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Views from the Prairie

February 2023

Collaborative Management

News channels are full of the "back to the office" push. Yet, in the rush to go back to "the good old ways of business", many managers may do the effort in the wrong way generating more resentment and quitting. The push needs to be clearly needs based and done with the goal of furthering the mission of the business. A new and collaborative method of management may be needed.

In the Declaration of Independence, it included the very controversial statement that rulers only could rule with the consent of the ruled; that people have the right to separate from rulers who fail to meet the needs of those being ruled. In the workplace, we see people quitting rather than return to the office.

The basic problem is that most people working from home can see the improved productivity that they have, deeply enjoy the flexibility and reduced costs that working from home has brought. Managers who want to pull people back into the office need to show not only that doing so will improve company productivity, but improve it so much more to justify the additional costs that the employees will incur. Without that, the managers are asking employees to incur a cost without showing them the benefits.

Many managers doubt the increased productivity that working from home has brought. That is because many do not know how to properly measure productivity. Office productivity is very different from manufacturing where the number of widgets produced is productivity. Many managers don't even know how their employees work or how to measure the difficulty of tasks that they are asking people to do.

Managing people working from home is a lot harder than collecting a bunch of people in a room separated by dividers and watching the activity. It requires defining what productivity really is and connecting the activity of each person to the mission of the organization. This type of management is more like mentoring each person.

Many a non-profit has dealt with this issue and worked out ways to accomplish the management task. They focus on the mission more than on the tasks. In that way, they invite the workers to participate in doing something for the greater good. They invite the workers to help manage the whole process and help select what tasks actually get done.

When managers are not able to lead each person individually, then using a team such as a peer group to help assign tasks and to measure productivity can be an effective strategy.

A collaborative style of management where decisions are made together can offer a number of benefits that greatly outweigh the extra costs. By bringing people into the decision process, we gain not only faster buy-in on critical decisions, but also it allows us to use the collective brain power of the team to solve problems in ways that drive real innovation.

Working together to manage what needs to be done can allow good productivity both in the office and remotely. Together, we can figure out new ways to manage and get the job done.

Fraud Not Detected

Now that the Federal Reserve is trying to stop the party, a lot of managers will be trying to keep the party going. Many will be tempted to "fudge" things to cover up how bad business really is. Over time, these efforts could lead them into outright fraud. The amount of fraud can be surprising. One estimate is that up to 10 percent of public corporations commit misrepresentations or fraud in any given year and 40% commit some kind of accounting violation.

A recent study concluded that a lot of corporate fraud is not caught. A few years ago, the accounting firm Arthur Anderson imploded and a lot of clients had to find new accountants and auditors. These new auditors were looking for fraud and some found it. This study compared the fraud alleged on those ex-clients against that found in other companies. The researchers concluded that perhaps as low as one third of fraud is detected.

Corporate managers have a lot of incentive to commit fraud. With so many of them having bonuses tied to the corporate results, the incentive to commit fraud is built into their compensation. The better the company looks, the more money these managers get to take home. Much of business has the attitude that they need to back up their managers even if they are doing wrong. This all combines to make fraud a real possibility.

In politics, the US has reporters who can dig out fraud. Whistleblower laws also exist, but have varied success in protecting those who find fraud. In many cases, the general public simply needs to be on guard against exaggerated claims, better than peer performance, and other signs that fraud is happening.

In investing, watch out and spread your risks.

Risky World

Many a bank and other important public institutions are urging their customers to allow them to send a text message as a second part of accessing their systems. Unfortunately, it is possible to do a SIM swap and hijack your phone for long enough to access your accounts. Relying on phone text messages to protect your accounts won't work.


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