1. The lower the rank of managers, the more they know about fewer things. The higher the rank of managers, the less they know about many things
Executives make mountains out of molehills; subordinates make molehills out of mountains.
The relationship between executives and subordinates is complementary: neither knows why the other does what they do, nor cares about it. This leaves a large black hole between them into which most important issues and communications fall, lost and, like Clementine, gone forever.
2. Managers who don’t know how to measure what they want settle for wanting what they can measure
For example, those who want a high quality of work life but don’t know how to measure it, often settle for wanting a high standard of living because they can measure it. The tragedy is that they come to believe that quality of life and standard of living are the same thing. The fact is that further increases to an already high standard of living often reduce quality of life.
Unfortunately and similarly, the (unmeasurable) quality of products or services is taken to be proportional to their (measurable) price. The price of a product or service, however, is usually proportional to the cost of producing it, not to its quality; and this cost tends to be proportional to the relative incompetence of the organization that produces it.
Like economists, managers place no value on work they do not pay for because they can’t measure it. Work that has no quantifiable output includes some of the most important work that is done, for example, raising children and maintaining a home. On the other hand, economists place a high value on work that destroys value, because the cost of such work can be measured. Hence the paradox: a prolonged war is a very good way of raising gross national product but reducing quality of life.
3. There is nothing that a manager wants done that educated subordinates cannot undo
The basis of this f-Law is as follows: the more power-over educated subordinates that managers exercise, the less is their power-to get them to do what they want them to.
Power-over is the ability to reward or punish subordinates for meeting or missing their boss’s expectations. Power-to is the ability to induce them to do willingly what the boss wants them to. Therefore, the ultimate source of power-over is physical or economic, but the ultimate source of power-to is intelligence.
The effectiveness of power-over decreases as the educational level of subordinates increases. It becomes negative when the educational level of the subordinates is higher than that of their bosses.
The exercise of authority is necessary for getting a job done by those who do not know how to do it, as, for example, in using aborigines to build a house. For those who know how to do it, the intervention of authority is an obstruction to getting it done, as, for example, in telling a plumber how to fix a leak.
4. The less sure managers are of their opinions, the more vigorously they defend them
Managers do not waste their time defending beliefs they hold strongly – they just assert them. Nor do they bother to refute what they strongly believe is false. For example, they would not defend the statement ‘It is necessary for the company to make a profit’, or refute the statement, ‘It is not necessary for the company to make a profit’. To most managers the former statement is obviously true and the latter obviously false, hence neither requires defense.