EVP Newsletter 11-30-16
Management Model-We Don’t Need No Stinkin’ Management Model!
Or do you?
If your firm is easy to assess what the cultural core is, good for you. You are ahead of many others. If, however, the cultural core of the firm is sometimes not clear, perhaps the first step is to identify what type of Management Model is generating that cultural core. By understanding this, you may be better able to be efficient, satisfied, and rewarded in your work environment. Or you may be better able to determine that you want to “jump ship” and head to another firm that suits your style better.
My background was with Kirkwood Bly, Inc. and we were a Family Owned business. We did not run as a single strong owner/manager type firm because we got too large for one person to make all the decisions. We operated with a strong cultural core that was well defined in our emphasis on how to treat our employees, our subs and suppliers, and how to interact with the Owners. Compensation was a combination of emphasis on merit (meaning your bonus was based upon what were “you” responsible for bringing to the bottom line that year) as well as some discretionary emphasis. We operated like a cross between a Team and a Family Management Model for many years.
As I look around the ECA, I see the four types of firms listed above in our Contractors and as Affiliates. In this time of high demand for skilled workers, it may be more important than ever to understand or more fully develop a company Management Model before your firm wastes time, effort, and resources on a more “reactionary” style of existence than a planned one.
One of the first things to consider is what “type” of business you are a part of. Whether you are an owner, a key management person, an employee, or a person thinking of going to or from a company, it is important to understand what Management Model (or lack thereof) the firms in question has in place.
As you look at your own firm, and think of others in the ECA and In our industry, you will probably consider there are four prevalent and common types:
1) Owner Operator/Manager
1- An Owner Operator Manager firm is one in which ONE person, usually the sole or majority owner, makes ALL THE MAJOR DECISIONS. This person does not need, nor seek, input from others. Usually a “self-made” hard worker who has gone from literally a one person shop to expanding into a company with expanding personnel and equipment which leads to potential expansion of opportunities. However, it is usually the force of the single Manager that is the driver of the operations and revenue. Not only the “driver” of the operations and revenue, but that person is the biggest constraint on the operations and revenue as well. Workers in this environment have to, and usually do, operate with one focus-“how will the manager react to what I’m doing?”.
2- A Family Management Model is sometimes an outgrowth of #1 above. A firm where the Owner-Operator/Manager has grown the company to be too large for his/her ability to oversee all the decisions on the company’s operations and revenue growth prospects. Usually a family member or a trusted senior manager becomes a part of the management “team” and those family members and/or senior managers are speaking to the employees and looking after them on any particular subject. Chain of Command is far less important than in the Owner Manager firm because the “Owners/Management Team” tend to speak with employees without regard to tenure or rank. Bonuses and salaries are usually more discretionary in this Management Model than in others.
3- A Team Management Model is run like a sports franchise. You have your superstars, and you have your role players. Winning is defined as completion of a project within the contract requirements and within the expected “team parameters” regarding time and profit, and leaving with a satisfied owner. No one person does it all. Bonuses tend to be based on measurement of both project and corporate success. Less discretionary compensation is seen in a Team Management Model.
4- A Bureaucratic Management Model is based like a government where many forms are filled out and lots of meetings take place. All processes and decisions follow a democratic process and there is a strict organizational chart that defines responsibilities. These types of Management Models are usually inherent in the largest firms. Career advancement usually trumps corporate goals and that is the challenge of management to align the motivation of the employee with the gains of the corporation.
Next week-I will talk about other aspects of these Management Models. Time is too short to cover it all in one “Soapbox”-
Thanks for all you do!
That’s All Folks