Distinguish the Variances That Require a Manager’s Attention
When critical care facilities in hospitals monitor patients’ vital signs, staff nurses are notified only when vital signs go beyond each patient’s pre-programmed range. Unless the monitoring devices sound an alarm, nurses take for granted that the patient’s condition is stable enough and will receive only routine medical attention.
The “Management by Exception (MBE)” method is the notion that a manager’s attention must be focused only on those areas in absolute need of his/her engagement.
As a rule, lower-level managers should handle recurring decisions. Only problems concerning extraordinary matters should be referred to higher-level managers.
This “exception principle” emphasizes that executives at the upper levels of an organization have serious restrictions on their time, capacity, and willpower. They should refrain from being caught up in minutiae that can be handled just as effectively by their junior managers.
A case in point: many companies establish protocols that designate the level of authorization required for purchases. Companies delegate authority carefully, prescribing spending limits for each level. For instance, a team leader’s approval is necessary for purchases of over $1,000. A department manager must approve purchases of over $5,000, the divisional leader for purchases of over $10,000, and the CEO for purchases over $50,000.
Managers Just Can’t Do Everything
The exception principle helps managers focus their attention on more worthy matters that justify their attention. Most managers hesitate to manage by exception because of the very human predisposition to focus on the immediate, tangible, and well-defined problems as against the distant, high-priority, challenging, and abstract problems.
In other words, mangers must distinguish programmed decisions from non-programmed decisions. Programmed decisions are routine activities that are well-defined and can be dealt with by using an established protocol. Non-programmed decisions are exceptional or significant endeavors that involve unfamiliar, one-time, and unstructured problems needing higher-level decision-making.
Idea for Impact: Don’t Get Lost in the Thicket of Trivia
Decentralize as much decision-making as possible. Establish protocols and standard operating procedures (SOPs) that empower your staff and enable your organization virtually to run itself.
Identify what deviations constitute as an exception and intervene only to solve significant problems.