Too much leadership?

When it comes to the ratio between “do-ers” and “supervisors,” many organizations are hopelessly out of whack.

Would you plan to win a boat race by reducing the number of people rowing the boat and replacing them with extra people steering? I didn’t think so. Yet that is pretty much what many of our corporations have done over the years. And while they’ve been cutting costs by removing rowers, they’ve been ignoring the costs caused by all those highly-paid steerers. In all the hype about a “war for talent,” it’s worth wondering what the impact has been from the massive loss of positions in the lower and middle parts of the organization in recent years.

I was amused by a management fable that popped up recently on a blog called “Cenek Report.” I won’t spoil it by reproducing bits and pieces. You should go read it for yourself ^*.

It’s kind of parable of competitiveness about two corporations, one Japanese and one American, who have a boat race. Each uses their own approach to organize their racing boat. The Japanese boat has eight rowers and one person steering. The American boat has one rower and eight people steering.

The rest of the parable charts the attempts by the American corporation to win the following year, using all the paraphernalia of “modern” management.

When they lose the next race by an even wider margin, they give up the idea entirely and distribute the money “saved” by abandoning the program as bonuses to their executives.

Sadly, there’s quite a bit of truth lurking behind the farce.

There’s far too much emphasis today on management theory and leadership prescriptions, while commonsense ideas about what produces good service, good operations, and good working conditions are ignored. It’s as if, in the rush to “professionalize” the workplace, everyone shies away from obvious questions, such as

• Do we have enough people to do the work required?
• Do they all know, clearly, what they are expected to do?
• Do they have the time, the tools, and the skills to do it?
• Are they paid enough to make what they do seem attractive?
• Do they enjoy what they do and give it their best efforts?
• Are the working conditions suitable to a civilized community?

There was a time when it was argued that holding costs down meant limiting wages because there were so many workers that even a small increase in each person’s wage would place a huge burden on the organization’s ability to compete. In contrast, executives argued, their salaries—even if they were much, much higher in each individual case—added up to only a small proportion of the total wage and salary budget.

After many years of cost cutting, a lot of companies now resemble the American boat in the parable. There are very few rowers left—most have been removed through downsizing, outsourcing, and cutbacks requiring “voluntary” overtime. The number of those steering the corporate boat hasn’t fallen much at all. People still cling to nonsensical ideas like “span of control” that stipulate a fixed allocation of supervisors to set numbers of employees. And that’s without the vast inflation in “support functions” such as human resources, legal, and finance. We're becoming a nation of more bosses and advisers than people to boss around or advise.

Logically, the best place to look for cost reductions nowadays must be in the executive suite and those support functions. Forget about head count. Lots of low-paid “heads” cost rather little, compared to even a few “heads” taking home multi-million-dollar packages. Unnecessary people? Try any support function you care to nominate.

If we want to have a business community that can be competitive in a global economy, as well as providing enough jobs and enjoyable working lives to enrich our society, we need to get back to commonsense observations. Instead of asking whether an organization “needs” yet another layer of management, or an additional specialist advisory function, how about asking how few leaders and advisers it could manage with? I suspect that the loss of many of these positions would scarcely be noticed—except through the subsequent increase in profits.

More rowers and fewer people steering (or advising from the riverbank) sounds like a sound recipe for better business and lower costs all round.

^* The Cenek Report site must be the least readable site I have ever come across. I hesitate to speak of design, since it is minimalist to the point of being almost invisible to tired old eyes like mine. Be warned!

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Technorati tags: corporate culture competitiveness management cost reduction uncivilized workplaces