval official wrote about the reasons why his country tended to come out the loser in naval engagements with the British:

On the dimensions of management astutely identified by Don Domingo, I'm afraid America today is becoming less like the British Navy of 1797 and more like the Spanish Navy of that same era.

Stuart Schneiderman said...

Thank you, David, for providing so much good information about the state of management science in America today. I hope that everyone takes the time to look over your writings on the topic. It's frightening to think that these principles are being taught in business schools and practiced in companies.

Anonymous said...

The educated elite know what is best in all things. That is their attitude. Like mad scientists, they design "fool-proof" systems that prove they are fools. There is deep, deep distrust of unsupervised human agency and initiative in corporate America. It is extremely unsettling, and is a reflection of the misanthropic worldview of scientific management amongst the uber-educated at America's business schools. Instead of building human capital, they build monuments to their own data-collecting, paper-processing power by treating everyone like idiots. Then when those they supervise become idiots, it is a tidy self-fulfilling prophesy that verifies and begets the need for more, more, more supervision and control.

We are entering the age of meta-data. The NSA scandal is just the beginning of our realization. It is a rude awakening. We are not human beings to those in power. We are data points, statistics.

The federal bureaucracy is one contributor, but really the legal class is to blame for this. Once employment law grew beyond the collective bargaining structures of labor law, the idea of "employment at will" really became an idea for suckers who didn't know to hire a lawyer. Employment at will as a concept has progressively (pardon the pun) eroded as to become largely meaningless. Ask anyone who owns a private sector company with more than 10 employees, and they will tell you that you must be very judicious with termination processes. The steps involved therein are not to create justice or compassion for the person being terminated... they are instead silly, sanitized steps to make sure one doesn't get sued.

Looking underneath the surface, one sees that the law is no longer primarily a structure to remedy disputes. Instead, it has become an operationalized means of regulating human behavior down to the most minute, arcane levels. No one is safe from it. Every employer is worried about getting sued in an employment or discrimination lawsuit, and it does not make the workplace more creative, engaging or dignified. Instead, it moves the bureaucratic mindset deeper into the private sector. This is dangerous.

We must look very seriously at what the legal profession is doing to this country. The law is becoming a special interest weapon, aimed at expanding an agenda rather than a civil way to handle disputes. Everyone fears the lawyer, judge and regulator. It's no longer about interpreting laws, it's about judicial review of behavior at all levels, using the legal framework as an extortionist means to advance a worldview of fairness, tolerance and relativism into business. Today's American law knows no restriction. It has become a leviathan.


David Foster said...

It's also important to note that the situation is not totally bleak, there are also some very good managers in this country. And there are numerous initiative to make more effective use of the ideas and creativity of front-line employees. See, for example, this post at the GE blog, about Innovation from the Manufacturing Floor, in locomotives, jet engines, and appliances:

David Foster said...

Stuart, an excellent source for thought-provoking posts on management is Bill Waddell's blog, at the Manufacturing Leadership Center:

Bill is a manufacturing consultant (and himself an experienced manufacturer), but many if not most of his posts also have applicability in non-manufacturing areas.

Stuart Schneiderman said...

I'm sure there are some very good managers out there, but what struck me was that 70% of employees surveyed by Gallup were dissatisfied with the way they are being managed. That is a very large number.

Dennis said...

Now we are starting to get to the crux of the problem. One example:
Now consider how actions like these work their way through a whole culture of perpetual victims always being set upon by"them."
If one can do no good them one is likely not to try and please others and themselves. What is the purpose?
Worse yet is a society that believes that a job is a right and not something for which one has to work. The more things become rights, without responsibilities, and are given the less value they have to the person who receives them. Much of the problem is a cultural problem with the "I am owed" mentality engendered by an over arching government.
Along with that mentality comes the support system that makes it virtually impossible to get rid of low or poor performers. Between government, unions, interest groups, and political correctness it make striving for success almost not worth the time or effort. Discrimination and using one's judgment is a GOOD thing. People value what they believe that they have truly earned. How much of the work environment is indicative of a person truly earning anything? The joy of life is knowing one worked hard to achieve one's goals.
Add to that a culture that rewards people for not working and one has a disaster in the making. Helping people was always meant to be personal.
The "Peter Principle" is alive and well because the culture rewards the "squeaky wheel" instead of the doer.

Bobbye said...

One person commented that people view a job as a 'right'. I think the problem, which also explains bad supervisors, is that people tend to view a job as a 'necessary evil' instead of a blessing. This is also why employers would rather hire immigants instead of Americans.Working emigrants tend to view a job as a blessing. When asked to work the weekend they tend to say "sure boss, when do you want me?" instead of saying, " sorry, no can do. I've got plans." Mid-managers are just employees and also tend to view work as a curse. I truely believe it is that simple. I also believe that almost no one will accept a simple solution. If they did the solution would be in thier own control. Can't have that, can we?

Anonymous said...

Today's managers are bad managers because they aren't given the time to manage. Companies are cutting back so much on workers that managers have a load of work they are doing for their higher-ups and can't invest much time to managing the people below them. It's all disfunctional.