The 14 Management Principles Every Manager Needs to Know

When you think of the French mining industry in the 1890’s, what pops in your mind? Terrible working conditions? A catastrophic collapse? The black lung?

What about the birth of modern work culture?

A coal mine might seem like an unlikely place for the emergence of work culture and organizational management theory, but you’d be surprised.

More than a century ago, Henri Fayol, the managing director of a French mining company, made groundbreaking advances in organizational management theory by constantly iterating his miners’ working conditions to uncover the optimal environment for efficiency, productivity, and happiness.

Click here to download leadership lessons from HubSpot founder, Dharmesh Shah.

Advancing the field of operational management was Fayol life’s work. For 28 years, he kept refining his own management techniques to improve his miners’ working conditions. And since there weren’t many management resources in the early 1900’s, he decided to write a book called General and Industrial Management about his own theory of management, Fayolism, to teach other managers how to lead a team.

Fayol's book covers the 14 principles of management that he leveraged to improve his mine’s efficiency and culture, and his ideas still ring true today. He’s considered the father of modern operational management theory, helping countless managers boost their team’s productivity and morale.

Honing the fundamentals of modern management isn’t easy. But, fortunately, we wrote this blog post to help you learn some of the most timeless principles of management that have guided teams toward success for the last 100 years.

1. Division of Labor

Modern Translation: Figure out what you’re employees are good at, and assign them tasks that play to their strengths.

All employees have their own set of strengths and weaknesses. And if you know your employees’ skill set and let them specialize in their strengths and expertise, they’ll sharpen their skills and boost your team’s efficiency, productivity, and accuracy.

Allowing your employees to specialize in one or two related skills everyday gives them more repetitions and time to master their craft. They’ll improve a lot faster compared to learning a broad range of skills. And the better they are at their jobs, the better your team will perform.

At HubSpot and most modern companies, all of our teams specialize in one area. For instance, on the blogging team, our job is to craft clear, concise, and compelling stories that build an audience. But we can’t do this to our fullest potential if we have to spend time finding the optimal keywords to target or the highest converting lead generators to attach to our posts. We leave that to the SEO and Lead Generation team -- improving our Google ranking and generating more leads are their strengths, and they can do those things better and faster than we can.

Specializing prevents us from wasting any time on tasks not related to our core goals. We would attract less organic traffic and generate less leads than the SEO and Lead Generation team would anyway. With specialization, we can spend more time honing the skills that actually help us reach our team's goals, which is the best way we can help our business grow.

2. Party of Authority and Responsibility

Modern Translation: You should take on more responsibility for your team's output as you gain more power.

In nearly all organizations, management makes the calls. As a manager, your job is devise your team’s overarching strategy and collaborate with your employees to find the most effective and realistic way to implement your vision.

But with this amount of power comes a lot of responsibility. Since you’re the one calling the shots, the consequences of your actions fall directly on your shoulders. If your strategy fails, it’s your fault. Not your employees.

Blaming and punishing your employees for the failure of your own vision and strategy is immature and spineless. Your employees will think you’re ungrateful for their efforts and won’t want to work for you anymore.

Holding yourself accountable for the consequences of your actions, especially when they’re bad, proves to your employees that you have strong integrity: you work to serve and protect your people, and you won’t throw people under the bus for your own personal gain.

3. Discipline

Modern Translation: You should demand as much discipline in your team as you do with yourself.

Every successful leader knows discipline goes both ways. You need to earn your employees’ respect, so they feel compelled and genuinely interested in following you. This way, you can streamline your team’s processes and help your employees produce quicker and better results.

But you also need to discipline yourself by making sure that you’re overseeing your team as ethically as possible. If you exploit your employees or cut corners just to improve productivity, then your employees will feel disrespected and unfulfilled, leading to low morale. Respecting your employees and offering them a good work-life balance is the right thing to do, even if the opposite conduct could produce more results.

4. Unit of Command

Modern Translation: Each of your employees should only have one manager.

Your employees are the most successful when they only have one direct manager overseeing their work. This creates a direct, genuine relationship between the two, and clarifies your employee’s sense of direction at work.

Having two managers isn’t ideal for anyone. It can spread employees thin, lead to conflicting directives, and even divide loyalty. Unless it's absolutely necessary, each of your employees should only have one manager.

5. Unity of Direction

Modern Translation: Each of your teams should only have one plan of action.

Each group of employees who have similar responsibilities and goals should pursue one plan to achieve those goals. For example, your blog team should focus on building an audience to increase website traffic. And your lead generation team should focus on turning that traffic into qualified leads. These teams obviously have different responsibilities and goals, so they should follow their own plan of action.

Merging both these teams into one would cause chaos. The merge wouldn’t change their incentives, prompting each sub-team to steer the combined team towards their desired direction. This power struggle would prevent both of them from meeting their own set of goals.

As a manager, you should set clear goals for your team, document your plan of action, and monitor progress. You also need to effectively communicate the purpose and benefits of your vision, so your team will buy in and do whatever they can to achieve your goals.

6. Subordination of Individual Interest

Modern Translation: Your employees should prioritize the company’s interest over their own personal interests.

Everyone has their own unique interests that they should pursue. But in terms of work, your employees should prioritize the company’s interest over their own’ personal interests. If you don’t clarify the importance of putting the company’s goals ahead of individual goals, workers who constantly pursue their personal interests before their company’s could veer your business off the path that’s best for them.

At HubSpot, we want to help our employees understand our company’s goals and communicate the importance of prioritizing them over their personal goals. But we don’t want to be overbearing and regulate their every move, so instead of using pages of policies and procedures to police our employees, we have a three-word guideline for just about everything. It’s called Use Good Judgement. And to help our employees use good judgement, we ask them, to first, do what’s best for our customers, then the organization, then their team, and, finally, themselves.

7. Remuneration

Modern Translation: You should reward your employees.

One of the best ways to motivate your employees is to regularly recognize their accomplishments and milestones and ensure their compensation reflects their performance. Ample recognition and fair compensation helps your employees meet the majority of needs in the most influential model of motivation: Maslow’s Hierarchy of Needs.

Photo Credit: Simple Psychology

Abraham Maslow, an American psychologist in the 20th century, suggested that humans have to meet some needs before others to truly be happy, like meeting physiological and safety needs before esteem and self-actualization needs. But once we successfully meet one need, we’re motivated to meet the next one.

In theory, the purpose of life is to meet every need in the hierarchy. So if someone can meet their physiological and safety needs, but can’t fulfill their need for love and belonging, they can’t truly be happy.

Fairly compensating your employees helps them meet their physiological and safety needs. Recognizing employees helps them meet their esteem and self-actualization needs, since awards and praise make them feel valued, boosts their confidence, and motivates them to meet their true potential.

8. Degree of Centralization

Modern Translation: There should be a balance of authority between upper, middle, and lower management in your organization.

When a company is centralized, it means that upper level management has all the decision-making power. On the other side of the spectrum, when a company is decentralized, middle and lower level managers wield more power in the company’s decision making process, just like a democracy.

The best organizations strike a balance between the two. Absolute centralization and decentralization isn’t sustainable -- no one wants to follow the order of a small, powerful group. But you also need a central power to instill order and guidance in employees so they can’t just do whatever they want.

Fayol suggested that companies should choose their degree of centralization based on the size of their business, experience of their superiors, and the ability of their employees.

9. Scalar Chain

Modern Translation: There should be an clear chain of communication in your organization.

Hierarchies exist in every business. From the executive board to your own team, they’re everywhere. And that’s not necessarily a bad thing. Fayol states that the most successful organizations have a clear understanding of each team and employees’ level of authority, and everyone should respect the hierarchy -- especially when an employee wants to communicate with upper management.

Messages and requests should go through a chain of communication. If you want to communicate to the highest part of a hierarchy, you need the help of the employees who are just above you to get your message across.

For example, low-level managers who want to pass a message along to upper management should contact the mid-level managers about it first, who can then convey their message to upper management.

But Fayol also realized that by the time a low-level manager’s message reaches the top of the communication chain, it could be irrelevant. If it takes too long to communicate a message, what’s the point of sending it? To combat this problem, especially when the message is urgent, you should let your employees skip parts or all the steps of the communication process and take shortcuts to anyone whose higher up than them, even if they’re the CEO.

The amount of time your employees can shave off the communication process and the type of shortcuts they can take all depend on the situation. If it’s an emergency, they should be able to take a big shortcut and quickly convey their message to an executive. If the matter is less pressing, they should take smaller shortcuts and more time to convey their message. The executive team will gladly listen to your request for mitigating a PR emergency. But no one wants a midnight Slack message about a marketing email that was sent twice in one day.

10. Material and Social Order.

Modern Translation: You need to make sure your employees can succeed

To help your employees do their jobs well, you need to make sure your teams have enough resources and know what resources they have at their disposal. You should also ensure their work environment is safe and clean -- a place where they look forward to going to work everyday.

As a manager, you also need to confirm that your employees are a good fit for their roles. Can they handle the stress? Can they manage their time and workload? Can they perform? These are things that every successful manager should know about all of her employees.

11. Equity

Modern Translation: You should treat your employees fairly.

In exchange for your employees hard work and dedication, you need to treat them fairly in return. This is crucial for healthy employee-manager relations because if one of your employees feels like other team members are getting preferential treatment over her, she’ll feel discriminated against, making her less happy and motivated at work.

You should always be hyper-aware of how fairly you treat each member of your team as well as your own unconscious biases towards your employees’ age, sex, religion, and personality type.

12. Stability of Tenure

Modern Translation: You should strive for a low turnover rate on your team.

Your new employees need time to get used to their work, improve, and, ultimately, succeed. Of course, you should expect your employees to master their jobs eventually, but if you don’t give them enough time to get acclimated, you’ll have to let them go -- they won’t be able to hit their lofty goals immediately. Constantly recruiting new hires, training them, and then recruiting their replacements is a waste of your time and resources.

On the other side of the coin, when your employees know their job is stable, they'll feel safe at work and enjoy their role more. This can lower your team’s employee turnover even more because employees will be less likely to move on from your team. You can also retain your employees longer by investing in their growth and wellbeing. Try offering them new learning opportunities, healthy snacks, and an inclusive environment.

13. Initiative

Modern Translation: You should let every employee make an impact on your team.

Your employees shouldn’t be scared to express their ideas. Instead, you should encourage them to take initiative and always be striving to improve your team’s efforts.

When you start implementing your employees’ ideas, your team will usually experience rapid growth -- your employees’ trust and affinity for you will skyrocket, and they’ll also have more energy at work since their creations are coming to life. This gets your employees invested in the company, which helps your team come up with more break through ideas.

There are also more employees than managers at a company, so diversifying your ideation process with your employees’ different perspectives can generate more creative and effective ideas than the same, few minds can.

14. Espirt de Corps

Modern Translation: You should know how to boost your team’s morale.

Managers are leaders. You need to know how to get your team to passionately support a mission, even during the rockiest of times. And there’s three things you need to consistently do to make sure this happens.

First, you need to convince your employees to buy into the “why” behind your mission. This gives your employees a purpose and drives them to work as hard as possible.

Second, you should foster a team bond and a sense of unity. By encouraging the development of personal relationships with each other through team outings or daily chit-chat, you can create an atmosphere of trust, understanding, and inclusivity. You team will have harmony when each of your members feels like they belong, and this inspires them to work harder because they’re not just working together -- they’re working for each other.

Lastly, you need to make your employees feel significant by rewarding high-performers and giving underachievers a chance to improve. If your employees know how important their work is to your team, they’ll feel valued, trusted, and motivated to help you succeed.

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via Business Feeds

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