The November 2007 issue of the BoardGrowth™ Newsletter offered an overview of Micromanagement. This issue takes the topic more in-depth for sound diagnosing and curing of this common Board ailment.

Micromanagement is one of those subtle afflictions that is often whispered about but rarely confronted. That's too bad, because it's responsible for the illness, even death, of a lot of organizations. In the sense that it is little thought-of, yet wreaks so much havoc, I call it the worm that eats organizations.

The difference between oversight and micromanagement

Before I do anything else, I'd like to give you my definition of two terms, so we're all on the same page:

Oversight:

The legitimate introduction of guidance by a managing authority, on people, projects or other initiatives. Its purpose is to avoid mistakes or to improve strategy or execution: to produce better outcomes. Although true oversight usually slows progress, it also provides benefits.

Micromanagement, on the other hand:

A pattern of interference of a managing authority with people, projects, or initiatives, that impedes progress without adding any value.

Obviously, the net effect of micromanagement on an organization is negative. It's an unnecessary cost.

Our focus: micromanagement between boards and CEOs

Micromanagement can occur at all levels of an organization: between a middle manager and a supervisor; a supervisor and workers; a CEO and a middle-manager. But, since we, here at BoardGrowth™, deal with boards of directors, this article will focus on micromanagement as it exists between boards and CEOs.

What makes the issue so important?

Micromanagement is extremely costly. Maybe a lot more so than you might think, at first glance.

Consider this: There are two challenges that all organizations face, whether they're for-profit businesses or non-profit organizations: 1.) Competition constantly grows more intense; 2.) The pace of change continues to accelerate.

Market advantages are momentary. Deals must be closed quickly or they're lost. Products or services must be brought to market as soon as possible. At very best, delays mean increased costs.

Speed, effectiveness, agility are all important. It's no surprise then, that good CEO's and management teams want to move quickly. Undue delays frustrate the progress of their initiatives. When that happens, the results are lost opportunities, lower profits, and fewer customers or contributors.

The inability to act in a timely fashion also causes discontent and, ultimately, costly turnover in management.

And, remember this: Micromanagement also implies that one person or group doesn't trust another person or group. Ultimately, this lack of trust can cost a bundle, by itself.

Identifying micromanagement can be tricky

Identifying a burgeoning case of micromanagement isn't as straightforward as, say, diagnosing chickenpox. There can be many subtle factors involved, on the board's side, as well as on the CEO side.

Ask a CEO if he or she is micromanaged. Most of them, including the very good ones, will say yes. Good CEOs will normally see any interference with their plans as micromanagement.

It makes some sense, in a way. A good CEO has a plan; She has confidence in herself, and in her team; She's entrepreneurial; She's anxious to move when conditions are ripe. To her, waiting to get board approval can seem to be simply a needless delay. Typically, her attitude toward the board is something like: "Just tell me where you want us to go, and get out of the way."

It's a can-do attitude; an attitude you want to see in a CEO. But, unchecked, it can cause problems for the organization. Indeed, recent corporate history is replete with stories of boards failing to provide adequate oversight.

Reasonable checks and balances are needed

Finding the right balance between micromanagement and irresponsible trust in management is the challenge for all boards. It takes talented boards and wise CEOs combining to use the board-management relationship in a way that adds value on a consistent basis.

Some tips for diagnosing micromanagement

I'd like you to consider the following "symptoms." If they exist, they can indicate micromanagement:

• The CEO has never established, or has lost, the trust of the board as a result of past errors in judgment.
• Performance of the organization is in decline.
• Morale is eroding and employees often approach board members with "issues."
• The board repeatedly tables decisions, and requests additional information.
• Individual board members consistently criticize the CEO or try to supplant the CEO's judgment or expertise with their own.
• Candidates are running for the board on a platform of "getting management back under control."
• Management has grown sloppy in both content and timing of board packets.
• The CEO is increasingly willing to take time to discuss issues with directors, between meetings.
• The CEO does not want members of the management team to attend board meetings.
• The CEO is pushing for greater authority to make decisions, independent of board oversight.
• You have just terminated a CEO for failure to perform.
• The board insists on controlling details (hiring, purchases, sites for meetings, vendors, and so forth) while ignoring control of the big picture, such as strategy, asset use, broad policy, performance indicators.

If you find evidence of micromanagement

If you find that any of the symptoms above exist in your organization, take pains to establish a real dialogue with your CEO. Seek to establish whether or not micromanagement is, indeed, a problem, and, if so, what must be done about it.

In addition, I recommend that, at the conclusion of each meeting, the directors and the CEO be asked by the chair to talk about how the meeting could have been improved.

If, in those comments, the symptoms I outlined above are mentioned by several members, it is time for honest discussion along these lines: Is there a lack of trust indicated? If so, is it interfering with organizational performance? If so, what do you do about it?

Unfortunately, most boards don't have this kind of dialogue until the relationship with the CEO has eroded beyond the point of repair.

That's a major reason why micromanagement is so subtle, yet so costly.

It takes courage on both sides to confront this issue. But nobody said that effective governance was easy.

More action steps you can take

1. Review the tips for diagnosing micromanagement. Do any exist in your organization? Why? Initiate a discussion between the board and CEO regarding the evidence that shows the existence of micromanagement, and the reasons that cause it.
2. Developing sound board policy can be a profound first step in guiding the board toward appropriate oversight and away from micromanagement. For more information on establishing policy, read The Development of Administrative Policies, available on the BoardGrowth™ website.
3. Standardize the process of reviewing your board meetings through the use of a meeting evaluation form. There are two versions available on the BoardGrowth™ website: Short form and Long form.
   
4. Review the Board-Management Roles worksheet, available on the BoardGrowth™ website. This article outlines 23 responsibilities in any organization and identifies the roles that are to meet that responsibility. This is a valuable starting point for eliminating any micromanagement that stems from confused or misunderstood roles.