The Three Types of Functional Management

The Three Types of Functional Management

Every day, bureaucrats are challenged with changing priorities brought about by the dynamics of the overall business environment.  During periods of accelerated change, these priorities seem to be more difficult to define, and change from one moment to the next.  Bureaucrats also tend to want a high degree of control over their time and the time of the people who work for them.  This entire dynamic of changes can cause larger and larger amounts of stress, and in the end, have profound effects on the overall morale of any work group.  The fundamental tools for handling these changes are a management framework  and a basic understanding of the three types of functional management; the ultimate goal is to be able to control the change process by knowing when and how they should be used.

Crisis Management

The first type of management is “crisis management”.  This happens when there is a strong possibility that a significant task will not get completed and the manager decides to increase the focus on it to a very intense level.  In crisis management, all the focus, resources, and energy are concentrated on a single priority.  This type of management can be the most rewarding to a person who requires a great deal of control.  Once a group is in “crisis management,” this person gets a complete reward.  When the focus is narrowed to a single priority, a manager gets total control, group communication improves, people feel a great sense of purpose, and most of all, there is a feeling of accomplishment.  People then tend to feel a greater sense of positive motivation in a good crisis than in any other period.  Feelings of control, and the rewards of accomplishment may lead a bureaucrat to establish a working environment in which crises are created in order to regain those feelings.

People who work under this type of stress may feel a variety of feelings.  If the crisis is real and the crisis process understood, all those involved can feel a great deal of comfort and confidence knowing that the group can perform under pressure, get through crises, and learn a lot.  After it’s over, the entire work group will be better for having performed in crisis.  Unfortunately, this is not the normal result of crisis management.

Usually, when the problem starts it is not clear that it indicates a crisis.  The manager usually denies that there is a problem at all.  The workers become aware of the problem but become afraid to tell the boss for fear of reprisal.  At some point it becomes obvious that there is a problem and the first thing that the manager does is try to affix blame.  The reason for this is quite simple.  When a more senior manager becomes aware of the problem, the bureaucrat must explain it; to save his own position he tries to shift the blame to someone else.  This entire process erodes the group’s trust and respect, so that morale and productivity deteriorate.

When denial and blaming finally stop, people turn to action.   Total deterioration is at hand and they define the problems, disregard their other priorities, and focus on solving the crisis.

What intensifies this problem is that when the crisis is over, the manager becomes aware that during the resolution portion, the work group got something done.   There was a sense of purpose,  the manager was needed, adrenaline was flowing, and things were very exciting.  When things go back to normal, life goes back to normal, only with the group more fragmented than before.

The manager is then confronted with the realization that he likes the crisis; he might even go so far as to start creating crises — sometimes consciously, sometimes subconsciously — to regain the feelings of control and ownership.

Standards and Procedures Management

At the other extreme of the functional management continuum is “Standards and Procedures Management.”  In many ways it is a business manager’s major task to establish standards and procedures for the workers and the entire organization to function by.  When I think of this type of management I visualize the restaurant business and, in particular, a comparison between a McDonald’s and a privately owned restaurant.  When you enter a McDonald’s you know exactly what to expect.  From the decor to the taste of the coffee, you know what you will get and how much you will pay for it.  There will be no surprises.  The McDonald’s company has been able to transcend cultural values and international boundaries, using a consistent approach from country to country, culture to culture.  It is a continuous management responsibility to train people and focus on the corporation’s standards and procedures.  I am often amused when I think that Russian society is learning about standards and procedures from the McDonald’s corporation.

At the other end of the continuum is the private restaurant owner.  When you walk into the neighborhood cafe your expectations are different.  In most instances each visit is a new and sometimes different experience.  Each wait person will act differently, bringing to the interaction their own personality.  The time and the process will vary and the portions served will not always be the same.  It is interesting that the vast majority of these ventures fail, while from the first day another McDonald’s opens in your neighborhood, it looks as though it’s been in business there forever.

It is obvious that in order to be in business and make money you must operate your business in an orderly and consistent manner.  Operational success of any business is dependent upon the ability of managers to maintain consistent and measurable procedures and standards.

Successful bureaucrats are responsible for managing these procedures and standards through an unwritten code of execution.  These standards, procedures, and the codes to accomplish them become the basis for the culture of the organization.  In most organizations the unwritten codes make it virtually impossible to have the standards and procedures change without a highly skilled and mature management.  As in crisis management, certain managers prosper in a highly standardized and procedural environment.  It is a very safe and stable environment with a high degree of accountability as to who does what and whose fault it is when things go wrong.  But there is a problem when the overall environment requires a change and the organization refuses to leave the culture supporting the old standards and procedures.  The number of managers who thrived in the old environment and stay with the organization is determined by the amount of change required to survive.

Issue Management

The third form of functional management is what I call “Issue Management.”  This type of management is either a skill or happens randomly, once again depending upon the skill level and maturity of the manager.  Whether an organization is in a crisis or running like McDonald’s, issues and problems arise that require action.  The style and process by which these issues are handled determine the ownership, the effectiveness, the productivity and the overall morale of the organization.  Like the two functional management types discussed before, there is a continuum of how issue management is handled.  In other posts I offer ideas and techniques to effectively use all three types of management.  The result of each of these discussions will be a combination of relationships and processes that form the unwritten codes of behavior that determine the culture of any given organization.

But the basic idea is that a company’s bureaucracy is there to effectively handle issues and problems created in the course of business.  Well-run business bureaucracies handle issues successfully.  The major difference in the future will be that the quantity of issues requiring attention will increase to keep up with the incredible increase in the rate of change.  In other words, the faster the rate of change, the more issues there will be.  Added to this will be a change in the level of knowledge required to make effective decisions.  I contend that an organization’s ability to handle these high-level issues will determine its ability to succeed.

Typical bureaucratic organizations handle issues mainly through political posturing.  In such organizations, warrior bureaucrats look for opportunities to position themselves on any one issue; the politics of the organization determines the outcome.  Very seldom do the workers get involved with the process.  Usually, an issue is discovered by a middle level bureaucrat who informs their boss.  The issue goes right to the senior pyramid head who takes the issue to a rival pyramid head who then works down their pyramid to find out the other side.  These challenges and counter-challenges form the battleground for the political wars of the organization.  In well-running traditional bureaucracies, mid-level warrior bureaucrats give their bosses “heads up” when an issue has left their battleground and headed up the ladder.  This allows for checkmates and volleys to be played at the point of attack.

This type of issue management has worked effectively in organizations with large standards and procedures manuals.  But the process has created huge inefficiencies and morale problems because it never delivers the optimum answer and seldom involves the people who must continue to work with the issue.  It ultimately causes a certain degree of crisis, putting the organization into an inconsistent environment of high levels of standards and procedures with periodic major crises, a difficult environment at best to work in.  The challenge is to create an atmosphere that allows any one in the organization to bring issues to the discussion level, allow involved workers and managers to discuss it and then make a decision that permits it to be integrated into revised standards and procedures.  The key is to let involved and interested people have an opinion on the problem and thoughts about the solution, but not get bogged down in a process that does not allow for timely decisions.

In any organization at any time, all three types of functional management–crisis, issue, and standards and procedures –are being used.  I contend that warrior bureaucrats can be trained to operate in all three types, and use these skills to provide a constant challenge for improvement.  The ultimate outcome will be an organization that can handle the dichotomy of having a high level of standards and procedures, with a culture that acknowledges rapid and uncontrollable change as part of doing business.