Our friends at Revitalization Partners help professionals make better business decisions. Here is a blog from their newsletter about the curse of micromanagement on small- to mid-sized businesses. At Juniper Capital, we are committed to sharing business advice that helps you achieve and maintain success. We specialize in real estate investments with private money loans in Washington and the greater Pacific Northwest. Share your thoughts on this blog, so we can continue to provide you with quality information:
Micromanagement is a curse in the world of business. Why? Because it destroys the trust and morale that every business needs to thrive.
If you look up micromanagement in Wikipedia, you will find the word “symptoms” in the table of contents. Symptoms are concepts used with diseases and illnesses. Cancer and diarrhea have symptoms. Like cancer, micromanagement kills! It kills enthusiasm and team spirit and cohesiveness. It kills confidence. And most of all, it kills trust.
These are essential elements to a successful business. Without them, you have disengaged employees, high turnover, and an inability to recruit and hire the best people.
So what exactly is micromanagement? When a manager closely observes and controls his or her employee’s actions, rather than simply supervising large issues and giving employees freedom of appropriate decision making. A micromanager oversees each step and assesses every action; needing to approve every decision personally.
Most employees working for a micromanager assume that person is just an arrogant jerk. That may be true in large companies where the vertical depth of management allows such managers to function. But our experience with smaller, privately held companies has shown us just the opposite.
As a restructuring firm, Revitalization Partners is most often contacted when a company is in trouble. But since most owners and senior managers of companies are convinced that most problems can be addressed by them, generally some crisis or trigger has occurred, causing the call for assistance. In the case of small to mid-market companies, it is a bank seeking to exit a loan, an investor unhappy with performance or losses that are beginning to overwhelm the company.
We often find a component of micromanagement within the company. But rather than simply being a symptom of arrogance, we find that it is more often a symptom of deep fear.
Consider that if the company doesn’t find a new bank or other funding, years of work may be lost. In most cases the owner(s) of a mid-sized company has personal guarantees with lenders. They stand to lose everything, including the company.
How do most entrepreneurs and senior managers react to that kind of fear? Some with paralysis and a refusal to change anything. After all, what they are doing worked before and the belief is that it will work again. And who knows what the results of change will be? It might make things worse.
Others, the majority, react with control. “I built this company; I know everything about how it should work. It’s my a** on the line. My employees don’t care the way that I do.” And the entrepreneurial tendency to want to be in control becomes overwhelming.
What we know is that, in a company of any reasonable size, no one person can know everything, every day. The hardest part of a restructuring assignment in such a company is convincing the senior manager or owner that their behavior is becoming a major cause of the very thing they fear the most.
Employees know when a company has problems. In most cases they are committed to their jobs and the company and want to do everything possible to help. But micromanaging behavior causes employee disengagement. They come to believe they are not trusted and their ideas are not valued. They become apathetic and are no longer emotionally invested in the company or the management.
Apathy can spread like a virus among employees. They begin to shut down and not offer suggestions and more importantly; solutions. Because they are disengaged, they no longer want to make investments like working longer for an important project.
Since micromanagers tend to want to punish every mistake, the climate of fear spreads to employees and they begin hiding errors and blaming others. This leads to avoidance of risk and declining productivity. The downward spiral tightens.
So, what can you do? First, be willing to admit the problem. Second, get help to change your own behavior. And, third, admit the problem to key employees and ask for their help in getting re-engaged and taking responsibility. Remember, they really do have an emotional attachment to the success of the company. And, in general, we all understand that fear cannot be the driver of a successful company.
Revitalization Partners is a Pacific Northwest business advisory and restructuring management firm with a track record of achieving the best possible outcomes for their clients. They specialize in improving the operational and financial results of companies and providing hands-on expertise, with a focus on small and mid-market organizations. Contact Revitalization Partners for the best resolution in the fastest time with the highest possible return.
Revitalization Partners… when a company is worth saving.