I was recently reading an article in the most recent issue of Harvard Business Review titled, “Stop Overengineering People Management.” The article highlighted how a recent focus on labor optimization has instead had the opposite effect – reduced engagement, productivity and innovation. The article is directly applicable to architecture and engineering (A/E) firms and is a great read for anyone enticed by the idea of a talent-on-demand model utilizing contract, remote and gig workers to minimize and supplement capacity in uncertain times.
As I thought about it, the managers who were focused on labor optimization likely had good intentions. They were trying to maximize productivity and minimize costs for their businesses. The article got me thinking. What else could well-intentioned A/E firm managers be doing that may not yield the best result for their firms? Below are five management traps I came up with that can ensnare well-intentioned and capable managers. Luckily, they are all avoidable if you recognize them before you get caught.
Herd Management
Managers often have a tendency to follow the herd and manage in the same fashion as their peers and competitors. They may manage to the same industry benchmarks with the same goals relative to those benchmarks. They may follow the same canned strategic planning process and follow best practices as if one size fits all. Do you blame them? This is what they were most likely taught to do.
Herd management will get you average but not much more. The things that make your company unique are the keys to its success, so you need to manage that uniqueness. The keys to avoiding the herd management trap are to gain deep insights about your company and what makes it unique, form your strategy to take advantage of that uniqueness, and manage that strategy in a unique way. Your company’s unique culture and strategy should be driving your decisions, not what everyone else is doing.
Blinders Management
Traditional strategic management is designed to keep a company focused in one direction while avoiding distractions, much like blinders do for horses. While it’s true that strategy is just as much about what not to do as it is what to do, our companies and environments are too complex to assume we know all there is to know about our path to success. The world is more like a trail than a highway, and you don’t see a lot of horses in the woods with blinders on.
While a certain amount of direction and continuity is necessary when forming good strategy, companies must also recognize when to exercise flexibility and agility. Don’t be afraid to dip your toe in the water and try new things when opportunities that take advantage of your unique capabilities, resources, and culture present themselves. The keys to taking advantage of these opportunities are having deep insights about your company and a strategy that allows you to dip your toe in the water. I discuss this more in this blog post.
Self-defeating Management
Managers need to be sure they understand the implications of their decisions and how they manage. They sometimes believe that cascading their goals down through the organization will help them achieve the results they desire. Again, this may be well-intentioned and what they were taught to do, but this can backfire and be an exercise in self-defeat.
A common example of self-defeating management in A/E firms that I have seen is driving utilization goals to individual employees, regardless of production. If utilization goals are driven to employees without the ability to bring work in the door, managers will often magically get the utilization results they desire. Employees will work to fill the time allotted, whether incented to or out of fear. Productivity could suffer and the manager would never know unless they were tracking other metrics. Your utilization data will no longer be useful as it was artificially (albeit unintentionally) altered. A similar situation can occur with project managers and revenue, despite project progress.
The key to avoiding self-defeating management is to only set individual goals for employees based on what they have the ability to control (group goals can be different). Know the difference between goals for employees and goals for managers. In the example above, utilization goals likely belong with the manager. Also, be sure to use measures that fully capture what you are trying to manage – read this blog post about productivity, as an example.
Myopic Management
Myopia is a condition also known as nearsightedness. In management, this can show up in several different ways – a focus on short-term results without considering the long-term implications, making decisions without insight into your company’s unique strengths and strategy, etc. Often, managers are taught and incented to make decisions in this manner but is that what’s best for the firm in the long term? Probably not.
Luckily, nearsightedness can be corrected with the right set of lenses. So can myopic management. Be sure that your company is encouraging long-term thinking. Be careful when developing reward and incentive programs so that they strike a balance between long-term success and short-term needs. When planning and managing strategy, make sure your managers have a deep insight into what makes your company unique and successful and how their decisions can strengthen or weaken that.
20/80 Management
The Pareto principle, or the 80/20 rule, is a wonderful management tool. It states that 20% of your efforts can be responsible for 80% of your results. Notice how I said, “can” and not “will”? In order for this to work, you need to concentrate your 20% on the right things. Concentrating on the wrong things can lead you to spend 80% of your efforts to only obtain 20% of the results you want to achieve – the dreaded 20/80 management trap.
Professional managers are great at creating 20/80 management tools. There are abundant examples that we have all seen – overly complex policies and procedures, overengineering processes that should be more art than science, detailed reviews of management data at a microscopic level (“picking at fly specs in the pepper” as one of my old professors used to say), creating regular reports not used to manage the business, etc. A good strategy and tailored strategic management system can help rid your business of this clutter. Understand and manage the true drivers of your business and its strategy and let your employees take care of the rest. Your time is valuable, use it wisely.
The labor optimization example in the Harvard Business Review article suffered from each of these management traps in one way or another. While this may seem like a good idea for A/E firms to explore, some serious issues could potentially come to light if run through the five filters above. Recognize that all companies are unique and there is no one-size-fits-all way of managing them. However, by recognizing and avoiding the management traps above, you can improve your chances of success of managing them effectively.
If you would like to discuss how this may apply to your business specifically, I would love to hear from you. You can get in touch with me here.