Who decides what?
In the late 1990s I was courted for 11 months to join someone else’s business. The biggest red flag was that the CEO was a Harvard MBA in his early 60s. Not much could make me more cautious than working for someone with that kind of ivory tower pedigree..
I said no a number of times. My biggest concern was how he, and by extension the company he had built, would make decisions. Would they let those most affected be involved in decision-making, or would they make top-down decisions like other companies stuck in bankrupt Industrial Age thinking?
I finally said if he spent a few million to build a new operations center, and committed to investing $500k or so each year each year that the company grew, that I would join the company. To my surprise he committed the first few million to the ops center, so I joined up.
We took the company from $8.5 million to $13 million the first year, but when it came time to put just $500k more in to support the next year’s growth, the CEO decided not to do it. Later that year when I asked for workstations and employees to support more growth, he emailed me and said I hadn’t put it in the capital expenditure forecast 10 months earlier – request denied. The golden handcuffs clouded me into staying for almost three more years, but two years after I left, the company went bankrupt and was sold in a fire sale.
What happened? Exactly what I had feared up front – the people closest to the ground were not involved in the decision-making process and had to implement decisions in which they had no say. Management knew best and didn’t need any help making decisions. Classic, but broken management practices.
Management is a Bankrupt Industrial Age Idea
“Management” as a function wasn’t common before 1900. Frederick W. Taylor (1911) popularized the separation of decision-making from the worker, who he felt didn’t have the smarts to be involved in decisions. He emphasized having Management make decisions that workers then simply carried out. My Harvard MBA CEO carried that practice right through to bankruptcy.
None of us is as smart as all of us.
In the real world, none of us is as smart as all of us. If you push through 112 years of bad management practice, you find that people who are most affected by a decision are most likely to have the best input. This should be a major leadership principle followed by all business owners. It doesn’t mean everyone just makes decisions by themselves, any more than having management make it by themselves. It means the owner/implementer of a decision should have the most say.
I Got Over-ruled
We’re designing the messaging and cool stuff that goes on the walls of our new Business Transformation Center. I had specific ideas of what I thought should go on the walls. When the designer came, the other staff there that day had wildly divergent ideas, and they would live with the results every bit as much as me, in some ways more. My ideas aren’t going to be implemented, but I got a few things that I wanted, too. The Chief Results Officer will make the decision.
What do you Believe?
We don’t believe in management and workers. We believe in the Wisdom of Crowds, which says that in a team there is a better answer than any one expert can give on their own. We don’t believe in consensus, either. A giraffe is a horse designed by consensus – close, but no cigar.
Make More Money – Trust Others to Make Great Decisions
Those with the most at risk get the most say. Even if someone doesn’t own stock in the business, they should own their work and their results. In MANY cases the business owner(s) has less at risk than those who will have to carry out the decision. And they will make more money if they let others who are closer to the ground make the decision.
1) Know you don’t know everything – none of us is as smart as all of us.
2) Respect the input of others
3) Whoever has to live most with the decision should have the most input.
4) There is still a Chief for each decision, but many times it should NOT be the Chief Exec. Officer. Everyone in our business has the title “Chief” of something, and the decisions get made by the Chief closest to the ground and most affected by the decision.
5) All of us should get input, aggregate information, and deeply respect the input of those most likely to have to carry out the decision.
The art of leadership is to know how few times the leader should actually make the decision.
It’s a great way to avoid bankruptcy.