Why Management is Important

There's a common belief in popular culture these days that management in general - and managers in particular - are obsolete, or even redundant. There's actually a theory of "non-management" that suggests that if you hire, train and empower the right people, you don't even need anyone to supervise them; just tell them what you want done, and get out of their way. It's a comforting idea, really; it suggests that all of us who have spent years learning about management science and practicing the profession of management don't actually know more than random armchair pundits can just make up on the fly. You don't even need to hang onto people who have managed not to get fired for two years and call them supervisors, just drop all of those high management salaries down to the bottom line and declare a higher dividend. And there's even some evidence to suggest that it might really work that way. But on the other hand, stories keep popping up that suggest that having someone who knows what he or she is doing running things might just be worth the money...

Consider the case of Capital One and a former customer named Perry. When Capital One sent the customer to their collections department she had the temerity to hire a lawyer and direct all future communications from the company to her attorney. Capital One took offense at this, and refused to go through the customer's legal counsel, persisting in calling the customer and members of her family at home, at work, and at all hours of the night.They also began ratcheting up the amount the customer supposedly owed them, ultimately demanding payment in excess of $286 million. Now, a competent manager, or at least one who had a passing understanding of strategy, public relations, or law, could probably have figured out why escalating from a $4,000 debt to something over $286 million was a bad idea. Somebody who had actually spent a few minutes in a business law class might have been able to explain why failing to appear in court is a bad idea, too. But apparently, nobody at Capital One had figured out why doing both of these things in the same case is a bad idea...

In the case linked above, the former customer is counter-suing for the same amount Capital One sued her for, claiming that the $286 million can't simply be a computer error, but must in fact be the product of a deliberate attempt to harass and intimidate her. The company could probably have raised some other argument, except they failed to show up for the court hearing and are now in very real danger of being found liable for the full amount. It doesn't help their case any that under the laws of the state where this action is happening, the company was legally required to communicate through the attorney, not start arbitrarily raising the amount of the case, and other minor civilities that were completely ignored in this case. In fact, even if they can get off the hook for the $286 million, Capitol One may still be hit with civil sanctions and even criminal charges because of their misconduct in this case...

Now, I'm not saying that there isn't a management team currently running Capital One, or that the management personnel running the collections department at Capital One are incompetents who have gotten so arrogant at being about to flout Federal law and sneer in the faces of consumers that they've made a mistake that could end up costing the company nine figures worth of money; I'm not even saying that if the case ultimately goes south on them that they won't just scam up money from a Federal bail-out program to make good their loss. I'm just saying that a real management professional would have understood the potential for ridicule, legal exposure, and (worst of all) lost profits that could result from allowing this sort of fiasco to continue, and thought of a better way to recover debts and intimidate uppity customers...

But if you still think there's no purpose in having somebody running the company who actually knows what he or she is doing, please feel free to eliminate the management positions in your company. I'm going to see if I've got any money invested in Capital One - and if I do, I'm going to transfer it into some company that still has managers working for them...