Why make managers? - highly skilled employees need not be groomed for management

Business Horizons, Jan-Feb, 1996 by Peter Meyer, Dennis W. Organ

In traditional industries, where the management chain of command was precisely defined, a person making a certain kind of decision was a person occupying a particular position in the organization chart. As the saying went, authority (to make decisions) went with responsibility (position in the management hierarchy). However, in businesses that mostly deal with information and know-how, a manager has to cope with a new phenomenon. Here a rapid divergence develops between power based on position and power based on knowledge, which occurs because the base of knowledge that constitutes the foundation of the business changes rapidly ....

At Intel anyway, we managers get a little more obsolete every day.

--Grove (1993)

At the time of his writing, Andrew S. Grove, the CEO of Intel, seemed to think that the divergence between the authority of position and the authority of knowledge was a threat mainly to high-tech industries. No doubt his observation was particularly pertinent to that sphere. But one gets the sense that the "phenomenon" to which he referred is now pervasive; it is just as noticeable in the marketing of beer as it is in the making of microprocessors. Put simply, the rules of the game keep changing in one industry after another. No way can a person do a good job of managing and still stay on top of the changes in the way things are done. And, to anticipate Mr. Meyer (below), someone who is good at keeping up with the changes is too valuable to be pushed "upstairs" (as we used to think of it) into administrative overhead.

Already we have heard much about the kind of organization that will be fit to survive in the 1990s and beyond. You know the magic words: lean, fiat, egalitarian, networking, flexible, and nimble are just a few that are used in the description. But if we are to have a truly revolutionary way of thinking about today's and tomorrow's organization, we will have to reconsider long-held ideas about the relative value and status of managers. Traditionally, prestige and riches have accrued to those best and brightest who crossed over into the ranks of management. Does that fit the bill? Mr. Meyer has some timely words to inform our thinking about such matters.

Why Make Managers?

Jane looked back at me and proceeded to ruin my whole day. We had planned the reorganization of our division carefully, placing people where they could contribute the most. Jane saw that, but she wanted to be a manager instead. From the time she had begun working for us, getting her management card punched was a major career step. Employees received increases in salary just for becoming managers. As managers, we were rewarded for making more like ourselves. Management was a career step on which everyone focused.

Since then, we have grown smarter. Should everyone be a manager? Hardly. Should we all be developing managers? I think we know better now.

When Jane started with us, proceeding to lead others in one's own skill was the next logical step. Then it made sense. If you were good at something, and you could show others how to do it, we'd put you in charge of people who did the same thing. So salespeople became sales managers, engineers became vice presidents of engineering, financial analysts became controllers. It made sense if a company needed people who were good at what their would-be subordinates did.

But everything changes--so fast that the old structures get in the way. For instance, technology changes faster than I can monitor and still focus on other tasks. The marketplace changes faster than management can cope with. The pace of financial change is intense enough to require ongoing attention from the best minds we have. Now, we need our best and brightest people on the front line. If they are truly expert, we can't afford the overhead of having them do something they have not mastered. We designed our reorganization with that principle. The best people should do the work.

As their areas of expertise changed, people quickly came to know more than their managers. Managers can never remain current. They will always be a step behind changes in the field. How much of a problem would that be? When we were honest with ourselves, we decided that this is nothing new.

Instead of trying to stretch the best people to be excellent at two things, we decided to eliminate the management roles. Who needs a manager who needs to be updated constantly? We asked: If people are really the best at what they do, and they know what to do, do they need a manager at all? The answer is yes. We don't need managers to supervise those old skills; we need them to manage resources wisely. That is another skill entirely.

Instead of making management a career step, we decided to make it a career. Then we decided it is a career that should get no more compensation or reward than any other. Clearly, some technical skills are worth even more to us than management skills. We started to compensate by skill set, not status.

This is not what Jane was thinking. She was concerned that we would hold her career back by not making her a manager. I told her all this. She was not convinced. What did convince her was the way we now treat our individual contributors. We honor them to death. We pay them, of course, and well. But what really makes people want to do more work is the opportunity to connect their contribution to their own sense of value--what Maslow called self-actualization. We do that religiously.