Hoffman Laissez Faire: A new style of management for the 22nd Century

The issue was not settled by Douglas McGregor from the MIT Sloan School of Management when he came up with Theory X and Theory Y concepts on how to utilize workforce motivation.  Rather constant innovation is always needed to push the boundaries and to refine previous thoughts until something new is revealed that nobody on the face of the earth has seen before.   Particularly, I have always disagreed with Theory X and have always found Theory Y to be entirely too relaxed.  So I spent the last 17 years refining a style of my own which was inspired by two people I consider to be some of the best leaders in history.  One is the football coach Sam Wyche from the Cincinnati Bengals and later Tampa Bay Buccaneers, the other is Claire Lee Chennault.  The football coach invented new aspects to an old game and was involved in developing Hall of Fame talent like Joe Montana, Warren Sapp, John Lynch and Derrick Brooks.  The other essentially prevented Japan from taking China during World War II—all by himself.   However, both men suffered from history as Theory X and Theory Y types have written the history books not sure or outright resentful of the success of their betters, which I have always found immensely interesting—actually I have been obsessed with that cause and effect.  This has prompted me to create my own management style which was developed to explain the conditions of the two leaders indicated.  I call it Hoffman Laissez Faire and I have just concluded a multi-decade research project that proves its dramatic success which I will explain the value for with some context.

In the United States, essentially created by the economist Adam Smith and his “invisible hand” concept of economic motivation and development, laissez fair capitalism is the best method of creating not only wealth for a country, but an entire race of people.  Since laissez faire capitalism scares 90 percent of the population who are not functioning from a proper personal value system that allows for that brand of economic motivation to manifest, it is important then to look at the various modes of personal management that drives people in their daily lives to understand why.  Most people live their lives in the easy way taught to them as children, the authoritarian system of Theory X which comes to them first from their parents—which they never escape.  That is the reason for the 50-year-old over-weight office employee who begins planning their lunch the moment they clock in for the day who is as productive as a flat tire shredded on the rim of a beat-up old car.  They have been taught Theory X management styles and accept them to the point that they no longer think from their own input, but from others.  In their homes, their parents controlled their first thoughts, and then it was their jobs.  So of course they vote that way and elect politicians who do the same things.  It is unreasonable to expect a company full of Theory X employees to vote in favor of a United States President who advocates laissez faire capitalism.  Rather, they would likely find socialism more appealing, because it most represents Theory X management styles.  So to fix the nation of America you cannot start at the top, but at the level of people’s personal management styles and fix that before any hope of a democratic republic can have hopes of success.

Theory X and Theory Y are models of the type of employees that managers may encounter in the workplace. These models are used to prepare tactics and protocols on how to deal with employees to maximize production and profit.

According to this theory, type X individuals are inherently lazy and unhappy with their jobs. Therefore, an authoritarian management style is required to ensure fulfillment of the individuals’ objectives. These workers need close supervision with comprehensive systems of control and a hierarchical structure is needed with tight controls at every level. According to this theory, employees will show little ambition without an enticing incentive program, and will avoid responsibility. According to Dr. Kumi Mark, if organizational goals are to be met, ‘Theory X’ managers must rely heavily on the threat of punishment to gain employee compliance. When practiced this theory can lead to mistrust, highly restrictive supervision and a punitive atmosphere. The ‘Theory X’ manager believes that all actions can be traced, and the responsible individual needs a direct reward or a reprimand according to the action’s outcomes. This managerial style is more effective when used to motivate a workforce that is not inherently motivated to perform. It is usually exercised in professions where promotion is infrequent, unlikely or even impossible and where workers perform repetitive tasks. One major flaw of this management style is that it limits employee potential and discourages creative thinking.

‘Theory Y’ managers assume employees can be ambitious, self-motivated and exercise self-control. Employees enjoy their mental and physical work duties and for them, work is as natural as play. They possess creative problem solving abilities, but their talents are underused in most organizations. ‘Theory Y’ managers believe that given the proper conditions, employees will learn to seek out and accept responsibility, exercise self-control and self-direction in accomplishing their objectives. A ‘Theory Y’ manager believes that, given the right conditions, most people will want to do well at work. They believe that the satisfaction of doing a good job is a strong motivation. Many people interpret ‘Theory Y’ as a positive set of beliefs about workers. A close reading of ‘The Human Side of Enterprise’ reveals that McGregor simply argues for managers to be open to a more positive view of workers and the possibilities that this creates. He thinks that ‘Theory Y’ managers are more likely than ‘Theory X’ managers to develop a climate of trust with employees required for employee development. This would include managers communicating openly with subordinates, minimizing the tension in superior-subordinate relationships, creating a comfortable environment in which subordinates can develop and use their abilities. This environment would include sharing of decision-making so that subordinates have a say in decisions that influence them.

Then of course there is Theory Z which came as a kind of off-spring in management evolution.  It’s a name for various theories of human motivation built on Douglas McGregor‘s Theory X and Theory Y. Theories X, Y and various versions of Z have been used in human resource management, organizational behavior, organizational communication and organizational development.

One Theory Z was developed by Abraham H. Maslow in his paper “Theory Z” and the other is Dr. William Ouchi’s so-called “Japanese Management” style popularized during the Asian economic boom of the 1980s. The third was developed by W. J. Reddin in Managerial Effectiveness.

McGregor’s Theory Y in contrast to Theory X, which stated that workers inherently dislike and avoid work and must be driven to it, and Theory Y, which stated that work is natural and can be a source of satisfaction when aimed at higher order human psychological needs.

For Ouchi, Theory Z focused on increasing employee loyalty to the company by providing a job for life with a strong focus on the well-being of the employee, both on and off the job. According to Ouchi, Theory Z management tends to promote stable employment, high productivity, and high employee morale and satisfaction.

Ironically, “Japanese Management” and Theory Z itself were based on Dr. W. Edwards Deming‘s famous “14 points“. Deming, an American scholar whose management and motivation theories were more popular outside the United States, went on to help lay the foundation of Japanese organizational development during their expansion in the world economy in the 1980s. (CLICK HERE TO READ MY OPINION OF DEMMING)  Deming’s theories are summarized in his two books, Out of the Crisis and The New Economics, in which he spells out his “System of Profound Knowledge”. He was a frequent advisor to Japanese business and government leaders, and eventually became a revered counselor. Deming was awarded the Second Order of the Sacred Treasures by the former Emperor Hirohito, and American businesses tried to use his “Japanese” approach to improve their competitive position.



Abraham Maslow, a psychologist and the first theorist to develop a theory of motivation based upon human needs produced a theory that had three assumptions. First, human needs are never completely satisfied. Second, human behavior is purposeful and is motivated by need for satisfaction. Third, these needs can be classified according to a hierarchical structure of importance from the lowest to highest (Maslow, 1970).

  1. Physiological need
  2. Safety needs
  3. Belongingness and love needs
  4. The esteem needs –self-confidence
  5. The need forself-actualization – the need to reach your full potential

Maslow’s hierarchy of needs theory helps the manager to understand what motivates an employee. By understanding what needs must be met in order for an employee to achieve the highest-level of motivation, managers are then able to get the most out of production. Theory X, Y and Z all play a role in how a company should manage successfully. Theory X and Theory Y were both written by Douglas McGregor, a social psychologist who is believed to be a key element in the area of management theory. In Mc.Gregor’s book The Human Side of Enterprise (1960), McGregor describes Theory X and Theory Y based upon Maslow’s hierarchy of needs, where McGregor grouped the hierarchy into a lower order (Theory X) needs and a higher order (Theory Y) needs. McGregor suggested that management could use either set of needs to motivate employees, but better results could be gained by the use of Theory Y, rather than Theory X (Heil, Bennis, & Stephens, 2000).

All those methods are insufficient to the modern task. The two great leaders I mentioned previously, Claire Lee Chennault and Sam Wyche were using something else which I would term a unique variation of laissez faire management styles.  The laissez-faire leadership style is where all the rights and power to make decisions is fully given to the worker. This was first described by Lewin, Lippitt, and White in 1938, along with the autocratic leadership and the democratic leadership styles. The laissez-faire style is sometimes described as a “hands off” leadership style because the leader delegates the tasks to their followers while providing little or no direction to the followers. If the leader withdraws too much from their followers it can sometimes result in a lack of productivity, cohesiveness, and satisfaction.[8]

Laissez-faire leaders allow followers to have complete freedom to make decisions concerning the completion of their work. It allows followers a high degree of autonomy and self-rule, while at the same time offering guidance and support when requested. The laissez-faire leader using guided freedom provides the followers with all materials necessary to accomplish their goals, but does not directly participate in decision making unless the followers request their assistance.

This is an effective style to use when:

  • Followers are highly skilled, experienced, and educated.
  • Followers have pride in their work and the drive to do it successfully on their own.
  • Outside experts, such as staff specialists or consultants are being used.
  • Followers are trustworthy and experienced.

This style should NOT be used when:

  • Followers feel insecure at the unavailability of a leader.
  • The leader cannot or will not provide regular feedback to their followers.[9]


Obviously a society who is trying to have a laissez faire form of capitalism needs voters from a democratic republic who function best within a laissez faire form of personal management.  And in tomorrow’s article I’ll elaborate more how and why this form of management is far superior to all the other methods mentioned within this text. My Hoffman variation to the laissez faire system is not casual, as one might imagine it to be, or misdiagnosed from a distance.  It’s rather intense, but it never robs people of their merit or emotional investment in the task at hand, which is incredibly important.  It requires the manager to be uniquely good and diverse at many levels to understand the emotional climate that employees need to function within to fully utilize the gifts of their productivity. These definitions are important before moving into the more advance notions of laissez faire leadership which I will do in the next article on this topic.  This article is but a foundation to begin building upon so that everything that comes next can be referenced correctly to the curious mind.

Rich Hoffman


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