Micromanagement is the answer

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How many articles have you seen with terms such as, “Modern Management,” “Management 2.0,” or “Leader that delegates?” All these say the same thing, “believe in your people, empower them, delegate, delegate, and delegate!”

These are very honorable and modern thoughts applicable mostly in developed worlds, but have very little application in the emerging markets. These articles were written in countries like the U.S. and the U.K, generally following the tech giants’ way of managing their employees: people working from home, giving free coffee and food in all their offices around the world, etc. It’s no wonder why companies like Google, Facebook, and their counterparts get the highest survey scores in every country as the “Best Place to Work.” The Ivy League business schools with their research centers, publications, and foundations, have little knowledge about the developing world which have very few Google-like companies. These countries are based on “old school” businesses, depending on their region: real estate developments, natural resources, business process outsourcing, and manufacturing. Thus, a more “old school” management approach is required.

About 95% of these economies are made of micro-enterprises (with 1 or 2 people) and SMEs (up to 50 people) where the owner “dominates” and is perceived like a god. Let us start with the big companies in Asia. Around 5% of its economy is composed of “family conglomerates,” spanning among numerous industries. Most started with real estate and expanded to every industry possible such as banking, utilities, infrastructure, and tourism. This is strong in countries such as the Philippines wherein the top 40 families own 77% of the country’s GDP, followed by Thailand with the top 40 families owning 33%. What type of management do these gigantic corporations use?

Business tycoons happen to have lots of daughters and sons (often from multiple marriages!) which you will find leading the different divisions of the conglomerate. Consequently, only a few non-family professionals have C-Level positions there. Despite getting degrees from the world’s top Business Schools (and should therefore master the delegation and flat organization concepts), theses prodigies tend to forget what they learned due to limited application in the market that they operate.

The manager or leader in these countries should focus more on creating the next generation of employees and developing a culture that will not require micromanagement. In most Asian countries, “respect” for an employee’s superior often leads to very little communication between them. Blue-collar workers therefore leave their jobs due to misunderstandings with their superior, but in reality, there was no misunderstanding since there was no communication to begin with. An employee leaves because he had enough, but hasn’t even tried to speak with his superior about the problem.

I always use the great metaphor called, “printer is not working syndrome.” It is when the job was not done simply because the printer ran out of ink, but nobody informed the person in charge of ink supply, to replenish it. Why did no one ask the person in charge for ink? This also has a lot to do with Asian culture. Too much respect causes employees to avoid confrontation with their superiors, afraid of getting a negative response or reaction.

So what sort of management style should these corporations adopt? Today’s short-term solution is micromanaging the resources and slowly identifying people who can lead. These people would then undergo a slow empowering and coaching process where the basics of management and leadership will be taught. In relationship economies, (where personal and professional relationships are intertwined), money is not always the best way to attract the best people especially in tech start-ups; everybody has to believe and share the common and ultimate goal: disruption.

Easy Taxi Philippines, an organization that I have built from scratch, is a clear example. Our employees live and breathe Easy Taxi every day, and their Facebook status and contents are all about the company. They come to the office wearing the company shirt, not because we are telling them to do so, but because they believe in what we believe.

Disruptive tech start-ups do not have an “execution manual” therefore they require lots of thinking out of the box and engagement by the employees to be rolled out well.

The above diagram represents the mechanics of employee rotation in emerging market organizations. This becomes particularly true in up-and-coming businesses (like start-ups) where, blue-collar employees for instance have little to no interest in the business or in the company. These employees go after a safe, repetitive job routine with clear working hours and little engagement. In most cases you will see people spontaneously quitting or showing very little engagement (i.e. sudden leaves of absence); this happens when they are going through different phases of leadership. Let’s walk through them one by one:

THE ENTRY LEVEL

The minimum you expect from the employees on their first week is to be super enthusiastic and energetic on their job post, this will happen in most of the cases. In this phase employees will understand they have not joined a “normal company”, it is the leaders’ job to make sure employees are aware of company culture since day one (from the interview actually). I have personally placed signs across our offices with messages like “we are not a call center”. This phase can last anywhere between one to five weeks before seeing people resign.

THE ADAPTATION LEVEL

On this level people are getting acquainted with the company culture and mindset. Employees have found their space and routine within the organization and the “start-up virus”, the thinking out of the box, has entered their bloodstream. This phase can last anywhere between two to four months since the incorporation of the employee.

THE ADOPTION LEVEL

This is the most critical phase within the employees’ development plan in the organization; employees who will successfully pass this phase would be the company’s future leaders. This phase has a sort of “mentor to protégé” relationship between the few employees left in this cycle and the leader/s of the organization. Main characteristics of this phase are: high level of engagement and commitment, high productivity, great out of the box thinking and long enthusiastic working hours at the office. So what can go wrong in this phase? One simple example is given by the mentor – protégé relationship. As employees gain importance in the company organization, some may start making absurd requests concerning salaries and / or incentives. This will create a domino effect with other employees making similar requests. Another common practice in countries where there is a lack of skilled employees is piracy by other companies bringing counter proposals for the employees with absurd requests. This phase can last between four to eight months since the incorporation of the employee.

THE LEADERSHIP LEVEL

This level can be manifested across all the employees rankings (from office manager to VP for sales). It is that magical moment where mentors and protégés realize the solidity and loyalty of their relationships. These people will follow you anywhere and their loyalty can’t be bought out. In Asian countries the blending of personal and professional relationships will keep this level going.

The leaders of the organizations are ultimately responsible for the success or failure of this cycle from the very beginning, having poor recruitment channels or interview processes will lead to poor resources that will not make it to level 2,3 or 4. Delegating recruitment to other people within the organizations that are not in the leadership level is another mistake leaders make. How can a recruiter properly assess a candidate if they themselves are not sold on the company yet?

Starting with a methodological micromanagement approach, allowing people to step up (not purely driven by monetary incentives), and developing a solid working relationship among employees within the organization are the secrets to successful management in emerging Asian economies.

Mario Berta

mario@marioberta.org