Six Myths About How to Manage People

“I have come to the conclusion that my subjective account of my motivation is largely mythical on almost all occasions. I don’t know why I do things.” – J.D.S. Haldane

There are six major myths about the “people dimension” of management — all of which ignore the “it-all-depends” aspect of situations.

Myth No. 1: Companies don’t thrive under autocrats.

That is not always true. Companies in their infancy, or in deep trouble, require a strong arm to keep them on course. A participative approach may be inappropriate. Infant companies cannot progress swiftly without directed leadership. They need more sales, more production, more new markets, more products, more services. Everyone must be action-oriented with an unquenchable thirst for results.

Myth No. 2: A healthy company exhibits a consistent management style.

In young companies, entrepreneurs dominate and administrators are in the penalty box. In aging companies, the power shifts, as administrators dominate. A company needs them both. Excessive uniformity indicates decay. Diversity of styles and the changing of styles are necessary.

Myth No. 3: There is an optimal reward system.

The right reward system depends on the stage in the lifecycle of the company. In Infancy, the norm should be low, fixed salaries with high commissions for verifiable results. Avoid giving equity. In Go-Go, raise the fixed pay, reduce the commission rate, and set commission thresholds that reflect profitability. In Adolescence, add profit sharing, cut fixed pay and bonuses a bit. Add stock options for a select few. In Prime, fixed salaries should be the smallest component of compensation, followed by bonuses and profit sharing. Stock options, distributed to full-time employees, should play a major role. Those options would vest over time. In an aged company, the reward system should resemble that of a growing company.

Myth No. 4: Always use teamwork.

Teamwork is being abused rather than used by managers who don’t want to act. They want to avoid leadership in times of crisis — times that call for action and commitment to a direction despite opposition and ambiguity. Teamwork is fine — when you can afford the time it takes to achieve consensus.

Myth No. 5: There are people who are born leaders, and there are those who are born followers.

I call this kind of talk managerial racism. What makes leaders is not simply personality traits, upbringing, or past experience. Every person is a born leader. What makes people leaders are the personality attributes that respond to the needs of the moment.

Myth No. 6: Management gurus know what they are talking about.

I hope that next year, I will renounce everything I now say with passion and conviction. I hope that I will grow and change. Every time I finish a book, I realize that in writing it, I have learned a great deal. Each book is nothing more than a progress report.

(Ed. Note: Business consultant Ichak Adizes, Ph.D., is president of the Adizes Institute and of the Adizes Graduate School. The above essay is one of thousands of articles about leadership, management, and business success that are available on “The Instant Consultant” CD from Executive Excellence Publishing.)