The 13 Golden Rules of Mismanagement

have worked with some really bad managers, and I've watched at least three promising companies go down the drain. Invariably it has been the fault of management, not the employees. Based on this experience, I've developed thirteen golden rules that any manager can use to run his or her company into the ground.

Many people think businesses fail because their product isn't good enough, or because they don't do enough marketing, or some such thing. But as long as your product works and doesn't kill too many of your customers, somebody will buy it. The companies I knew never got to that point. Mismanagement killed them long before they got a product out the door. But not before they had burned through millions of investor dollars.

To a normal person these rules may seem like tautologies. But managers are not like normal people. I guarantee there are managers who would dispute every one of them. If you know more rules, or if one of these rules is wrong, feel free to let me know.

Rightsizing Into Oblivion

If you want to kill creativity, threaten your employees.
Sure, you would never bully your employees. But they might not see it that way. You can make them work harder by constantly threatening to fire them. Unfortunately, most jobs also require a certain amount of creative problem-solving. Creativity means taking risks. When they feel threatened, employees play it safe. They revert to their "core competencies" and stop innovating, just as a company does.

Neurologists have found that chronic stress also reduces the number of synapses in the brain. So if you threaten your employees too much, it also can literally make them less intelligent.
If you get rid of people for expressing their opinion, all that will be left are yes-men.
In case anyone doesn't know, yes-men are people who rise in the organization by agreeing with whatever the boss says, no matter how idiotically stupid it is. Once you start firing people, you will discover that those who remain will simply start agreeing with whatever you say to avoid the fate of their friends. This means you stop getting information about what's going on in your company. Considering what's happening to it, maybe that's for the best.
If you have to fire more than 1/3 of your employees, you're doing something wrong.
I know one guy who fired three-fourths of his employees, then turned around and hired new ones. Then he fired all of them, too. If you find yourself doing this, it might mean it's time to re-evaluate how you're handling your employees. Maybe you shouldn't have hired them in the first place, or maybe you should have managed or trained them better. If they're not doing what you want, it's most likely a sign that you're not communicating effectively. Unfortunately, often a new boss will start out by firing most of the existing employees just to create chaos or to send a message to them. It sends a message all right. But maybe not the one you think.

Anyway, you'll find that if you fire too many of your employees, the Board will eventually notice. They might even try to stop you—for example, by setting up a formal procedure for firing somebody. So you have to resort to management tricks to get around these pesky rules. Here are some of them:

● Force your employees to do dumb stuff. Then nail them for doing dumb stuff. They can't complain, because they're just disgruntled former employees, right?

● Assign them an impossible task, then nail them for not accomplishing it. Unfortunately, the smart ones might find a way of doing it anyway, so you're back to square one. This also requires that you have some knowledge of what constitutes an impossible task. Otherwise, you might inadvertently help your company. So it must be used with caution.

● Don't let them do any work, then nail them for not doing any work. They just sit around all day doing nothing! A variation of this is: don't give them any autonomy, so they have to sit and wait for you to tell them what to do. Then all you have to do is ignore them, and they'll just sit around doing nothing. Then you've got 'em!

● Of course, the best way is to make their lives miserable, so they quit on their own. Give them tasks way below their skill level. Treat them like kindergardeners. There are a thousand ways, limited only by your ingenuity.

Of course, there are certain risks involved in treating your employees like this. That's why it's best to delegate to lower-level managers whenever possible. That way, you can kill two birds with one stone.
For each person you fire, you will lose two.
Most managers know that firing people hurts morale. But often it also causes the survivors to jump ship. A critical employee might just assume they're next, or conclude that the company is going under, and quit. It might take a year or longer if the economy is doing poorly, but rest assured: your employees have stopped thinking about their jobs when they go home at night, and have started sending out résumés. The better your employees are, the easier it is for them to bail out. So you will lose the good ones first.

Honesty, and the Absence Thereof

If you pressure your employees to tell you what you want to hear, don't be surprised if they say it, even if it's not true.
If you base your business decisions on the data they're giving you, your company's survival depends on whether they can deliver unpleasant information without risking their careers. I once saw a boss pressure employees to give him falsified numbers so he could put them into a company's business plan to make it seem rosier. They did. That company later went bust, because their business plan, which was based on those numbers, sucked. A corollary to this is: if you force your employees to lie to your customers or business partners, don't be surprised when they start lying to you as well.
If you lie to your employees, they will not believe you when you praise their work.
When employees discover that the boss is willing to lie to achieve his or her goals, they will regard even glowing praise with suspicion. In fact, one of the most common complaints of employees is management dishonesty. If you mislead your staff about how well the company is doing, or if you withhold information that they need, don't be surprised if they're skeptical when you tell them they need to do special tasks to keep the company afloat. They might just assume you're just lying to justify a raise for yourself. Which is true, right?

As for employees not believing you when you praise their work, that's not really much of an issue. I mean, how often does that ever happen?
If you evaluate people according to a formalized list, they will work for the list instead of the organization.
Congratulations. You've outsourced yourself to a piece of paper. I don't know if Pfizer uses this system, but if they did, the employees might never have discovered Viagra. They weren't supposed to do that. It wasn't on the list.

Problems and How to Create More of Them

If you criticize people for complaining, they will conclude you don't want to know when there's a problem.
If employees complain, it means they have confidence in your ability to fix the problem. If they don't complain, it means they think either you can't fix anything, or you don't want things to get better. Eventually they will conclude you con't care whether they can do their job.

Your employees may not have the full picture—how could they, since you never tell them anything—but they know a lot more about their specialty than any boss ever will. If you criticize them for expresssing an opinion, or if you ignore their advice, they'll conclude that your real goal is not to fix things, but to create a disaster in order to have an excuse for firing them. They will sit there passively, knowing you are making a catastrophic mistake, and watch as you run your company into the ground.

I know of one boss who always dropped clever aphorisms, not realizing that they were actually quoting Josef Stalin. The employees knew, but they assumed that was the boss's message, because the boss already knew everything about everything. The message was: disagree with me, and you go to Siberia. Nobody dared question that. And no one ever volunteered any information, either. That company was one disaster after another. The boss never understood why.
If your smartest people never tell you that there's a problem, you have a problem.
Smart people are always seeing ways to improve things. If they never mention them to you, it means their level of trust is so low that the lines of communication have broken down. This is tough to repair, because they will always be skeptical that you have really changed your policies. Example: Mao Tse-Tung's Hundred Flowers campaign. The naïve ones who thought Mao really wanted openness discovered the truth the hard way. The smart ones learned they were supposed to lie and tell everyone what a wonderful system Mao had created.
If your smartest people leave, it means your organization is doomed.
They're the ones who can see where the problems are. If they leave, it means they either don't believe you care about the product(s) being no good, or they're afraid to tell you.
If the employees fight among themselves, it means you are not treating them equally.
People don't fight without a reason. They may be fighting over resources, or because of resentments caused by favoritism. If they fight, it's a valuable clue that you're doing something wrong. Unfortunately, most bosses just treat the symptom and get rid of the "troublemakers." Those who are left are usually the ones who don't give a sh*t. If you want your company to survive, you need troublemakers. They're the ones who aren't afraid to think for themselves.

I often hear managers say they need to get rid of anyone who expresses negativity. Negativity, it is said, is a disease that needs to be rooted out. But if people are pessimistic, it's because they're worried about the direction you're taking, and they think you're ignoring the problem. Pessimism is a symptom—a valuable clue that you're doing something wrong. Firing people won't cure it. It will just cover up the real problem.

Other Great Ways to Flush Your Company Down the Drain

If you don't understand what the employees do, or the technology they use, your employees will lose respect for you.
Only a manager would need to be told that this is a bad thing.
If you hire people for a specific skill instead of their intelligence, you will eventually end up with people who can only do one thing, and can't learn anything else.
Some people can learn new skills very quickly. Others become anxious and frustrated when facing a new task, and will only do what they already know. Once you get the second type, it becomes self-perpetuating because they will recruit more people like themselves. So you end up with high turnover, low morale, and excessive staff. Or you have to spend money to train them. Unfortunately, it's illegal to give intelligence tests when hiring people. The only other way to tell if a candidate is intelligent is to have people around who are smart enough to recognize them. Once you start down the other path, forever will it guide your destiny.