Monday, January 16, 2012

Another Real-Life Lesson on "How NOT to Manage Your Business ..."

Most of you know I have consulted with a number of local businesses in Pierce County over the years. Some took my suggestions. Others did not.

One that comes to mind easily is now in decline. They tried to manage by consensus. When I say “manage by consensus” I mean that they let the employees make the decisions that most directly affected the business. Unfortunately, none of them had any real financial interest in the business other than a paycheck – and none of them had ever run a business before. To put it nicely, they didn’t have a clue.

But, the company had another business consultant who told them the collective thinking was much better when it came to decision making.

Now, don’t confuse the popular concept of employee empowerment with management by consensus.

Employee empowerment means you give your employees the authority to do their jobs.

Management by consensus means you give the employees the authority to do your  job.

See the difference?

Oh, the company I worked at used to love to have committee meetings to accomplish this. Then the boss would say, “Well, I still have final say.” But the fact is, keeping the team leaders involved not really what is most important. It’s making the right business decision. And most often, management by committee is a very poor decision.

It often leads to situations where the company suffers from analysis paralysis. The misguided business consultant tells the company president: “Since we can’t all agree on a solution – we’ll just study the problem some more.”

I used to be required to be at weekly review meetings where 100’s of pages of reports were analyzed … but with management by consensus, most of the meetings never lead to any decision or direct action. Instead, new reports were dreamed up to further study the imaginary problems the other “business” consultant came up with.

In just a few short years, the advertising program I implemented took the business from about $1-million a year to over $10-million a year.  But by managing by consensus, the business has shrunk and is MUCH smaller today.

Business leadership is a matter of courage.

Business owners who manage by consensus want to share the responsibility for possible failure.

Managing by consensus allows them to escape the possibility they may one day have to look in the mirror and admit, “I, alone, was wrong.”

Take my advice: don’t put the success of your business in the hands of your employees by managing by consensus. It’s just not worth it.

Good Selling!


Mr. Dana Kehr
Pro Marketing Northwest
PO Box 731413
Puyallup, WA  98373
(253)579-4040 direct and text

P.S. Need some help with direction for your company? Please contact me. It's what I do!  

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