Is it time for managers to break the rules?

27 February 2015 -

Bosses must adopt looser and more agile management styles, argues author Martin Thomas. But is he right?

Philip Smith

Let me run this angle on management styles by you for a second: Facebook is fine, really. If staff want to log on and have a chat mid-morning, why not?

Is that view ridiculous, revolutionary or just realistic? After all, if staff can chat with colleagues while making a cup of coffee, converse over the water-cooler or while on a cigarette break, what’s the difference between that and, say, chatting with friends on Facebook or even customers on Twitter?

The difference is one of attitude, and it’s time for a change, say some. We are living and working in a fast-moving, flatter and far more empowered society – and the skill that managers need now is knowing how to harness that and make it work for their business. Updating your Facebook status during working hours is simply symbolic of the way the rules have changed.

It’s a cultural shift that many will find particularly hard to implement in the current climate. “When things go wrong, we revert to the autocratic way,” says Martin Thomas, a business consultant. For many, things are going very wrong – with consumer demand dented, bank funding limited and profit margins squeezed, heavy-handed micromanagement may be seen as the surest way to commercial survival.

Not so, says Thomas, a non-executive director of Sport England. In Loose: The Future of Business is Letting Go, he argues that tight controls need to be replaced with a more relaxed management style. According to Thomas, for a business to survive in these changing times, it needs to adopt a far looser approach in which specific rules are replaced with broad business principles. “The future for control freaks is very short,” he says.

The move to modernise is being driven by employee and customer expectations; the result of social and technological change. The modern workforce expects to play a greater role in service delivery, in strategic direction and in business development. And they can’t do that, argues Thomas, if they are hampered and hindered by strict rules and inflexible regulations. “Social media has raised the bar in terms of expectations. The companies that do best are the ones that work by broad principles,” he adds.

People power

“It’s not just the staff who are newly emancipated. Customers, too, are more demanding, expecting and critical, buoyed on by the mass power that informal networking brings. There is a cult of self-expression out there, of collective action and subversive behaviour. These things are always there, latent – the question is to what extent has social media unlocked and accelerated the change?”

The question is rhetorical: Thomas is urging businesses to stop analysing the why and where, but to start harnessing this newfound energy. Organisations with a looser mind-set, he says, are far more capable of responding to changes and reacting to the demands of these new super-confident and highly empowered consumers.

“A business such as Microsoft, which had to accommodate 6,000 staff bloggers – because its employees expect a high level of engagement with customers – cannot expect to manage that in a tight way,” he says.

So rather than banning blogging, businesses need to lay down broad principles leaving individuals and small teams to interpret them in a way they see as best for the business. “You have to build a culture of trust where people want to behave in a way that is best for the organisation,” says Thomas.

But it’s not an easy option. “This isn’t an excuse for non-management. It is difficult to build a loose management culture – you have to put a lot of time and effort into the recruitment and training. Ultimately, it will pay dividends, but this is not a short circuit.”

The biggest obstacle comes from middle managers, warns Thomas. “Senior managers get it, and the people coming into the workforce demand it. But, in middle management, there is fear; they don’t have the authority to make the big decisions and so rely on management by the rulebook. This is where the blockage seems to be – and they have to learn to move away from their process, templates and rigid structures.”

Time to break loose

If ever there was a right time to implement new ways of working, now could be it, according to a recent CMI poll. Its Future Forecast: Priorities and Expectations for 2015 survey revealed that 72% of managers had trouble with finding the talent they needed in 2014 – up from 66% the previous year. Some 39% said they already didn’t have the right people in place to fulfil their current objectives.

Thomas thinks the figures are even more revealing. “Managers now recognise that they have to change the way they work – and that they can’t carry on as they were. They just need to be given the encouragement. They need to ask: ‘Why do we do things in a certain way – does it bring competitive advantage by being responsive to customer needs, or is it just habitual?’

“The planning cycle has to be shorter, and businesses have to be more responsive and move more quickly,” adds Thomas. “It makes me laugh when I hear a company say it must embrace Facebook, yet it still takes five days to issue a press release. Why do organisations allow themselves to be so institutionally slow and contained? They don’t have a hope of embracing this new world and meeting people’s new expectations if they don’t address this problem.”

Meet the rule-breakers

But will it work? It’s proven, says Thomas. Not only has US online retailer Zappos adopted such a culture – gone are scripts and telephone time-limits for its call centre staff, for example – big high-street names such as Marks & Spencer are devolving decision-making away from head office down to branch level.

It’s not just commercial concerns that can benefit from adopting looser management styles, he claims. “Even the Army has changed tactics in Afghanistan from being prescriptive to much more flexible, relying heavily on decision-making on the ground. It realised it had to react quicker to events as it is not fighting a conventional war.”

One of the greatest and earliest exponents of loose decision-making, adds Thomas, is Al-Qaeda. “In some ways, it is the perfect loose organisational model for the modern world, which is somewhat ironic,” he writes in the book. “It adheres to a broad set of principles and objectives determined by a small leadership team, but operates through a complex network of semi-autonomous units or cells.”

Be warned, however, says Jim Evans, managing director at management consultants Navigant. Being free and easy is not always the best way to tackle today’s challenges. There are increasing pressures on managers to keep a tight grip on staff activities, not least from The Bribery Act.

‘The key point is that the individual employer of someone engaged in bribery can be held to account for those acts, even if the company did not condone or even know about it. If a company fails to act in the appropriate manner by not having adequate polices, systems and processes, then it will be held liable. It is very serious.”

Charlotte Mepham, employment law specialist at law firm Davenport Lyons, agrees: “A ‘loose’ management style may sound great, but there are risks attached which managers should be aware of. Without written procedures and policies, it can be difficult to establish clear parameters that apply to all employees. Written rules make it easier for employers to understand their obligations and for the company to justify disciplinary action if a rule is broken. Pleading a loose management style at a tribunal is likely to get very short shrift!”

Would you loosen up?

RICHARD ILSLEY, co-founder, Synogis, London

“We do it. We started off setting up a code of conduct, which became a rulebook and then we thought we were spending too much time working on it so now we leave it to each to set their own guidelines. If you pay someone $100,000 a year and you don’t trust them, something has gone wrong. Ultimately, you are checked by your colleague and clients. The one agreed measure we have is: ‘Did the client like it, and will they use us again… ?’”

RICHARD JAMES, group creative director, The Partnership Agency, Guernsey

“It depends on the industry you’re in and the challenges you face. It wouldn’t be right for every business to make decisions based only on broad principles. We have a lot of financial services sector clients, so are limited by their compliance regulations. But this is a creative business and we do find that too many systems and structures are restrictive. We do have some, but they’re at the top, hidden from the teams implementing programmes.”

BECKY DAW, managing director, Lehmann Communications Plc., London

“It’s all about trust. I lay down the basics of what’s expected in time-keeping and things like that but everyone’s needs vary. They know what’s required of them. I don’t give them a template but say, “You know what you need to do – the training and support is there if you need it – you can work out your own work plan as long as the objectives are met and the client is happy’. If you empower people in that way, they’re happier, more productive and committed.”

BOB TARZEY, service director, Quocirca Ltd, Slough

“If you block access to social media sites via the corporate web link, then many employees will simply access them anyway on their personal smartphones. If you allow access to the sites via the corporate web, at least you have the option to monitor and filter content, as well as providing a more efficient interface for employees to do something that they are going to do anyway.”