The most popular search key word that brings people to this site is “Micromanagement”. I talk about innovation and how tools like Web Office can be used to help companies become more innovative. But a side article seems to attract more general searchers than anything else. That article was called “The Micromanagement Flaw”. My guess is that the people searching the term “Micromanagement” are over managed employees, trying work out how to deal with an overbearing boss.

Tim Hindle recently wrote a survey for The Economist entitled “A survey of the company”. I recommend it highly. It begins with this insight:

The way people work has changed dramatically, but the way their companies are organized lags far behind.

The last article in the survey talks about Douglas McGregor’s seminal book 1960 book “The Human Side of Enterprise”. In it, McGregor divided management styles into two main types: Theory X and Theory Y.

Here’s how The Economist describes it:

“Theory X was the classic command-and-control type of management, the authoritarian style which (McGregor wrote) “reflects an underlying belief that management must counteract an inherent human tendency to avoid work”.

Theory Y is the antithesis of X. It “assumes that people will exercise self-direction and self control in the achievement of organizational objectives to the degree that they are committed to those objectives”.

Theory X is bent on devising the right sticks with which to prod work-shy labour; Theory Y looks for the carrots that will induce them to stay.

McGregor’s dichotomy has been hugely influential in management thinking ever since his death in 1964. The new organisation lies firmly at the Theory Y end of his spectrum. It challenges employees, in his words, “to innovate, to discover new ways of organising and directing human effort, even though we recognise that the perfect organisation, like the perfect vacuum, is practically out of reach.”

McGregor himself came to believe that neither management style in its pure form could work successfully. Firms would find a balance between the two that would shift over time to fit new circumstances. But the new organisation is beginning to prove him wrong. Companies are coming to realise that knowledge workers, who have been identified as the creators of future wealth, thrive only under Theory Y. Theory X is becoming extinct—just like organisation man himself.

In “The Next Productivity Tool: Web Office”, I quote Intuit’s Scott K. Wilder’s advice on how to roll out a successful enterprise blogging system.

Scott says:

Managers will need to learn to trust. Any company considering allowing internal or external blogging is going to face some concern from senior management. Senior managers will need to learn to trust their employees. However, this shouldn’t be too hard. Managers will quickly see that the quality of their people will not fall apart just because they are now using a new technology. However, if management does not start by trusting, and instead requires something like formal approval for every internal blog and Wiki post, then the system will never take off and the promises of Web Office will go unrealized. The self motivated, innovative and emergent teams simply won’t show up.

This is an echo of Theory Y.

I hope that the Economist is right in claiming that more companies are moving to Theory Y. However, the massive number of searches for “micromanagement” indicate that there are plenty of bright knowledge workers still suffering under old-school Theory X managers.

If you are a CEO, or some other kind of senior executive, you got there by learning how to get the people underneath you to take responsibility, to take ownership and to produce. This is beyond just delegation. You cannot delegate initiative. If your company is going to continue to growth, you need your managers to think like you. That means you have to convert your Theory X micromanagers into Theory Y managers.

A fast way to get the message across is to give them a copy of
Lost and Found : The Story of How One Man Discovered the Secrets of Leadership . . .Where He Wasn’t Even Looking

Example: Micromanagement Vs. Enablement of Microfinance

Microfinance is built upon a simple idea. The best way to help the poor in countries like India, is to give to lend them the capital to help themselves. The basis for this approach is the same kind of trust that Scott K. Wilder talks about. Microfinance assumes that people everywhere are capable of being entrepreneurs, whether they are starting a tech company in silicon valley, or sewing business in rural India. There are no formal programs that dictate exactly what skills have to get or what businesses people have to start. Instead, there are simply a collection of people who are willing to lend in small chunks, and price the loans to deal with the fairly high level of risk associated with each micro start-up.

The success of this approach seems to be truly impressive. If you want to find out more, check out MicroCapital: On Microfinance and Microcredit Investment. The NY Times ran an interesting article in April 2004 called Tiny Loans Have Big Impact on Poor.

Microfinance is Theory Y applied to the problems of the 3rd world, and it is proving brilliantly successful.