Balancing Empowerment and Control
For a straightforward approach to allowing employees scope for exercising their intelligence and creative talents, while controlling risks associated with empowerment, you can look to the "levers of control" framework put forward by Robert Simons, a professor at Harvard Business School.Simons describes his approach in a 1995 article in the Harvard Business Review that is based on his book, Levers of Control: How Managers Use Innovative Control Systems to Drive Strategic Renewal, published by Harvard Business School Press in 1994.
Simons recommends adopting four types of control system so that employees can "initiate process improvements and new ways of responding to customers' needs — but in a controlled way." The four types of control system are:
- Diagnostic control systems — The traditional approach of checking performance against plan by monitoring critical performance outcomes, such as sales and profits.
- Belief systems — Communication of your company's core values and its mission in a way that inspires employees' commitment and motivates them to "search for new ways of creating value." Simons notes, "In the absence of clearly articulated core values, [employees] are often forced to make assumptions about what constitutes acceptable behavior in the many different, unpredictable circumstances they encounter."
- Boundary systems — Ground rules for operations, and limits on the types of opportunities that employees are allowed to pursue. Simons argues that empowerment only works if you refrain from making lots of rules about what employees must do, and instead specify what they may not do. For instance, departures from ethical behavior should be clearly verboten. A company will probably also want to specify types of business it does not want to get involved in (perhaps because of lack of needed competencies), and/or types of customers it does not care to serve. Simons argues, "Boundary systems are especially critical in those businesses in which a reputation built on trust is a key competitive asset."
- Interactive control systems — The "formal information systems that managers use to involve themselves regularly and personally in the decisions of subordinates." In practice, this means regular face-to-face discussion between senior managers and subordinates to assess emerging information and new ideas that may or may not indicate a need to revamp the company's strategy and action plans. Managers are looking to "identify specific vulnerabilities, opportunities, and the source of any problems that require proactive responses." The sorts of questions to explore are What has changed since our last forecast? Why? What are we going to do about it?
Labels: Communication, Competencies, Decision-making, Innovation, Management practices, Motivation, Organizational culture, Risk management, Strategy
posted by Karen Nelson @ 11:20 PM
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