Managerial Neglect

Managerial neglect is expensive. When there is managerial neglect, businesses are not only losing “opportunity dollars,” but hard dollars as well. Managerial neglect that costs a business money is defined as all those things that a manager should be doing but isn’t.

The training, mentoring and coaching that the American workforce receives in the art and science of managing people is truly negligible. Many fortune 500 companies still depend on archaic methods for selecting and training their managers, which often includes promoting the best performer in a department to be the manager even though that person may have little to no talent in teaching and motivating people or skills in developing processes to improve work flow. Even if the new manager does have the talent, many companies don’t invest in mentoring, training and coaching their managers, therefore that talent may never be fully developed. This type of company depends on the old “sink or swim mentality” and hoping through the repetition of a task that their workforce, including their managers will improve. Just as in sports, it is not “practice makes perfect” but instead “perfect practice makes perfect.” It’s not helping to practice the same poor technique for eight hours a day. And while it is true that some folks may figure out how to do something better over time, I don’t find that to be the norm. And a better way doesn’t mean the “best” way. What upper management does not realize is that that is a poor economic decision.

A few years ago, a couple of industrial engineers from The University of Buffalo formulated a method to quantify managerial neglect related to processes. Their formula determined that the value of improvements that management could have made over a set period of time, but did not, was costing the company money. The formula factored in the rate by which a given process improves, when that process is left alone to improve only through repetition, versus the returns given when constantly evaluating and making improvements to those same processes.

The engineers created an example of a hypothetical organization with a two stage supply chain of manufacturer to customer. They showed that managerial neglect over three years would double the costs incurred due to untimely delivery of goods, inventory holding, production stoppage and other inefficiencies. In theory a manager’s efforts to improve a company’s supply chain over 36 months would save a company 50 percent of the costs incurred by inefficiencies in that chain.

One major cause for manager neglect is that many so called managers are performing other functions such as selling, estimating, accounting, designing, writing code, etc. This is extremely prevalent in small organizations where the budget simply does not allow for a full time manager. So what’s a company to do? Well most companies, I’m afraid, are going to keep doing what they’ve always done, but if we want to get what we’ve never had, we must do what we’ve never done. However, many managers don’t have the knowledge to manage properly for what time they do have.

In the case described above, the engineers are looking at processes, where quite often, the team players don’t know how to improve the process. So, the question is how to implement a program of constant process improvement driven by management. This does not happen with a suggestion box in the lunch room, but with a well scripted program. It would be a wise investment to bring in an Interim Executive to develop with management and the team players a program of constant improvement that can be maintained by the organization long after the Interim Executive has gone.

The obvious results of “manager neglect” are huge financial losses. Businesses are always looking for a competitive edge and a way to increase the bottom line. One of these ways can be found right under their very noses – “Good Management”.