The Hidden Structural Costs of Incompetence

It is costly to have incompetence in your organization. This is obvious. Someone is not performing or delivering at a high level, your product or service suffers, your business suffers.

It is also obvious that as a secondary effect, your team suffers. Other people have to work harder to correct mistakes and pick up the slack. Everyone has less pride in their workmanship.

The thing is, those costs are easily correctable once the person responsible for incompetence departs (willingly or unwillingly) or corrects (gains the will or skill required to do their work correctly). They’re not structural.

There are more subtle hidden structural costs of incompetence, and what they look like depends on where they occur in the organization.

High-level incompetence, at the managerial or executive level results in excessive subversion. In a healthy organization, people trust management to make management decisions. And, as much as I hate top-down hierarchical management, the role of management is to have a broader, more strategic view than any person or team in the rest of the organization. When managerial incompetence occurs, managerial trust is lost. Management loses its ability to direct, nudge, or otherwise “manage”, and becomes ineffective. Employees usually still know well enough to tell managers what they want to hear, but they won’t actually follow-through effectively.

This becomes a structural problem that can’t easily be resolved by changing a manager or two (or even the entire management team). People become subversive, and management has to resort to some combination of carrots/sticks rather than relying on intrinsic motivation and alignment.

Low-level incompetence, on the other hand, results in over-management / micromanagement. This creates a culture where driven, independent-minded employees have one of two choices: either stop being driven and independent-minded, or leave. Which results in more incompetence, and more over-management. This is structural too, in that it is self-reinforcing. The manager’s instinct is now more command-and-control, more management, more deadlines, more check-ins, etc. But that’s the opposite of what’s actually needed.

This is why it is critical to rectify incompetence as quickly and effectively as possible, at any level of the organization.

Of course, this entire post would be lacking if I didn’t clarify that management is always ultimately responsible. Management has the ability to hire, fire, reward, and punish, and so any incompetence is management’s responsibility.

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