How to save time at meetings – management by exception


Everyone hates meetings, and for good reason. They interrupt workflow (meetings are usually called by middle managers, not individual contributors like programmers or graphic artists who need to concentrate for extended periods of time) and bore most of the people, most of the time.

The problem is that many companies have regularly scheduled status meetings. For example, every Monday morning all functional group leaders gets together and they go around the table reporting on their groups activities for the past week and perhaps if the meeting is well run, their plans for the coming week.

There is really no excuse for typical “what I did on my summer vacation” style update meetings. With today’s corporate communications tools like Slack, this kind of information can be communicated on a need to know basis to groups or individuals, who can then take it in on their schedule – asynchronously. This is like Netflix vs. traditional appointment style TV viewing. The latter is dead, and for good reason. People need to own their schedules; cutting down on meetings or length of meetings is one way to do that.

I’m not in favor of eliminating all meetings; I believe there is a way to drastically cut down on the time they take up and the boredom they inflict. It’s called management by exception. In its simplest form management by exception is the practice of communicating and discussing only issues where actual operational results deviate significantly from the  projected results. These results typically relate to schedule, budget, and performance. Budget vs. actual is standard practice in accounting. Any financial difference is called a variance.  For example, if last month’s sales were projected to be $100,000 and were actually only $85,000 the variance would be $15,000. A variance must be a difference that makes a difference. A 15% variance in revenue can make a big difference in a startup where cash is king. A .05% difference isn’t a difference worth discussing.

So how does management by exception and variances relate to status check meetings? Attendees at these meetings should only report on significant variances. If there were none, they have nothing to say. Conversely, significant variances should trigger a discussion that includes what caused the variance, its impact, and any necessary remediation. This may happen in real time or at a separate meeting around this issue.

Management by exception gives staff the responsibility to make decisions on their work. Only if variances or differences from plan surface that require informing the next level of management – or perhaps peers across the organization – does the staffer need to interrupt their work.

Management by exception has another benefit: focus. By only reporting and perhaps discussing only significant variances and their causes the team is focused on one thing: improvement of any negative variances.

Management by exception can apply just as well to email. The most common complaint about email is that so many people get cc’d on email chains unnecessarily. If email is focused on variances and on a need to know basis your firm should be able to cut down cc’d emails.

But management by exception is not free. There is a cost to be paid. That cost is developing a plan and quantified goals. For without a plan and goals you cannot have a projected results. And without projected results there can be no variances between the actual results and the projected results.

As noted in Wikipedia:

Management by exception can bring forward business errors and oversights, ineffective strategies that need to be improved, changes in competition and business opportunities. Management by exception is intended to reduce the managerial load and enable managers to spend their time more effectively in areas where it will have the most impact.

The main advantage of management by exception is that problematic issues are identified rapidly and managers are able to use their time and energy more wisely for important issues rather than for less important ones that could provoke delays in their daily operations.Additionally, managers need to work less on statistics and the frequency of making decisions becomes less, which saves time. As managers take fewer decisions, employees have more responsibility, which increases their motivation.

One other point. Not all variances are negative. A sales team might exceed its projected revenue per quarter or its quota. But if the positive variance is significant that positive variance might need to be examined. Perhaps the sales projection was lowballed, or a competitor dropped out of the market. And if no variances are being reported over an extended period, the team or individual may be stagnating. Anyone striving to improve will occasionally stumble, resulting in a negative variance. As the saying goes, If you never fail, you’re not trying hard enough.

Time is an incredibly important asset in startup ventures. Management by exception can both increase time available and improve motivation and performance. Give it a try!


Author: Mentorphile

Mentor, coach, and advisor to entrepreneurs, small businesses, and non-profit organizations. General manager with significant experience in both for-profit and non-profit organizations. Focus on media and information. On founding team of four venture-backed companies. Currently Chairman of Popsleuth, Inc., maker of the Endorfyn app for keeping fans updated on new stuff from their favorite artists.

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