You may have heard the phrase “managing by exception” used in the workplace. When a leader manages by exception, it means they only want to be notified when something out of the ordinary occurs.
In other words, if everything is working properly and progressing normally, there is no need to involve them. Only when something unusual happens would they expect to be contacted.
So is managing by exception a good or bad thing? And what impact does it have on our people?
What’s Good About Managing By Exception?
The concept of managing by exception is often used in project management. In this context, it basically means that we only raise issues to senior managers when there is something to worry about.
This makes good sense. After all, why would we bother our superiors when everything is going fine?
Managing by exception can be beneficial for people who are very busy. Rather than involve them regularly in the day to day operations, we reserve this for when we need them to help us solve an issue or make a decision.
This means they can be confident that when they don’t hear from us, things are OK. They can use their time to focus on other activities until we need assistance.
Managing by exception can be attractive for leaders because of this potential to free up time and eliminate distractions. When you have a high degree of trust in the people around you, this may be a good strategy to keep your processes streamlined and the work flowing without needing to be too involved along the way.
Of course, you need to define what “normal” looks like, and then people will know if what they’re seeing falls outside of those guidelines. Once the rules are clear, people will know when they need to escalate issues to you, and when they don’t.
I often see this style applied in projects. This has several benefits for busy executives who need to understand the project, as well as keep on top of their other responsibilities. They use this approach to help them save time while still having some control over the project.
However, I have also seen managers use this approach as their go-to strategy, outside of projects. This could possibly be considered a style of “hands-off” management.
Active vs. Passive Management by Exception
Management by exception also includes the concept of “Active” and “Passive” management. As you might expect, active management means helping people work through issues and proactively working to prevent problems.
By contrast, the passive approach means we only get involved when there is an issue.
So, it should be said that managing by exception does not necessarily mean that a leader is completely distant and unavailable. More active management approaches may still mean that a leader can engage to support their team members along the way.
I see this as lying on a spectrum, from completely hands-off to more engaged approaches.
The Potential People Impacts of Managing By Exception
I have worked with leaders who say they like to manage by exception as their primary approach, even outside of a project situation.
While there are merits to this approach for streamlining communication and safeguarding your time, I feel that there are several potential impacts of this leadership approach that should be called out.
1. Managing by Exception Can Build a Culture of Fire-Fighting
Managing by exception can result in a tendency to become focused only on managing issues.
The danger comes because a leader would be involved only when something has gone (or is going) wrong. Once alerted, the leader can now put their attention to fixing the issue.
If we’re not careful, we see team members try to minimise the appearance of issues, so they don’t need to highlight them to the boss. This brings the potential for covering up problems.
One of the most worrying aspects of this style of management for me is that it conditions leaders to respond only to negative events. If my team only comes to me when there is an issue, I’m going to associate their interactions with problems.
I’ll also spend most of my time with my team when we’re working on fixing bad things, rather than focus on positive aspects. Over time, this can mean that leaders become concerned only with issues, rather than strategic aspects like planning, or helping their people grow and develop.
2. We Depend On Our Team Members to Tell Us What’s Important
When we start to manage by exception as our default strategy, we start to rely heavily on our team members to identify problems and escalate them to us. This approach can work well when team members are crystal clear about what matters.
However, if there are some grey areas about what constitutes a cause for concern, then you may not hear about issues that you really care about until it’s too late.
I’ve seen examples where leaders have been caught by surprise when their team didn’t alert them to issues. If you’re going to manage by exception, you’d better be super clear about your expectations. You should also have very good ways for people to identify what’s an issue, and what’s not.
3. Managing by Exception Can Disempower Team Members
When we manage by exception, we empower our people to get on and do their work. This can be fantastic for motivation, because people have autonomy to do the work without rigid oversight.
A potential issue is that team members may feel like they need to escalate all the “important” things to the boss. They have no capacity to solve problems or make decisions for themselves. This can have them feeling like they play a minor role in the workplace.
This may also reduce confidence over the long run, because your people won’t stretch outside of their comfort zone. Instead, they’ll sit safe and comfortable while you fix their issues for them.
4. Managing by Exception Can Create a Barrier
Power distance represents the degree of respect or deference that employees give to leaders. In low power distance environments, we’re more likely to see employees who speak up and challenge the opinions or provide feedback to their leaders.
When we have a high power distance culture, we’re more likely to see the opposite. That is, we’ll see employees who are more likely to stay silent and follow orders.
Managing by exception can start to create a barrier and put a greater distance between you and your people. If you are seen as someone who should only be disturbed when there is a problem, you may have less contact with your people, and be perceived as “too important” for the people who report to you.
I’ve found that more collaborative, inclusive relationships with managers provide an environment where people are more likely to feel engaged. This is echoed in a recent HBR study, where relationships with management were seen as a huge driver of job satisfaction in the workplace.
The greater the perceived distance between you and your people, the less ability you’ll have to support them and build positive relationships.
Pay Attention to Where You Spend Your Time
Where leaders spend their energy will set the tone for the workplace.
A focus on managing issues can lead to a blame culture, where people are scared to try anything new for fear of having it escalated to the boss.
A more proactive approach, where you spend time supporting and guiding your people can provide the opposite experience.
Do you wait for your team to escalate issues? Or do you spend time proactively engaged with your people?
Managing by exception has its place, but it can set the tone for a workplace where the boss is sacred, and too important to be disturbed.