The Manager 103 - Who's actually adding value?
THE MANAGER - BY ROB LAMBERT
Hi,
I hope you are safe and well.
I’ve been quiet on the video front recently as the kids are off from school, and I’m trying to make the most of my time with them.
They go back to school in two weeks – I’ll be ramping up production then!
I did some work for a client the other week. They have a delivery problem.
Don’t most companies?
Things just weren’t moving. Work was not getting done. Value was not being shipped to the customer.
And the leaders couldn’t work out why.
There are many reasons why this happens.
I suggested to this client that they do a short audit of the roles in their team.
Their department, or better to call it their span of control, was significant. Many hundreds of people employed to deliver value. Or were they?
I asked the leaders to instruct their managers to classify people’s roles (not people, but their role) into one of four categories:
Those directly building the product or service (i.e. - the actual value being sold)
Those supporting the product or service (i.e. - the actual value of the customer care being sold)
Those organising the people or work
Those supporting by doing administration
It’s a simple breakdown that doesn’t tell the whole story, but it paints a vivid picture so we can start to have crunchy conversations, and know where to focus energy and attention.
In small companies you likely find more people doing roles 1 and 2, and fewer doing 3 and 4.
In large organisations you see those numbers flip. Sadly.
Companies are addicted to trying to control work and people, so they bloat their companies out with people who do roles 3 and 4.
I’m not saying you don’t need them, but you don’t need as many as many leaders think.
In this organisation the numbers looked like this:
20% of roles were building the product or service being sold
10% of roles were supporting the product or service when live, or pre-sales.
60% of roles were organising people and work...
10% of roles were performing admin such as financial reporting etc
Their data wasn’t scientific, so these numbers will vary a little for this client, but it tells me an important thing.
They have more roles designed around organising people and work, than those actually doing the work, or supporting the customer.
Numbers and financials need adding to this picture at some point, but it's fair to assume that a large part of this company's salary expenses are spent on organising people and work - not necessarily delivering it.
It’s common to see numbers like these in large organisations.
In fact, in some organisations it’s really hard to actually find the people who do the work.
It should be an alarm bell to managers who understand basic economics. But to some, this is just a natural state of a business. I don't think this is natural.
Some managers and leaders feel the need to control other people and work - but they can't be everywhere, so they hire other people to do it.
They need people to control the work. They need people to control the projects, the tasks, the risks, the issues, the growth, the change, the Target Operating Model, the reporting, the governance board meeting notes…..
They are trying to control when, ironically, the best way to gain control, is to give control away to those doing the work – and employ more people to do the work.
It doesn’t make any sense at all to have more people controlling the work, than people doing it. You do need governance, oversight, project management, but you don’t need to fill your teams with people whose role this is.
I do this little exercise of working out what percentage of people are building and supporting, versus controlling and organising, everywhere I go – and it’s powerful.
It shows you where the major problems are.
It show where the lack of visibility, coordination, cooperation and communication is
It shows you where salary is being spent – and as a manager, you’ll likely know that salary is one of your major expenses. Spend it wisely.
Every person you hire should add value to the customer – does having 60% of a team organising others, add much value to your customers? Maybe?
It shows you what the leadership value.
They value insight, control and rigour over delivery of value. They likely don’t really, but it’s just become this way because they’re solving the wrong problems.
It gives you hope.
You know the leaders are willing to spend money – you just need to work out what the real problems are – solve them, and redirect money to those actually doing the work.
It gives you bargaining power as a manager or leader.
Every executive I’ve ever met responds well to financial levers.
In a simple way, they either want you to bring in more money, or save them money – and this simple audit can be a powerful lever to pull.
But most importantly, it gives you a good starting place to go forth and study what the real problems are.
Bloated teams are everywhere. They are a result of poor management.
Rather than addressing a company’s real problems, managers throw people at the problems. Sometimes you need people, most of the time though, you just need to solve the problems correctly.
As teams grow it is tempting to start adding layers of control. Pretty soon you have 60% of your team organising just 20% of the people doing the work. Madness.
Instead, delegate work well, train people, give them power to make decisions, teach people how to communicate effectively, solve problems, give people a bright purpose and mission, hire well….yada yada yada – I say the same thing every week :)
Management is hard. But keep yourself honest by keeping an eye on the structure and economics of your team.
My advice is to always ensure you have more people delivering value to your customers, than you do people organising work and people.
This may seem overly simplistic; to work out the ratio (and costs) like this, and it is, but it’s a good starting point.
Until next time.
Rob..
FOOD FOR YOUR MANAGEMENT BRAIN
1. I'm not sure about this - online working gyms.. - https://www.bbc.com/worklife/article/20200812-the-online-work-gyms-that-help-spur-productivity
2. WFH with kids? Some good advice - https://selfmadewebdesigner.com/how-to-stay-focused-when-youre-working-from-home-with-kids
3. Seth Godin sums up The Cultivated Management philosophy of work in a few short sentences. Know where you're going and then make improvements at the basic level - https://seths.blog/2020/08/small-adjustments/
4. Found this helpful - how can we deal with the current reality when our world seems so goal and action focused - https://elemental.medium.com/your-surge-capacity-is-depleted-it-s-why-you-feel-awful-de285d542f4c
5. Just read the last 4 bullet points in this article to understand how work and life come together (and then read the rest of the article) - https://www.newyorker.com/magazine/2017/06/05/the-work-you-do-the-person-you-are
6. People management skills for global teams - https://lattice.com/library/4-people-management-skills-for-global-teams?
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Thanks
Rob..