The Five Styles of Management and When to Use Each
Part of Our Complete Productivity, Accountability and Merit Management Systems (PAMS)
By Bob Norton, CEO Coach, Author and Speaker
Introduction: Managing employees at different levels of experience can be a significant challenge but there is a simple system that can be used in most cases which will greatly increase employee productivity and morale too. By having a standard and language for this you can both manage employee expectations and coach other managers to use this effectively. This article is a sample of what is included in our AirTight Management System #2 Productivity, Accountability and Merit Management Systems (PAMS). There are far too many texts and systems on the art of management and I do not want to create another. But after studying the best of these systems, the research on them and applying them during my 25+ years of managing people I have been able to crystallize what has real-world, practical value into a simple and effective system. This system leverages many of the best practices and research, which even shows a 56% increase in overall productivity when these practices are implemented correctly. Of course the devil is in the details for correct implementation.
This simple, yet very effective, model for people management uses a combination of classic management styles (shown below). By providing the framework to decide the appropriate method for each individual, based on their level of experience, managers can dramatically increase that employee's effectiveness, future growth potential and even their morale. This is a win-win for the employee and company, which should always be a goal. Of course people do not grow in big leaps but gain experience over many years moving from one level to the next. This is an easy model to understand and implement and adjusts the management style to each individual's specific abilities and limitations. In general you are going to work very closely (micromanage) with anyone when they are first hired to help determine where they are on this scale and get them up to speed on their new position. You will then move down the scale until you reach their current ability to perform. Going beyond this causes serious problems, but not stretching them some also can cause lack of challenge and growth. Initial micromanagement will also allow the defining of parameters for working together and understanding each other's styles and needs. Don't forget there is always a responsibility to manage your boss as well, and the boss gets to define that style.
|1. Micromanagement (MM) (Also appropriate for new relationships to get up to speed on each other’s strengths, weaknesses and style)||Individual Contributors|
|2. Management By Objective (MBO)||Experienced Managers|
|3. Management By Exception (MBE)||Experienced Executives and Senior Managers - Enabled by dashboards|
|5. Leadership||Business Managers, CEOs, GM, Managing Directors|
Micromanagement (MM) is constantly looking over someone's shoulder, this can be minute to minute or hour-to-hour, but is typical in situations where employees are new (high turnover), low skilled or simple not well motivated. For example in a telemarketing operation callers are monitored very closely using physical supervisor presence and/or much electronic monitoring to ensure work is carried out properly and with sufficient effort. I believe is it completely appropriate to micromanage all new employees for some period of time until you understand their abilities and limitations and they understand what to expect from you as well.
Management by Objective (MBO) was invented by Peter Drucker, one of the fathers of management science. Using MBOs means you can lay out specific goals and trust that the employee has all the necessary skills and experience to perform THAT TASK without outside help or resources. This could be daily, weekly or even monthly goals depending on the industry, task and other factors, but typically any good manager should be able to go a week or more without needing help from their superior. This can be easily done with repetitive work, especially when it is event drive by outside factors. i.e. a car wash attendant can be managed this way with little training because the cars keep coming and the job is relatively simple. To use MBO properly you need a system with the specific forms, meeting rhythm, performance compensation and other cultural elements included in our System #2 training package.
Management By Exception (MBE) is when not only can you trust the employee to carry out the task, but you can also trust them to understand when they are outside their own abilities and experience and come back to you for additional help and resources. This really must be earned and is rare without lots of management experience, high confidence and ability. There is also the supposition here that the person has the experience and skills to identify opportunities that might come out which were outside the scope of their objective. In other words this employee will seek out and find new opportunities to help the company which were not part of their objectives. In this "mode of management" you may be meeting with the employee once a month to review progress. Only 5% of people will ever achieve this level of expertise and these people are the most valuable in your organization because they have leverage and can cause resources to be used in such a way as to generate profits.
Leadership is the next level where a person is ready to successfully start and/or run an entire business and does not need to be managed at all. By this I, of course, do not mean running a simple sub shop or dry cleaning service, but a complex organization where multiple departments, level and/or disciplines must be used to deliver value to customers. This has a large set of skills which could fill a book and most people will jump in before they are ready, but that is how we learn too. Unfortunately it is easy to find people who consider themselves executives, but are not able to perform at this level for many reasons, which might include a poor history of managers, simple jobs with support systems which never required this or even corporate structures (which you and they may not have in a new position) that did not require this level of performance. Today many organizations have frozen growth because they have people without the correct level of ability in positions of responsibility. Often this is even the owner, board of directors or CEO, who cannot begin to let go and delegate to more senior people who can be trusted with key tasks.
As organizations grow it is easy to have key positions filled by people who limit growth. Therefore replacement of some people is inevitable as an organization grows it must shed some skin because few people can keep up with a fast growing organization completely. It can take decades to develop all these skills and a company can go through fast growth spurts. Some larger organizations spend a fortune on organizational development (OD) to ensure this does not happen. This is valuable but often not necessary until a company is very large to reach optimum performance. Any company under $1 billion in revenue should be able to have its CEO select and replace the senior staff appropriately. If this is done right then that senior staff will be able to do it on the next level down.
The fifth style is different and not applied to any one individual but to the company as a whole. It is called Management By Wandering Around (MBWA) and is necessary in any organization with more than about 10-20 employees. MBWA keeps the organization honest and shortcuts the politics and invisible department walls that often stop information from flowing. When the CEO and senior staff have regular communications with the lowest level employees managers get really honest and the "signal loss" on communications improves. In other words the sugarcoating of information as it travels up the ranks is almost eliminated creating a culture of merit and honesty instead of politics.
Using each of these styles well take years of practical experience. No book or article can do more than give you a model and understanding. Many managers go through their entire careers never learning about these, they just "wing it" and react as a person. This is ignoring a century of Management Science that is the difference between the amateurs and the professionals who rise to the top. Studying Management Science creates a foundation to build on, but using it every day will make you a top performer who people will follow and do great things for to achieve a compelling vision. It is best to work your way up through these five methods of management, refining each as you become more senior. You will only be a true professional executive when you know how to use them all effectively based on the circumstances and person being managed.
Less than 1 in 100 companies will grow to $10,000,000 in sales or more. When they do most founders will be replaced by "professional" CEOs and others by investors or boards. Sometimes even by the choice of the founder who realizes he or she has outgrown their experience level. This is because the skills to run and grow a company once it reaches several mil-lion dollars are very different than the skills to get it there. Even though these skills can be learned they are not easy to learn on the job. Learning this way will be VERY expensive!