How to Handle the 5 Toughest Management Challenges

Anyone can be a supervisor, a manager, or even a CEO. Titles are often given, not necessarily earned.

It's relatively easy to carry a clipboard and monitor processes, impose work rules, report results, and occasionally glower menacingly.

Managing is straightforward; leadership is not. You really earn your management stripes when the right answer is, at times, also the hardest answer.

Why are situations like the following so challenging? Managers don't just manage processes. Managers manage people: People with hopes, fears, and emotions, no matter how rational or justified.

The following are some of the most difficult management challenges I've faced. Some I handled reasonably well; others I screwed up the first time (and sometimes the second and third times.) See how my list -- and my advice -- lines up with yours.

Challenge #1: You know things you can't share with employees.
Typical Situation: Sales are down, financial results are poor, layoff rumors have been swirling for weeks. The employees you manage know you've had several meetings to discuss options, one as recently as yesterday. During that meeting you decided to lay off 10 employees the following week.

An employee comes in your office and says, "Hey, I know you guys have been talking about layoffs. I'm really worried; I can't afford to lose my job. Do you know what's going to happen?"

The Challenge: You shouldn't say. You can't say. But you've built a solid rapport with your employees, always answering questions and giving honest feedback. How can you respond without breaking confidentiality yet also without breaking the sense of trust you've built with your team?

The Solution: Hard as it is to do, you can't say what you know. But you also can't just say, "I'm sorry, I can't tell you." That non-answer will go out on the floor as, "I asked him, and he said he couldn't tell me. If there weren't going to be layoffs, he would have just said so. So I know people are going to get laid off."

Clearly that doesn't work; you have to go a little deeper. Here's what you could say:

"You know we've been struggling as a company. And we have had a lot of meetings where we talked about what to do. We've looked at all kinds of options. I wish I could, but I really can't tell you anything at this point. I've been asked not to, and that's a good enough reason, but more importantly it wouldn't be fair to anyone else if I told you things I didn't share with everyone.

"Here's what I can tell you: Whenever decisions are made and I have permission to share those decisions, I will tell you and everyone else on the team immediately. You will be the first to know. I promise. For now, just know that we're doing everything we can to make a bad situation as good as possible."

Will the employee go away happy? No. He might even get angry or feel betrayed, especially if you have shared things in the past you weren't allowed to share. (Admit it -- we all spill a few secrets from time to time, especially with great employees we trust.) But this is one situation you can't leak. Don't assume the employee will be able to keep the news to himself. After all, you didn't.

Bonus Tip: Any situation where you are asked questions you shouldn't answer is made more difficult when your lips were loose in the past. It's always tempting to share sensitive information with certain employees. Not only is it at times nice to have someone to talk to, sharing also builds a stronger relationship and bond... and makes managing a little less lonely. But that "openness" also makes any "I really can't tell you" situation that much more difficult -- and leaves the employee feeling suddenly shut out. The best practice? Keep all sensitive matters to yourself, and never share information you aren't allowed to share. Not only is that a good personal policy to follow, it makes this challenge much easier to deal with.

CLICK here for the next challenge: Dollars versus ethics >> Challenge #2: Balancing standards against financial considerations.
Typical Situation: I worked in book manufacturing for twenty years, and this management challenge came up a lot. Say we were running a job where the quality didn't quite meet standards but needed to ship or the customer would be upset... and reworking the job would create an expensive and all too visible spoilage. Making the decision tougher was the fact books were shipped to warehouses and bookstores all over the country; our actual customer, the publisher, would only see a few books that were hand-picked by our sample selectors. In short, our customer would likely never know there was a problem... and neither would retail customers who purchased and read the books.

The Challenge: Quality is important and all jobs should meet standards. But so is cost control and hitting ship dates and all the other performance metrics. Besides... who will know? Just you -- and your employees, who will inevitably decide that quality standards are flexible, and who are likely to drop their own standards in response. Lots of needs, lots of agendas, a variety of potential repercussions.

The Solution: Share your decision-making process with your team. Talk it through openly. Think out loud. Then ask for their opinion and get them involved. Sure, you'll ultimately make the final decision, but the better you engage your team the more they realize that there is a logic behind whatever decision you make, and that tough calls are always case by case and never automatic or knee-jerk.

What did I typically decide? In general, I followed a thought process like this:

1. Is it really bad? Sometimes you look at the final product and immediately think, "Ouch, this is bad." If that's your reaction, rework the job.
2. How important is the ship date? Major publishers often tied advertising campaigns, store placement, etc. to ship dates. If we shipped late they lost money and sales. Shipping the new Harry Potter book late would have been considered to be a very, very bad thing.
3. How much time/money is involved in rework? It's unfortunate but this factor did play a role. No business is in business to lose money. Deciding to rework when it's quick and cheap is an easier call than when considerable delay and expense is involved.
4. Will the end user be affected? Sometimes a quality problem would only be noticeable by us and the publisher, like a book trimmed 1/8" too short. (Similar to shipping, say, a shirt that is a slightly different color than specified in the contract. Will a customer in a store notice a shade difference that can only be identified with a swatch?)

Bonus Tip: Never get other people involved in the decision-making process unless you really want their input -- and will act on it. For example, in our case I could have called our customer service rep handling the job, but I know what most would say: "The job needs to meet standards and it needs to ship today." Great -- and impossible. Also never call in someone higher in the corporate food chain unless you are required to get their input; otherwise your team will know you shy away from making the tough calls. You're in charge: Make the decision and accept responsibility for the outcome.

CLICK here for the next challenge: Firing a superstar who breaks a rule >> Challenge #3: Enforcing policies at the risk of losing a superstar.
Typical situation: An employee is so outstanding he seems almost irreplaceable. Say he's a salesperson responsible for well over half of your revenue. Then you find out he cheated on an expense report.

The Challenge: He didn't make a mistake; he clearly overstated expenses.

Or he violated another basic and important company rule, and based on your policies he should be fired.

Do you let him go and risk the potential impact on your business? In your business, sales are heavily relationship-based, and if he goes, many of your best customers could go with him.

The Solution: This time there's little judgment involved. First make sure you have all the facts. (Any time you fire an employee you should work very hard to ensure you aren't making a decision based on inaccurate information.)

Then let him go.

No matter how "important" he may be to your business, employee policies are only as effective as your enforcement of those policies. Plus it's likely whatever you did find was the tip of a larger iceberg, since an employee who cheats on his expense reports is probably unethical in other ways as well.

Then look at your sales process. Why was he such a superstar? While it is possible to have a "knack" for sales, most great salespeople have skills that can be copied. Sales is both art and science; what caused him to be so successful? Even if you didn't let him go, you have a problem that still needs to be addressed because he could choose to leave at any time. Either your sales process is broken, or your sales training is ineffective, or you have a product that's almost impossible to sell. Figure out the problem and fix it.

Bonus Tip: While you should never discuss the reasons for any disciplinary action with other employees, guaranteed word will get around regarding why he was fired. Never confirm or deny; always say, "I'm sorry, but whatever happened is confidential." Don't grandstand or say something to the effect of, "No one is bigger than the company!" Employees will respect the fact that rules are applied fairly; don't spoil it by patting yourself on the back for making a hard decision.

CLICK here for the next management challenge: Interpersonal issues between employees >> Challenge #4: The all too frequent "He said, he said," conflicts.

Typical Situation: An employee complains about how a peer treats him. While it happens at work, the behaviors aren't specifically work-related: He says the other employee makes snide remarks, sometimes ignores him, makes dismissive gestures, talks behind his back... high school stuff that nonetheless often happens in the workplace. You speak to the other employee, and he denies it, saying, "I don't know what his problem is. He thinks everyone hates him."

The Challenge: Sorting out interpersonal issues is never easy and it can appear you took sides -- especially to the employee who "loses."

The Solution: Stick to facts. Talk to both employees, separately or together, but only talk about facts: Words, actions, behaviors, tangible outcomes. Enter the "feelings zone" and you're in a black hole you won't escape from. Sure feelings are important, but you need to know the actions that caused those feelings. Feel free to interrupt and direct the conversation.

At all costs avoid discussion like, "I know he thinks..." or "I know he assumes..." or "I know he doesn't like me..." For example, if an employee says, "I know he doesn't respect me..." interrupt and say, "Let's talk about that. Why do you feel he doesn't respect you? What has he said or done to make you feel that way?"

By discussing the situation in terms of facts, you help employees focus on behaviors that can be changed. Employee emotions are largely outside your control as a manager, but employee behaviors definitely fall within your scope.

So find out exactly what was said and done, determine whether that was appropriate, and then clearly state what you expect in the future. And then keep a close eye on the situation and make sure your door is always open.

Bonus Tip: Never say something to the effect of, "Look, grow up. You don't have to like each other. You just need to do your jobs." While that is what you may want to say, you can't. To at least one employee the problem is very real. While you may not fully solve an interpersonal squabble, most employees respond positively to the fact you tried.

CLICK here for the next management challenge: Talented employee, no opportunities >> Challenge #5: You have little tangible to offer a talented employee.
Typical Situation: One employee stands out: She's smart, energetic, self-motivated, consistently outperforms her peers, takes on formal and informal leadership roles, steps up when there's a challenge... if you could clone her you'd have it made.

The Challenge: She wants to advance, professionally and financially, but you have no money or promotions to offer. And you know other employers would snap her up in a heartbeat.

The Solution: Be honest. Explain the situation. Say why a raise is not possible. Discuss the current lack of openings. Admit you know she has opportunities; don't let that be an elephant in the room.

And never make promises or dangle the hope of opportunities that may not come through. You'll be tempted; resist the temptation. Don't say, "In six months I think there will definitely be opportunities for promotion," unless you absolutely know that is true. Don't say, "After the next budget cycle I think we'll have money available for raises," unless you absolutely know that is true.

When false hopes go unfulfilled, great employees are gone.

Why? In most cases, employees don't leave companies. They leave bosses. Outstanding employees are typically loyal employees. Being a great boss -- honest, loyal, constantly seeking to improve the skills of your employees, etc. -- is the best way for you to keep great employees, even those who yearn for other opportunities.

Then keep creating opportunities for her to expand her skills and continue to shine. There's nothing wrong with saying, "There are no openings now, but I can promise that I will do everything possible to help you be a great candidate when there are openings."

Will that satisfy her, at least for awhile? I was in a similar situation once and it satisfied me. And I was glad I stayed.

Bonus Tip: Don't go overboard, though. All your employees deserve development opportunities. Spread the wealth. Go too far and you turn an outstanding employee into an entitled employee. Great employees understand that others deserve opportunities as well. Work too hard to keep a great employee happy and you may lose the rest of your team in the process.

Related:

• 5 Great Leadership Lessons You Don't Want to Learn the Hard Way
• Forget Raises -- Here's What Employees Really Want From You
• 7 Things Employees Are Thinking -- But Won't Say