The Hidden Costs of Overbearing Bosses

Posted by Gary Hamel on April 28, 2009

At one time or another, most of us have probably worked for a boss who was self-absorbed, vindictive, or just plain inept — a real-life equivalent to Dunder Mifflin’s Michael Scott. One of my first jobs was for an HR manager who thought the best way to humble a cocky new MBA was to have him spend hours sorting files into alphabetical order. Needless to say, he didn’t get the best out of me or anyone else that worked for him.

As we burrow deeper into the recession, companies around the world are cutting costs in all the usual ways—by reducing headcount, slashing capital budgets, and trimming overheads. All these measures are vital. But in their quest to root out inefficiencies, companies should also be focusing on the hidden but substantial costs of supercilious and overbearing bosses.

Last year, a global survey of 90,000 employees by Towers Perrin revealed that only 21% of employees are highly engaged in their work. The other 79% may be physically on the job, but they’ve left their enthusiasm and ingenuity at home. This is a scandalous waste of human capability. It’s also a virtually bottomless reservoir of creative potential that has yet to be tapped.

The fact that so many workers in so many parts of the world are simply going through the motions suggests that the roots of employee alienation are deep and systemic. While in some cases the culprit may be the work itself, (who wants to spend eight hours restocking supermarket shelves?), this explanation is manifestly inadequate. If a grocery retailer like Wegmans Food Markets can rank alongside a Genentech as one of America’s best place to work, the monotonous rhythms of a hum-drum job can’t be the whole story.

The real damper on employee engagement is the soggy, cold blanket of centralized authority. In most companies, power cascades downwards from the CEO. Not only are employees disenfranchised from most policy decisions, they lack even the power to rebel against egocentric and tyrannical supervisors. When bedeviled by a boss who thwarts initiative, smothers creativity and extinguishes passion, most employees have but two options: suffer in silence or quit.

In a well-functioning democracy, citizens have the option of voting their political masters out of office. Not so in most companies. Nevertheless, organizations here and there have taken steps to make leaders more accountable to the led. HCL Technologies, a progressive Indian IT services company, encourages employees to rate their bosses, and then puts those ratings up online for all to see. Bullies and bunglers have no place to hide. And W.L. Gore, the Delaware-based maker of Gore-Tex and 1,000 other products, lets its highly decentralized teams appoint their own leaders. These are interesting aberrations from the norm, but in most organizations, power is still allocated top-down.

Dispirited and poorly led employees are only one of the baleful side-effects of Politburo power structures. Here are a few others . . .

When big leaders appoint little leaders, they often do so in their own image. This reduces intellectual diversity and promotes sycophancy. The danger: a collective myopia that desensitizes organizations to orthogonal threats and blinds them to new opportunities.

When authority is vested from above, the only way for a manager to retain her privileges and prerogatives is to please her political patrons. Consequently, mid-level bureaucrats often spend a disproportionate amount of time managing upwards—working slavishly to burnish the egos and divine the intentions of those they work for. In most cases, this energy would be better spent attending to the needs of those on the frontlines—the folks who actually create value for the firm’s customers.

In traditional power settings, key decisions have to be approved by one’s superiors, but merely explained to one’s subordinates. This reality often tempts managers to ignore the disquieting views of direct reports, and to content themselves with compliance when they should be seeking genuine commitment. The result: employees who can no longer be bothered to bring troublesome truths to light and are unlikely to go the extra mile.

In an ideal world, an individual’s institutional power would be correlated perfectly with his or her value-added. In practice, this is seldom the case. Given the reputational costs incurred when a senior executive is forced to remove a hand-picked associate from a key job, corporate leaders are often slow to reassign power, even in the face of widespread doubt about an individual’s competence. As a result, there is often a significant lag between declining managerial effectiveness and the reallocation of positional power. These lags are most likely to occur in the upper reaches of management—where the political stakes are highest, and it is here where they exert the greatest drag on organizational performance.

Too little diversity and too much sucking up. Not enough commitment and too many misalignments between power and capability. In highlighting these defects of top-down power structures, my aim is not to challenge the notion of hierarchy, but rather to question the usual means by which power is allocated within hierarchies.

In my next post, I’ll toss out one (partial) remedy for these problems. But first, a couple of questions to ponder:

Readers, what do you think of the trickle-down power structures found in most organizations today? Are they a problem? If so, why?

And can you imagine any alternatives to this taken-for-granted feature of organizational life? What’s your work-around?


We have met the enemy as he is us.

GH>> What do you think of the trickle-down power structures found in most organizations today? Are they a problem? If so, why?

Of course they are a problem - for the reasons you list and for the long term damage they do to people and national competitiveness. Between the cookie-cutter educational system and the corporate hierarchy, we are taking 9 of every 10 creative, valuable souls and tossing them into a wood chipper.

GH>> And can you imagine any alternatives to this taken-for-granted feature of organizational life? What’s your work-around?

The work-around is simple - implement a new breed of non-managers move past the human nature that makes one person force their will on another. When smart people have respect for each other, need for each other, a desire to support and serve each other, lack artificial deadlines, and are empowered by leaders who believe in their people and champion them, help fill in their weaknesses without judgment (aka yearly appraisals) while helping keeping them motivated towards the common goal, you will move to the next level of management. Its more like coaching, but through inspiration, not coercion.

Computers and networking have enabled us to decouple information from command and control. Yet management still controls information and decision making. Why? Because that is the value they are claiming for themselves. But if people had the information, and have the ability to make decisions, they could find more value and be more engaged. But then what would the managers do? We have met the enemy as he is us.

To save our profession, we must destroy it. We must reinvent it. We must be selfless, fearless, and confident of our value in the new era as leaders. To do this, we have to leave behind the authority of our position and find ways to empower others. We must not lead from the front, but from behind. We must be equals, not superiors, that provide the skills that keeps groups together, working effectively, to deliver results. That will be our value in the new era.

How to make this happen? First we have to overcome a lifetime of mis-training and mis-education, and outdated assumptions. Then we have to overcome the skepticism of anyone we work with. Then we have to create the organization that delivers value in a market driven to untimely profit.

Google is experimenting with this type of approach. Other companies are working on this approach too, in different ways. The blueprint for success hasn't been compiled yet.

That's what we are doing here. And that's our value.

Decentralize Power

It is absolutely a problem especially when the fates of employees on one side of the world lie completely within an executive's hand on the other side (in our particular case it would be a middle aged, white, exec donning an outfit bejewled with the lone star state).

How can you decide for your populations in Africa, Russia, The Middle East and Asia regions without giving them a voice and the power to act on that voice.

Our organization has just gone through a massive re-org where we moved away from the siloed divisions into the "we are one" concept - unfortunately and realistically we are not one, we are many and we need to listen to the voices, concerns, and challenges of the many in their respective locations to better serve the employees and the business ultimately.

Check box exercises and spreadsheets, and deadlines thrown out from the west hemisphere at the population in the east hemisphere demanding they "meet the deadlines" without consulting the masses on what works and what doesn't is completely ludicrous in my mind and an absolute drain on both the employees and the organization in terms of wasted time, effort and most importantly to the execs $$$.

Great work, I am a huge fan!

Culture is what people make it...

Trickle down cultures in the organisation is a product of culture we inherit once we join the Organisation.

Probably our naive ideas in 1st year of Employment were too simplistic to be implemented,
may be some of our so-called Seniors(year wise, not idea-wise) were too scared for a Rookie to come out as a Smart-bug. So ideas were killed and culture of obedience taught.

What it told about a Smart-bug was, that Smart-bug doesn't know how to play a smart game. To be a champion you need to understand the rules and come out with a perfect gameplan. Its subjective dude ...

Difficult, but who told Success comes cheap...
So keep trying(you have to decide your stakes yourself) ...

Remember Edison's famous quote something like this...
I know 999 ways of how not to make Electricity Bulb..

And once you assume the Leadership, keep on talking to Frontline Employees...


The Hidden Costs of Overbearing Bosses

Mr Hamel,

I've followed your work through my MBA program and consider you a genius. I've attempted [on many occasions, mind you] to bring your views on organizational effectiveness to my company only to be rebuffed again and again. I work for a Fortune 500 company that's so entrenched in their culture and "way of doing things", it would take a colossal crisis to change course. Decades of promoting only from within has resulted in a rigid heirarchy, a self-referential attitude, insular views, and classic symptoms of groupthink. So in answer to your first question, it is a problem .... and one that we must suffer in silence.

Please keep up the great work. You are an inspiration to those of us who, one day, wish to work for enlightened organizations or to create them ourselves.