Why corporations love delegation and are scared of Empowerment

Not only does empowerment of employees take the load of the task away from managers, it also takes the load of the decision away, making the role of the manager much easier. The time the manager does not have to be in the operation, she can work on the operation – improving it.

Having more decision power closer to the customers and the employees create a more agile organisation that can respond to rapid or local changes without HQ being awake.

Decision power and responsibility is a powerful motivator that significantly increases Employee Engagement and through that increases customer engagement and financial results.

Most employees also tend to grow capabilities faster when trusted with decisions rather than being locked in a training room for mandatory compliance training. So how come many companies don’t really deploy empowerment?

So why don’t organisations embrace Empowerment?

Many organisations now see themselves as values based. This should in principle means less rules and higher ability for the individual contributor to have responsibility and decision power over what they do. Often in the same companies there are more rules than ever, often camouflaged as a need to meet governance, compliance or to lower corporate risk. Many of these rules are created to protect the organisation against potential actions of the individual employee - a strange concept indeed. 

Decisions are concentrated around a few select senior managers and delegation trickles down the organisation in a way that often is counterproductive to what individuals and departments are trying to achieve.

In these organisations it looks like control and hierarchy is more important than making the company great and able to create value. There are powerful forces that make it so, as senior management is always benefitting from status quo.

Their operating logic dictates that highly paid individuals knows best and needs to decide. While this might be true it completely disarms the organisation and lowers the engagement of the entire organisation. This can become a threat for the survival of the organisation. People without engagement stay and get their pay check but they are not motivated and do not contribute.

The direct manager

When divine decision does not create the intended greatness the spotlight is on the middle manager responsible for the implementation close to the employees. Creating an environment that punishes only increases the middle managers need for control and somebody to direct the blame to.

At the same time, it has become so popular to coach that managers call everything they do and have always done for coaching. Reality is that most managers are still coaching for compliance: Trying to manipulate the employee into what the corporation thinks is the right behaviour.

Delegation is a great tool if it is more important to stay in power than to create a great company and all stakeholders should analyse if their company has a delegating or an empowering culture. This is likely to determine their fate.

Seek companies with an Empowered Culture

The 11 questions that will tell you if your behaviour is collaborative

From the industrial age of business the concept of coordination has ruled the way people work together. Driven by directive and a singular focus on return to the ownership structure it is not based on trust or on team work, but often focused on a narrow short term cost based goal.

In the more modern knowledge area cooperation started to become more important. Although still a directed mandate it requires a higher degree of personal investment and motivation from the individuals participating. However cooperation still works inside the frames established by the operating logic of the company.

Neither works well when innovation or disruption are needed, which is why collaboration has emerged in the recent years. Collaboration is driven by mulutal self interest and requires a high level of trust and commitment for each party. It requires highly engaged people that are willing to challenge authority and status quo to unlock new value to the benefit of all parties.

These 11 questions will give you an idea if you are currenlty working in a collaborative way:

1. Are you unselfish and do not pull rank
2. Are you Inspirational and positive
3. Are you Committed to the team and the challenge
4. Are you Curios and have an open mind
5. Do you Participate but do not dominate
6. Do You Build trust and create a safe environment
7. Are you adaptable – not Dominant
8. Are you honest but with respect and tact
9. Do you Listen with the aim to understand
10. Do you Respect other persons and their views and ideas
11. Are you focused on Value Creation not value extraction

Competitive advantage can only be created through people.

Since the financial crisis the focus of some corporations has turned from a desire to create value to a perceived need to extract value from their existing business. This has mainly been achieved by starving the existing business through headcount reductions and outsourcing of corporate support functions to cheaper jurisdictions.

 Included in the cost savings has been customer direct and indirect support functions – in reality revealing that these corporations has limited belief in these functions as assets able to deliver revenue and growth to the corporations. This also means less delivered to the customers for the same price; as a CEO of an insurance company put it: “A more disciplined offering to our customers” – a lyric formulation for less.

Reducing frontline employees is a dangerous game as automated response systems and web based support might not be able to create the emotionally connection with customers that most corporations marketing campaigns are based on. What customers expect and what they get will be quite different – automated and generic response does not create engaged customers.

These kinds of headcount reduction and reductions in funding to training programs, maintenance of equipment and R&D to improve the bottom line has not exactly been rare. There might not be anything legally wrong with doing this but ethically there can be issues.

From a governance issue, under-investing in people and under-investing in the revenue generating part of business is considered stealing from the future to benefit today. This is especially a problem when executives are paid based on P&L metrics and share compensated affected heavily by earnings per share. It could be seen as stealing from the future for own personal gain.

The increased cashflow from these activities has predominantly been reinvested in the company’s own equity as pointed out in the Harvard Business Review article: Profits without prosperity, with increases in share price as a result. The problem is that this is not an investment in the business future and based on assumption that the existing base of competitiveness is relatively safe. Companies might believe there is safety in size, like Kodak did or safety in technology as Nokia did. They might think that their brand is the strong enough – like Blockbuster or Motorola did.

Unfortunately for these companies there is a new breed of predator in the corporate jungle. Companies like Google, amazon, Netflix, Tesla and Apple are redefining the rules of the game in ways the more mature companies has no response to within their current way of thinking. 

The mature companies think that the new companies have created their competitiveness through people-less assets like computers, artificial intelligence, automation, robots and Internet based offerings and assume that reduction in headcount is the way forward.

What they have failed to understand is that all of these companies only create competitive advantage through their people and not at the expense of their people. If they wanted to take a closer look they would see companies highly focused on getting the right kind of people, making sure they are continuously developed and satisfied.

These companies know what is well established outside the economic and financial circles – probably also in these circles but not stated publicly – that human beings are not only rational people but more importantly emotional beings that are affected by the social context around them.

They make sure that their employee are not only rationally connected to the companies though satisfaction but more importantly connected emotionally through engagement. Connected to the purpose of the corporation – the “Why” of the corporation.

These companies also have a belief that employees are the only true source of competitiveness, even if it manifests itself through products, systems, knowledge or other employee made artifacts.

Employees make a difference. Employee engagement matters.