It's time to reinvent management. You can help.

FreshMIX

daily dispatches from the management vanguard
gary-hamel's picture

The Hidden Costs of Overbearing Bosses

At one time or another, most of us have probably worked for a boss who was self-absorbed, vindictive, or just plain inept — a real-life equivalent to Dunder Mifflin’s Michael Scott. One of my first jobs was for an HR manager who thought the best way to humble a cocky new MBA was to have him spend hours sorting files into alphabetical order. Needless to say, he didn’t get the best out of me or anyone else that worked for him.

During the recession, companies around the world have cut costs in all the usual ways—by reducing headcount, slashing capital budgets, and trimming overheads. All these measures are vital. But in their quest to root out inefficiencies, companies should also be focusing on the hidden but substantial costs of supercilious and overbearing bosses.

A global survey of 90,000 employees by Towers Perrin, conducted in 2008, revealed that only 21% of employees are highly engaged in their work. The other 79% may be physically on the job, but they’ve left their enthusiasm and ingenuity at home. This is a scandalous waste of human capability. It’s also a virtually bottomless reservoir of creative potential that has yet to be tapped.

The fact that so many workers in so many parts of the world are simply going through the motions suggests that the roots of employee alienation are deep and systemic. While in some cases the culprit may be the work itself, (who wants to spend eight hours restocking supermarket shelves?), this explanation is manifestly inadequate. If a grocery retailer like Wegmans food markets can rank alongside a Genentech as one of America’s best place to work, the monotonous rhythms of a hum-drum job can’t be the whole story.

The real damper on employee engagement is the soggy, cold blanket of centralized authority. In most companies, power cascades downwards from the CEO. Not only are employees disenfranchised from most policy decisions, they lack even the power to rebel against egocentric and tyrannical supervisors. When bedeviled by a boss who thwarts initiative, smothers creativity and extinguishes passion, most employees have but two options: suffer in silence or quit.

In a well-functioning democracy, citizens have the option of voting their political masters out of office. Not so in most companies. Nevertheless, organizations here and there have taken steps to make leaders more accountable to the led. HCL Technologies, a progressive Indian IT services company, encourages employees to rate their bosses, and then puts those ratings up online for all to see. Bullies and bunglers have no place to hide. And W.L. Gore, the Delaware-based maker of Gore-Tex and 1,000 other products, lets its highly decentralized teams appoint their own leaders. These are interesting aberrations from the norm, but in most organizations, power is still allocated top-down.

Dispirited and poorly led employees are only one of the baleful side-effects of Politburo power structures. Here are a few others:

When big leaders appoint little leaders, they often do so in their own image. This reduces intellectual diversity and promotes sycophancy. The danger: a collective myopia that desensitizes organizations to orthogonal threats and blinds them to new opportunities.

When authority is vested from above, the only way for a manager to retain her privileges and prerogatives is to please her political patrons. Consequently, mid-level bureaucrats often spend a disproportionate amount of time managing upwards—working slavishly to burnish the egos and divine the intentions of those they work for. In most cases, this energy would be better spent attending to the needs of those on the frontlines—the folks who actually create value for the firm’s customers.

In traditional power settings, key decisions have to be approved by one’s superiors, but merely explained to one’s subordinates. This reality often tempts managers to ignore the disquieting views of direct reports, and to content themselves with compliance when they should be seeking genuine commitment. The result: employees who can no longer be bothered to bring troublesome truths to light and are unlikely to go the extra mile.

In an ideal world, an individual’s institutional power would be correlated perfectly with his or her value-added. In practice, this is seldom the case. Given the reputational costs incurred when a senior executive is forced to remove a hand-picked associate from a key job, corporate leaders are often slow to reassign power, even in the face of widespread doubt about an individual’s competence. As a result, there is often a significant lag between declining managerial effectiveness and the reallocation of positional power. These lags are most likely to occur in the upper reaches of management—where the political stakes are highest, and it is here where they exert the greatest drag on organizational performance.

Too little diversity and too much sucking up. Not enough commitment and too many misalignments between power and capability. In highlighting these defects of top-down power structures, my aim is not to challenge the notion of hierarchy, but rather to question the usual means by which power is allocated within hierarchies.

Readers, what do you think of the trickle-down power structures found in most organizations today? Are they a problem? If so, why?

And can you imagine any alternatives to this taken-for-granted feature of organizational life? What’s your work-around?

Note: This post was originally published as a Management 2.0 column in The Wall Street Journal in April 2009.

You need to register in order to submit a comment.

tamara-parris's picture
I think you all have brought to the table interesting insights.
 
 I agree the there is a Us verse Them concept when working in a company.
 
 I have been a subordinate in several companies where senior managers or even immediate managers view that sharing  information with sub-employees will some how disassemble the ability to achieve business goals and objectives.
 
I agree we need to identify the STAR personality types, however I also believe businesses would find more variety of STARS and knowledge / creative wealth by developing think tank opportunities so subordinates could work along side senior management and be involved in various brain storming and strategic development.
 
This would help employees at all levels become engaged in the development of the companies business goals, encourage all members of the team to have purpose and some ownership, thus a reason to buy into the business goals and directions.
 
Perhaps then it would encourage more people to want to achieve a collective goal.
 
 I believe it would enhance the process of achieving the senior levels business goals and strategies if all employees could feel they contributed to the development of the  companies successes.
 
 This would also help leaders identify future leaders and help with succession planing. Also the subordinate employees would be able to develop mentor-ship relations and start to see how they could progress to a different position in the company.
 
Current methodology leaves subordinates feeling that both the company AND Senior Management do not care about them, so why would they want to be bothered helping you out!
 
 They think Senior Management views themselves as being smarter, bigger and better then the subordinate employee.
 
In a nut shell -  they mostly say screw you all!
 
Trust me when I tell you, your well thought out ideas usually ends up in either the physical trash can, or the emotional trash can.
 
 Senior management might want to work on the idea of how to change that group dynamic and concept.
 
I am Tamara Parris, an ADR Coach and Workplace Researcher.
 
I have a report on this if you are interested, please feel free to connect with me:    tamara@businessgenie.ca
 
 
Business Genie helps businesses save money, avoid legal costs and increase productivity.

I think you all have brought to the table interesting insights.

 I agree the there is a Us verse Them concept when working in a company.
 I have been a subordinate in several companies where senior managers or even immediate managers have viewed sharing information with sub-employees will some how disassemble the ability to achieve business goals and objectives.
 
 - very odd outlook to me, because I am pretty sure the world will not crumble! BUT it might get employees to buy in if they did share!
 
 Let us break this down more - ok - :)
I agree we need to identify the STAR personality types, however I also believe businesses would find more variety of STARS and knowledge / creative wealth by developing think tank opportunities so subordinates could work along side senior management and be involved in various brain storming and strategic development.
This would help employees at all levels become engaged in the development of the companies business goals, encourage all members of the team to have purpose and some ownership, thus a reason to buy into the business goals and directions. Then we could all be saying LETs GO TEAM!!!
Perhaps then it would encourage more people to want to achieve a collective goal.
 I believe it would enhance the process of achieving the senior levels business goals and strategies if all employees could feel they contributed to the development of the companies successes.
 This would also help leaders identify future leaders and help with succession planing. Also the subordinate employees would be able to develop mentor-ship relations and start to see how they could progress to a different position in the company.
Current methodology leaves subordinates feeling that both the company AND Senior Management do not care about them, so why would they want to be bothered helping you out!
 They think Senior Management views themselves as being smarter, bigger and better then the subordinate employee.
In a nut shell -  sub-ordinates mostly say screw you all!
Trust me when I tell you, your well thought out ideas usually ends up in either the physical trash can, or the emotional trash can.
 Senior management might want to work on the idea of how to change that group dynamic and concept.
I am Tamara Parris, an ADR Coach and Workplace Researcher.
I have a report on this if you are interested, please feel free to connect with me:  
 
Business Genie helps businesses save money, avoid legal costs and increase productivity.
mitch-mccrimmon's picture
I totally agree with Gary's statement: "The real damper on employee engagement is the soggy, cold blanket of centralized authority. In most companies, power cascades downwards from the CEO."

I have a slightly different, but complementary, take on the root causes of employee engagement. I think that all organizations are infected with the metaphor of the "organization-as-person" which means that the "head" (management) does the thinking and the "hands" (employees) are just there to execute. In any hierarchy, people rise to the top by scoring goals, promoting their solutions. Managers play to their greatest strength - their analytical ability. They like to do their own thinking, not ask employees what they think.

Individualistic cultures like the US, Canada, Australia and the UK have a heroic mindset. Sports metaphors are popular because executives like to score goals by promoting their own great solutions. Defining leadership as being visionary reinforces this top down flow of thinking. I'm not sure that the recipe is democracy because those at the top need to serve the owners of the business, not the "citizens" (employees).

However, I think that managers can be encouraged to do a lot more asking: "What do you think?" and a lot less telling and selling. See my two articles on these themes: "Creating an Engaging Culture" - http://www.lead2xl.com/creating-an-engaging-culture and "A Hero at Work" - http://www.lead2xl.com/a-hero-at-work

simon-galbraith's picture
As someone who runs a ~200 person organisation these issues are something we wrestle with a lot.

However you are confusing two very distinct problems and talking about them as if they were the same thing. You are confusing managers using the wrong management style for needs of the employee and organisations that hobble themselves with a disfunctional culture.

When you complain about feeling demeaned by your first boss in my view you are complaining about her using the wrong approach with you. You were being directed when you needed to be coached. This stuck in your craw because you needed to be sold a dream and coached on how to get there but that in itself says nothing about the culture of the organisation. Incidentally, there are times when a good boss is directive - for example when instructing an employee who is unfamiliar what to do and what good looks like. That isn't about top down or bottom up it is about applying the right management style for the situation you are in at that moment in time.

There has to be a tension between the organisation and the individuals in it - organisations are so named because they have structure - this has to deny people some independence. To be greater than the sum of our parts we have to organise peoples' contribution, focussing only on individual taken to extremes destroys the organisation. Malcolm Gladwell critiqued your work on Enron partly by saying you ignored the costs of focussing on the (star) individuals at the expense of the whole, I think you make that same mistake in this article.

Our approach is to state some fairly inviolable values which we publish in a special book and to have a bunch of tactics that are size and situation dependent. The values include: "We base decisions on the available evidence", "Visible mistakes are a sign of health" ,"Do the right thing for our customers" and "Do the best work of your life". We try to look at our actions and see if they embody our values and people have permission to question whether we are actually living by them. A couple of our tactics include: A decisions taken forum where we announce the decisions we've taken (and occassionally reverse). A situational approach to management in which we try to be mindful of getting the management approach aligned with the needs of the employee.

Thanks for the thought provoking article.