Management Today

The idea of management comes from the military because that was the first time in human history a diverse group of people who did not know each other were organized to work together towards a common goal. That structure gave us a few principles: 

1. Hierarchy 
2. Command and control 
3. Incentives for achieving the goals 
4. Division of responsibility based on function 
5. Centralized decision making

Not much has changed over the last few thousand years. Today, the business world follows many of the same principles. At the highest level, business management is about capital allocation, mainly within an organization, to maximize shareholder returns. To do that, a manager must be good at understanding risk, making decisions, making trade-offs, communication, and putting the right people in the jobs. Middle management is more nuanced. Theoretically, management is an easy concept to grasp. However, the execution of the concept is complex. Having worked in organizations ranging from about half a million people to two people, I see that management today, can be categorized into four categories:

1.  Domain Management (DM): This idea is very familiar in the business world. If you get an MBA (Master of Business Administration), this is what you study i.e. how to manage different business functions (domains) which might be marketing, finance, technology, strategy, etc. Your job description tells you what you are supposed to do. People can follow an exact set of principles and rules and become good at managing a function. For example, traditional marketing has four Ps (Product, Price, Place, Promotion) of marketing management. Over time, doing the same thing again and again, you become an expert in that function. However, with time the new things you are learning continues to decline and you get set in your methods because you have all this experience that tells you what works and what does not. Hence, you become less adapt to changes in culture, technology, and industry.  Try hiring someone who has spent ten years doing direct marketing with a big budget for a CPG (Consumer Packaged Goods) company into a tech startup for growth marketing.

2.  Organizational Management(OM): When you hear the term leadership in the business world, generally, Organizational Management is what people are referring to. After you join an organization in a managerial position (manager, director, vice president, president, etc.), where you have direct reports, to manage a function or to run a division i.e. Profit & Loss (P&L) responsibility for that division, you are expected to manage all the resources working in that function or division. Doing that requires:

• Setting up a shared vision: Everybody in your organization and the other organizations you work with should understand what you are trying to achieve and why.
• Incentives: Nothing changes human behavior like incentives. The shared vision you align your organization with has to reward people for continuously delivering on the shared vision. A common management error I have observed is that the new strategy or vision is declared by management and nobody tells the employees how they are supposed to do the job differently and if and how their incentives have changed.
• Goals: The shared vision has to converted to individual goals with incentives tied to them so that people understand what is expected of them in what time frame. I have seen this so many times that executive vision is never converted to concrete goals that the employees are supposed to achieve. This causes a lot of confusion within the organization.

3.  Perception Management (PM): In a management role not only you have to do DM and OM, you have to manage the perception of yourself and your team in the organization. The time you spend in PM is directly proportional to the size of the organization. In a small startup, you don't have to worry much about PM because everyone sees your work. However, if you are the startup CEO, you might have to manage the perception of the investors and the board. On the other hand, as a mid-level manager (Director/VP) in a big company, you have to manage how your peers and your superiors perceive you. It is really important because decisions about you and your team are made in your absence and based on how the others perceive you. This means that as a manager you spend a lot of time aligning with various other managers so that you are perceived as a team player and nobody says anything negative about you to your superiors in your absence. And, of course, you want to score well in the 360 review. You also spend more time on the PowerPoint to look polished than on the content in the presentation. In case you are wondering, why your boss is getting promoted when he is not good at his job, it is because, generally, the people who rise in big organizations spend most of their time in PM and not enough in OM and DM. If you are not doing PM, people are perceiving you anyways, it is a natural thing to do. So you might as well take charge and manage how others perceive you.

4.  Feelings Management (FM): No matter how good you are at management, eventually you will end up hurting someone’s feelings in the organization. If you want people’s commitment to your vision, they have to feel good about the shared vision and about working with you. If you are doing something bold, you want people to change their thinking, you have to critique someone’s work or reject someone’s idea, you have to do it very tactfully. All humans want to feel valued, liked, and respected. Relatively speaking it is common that engineers are better at taking direct feedback as long as you have a logical explanation. Other professionals, especially in the creative fields like design, may be more responsive to a different approach to receiving the same feedback. So, you have to recognize who you are speaking with and communicate accordingly. How you say things becomes more important than what you say. This skill is getting more and more important because culturally the younger generation is much more feelings conscious. The norm used to be that if your boss did not say anything about your completed project that means you did a good job. Slowly, the norm is moving towards positive reinforcement to your employees every day. So, if you want your younger employees to do their best work, start addressing their feelings. These days, it is not uncommon for management to use emojis to provide positive feedback on employee efforts.

You have to manage DM, OM, PM, and FM in parallel. However, the four management categories do not carry equal weight. A lot depends on your level in the hierarchy, the maturity of the organization, and your function. For example, as a General Manager for an established semiconductor company, I did not have to worry so much about FM because I was mainly dealing with engineers. As the CEO & Co-Founder of my media & entertainment focused startup, EVER, I had to become better at FM because most of the staff was just out of college and expected frequent direct feedback on their progress. To become a better manager, understand where your skill level is in the four management categories and prioritize your development in these categories based on your role in the organization.

The article was originally published on Forbes.com on August 18th, 2018.