Management is the Least Efficient Activity in Your Organization

Management is the Least Efficient Activity in Your OrganizationI grew up working in my father’s business. He sold industrial supplies like bolts, nuts and construction tools to contractors throughout Utah and the Intermountain West. At sixteen I was driving the delivery truck and working in the warehouse. In the early days it was just he and I (him mostly). I would come over after school to pull orders and make deliveries. It was a good education to learn about starting and managing a small business.

My Dad felt like there was a right way and a wrong way to do everything—and that included the way I swept the warehouse floor. Every time I would try to find a shortcut or sidestep how he wanted me to work, he would remind me that there just aren’t shortcuts or an easy way around the right way to do some things.

While sitting in a waiting room the other day, I picked up the December 2011 issue of the Harvard Business Review and stumbled upon an article titled First, Let’s Fire All the Managers by Gary Hamel. My Dad would have hated Mr. Hamel’s argument, but there might be something to it.

Hamel suggests, “Management is the least efficient activity in your organization.”

I’ve certainly worked in organizations where that was the case—have you? “A hierarchy of managers exacts a hefty tax on any organization,” he suggests. “This levy comes in several forms. First, managers add overhead, and as an organization grows, the costs of management rise in both absolute and relative terms.”

I’m not convinced this is the only reason why we should reconsider how we manage process and lead people. Today’s economic climate requires organizations to do something more than just approach business as usual. Hamel argues, “We are all prisoners of the familiar. Many things—the first iPhone, J.K.  Rowling’s wizardly world, Lady Gaga’s sirloin gown—were difficult to envision until we encountered them. So it is with organizations…”

As an example of a successful organization that’s completely thrown typical management structures on its head, Hamel talks about  the Morning Star Company (a $700 million a year tomato processor) headquartered in Woodland, California. Morning Star focuses on seven core principles they call Colleague Principles. These principles are the foundation for how they “…encourage, achieve and maintain an atmosphere of high integrity, trust, competence and harmony among all colleagues, customers and suppliers…” According to Morning Star’s Organizational Vision, they do this to create a company in which all team members will be “self-managing professionals, initiating communications and the coordination of their activities with fellow colleagues, customers, suppliers, and fellow industry participants, absent direction from others.”

Here are the core principles:

  1. Mission: Morning Star’s mission is to produce tomato products of high quality and meet the service expectations of their customers. I don’t think it’s an accident that “Mission” is number one on the list. What’s more, when everyone in the organization is working to accomplish the same mission, it’s amazing what a difference it makes in how engaged the workforce becomes. Does everyone in your organization understand the mission?
  2. Individual Goals and Teamwork: Not only does every member of the team make a personal commitment to pursue individual excellence, teamwork is important because, “In recognition of each colleague’s personal goal of achieving happiness, each of us commits to pursue teamwork because Together Everyone Accomplishes More.” I’m convinced that most people are proud of what they do and will perform at a higher level if given the opportunity. When management steps out of the way (as demonstrated by Morning Star) people are willing to commit to it.
  3. Personal Responsibility and Initiative: Everyone at Morning Star takes personal responsibility for their actions. They take ownership of what the do and “…initiative to coordinate their responsibilities and activities with others, to develop opportunities for improvement and for making things happen.” I know this is counter-intuitive for most business leaders (my father is rolling over in his grave as we speak), but fostering this type of environment is the real challenge of great leaders. Understanding and working toward the same objectives helps. Although Dad wanted his employees to take personal responsibility and initiative, the way he managed his people made it difficult. What are you doing to inhibit this within your organization?
  4. Tolerance: No two employees are the same. Tolerance for those differences is a principle agreed upon by everyone at Morning Star. Having spent the last several years working in high-tech, this Boomer has come to appreciate the Gen-X’ers and the Millennials with whom I’ve had the opportunity to associate. They may not have waited in line to see the original Star Wars movie in 1976, but they enjoy the movie every bit as much as I do. It’s the differences that really make teams powerful anyway.
  5. Direct Communication and Resolution of Conflicts: Morning Star recognizes that “Conflicts and differences between human beings are a natural and necessary aspect of life, especially in the pursuit of excellence.” And, it doesn’t stop there. They’ve put in place a process (and expectation) that colleagues will work together to resolve issues. Ignoring issues is never a good solution, but recognizing, acknowledging and dealing with them in context of how best to achieve the Morning Star vision makes it possible to do so in a more collegial environment.
  6. Caring and Sharing: According to Morning Star, “To the degree colleagues care about themselves, their friends and relatives, fellow colleagues, suppliers, customers, the environment, the Mission, Principles and facilities, etc., each of us will come closer to achieving our personal goals.” I once worked with a guy who went out of his way to make sure the relationship he had with his employees was impersonal. I think this is a mistake. I learned a long time ago that business is personal—and that there’s nothing wrong with that.
  7. Do What is Right: Morning Star suggests, “Live, speak and endeavor to find the truth.” Doing what’s right is never wrong—in our personal lives, in our relationships and in business.

Whether or not your embrace the Morning Star model for eliminating management (I think leadership is critical for any endeavor), there are clearly compelling reasons to embrace their “Colleague Principles.” Would these principles make sense within your organization?


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About the author

Ty Kiisel
Small business evangelist and veteran of over 30 years in the trenches of Main Street business, Ty makes small business financing and trends accessible in common sense language devoid of the jargon.


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