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Controls & Empowerment

Sandeep Dhar
Thursday, December 2, 2010
Sandeep Dhar
As a leader, a dilemma one constantly struggles with is between Control and Empowerment. These clearly are two schools of thought, often at conflict with one another. On one hand, there is a case to be made around building strong processes with checks at every stage. Doing so, one is told, results in greater discipline and process adherence which should be good for the organization, especially from a scalability perspective. Those who disagree, contend that having controls results in reduced speed of execution and stifles creativity, both of which are not good for the organization. Let’s examine these two schools of thought.

I would like to start by narrating a small personal anecdote. Many years back, when I was a junior manager at a leading financial institution, there was a rule which required a business head’s approval for any kind of travel that was required. This control obviously was put in place to keep travel costs in check. At that time, I got involved in a project that was being run out of Mumbai, while I was based in Delhi. It therefore required me to travel between the two cities. As per the process, I used to send an approval email to my business head and I would go ahead with the travel. On one such visit to Mumbai, I happened to bump into the business head in the corridor and after exchanging greetings he asked me with a quizzical look on his face why I had been sending him a string of ‘silly’ messages. I was taken aback and asked him which message he was referring to. He told me that he was referring to the travel approval messages. I tried to explain that I wajust following the process. He hardly listened to me and said that I was a ‘senior’ officer of the bank and that I should feel free to travel whenever I felt it was necessary and that he would approve my travel post-facto.

Now this was a short but an extremely impactful interaction for me for more reasons than one. Firstly, it made me feel really good since by calling me a senior officer, he showed that I was important to the organization regardless of my title. It also taught me an important lesson, which is that - no organizational policy is cast in stone and all existing policies can be questioned and changed if it made business sense. The most important question, of course, was what happened to the travel costs? Guess what, the travel costs came down! They came down because in the past I had ‘outsourced’ decision making to the business head. As long as he approved the travel, my conscience was clear and I merrily jumped on to a flight and landed in Mumbai. In any case, the business head never had the time to evaluate my travel requests and would approve all of them based on trust. So clearly, the objective behind the approval process, which was to minimize travel costs, was not being met.

What happened when I was empowered to travel was that I now had the responsibility to make sure that I evaluate each potential travel opportunity and exercise due diligence, before I was convinced that there was an unavoidable need to travel. I started making use of email and telephone calls to do things which could be done remotely and more effectively because it was now my decision and not someone else’s.

Therefore, should one jump to the conclusion that in an organization one should do away with all approval related policies? That certainly wouldn’t be a great idea. In the above example, what would the outcome have been if I were a person who did not have the best interests of the business at heart? What would have happened if I did not have the competence to evaluate or judge when travel was necessary and when it wasn’t? Obviously the outcome would have been different. So before we start loosening controls in an organization, we first have to make sure that our teams consist of inherently self- disciplined and well-intentioned people. People who are not self-disciplined do find ways around processes and controls as well, but at least it is more difficult to do so. Even more important, is that we have to train people to be able to make the right decisions. We need to teach employees how to determine what makes business sense and what doesn’t. Empowering people with decisions which they are not capable of making will definitely set them up for failure.

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Reader's comments(3)
1:One of the common dilemmas of the management has been well captured. The author has used simple but powerful personal example to present a possible answer. If you take this discussion further, you could say the solution also depends on the leadership and culture of the organization.
Posted by: Murali Raj - 18th Dec 2010
2:So true!
Posted by: Subhalakshmi Adhya - 16th Dec 2010
3:Completely agree!

yours truly,
Posted by: - 16th Dec 2010
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