Want to increase profitability by slashing staff? I recommend it, though not in the way you’re thinking. Plus a radical managerial mindset that will make you a better leader, if that’s your gig.
Not going to lie, our business is more profitable than others in our field. That’s how we survived the event industry COVID-19 apocalypse with our team intact. And that profitability comes from being ruthless about weeding out excess management. Not so much firing them as not allowing them to take root in the first place.
On average, managers are time and profit vampires and a general burden on your staff. You need a lot fewer of them than you think.
And a shitload less than they will tell you you need.
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Our entire approach is: better people on the front line, as little management as possible.
The value in our business is in the people who do the actual work we do, and our sales people. Each of them brings money through the door, an obvious point a lot of businesses don’t appreciate.
Managers cost you lots and many of them don’t contribute much. They multiply like half-used jars in the back of your fridge. You got them for that one time you needed them, and they’re still there, justified by PowerPoint decks about new compliance requirements.
They’re so good at looking busy. They’ll spend a year workshopping a new mission statement that says:
“We’re passionate about what we do.”
A statement that gets fist-bumps at head office but means nothing to the people doing the actual work.
Stop saying you’re passionate
Side-note: never use the word “passionate”. It’s the empty language of LinkedIn wannabes.
You know how to tell if someone is passionate about something? Watch what they do. Do they light up when they talk about that subject? Do they take risks to pursue it? Do they have a track record of achievements in that subject?
It’s like describing yourself as cool, quirky or edgy. If you say it, you are not that.
“I’m passionate about customer service.”
Actual passionate manager:
“I spent last Saturday working behind the counter in one of our outer suburban stores and realised that our own internal processes are stopping our staff resolving customer issues quickly. Here are some ideas.”
Management flourishes because they’ve persuaded their paymasters the organisation needs two things above all: supervision and prediction.
Managers like to supervise people
Managers love to watch over workers, on the grounds that people would otherwise goof off. Because workers are intrinsically lazy.
The last two years have been the Emperor’s New Clothes of management. Turns out most people can work just fine on their own, without direct surveillance from middle management Gregs and Debs. People need a lot less management than managers thought.
When managers aren’t directly watching, they like to measure their staff because “if you can’t measure it, you can’t manage it”. To justify their salary, the more measurements and data the better.
Pretty much every business I’ve known succeeds or fails on three or four ratios max. Labour costs as a percentage of revenue, that kind of thing. Get those right and everything else flows from there. Every other measurement is trivia that you should not bother your staff with.
The data becomes slide fodder for endless meetings that, ironically, lower everyone’s work output and morale through endless wasted time.
Managers like to predict the future
A big part of the management explosion is a response to the eternal question: what’s going to happen in the future?
What are customers and competitors going to do? Where’s the market going? How can we future-proof shareholder value? People love the idea of certainty.
So you get armies of spreadsheet soothsayers creating their version of the future, and presenting it to each other in meeting rooms all day. There will be disagreements, because the future is a squirrelly, subjective thing.
They retreat to their corners to gather more data, more PowerPoint, more talking points. And so the cycle continues, everyone pretending they hold the secret to predicting human behaviour and market conditions.
Of course businesses need to plan. But taken to the big corporate level, it’s no less of a grift than tarot card readers, just better-dressed, nicer certificates and less incense.
That’s the glorious thing about being a smaller business. Your huge competitor might be able to buy 5% cheaper than you through their enormous purchasing power. But you’re not spending 20 cents in every revenue dollar on people sitting in high-rent meeting rooms all day talking about what might happen.
You can do stuff faster and cheaper, and your quick and dirty guesses about the future will do fine.
The deadwood plantation
A rich source of deadwood management is people who used to do the thing your business does, but don’t want to do it anymore. It’s not like they’re driven to lead people. If that were the case, they would have made that move long ago.
Now they would like a nice quiet desk life, and they seem like a decent person, so they become something like compliance and training manager.
Except they don’t do any training, instead spending their time creating training needs analysis documents and hiring outsourced trainers. The costs balloon.
If people in these roles are motivated, their wisdom can be of major value to your team. They give you the knowledge continuity that so many businesses lack in these times of endless churn.
If they’re not, and just want to stop doing a job they don’t like any more, you should move them on.
Management is not leadership
I’m not suggesting some kind of anarchic workers’ co-operative system here. Someone needs to be in charge. But leadership is different to management.
Which are you?
Ask yourself, why are you in this? Is it because you’re aroused by exercising power and control over others? Or because you want to run a high-performing, profitable organisation?
If you want the latter, and you’re in charge, could I suggest a different way to view your role?
Your job is to serve your staff.
Not in a subservient way. You still have to make hard calls. But day to day, ask yourself how you can support them to do the best job they can. Ask them how you can do it.
How can you give them the best tools possible to do a good job? How can you remove obstacles and stupid rules? How do you make them feel like they work somewhere that gives a fuck about them?
We spend a lot of money buying the big-name tech equipment for events, when we could get a much higher daily ROI from cheaper replica gear that looks pretty similar. We do that because good staff are hard to find, and we want them to have absolute confidence that when they’re running the major bank CEO announcement or the big car launch, everything is going to work.
That staff confidence produces higher ROI in the long term. Because trying to explain why things didn’t work in front of a large audience is super-demoralising. I have some first-hand experience of this in previous gigs, it really sucks.
With the serve-your-staff mindset, there’s a big difference in the simplest interactions.
“Here’s what you should do.”
“What do you think you should do?”
In a few words, it shows you’re interested in their opinion. You’re opening up an opportunity for them to show what they know and what insights they have.
And if their idea could use some fine-tuning, it’s a chance to teach them something. Plus you learn more about what’s going with the staff at all levels. Wins all round.
It helps you find better ways to recognise and reward performance. We don’t have any seniority-based job titles. Because it encourages an unproductive sense of progress through power over others.
As work gets more remote, you have two options. One is creepy surveillance, logging keystrokes and timing bathroom breaks. The other is to make people want to do the best job they can. Choose wisely.
This article was first published on the Undisruptable website. Ian Whitworth’s book Undisruptable: Timeless Business Truths for Thriving in a World of Non-Stop Change is out now from Penguin Random House.