I’ve been considering the topic of management for close to a decade — mostly because I started out as an absolutely awful manager and leader, and then slowly became better over time.
I distinctly remember telling one subordinate in London when I was 21 that if she couldn’t do her job, she should “resign and fuck off”.
Hardly the best way to get results out of people.
These days, I’ve got a somewhat more measured approach to management, and I have concluded that, in the best organizations, management is almost invisible.
But let’s take a step back, and consider why we have management as a role, and what is the responsibility of managers? Why don’t we just have a large group of people working together without management?
Well, in fact, some companies apparently do run like this. I can think of Valve, the game company, that runs in a very flat manner without any direction, and they tell their new team members that the desks have wheels for a reason — so you can move your desk to the project that is most interesting and valuable.
It seems to work for them — they have a revenue per employee that makes almost any technology company envious. But, I think that technology companies are somewhat unique in the leeway they give in terms of organizational design and freedoms, because there is an abstraction layer (the software!) between the people doing the work and the customers who consume the product.
And, you enjoy very high gross margins as well generally hiring some of the smartest people available in the marketplace.
In many other industries, it is much messier; you have much closer contact with your customers — they may even come into your office for meetings! Your labour pool may be largely made up of disinterested teenagers that must somehow be coordinated to ensure that they can deliver a consistent product — the way McDonald’s manages across the the globe. You may have razor thin margins, such as in the steel industry, where it is a question of survival whether you can squeeze out an extra 1% margin out of the production process, and if the production line stops for any reason, the losses can add up to millions an hour.
So, back to our question: Why have managers?
After all, they are actually quite expensive, and it can be difficult to pinpoint precisely what they do — and this is especially true if you have never been a manager yourself.
Well, the answer is disappointedly obvious and rather mundane.
We have management because organizations work better when there is management.
This is a bit like saying that a London bus is red because it is painted red.
But let’s dig below the obviousness of this statement. In the end, an organization delivers value through the front line, the same way that an ancient army in Ancient Greece could really only inflict casualties on the enemy via their front lines — everyone else behind was essentially waiting their turn to kill or be killed.
Yes — I’m ignoring archers 😉
The simple answer is that, as organizations get larger and more complex, it becomes necessary to have someone whose primary responsibility is to ensure that the work gets done efficiently and effectively.
In a small organization, everyone knows what needs to be done, and there are relatively few moving parts. But as organizations grow, it becomes increasingly difficult for everyone to have a clear understanding of what needs to be done, and how their work fits in with the work of others.
So, if an organization really only delivers value to end-users or customers via the front-line, it makes sense to ensure that the people who are on the front-line are supported as much as possible, and that they can focus on the job at hand as much as possible.
Let’s take Mäd as a case study, and build an abstraction of a product designer who comes to work each day. They will know what to work on because there are customers, there has been a project brief, and they’ve been told the next series of milestones and timelines that need to be hit, and when the next presentation to the client will be held.
So, there is a huge and invisible abstraction layer that removes the messiness of real life, and allows that product designer to come in, turn their iMac on, and start working on the client project.
That abstraction layer, is handled by management. Let’s dig into it!
The product designer turns up in the morning at the Mäd office. The office is already set up. The air conditioning is on, the lights are on, and the office was cleaned and reset every morning at 7 am. There’s coffee available, soft drinks and beer in the fridge.
Who does that? A third-party cleaning company — which someone had to source, negotiate a price with, monitor quality, and ensure that they are paid.
In fact, the office itself also has a lease that had to be negotiated and then have a deposit and be paid for. The Managing Partner at Mäd and I saved around $12,000 over one lunch the other day by negotiating a significant saving on the rent by doing a year of prepayment.
This is good management, and yet nobody in the organization was the wiser on this — it’s behind the scenes.
The Product Designer turns on the iMac. This also had to be purchased and depreciated according to a specific depreciation schedule in the accounting system. The software he opens to start work, has to be decided upon by someone, who compares various options and makes a decision based on features and cost.
The client work itself requires a marketing and communications machine to reach new clients; the entire process needs to be completed, contracts signed, and payments taken. Again, all in the background, humming away silently.
And while the internet fetishizes freelance work, there are significant disadvantages to being a freelancer, the main one being that you have to deal with everything —and that there is no safety net. If an aircon breaks, then that’s your problem. You do not get paid on time if a client doesn’t pay on time. You’re not just a Product Designer — an accountant, a human resources professional, a janitor, etc.
There is no safety net. And that is why management exists — to provide some stability in an otherwise chaotic world, to provide some guard rails so that the people who are actually doing the work can focus on the work, and not worry so much about everything else.
And that is good management.
Good management provides that safety layer by ensuring sound financial management of the organization. There is a financial abstraction layer, ensuring a disconnect between client payments and team members receiving their salary. The ideal situation is that the organization is always spending “old” money — which means spending revenue that was earned over six months ago. So it is irrelevant if a particular invoice comes in on a specific date or not; everyone can still get paid regardless.
That said, good managers are also very visible, but I believe this is the distinction between management and leadership.
Management is about the day-to-day, ensuring that things are running smoothly, and that there are systems and processes in place to make everyone’s lives easier.
Leadership, on the other hand, is about setting the organisation’s direction. It is about making big decisions, such as what products or services to offer, what markets to enter, or how to structure the organization.
At the core, leadership’s job is to look forward and drive the strategy of the organization, and constantly be asking:
That should be highly visible, and it will have a significant impact on anyone in the organization.
A manager can be a leader, but a leader must be a manager.