Small Efforts

That Yield Cultural Changes


Few efforts are more exhausting than instituting cultural change.  Getting managers to support cultural shifts requires great skill and determination. 

This is current management thinking, and indicates a deeper problem; we think we can use skill and determination to institute a cultural change.  Culture is not determined by what we do, but by why we do it.  Cultural change is not imposed, but is created through changing our understanding of our environment.  When we change the way we see business, the culture changes too.

By definition, management is an action that gains through the efforts of subordinates.  For the management engineer, the modern attitude implies a disturbing fact, that business leaders have nothing to gain through a cultural change.  Without something to gain, our changes themselves have been unmanaged.

Management Engineering is the art of finding practical solutions to real problems in management.  This emerging specialty brings two general benefits to the senior manager.  The first is a focus on performance that is very difficult for general managers to maintain in light of their other important concerns.  The second is a technical knowledge for gaining efficiency through structural design and management actions.

Management engineering is much more than management improvement.  It is the basic application of efficiency principles to solve technical problems faced by senior managers. 

The general cause of managerial inefficiency is a failure to manage.  We now lack management above organizational design.  We do what has worked in the past with only minor modification.  We perform no coherent management over management processes.  We have only general guidance, such as through the structured use of goals and objectives.

This article addresses cultural alterations that can be accomplished through relatively simple changes at the top of organizations.  As with most undeveloped knowledge areas, original applications can be both simple and startlingly effective.


The Exception Principle: Part II

Management now recognizes an effective exception principle that has been applied to excellent effect.  It is founded on the idea that managers are hired to manage, and workers are hired to work.  Therefore, managers do not perform the work of subordinates unless it is somehow exceptional to the subordinate’s skills and abilities.


Exception Principle: Part I

Performance work never rises up the organization

unless it is exceptional to those who would perform.


Application of this rule has kept workers focused on doing work, and managers focused on the performance of management.  This exception principle has defined a cultural mandate that is part of our modern management culture.

The second side of this same principle has not been applied, which has resulted in a great deal of inefficiency in management.  The same type of foundation is needed for managing the distribution of administrative work.  Administrative personnel are hired to do administration, and their subordinates are generally hired to perform other work.  Efficiency is enhanced by keeping administrative work away from subordinates, unless it is exceptional for the administrator.


Exception Principle: Part II

Administrative Work never gets passed down the organization

unless it is exceptional to those who are above.


The impact of applying this principle can be startling.  It creates changes throughout our present mode of doing business, accomplishing a major cultural shift.

Change #1:  Application prevents a manager from creating administrative work for subordinates to perform.  This promotes a substantial reduction to the amount of administrative work performed in an organization.  The manager would have to perform all non-exceptional administrative work that might now be passed to subordinates.

Change #2:  Any person who receives an administrative assignment from above is bound to perform that assignment up to their capacity.  They can only pass to their subordinates such parts of the work as are personally exceptional.  The originating superior manager gets the benefit of the skills and abilities of the one to whom he or she assigns work, and the burden of the work is not passed to subordinates as their workload.

This prevents daisy-chain assignments, where we have three or four managers serially managing the same performance by some lower-level employee.  It avoids having many different managers trying to perform management over the same work effort.


Any effort important enough for a manager to assign

is important enough for the Assignor to manage.


Change #3:  The third change is subtler; and it directly involves the senior manager as one whose assignment process will be altered.  Where a task has to be assigned to a lower-level worker, this principle encourages making that assignment directly, rather than passing it through subordinates.  The technical professional who must produce a report for an administrator should be directly supervised by that administrator.  This simplifies management, and removes the workload of intermediate managers who are unlikely to add value to the product through their management efforts.

This principle applies to operation of the organization, not to its command functions.  The administrator in charge of a major productive area of a business (the CEO, plant manager or product manager) is in place to originate such administrative work as is necessary to assure organizational performances.  He or she is the one most likely to do the implementation of this cultural change, and will not be subject to the application.

The big challenge is in enforcement, as this goes against the grain of present management thinking.  It attacks the currently popular viewpoint that the subordinates are working for their direct supervisor.  It attacks the position of a manager as one of privilege in the direction of resources to personal, or even managerial, goals.  It replaces this with the less popular idea that the subordinates are working for the organization, with the manager in charge to provide effective supervision and assure performance.

The implementation tool is policy backed by exception management.  The basic policy is a formally issued statement, with an “open door” for entertaining challenges by those who feel that the some assignment does not follow the new policy.  For extremely large organizations, the person with the open door can be specified for each sub-organizational area.

The primary cost of this change is the cost of handling exceptions, and there will be a good many before the policy becomes accepted.  An ancillary cost is found in the reduction of the management workload, which can be substantial.  There will be an eventual need to reduce the number of managers and widen their span of control.  This is a long-term threat to the employment of current managers.


Attach Performance Measurement to Employment Contracts

Everyone seems to know that our personal performance measurement systems in management and internal support are not all that useful.  Management engineering identifies the cause and highlights the change that establishes effective performance measures.  It involves a partial reversal of a management error from the 1950’s.

In the early days of computers, someone had the idea that payroll could be made more efficient through centralizing calculations, and automating the generation and delivery of paychecks.

This was a remarkable error, as the basis for pay is employee performance; and pay and performance are related through the employment contract.  Paying an employee addresses an effective delivery order on the employment contract.  The automated delivery of pay separated authority to accept performance from responsibility to pay.  It was a basic abandonment of management to save a few processing dollars.


Efficiency Engineering Principle

"A fair day’s work for a fair day’s pay."


This separation had a substantial impact on the measurement of performance, it left a void where the employee was paid for being an employee, and performance was accepted by supervisors who had little input to pay decisions.  Our modern performance measurement systems demonstrate an attempt to put some of the natural controls back in place.  The obvious and general despise for these systems speaks to their lack of effect.

Solution requires a partial return to what makes sense, a reattachment of pay to performance, more effectively implementing employment contracts. 


The natural performance period

is the pay period.


Pay is given for a delivery order under the employment contract; performance during that same period should earn the pay.  If performance earns pay, the acceptance of pay should close out that delivery order as being fully executed by both parties.  If it does not, it raises an immediate exception.

The potency of this approach should be obvious.  Any exception goes to the purpose for the employment contract, and action will be backed by a management requirement to protect business income.  Paying for services that are not being provided is wasting business resources!  Exception situations will arise and be handled expeditiously.

Also, defining a performance failure as a contract exception provides the tool for taking action.  The employee is either going to begin performing their position acceptably or they will very quickly find their continued employment in threat.

Implementation turns out to be less of a challenge than realizing the possibilities.  The change can be initiated by passing the pay-record slips through each supervisor.  The supervisor evaluates performance and then passes the slip to the employee.  The only functional question to be answered is: “Has this pay been earned?”  A “Yes” answer closes the books as to that performance period.  A “No” answer is an immediate exception.

As an exception, the "No" should be permitted only with superior-manager approval.  That superior manager should investigate the situation and assure that it really is an exception that goes to the heart of the employment contract. 

Formal counseling is only necessary where there is a negative finding by both supervisors.  The record should have a brief annotation of the failure being identified, and what will be required to remedy the situation.

If corrective actions are not taken by the employee, and there is a second failure; the situation should involve the third supervisor above, and should be an immediate threat to continued employment.  Any third failure would almost force removal for the good of the organization.

There are some caveats.  The employee is only responsible to do assigned work.  Failure to assign is not a failure in performance.  Also, use of approved or emergency leave is always acceptable performance.  Supervisors are to be given latitude in determining whether some behavior or act is really an exception.  If a temporary situation causes a failure, as where death of a spouse might interfere for a time with performance, latitude would normally be given.  The involvement of the higher-level supervisor should still be mandatory, but only for general information and approval of remedial actions.

The cost of this change is negligible in dollars, and should actually reduce the work of managers in recording personal performances by their people, even as it increases management effectiveness.

The benefits from this sort of change can be remarkable.  Every employee receives regular support or challenge for their performance.  There is no need for quarterly reviews.  It puts the manager more in charge of performance, even as it limits the workload associated with generating potent performance records.

A hidden benefit is found in subjecting all the supervisors to the same performance measurement system as common workers.  They are both hired to perform work; and this provides a common way that their performance will be measured.  It builds sensitivity; and gives managers common concerns with those they rate.

Another hidden benefit is found in dealing with a union.  The only acceptable argument against any adverse action will be based on mistake, that the employee is really earning pay.  The union is most unlikely to argue that people should be continued as employees when there is a general consensus that they are not earning what they cost.

The only major challenge that this performance measurement approach might face is that it does not support positive exceptions.  This is a true statement.  The employment contract is the foundation, and exceptions should always be exceptional.

The same basic approach can be modified to identify positive exceptions.  Instead of a pass-fail judgment on performance, it can also allow a measurement of exceeding standard.  The number and type of exceed-performances can be used to key a system for exceptional awards.  Any finding of exceeding will probably have to be annotated to be effective.

This cultural change can be implemented by directive.


Managing Leave by Dollars

There is nothing for an executive manager to gain through leave management.  It has no valuable product supporting its application; it is unmanageable as a program.  Our present approach involves management work that should be eliminated.

In current practice, employees earn a right to leave hours.  When a need arises, they request those hours from supervisors, who generally permit the use.


Engineering Rule:

When a problem is properly defined,

the solution will be obvious.


The question is: “What should the organization gain through leave-management?  When this question has an answer, then we have a place to begin designing a process to meet that purpose.

I assume that the purpose is to support a reasonable level of non-productive employee time to assure performance by meeting personal needs.  The purpose is in providing this benefit at minimum cost.

The challenge of the current system is obvious.  Leave is handled as an entitlement; but that entitlement is not distributed. 

The first obvious change is delivering this entitlement to the employee so that managers don't have to manage it.  Where leave is not retained there is little reason to manage the granting of time off from work.  The default should be that the employee is given the time as personal property.  Interfering with an employee taking time off should be the exception action.

Implementation involves a shift in resources, as the leave becomes employee property.  When the employee uses leave, he or she will be expending their own property, rather than trying to collect something that was promised to them.

One amazing aspect of this is the immediate elimination of differences between annual and sick leave.  If it belongs to the employee, the employer no longer has reason to try to directly categorize and control it.

Also, that leave has a value when delivered, and that value should not change with an employee’s earning capacity.  Instead of giving hours, the delivery should be in equivalent dollars.  The employer then knows exactly the dollars committed to the employee.  Changes in the value of employee hours should have no impact on what has already been identified to the employee as their property.

Leave dollars will be the undistributed property of the employee.  When an employee uses leave, this will involve dipping into a personal employee account and drawing it down.  Abuse of sick leave would no longer be a management issue, it would be a performance issue.  If someone was able to regularly expend all the leave they earn, but still perform acceptably, there would be no problem to solve.  If someone used the leave to avoid undesirable work, that would be a matter to be handled as a performance exception.

If there is concern about employees becoming too wealthy in these accounts, the excess leave dollars might be distributed (by policy) directly to the employee, or into their retirement accounts.  This could both limit the size of leave accounts and maintain the value of the leave given to the employee.

Also, on separation or retirement, the whole remaining account could either be distributed to the employee as his or her individual property, or could be distributed into the employee’s retirement account as an increase in actuarial value.

What this accomplishes may be subtle, but can be impressive.  The current use of leave requires approval.  After the change, there is no need for documents supporting the regular use of leave.  Interfering with leave becomes the exception that would have to be documented.  This reduces both the paperwork required to manage leave, and the time of both supervisors and employees.

This change minimizes management requirements, and puts additional personal-management responsibilities upon the employee.  It simplifies bookkeeping, budgeting and accounting.  It puts the employee in more control over his or her own destiny, and does this with only an initial expense that is already owed to the employees.


Replacing Suggestion Programs

Our current approach to managing innovation centers on suggestions.  Suggestions by employees often address process improvements that can only be implemented by managers who are otherwise satisfied with current operations.  Part of the mandate for all managers is to promote unity of purpose, to draw subordinates into coordinated and productive efforts.  Suggestion programs encourage disunity and competing purposes; a source of managerial inefficiency. 

A suggestion is only a potential.  It has no intrinsic value to an organization.  Value is only gained through implementing improvements.  Executive-level value will be found in managing the implementations that generate improvements.

Implementing process improvements is within the purpose and responsibility of supervisors over performance processes.  This is where improvement-management must be applied to be effective.  If a positive cultural change is to be implemented, process improvements must become part of the job of the supervisor.

This turns out to be relatively simple, as process management is already the responsibility of these managers.  The beneficial change only awaits activation; and activation can be by directive.


All process management involves some level

of process improvement.


The first change action will be to mandate that every manager implements some token level of beneficial changes in his or her area of responsibility.  This communication should specify that process improvements will be considered when addressing advancement.  Process improvements will demonstrate one of the valuable skills a manager must exhibit to be promoted.

The standard challenge will be raised, that the manager is not able to do this on his or her own.  The right answer will set the new cultural direction: "A manager is given authority over employees with the idea of using them to do work assigned to that manager.  Process improvement is being defined as part of that work."  A manager who is unable to find his or her own improvements must be able to solicit improvements from subordinates.

The impact of this change is immediate in the sense that it aligns the new improvement-purpose of the supervisor with the improvement-interests of the employees.  They join together instead of working at cross purposes.

Suggestion programs can be replaced.  The resources now used to track and manage suggestions can be redirected to helping managers document their process improvements. 

One impressive new potential is realized by replacing payment for suggestions with performance awards for employee-implemented improvements.  If developing improvement ideas is the responsibility of the manager, then employee performance of this function is exceptional by definition.

The result of this effort is a cultural change that institutionalizes process improvements.  As a side benefit, it also orchestrates the efforts of managers and workers to the same desired effect.  It institutes management where it is now missing.



Management is defined as gaining performance; but much of our present focus has been redirected to modifying processes.  The performance focus maintained by management engineering can provide the executive manager with new management vision.  Crystallizing focus on senior-manager vision is the heart of cultural change.

Management engineering is more than a program.  It is a new way of supporting today's executive manager with valuable perspectives and technical knowledge.  Its current novelty assures substantial benefits from early applications.

The full implementation of the exception principle both increases managerial efficiency, and provides more effective process.  Reattaching performance measurement to employment contracts yields potent new management tools.  Converting leave from held-hours to distributed-dollars can eliminate unnecessary work.  As in the replacement of suggestion programs, management engineering can even redesign programs so that they become a part of ongoing management operations.

 These are all permanent changes affecting organizational culture.  When fully instituted, they become self-sustaining; a price paid once for a relatively permanent