Striking the Right Balance Between Control and Empowerment

Today’s post is by Irv Rothman, President and CEO of Hewlett Packard Financial Services and author of Out-Executing the Competition: Building and Growing a Financial Services Company in Any Economy (CLICK HERE to get your copy).  Here’s Irv…

I’m all for a sound control environment and playing within the rules and I’m not advocating coloring outside the lines per se. However, an environment that does not allow the most basic freedom to use reasoned business judgment is one which will invariably result in dissatisfied customers. And there is a direct corollary between highly satisfied customers and profitability. You are no doubt smart enough to draw your own conclusions as to the less than satisfied customers scenario.

It’s the age-old question: how to exercise sufficient control without stifling responsiveness and creativity? Perhaps it is a gross generalization, but it seems that the larger the organization, the more bureaucratic it tends to be. The challenge for big companies then is to align against organizing principles that promote a small company atmosphere where people feel sufficiently free to strike that delicate balance between maintaining good order and market differentiating customer responsiveness.

Not an easy task, but not impossible either. Organizational choices and messaging are where it starts. Great leaders inspire with long term vision and operational direction to help make it a reality. For many businesses today, the word “team” is in common usage (perhaps overused?), but it is almost a cliché because it is rarely deployed as anything more than a catch phrase. Yet despite the general absence of formally designated team structures, employee satisfaction surveys often give working within “my team” and for “my team leader” high marks for leadership, integrity and engagement. Far less often are the same high marks used to describe senior management.

So, one thing to consider if you are thinking about ways to keep a small company feel inside a large corporate environment is to actually organize people into genuine work teams, with tangible (and as quantitative as possible) goals and objectives. The key is to provide the team with the latitude, within clearly articulated guidelines, to figure out for themselves how to manage the achievement of those targets and the understanding of how what they do links directly to the company’s financial and strategic aspirations.

Personally, I’ve long held the belief that people want to come to work every day and do a good job. If you share that philosophical perspective, then a team structure as briefly described above may work for you because if people can be made to feel like owners of a business, they behave the way owners behave. Said another way, they’re more likely to do what needs to be done to satisfy the customer while keeping an eye on the bottom line at the same time. Conversely, if your company is more oversight oriented, more a punch the clock culture; you are more likely to have people think in terms of what they do every day as a “job” with little to no emotional connection to the company and its results. The outcome typically is a lack of incentive to step up or step out… the dreaded “it’s not my job” response.

And let’s be honest, no control environment can anticipate every eventuality. People with bad intent are a fact of life. So, an atmosphere can be created that emphasizes an attempt to control the uncontrollable (think corporate police state) which will surely stifle creativity and responsiveness. Or, you can recognize reality, train the heck out of your people so that they are alert to those rare occasions when people with bad intent surface, can respond accordingly; and, in so doing, engage your people even more thus further reinforcing that ownership belief.

Of course, a small business/owner feeling is not all upside. The rules around accountability must be made abundantly clear and, perhaps more importantly, enforced with great consistency at every management layer within an organization. It’s up to every organization to ensure that all of their people understand the operating guidelines as well as the consequences for not acting within them. But there’s a way to gain this understanding and still send the right message: training is important so people know what’s expected of them and their role in protecting company assets. Overemphasis on the punitive aspects can be counterproductive, especially if it’s in sharp contrast with the way employees are otherwise treated.

There is a fine line between heavy handed oversight and the need to be customer responsive. Managing that balance is doable, however, if it’s important. I think it is.

– Irv Rothman is the President and CEO of Hewlett Packard Financial Services.  He’s also the author of Out-Executing the Competition: Building and Growing a Financial Services Company in Any Economy (CLICK HERE to get your copy).