Filed Under:Claims, Education & Training

For Better or Worse: How Management Styles Impact Companies

Performance, Office Politics and Why Nice Guys Sometimes Finish Last

When Steve Jobs died of cancer earlier this year, the “weeping and wailing” seemed to go on for weeks. It was as if America’s greatest hero had passed away, and all the techies with their “i-things” were lamenting his passing.

Then, over the following several months, articles and TV biographical specials let America know a little more about Steve Jobs, such as his rise from a marketer of an early personal computer invented by a friend in the back of a garage to the grand marketer and wizard of all those “i”—phones, pads, pods, tunes, and “apps,” as in Apple. But the more we learned, the stranger this great entrepreneur became. Frankly, Steve Jobs was not a very likable guy. Even his own company fired him once, though they later hired him back. He had a mean temper, and if things did not go his way, well…then hit the highway.

Comparing Apple to Microsoft

I am not an advocate of annual or semi-annual job-performance reviews. The relationship between an employee and his or her boss should be daily. This means the employee that is doing well will know it. Likewise, the one doing poorly should also know it—or should at least be warned that improvement is needed. The problem with conducting only periodic reviews is that too often emotion and personal-relationship factors interfere with sound and useful review. Apparently, according to Kurt Eichenwald’s article in the August 2012 issue of Vanity Fair, that is what has caused Microsoft to fall on hard times since Bill Gates stepped down as CEO. His replacement, a guy named Steve Ballmer, a friend from Gates’ days at Harvard, took over in the 1990s. According to the article, Microsoft has been in decline ever since. Could the management style be to blame? Apparently, Ballmer is a tough guy who plays politics. One product manager is quoted as saying, “If you don’t play the politics, it is management by character assassination.”

“The practice leaped into the spotlight—at least for people who study how companies perform—when Vanity Fair’s August issue published a profile of technology icon Microsoft. The company’s malaise, the author argued, was partly pegged to its evaluation system.” It was the same “management by objectives” process that I first criticized in September 1983 in “The MBA vs. The MBWA,” which appeared in Insurance Adjuster Magazine, predecessor to Claims. Back then, what Microsoft experienced in the early 21st century was called “The Great Malaise of the Eighties.” Management types with their MBAs were everywhere, suggesting certain pathways to prosperity. If Harvard Business School had suggested that the way for a company to make money was for all the executives to stand on their heads in the hallway with a nickel in each of their mouths, then hallways of corporations all over the nation would have been full of guys standing on their heads with nickels in their mouths. It might have worked, too; they would have been out of the way of the employees who actually were accomplishing things.

It was the anticipation of bad performance reviews that led Enron’s employees to commit the dirty deeds that led to the company’s demise and the loss of billions of dollars to those who had invested in it. “Performance” was translated to “bring in big bucks, even if you have to do it unethically.” This is the exact same mind-set that has ruined America’s banks.

Now there is nothing wrong with a company having a goal or objective. The problem is when the objective becomes a fanaticism that blocks common sense and reality. This has happened to a lot of great companies. The goal became a god, and those who didn’t worship that god got the boot.

Management by Wandering Around

Relationships and Job Performance Evaluations

Perhaps the fastest growing area of tort claims is employment practices liability. Once it consisted only of perils such as wrongful termination, but today there are a variety of individual perils such as sexual harassment; religious, age, sexual orientation, racial or handicap discrimination; and similar personal breakdowns between an employee and the employer. As with many such torts, a number originated in California and wound up as workers compensation claims: “My boss yelled at me, and now I’m depressed and have to receive psychiatric care and am now disabled.”

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