How to manage managers
A question I'm asked frequently is what changes when you move from being a manager of individual contributors to a manager of managers. I've been able to deliver this as a talk a few times now. This is the outline.
A) Things I believe about people
A1) Every one of us is born with a distinct set of gifts and talents.
A2) Despite those differences, we are all equally valuable in a broad sense...
A3) But there are certain gifts and talents that will be more valuable in the context of your firm or business.
A4) Because of these differences, every one of us is completely unique. So there are no universal solutions.
A5) Therefore, tools like Enneagram, MBTI, Strengths Finder, DiSC give us single lenses, but never the full picture.
A6) Therein lies both the beauty and the complication of working with people.
A7) People are unpredictable because we expect them to behave like we do, or like other people we know do. But they don’t.
A8) The most effective way to add predictability to behavior is to create process and structure and thereby decrease autonomy.
The healthiest, but less effective way, is to create a culture. But this is way harder.
A9) Caring about people makes business short-term harder and long-term better. Not caring about people makes business short-term easier and long-term worse.
A10) I am operating from an assumption that you’re reading this because you care about people. If not, don’t listen to me because it’s way more efficient not to, but I’d argue strongly that it’s long-term more profitable.
B) Things I believe about managers
B1) Management is the first and only job that is not a trade. That is, there is no concrete outcome or deliverable. (h/t to @DeniseSenpai for this insight)
B2) No, really. We talk about plumbers & electricians & masons. But Software dev is a trade. Dentistry is a trade. Investing in its various forms is a trade. Each has a distinct outcome that is expected with a certain amount of work. Management does not.
B3) Because of this, management is a different career...
B4) Peter Principle, 1969: “members of a hierarchy are promoted until they reach the level at which they are no longer competent.” I'd argue unless they have received training, this is the case immediately.
B5) Management is wide, not deep. This is another thing that distinguishes it from trades. With trades, generally, the deeper you go, the better you are. With management, the deeper you go, the more you’re taking your eye off something else.
B6) It’s so important to distinguish between managers & Principals. Principals help people go deep. They're subject matter experts that help trades perfect their craft. For most people excellent at what they do, Principal is the right route.
C) Things I believe about managing managers
C1) It’s hard to manage managers with misaligned incentives.
C2) The best way to think of this is “drinking from the same straw.” Make incentives as similar as possible up and down the organization - even slight differences can lead to tough conversations (and sometimes the slighter they are, the greater the difficulty, e.g., the difference between FCF vs. EBITDA).
C3) Incentivize on things they can control & only those. (ex: Don't incent a sales leader on Net Income when they have no control of OPEX. Or on Revenue if they have control of pricing - incent on GM instead.) The higher on the org chart, the lower on the income sheet.
C4) Major in the majors. Ego is not your friend as a manager of managers. You’ve got to fight the voice of “don’t they know who owns this business?” or “don’t they know how much experience I have in this?”
C5) Remember how everyone is unique? If you have a normal relationship, you will disagree on a lot. If the relationship is important, save your chips for items of strategic importance.
C6) Don't give feedback based on outcomes, give feedback based on inputs:
a) Hypothesis – how they thought about the problem
b) Process – how they chose which steps to take
c) Execution – how each step was performed
d) Analysis – how they interpreted the result
C7) Managers are like you – they like their own ideas. Again, if the relationship is important, it’s worth the extra time to make your case rather than force the issue.
C8) Leadership is lonely. The best working relationships I have are the ones where I get to listen a lot. If this gets inverted, you’re not managing, you’re directing.
C9) You set the stage. Culture is a) what leadership actually does and b) what leadership tolerates (including underperformance). Don’t expect openness if you’re not open, or vulnerability if you’re not vulnerable, or apologies if you don’t apologize.
