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The Real Cost of Micromanagement (and How to Fix It with Trust)

It turns out the "hidden costs" of micromanagement aren't so micro. Here's a powerful fix.

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Marjon Bell had just started a new job in marketing at an insurance company.

On her first day, she received an email from her new boss saying that employees were no longer allowed to bring their personal phones to the office.

Why? Well, moms (especially) spent too much time checking on their kids.

Then, at lunch, she learned another interesting rule. Employees were required to inform their boss when they left the office for lunch, and then again when they returned.

As the weeks wore on, the rules got even stricter. Once, after a short restroom break, Bell came back to her desk only to find her boss waiting for her, asking where she’d been. Her “green” circle had turned “yellow” in their company’s instant messaging app, indicating she was idle.

Even more, her fellow employees were rewarded for reporting each other’s rule breaking—earning a $500 “accountability award” after turning a coworker in. This incessant micromanaging created an abysmal, suspicious, and even hostile culture. One employee actually ransacked the women’s restroom to “stick it to the man.”

While this story of micromanagement (reported by NPR) is extreme, it doesn’t take much micromanaging to harm culture. And in turn, to harm wellbeing, happiness, and productivity.

Work culture and employee productivity are almost always a top concern for today’s leaders, but oddly enough, many unknowingly sabotage their own company through micromanaging.

As my company has grown from a team of a few to over 100, I’ve had to check my own tendency to micromanage and control every aspect of the business.

The Cost of Micromanagement

Employees often wonder if they’re micromanaged because of underperformance, or something they’ve done. Are they incompetent? Do they misunderstand their work? Is their performance really that poor?

Jenny Chatman, a professor of management at Haas School of Business at UC Berkeley, says to employees, “It’s more about your bosses’ level of internal anxiety and need to control situations than anything about you.” 

So, why do leaders micromanage?

Some are afraid they won’t be seen as the authority figure. 48% of those in charge want to be seen as the expert or authority. Leaders might struggle with employees who are doing excellent work without a need for their input because it feels like they are unnecessary.

It’s difficult to be the expert when no one needs to ask for your help. Micromanaging insists on being necessary.

Some leaders are perfectionists. They don’t trust others to get things done the right way (i.e. their way), so they get involved in every process they can. They want things done through a specific process and either can’t or won’t see any solution as viable other than the one they would offer.

Some leaders are unable to let go of their previous positions. They’ve been promoted up to management because they excelled at a different job. In their new position, they don’t know how to let go of what they used to do (and were good at). They’re unable to stop thinking and working in minutiae when they should be shifting to leading with a broader view. Or, they feel less connected to the people and work they used to know and try to find ways to involve themselves with their old identity.

Micromanaging hurts employees, and it ultimately hurts employers. 

For one, it creates disengagement, a “state of distance from one’s work.” Disengaged employees are apathetic, putting in the bare minimum required to do the job. They clock in and clock out, complaining in between. They have increased “sick” days, as any excuse to skip work will suffice.

This is where we start to see how micromanaging hurts employers: disengaged employees are expensive.

In their book 12: The Elements of Great Managing, Gallup found that disengagement-driven absenteeism costs 10,000-person companies as much as $600,000 per year for work that’s never performed. This doesn’t even account for turnover costs, which skyrocket into the millions.

The good news is that the tide starts turning when trust enters the organizational picture.

The Connection Between Trust and Performance

Trust is the solution to lagging culture and employee performance due to micromanagement problems. To borrow from author Stephen Covey, great cultures move at the speed of trust through less micromanaging and more ownership.

Covey and researcher Douglas Conant discovered that companies on the Fortune list of “100 Best Companies to Work For” (of which trust comprises two-thirds of the criteria used to make the list) exceed “the average annualized returns of the S&P 500 by a factor of three.” Research by Trust Across America, a group that tracks how trusted companies perform, revealed something similar: companies with high levels of trustworthiness at work regularly outperform the S&P 500.

In companies with a high trust culture, where all people are treated as capable professionals, measurable financial performance is greater. 

Why?

Because trust creates engaged employees. People who know they are trusted are motivated to continue to earn that trust. They have confidence. They respond to the gift of trust with loyalty and hard work.

Engaged employees show up for work, have lower turnover, and are 18% more productive than employees who are disengaged. Engaged teams are 12% more profitable than disengaged teams.

If micromanaging has hurt your bottom line, the solution is to actively show employees that you trust them, their work, and their feedback.

The Simple Alternative to Micromanagement

Of course, it is naïve to think employees will magically turn in to top performers simply by being trusted. Instead, leaders can foster trust and simultaneously improve performance by taking a coaching approach to management.

On the surface, coaching and micromanagement may seem similar. They both:

  • …set clear outcomes and hold teams accountable.
  • …ask frequent questions to course correct.
  • …require step-by-step instructions to train people well.

But in reality, they differ sharply.

Coaching sets clear outcomes that enhances performance and helps others be successful. Micromanagers set clear outcomes and monitor performance to maintain control.

The difference is in both the aim and application. 

More than this, coaching also allows people to own processes, making them their own. It also allows room to fail. For the micromanager, the key outcome is perfection and non-failure. For the coach, the key outcome is empowerment and success. This is how coaching creates trust.

How to Increase Trust in Remote Teams

While a lack of trust can run rampant in a traditional office, it can really get out of hand for remote employees.

My company is 100% remote—with employees in over 20 U.S. states. We work with hundreds of clients and have thousands of projects happening at any given time. That is a lot of room for micromanagement. However, we strive to use each as a chance to increase trust and empower our team.

Building trust in your remote team is simpler than it may seem!

First, communicate clearly and openly, and extend the same courtesy to your team. Be available as the leader. Be clear about what you expect from your team regarding ethics and results. Allow them room to learn and make mistakes without being punitive.

At our company, we’ve tried to build a culture of proactive support. 

For example, one of our business support specialists, Stacy Baker, was used to working 24/7 at her previous job. She was routinely expected to check emails past 8 p.m. and never felt permission to turn off.

When she started, though, her team leader helped her set healthy boundaries. Stacy recalled their conversation, saying she was told, “You don’t always have to have your notifications on. Support your clients, but also take care of you.”

We have found this kind of support pays dividends in trust. When your team knows you care about them, they care about their work all the more.

On top of supportive culture, make sure the work your team is given to do is meaningful. This is so powerful that 9 out of 10 people would actually take a pay cut to do more meaningful work!

When employees are given “real” work that carries actual weight and importance, they realize they are being entrusted with something valuable. Valuable work is given to valuable people.

Finally, assume they’re doing their work well instead of assuming they need you to get involved. Work from a trusting assumption unless you have historical reasons for doing otherwise.

Key Actions 

The enemy of trust is a leader who worries and has control issues.

Avoid nagging and unnecessary “checking in” on projects that you don’t need to be concerned about yet. If your team is still meeting expectations and timelines, let them work. Stop jumping the gun.

With remote workers especially, skip the habit of seeing who is available or who is idle online. Tools that track or measure how much an employee is online are not a good measurement of the quality of work. Micromanaging fixates on the process instead of the end result. Trust is based on results.

Write your own job description. Condense what your leadership position is really about. This helps you focus on what you need to be doing and what you need to stay out of. 

Try to think of yourself as a leader as much as a manager. A manager is someone concerned with multiple moving parts, regulating each part. A leader, in contrast, inspires through trust creating a team that self-regulates.

What has been your experience in cultures of trust (or lack thereof!)?

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