The Better Result
Published: December 11th, 2006
By: Tom Morgan

The better result

This question never goes away. People wrestle with it. They win and lose fortunes according to how they handle it.

I came upon it many years ago. When I dealt with the head offices of two drug store chains. They were similar-sized companies. They owned roughly the same number of stores. Their stores competed with each other. Each company boasted it ran the better business. Each kept close tabs on the other.

Here is how they differed: One gave real power to its store managers. And to the supervisors who were responsible for clusters of stores and travelled to them every day. When situations arose, the managers decided how to handle them. When opportunities arose - they knew it was their call as to whether to take advantage of them. Head office set the policies. The managers and supervisors worked within the policies. But the policies allowed them a lot of leeway, in which to use their judgement.

Often the people in the field made decisions first. And informed head office second.

The other chain operated on an opposite philosophy. It was proud that head office controlled everything that happened at the stores.

It paid its managers and supervisors less. It allowed them to make precious few decisions. When I visited head office I often heard calls from stores asking permission for simple things. Head office people decided if a store should have its parking lot plowed a second time on a snowy day. They decided whether to move the toy display five feet nearer the... you get the idea. I wouldn’t be surprised if store managers had to ask head office if they could turn up thermostats.

I wondered which philosopy worked better. Well, the chain that micromanaged from head office grew at half the rate the other chain did. In fact, it eventually sold out to the chain that had vested its managers with more power.

Years later I saw the same phenomenon with companies that owned radio and tv stations. One prided itself on giving so much power to its station managers. Folks in the industry said its station managers could go so far as to buy and construct a new tower. And after the fact, send a memo to head office to inform. An exaggeration, but not by much. In fact, head office was home to a mere handful of executives.

Other chains had armies of execs at head office. Every station had to confer with the head office engineer. And the head office sales execs. And the head office programming execs. And the head office human resources people. In other words “You may be manager of the station. But we do the managing.”

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