Here’s how SME leaders can avoid the urge to micromanage

Leaders should shift from dictating how tasks should be done to providing guidance and support.

Most SME owners make this leadership blunder: Micromanagement. It is a common mistake that can stifle creativity, demotivate employees, and hinder growth. Indian companies, like those around the world, have not been immune to this issue.

Many leaders don’t understand micromanagement. It is a leadership style where a manager closely observes and controls every aspect of the subordinate’s work. It often stems from a leader’s desire for control and perfection. It can manifest in various forms, such as excessive oversight, involvement in minute details, and a lack of trust in team members’ abilities.

SME leaders may particularly struggle with this urge as they are deeply invested in the success of their businesses. Micromanagers struggle to delegate tasks, fear relinquishing control, or simply do not trust their team’s abilities.

In the early 2010s, Tata Motors was facing challenges with its passenger car business, particularly the Tata Nano project. The then-chairman of the group, Ratan Tata, was known for his meticulous oversight and strong leadership style. While he had successfully guided the company in various endeavours, the Nano project suffered from excessive micromanagement. Tata’s direct involvement in product decisions and cost-cutting measures limited the team’s creativity and resulted in the Nano's failure to meet market expectations.

Infosys saw an example of micromanagement in the controversy surrounding one of its founders, Narayana Murthy. After retiring, Murthy returned as CEO and was seen as overly controlling and critical of the company's direction. His management style led to leadership conflicts and concerns about stifling innovation within the organisation. Eventually, he stepped down, and the company underwent leadership changes to drive a more open and collaborative work environment.

There can be serious consequences for both leaders and the enterprise in a severe case of micromanagement. Micromanaged employees usually feel frustrated, demotivated, and disengaged. They may become more focused on complying with instructions rather than thinking creatively. This, in turn, can lead to reduced productivity. Overly detailed control most likely slows down decision-making processes and impedes overall productivity. Such employees are more likely to seek opportunities elsewhere, resulting in high turnover rates, which SMEs cannot afford.

Micromanagement discourages innovation, as it leaves little room for employees to experiment, take calculated risks, and come up with new ideas. Most SME owners who complain to me about lack of initiatives form their employees almost always micromanage their teams, which I usually point out to them indirectly in actionable assignments.

Good leadership involves providing clear guidance, setting expectations, and then allowing employees the autonomy to execute their work. SME leaders must avoid the pitfalls of micromanagement.

Here are some best practices SME leaders can adopt to resist the urge to micromanage:

Delegate responsibility: Great leaders understand the importance of delegating responsibility. By entrusting team members with tasks, leaders can free up their own time for strategic planning and decision-making. Richard Branson, the founder of the Virgin Group, is known for his philosophy of delegating responsibility to empower employees. This approach has allowed Virgin to expand into numerous industries successfully. Ricardo Semler, my friend and the author of the best-selling book The Maverick, is a CEO who is a total practitioner of delegating. His group, SEMCO, allows employees to choose their bosses, decide on work hours and even pay!

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Set clear expectations: Avoid micromanagement by setting clear expectations and objectives for team members. Elon Musk, the CEO of SpaceX and Tesla, is an example of a leader who emphasises clear goals. This approach enables his teams to work autonomously towards specific objectives. It will be worthwhile to deploy balanced scorecards to make this work best in SMEs.

Drive a culture of trust: Trust is the foundation of empowerment. Leaders should cultivate a culture of trust within their organisation. Sundar Pichai, CEO of Google and Alphabet, is known for trusting his employees and giving them the autonomy to pursue innovative projects. This has resulted in numerous successful initiatives.

Provide guidance, not dictation: Leaders should shift from dictating how tasks should be done to providing guidance and support. Amazon’s Jeff Bezos emphasises giving people the tools, resources, and guidance they need to succeed, rather than micromanaging their work.

Encourage feedback and open communication: Open lines of communication are essential to resisting micromanagement. Actively seek feedback from team members and encourage them to share their insights and concerns. Indra Nooyi, former CEO of PepsiCo, was known for her openness to feedback, which helped her make informed decisions and build a culture of collaboration.

Acknowledge and celebrate success: Recognising and celebrating the successes of your team members is crucial. It reinforces their autonomy and shows that their efforts are valued. Many leaders emphasise the importance of recognising and rewarding employees’ contributions.

Provide training and resources: Empower your team by offering training and resources that allow them to enhance their skills and capabilities. This approach was exemplified by Steve Jobs, who believed in providing the best tools and resources to help his team create groundbreaking products.