From the October 2001 issue of Entrepreneur

Last year, the management team of a small technology firm was trying to understand why projects were coming in late and over budget. The company hired Leslie Kossoff, owner of Kossoff Management Consulting in San Mateo, California, to find the problem. All roads led her to the firm's lead software designer. Only he knew the foundation code for the company's software programs. Even worse, he refused to share it with other designers. His secrecy was a huge drain on productivity.

"Designers were always waiting for him. They could read only aspects of his code and didn't know if their work would be compatible," Kossoff says.

Once management understood the situation, the other designers felt empowered to crack the code. Once they did, the lead designer left the firm. "He didn't have his power base anymore," Kossoff says. "His way of having control was through this foundation code. He built his empire this way."

This software designer was a classic "empire-builder," someone who tries to become indispensable by gaining exclusive control over a piece of knowledge, a project, even a whole department. For the empire-builder, being the one in the know is the key to job security. But this person will eventually hold your company hostage. "CEOs rationalize this and make excuses for it, but it will get to the point that they no longer can because productivity drops," says Bob Turknett, president of Turknett Leadership Group, an executive and team leadership consulting firm in Atlanta.

Drawing the Line

All employees want to be considered indispensable, and that mind-set can motivate them to work harder. But when their desire for control spins out of control, you've got a problem.

Chris Dyson, 31, founder and president of Nashua, New Hampshire-based mobile advertising company Ads on Wheels, experienced such a problem. Six months after hiring a few technology consultants to develop the company's Web site and proprietary technology, Dyson realized he didn't know what they were doing, and they weren't telling him.

He forced himself into the loop by talking to his tech employees about what they were up to and reading up on the technology. He also started cross-training employees so no single worker was irreplaceable. "You don't want to lose control of any facet of your company," he says. "You have to react." Today, he has 30 employees and annual sales of about $1 million.

Burning Down the Empire

If you find an empire-builder in your midst, you must act fast:

1. Don't assume everyone is a team player just because your organizational chart reflects teamwork.
While your organizational chart is flat and most employees are assumed to have equal power and rank, the empire-builder is busy building a hierarchy. What results is a "shadow bureaucracy" that management doesn't see.

"For empire-builders, the thinking process is always there. 'How do I consolidate my power?' Even when they pretend to be working as a team, these are not team players," Kossoff says. "If there's no hierarchy put in place by management, the employees will create it for you."

2. Look for systems that don't make sense.
If you have 10 employees on a project that consistently lags behind, or employees are hinting that they can't finish their work without a particular employee's help, you have a problem. Ask employees where their projects are held up. They may point you in the direction of one individual. In fact, Turknett says, frustrated subordinates usually blow the whistle on empire-builders.

3. Don't ignore the situation.
Confront the empire-builder and talk about his or her impact on the company. Require that he or she share knowledge and cross-train other workers. Other techniques, including 360-degree feedback and professional counseling, can also break empire-building habits and force employees to share. "Let the person see it in spades. Put it on the table and keep it on the table until it's resolved," Turknett says. "Otherwise, you're enabling it."