Micromanagement and How To Correct It

Micromanagement is best defined as a pattern of over-involvement in operational details. It means needlessly slowing down the pace of progress, growth or improvement without adding any value. That is, the added oversight or approval step consistently fails to result in 1) avoidance of a mistake, 2) an improved strategy or action plan, 3) better execution, or 4) a better outcome. Thus, the cost of the delay in making a decision is not off-set by any gain.

Ultimately, it is a lack of trust of one party in another to make sound decisions or effectively execute.

The impact of micromanagement is that it tends to suppress the potential contribution of the person being managed. The effect is less motivation, less innovation, loss of confidence and waste of time. Over time, this leads to good people leaving or in some cases just living with it, but under-performing what they could potentially contribute to the organization. The impact of micromanagement changes the organizational culture to one in which mistakes are punished. Such a culture results in an organization that doesn’t make needed changes, doesn’t innovate, under-performs and, in some cases, fails.

Micromanagement can occur relative to any given decision because of the circumstances that surround that particular decision; e.g. the cost of a mistake, the players involved, political sensitivities, etc. In my view, micromanagement does not exist as a problem unless there is a clear pattern of occurrence no matter the circumstance; in short, it is a symptom of a disorder in need of correction. Therefore, a single or even several instances of unwarranted oversight can arise from circumstances without a pattern or true problem of micromanagement existing.

Micromanagement can occur at all levels: supervisor to subordinate, middle manager to supervisor, CEO to middle manager, board to its committees or board to CEO. In this article, we will focus on the board-CEO relationship only, however many of the theories and remedies can be applied to all situations

Why is this important?

If there is one trend that all organizations face, it is that competition grows more intense as the pace of change accelerates. This is true in both the non-profit and for-profit sectors.

Market advantages are momentary, deals must be closed or they migrate to a new buyer/partner, delays mean increased costs, and the inability to act erodes confidence both inside and outside the business.

If you simply look at the definition of micromanagement, it is by its nature wasteful, i.e. it adds cost without adding value.

Good CEOs and management teams want to move quickly. Undue delays frustrate their progress toward goals (and usually personal bonuses), result in discontent and ultimately turnover in management. Lastly, a board that sets high performance targets for management and then prevents them from getting there is viewed as unfair at best.

At the board level relative to its committees, if the work of committees is always questioned and re-done by the full board, committees lose commitment and cease doing their work, adding cost to each decision.

Add these together, and you have a significant problem.

Asking the CEO is Not the Answer

Ask the vast majority of CEO’s and they will tell you that their board is a net drain on their time and that most boards micromanage. A good CEO has a plan, has confidence in herself and her team, is entrepreneurial and impatient to move when conditions are viewed as ripe for change. Stopping to get board approval is a needless delay from the CEO’s perspective. Good CEO’s simply say, “just tell me where you want me to go and watch me take you there”.

It is only the most talented boards and the wisest CEO’s that combine to utilize the board-management relationship in a way that consistently adds value to management.

Most boards are in a fiduciary role of merely preventing harm from being done. They don’t have the expertise, knowledge of the business or commitment of time to truly improve upon the decisions of management. Instead, it is their role is to slow the train to be sure it does not run off the tracks. Before proceeding, a decision is reviewed and, if no potential harm is detected, the “proceed” command is given. If the organization is about to run off the tracks by proceeding with management’s plan, then that board is adding value by calling a halt. If it is not, then the board is a net cost to the organization, i.e. needlessly delaying progress.

In defense of this fiduciary role, recent corporate history is replete with stories of board’s failing to provide adequate oversight and riding the agenda of the CEO too long. Finding the right balance between micromanagement and irresponsible trust in management is the challenge for all boards.

In sum, asking the CEO whether micromanagement exists will not tell us much; they will almost always answer yes. This can’t be our test of the existence of micromanagement, so how does one know?

Diagnosing Micromanagement

The following are offered as conditions which, if extant, often lead to micromanagement. If these conditions exist in your organization, then you should dialogue with your CEO as to whether micromanagement is indeed a problem, and what the solution might be:

• The CEO has never established or has lost the trust of the board as a result of past self-evident errors in judgment
• Performance of the organization is in decline
• Morale is eroding, and employees are frequently approaching board members with issues
• The board repeatedly tables decisions and requests additional information
• A single board member consistently criticizes the CEO or tries to supplant CEO judgment/expertise with his/her own
• Directors are running for the board on a platform of “getting management back under control”
• Management has grown sloppy re. both content and timing of board packets
• The CEO is increasingly unwilling to take time to discuss issues with directors between meetings
• CEO does not want members of the management team attending board meetings
• CEO is pushing for an expansion of authority to make decisions independent of board oversight
• There has just been a turnover in the CEO position following termination of a CEO for failure to perform
• The board insists on controlling details (e.g. hiring, purchases, sites for meetings, vendors), while ignoring control of the big picture (e.g. strategy, asset use, board policy, performance indicators).

I recommend that, at the conclusion of each meeting, directors and CEO be asked by the chair to speak on how the meeting could have been improved. If several members mention the symptoms above in their comments, then it is time for honest dialogue on whether the lack of trust is impeding organizational performance and what to do about it.

Most boards don’t have this dialogue until it is too late and the relationship with the CEO has eroded beyond the point of repair. It truly takes courage by both sides to confront this issue. But, no one has said effective governance is easy.

Playing the Micromanagement Game

So, what do these symptoms of micromanagement look like when they are in full bloom in the organization? Here are some scenarios observed over many years:

• One or more directors consistently take a stance contrary to the CEO, questioning the data, the conclusions, even the motives of the CEO. Accusations of falsification of data, exclusion of data, collusion with friends, wanting to please staff rather than serve shareholder or stakeholder interests, leaving out alternatives to be considered, pushing an agenda or selling a decision vs. providing impartial counsel to the board are among the accusations or “cards” played in this game. The board has to ask itself, is this legitimate caution based on past errors/omissions, or does the board have in its midst a director who is exploring a personal path to power by unfairly criticizing the CEO?

If concerns are legitimate, dialogue with the CEO to gain a commitment to improved performance, if not legitimate, then the board has to police itself and deal with a director who is doing harm to the common good of the organization.

• The board adopts excessively restrictive policies on CEO authority. Trying to make hiring decisions, purchasing decisions and the like is common micromanagement practice. Board policy on CEO authority should be eased when a) the organization is growing based simply on the percentage of total revenue or expense involved, and/or b) when the CEO track record of performance warrants letting loose of the reins to reduce the cost and time of decision-making and enable the organization to progress more rapidly. Alternatively, when performance is eroding, the reverse is true. If performance warrants loosening the reins and the board refuses to do so, then micromanagement, i.e. an addiction to control, is likely the culprit. Continuing restrictive policies when growth or proven performance warrants loosening the reins is a clear symptom.
• The board seeks to control details or criticize what has happened, while avoiding responsibility to control the future. Most boards lack effective tools and the knowledge to control the future of their organization. They don’t plan well, don’t set policy well and don’t evaluate performance well. Lacking tools and knowledge to do so, they instead control the minutia that virtually anyone considers themselves an expert in, e.g. “you should have hired Sally not Betty Lou”, “you should have bought a Ford not a Chevy”, “you can’t travel to Hawaii to that conference”.
• The CEO is asking for clarity and consistency of vision, strategy and action; the board, instead, jumps from one “gotcha” pounce after another upon what are really operational details, and fail to answer the call for overall consistent direction.

Correcting Micromanagement

The most challenging and courageous step is to self-declare that you have a micromanagement problem. Micromanagement is the silent killer of many a board-CEO relationship – silent in that it never gets discussed, the relationship erodes, a “divorce” ensues, only to see the pattern repeated with a new CEO.

To avoid this, look over the symptoms and have the courage to honestly dialogue about them. Use the absence of these symptoms to praise one another for avoiding a common governance problem. Use the existence of these symptoms to proactively deal with the problem.

When you are clear that you have the problem, consider one or more of the corrective steps listed below.

1. As a board, first examine whether the cause is the personal agenda of one or more directors and is thus unwarranted. If so, discipline the member(s) under your board ethics policy. If such a policy does not exist, then develop and adopt one. Needlessly impeding progress of the organization to serve the ends of a director is an ethical violation.
2. Adopt a procedure to evaluate each meeting and define how it could have been improved: packets, presentations, chairmanship, debate. Based on these comments ask whether the problem is improving or worsening.
3. In executive session, dialogue with the CEO regarding what he/she may have done to erode the board’s trust. Agree on a corrective course of action.
4. If micromanagement is sourced to the board not having the knowledge or tools in place to appropriately control the strategic agenda and overall performance of the organization, then get about putting in place the following:
   • an effective strategic planning system
   • effective measures to evaluate organizational and CEO performance
   • clear policies on intended outcomes and authorities of management

These tools will give you control of the “big picture” provided you have the knowledge to use the tools effectively. If not, make getting that knowledge a high priority. Without it, you will continue to micromanage. It is my view that all boards know they should control something, if they don’t know how to control the big picture, then they will micromanage the minutia they are familiar with.