Management: Infinite Nuance
In early 2020 I took on managerial responsibilities, which was the definition of being dropped in the deep end. To be a manager is to have a focus on the process that produces the output, rather than the output itself. The switch to focusing on the process clicked very quickly with me, piggybacking on years of working on an investment discipline. I’ve been investing for about twelve years and focusing on improving my process for 5-ish years (of which this blog shows the last ~4).
Another part of being a manager is being the “owner” of the output, even without producing much of the actual work. I have a core belief about leadership – to be blunt ; if you have a bad team, you don’t have a bad team – you have a bad manager. That accountability escalates as seniority increases. This is why CEOs are fired for behaviour within their organisation which they did not contribute to and had no knowledge of – it’s all their fault. (I speculate this extreme accountability is a significant contributor to high CEO pay and severance, but that’s a story for another time.)
Process versus Outcome
It comes naturally to me to understand that sometimes we try new things (a process for creating new products) and they fail either through bad luck or because it was the first time we tried it and the learning curve was steep (bad outcome). Other times it’s because we didn’t follow our plan and didn’t know what we were doing (bad process). This is a direct parallel to investing, and the manager – like the investor! – only gets measured on outcomes. It’s critical for an organisation to understand that good process will on average over time lead to good outcomes even if any individual outcomes falls short. (There are scenarios that are must-win because they carry disproportionate risk, where you need to win every time, but those are also a story for another day.)
The “hard” part of management is the infinite nuance which you grapple with once you move beyond the high level principles. High level principles might look something like this:
- Good process on average over time produces good results
- The output of the manager is the output of the team
- The manager is responsible for the success or failure in achieving business goals
Once you get into the practicalities it gets fiendishly difficult. You start to run into paradoxes.
- People work better when they are empowered and have autonomy, but
- The manager has total accountability for the output of the team, and they cannot control the output when the team has high autonomy.
How do you intermediate these opposing approaches? I have run into probably 50 of these paradoxes (which I’ll talk about more below) but so far, I have found that careful thought always reveals a third variable that allows you to discriminate between and unlock the paradox. In this example, the discriminating variable/s are what I’ll call alignment and teamwork.
- Does the team deeply understand the company’s objectives and are they aligned on how the team’s work fits into those objectives? People make different decisions when they correctly understand which things are important. In practical terms this breaks down into a “should we do this project or that project, well, which project contributes more to the goal?” type of dialogue.
- Does the team communicate amongst itself (many-to-many communication) or is the manager the nexus of all team information (one-to-many) ? You need many-to-many communication for the team to self-correct and own the outcome, and it’s a lot harder than it sounds.
Another way to defuse this paradox would be using productivity as the discriminating variable. The team is more productive when the manager has less input, because there is far higher leverage. If a manager has to oversee every single piece of output, the manager’s leverage is quite low (1 hour of management time for 1 hour of output). However if the team gets 100 hours of output for 40 hours of a manager’s time, the leverage is far higher and the cost of mistakes is relatively lower. When you only get 40 hours of output, a 40-hour mistake is a total write-off. However if you have 100 hours of output, you can lose 40 hours and still come out ahead. That’s grossly simplistic take, but it is still true.
Now if I was a manager by training I’m sure some of these things would be obvious. Maybe it’s just a given; the output of the manager is the output of the team and so when you reach a fork in the road, prioritise the path that improves the output of the team. Unfortunately I’m not a trained manager and despite reading a lot of books (Andy Grove is a god) there are some things you only learn through experience.
The way that I think about managing things I’ve never done before is to start with principles. How do you set up a team? I don’t know. My guess is; find a few principles that are self-evident truths about the performance of teams (see my comment on bad team = bad management, above). These are things that are absolutely true and will never change. When you get 2-3 principles you invariably find one that conflicts, like the paradox above. Then you need to find the discriminating variable to unlock the paradox and come to a decision.
Reality-check if your decision violates your principles, and if not, you’re probably good to go. (a very helpful tool is explaining the paradox and how it led to the decision to the people you work with, so that they can understand where you’re coming from and/or call you out if you’re talking nonsense).
As I’m writing this I noticed that there’s another Willink and Babin book, The Dichotomy of Leadership, that’s come out. I’m only partway through but it looks to tackle this exact paradox. Unfortunately the military metaphor doesn’t communicate well at all, but they absolutely nail the paradox of autonomy and management. They’re approaching with a different lens, but you can see signs of the intermediating variable there as well.
Long story short – “Manager” is an interesting role. There are many nuances, many paths, and very few problems with a single correct solutions. I am enjoying it.