The Croatian times reported on 29 December 2011 that the Croatian Ministry of Justice has to pay back a total of 900.000 euro to the EU. This subvention was a contribution for a number of different projects but the Ministry did not fulfil the requirements and procedures of the project agreements.

In my opinion this is a failure of management, not of employees.

Management is always responsible for the way they manage their employees and how the work is done according to the rules and procedures, this responsibility can never be delegated.

Employees work according to the assignments and directions they receive from their manager(s) and these are not always according to the rules. And exactly this puts employees in a difficult position because they know very well what the rules and procedures are.

This is a common and often occurring management mistake which puts employees for a dilemma:

‘I follow the procedures?’ or ‘I follow the assignment of my manager?’ What should an employee do in such a situation? They might have to ‘invent’ new rules to be able to fulfil their assignment and to justify their performance, at least for themselves and maybe to please their manager also.

In general the feeling will be that the employee always loses, no matter what (s)he will do; imagine for a second what effects this has on the motivation, labour morale and productivity of employees?.

And I wonder what the difference with the financial crisis in the USA actually is, of which we still feel the consequences daily.

The financial crisis

The financial crisis started with ‘consciously not applying rules and procedures’ for different reasons, mainly for personal enrichment of some top managers in several sectors. Looking back after four years we see that the financial crisis had big effects on companies in all kind of sectors worldwide, but also for management, both in the market, job positions and management styles.

What is happening in management today?

In the USA a new Appreciative Governance model is becoming more and more popular which should bring more transparency in organisations. In Western European companies many ‘macho’ managers were replaced by managers with a more ‘feminine’ style in their leadership. Unfortunately not meaning that more women are appointed, it is a ‘new’ management style.

We see a shift from ‘hard to soft’, from ‘individual to collective’, from ‘giving orders to dialogue’, aimed at more involvement of employees and using their knowledge and experience. This shift is also influenced by the so called ‘New Working’ as result of IT developments and by another way of giving priorities to the ‘work-life’ balance of employees.

What we on a macro level actually see is that the traditional, hierarchic way of management does not work anymore; the old ‘Taylor’ principles are slowly disappearing from our (management) systems.

Research (2009) shows that ‘strength based leadership’ is applied more and more. This management style is focused on finding and stimulating the strong points of both the manager and their employees and then making sure that people are put in the right positions, according to their competences. This approach increases employee’s self-esteem, pleasure, motivation, their sense of belonging and their productivity.

As Marcus Buckingham puts it, after research under 88.000 managers, rules and procedures hinder development of positive characteristics like originality, initiative, creativity, and productivity of employees.

The question here is not if we need procedures, the question is how management applies procedures and rules. Of course every organisation needs procedures, this may sound logic, but…how do you apply the rules and procedures in your company? Are all these rules and procedures really necessary? Do they contribute to and support the goals of your organisation? Or do they hinder and block your company’s success? In practice this is usually the case!

How much does controlling and updating all these procedures cost your company? How big are the risks if you would get rid of say 40% of your procedures? What would happen? I dare to say nothing bad! There are enough examples of companies who successfully managed to skip and reduce the bureaucracy in their organisation.

If you manage and treat your employees well, based on mutual trust and open communication, you can easily skip at least 40% of your procedures and rules.

Management could create a positive culture in their organisation, would not feel the need to disregard their own rules themselves and, on top, management does not need to pay for an expensive administrative controlling system. They will find more time to focus on their real management tasks and manage people and processes, to create a more successful company with more motivated employees.

Efficient and happy employees

Strength is actually not a characteristic but a management activity that provides energy and makes someone feel stronger. Unfortunately the focus on weak points is a strong cultural artefact that we are learning since our earliest school experiences. An example: ‘Coming home with a report with all rates being eights and only one four; what happens? The talking is only about this four, this is what you have to improve, to work on. And what is the effect on the schoolchild with that excellent report?

It means that its proud feeling is devastated. Then these experiences continue similar in further school and working life. And from psychology we know for so many years now that focusing on improving weak areas is a waste of human capital as well as of real money. Managers focussing on areas where someone might be able to improve enlarge a problem unnecessarily and hinder employee development. Managers should focus on individual talents instead of a general ‘command and control’ style, employees should do where they are good at and managers should support and coach them in this.

How could managers cope with this shift in thinking and behaving?

We use words to literally create the world in which we live, and successful managers are very careful about the words and images that describe their world. Instead of "problems," they talk about "challenges" or "opportunities," or simply "surprises." Not as a trick but as an authentic management style. Based on research we know that metaphors that empower us lead to action. When we use words that suggest opportunity, possibility or potential, we feel good about ourselves and our lives. But when we use metaphors that suggest our very survival may be at stake, we tend to "keep our heads down" and be fearful.

An important element to take into account regarding trust is that people have a very good sense of what is right or wrong! Do not fool yourself, they do know! Just listen when they are with friends, talking in their families. Let me shortly explain four principles of ‘rightness perceptions’.

Distributive rightness:

Employees compare themselves with colleagues (internal or external) to judge if a certain procedure is right. ‘(s)he earns more than me is ok because (s)he has more experience’.

Procedure rightness:

Here it is not about the result but about the question if procedures are applied correctly. ‘Everyone had the opportunity to say what (s)he wanted to say’ and ‘my manager does apply the same procedures to everyone’.

Informational rightness:

Employees expect to receive honest information in time and as much information as their colleagues receive, especially when it is about their own work and position.

Interpersonal rightness:

Employees expect to receive the same respect from their manager as they give to them.

What is transformational leadership?

The manager is the leader, the role model, thus management behaviour gets copied. This requires from the manager to show integrity, coaching, inviting employees to discuss about your decisions, making use of their knowledge and experience, to connect your employees to your vision, and by doing so create a positive team spirit.

Transformational leadership is about the person the leader is himself. Not being a walking toolkit with a set of tricks but understanding the managing principles so well that you can create your own, your personal tools.

Transformational leadership is the competence to realise and acknowledge that you do not know everything, that you are capable to trust your people who have the knowledge that you do not poses.

Or, shortly put, being capable to surround yourself with people who - all together - know more than you do and, by managing this knowledge and business process, make your business grow.

I am very curious how management will adjust bureaucracy in their companies and get prepared for the market(ing) challenges the EU accession will require.

John Lodder,
www.balance-consultancy.com