There are many styles of management, and depending on the size of your business and the organizational format and whether or not you have departments and department managers etc, all may help determine how you manage your business. However the real issue is the personal preference of the owner as to how he wants to have the company run.
There are two basic formats, the pyramid organization with the head of the company, typically the owner, making all the decisions and the managers simply implementing his mandates.
Alternatively there is the flat organization were the managers make the operational decisions with the management team and owner only reviewing results or discussing issues and problems on a timely basis as in a weekly managers meeting leaving daily operation issues to the managers to resolve.
Of course critical issues can always be reviewed and determined by the owner when and as required but the company is basically run by the managers in this flat format.
There is a huge difference in these styles as the former concentrates all power and all decision making typically in the owners hands. He micro manages every aspect of the business with a constant flow of managers asking him for immediate short term consideration and responsiveness to whatever is happening at the moment.
There are typically few systems installed as the owner makes up his mind on an issue by issue basis. This is more often called putting out brush fires and babysitting as these are the main functions such a style promotes.
On the other hand the flat organization allows and encourages, actually requires the managers to make all the operational decisions without going to the owner or the head for the answers to every micro issue imaginable.
The later method requires the managers to be held responsible for success and also held accountable for their achievements or failures.
As you can see the choice of management style must emanate from the ultimate boss, the owner and if he is committed to controlling it all, he is establishing his and the businesses limitation, as there are only so many decisions one can make before this style begins to limit the effectiveness of the organization.
The second system, the flat organization requires the owner to trust his managers, and rely on key indicators to track, monitor and control their actions while the owner makes policy decisions as the managers manage the daily operations.
Manager meetings are when information is shared and discussed and success is monitored and controlled.
To develop the style further, if the decision is to manage via a flat organization, why not empower the employees to also contribute to management decision making and thus involve the entire team in the responsibility and accountability for success. Thus periodic department meetings were frank and honest discussions are had about the workings of the operation and how to improve it.
This approach works best when the employees are also rewarded for success with an incentive based reward system, thus putting everyone in the same boat all pulling together trying to achieve the same goals and being held accountable for success as well as rewarded for success.
I believe the flatter the organization is, the more the employees and managers are held responsible for success and accountable for reaching goals as well as being rewarded for achieving stated benchmarks, the more effective, efficient and profitable the business will be.
It must however start from the top. If the owner selects a strong management team and then lets them manage, if the managers can create quality team work in each department and then if the departments can work together to create a larger team effort success will be most assured.
The owners job changes form crisis management and brush fire management to training, planning and reviewing, what he should be doing.
This is the way many successful companies are being run today. While neither style is wrong, it appear the flat organizations are the current trend. The issue is the style and vision of the owner. Such major business successes such as Toyota and Whole Foods are truly flat organizations, and these businesses are very profitable and growing rapidly with control and profitability. Perhaps they should be emulated. Call for help 413-584-2581
