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The full version of this article is available on Harvard Business Online (subscription required).

Most companies have elaborate procedures for managing capital. They require a compelling business case for any new investment. They set hurdle rates. They delegate authority carefully, prescribing spending limits for each level.

An organization’s time, in contrast, goes largely unmanaged. Although phone calls, e-mails, instant messages, meetings, and teleconferences eat up hours in every executive’s day, few rules govern those interactions. In fact, most companies have no clear understanding of how their leaders and employees are spending their collective time. Not surprisingly, that time is often squandered—on long e-mail chains, needless conference calls, and countless unproductive meetings. This takes a heavy toll. Time devoted to internal meetings detracts from time spent with customers. Organizations become bloated, bureaucratic, and slow, and their financial performance suffers. Employees spend an ever-increasing number of hours away from their families and friends, with little to show for it.

Most advice about managing time focuses on individual actions. Coaches tell us to reassert control over our e-mail, be far more selective about which meetings we attend, and so on. Such recommendations are worthwhile, but executives often discover that their best intentions are overwhelmed by the demands and practice of their organizations. The e-mails and IMs keep coming. So do the meeting invitations. Ignore too many and you risk alienating your coworkers or your boss. And if this steady flood of interactions is how your company gets work done, you have little choice in the matter: You have to plunge in and swim your way to the other side as best you can.

Some forward-thinking companies have taken a different approach entirely. They expect their leaders to treat time as a scarce resource and to invest it prudently. They bring as much discipline to their time budgets as to their capital budgets. These organizations have not only lowered their overhead expenses; they have liberated countless hours of previously unproductive time for executives and employees, fueling innovation and accelerating profitable growth.

Read the full article on Harvard Business Online.

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The Harvard Business Review recently hosted Partner Michael Mankins for a discussion about the ways forward-thinking companies manage organizational time. View