Management is a system – with 3 levels
Management is getting work done through other people. We’ll discuss the people part in another article – it’s just as important. This one’s about the work.
If you think about that definition, you’ll discover that the point of management is output; in other words, results. Just like any other system. Good managers define those outputs clearly. Often managers have a broader perspective on the direction of the company so this helps align the outputs the employees are producing with the company’s needs. Nobody likes to work hard on something that doesn’t matter. But good managers also give employees autonomy in how they achieve those outputs. This avoids micromanagement.
Since management is a system, managers themselves produce outputs. Those outputs are of 3 distinct types. I call them the levels of management.
Level 1 – Team Leader
In retail it’s often called a supervisor, in other places a team leader or overseer. It’s a person in charge of a small crew who is usually also a worker on that crew. It addition to doing the work, the team leader is responsible for leadership and intra-crew decisions such as scheduling, making sure the crew has enough supplies, etc. But they usually cannot change the direction or makeup of the crew nor can they make major decisions about the crew’s assignments. The team leader is usually given a task for the crew to perform – then helps organize the crew to accomplish the task, but can’t modify the task in any significant way.
A common mistake is to “promote” your best worker to team leader – this happens often in sales. Leading a team is a vastly different skill from doing the work. It requires a different temperament & training. Don’t neglect training team leaders.
Level 2 – Executive or Middle Management
These managers are responsible for allocating resources to accomplish something. They are usually given goals and they prioritize the tasks needed to accomplish those goals. Then they work to assign ways that the project can be accomplished within constraints of budget, staffing levels, equipment etc.
In smaller SMBs level 2 management is often done ad hoc based on situational needs. And that’s OK. But as the company scales you need more rigor at this level. In large organizations, middle management is also responsible for coordination between different groups or teams.
Level 3 – Upper Management
This level is responsible for setting strategic direction. They are also concerned with things like how to best utilize funds, making decisions about products, and how to address trends in the market place. Profitability goals and long term vs short term tradeoffs are the purview of this level of management, as are exit strategy decisions. These decisions are best made with lots of input from others in the company. But ultimately these leaders make the call.
1st level managers tend to ask When? What? and Where? because they are responsible for getting stuff done.
Middle managers ask How? and Who? because they are given a goal and have to muster resources and assign them often within budgetary constraints.
Top level managers asks WHY? because they are responsible for the strategic purpose of what is being done.
Smaller organizations spend most of their management efforts at level 1; almost none at level 2, and some at level 3. This changes as companies grow and strategy and planning become more important.
Also larger companies might have more than 3 “layers” of managers but if you look at the output they produce, you’ll see they form these 3 levels. Much like a large restaurant might have a pastry chef and a chocolate chef who both produce desserts. Levels? Layers? Vocabulary fails, but if you consider the outputs you need, it becomes clear.
A useful exercise is to track your management time according to the level of management output you produce. Are you keeping a team on track? Level 1. Are you allocating resources or assigning people? Level 2. Are you making strategic decisions? Level 3. As the owner of an SMB you are the only person who can be the ultimate decision maker at level 3. If you are doing level 1 and 2 management, perhaps you need to train people to take that off your plate.
The first thing to do when training people for management is to be crystal clear about the outputs you expect from a good manager at their level. If you don’t do this, you’ll be at the mercy of needing to find “good people” who can do that thinking for you. That works, but it’s hard to scale.