When is Micromanaging, Not?

How do you know when governance, a hands-off stance, is no longer right? Leaders of non-profits agree that micromanaging is not desirable. A Board should lead, not manage. Leaders are visionary, guiding and inspiring, and focus on the organization doing the right things. On the other hand, managing means to guide and supervise, and try to get things done right.

In a recent conversation with a director, she told me, apologetically, that for a few years her board had micromanaged. The story was that the Board got involved with operational things. The financials showed stress and it appeared that some of the executive’s staff members were underperforming.

In one case, where deficiencies are not critical, the Board may simply ask more questions that are detailed and request more information than usual. In another case, where deficiencies threaten the organization’s viability, or could, the Board may have to be more ‘directive’ and demanding of the Executive. In either case, diligent governance work includes a better understanding of the issues, obtaining the Executive’s plan to correct them, and follow up on the improvements.

Micromanaging is a continuum from doing management’s tasks, through guiding, to supervising, and to meddling. When a Board is micromanaging, it is not leading. For some directors, micromanaging is like a drug addiction, and like drugs, there are potential side effects:

• Erosion of trust between the board and executive
• Confusion over roles and responsibilities
• Loss of value for the constituencies who provide the funds that pay the executive's salary and benefits

Micromanagement means doing management stuff instead of sticking to leadership stuff. However, from time-to-time, Boards need to drop below their proverbial “30,000 foot level” because of a performance issue. Issues include when the essential ratios are not in desired ranges, excessive turnover in staff, and a significant drop in member satisfaction. In other words, anything thing that left uncorrected will affect the organization's viability.

Fiduciary responsibilities require a Board to pursue anything that may threaten the viability of the organization. A Board would be negligent not to adequately pursue signs of performance issues or negative trends. Therefore, a Board in pursuit of a performance issue is doing its job, and would not be guilty of micromanaging. In other words, serious performance issues are legitimate opportunities for directors to get into the “weeds” for a time, and limited to the area of concern.

Legally, a director or the Board can see anything they want to. Transparency is essential to a Board’s ability to hold the Executive accountable. Inquiry and inspection by a director or Board do not inherently constitute micromanagement. However, doing the wrong things with the answers could be.

A board micromanages when it drops below the governance and strategic level without justification. When a Board has justification to drop below normal levels of discussion and leadership, it is doing its job and not micromanaging. Once the justification disappears, the effective governing Board elevates back to the “30,000 foot level” of leadership.

What is your social purpose?

I believe that every business, every organization must prove that it represents synergy.

Every organization takes three resources from the society, the communities it serves. Every organization absorbs land meaning, when you occupy a space, a footprint on the ground or an office in a tower, no one else can use it.

The same goes for human resources – when they are working or volunteering for you, they are taken from other enterprises, family life, and more. When organizations pull capital from the community, it is no longer available for other investment or spending options.

Organizations process those resources to produce products and services. Here is the first evidence that the organization is accomplishing something.

Sales and advertising efforts generate output, the point when the customer takes the products or services. This often means revenue to the organization. The output stage often defines success to people in organizations.

Yet, the return of customers depends on outcome, the realization by the consumer that the products and services actually made their lives better. If an organization does not generate an accumulative outcome that exceeds the cost of the inputs of land, labor and capital, the organization will collapse and die.

The highest level of planning, strategic planning, deals with outcomes. Where are the needs in the world, the US, your state, the communities you serve that are not being met? There are needs out there. If your organization can identify a need and make a difference, and it made sense based on what you already do well, shouldn’t you look at it carefully?

Analyze the broad market place on a regular basis, not just your niche but broader. Prove your worth by producing outcomes that benefit the communities you serve.