> What constitutes managerial competence? As a vague starting point for an answer, we could say that competent management sets achievable objectives and then achieves them, by organizing and incentivizing the necessary work.
This is a terrible definition, and the author proceeds to make their entire argument based off of specifically the shortcomings of this definition.
Any idiot can set an achievable objective and then achieve it. That's not competence, it is the bare minimum level of functionality to claim something is being managed. Having people dig a ditch and immediately fill it back in, over and over again, would be labelled as competent management under that definition.
Competent management identifies critical objectives and prioritizes resources such that they are accomplished adequately and efficiently.
If your goal is to get something done, then yes, obviously having more budget to do so would be better. But that's never the actual objective. The real objective is to advance the organization's goals - increase profit, raise capital, gain market share, avoid liability, what have you - which means making optimal use of finite resources.
> But wait, seriously though, what’s the math here? What are we maximizing? Revenue minus cost? Revenue divided by cost? I mean, shrinking the cost has got to be helping with these?.. Well, sure it’s helping, but it’s not helping you, because you don’t bring any revenue by yourself, unlike cost, which you very much do incur all by yourself. The math with you is, we tell you to do something if the cost is below a threshold. If you won’t commit to doing it cheaply enough, we’ll find someone who will, and if we can’t, we won’t do the thing, or reconsider the options in some other way. But exactly what the cost below the threshold is changes nothing in any math related to you, except for a lower cost making your job harder, since you have the same objectives to achieve. The firm’s bottom line - sure, lower costs help there. But the impact on the firm’s “revenue - cost” doesn’t trickle down to your “cost < threshold,” because you have no revenue.
This entire line of thinking is incompetent management all the way down. At the top level, they have either failed to recognize their critical objective (improving the revenue to cost relationship), or failed to allocate resources to accomplish it adequately and efficiently (setting up an incentive structure where middle managers can successfully deliver). The middle manager in this scenario is not even doing any management - the decision of what would be done and what resources would be allocated was made above them. This isn't a manager, this is a messenger assigned to communicate orders from on high to their peers. Perhaps they will get to make some lower level decisions over how exactly their team accomplishes the goals, which could yet be competent, but given that their goal is advancing their corporate fief it seems unlikely.
> What happens in a badly run place? In a badly run place, management is bad at setting objectives, so you have people aimlessly wandering about, lacking clear goals, and just doing stuff because they want to. They see an optimization opportunity and they gladly pursue it - it’s interesting, it’s fun, it’s good for the company, it’s what they’re here for... they don’t mind shrinking their resource footprint, because nobody monitors the resource budget properly, nor presses them to meet any targets very hard.
That's not a badly run place. That's just a place where people aren't being micromanaged. Top level leadership is supposed to give broad direction - are we more concerned with growth or cost reduction, for example - and make sure that there are enough people who are sufficiently motivated to make that happen. The specifics of how they can best accomplish those goals ought to be determined at that lower level either by the individual employees or, where collaboration is necessary, the team level. Incentives, targets, budget monitoring, these are all tools that management can use to solve problems, but it's not a failure when they are unnecessary, it is a mark of competence.
This is a terrible definition, and the author proceeds to make their entire argument based off of specifically the shortcomings of this definition.
Any idiot can set an achievable objective and then achieve it. That's not competence, it is the bare minimum level of functionality to claim something is being managed. Having people dig a ditch and immediately fill it back in, over and over again, would be labelled as competent management under that definition.
Competent management identifies critical objectives and prioritizes resources such that they are accomplished adequately and efficiently.
If your goal is to get something done, then yes, obviously having more budget to do so would be better. But that's never the actual objective. The real objective is to advance the organization's goals - increase profit, raise capital, gain market share, avoid liability, what have you - which means making optimal use of finite resources.
> But wait, seriously though, what’s the math here? What are we maximizing? Revenue minus cost? Revenue divided by cost? I mean, shrinking the cost has got to be helping with these?.. Well, sure it’s helping, but it’s not helping you, because you don’t bring any revenue by yourself, unlike cost, which you very much do incur all by yourself. The math with you is, we tell you to do something if the cost is below a threshold. If you won’t commit to doing it cheaply enough, we’ll find someone who will, and if we can’t, we won’t do the thing, or reconsider the options in some other way. But exactly what the cost below the threshold is changes nothing in any math related to you, except for a lower cost making your job harder, since you have the same objectives to achieve. The firm’s bottom line - sure, lower costs help there. But the impact on the firm’s “revenue - cost” doesn’t trickle down to your “cost < threshold,” because you have no revenue.
This entire line of thinking is incompetent management all the way down. At the top level, they have either failed to recognize their critical objective (improving the revenue to cost relationship), or failed to allocate resources to accomplish it adequately and efficiently (setting up an incentive structure where middle managers can successfully deliver). The middle manager in this scenario is not even doing any management - the decision of what would be done and what resources would be allocated was made above them. This isn't a manager, this is a messenger assigned to communicate orders from on high to their peers. Perhaps they will get to make some lower level decisions over how exactly their team accomplishes the goals, which could yet be competent, but given that their goal is advancing their corporate fief it seems unlikely.
> What happens in a badly run place? In a badly run place, management is bad at setting objectives, so you have people aimlessly wandering about, lacking clear goals, and just doing stuff because they want to. They see an optimization opportunity and they gladly pursue it - it’s interesting, it’s fun, it’s good for the company, it’s what they’re here for... they don’t mind shrinking their resource footprint, because nobody monitors the resource budget properly, nor presses them to meet any targets very hard.
That's not a badly run place. That's just a place where people aren't being micromanaged. Top level leadership is supposed to give broad direction - are we more concerned with growth or cost reduction, for example - and make sure that there are enough people who are sufficiently motivated to make that happen. The specifics of how they can best accomplish those goals ought to be determined at that lower level either by the individual employees or, where collaboration is necessary, the team level. Incentives, targets, budget monitoring, these are all tools that management can use to solve problems, but it's not a failure when they are unnecessary, it is a mark of competence.