Permanent Equity: Investing in Companies that Care What Happens Next

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In Defense of Micromanagement

Here’s what Jerry Seinfeld had to say to the Harvard Business Review about why Seinfeld was such a success:

“If you’re efficient, you’re doing it the wrong way. The right way is the hard way. The show was successful because I micromanaged it – every word, every line, every take, every edit.”

This very well may have offended the HBR professionals (or at least made them cringe), as they have published a deep catalog of content writing against micromanagement as a viable business philosophy:

February 2008: Micromanage at Your Peril

September 2011: Stop Being Micromanaged

November 2014: Signs That You’re a Micromanager

August 2015: How to Stop Micromanaging Your Team

August 2017: To Get Your Boss to Stop Micromanaging, Clarify Expectations

December 2019: 3 Ways to Kick Your Micromanaging Habit for Good

December 2020: Stop Micromanaging and Give People the Help They Really Need

January 2021: How to Help (Without Micromanaging)

September 2022: How to Stop Micromanaging and Start Empowering

You get the point. Conventional wisdom doesn’t have a lot of nice things to say about micromanagement. And yet, we see it happening – and often working – all the time

The reason is that small businesses tend to struggle to hire talent and not have time or resources to invest in building training programs. Absent those factors it’s almost impossible to run a business without micromanaging.

What’s more, micromanagement is an effective way to manage risk. If nothing can happen without an owner’s approval, it’s nearly impossible to stumble into a problem that might destroy your business. 

There is, however, a cost to micromanaging, which is that a micromanaged business can’t grow sustainably and its equity is worthless to anyone but the micromanager. This is why Seinfeld stopped running after nine years even though NBC would have loved to keep it on the air. You couldn’t just bring in John Goodman or Nathan Lane and keep rolling.

But that’s also one way to do it. Not every enterprise needs to have a plan to grow for decades and go public. It’s okay for something to exist successfully for a period of time and then stop existing. That’s not nihilism, it’s reality, and it happens all the time.

Tim Hanson


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