Welcome to Senior Spotlight

In this blog, David Thomas, principal of The Fundamentals Group and a Certified Senior Advisor, writes about issues important to seniors — factors about retirement activities, finances, health, and aging. He also asks some questions that may test senior memories, reminisces about food and drink, and offers comments about current events and changes in the cultural scene. Please visit the Management Fundamentals and Retirement Fundamentals pages for more information on those topics and the services The Fundamentals Group provides in those areas.

Holiday Memories

A recent column about Christmas trees in the Raleigh News & Observer kick-started my memory.  The columnist, writing about his family’s post-Thanksgiving search for the perfect fir, wondered “if any real people wait until Christmas Eve to put up their trees.”

Christmas Eve was always the night we trimmed the tree in my family, starting in New York in the 1930’s.  As a matter of fact, when I was really young I never even saw the tree until Christmas morning.  My parents put it up and decorated it after my brother and I had gone to bed. In the morning, my mother kept us just outside the living room while my father went in to see if Santa Claus had been there yet “and trimmed the tree.”  Then we’d hear some sleigh bell (Santa departing) and Dad would call us to come in. There was the tree, all decorated and surrounded by presents.  As a grownup I was involved in many December 24th Trim the Tree parties.  By the way, trees in our area stayed up until January 6th – Twelfth Night.  Southern tradition seems to call for the trees to both go up and come down earlier.

An Email from my cousin, Audrey, kept the memories going.

“I still remember,” she wrote, “how upset Robert used to get when you and I wanted to read our Christmas books after Christmas dinner: ‘Please don’t read now!’”  Robert was my younger brother.  He went on to become an engineer, and mainly read blueprints.  Audrey and I went on to careers that involved a lot of reading and writing.  I wonder who, observing these eight- and ten-year olds that long ago, might have predicted that.

Thanksgiving and Christmas in the 40s always found the same family group together.  Grandma; my mother and father; my mother’s sister and brother along with his wife and two children; my brother and me.  Sometimes we had another uncle and his family, which meant we needed a children’s table.  The two holiday menus seemed to be identical: turkey, mashed potatoes, turnips, onions and something green.  Aunt Lillian always made three pies: mince, apple and pumpkin.  As she dished out the pie she asked each person which variety they wanted, except me.  “I know you want a piece of each, David,” she’d always say.  And I’d get three pieces.

Years later, when I married into the Buchanan family, I discovered that one could have roast beef and Yorkshire pudding for Christmas instead of turkey.  There weren’t as many pies, though.

Most of those early holidays were spent in New York City or nearby.  Two highlights come to mind.  First, visiting Rockefeller Center and looking at the tree and all the skaters on the rink below.  There was a café at rink level, where you could sit and watch people skate.  I think I was there once and had hot chocolate.  The second highlight was a visit to F.A.O. Schwartz, the fabulous toy store at Fifth Avenue and 58^th Street.  It’s almost impossible to describe, but if you put together all the Christmas shopping scenes from all the TV programs and movies you’ve ever watched, you’ll come close.  (I don’t mean to include people getting trampled and losing their wigs.)  My favorite at Schwartz’s was a policeman’s uniform, complete with cap and gold braid.  It took three seasons of asking, but Santa finally brought one.

Family celebrations continued through my high school years.  Count the pies!  Two of my good friends show up in my memories of those times.  One was my best friend Charlie, who lived a couple of blocks away.  The Christmas day routine included a visit to Charlie’s after our own gift opening and before leaving for Aunt Lillian’s.  Charlie always seemed to get the best presents in the world.  One year there was a Zeiss Ikon camera with a tripod and a complete set of golf clubs topped the list another year.  I got some good model airplanes and a favorite red and black checked wool shirt.  Charlie got all of those items, too, and the million-dollar stuff on top of them.  Henry was the other friend in my memories.  A visit to Henry’s always found his mother and aunt setting out cakes, cookies, breads and pies on a huge table in the kitchen.  These lovely ladies pressed Charlie and me to keep eating, instructions that somehow overcame our mothers’ admonitions to “go easy on Mrs. Fischer’s pastries or you’ll spoil your dinner.”

The older we get the more satisfying it becomes to remember the good times of the past and the families and friends we shared them with.  May your memories be bright, and may you create more delightful ones the rest of this season.

CSM 7 – Know Where You Want To Go

This is the seventh installment of “The Common Sense Manager.”  It’s the first section of chapter four, which covers the first Management Fundamental.

KNOW WHERE YOU WANT TO GO

“If you don’t know where you’re going, any road will take you there.”  Anon.

What causes people to start a business?  There are those who retire and decide to invest their nest-eggs in a picture- framing franchise or a packing and mailing shop.  And there are those who walk away from a downsizing with a major cash settlement and a set of skills that consulting clients are willing to pay for.  These are the “cash and leisure” entrepreneurs, and their ideas and companies often add to the economy and to their own income and sense of accomplishment.  But the traditional entrepreneur is one who has a great idea.  It may be a product idea, like Dr. Land’s Polaroid camera, or it may fill a perceived market need, like the Waring Blender.  In any event, the idea is only the beginning.  The idea generator is here, and needs to go there.  How do you get there?  And where is “there,” anyway?

Benchmarks of success can give us the answers.

BENCHMARK: There is a clear statement of “what business we’re in,” and there is evidence of the analysis and discussion – even debate – that preceded the adoption of the statement.

A prominent community leader from Eastern North Carolina agreed to join the board of a non-profit organization that helps train entrepreneurs.  At the board’s annual planning session, directors were divided into work groups to deal with various elements of the organization and its activities. The new board member said:  “I’ll serve on any committee except the one that’s reviewing the mission statement.  I never want to discuss another mission statement in my life!”

Let’s face it.  Mission statements were very fashionable a while back. While not many small companies played the game, most large corporations and almost all foundations and public service groups took a deep breath, stepped back, and wrestled with the core of their being.

This preoccupation with missions may have reflected a need for organizations to establish a rallying cry for their employees.  It was a motivational move, with overtones of morality.  Perhaps it stemmed from corporate uneasiness over accusations of venality in an era of downsizing.

The framed mission statements on the wall were often accompanied by a list of “core values” or beliefs.  The combination had a public service look and feel, and it appeared to carry an extra message:  “Even if we have to downsize, look at what noble motives we have.”

Non-profit organizations, of course, are expected to do good in the world, so their mission statements would naturally reflect that.  We talk about “missionary zeal,” and that’s no doubt appropriate for a public service, charitably funded organization.  “Missions” in history were always high-minded and momentous:  “Convert the heathen; make the world safe for democracy; destroy the Nazi war machine.”

But statements of that sort don’t do a very good job of guiding decisions about products and markets.  That’s why it’s important for a profit-oriented organization to think about “what business we’re in,”  and to understand who their customers are and what products or services they need and want.

Let’s look at some statements about mission/what business and see what guidance they might give us about products or markets.

What business/mission? “The movement and measurement of fluids in continuous systems.”

This statement was adopted in 1972 by a company that made textile products for the paper industry.   They were experts at producing the forming fabrics, press felts and dryer fabrics that operated on the Fourdrinier machine to remove water from slurry and make paper.  Unwilling to be boxed in as “specialty textile producers,” the top executives looked more closely at what they really did.  They dealt with water (a fluid) that was being constantly taken from one end of the paper machine to the other (movement).  They had to remove a specific amount of water from the slurry at each of the three succeeding papermaking steps (measurement) and they had to do this while the Fourdrinier and associated machines were moving the slurry at speeds up to 6000 feet per minute (continuous systems).

We’ll get back to this company when we talk about diversification, and we’ll discuss an acquisition they were led to by their “what business” statement.

What business/mission? “To become the dominant company in the world providing analytical chemistry services.”

The analytical chemistry company that had adopted this mission statement took another look at it a few years later.  They concluded it didn’t help them with product decisions, because all analytical products were covered.  It didn’t guide them to particular markets, because no markets in the world were eliminated.  They even concluded it might be perceived as arrogant.

The new “what business” statement for this company was based on their expertise in analysis plus their knowledge of, and priorities for, two industry categories:  “To apply scientific measurements to help solve society’s environmental and health problems.”  Their business planning became a lot sharper.

What business/mission? “To provide America’s taxpayers top-quality service by helping them understand and meet their tax responsibilities and by applying the tax law with integrity and fairness to all.”

If you guessed H. & R. Block, you’ll be happy to know that IRS ex-Commissioner Donald Alexander agrees with you.  He thought it sounded like it ought to be their mission statement.

In reality, it is the new (9/98) mission proposed for the Internal Revenue Service, in the wake of complaints and hearings about poor service, bullying, etc.  Many Congressmen think it’s right on target.  Others think it should say something about collecting taxes.

Since we’re talking about the government, the newspaper that carried the item about the IRS mission statement had an article about the conflicting roles of the Food and Drug Administration.  The agency’s recent efforts appear to reflect a mission “to ensure that valuable new remedies aren’t delayed by red tape,” a legacy of the controversy over the slow approval of early AIDS drugs.  But the problems with diet drugs and painkillers are painful reminders that the FDA’s traditional mission was:  “protecting public health.”  This dilemma provides a stark illustration of the effect that different mission statements can have on the decisions we make.

Perhaps the best statement of “what business” is one attributed to Pepsi-Cola.  If there’s any product, market, sales policy, or pricing decision that can’t be made under this guideline, I’d like to know what it is.  Pepsi’s mission: “Beat Coke.”

Finally, why all this self-examination?  What’s the rationale for spending time analyzing and debating what your business is and what it should be?  Drucker explains it perfectly:

“That the question (what is our business?) is so rarely asked – at least in a clear and sharp form – and so rarely given adequate study and thought, is perhaps the most important single cause of business failure. Conversely, wherever we find an outstandingly successful business, we will almost always find…that its success rests to a large extent on raising the question clearly and deliberately, and on answering it thoughtfully and thoroughly.”

BENCHMARK: The company has a current business or marketing plan which deals with the market, the product, the competition, strengths and weaknesses, objectives, strategies, action plans and budgets.

In the early 60’s,  Esso Chemical US Marketing Vice-president Karl Nelson was the driving force behind the adoption of marketing plans.  We talked a lot about “where you want to go,” but Karl also wanted us to know how we were going to get there.  “It’s not enough to know the map coordinates of your destination,” said this slide-rule wielding chemical engineer.  “You also need to see the variety of roads that can take you there, and what detours and obstacles you may encounter.  You also need to know the mileage your car gets, and where the gas stations are along the way.”  (Esso stations, of course.)

Planning and decision-making begin with the establishment of an appropriate information base.  Information should be collected and analyzed about the market, the product, the competition, the company’s internal strengths and weaknesses, and the relationship of new business opportunities to the company’s overall goals and objectives.   Some of this information can be gathered with the help of government organizations or chambers of commerce.  Other information, internal to the company, may be the sort of data that everyone in the company takes for granted.  All the more reason to commit this to writing, and to spell out the assumptions made where hard data are not available.

To be continued

More octogenarians, plus

November birthdays of note:

Jacques Barzun is 102.  A powerful chronicler of American culture.

June Havoc is 97.  Danced more demurely than sister Gypsy Rose Lee.

Sargent Shriver is 94.  Founded the Peace Corps and the Special Olympics.

Robert Byrd is 92.  West Virginia’s bacon-delivering senator.

Billy Graham is 91.  Unofficial chaplain to presidents.

Nadine Gordimer is 86.  South African Nobel laureate.

Jonathan Winters is 84.  So is Maude Frickett.

Joan Sutherland is 83. Pavarotti called her “the voice of the century.”

Robert Guillaume is 82. Twice Benson, then Isaac and Eli.

Estelle Parsons is 82. An Academy Award for Bonnie and Clyde (Clyde’s mother).

Patti Page is 82.  How much is that doggie in the window?

Vin Scully is 82.  The voice of the Dodgers.

Dick Clark is 80.  It’s rumored that he may stay warm this New Year’s Eve.

Many happy returns to all of them, and to the rest of us.

CSM 6 – The Management Fundamentals Inventory

This is Installment 6 of “The Common Sense Manager.”  It consists of the entire third chapter.

How can the Management Fundamentals be used? The answer: conduct an inventory to see how your own company stacks up against the benchmarks, then follow prescriptions/guidelines to bring the company up to benchmark level. Here are the seven fundamentals and the 38 benchmarks.

FUNDAMENTAL ONE:  Know where you want to go

1. There is a clear statement of “what business we’re in,” and there is evidence of the analysis and discussion (debate?) that preceded the adoption of the statement.

2. The company has a current business or marketing plan which deals with the market, the product, the competition, strengths and weaknesses, objectives, strategies, action plans and budgets.

3. The company has a plan based on future needs in its existing businesses. This can include growth, change in product/service, phase-outs, etc. The plan is rooted in research. The board has seen it and approved it. It can be readily pulled out and presented to potential investors. It is updated yearly.

4. The company is working on a plan to diversify, and has a deadline by which this will be presented to the board.

FUNDAMENTAL TWO: Ask good people to help you get there

5. The company has a population of employees who understand their job responsibilities.

6. Employees understand how their work fits “the big picture.”

7. They are learning new skills.

8. Employees have continuous feedback on their performance.

9. They are rewarded according to their contributions.

10. The company has a competitive compensation plan coupled with a comprehensive appraisal system. All managers and employees understand the philosophy and operation of the plan.

11. The company has several sources from which new employees are recruited. “Owners” of these sources – high schools, colleges, employment agencies, etc. – think of the company as a top place to work, and are familiar with the company’s managers and the company’s direction.

12. The company develops employees to take on increasing responsibility. There is a logical sequence of promotion to higher level jobs, which depends on training, experience and performance, and a replacement chart is a living document. Development takes place in technical as well as management areas, evidenced by a “technical ladder.”

FUNDAMENTAL THREE: Make sure everyone knows what you’re up to

13. The first-line supervisor is the employee’s main source of information about the company and its activities, and about the employee’s role in creating success.

14. Employees all know what the company stands for, how it’s doing, where it’s going, what critical problems need to be solved in their own area, and what’s expected of them.

15. Employees have an opportunity to communicate their ideas to management, and they get feedback about them.

16. Customers and buying influences in the marketplace have a favorable impression of the company and know how it can help them in their businesses. They have a way of being heard by company management.

17. Stockholders have the same information as employees.

18. Suppliers, government agencies and the general community are all familiar with the company and the good work it does.

FUNDAMENTAL FOUR: Understand your customers’ needs, and fill them

19. Marketing and sales personnel can describe the business process of their customers and the entire population of the transaction chain.

20. The company’s leaders know what problems their customers are trying to solve, and they sponsor a continual search by all employees for better ways to solve those problems.

21. There is an active program to define new products and services for the customers in existing markets.

22. There is a desire to reach up to the next level in the transaction chain, and there is research that examines the feasibility of doing so.

23. Strategic planning efforts are coordinated with marketing.

FUNDAMENTAL FIVE: Anticipate technology

These criteria apply not only to the technology behind the company’s product or process, but also to technology that changes the way people do business, such as use of the Internet.

24. There are guidelines for making good business decisions by integrating technology and business planning.

25. There is a system for the company to anticipate future technological advances and to monitor trends.

26, The company’s technical leaders participate actively in the analysis of trends, and in the development of new technology that leads to new products or services.

27. Someone is assigned the responsibility of developing and introducing new products.

28. There is a clear set of checkpoints, or “gates,” in the product development and introduction process.

FUNDAMENTAL SIX: Plan, act, review, correct

29. The company has a budget and an operating plan.

30. That budget and plan can be defended and explained under rigorous questioning by a board of directors.

31. Executives and managers at all levels acknowledge their accountability for their parts of the plan and budget.

32. Progress vs. objectives is assessed on a regular basis. Executives and managers are able to report on whether they did what they said they would do, whether it achieved the expected results, and, if not, what they’re going to do to get back on track.

33. Executives and managers who are not successful are given opportunities to improve, including training, coaching, etc. If they remain unsuccessful, they are replaced.

FUNDAMENTAL SEVEN: Improve continuously

34. There is a system in place to spot “defects” and to develop plans to eliminate them forever.

35. Employees know how to utilize all quality tools, and are doing so.

36. Ideas for costs reduction, process improvement, etc. are received from employees on a regular basis. They are evaluated, reported on, and used where appropriate.

37. Successes are rewarded and acknowledged.

38. Someone is continually pushing the company to apply for the Baldrige Award or a local Quality Award.

Thanksgiving memories

The Raleigh News & Observer once held a Thanksgiving contest for children.  The notices about the contest started like this:  “Turkey, cranberry sauce, macaroni and cheese!  Kids, tell us about your favorite Thanksgiving…” etc.  So far I have not been able to find anyone who can tell me when macaroni and cheese became a part of Thanksgiving dinner.  It certainly can’t be called “traditional.” There is some credibility to the recent addition of a string bean and fried onion casserole, courtesy of some food producer who promoted it for several years.  I like macaroni and cheese, but some other time, please.

Thanksgiving in the 1940s always found the same family group together in our hometown of Bellmore, Long Island. There was Grandma; my mother and father; my mother’s sister and brother along with his wife and two children; my brother and I.  Sometimes we had another uncle and his family from out of town, which meant we needed an overflow table – for the children.  As the second oldest of my generation, I bristled at the idea of sitting at a card table with my kid brother and cousin, with “big cousin” Dorothy lording it over us.

The menu was always the same: turkey, mashed potatoes, turnips, onions and something green.  Aunt Lillian always made three pies: mince, apple and pumpkin.  As she dished out the pie she asked each person which variety they wanted, except me.  “I know you want a piece of each, David,” she’d always say.  And I’d get three pieces.

Some 25 years later Joyce and I, and two-year-old David, were in Brussels on an assignment with Exxon Chemical.  Putting on Thanksgiving dinner with the rest of our American contingent was not quite as routine as it was for Grandma, my mother, Aunt Con and Aunt Lillian.  For one thing, Belgians do not celebrate Thanksgiving. This isn’t so surprising when you realize they have no Plymouth Rock, no Indians and no corn.  Nor was turkey a national bird.  Getting ready for this holiday away from home required some ingenuity on the part of the hardy hostess group.

The 1967 dinner was to be at our home.  Fellow Americans Doris and Art and Sally and Don were coming, as well as our good Dutch friends Hermann and Josephine and our favorite German-Chilean couple, Ursula and Edgar.

Joyce got the ladies together to organize the shopping and cooking.  Turkey was Joyce’s job – procuring as well as roasting.  Fortunately, Eddy’s American Market catered to expats, and Eddy knew by then that Americans ordered dinde (turkey hen) late in November. There are separate French words for tom turkey and young turkey, but Eddy knew what Joyce wanted.  Eddy could also get you Kansas City strip sirloins, a mysterious cut that baffled most Belgian butchers.

The other ladies accepted assignments for potatoes, beans, turnips, boiled onions in cream sauce, stuffing, chestnuts, pie ingredients etc., and the group dispersed to begin pulling the meal together.  Daily reports of success were ticked off on the master menu in the kitchen at 45 Avenue des Aubepines. A beverage list was also tracked without difficulty; almost every corner store stocked beer from Alsace and wine from St. Estephe.

By the way, since the commune of Uccle was bilingual, the street sign outside our house also said Hagedoorn Laan; so we displayed both the French and Flemish terms for Hawthorn.  There’s no obvious logic behind one group’s calling it an avenue and the other a lane.

All the procurement was going smoothly except for the small onions.  Sally had them on her list, and had already looked in three or four stores for the familiar cans of S&W brand small boiled onions.  After a few phone calls, the group decided that all shoppers should add this item to their lists; nobody really wanted to buy raw onions and peel them.  This might mean multiple visits to multiple stores, but that was better than peeling.

Thanksgiving came closer and nobody had found the canned onions, so a momentous decision was made to go the peeling route.  History does not record if anyone volunteered for this task, or whether conscription was resorted to.  The feast was complete, and the five families enjoyed it thoroughly.

But history did record something else about the onions.  The store managers, besieged by what appeared to be hordes of expat women all looking for (and not finding) the same specific product, phoned their headquarters and reported the news of this unprecedented demand.  And so, early in January of 1968, every grocery store that had been visited six weeks earlier by our five shoppers blossomed with large end-of-aisle displays of S&W canned boiled onions.

They may still be there.

 

Customer Service Payback Day

Please join in celebrating Customer Service Payback Day on Thanksgiving Friday.  Here’s all you do:  Dial a favorite customer service number and punch numbers until you get a live person.  Then say, “Please listen carefully, as my menu items have changed.”  Then hang up.

CSM 5 – More first principles

This is installment five of “The Common Sense Manager,” concluding Chapter Two of the book.

First principle #3.

People want to do well, and when they are informed, educated and “empowered,” they will. McGregor called this “Theory Y.”

Nearly forty years ago, Douglas McGregor changed the world’s view of management forever when he wrote “The Human Side of Enterprise.” His findings were based on five years of research into human nature and human behavior, research that was inspired by a discussion McGregor had with General Motors legend Alfred Sloan at MIT’s School of Industrial Management.  Sloan wondered whether successful managers are born or made; McGregor and colleagues Alex Bavelas and Theodore M. Alfred proceeded to study company management development programs to try to uncover the answer.

McGregor concluded that formal efforts in management development were much less influential than management’s ideas of “what people are perceived to have ‘potential’ and how they develop.”  In other words, “behind every managerial decision or action are assumptions about human nature and human behavior.”
The organizational literature of the day (1954-1960), and much of the prevalent managerial policy and practice, contained some basic assumptions which McGregor labeled “Theory X.”

1.  People don’t like to work, and they avoid it if they can.

2.  People have to be forced and threatened to get them  to work toward company goals

3.  People want to be told what to do, and are more interested in security than responsibility.

McGregor, of course, felt these assumptions were false, damning them as assumptions of “the mediocrity of the masses.”  He showed that the growing knowledge about human behavior made it possible to begin “a new theory with respect to the management of human resources.”  This he labeled “Theory Y.”

1.  Working is as natural as playing, and people don’t dislike work.

2.  If people agree with the goals, they will work toward them without outside control.

3.  Rewards for achievement stimulate commitment to goals.

4.  People are eager to accept responsibility under the right conditions.

You may believe that all of this explanation of First Principle #3 means it is the keystone of the Management Fundamentals approach to business leadership.

It is.

First Principle #4:

The leader who believes in “Theory Y” can’t get away from ultimate accountability for the business. Two critical techniques allow the belief and the accountability to coexist:  Delegation and Completed Staff Work.

Delegation.

Most people who have thought at all about organization have heard about delegation, but few have examined it.  From a common sense point of view it seems to entail giving somebody else some responsibility.

Owners of small businesses (and medium and upper level managers in large companies) know they shouldn’t do everything themselves, so they act in a way they define as delegating.  Often what they are doing is sending people out to get information which they then bring back for a decision and another assignment.  Or they may be spelling out in detail exactly what steps they want their delegate to take.

Scientists with management responsibility are likely to do this.  Remember “scientific management?”  Its aim was to determine and replicate the “one best way.”  It’s not surprising, since scientists’ training and education is full of facts and consistent phenomena, all of which can be measured.

Several years ago, a brilliant chemist received his PhD. from a prominent eastern university.  Evaluating the opportunities open to him to practice the profession of chemical research, he turned down an assistant professorship at a small, well-respected college and accepted an offer of employment from the research affiliate of one of America’s leading petroleum and petrochemical companies.

Two months later, he quit.

The baffled division managers, themselves qualified professionals, were at a loss to explain his action.  The employee relations vice-president, who took pride in the advanced motivational techniques in use in his company, felt that a horrible mistake must have been made.

So did the chemist.

The young man in question resigned from the company in question because the treatment he received, and the professional challenge in  the work he found facing him, did not at all match the expectations he had developed during seven years of study in chemistry.  In the academic world he had been a member of a fraternity devoted to increasing knowledge; in his industrial assignment he was part of a group charged with finding new uses for old petroleum products.  His project leader, tenth in management hierarchy, and tenth in the sequence of chemists-turned-administrators, was either unavailable because of some meeting, or was leaning over the chemist’s workbench, asking for progress reports and making suggestions about which hydrocarbon to use.

The tendency to delegate specific tasks, as the section heads and group leaders did in our chemist’s company, is one type of delegation.  Sending out for information is another.

1.  Delegating for specific action:  mix two parts of  isopropyl alcohol with four parts ethylene glycol                 monoethyl ether and stir for three hours.

2.  Delegating for information:  go find out, tell me, then I’ll tell you what to do next.

The third kind of delegation, the one covered in First Principle # 4, involves handing over responsibility for “the whole job,”

3.  Delegating for results:  take that hill; increase market share by four points.

This kind of delegation takes full advantage of people’s capabilities, and frees the supervisor for other activities.  It has its pitfalls, however.  Some CEOs seem to think it takes this form:

“I give you the responsibility for this function and I fire you when I don’t like the results.”

The original prescription for good delegation goes like this:

1.  Train
2.  Delegate
3.  Measure
4.  Retrain (correct)
5.  Redelegate
6.  Measure

This means you must be sure your subordinate is capable before delegating the whole job, and that you must review progress regularly to see that things remain on track. In most cases we don’t hire a neophyte and go through the train, retrain routine; we look for experienced managers, or we promote someone from within whom we’ve already trained and developed and who has shown capability.  But don’t forget: some one else did some training.

Completed staff work.

This is the other technique that makes accountability (yours) compatible with a belief in Theory Y.  The term comes from the military, where “staff proposes and line disposes.”  Generals expect their staff officers to investigate a problem, quantify it, report on the pros and cons of alternative solutions, and make a recommendation.

In modern organizations the “proposes/disposes”  dichotomy is often not in effect, and it may be a line executive who is presenting the idea to a superior.  Enlightened leaders expect the thinking process to include an implementation plan and the willingness to assume responsibility for the decision.

The neophyte brings a problem to the boss’s attention  The trained, experienced manager (the one you all want working for you) has thought through the entire process and is ready to go.  The eight steps to completed staff work illustrate the route from neophyte to experienced manager:

1.    I have discovered a problem.

2.    I have discovered a problem, and I know what it’s costing us.

3.    I have discovered a problem, I know what it’s costing us, and I have a proposed solution.

4.    I have discovered a problem, I know what it’s costing us, and I have three alternative solutions.

5.    I have discovered a problem, I know what it’s costing us, I have three alternative solutions, and I have evaluated the pluses and minuses of each one.

6.    I have discovered a problem, I know what it’s costing us, I have three alternative solutions,  I have evaluated the pluses and minuses of each one, and I have a recommendation.

7.    I have discovered a problem, I know what it’s costing us, I have three alternative solutions,  I have evaluated the pluses and minuses of each one, I have a recommendation, and I have worked out a plan of                 implementation.

8.    I have discovered a problem, I know what it’s costing us,I have three alternative solutions,  I have evaluated thepluses and minuses of each one, I have a recommendation,  I have worked out a plan of implementation, and unless you  tell me not to, I will start on it tomorrow.

Most company presidents would prefer someone who’s made it to step eight.

These First Principles provide a backdrop against which to explore the seven Management Fundamentals.  No rigorous connection is claimed between the Principles and the Fundamentals, but it is difficult to visualize someone denying one and accepting the other.

See for yourself.

To be continued

The famous add another year

October birthdays of some past favorites:

Joan Fontaine is 92.  Olivia de Havilland’s sister; a star in her own right.

Nanette Fabray is 89.  NBC used her picture to calibrate color cameras.

Bill Keane is 87.   His “Family Circus” kids are still 2,3, and 4.

Glynis Johns is 86.  Send In the Clowns.

Bobby Thomson is 86.  The shot heard ‘round the world.

Jimmy Carter is 85.  Always with us.

Bill Dana is 85.  Born William Zathmary, became José Jimenez.

Ruby Dee is 85.  A Raisin in the Sun.

Lee Iacocca is 85.  Still looking for that better car.

Angela Lansbury is 85.  From Mame to Jessica.

Gore Vidal is 84.  Famously controversial.

Margaret Thatcher is 84.  The Iron Lady.

Chuck Berry is 83.  Mr. Rock ‘n’ roll.

Roger Moore is 82.  He was The Saint before he was 007.

Marion Ross is 81.  From Happy Days to Brooklyn Bridge.

Joan Plowright is 80.  A Tony for A Taste of Honey.

Many happy returns to all of them, and to us.

 

 

CSM 4 – First principles

This is installment four of “The Common Sense Manager.”  It covers the first half of  Chapter Two, and includes two of the four “first principles.” Since this is not a revised edition of the 2000 publication, some topical references will be out of date.

All management decisions are based on a set of beliefs or principles.  An example: “paying competitive salaries helps reduce employee turnover.”

The seven Management Fundamentals are all beliefs or principles, even if they’re not stated in that form.  Fundamental #2, “ask good people to help you get there,” is based on this belief: “you can’t get there all by yourself.”  Similarly, “giving your customers what they really want will help them and make you successful,” is the underlying principle of Fundamental # 4,  “understand your customers’ needs, and fill them.”

Reflecting on 40 years of management experience led to the recognition of four beliefs or principles that are so basic that they can’t be indexed under one or another of the Fundamentals.  They form an overall philosophy of management, and deserve to be called “first principles.”

The First Principles are about enterprise and the economy as well as about people at work.  These are subjects not often encountered by students in high schools and colleges today, unless they specialize.  Many people start businesses without any background in these areas, and are likely to focus on their products and how they work.  A broader view of the how and why of business is embodied in these First Principles.

You may not share these beliefs.  But they are worth considering as you develop your own list of beliefs and First Principles, and write them down.  By all means, write them down.  That’s the best way to let others know what you stand for, and to give them a chance to decide whether or not to help you get where you’re going.

The four First Principles:

1.  The only reason for a company to exist is that it provides a needed product or service.  Drucker says: “create a customer and fill a need.”

2.  A company cannot fill any obligations it may have to employees, customer, stockholders or the community at large if it goes out of business.  “Survival is Job One.”

3.  People want to do well, and when they are informed, educated and “empowered,” they will.  McGregor called this “Theory Y.”

4.  The leader who believes in “Theory Y” can’t get away from ultimate accountability for the business.  Two critical techniques allow the belief and the accountability to coexist:  delegation and completed staff work.

First Principle #1

The only reason for a company to exist is that it provides a needed product or service.  Drucker says: “create a customer and fill a need.”

This does not negate “corporate responsibility” but puts it in perspective.  In a time when the run-up to the November 2000 election has voters focusing on poverty in Appalachia, tax cuts affecting the top 5% of the population, people without health insurance, Washington vs. the local community in areas such as school governance, it’s easy to question the role of America’s corporations and what they owe to their various “stakeholders.”

On one hand we have activists who call for business decisions to give more weight to social consequences:  “don’t close your plant, it’ll put the whole community out of work.”  On the other hand are those who complain that such laws as the Family Leave Act and the Americans With Disabilities Act are adding unfairly to company operating costs, and may drive some small enterprises out of business.

These issues certainly can’t be ignored,  but they can be divided into social and economic categories.  Making good economic decisions can also have positive social consequences.

In a competitive environment where unemployment is low, companies fight for the best employees.  Providing child care may be a social good, but it is also an economic tool to attract employees.  Helping to revitalize an urban area is also a social good, but it may also attract more customers from among concerned members of society.

Conversely, corporate behavior that is not accepted by stakeholders will have adverse economic consequences.

Of course you can’t stay in business if you don’t treat your employees well.  They’ll quit, or they won’t be very productive.  Your costs will go up and you won’t be competitive.

Of course you can’t stay in business if you don’t treat your suppliers fairly:  they’ll find other customers who do, or they’ll raise their prices to you to make up for the extra costs you make them bear, or they’ll go out of business and you won’t have their supplies after all.

Of course you can’t stay in business  if you stink up your neighbors’ air or water; if you use community services like roads, police and (yes) schools, and don’t pay enough taxes.  Boycotts are the final weapon of a dissatisfied group of stakeholders.

There has been a lot of commentary about the moral responsibility of chief executives, particularly those who cut thousands of jobs and then receive millions of dollars in salary and/or stock options.  Religious groups have blown the whistle on members of their churches, saying, in effect, that their executive actions run counter to the precepts of their faith.  This criticism is bound to have an effect on business leaders who believe they are bettering the state of their fellow humans by introducing new products that benefit people.

Each CEO needs to deal with this as an individual.  It helps to have a moral mentor or confessor who is not an economist.  It also helps to remember that you can use company profits to contribute to social causes, and that you can give your own money, and your personal time, as well.

In reviewing Management Fundamental #4,  we’ll examine this more closely as we look at giving your customers what they really want and need.  But let’s agree on two points:

(1)  customers can probably do without a lot of things they want.

Therefore, the principles about creating a customer and filling a need do not deal with moral questions about what people should and should not have (cigarettes, a four-wheel drive vehicle, a boat, beer) but only with the question of economic utility.  In this context, hula hoops are just as legitimate as allergy medicine.

(2) sometimes customers don’t know what they want or need until they’re shown what it can do for them.

This point should be obvious.  Could this book have been serialized on a blog ten years ago?

First Principle #2

A company cannot fill any obligations it may have to employees, customer, stockholders or the community at large if it goes out of business.  “Survival is Job One.”

This principle is usually violated by the manager who is reluctant to let people go to reduce expenses.

The CEO of a Fortune 1000 company once made this point clearly with the head of one of his money-losing subsidiaries.  “If you don’t bite the bullet and let people go in your operation, the rest of the company has to make up the losses.  If things slide far enough, the entire organization may be in jeopardy.  You can’t risk the future of several thousand employees for the welfare of fewer than one hundred.”    The subsidiary was eventually shut down, and the parent company survived and prospered.

An entrepreneur with about 100 people on his payroll and a series of unprofitable months refused to cut his staff to reduce expenses, even though a number of his advisors were convinced that there were some nonproductive people in headquarters.  The problem, it turned out, was that all four of the candidates for job elimination had been family friends before he started his company.  He had hired them on the basis of that relationship in the first place (getting cool to lukewarm performers as a result), and was now unable to face them or their families if he terminated them.

After another month or two of losses, the inevitable cost-cutting came.  Unfortunately, by this time the cuts had to go a lot deeper, and even more people had to be let go.  The CEO today acknowledges that he could probably have saved some jobs if he’d acted more quickly.

To be continued

CSM 3 – More management lessons

This is installment 3 of “The Common Sense Manager,” a book I wrote 10 years ago.  It covers the second half of Chapter One, “A Little Help Here.” Since this is not a revised edition, some of the references may be a bit out of date.  The fundamentals haven’t changed.

Reading about management

Take a look at business best-seller lists or bookstore databases under the headings “management,” “leadership,” “entrepreneur,” and you’ll find that recent books (1999) seem to fit four categories:  money, power, technology, ethics.  Here are some topics:  Your investments /retirement; global economic stress; the internet and other technology subjects; work, life and mortality; Machiavelli revisited; interpersonal relations, negotiating; new products; IPOs and other financing techniques; A cluster around Deming and quality; branding.

Over the past few years we’ve seen books about habits, time management, negotiating, teams, sensitivity training, “the ropes course,” telecommuting, globalization, matrix management, strategic alliances and others.  Each of these books (or groups; they tend to come in groups) contains good advice, but most of them have a very specific focus.

Some management books are collections of case histories, but they seldom include a comprehensive set of definitions. The many excellent examples in Tom Peters’ books, beginning with “In Search of Excellence,” are easy to understand and worthy of emulation. They can have even greater benefit if you can place them in a management framework of your own.

With the notable exception of Peter Drucker, most authors attempting broad treatments of management have tended to use the academic definitions of “planning, organizing, staffing, direction and control,” with additional detail in finance, production, and, more recently, information management.  The results are often as academic as the definitions.

As we said before, many people starting new businesses have scientific backgrounds. On occasion scientists engage in the study of management.  This produces PhDs with MBAs.   In many cases the technical training combines with the quantifiable elements of business, producing statements like this:

“Structures = business plans, QA systems, etc. Forces = employee efforts and ideas, and investor requirements. Resultant movement = reformulation or change of product, capabilities, capital, plans, QA systems, etc.”

Our solution:  The Management Fundamentals

The Management Fundamentals were developed to help people survive without overly sophisticated advice; to provide readers with an understandable set of definitions;  and to construct a broad framework that can include specific examples of good management practices in a variety of functional areas.  They are presented in a format designed to make them usable by anyone, regardless of management training or experience.  They are intended to improve the reader’s understanding and use of the key principles of organization, management and leadership.  And they are written in “shirt-sleeve” English.

These are the Management Fundamentals:

1. Know where you want to go

2. Ask good people to help you get there

3. Make sure everyone knows what you’re up to

4. Understand your customers’ needs, and fill them

5. Anticipate technology

6. Plan, act, review, correct

7. Improve continuously

Know where you want to go deals with deciding what business you’re in, definitions of your market, your product and your competition, your business objectives and how you plan to achieve them.

Ask good people to help you get there is about making sure your employees know their jobs, are getting feedback on performance, receiving equitable compensation and gaining new knowledge and experience.

Make sure everyone knows what you’re up to demonstrates that people will usually support you if you tell them about your plans and activities; it concerns two-way communication with employees, suppliers, customers and the community.

Understand your customers’ needs, and fill them involves gathering information about the way your customers operate, how your product or service fits in, how they make decisions, what their customers are looking for.

Anticipate technology calls for predictions about the effect of technological improvements in the future, and how they might effect you and your customers and competitors.  This is not necessarily about your own R&D or inventive ability; it applies to companies that don’t have a science base as well as those that do.

Plan, act, review, correct entails keeping track of “who will do what by when,” whether the planned action produced the desired results, and what corrections are needed if it didn’t.

Improve continuously tracks the Japanese approach to quality:  the one they learned from Professor Deming.  It involves  finding the root causes of defects and changing the system to avoid them in the future.

Once in a while someone will ask why there’s no Management Fundamental that deals with business finances?  That’s okay.  There isn’t one that says “obey the law” or one that says “keep your tax records straight.”  That’s because these are not Business fundamentals.  Most entrepreneurs have accountants, bankers and lawyers to help them with those.  These are Management  fundamentals, and management has to do with achieving results through people.

Actually no company can survive without decent financial management, and the need is acknowledged and covered in Management Fundamentals #1 and #6.

For readers who still aren’t satisfied, you can add a Fundamental that says “obey the law and all the rules of the SEC, IRS, FASB, OSHA, EEOC, FTC, FCC, FDA, EPA, the FAA and the (your favorite regulatory agency goes here.)”

How can the Management Fundamentals be used?  The experience behind the Fundamentals leads to conclusions that standards exist for each of the seven elements.  These standards have been derived
by observing the practices of successful organizations with a variety of missions, structures and customers, over a period of years.

Evaluating a company’s status in each element can be done by reviewing company policies and procedures, interviewing employees and conducting several types of survey.  This results in an inventory, which leads to a proposed plan for improvement.   In other words,

What can be observed in a company that is successful in this particular area?

How does the organization stack up against those criteria?

What plans and programs do we need to meet the standard?

As we explore each of the Management Fundamentals in succeeding chapters, we will define the benchmarks first, then propose a set of prescriptions – steps a CEO can take to bring the company up to scale for each benchmark.

But before we define the benchmarks, one final step to set the stage.  We’ll examine an underlying philosophy about the reasons for organizations to exist, and about the relationships among the people involved.  These are “first principles,” and they’re next.

To be continued