---
title: "Over-management: A Hidden Trap in Business Operations"
description: "Over-management can cause significant harm to a business while being difficult to detect because it is disguised as strengthening management. This article explores the concept of over-management, its causes, and measures to avoid it, emphasizing the importance of focusing on customer value creation."
author: "蔡海彬"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2018-09-22"
language: "en"
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# Over-management: A Hidden Trap in Business Operations

> Over-management can cause significant harm to a business while being difficult to detect because it is disguised as strengthening management. This article explores the concept of over-management, its causes, and measures to avoid it, emphasizing the importance of focusing on customer value creation.

Click 'Read Original' for details.
**Over-management can cause significant harm to a business, and because it is disguised as strengthening management, it is not easily detected.**
The business goal of an enterprise is naturally to earn profits. To achieve profits, it must provide customer value; an enterprise that cannot provide customer value cannot survive. Everyone understands this principle, but in practice, although many enterprises know to be customer-value-oriented, they often deviate during execution and easily fall into the trap of over-management.
What is over-management? In my view, management behaviors that aim to improve efficiency or reduce costs but seriously hinder the enterprise's ability to create customer value are over-management. Over-management causes great harm in business operations, and because it is disguised as strengthening management, it is not easily detected.
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**Example:** After more than a year of R&D and overcoming numerous difficulties, a new product finally launched. After launch, various sales regions actively promoted it, increasing terminal promotional activities. However, due to the introduction stage, overall sales growth was slow and investment was relatively high. Two months after market introduction, senior marketing management began to follow up on new product work in each sales region. By using sales rankings and per-store analysis, they continuously demanded lower expense-to-sales ratios (to reduce costs). Regions, not daring to neglect, reduced investment to lower the ratio, leading to a severe decline in new product investment. New product sales also began to decline, eventually becoming a mediocre "chicken rib" product.
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Such incidents happen repeatedly in many enterprises. The scary part is that enterprises do not see anything wrong with pursuing lower costs in this process; senior management's over-management behavior is not criticized but praised. When such results occur, the easiest conclusion is: the new product lacks vitality and competitiveness! Once this conclusion is formed, most enterprises quickly halt the new product to reduce losses and start new product development. In the long run, the goal is to reduce costs, but in reality, it is the most costly behavior.
In this case, the main cause is that senior marketing management demanded results too quickly. It must be understood that a blockbuster product that sells well immediately upon launch is rare; many good products die under such management thinking, and enterprises are unaware of it.
Admittedly, the success rate of new product launches is low. If the market does not accept it, stopping losses promptly is the right approach. However, in the case, senior management did not consider the customer's perspective but simply used management thinking to force a lower expense-to-sales ratio, causing significant losses.
During the new product launch period, the enterprise's focus should be entirely external, conducting research and analysis on customers: whether the new product meets customer needs, what customers think of it, etc. If customer feedback is poor, it should be eliminated immediately. But if the new product meets customer needs, receives positive feedback, and aligns with industry trends, investment should be increased and cultivation should be patient. For example, Uni-President's Tang Daren (汤达人) took several years of market layout before achieving its current explosive growth.
**Four Reasons for Falling into Over-management**
So the question arises: why do so many enterprises value customer value and realize they need to create it, yet unknowingly fall into the trap of over-management during execution? I believe there are four reasons:
**1. Customer value creation is not easy to grasp**
**Focusing on customer value means looking outward, while a management perspective looks inward.** As business operators, looking outward, factors such as channels, consumers, industry background, and policy background can all affect customer value, making it easy to feel there is no handle and no way to exert effort. Looking inward, everything is under control, with clear handles for efficiency and cost, which is why many operators unconsciously turn to management.
**2. Customer value is not easy to unify understanding**
Many enterprises talk about being customer-value-centric, but many operators find it hard to implement. The difficulty lies in that customer value is hard to articulate clearly; it may be just a principle or a feeling, so each team member's understanding differs. With different understandings, communication is difficult, let alone reaching consensus. Management work, on the other hand, is grounded in the present, making it easy to unify understanding and reach consensus. This is why many enterprises hold business meetings that end up becoming management meetings.
**3. Customer value has a long payoff cycle**
Work centered on customer value often requires cross-departmental collaboration and a long cycle, ranging from a few months to several years. Once effective, it creates immense value, but in daily work, it is hard to feel the value. Management work, however, can show short-term results through adjustments in one department, one person, or one thing, making it visible and tangible.
**4. Customer value is not easy to assess**
Work centered on customer value is difficult to specify and quantify, so it generally does not enter team assessment indicators. Team assessment indicators are usually those that can be achieved through strengthened management. Since assessment acts as the baton for team actions, the results are predictable.
**Four Measures to Avoid Over-management**
Enterprises cannot lack management, but over-management reduces work centered on creating customer value, making the enterprise strategically short-sighted and losing competitive advantage. How can this be avoided? I believe we should start from the following aspects:
**1. Organizational division and reform**
**Organizational division:** For customer value, enterprises should clarify division of labor and authorization. In principle, this is the responsibility of senior management, but if the boss does not delegate enough, senior management is more likely to engage in over-management.
**Organizational reform:** Through organizational fission, form more small organizations, such as Haier's micro-enterprises, making more managers become bosses, and letting managers think like bosses, effectively reducing over-management problems.
**2. Institutional safeguards**
Think clearly about the enterprise's business goals and how to create customer value. After consideration, establish clear systems and work principles to ensure that departments have rules to follow during execution, placing customer value creation above management. For example, Huawei's Basic Law is such a safeguard.
Huawei's Basic Law describes its business model: Our business model is to seize opportunities, achieve leading advantages in product technology and performance-price ratio through high R&D investment, and through large-scale sweeping marketing, form a positive feedback virtuous cycle in the shortest time, fully capturing the excess profits of the "opportunity window."
**3. Regular correction**
Regularly conduct customer value discussions to continuously correct deviations. Any behavior that hinders customer value creation due to over-management should be treated as a typical case and prevented from recurring.
For example, in the new product case mentioned above, if there was no careful market research, no clear market strategy, and only simple and crude control of the expense-to-sales ratio, that is typical over-management. Such behavior not only has a significant impact on the enterprise's future but is also highly concealed. Without regular discussions and analysis, it is difficult to detect and avoid recurrence.
**4. The boss must not overemphasize management**
The boss must clearly recognize the importance of creating customer value for the enterprise and not be too obsessed with daily management; otherwise, everyone will follow the boss's lead and treat management as the top priority.
This is crucial. The boss must absolutely value the guiding role of his behavior on the enterprise. "When the King of Chu loves slender waists, many in the palace starve to death." Leave management work to functional departments, and for customer value creation that relates to the enterprise's direction and development, whether the boss understands it or not, he must show absolute importance. Only then will a culture that values the long term and value gradually form within the enterprise, reducing short-sighted and overreaching behaviors.
Management is indispensable in business operations. Regarding the degree, opinions vary, but I believe that management should ultimately serve the achievement of business goals and the creation of customer value. Whether an enterprise ultimately survives and develops is not determined by the quality of management work. From this perspective, management is a double-edged sword in business operations; over-management tends to cut the enterprise's body. I hope every business operator can wield this sword well and run their business better and better.
Source: Sales and Marketing (ID: cnmarket)
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