Principalities are great for stamp collectors. They’re less appealing when they exist inside your company, thanks to the manager or staffer who has built his or her own private Luxembourg.
It’s a phenomenon known in the management trade as ‘empire building’: An urge to create fiefdoms with pumped-up staff and budgets that match the inflated ego of the perpetrator and it can sabotage your team, bottom line and worse.
“It can kill the company,” says Mark Faust, a growth and turnaround specialist at US-based Echelon Management International and author of Growth or Bust! “You’re lucky if it’s just reducing the potential of the company by 20% or 30%, but it could be a lot more. It’s one of the greatest constraining factors for business.”
Empire builders don’t care about that. Their goal is to increase their personal power and stature by amassing departments, information and head count.
They measure their worth by the heft and gleam of their domain. It’s a little like the peacock strutting his technicolour tail for the females, says Art Markman, a psychologist at the University of Texas who runs the Human Dimensions of Organisations programme.
“In this case, it’s not a mating signal, but a power signal to the organisation that you’re somebody to be reckoned with.”
Thirty years ago an empire builder might have been applauded for chutzpah. But times have changed. In recent years there has been growing scrutiny of the dangers of empire building; management experts have come to see it as a hidden toxin at the root of many business dysfunctions, leading to excess spending, anaemic growth and turf wars.
In today’s lean landscape, there is little tolerance for rogue hoarders and bloat. Further, leadership philosophies are evolving from the rigid command-and-control structure to a collaborative model.
Power-hungry alphas are seen as undermining the collective good and hindering employee engagement.
In fact, empire building can be seen as a tendency of new, status-seeking middle managers who want to create organisations around them. The danger is that you pump up expenses too high and too soon.
Payroll and administrative costs start rising, but you don’t see the revenues. Worthwhile projects get scuttled this way.
How to spot an empire builder:
- A department suffers from excess spending
- Visible power struggles demoralise teams
- There are frequent bottlenecks
- Employee engagement is hindered
- Poor bottom line
- Poor team morale
- The company’s potential is reduced by up to 30%
- Worthwhile projects are scuttled
- Growth is hindered.
Follow the bickering
Empire builders are skillful manipulators who build up their holdings over time – manoeuvre for a project here, adding budget there. “It can happen to anyone,” says Robert Quinn, faculty director of the Centre for Positive Organisations at the University of Michigan’s Ross School of Business.
“Usually, they’re very technically competent at something, and the person takes advantage of that. It creates friction in the organisation, but because of the power base, it’s felt that no one can touch the person.”
It’s ‘too big to fail’, the personnel version. A classic case is the IT chief, keeper of the sacred code, or a sales honcho who is so good at what he does that no one dares challenge him. Empire builders are not hard to find: Just follow the bottlenecks and the bickering.
Secret agendas, diverted resources, walling off one part of the company from another – empire building can smother performance and destroy rapport and trust. In addition to territoriality, the behaviour breeds resentment and disengagement, fuelling interpersonal conflict and division.
“Companies are human networks,” Quinn says. “Everyone suffers when there’s no longer a sense of teamwork or organisation.”
It’s on this cultural level where the rot of empire building really takes hold, souring relationships and creating internal rivalries that take time and energy away from the battle against the real competitors in the market.
“Empire building is the enemy within,” says Dana Ardi, author of The Fall of the Alphas. “They’re not operating for the greater good.” She argues that the behaviour is out of step in the social era of collaboration and connection.
“We want a competitive spirit, but we don’t want people competing against each other. You want to be in a culture that rewards collaborative behaviour and the overarching goals of the company.”
Research on human motivation over the past couple of decades has shown that the command-and-control model of leadership is flawed. As University of Rochester psychology professor Edward Deci has detailed in Why We Do What We Do and a host of landmark studies, monetary incentives and rigid control don’t drive employees.
To get the best out of your team, you have to allow them to participate and be more autonomous, and you have to make sure they understand how they are contributing to the company mission.
Empire building is the antithesis of that. “The question isn’t how much can I achieve; it’s what can I contribute,” says Rick Wartzman, executive director of the Drucker Institute in the US. “That’s one of the hallmarks of a leader. What’s the mission of the company? Your objective should be in line with the objective of the company.”
The territorial urge
The drive to extend domain and, thus, status has been playing out for millennia in the sweepstakes for survival of the fittest. The more territory and resources, the more power. Those who can dominate gain further access to additional valuable resources.
But this competition is no longer about physical survival; rather, it’s about social and psychological survival. “Today we fight over the survival tools of information, relationships, status or visibility. That’s what people need to succeed,” says Annette Simmons, author of Territorial Games. In fact, Simmons says, empire building is simply another term for protecting territory.
They both come from the same primitive place in our brains, the emotional hub of the ancient limbic system. That means empire-building stratagems like keeping an employee from working on someone else’s project so they can work on yours fall into the reflex category. The typical empire builder is oblivious to what he or she is doing.
Some empire builders are responding to the signals the organisation is sending as to what constitutes power. Others are driven by contingent self-esteem, a belief that self-worth comes from external markers such as money, recognition, size of office/budget/staff.
It’s a futile game; external approval can’t make a person happy, because it’s based on what others think. Further, it’s fickle, and it can put a person on a hedonic treadmill where they can never catch up with the next set of wants.
“If they get the corner office, now they need the suite,” Markman says. “They have five people working under them, now they need ten. That isn’t going to end.”
The prime mover for most empire builders, it turns out, is the opposite of what they want to project: Weakness. As with the braggart, behind the brash behaviour is anxiety and a low self-esteem that has to be padded constantly.
“If you’re not telling them how great they are, they’re in an anxious state that they’re not great,” Markman adds. “All of this is a way of trying to keep the anxiety at bay. ‘I must be important; I’ve got a huge staff.’”
When personal worth is based on the external domain, there’s a constant fear that someone’s going to take it all away.
“When you start seeing behaviours that reflect someone needing to control everything – a lack of integrity, backstabbing, information hoarding, empire building for the sake of empire building – it’s often a reflection of someone feeling threatened,” says Nicole Lipkin, author of What Keeps Leaders Up at Night.
“The real or imagined threat is often a perceived threat to one’s self-esteem or sense of self.”
That sense of self needs more strokes if it is part of a narcissistic personality, which fuels the empire-building psychology.
Unhealthy narcissists are in it for the glory and praise; they need a steady stream of both to feel powerful. Because their self-construct is weak, they detest criticism and can’t stand for anyone else to get credit for anything good that happens – which makes them extremely hard to work for and sows dissension in the ranks.
They lack a crucial ingredient of leadership: Empathy. They can turn on anyone at any time, stretch the truth, hide bad data, duplicate staff without a whiff of concern about the effect on budget and rationalise it all as necessary for getting the job done.
No wonder colleagues break out the champagne when these self-obsessed roadblocks are relieved of their duties. Quinn of the Ross School of Business recalls when an empire builder at a company where he worked – an executive secretary who used her access and institutional knowledge to build her fiefdom – was fired.
“Her last day, as she walked down the hallway, heads popped out to watch her, and after she left everyone sang, ‘The wicked witch is dead.’”
Reigning in imperial designs
It’s not only power and insecurity that cause imperial behaviour. Organisations can enable it, too, by signalling that amassing resources is the route to respect and power. Empires rise within companies because, “Either the organisation is not clear on what its objectives are, or you have people who are not fit for leadership,” says the Drucker Institute’s Wartzman.
The solution lies in communicating the goals of the organisation clearly and calling out offenders. Take the time to ask questions and listen to staff for problems and conflicts. What’s standing in the way of the mission and performance?
Identify the black hole where resources and engagement are vanishing, then confront the person responsible with the evidence: Outsized staff, perks, ballooning turf, conflict with others. The response will usually be, “I’m just doing my job.”
“The truth is the person is not doing their job,” Quinn says. “Part of the job is embracing the common good. When I’m destroying that, I’m not doing my job. It has enormous financial implications. When your team breaks down, and the climate becomes toxic, you’re losing things that impact the bottom line.”
The empire builder has to understand that his or her behaviour is a detriment to the company, which means bad job performance – something that can wake up the insecure very quickly. The key point, Wartzman says: “You need to be focused on creating value for customers, not yourself. It’s backwards.”
Performance reviews are a good place to make the case that being a leader requires the effective use of resources. Another approach is to show why it’s in the person’s long-term interest to rein in the potentate behaviour.
Markman suggests taking a trip forward in time with the empire builder and having the person review their life from the point of view of their retirement years. What most people want, he says, is to feel like they were respected, that they moved their organisation forward, that they innovated.
“There are very few people who look back on their career and say that what they wanted was to have a very big office.”
Related: 4 Ways to Diffuse a Toxic Workplace
6 Timeless Strategies That Drive Successful Entrepreneurship
Adhere to these key principles to build a high-growth company amid changing circumstances.
In today’s ever changing business climate, an entrepreneur can easily become overwhelmed. It’s vital, though, to stay focused on your goals for the company.
Even with a firm strategy in place, every entrepreneur should do these six things to clear a path to success:
1Study the competition
As an entrepreneur, you need to know who your competitors are. You also should understand the rival product or service that is being offering.
This knowledge will help you better market your product or service to stand out, perhaps even using your competition’s weaknesses to your advantage.
2Conserve cash no matter how good business is
Frankly put, live as cheaply as possible.
Entrepreneurs should be as conservative with their money as possible to be able to deal with any rough patch that arises. Conserving several months’ worth of operating expenses in the bank will help you survive most unforeseen circumstances.
3Research new products and services
Understand emerging products or services on the horizon that could improve your company’s operations.
Do your homework.
- Are you taking advantage of all technology has to offer?
- Is there an app that could help you manage your time more efficiently or a service that lets you delegate ordinary tasks to free up more time for priority projects?
4Don’t tackle huge markets at first
Avoid expanding into large markets in the initial stages. Thinking “if we can capture just 1 percent of China” could turn into a mistake. Niche marketing can be extremely cost effective if you keep three things in mind: Meet the market’s unique needs by offering something new and compelling. Speak the market’s language and understand its hot buttons.
Your language should be in synch with that niche even for the minor aspects of a marketing campaign like the company’s slogan.
5Listen to customer feedback and adapt
Salespeople know the adage “always be closing,” referred to by the acronym ABC. Entrepreneurs have an acronym, too: Always be adapting, or ABA.
But entrepreneurs can evolve their business only when they’re listening to customer feedback. It may not mean much if one customer doesn’t like your product but if this is true for many of them and they’re requesting another feature, listen and be ready to adapt.
Whether you’re adapting your marketing plan, simplifying a product or responding to new trends, pay attention to customer feedback. Be all ears.
6Respond to change
In business change is inevitable and those capable of responding are flexible and versatile.
An entrepreneur must be prepared to accept change and adapt business operations accordingly. Be flexible. If a shift in your product or service is warranted, don’t be left behind. Realize from the start that where you are is likely not to be where you’ll end up. A lack of adaptability can result in loss in customers, profits and even business failure.
As an entrepreneur, understand that the world is evolving rapidly. Even a company founded a year ago could change the world today.
Yes, the world customarily commends big players like Bill Gates and Oprah Winfrey. Yet there’s room for everyone in the game. Entrepreneurship in emerging markets could very well be a major factor in the return of a hearty global economy. Why couldn’t you be a part of that change?
This article was originally posted here on Entrepreneur.com.
Yellowwood Future Architects Are Helping Their Clients Understand The New Future
The world is changing. And young, digitally-savvy consumers are becoming an increasingly large and powerful segment. So how should your business adapt to the changing face of the consumer landscape?
- Player: David Blyth
- Position: CEO
- Company: Yellowwood Future Architects
- Established: 1997
- What they do: Yellowwood is a South African marketing strategy consultancy. It helps clients find top line growth for their businesses by offering strategic focus and insight into customers.
- Visit: www.ywood.co.za
Yellowwood Future Architects specialises in helping its clients understand their customers. It is a crucial task, since no organisation can survive long-term if if doesn’t have a deep understanding of the people who buy its products and services.
But even companies that pay great attention to their customers can find themselves struggling to understand the mindset of the modern consumer. Why is that? Well, the consumer landscape is changing drastically, especially in Africa.
“Globally, the youth market is the largest the world has ever seen, and Africa has the majority of these young people. According to the latest census figures, South Africa’s 15 to 34-year-olds total in the region of 19,5 million, or 37,6% of the total population of 51,7 million. By comparison, South Africa’s Generation Xers (the 37 to 56-year-olds) number under 12 million. With direct youth spend in South Africa sitting at a hefty R130 billion per annum, marketers need to sit up and take notice of the youth market. “They are not just ‘the future’ as we are often told — they are ’the now’,” says Yellowwood CEO David Blyth.
This means that no company can afford to ignore the youth market. As Blyth says, they are having a profound effect on the economy already, and this influence will only grow as they age.
So what does this new generation look like? What are their wants and needs? And what do they expect of the brands and companies they interact with?
They want relevant marketing
The days when consumers could be seen as passive receivers of marketing materials are over. Young consumers expect the right information at the right time. They don’t want to be spammed with information that’s not relevant to them, but they do want information to be instantly available when necessary.
They have a lot of disposable income
Young consumers have a surprising amount of disposable income. How so? They live with their parents longer than previous generations did, and they often rent instead of buy.
“We are seeing a shift in how young people spend their money. Many of them aren’t paying a bond or monthly car instalments, which gives them more disposable income,” says Blyth. “Depending on your industry, this can have a profound effect on your business.”
They demand authenticity
“Don’t try to be cool,” says Blyth. “Young consumers want brands to be real — they don’t want to be fed an inauthentic marketing line.” According to Blyth, they want to be approached on equal terms.
They want value
“Brands are important,” says Blyth. “But we are also seeing that young consumers want value. Brand alone isn’t enough. There is simply too much choice out there these days. Combine this with an uncertain economy, and a unique value offering becomes critical.”
They want dialogue
As mentioned earlier, young consumers aren’t willing to be the passive recipients of marketing material. These days, engagement is key.
“Thanks to platforms like Twitter and Instagram, consumers have a loud voice,” says Blyth. “And they aren’t afraid to use it. They will let you know if they’re unhappy, and they will expect you to respond. They want two-way conversation.”
They are socially conscious
“Young consumers are very socially conscious. They care about social issues and the environment. So it goes without saying that they expect companies and brands to care about these things as well,” says Blyth.
They are complicated
Perhaps the defining characteristic of the youth market is its inability (and unwillingness) to be pigeonholed and broadly defined. Young consumers are incredibly complex in their wants, needs and demands.
They can appear self-centred and very focused on instant gratification, but research has also shown that they are incredibly concerned about the future, and very conscious of social and environmental issues.
What this means is that the days of approaching marketing in a linear way are over. The world is becoming more complex, consumers are becoming more demanding, and companies have no choice but to keep up.
Never assume that you know your customer. Customer research should be an ongoing activity. The world is changing quickly, and companies need to keep up. They need to evolve at the same speed as their consumers.
Developing Your Business’s Ethics Policy
It’s not enough to have a vision statement and values; you have to integrate them into your company’s culture.
Definition: Business ethics is the study of proper business policies and practices regarding potentially controversial issues, such as corporate governance, insider trading, bribery, discrimination, corporate social responsibility and fiduciary responsibilities. – Investopedia
In training values and ethics, many “what if” scenarios should be developed so that employees can learn to react to possibilities.
Once you have defined what’s acceptable and what is not, plan how the organisation will respond to employees who do the right thing. For example, if someone makes a business decision that is consistent with organisational ethics, but causes the company to lose business, show that person as a positive example.
Next, examine negative situations. Most lying in organisations isn’t for personal gain but to avoid embarrassing consequences.
If you frequently take success for granted and consistently punish failure, you can count on people changing the numbers to look better than they should, blaming others for their mistakes or hiding errors.
In summary, you should:
- Specifically define values and ethics as they relate to suppliers, customers and employees.
- Train employees using realistic examples relating to your own business.
- Examine how you respond to success and failure. within your organisation.
- Reinforce all who make an improvement, not just a select few.
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