HOW A SUPERVISOR SELECTS A MANAGER

A father who cannot let go of his child (or what a supervisory board can and should do)

“Surely, this is not happening! When he gave his presentation, he showed himself to be an ideal candidate, even his references demonstrated that he was by far the best. He said that he needed three months to acquaint himself with the company and the results would come quickly after that. True, we did not supervise the operations and we convened the first meeting of the Supervisory Board only after six months of him at the helm of the company. I almost had a stroke when I saw the invitation and it read that he wanted to increase the company's capital instead of showing positive results,” the President of the Supervisory Board who is also the majority shareholder of a sales and production company explained indignantly.

“He has pushed us even deeper into the red. And that’s all he’s done, and now he is demanding even more money. You obviously can't trust anyone these days, even references are no longer what they used to be. My generation was honest, we did what we promised no matter the circumstances. But young people today are just looking for ways to make a quick buck. They have no work ethic! All that matters to them is appearance, that people are writing about them, they are not interested in the results and probably think that 'the owners will pay anyway'. I just can't calm down. He spent everything that has taken us our whole life to build,” complained the President of the Supervisory Board.

A Manager Without Authority

The President of the Management Board, however, presented the other side of the coin. “He must be crazy! He accuses me of stealing his money, but the truth is he didn’t leave me any room to do my job. He appointed me manager six months ago and has been in my office every day since. He strolls around the company premises delegating tasks as if he were in charge. It is true that he owns a majority shareholding in the company, but I, the manager, am responsible for it. I failed to establish respect and authority among the employees as they still saw him as the manager and I was nothing to them. Everyone bows to him and no one does any work. There was simply nothing for me to do as it was as if I was alone in the company, leaving me with no choice but to convene the Supervisory Board meeting, present my view of things and ask for more money. Otherwise, I would have had to take out loans,” explained the President of the Management Board who hired me to help distribute responsibilities evenly across the company.

Let us look at what was actually going on: Gentlemen who were approaching their seventies and had accumulated some capital over the course of their careers had decided to hand over the management of the companies they had turned into a stock corporation to a younger team. They published a job opening and selected the best candidate for the position of President of the Management Board subject to references and their own opinion of the candidate. But even before he could build up his team and start working, one of the owners came to the company every day to check what they were doing and how they were feeling. The employees therefore could not accept the new manager as a figure with authority because the previous manager was checking each of them individually to see what they were doing.

As the company suddenly had no real leader, things started falling apart at all levels. They hadn’t sold a single product in the last three months, and they divested and used up all the 'reserves' as well as all bank overdraft facilities. The manager was thus left with no other choice but to take out loans or to have the owners inject additional capital into the company. The members of the Supervisory Board, which consisted of the owners and the previous management, were, of course, shocked by this. Nevertheless, they simply did not want to hear the manager out and could not understand that they basically had not given up running the companies in any sense of the word. Nor did they realise that they were as much to blame as the management team for the catastrophic situation at the company.

A Role Model from Childhood – the Show-Off

And what was the cause for all of this? The President of the Supervisory Board was neglected as an elementary school student and his role model was his classmate, Robert. Even though he was a poor student academically, he was very popular, so he looked for opportunities to hang out with him as much as possible – he did his homework, he tutored him and even started dressing like him ... but he was always just a bad copy of him. Robert was still the cooler dude.

Then they went their separate ways. But this image was deeply etched in his memory. And it came back nearly 60 years later when he was selecting someone to run the company or manage its assets. There were 10 candidates who applied for the opening, but he decided on Darko without much hesitation as he remembered his classmate Robert as soon as he saw Darko. He seemed an ideal candidate. Darko did indeed meet all the requirements, but the President of the Supervisory Board did not see his psychological test because he had decided that Darko did not need to do it.

He relied on his intuition. But at the time of the selection of the new Management Board President, he was actually blinded by his childhood memory. All he saw was the popular kid and not the latter's actions. Because he did not value hard work and knowledge as a child, this pattern resurfaced. He was diligent, but he valued neither himself nor his knowledge. He always believed that it was better to be in charge in the company. And Darko was just that: he was a populist manager, he knew how to perform and speak, but did not know how to position himself as a figure of authority. In addition to not being able to establish discipline, he also lacked expertise.

Patterns Resurface Completely Unexpectedly

Patterns from childhood can hide within us for years and then attack ‘from an ambush’ when we least expect it. The President of the Supervisory Board had a very poor self-image as a child and had to prove himself to his parents all the time, but he was never praised for this, which is why he believed throughout his life that the right people are those who know how to put on a good show even if the show lacks any content. But because he was diligent and hardworking, he always knew how to get back on his feet after a sobering experience. However, this time, this negative trait of his betrayed him when he no longer had that power.

It was only when the owners were left with almost nothing that they were willing to hear that they would have to change their behaviour. In this example, mediation proved to be the best solution. I put myself in between the management of the company and the owners, started by calming them down and then explained to each of them individually where they were making mistakes. After two individual and one joint meeting, the owners decided not to show up at the company anymore and to give the management the freedom to do their work. A one-tier management system was introduced in the company, meaning that the President of the Supervisory Board at the time became the President of the Board of Directors and the President of the Management Board became the CEO. They thus convened board meetings every month. The President of the Management Board, who was now the CEO, still had to work on his self-confidence in order to establish authority vis-ŕ-vis his colleagues and gain their respect.

The role of the Supervisory Board in a company is much greater than the members of the Supervisory Board and the management of the company realise and in comparison to what is portrayed in the media. The members of the Supervisory Board, who are representatives of the capital, elect the management of the company. They are also the ones who are supposed to clearly present the objective of the capital, and the company management should outline the path or strategy that will lead the company to this goal.

The Supervisory Board members are supposed to confirm this path and then only supervise the successful implementation of the strategy. Naturally, when the management wishes to change the plan, the Supervisory Board must approve it. In no event should Supervisory Board members delve into the operational management of the company.

The owners actually had no other choice. They could have replaced the management, but they would have chosen even worse candidates based on their repetitive personal patterns. Since this was their last chance in life, they had to give in and start talking. They had to overcome their own beliefs that had got them into trouble on so many occasions before—this time even right before the ‘grave’. Being in the later stages of life, they no longer had the energy to start all over again!

The ‘young guns’ from our story did not value themselves and their work throughout their lives; it was only when someone took almost everything from them that they realised that they had built everything with their own work and knowledge, which is theirs and theirs alone.

***

Life is always a mirror, but we simply look away and it is only when it really starts to hurt that we ask ourselves whether something could be wrong with us. Many ask this question too late. We need to start respecting ourselves and our work before we are reminded of this by others. For they remind us of this by taking away from us what is truly ours.