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Let's Get Rid of Management

By Roy E. Chitwood, CSE, CSP, President, Max Sacks International

Only leaders can effectively lead a department, a division or a corporation through the journey of change

The only reason to consider getting rid of management is if you want your organization to survive in the current economy. In the United States, four out of every five corporate change efforts fails." Re-engineering", "reinventing", "downsizing", "rightsizing", "empowerment"," wake-up call" and " level playing field" are overused buzzwords used in an attempt to cover up the incompetence of management.

The reality of today's marketplace is change or fail. The major reason that change is not working is because managers are managing in this period of economic turbulence the same way they managed during boom times and that way doesn't work anymore. Many companies today are downsizing and outsourcing and calling it "re-engineering". The reality is that companies are getting rid of massive numbers of people, and the people who are left are working twice as hard and twice as long.

Change cannot be "managed" by managers. Only leaders can effectively lead a department, a division or a corporation through the journey of change.

Let's examine the seven myths of change:

Change Starts at the Top

A study by the Academy of Management showed that only 18 percent of the Fortune 100 companies who downsized during the recessions of the 1980s and 1990s actually grew in volume; 25 percent declined in profitability; and 44 percent went on to additional merger, acquisition or financial ruin.

Start with a Clean Slate

The new CEO comes on board with his or her vision for the enterprise. Management doesn't show the employees the justification for change nor what is required to meet the challenges of the change. Employees are required to submit resumes, undergo interviews, go through new employee orientation and sign a new employment contract. Management claims that "our people are our most important assets" but they treat people as any other raw material. This leads to inevitable downsizing, elimination of jobs, outsourcing and destruction of any degree of loyalty, trust or confidence.

Develop the Vision and They Will Come

The CEO and the executive team develop a vision for the enterprise. They publish a mission statement and formulate a plan for company-wide implementation. They push the change throughout the enterprise with a new management structure, pay plan, training program and customer surveys. However, after a couple of years nothing happens. Leaders need to get commitment to change in order to handle specific business problems. They must develop a shared vision of how to organize and lead the change necessary to solve the business problem. Every employee needs to be involved in the change process as Raymond Smith, CEO of Bell Atlantic, said, "When we created our vision, we had to include 22,000 people."

Get Everyone Committed

A major misconception about change is that everyone in the organization from the top CEO to the assembly line worker must be involved in the change. It has to be a company-wide program that includes changing corporate culture, mission statements, training courses, new compensation programs, etc. Management thinks all this organizational structure change will turn an outdated, bureaucratic organization into a high-flying, state-of-the-art, fast-track company. History shows us that very little change occurs in these organizations as program after program that promises change fails.

In companies where change is taking place it usually starts in small units, departments, divisions or plants, many times removed from corporate headquarters. These units invariably are run by leaders who carry the title of supervisor, manager, divisional manager or general manager. In most cases, it is not CEO. These individuals do not focus on cultural, organizational or structural changes. They create change to solve concrete business problems. They focus their work and energy on the work itself, not on the culture or buzzwords.

Total Commitment

The CEO and the executive staff go to some mountain top retreat led by some guru who focuses them on reexamining their business and their culture and on developing a vision and mission statement. They go back to the real world with a determination to succeed in spite of all obstacles. They land on the beachhead of change and burn the ships with the battle cry, "Win the battle of change or perish!" The philosophy is, "We're going to fix them." Believing that individual knowledge and attitude of individuals will change behavior, the Human Resource Department rolls out program after program to educate the employees about why change is necessary and to give them additional knowledge. They have the process backwards. The best way to change behavior is to put people into a new organizational structure with new rules, responsibilities and relationships.

Train Our Way to Change

It's change you want, not training. One of the first things that must occur is to take the training responsibility out of the hands of the HR Department and give it back to the leaders where it belongs. As an example, Jerre Stedd, CEO, started a new global manufacturing and sales strategy for Square D. He created Vision College where he, his managers and workers all worked as trainers to help veteran employees and newcomers understand the new corporate vision.

"I told companies they needed to quintuple their investment in education," says re-engineering guru Michael Hammer. "Training is about skills; education is about understanding broad knowledge. Everybody who works in a company needs to understand the business."

The company's greatest asset is not its people. Any company's greatest asset is the undeveloped potential of its people. The most important aspect of any company's desire to change is its people. According to a recent study by Harvard University and Wharton Business School, the surest way to profits and productivity is to treat employees as assets to be developed.

People move forward and make change happen, with a vision of the company's overall strategy, which has been effectively communicated to all employees.

Change Must Be Managed

Managers don't make change happen - leaders make change happen. Under the old management method, management makes the decision and then communicates that decision down through the ranks. The goal is to build awareness and buy-in so employees will implement the decision. At the same time, management makes any necessary changes in organizational design required by the decision. Under this style of management, people are told about the decision and that's it.

Today it is different. Changes such as re-engineering, total quality or becoming a learning organization require everyone to change their skills, behaviors and working relationships. Such changes are behaviorally-driven. Managers of the past were watchdogs and police officers. Leaders of the future will be nurturers and teachers who will be judged on how well they take care of their people.

Are you a manager or a leader? Your answer to this one question will tell you: Are your people working for you or are you working for your people?

Roy Chitwood is an author and consultant on sales and customer service. He is the former president and chairman of Sales & Marketing Executives International and is president of Max Sacks International, Seattle, 800-488-4629, www.maxsacks.com. If you would like to subscribe to his free Tip of the Week, You're on Track, please e-mail contact@maxsacks.com

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