The Cost of Poor Management

I recently engaged in a conversation on Linkedin on the subject of "The Cost of Poor Management." The initiator of the conversation referenced a survey published in HC Online titled "Poor management responsible for negative impact on productivity." In summary, the article said:

"Workers believe the number one factor that negatively impacts employee productivity is poor management, according to the a survey conducted by the Society for Human Resource Management (SHRM). The survey of 478 HR professionals and 613 employees found that the factors which negatively impacted upon productivity at work included: poor management (58 per cent); lack of motivation (38 per cent); organisational changes (26 per cent); a lack of defined goals in the job (24 per cent); readiness to leave the organisation (16 per cent); a lack of accountability in the job."

This was my contribution:

Dr. W. Edwards Deming had a lot to say about the state of American management, and it seems that we have not learned a great deal since he was alive. In his classic "Out of the Crisis" (1982), he commented:

"Part of America's industrial problems is the aim of its corporate managers. Most American executives think they are in the business to make money, rather than products or service...The Japanese corporate credo, on the other hand, is that a company should become the world's most efficient provider of whatever product and service it offers. Once it becomes the world leader and continues to offer good products, profits follow." (pg. 99)

Apart from Dr. Deming's considerable work on this subject, I recommend three contemporary books for some great insight:

1. "How the Mighty Fall" by Jim Collins
2. "Why Smart Executives Fail" by Sydney Finkelstein
3. "Crazy Bosses" by Stanley Bing (for a little comic relief)

My personal opinion is that corporate America, with some notable exceptions, has lost its moral compass. Executives are rewarded whether they succeed or fail (to wit, the fiasco of October 2008). Why are some of the investment bankers not in jail for the fraud and damage that they have perpetrated on the world? There is no accountability, and Washington allows these shenanigans to carry on unabated.

I am not part of the "Occupy Wall Street" crowd, and I do feel that the capitalist system provides the best chance for the most people to participate in the wealth that western countries provide, but I do sympathize with some of the protesters' concerns. People need to be treated with respect, not threatened and bullied by senior management. Executives need to have a long-term view of the health of their organizations rather than become enslaved to next week's share prices. I have seem company after company lose good - nay, great - people to burn-out, disgust, and inability to make a contribution. I have seen executives bring companies to their knees by their own hubris, walk away with millions in severance in their pockets, leaving hundreds of workers devastated by their curious decisions. We cannot continue on this path,

We, in this forum and others, have dedicated ourselves to finding professional enlightenment. If we find ourselves in a position of power, we need, I believe, to be strong evangelists for ethical and forward-thinking business practices. We need to build this culture in our own teams, and export it to others. We need, I believe, to recognize the values of ethics, respect, and fair treatment as Best Practices. We know what these practices are. We simply have to live them, every day.