How to balance empowerment and control?

Business guru Tom Peters quotes Alfred Sloan, former GM CEO, saying that management is “steering back and forth between: a) Centralizing the hell out of things, which saps creativity, and b) De-centralizing the hell out of things, which encourages reckless risk taking.”

Control, policies and procedures, approval levels and processes, are really just an attempt at risk management. Each one represents organizational scar tissue, a past injury, and a best-efforts attempt to prevent repetition. All well and good until they accumulate, create gridlock and stifle creativity and speedy, nimble responsiveness.

No magic answers, just five guiding thoughts:

1) NO system of control can anticipate everything that could go wrong so always teach BOTH overriding principles and guidance of specific practices. Principles are simple, application is complex.

2) Periodically weed out policies that are out dated or no longer relevant. The purpose of every policy should be clearly stated; conduct frequent cost/benefit reviews? Is the intended benefit being achieved? Is it worth the cost (often a hidden opportunity cost)? Is there a better way?

3) Encourage “I Intended To” (IIT), a form of communication especially useful at the edge of one’s authority that allows one to act (usually with 24-hour notice) while still allowing oversight/feedback. “Immediate I Have” is an accelerated form.

4) Do not bottle neck the many for the few, assume good intent, don’t allow your policies to “major in minor things.” The greatest of all risks is to attempt to avoid all risk.

5) Strongly differentiate between Red Rules and Blue Rules i.e. “Thou shalt not kill”(Red!) & “65 MPH Speed Limit” (Blue). In the law, these are labeled Malum Per Se (Wrong because it is evil) and Malum Prohibitum (Wrong because it is prohibited).

Closing Quotes:

“Rules are for the guidance of the wise and the blind obedience of fools.” – Proverb

“There is a war on…between people who are trying to do something and the people who are trying to keep them from doing something wrong.” – Bill Creech, 4-star general (ret.), US Air Force Tactical Command

As always, I share what I most want and need to learn. – Nathan S. Collier