James Lewis (in SixSigmaIQ.com)
In the past several years, we have seen so many corporations implode, explode or whatever, that it is easy to accept what Peter Drucker is credited with saying: The first myth of management is that it exists. (It is not clear whether Drucker actually said this, but he did make similar statements that are on record.) It is not just the Enron debacle that has been in the spotlight, but the mess the mortgage lending institutions have gotten into has drawn our attention to the sorry state that many large institutions have gotten into. On top of that, the huge compensation accorded the executives of these poorly performing companies has sparked outrage, causing people to ask how such fees can be paid when the organization is performing so badly.
The Law of Requisite Variety
Before presenting this law, it is important to realize that an organization is a system of people, capital resources and various processes. Another term sometimes used is socio-technical systems, the combination of social and technical systems. So, given this definition, we can say that the laws and principles of systems must govern organizations. One of those laws is called the Law of Requisite Variety, and this law states:
In any system of humans or machines, the element in the system with the greatest variability in its behavior will control the entire system.
Now it seems clear that what a manager is expected to do is to control teams, departments and overall organizations in the sense of ensuring that these units achieve their performance goals. It follows, then, that the Law of Requisite Variety is saying that for this to be possible, a manager must have enough flexibility in her own behavior to match or exceed the variations in behavior of all components of the system over which she is supposed to be in control. It is easy to see that the total variability of large socio-technical systems immediately rules out the possibility of an individual manager actually being able to control them because he cannot possibly match the variations in behavior of the system components.
For that reason, organizations are divided into teams, departments, divisions and so on, the idea being that each of these units will be managed (controlled) by a manager who should be able to match the variability in behavior of the unit itself. However, most managers quickly realize that if there are more than a few members of the unit, their collective behavioral variability exceeds their ability to respond. The net result, then, is that even the unit manager is unable to control the behavior of her unit.
Since being unable to control is unacceptable, the manager has two options. One is to increase his flexibility, so that he can match the variation of the unit (sub-system). The second option is to reduce the variability of the subsystem itself.
How Flexible Are You as a Manager?
Let’s look at the first option. Ask yourself, how flexible am I? When I have asked people in my seminars whether they believe themselves to be flexible, most say that they are. Then I ask how many of them who have children would agree that their children know how to push all of their “hot” buttons, and they immediately begin laughing. They realize that the only way their children could do this is that they (the parents) are actually programmed to respond in certain ways to certain stimuli. In fact, it is called stimulus-response conditioning, and the fact is that we are all programmed to respond to various stimuli in prescribed ways. How this comes about is very complex and would require far more space than I want to devote in this paper, but suffice it to say that it begins in childhood, when our response repertoire was limited, and it continues throughout our lives. And as we grow, we may develop multiple responses to certain stimuli, while for others, we may only have a single response.
To illustrate this, you sometimes hear a manager say, “I’ve tried everything I can think of to get him to perform, and nothing works! I don’t know what to do.” In other words, this manager has exhausted his response repertoire to the stimuli, which in this case is the unacceptable performance of one of her direct reports.
Now this points out a very important issue for managers. We are always being confronted by new and novel situations, which require responses different than those we have already learned, so the key to being effective is to be continually learning new ways to deal with the situations you encounter. For that reason, lifelong learning is vital. (Of course, this is true for all of us—not just those who are managers.)
Reducing Variability Through Prohibitions
Even when we try to increase our flexibility, there are limits. Therefore, the second option may be necessary, and that is to reduce the variation in the system behavior itself. This is, in fact, the primary approach taken by many managers, and there is nothing wrong with it. The mistake that many make is that they try to reduce variation in the wrong way. The method of choice is what I call “thou shalt not.” That is, managers impose strict boundaries on what employees are allowed to do. Their spending authority is limited. Their decision-making autonomy is limited. They are told to “check with me before you do that.” In this way, the manager tries to maintain control.
Unfortunately, if this is carried too far, you have the micro-manager, and in the extreme case, the micro-manager is almost supervising 100 percent, which means that either the manager or the employee is redundant!
The essence of these restrictions is called the policy and procedure manual, which almost all corporations have. The sad truth is that these documents serve only to limit the ability of employees to actually perform effectively, and they do not achieve the intended result.
Reducing Variability the Right Way Through Empowerment
The correct way to reduce variability in behavior is to apply management principles to everything that is done by every employee. This was called empowerment a few decades back, but it was so incorrectly applied that it soon got a bad name and was abandoned. However, it was not that the idea was wrong, but that it was misunderstood.
One of the most famous remarks made about empowerment was said by Frank Borman, the astronaut, who tried to run Eastern Airlines. Frank is reported to have said, “I’m not going to let the monkeys run the airline.” There are two notable parts to this remark. One is that you can’t view your employees in such a derogatory way and expect to have them give you high performance. Secondly, nobody should have expected that the lowest-level employee was going to run the airline. This is a common misconception about empowerment—that there would be no limits on what employees were allowed to do.
What empowerment should convey is that at the employee’s level, she is given the authority and autonomy to make decisions about her job without having to seek permission from her manager. However, there are a number of problems that immediately surface. Does this mean that every single employee would have the same degree of autonomy? That is, do you allow the entry-level person to have the same autonomy that is given to a person with several years experience?
No!
The autonomy given to each person is commensurate with his experience, the training he has received, and his demonstrated willingness and ability to handle that autonomy! If empowerment is understood in this way, then it can work.
You Actually Have No Choice: Empowerment of Employees is Necessary
Let’s revisit the Law of Requisite Variety for a moment to see why empowerment is actually not an option but a necessity, if you want to have an organization that is in control. Another way to state the law is to say that, if any element in a system goes out of control, it will cause the entire system to go out of control. This is easy to understand if you use your automobile as an example.
Let’s say that one of your tires is punctured, and you have a flat. The car is brought to a stop because that one component has malfunctioned. The same is true of any component—if the fuel pump fails, the car stops. The conclusion is that every person in the organization must be in control of his own performance for the entire organization to be in control. This cannot be achieved through micro-managing. Nor can it be achieved through thou-shalt-not restrictions. It can only be achieved when every employee is empowered, in the manner that I will prescribe in the next section of this column.
The Correct Approach to Empowerment of Your Employees
For an employee to be empowered properly, the following procedure must be employed:
1. The individual must have a clear understanding of what he is supposed to do with the purpose stated. It is not enough to say, “Here’s what you are to do.” You must explain why it is supposed to be done, or else you are only employing the person’s hands and not her head. Doing this means that one of the subsequent steps becomes impossible.
Let me give an example. A fellow once told me that a friend was helping him do some yard work around his house. A small tree in his yard had limbs protruding onto his sidewalk, and he told his friend to trim the limbs off his tree to a certain height above the ground. However, he did not specify what he was trying to accomplish, so a while later, when he checked to see how his friend was doing, he found that the guy had cut all of the limbs of the top of the tree off so that the height of the tree was what had been specified. Had he said why he wanted the limbs trimmed, his friend would have known that he wanted the limbs trimmed from the trunk of the tree, rather than the top.
Now you may say that he could have specified trimming limbs from the trunk, and this is true, and it would have conveyed the purpose of the activity at the same time. It only takes a few seconds to explain why something is being done, and the attitude of managers who say employees don’t need to know why things should be done is very misguided at best and elitist at worst.
2. The second thing the employee must have is a plan for how to do her work. The reason for this arises from the definition of control, which is:
Control is exercised by comparing where you are to where you are supposed to be, then taking corrective action to get back on track when a deviation from the target exists.
There are three components in this definition that need to be in place. First, you can only know where you are supposed to be if you have a plan. Secondly, you can only know where you actually are if you have information on your progress. An analogy is that the plan is a roadmap and signs along the highway tell you where you actually are. Finally, you must take action to correct for deviations from your plan. If you are driving and are supposed to be on Interstate 40 and you see a sign saying you’re on highway 63, then something is wrong, and you are not controlling if you say, “Well, it’s a nice road, so we’ll just keep on going.” You have no idea where highway 63 is taking you. Rather, you check your map, determine how you must have gotten onto highway 63, and you take steps to get back on the right road.
The most important point to remember here is that, if you have no plan, control is impossible, because you have no way of knowing where you are supposed to be at any given time! This means that plans are mandatory, not optional, if you want to have control of any endeavor.
3. The individual must have the skills and resources to perform the job at the required level. Here is where a major mistake was made in the previous attempts to empower employees. They were given jobs to do without being given the training to develop their skills, and the result was failure. We see this frequently when individuals who do good work are promoted to supervisory positions, without then being given any training in supervision. There seems to be a tacit assumption that if a person can do good work, they can supervise others. This is where the Peter Principle is misstated. The Peter Principle says that people rise to their level of incompetence. That is seldom what happens. The skills needed to be an effective supervisor are very different than those required to do the person’s former work. So you have promoted the person into a job for which he has no skills, but given training, the person may be completely competent to do the supervisory job.
4. The individual must have feedback on how he is performing. Remember that the definition of control said you check progress and take corrective action if there is a deviation from planned performance? OK, then the person must have some way of knowing how she is doing. Otherwise she does not know whether she should be taking corrective action or not.
5. The person must also have a clear definition of his authority to take corrective action when it is necessary, and that authority cannot be zero, or the person is not in control, someone else is. This is another mistake that was made in empowering people. They were either given no authority to deal with deviations or they were given carte blanche, neither of which is correct. You may express authority boundaries by saying, “So long as you are within ±10 percent of your target, do whatever you need to stay on track, but if you deviate more than 10 percent, then you need to consult with your manager to decide what must be done.
The Net Result of This Empowerment Practice
If this approach is followed, you have accomplished exactly what you intended to achieve and you will have dealt with the Law of Requisite Variety correctly. You will have reduced variability in the performance of all employees, because each will have clear guidelines on what is expected, measures of actual performance, proper skills and resources needed to perform, feedback on results, and the autonomy to deal with deviations in the proper manner.
One of the other factors of the thou-shalt-not approach to reducing variation is that it stifles creativity, reduces motivation and creates employee attitudes that result in just “doing what I’m told,” rather than taking initiative. Peter Drucker once wrote that a manger must get employees to perform above minimally acceptable levels, because that level is survival level, and an organization must do more than simply survive—it must thrive. So we can’t afford to destroy initiative through unsound practices.
Finally, what is being advocated here requires a number of changes to the way that many organizations are managed. Mushroom management—the practice of keeping employees in the dark, feeding them crap and cutting them off at the knees to can them—must be abandoned. Rather, they must be kept informed. In addition, the rigid command-and-control model once advocated by the military (and which even they have realized is flawed) has no place in today’s organization. Remember—it’s really all about people. In the end analysis, your capital makes you no money. It is the people who deal with the capital who generate your revenues, but they can only do this if the proper conditions exist.
Control is possible—when it is handled correctly.
About James Lewis
James P. Lewis, Ph.D., CIC, is an experienced project manager, who teaches seminars on the subject throughout the world. His solid, no-nonsense approach is largely the result of the 15 years he spent in industry, working as an Electrical Engineer who was engaged in the design and development of communication equipment. He held various positions, including Project Manager, Product Engineering Manager and Chief Engineer for Aerotron, Inc. and ITT Telecommunications, both of Raleigh, NC. Lewis was also a Quality Manager for ITT Telecom, managing a department of 63 quality engineers, line inspectors and test technicians.
Since 1980, Lewis has trained over 35,000 project managers. He is the author of 12 books on project management. He has a B.S. in electrical engineering and a Ph.D. in psychology, both from NC State University in Raleigh. Lewis is a member of the Project Management Institute, and he is also a certified Herrmann Brain Dominance Instrument practitioner and a Certified Integral Coach®.
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