If you spent $15 million at work and had nothing to show for it, would your company be OK with it?
Probably not. No company would put up with that kind of cash outflow and not expect something in return, whether it was a new product, idea or service.
Yet, that’s what is happening as managers struggle to solve a complex problem, and end up spending millions of dollars that bring no solution. They spend the money on surveys, consultants and technology – or fire and hire workers as they look for a way out of a messy situation.
In a new book, “Stop Spending, Start Managing: Strategies to Transform Wasteful Habits,” authors Tanya Menon and Leigh Thompson say this “action without traction” is a problem that not only wastes money, but hurts creativity, innovation and productivity.
The authors asked 83 senior executives from a variety of industries to think about their most critical people problem at work, and then estimate the average cost. The results showed an average cost of $15.5 million, along with 5,514 hours dedicated to the problem. In addition, an average of 357 people in the organization were used – employees who could have been doing something else other than dealing with the issue.
The problem-solving approach that was used most often was discussing it in meetings (68%), followed by conducting analyses (43%) and hiring a consultant (36%). Twenty percent admitted to doing nothing.
At the same time, the executives estimated that there was only a 46% chance that these approaches would solve the problem.
“It’s people problems, not technical problems, that exact the greatest toll on productivity,” the authors say.
Menon, an associate professor at Fisher College of Business at Ohio State University, says that as companies are under increasing pressure to innovate to keep up with the competition, there is more disagreement among workers on how best to do it. That can lead to endless head-butting among different factions of workers and frustrated managers who are trying to be proactive in solving the problem.
“You may talk to these people over and over and it’s just an endless cycle of the same arguments,” Menon says. “It’s that lack of results that exhaust you. You’re making no progress, and as a manager, that just kills you.”
Managers aren’t spending money to solve the problems because they are wasteful, but because the problems are complex and they can’t find a way to overcome them, the authors say. While these managers are smart, action-oriented bosses who are quick to try new things, their actions become “misdirected,” and they end up “capturing noise” instead of “meaningful signals” that will help them solve the problem, they say.
Menon and Thompson say if managers want to quit wasting time and money on solutions that don’t work, they need to understand the five spending traps and how to overcome them:
- The expertise trap. Most managers have reached a certain level of expertise and rely on their own intuition. But relying on a tried-and-true answer narrows their focus. “It’s a double-edged sword,” Menon says. “You’re getting results – but predictable results.” They suggest managers play the “bad cop” with themselves and set out to disprove their intuitions and learn to spot their own biases. They need to widen their view and look for untapped resources, how others reached their conclusions and what needs are not being met.
- The winner’s trap. “Managers have been successful in order to get them where they are, and then they’re hearing all these new ideas from younger employees. It’s a natural human response to resist those ideas,” Menon says. Managers can feel competitive when they are challenged to admit that someone else knows more, or that a project is a failure. They must learn to ask for input from others and be willing to admit that failure is a learning experience and not a sign of weakness.
- The agreement trap. Managers are like most people in that “they want to be likeable and popular,” Menon says. Giving feedback can be difficult, and so they may remain silent – or even praise – employees who need improvement. “When managers embrace rather than avoid conflict and speak up rather than quiet down, they empower others to do the same,” she says.
- The communication trap. Managers often end up communicating the most with those nearest to them or who have similar perspectives, filtering out contrasting opinions and information. Further, the growing reliance on data can be a detriment. “The minute I come up with data, it shuts down the conversation,” Menon says. “Data collection ends up being a substitute for strategy, creativity and solutions.” Managers and teams need to expose themselves to diverse ideas and people and do things like banning technology in meetings in order to avoid distraction and keep their minds open to ideas.
- The macromanagement trap. When a team is full of great talent, it’s tempting to stay out of their way and just let members do what they do best. Or, managers rely on the strategy of “empowering” teams and completely step aside. But these teams can still get into petty arguing and unproductive habits that can lead to mistakes or less-than-stellar results. To counter such problems, managers need to help groups navigate conflicts and encourage them to tap into more creative solutions.
Menon says the key for spotting these traps and overcoming them is for managers to realize that they need to “focus on the weakness implicit in their own strength.”
“The traps are especially insidious because, ironically, they often result from the skills and strengths that have served successful people so well in the past,” she says.Posted in People Management, Team & Project Management | Tagged Collaboration, consultants, data, fire, habits, hire, technology, wasteful spending