All posts by Steve

Employees, Empowerment, Leadership, Management Style, Responsibility

Micromanagement

Before I dive head first into the metaphorically shallow waters associated with this topic, I guess it would be best to find an acceptable definition of exactly what micromanagement is. We are all pretty comfortable with what a microprocessor is. I am particularly well versed in what a microbrewery is and the delicious products that they produce. I am even familiar with the show “Tiny House Nation” on the FYI channel. (I couldn’t think of another micro-something, so I had to settle for a tiny-something. It’s the same thing really.) But I think everyone has a different view or definition of micromanagement.

Webster’s dictionary defines micromanagement as:
verb (used with object), micromanaged, micromanaging.
1. to manage or control with excessive attention to minor details.

That’s a pretty good start, but I don’t feel that it entirely captures the full annoyance factor that can be associated with this management practice. I have found that attention to detail is sometimes a necessity and not a particularly negative connotation item the way micromanagement is. I think we can all reminisce back to past assignments, lives and times in our respective business careers when we each may have been members of teams that were led by individuals that might possibly have been defined as micromanagers.

A cold chill just ran down my spine. I think I will go and get one of those previously mentioned microbrews to try and soften that specific micromanager memory.

The definition of a micromanager that I will start with is someone who not only tells you what to do (which is the role of just about any standard run of the mill manager) but also tells you how to do it.

Remember, a leader is someone who tells you what has to get done and then supports you when you work out the part that you need to do, and how you plan to go about doing it. Leaders inspire and groom future leaders by challenging them to perform the radical business process commonly known as thinking.

Micromanagers seem to believe that they should do all the thinking. If something needs to get done, they will tell you what you need to do, how you need to do it and when you need to do it. Your responsibility will simply be to follow the instructions. That is unless you have been told to do the wrong thing. Then it will most likely be your fault for not recognizing it was the wrong thing that you were told to do, and instead doing the right thing.

I have heard of many micromanagers being described as “control freaks”. Again I think this description has a little bit too much of a negative connotation that I don’t wish to be fully associated with. I think I would prefer to refer to them as “control enthusiasts”. Some of them can be so enthusiastic about it that at times they can become difficult to tolerate.

So now that we have hopefully adequately defined what a micromanager is, the question that is engendered is: Why do people become micromanagers?

The simple answer to this one is: I have no idea.

If I were going to guess, I would guess that during their formative years in business they were once given an assignment and for whatever reason they created and implemented an ultra-detailed plan, and it worked. This possibly reinforced what here to fore might have been a latent behavior and voila, and a future micromanager was born. Perhaps during the same formative period the future micromanager reported to a current micromanager and the micromanagement DNA was passed down to the future management generation through some sort of micromanagement osmosis.

It might be as simple as a personality defect.

Whatever the cause micromanagement is in and of itself a self limiting management style. As a manager matriculates up the management structure they take on more responsibilities. This means that there are more and more items for the micromanager to try and keep track of and manage. There are only so many hours in a day. Sooner or later the micromanager is going to run out of time to micromanage all that they have on their plate.

One of two things will then happen. The pace of the business will either slow down to accommodate the micromanager’s business technique, or the micromanager will learn to let go of some of the control that they are so enthusiastic about in order to keep pace with the demands of the business. If the business is slowed by the management process, it will fall behind the market, which will not slow down in order to accommodate the micromanager’s technique and it will soon find itself in a recovery mode.

Either way the level of micromanagement will have reached its limit.

During a discussion some time ago I was asked if there was ever a time where micromanagement was called for.

I had to sit quietly and think about that one for a moment. With the entire myriad of business structures and environments there probably was at least one that called for this approach. After careful consideration I had my settled on my response.

I said “no”.

I have mentioned many times that people and teams want a leader not a manager, and certainly not a micromanager. A leader does not tell all members of the team what they are to do. Team members have their respective responsibilities. It is up to the leader to define and communicate the goal and then enable the team to achieve it.

If a team truly requires micromanagement attention in order for them to achieve their goals again one of two things has happened. They have either been so conditioned that their individual input is not appreciated or utilized and have adapted their behavior to that desired by the micromanager, or they truly cannot or do not know what to do.

In the first instance, a management or management style change may be able to return that micromanagement conditioned employee to a business condition where they can contribute more fully to the success of the business. Instead of being an “order follower” they can become a solution creator in their own right.

In the second instance the team either needs to be better trained or replaced. If the team is incapable of performing except under constant management supervision they may be trying to do work that they are not qualified or capable of completing. If the team members are in fact capable and qualified to do the work, yet still require micromanagement in order for them to achieve their goals then they may be candidates for roles in other organizations where micromanagement is the preferred form of management.

Offhand, I can’t think of many of those types of organizations.

Micromanagement is a centralized decision making management structure. One person, the micromanager tries to make the decisions for everyone else in the organization. As organizations become more culturally diverse and geographically dispersed this structure rapidly becomes a limiting factor instead of a performance enabler. The speed and flexibility of response that an organization needs to be successful in today’s business environment is lost when micromanagement is in play.

People will respond to the guidance provided by leaders by making good business decisions and will be fully vested and committed to the outcome. The only response people will have to micromanagement direction will be to make no decision, only to comply rather than commit to the desired outcome, and just follow orders.

As leaders we need to focus on what needs to get done, and rely on the talents of our team members to help us come up with the best ways to get it done. By definition they are closer to the issues than we are. It only goes that they should have some good ideas on what needs to be done and how they can best do it. It is up to the leader to best utilize all the ideas that are available, not just their own.

Challenge, Predictability, Sales

Forecasting: Gaps and Plugs

It has been raining here in Dallas. It has actually been raining a lot here in Dallas. It is week twenty of a fifty two week year and we have now officially had more rain in the last twenty weeks than we had ALL of last year. The drought that has plagued us for the last four years is now officially over. The lakes are full. It can now stop raining. Please.

The reason I bring all this up is because it points out that at least for the last little while the weather forecasters in this area have had it pretty easy. All they had to do was mention the word “rain” in their forecasts somewhere and they were golden. They were going to be right. It was probably going to rain.

But even that didn’t seem to be good enough. It now became a forecasting contest to see who could be the most accurate in predicting the amount of rain we were going to get each week with each ensuing storm. Even this doesn’t seem too difficult. It’s week twenty and we have had almost twenty two inches of rain. I’m usually a pretty good numbers person, but this one should be pretty easy for everyone. We are getting a little more than an inch of rain a week here.

Forecasting. Go figure.

If only forecasting orders in business could be so easy.

For the most part it should be. We know how much rain (or how many orders) we already have. These amounts are called “actuals”. As an example, in Dallas we have actually had twenty two inches of rain so far this year, or “year to date” as we like to say. Management likes to work with trends. If we are trending at a little more than an inch of rain a week, they will more than likely expect at least another thirty three inches of rain over the next thirty two weeks. (Did you catch that? I told you I was good at math).

Knowing that everyone expects their fourth quarter to be their best quarter (for orders) they could conceivably expect even more rain, but we won’t get into that at this point.

Extending this example a little further, we could now say that we have a “gap” between the twenty two inches of rain that we “actually” have year to date and managements desired target amount of fifty five inches of rain for the year. This “gap” is obviously the target amount less the current actual amount. This is a pretty straight forward system and process. Take what you have and subtract it from what you want and there is your gap.

It works the same way for orders. Take the amount of orders you have (actual) and subtract it from what you want (plan) and there is your gap.

As time passes and more rain (hopefully) falls, the amount you have, your “actual” amount of rain, should grow and through the wonders of mathematics your “gap” to your desired annual rainfall target or plan should reduce.

But we have a slight problem. Despite what we have seen for the first twenty weeks of the year here in Dallas, we know that rain will not continue to fall at the rate of slightly more than an inch per week. We have a time here in Dallas that is known as “summer”. This is the time when you can replace the word “rain” in the forecast with the words “hot” or “heat”, and again be referred to as a brilliant and accurate forecaster. The only problem is that when it is “hot” in Dallas, it usually doesn’t “rain” much. It is usually dry.

Despite management’s belief and demand that twenty consistent weeks of rain performance does constitute an unbreakable trend, nature does not usually pay attention to these management expectations. There will inevitably be weeks where it does not rain.

Here is where weather forecasters and order forecasters begin to diverge. Weather forecasters would continue to look at the “actual” amounts of rain, compare it to the desired or “plan” amount of rain and calculate the “gap” or amount of rain needs to reach the plan. Order forecasters have developed this concept called a “plug”. A “plug” is something that is inserted into your forecast so that management can feel better about the team’s ability to reach the goal.

Dropping back to our weather and rain example, it can be expected to be both hot and dry in Dallas through most of June, July and August. It might rain occasionally, but it won’t rain at the afore mentioned rate of a little over one inch a week. It will be nowhere near that amount. Somewhere in late July or early August you can reliably expect the ground to dry out and start cracking due to the lack of rain. It would be fair to estimate that instead of the twelve or more inches of rain that the trend would show you to get, and that management would want, we might more realistically expect about two inches of rain in this period.

If this is truly the case, we would then expect to miss the annual rainfall plan of fifty five inches by as much as ten inches. From a weather and rainfall point of view this miss will probably elicit a collective “so what” from those of us who live here and see that the lakes are already full anyway.

If we are talking about orders however, this is unacceptable, unless you really want to invite a significant amount of management attention and assistance in your efforts to get more orders. So what happens here is that the orders forecasters understand that more orders are usually generated in the fourth quarter of the year than in the other times of the year, so what they will do is forecast ten weeks with more than two inches of rain in the fourth quarter.

Do they know if it will in fact rain this much? No. Is the plug amount twice as much as the rate for what is already one of the wettest years in a very long time? Yes. Do they have any idea as to if this increased performance rate is attainable?

In short a plug is something that is inserted into a forecast in order to make sure that the forecast ends up balancing with the desired annual target or plan. It is an as yet unidentified event or opportunity that is going to hopefully bring more rain after a dry period. In this example the forecasters do not know where they are actually going to find that extra / desired ten inches of rain that was missed in the summer, they are just committing to do it, somehow. It may not have any real substantiation, but it is now in the forecast so everyone now feels more comfortable about meeting the rainfall target.

The problem with putting plugs in a forecast is that they have a tendency to hide or mask an issue. As the actual performance diverges from the desired trend line, plugs have a tendency to be inserted. This may reassure some people that the target is still the target, but it does not solve the issue. Plugs are very good a defining what the problem is. The issue to be solved is how the lack of desired incremental rain is going to be obtained. Where is the incremental rain that is needed to reach the goal going to come from?

A “plug” in a forecast should be an alarm to anyone that sees it. A plug usually appears when there is a gap between actual performance and the desired goal. It is usually put in place to acknowledge that there is a gap and that there is every intention to try and close it. What it does is obscure whether the gap can in reality be closed and the goal attained. It provides the illusion of goal attainment when the reality may call for other actions to be planned or implemented.

There is a reason that weather forecasters don’t insert plugs into their weather forecasts. The lakes here in Texas for the last three to four years were well under their capacities. Water conservation measures were enacted to limit use so that things didn’t get any worse. Every year that the drought went on, the conservation efforts increasingly limited water use. Can you imagine what would have happened if rainfall “plugs” were inserted into the weather forecast in order to let everyone think that it was acceptable to continue to use water at the accelerated rate? When the shortage was finally acknowledged, it would have probably been too late and even more draconian measures would have been required.

Such is the case with orders plugs too. It is always best to acknowledge orders gaps and try to close them than it is to obscure them with plugs and have to deal with any potential shortfall consequences.

Goals, Leadership, Process

Goals and Processes

Whenever I find myself casting around for a topic to write about, I seem to always migrate toward one of my favorite conundrums: Goals and Processes. Is it goals that drive business processes, or is it processes that enable business goals? Because I have a little time, I think that I’ll go ahead and address this one some more.

Almost everything I see and read these days on this topic seems to be focused on the Process side of this question. It is interesting how the focus and primacy of management ideas and structures ebb and flow over time. In the past it did not seem to be such a Process focused set of business literature. I guess William Deming was one of the first to work in this area, and he did some ground breaking work. Having a Process focus is good from a predictability and repeatability point of view. Businesses like a predictable and repeatable outcome.

A good business process is like a security blanket. If you don’t know what to do, you can fall back on the process and hopefully expect to end up relatively close to where you were aiming to be at the end. Having a process reduces the risk and can remove uncertainty from the business.

At the risk of sounding like some sort of business contrarian I need to openly admit that I do not particularly ascribe to this way of leadership or business thinking.

For me an over reliance on process removes the value of people from the equation. They don’t Plan-Do-Study-Act as Deming said, they just follow the process. If they are following an industry “best practice” they probably are not even encouraged to think. They are part of a production line-like process. This seems to promote a very risk averse position for people. They can’t be wrong if they are following the process, and if they are wrong it is the processes fault not theirs.

I think a process is an extremely efficient and effective way to codify something that you have already done. That means that some way, somehow somewhere someone has already achieved the goal, and that the process has become the documented method that they used to achieve it. If you have been successful in manufacturing the first widget, then a production line process for all subsequent similar widgets would be called for.

When Sir Edmund Hillary climbed Mount Everest, there was no known process associated for a successful summiting attempt. People had been attempting the summit since 1921, but it was not until 1953 that is was actually accomplished. It was only after he was successful that the process of creating a series of ever higher camps, and the selection of which specific routes provided the greatest probability of success started to coalesce. In fact it has now evolved to a situation where the process for climbing Everest is so well defined that even novice non-climbers are now being taken up the mountain escorted by seasoned mountain climbing guides.

I think the cost for the Everest “guided expedition” is approximately sixty five thousand dollars ($65,000) and takes several months to prepare and execute.

I think this is a little bit of hyperbole, but it does illustrate my point. It took more than thirty years to achieve the goal. There was no defined process that anyone could fall back on. Every attempt was breaking new ground. We also need to recognize that just because there is a process does not guarantee that each climb will be successful.

To date there have been about eleven thousand (11,000) expedition attempts to summit Everest, with the vast majority of them since the year 2000. This would indicate that the process is reasonably well defined. However there have only been three thousand (3,000) expeditions that have ended in success. These successful expeditions resulted in only approximately five thousand (5,000) individuals that have actually stood on the summit.

In the mean time it should also be noted that more than 260 people have died while trying to climb Everest. That means that for every 20 individuals that succeeded in climbing Everest, 1 paid the ultimate price.

Thank goodness for the internet and Wikipedia. Where else can you get facts and statistics like that so easily?

So, what does all this have to do with the discussion of Goals and Processes in business? As I said, I think it illustrates several points:

First, if something has never been done before, there is probably no defined process available for doing it. People knew the process for climbing mountains. They had been doing it for years. It took more than thirty years and many unsuccessful attempts before they climbed Everest. They ended up creating a new process in order to do it. If you are trying to do something in business that has been done before, you had better come up with a faster, better cheaper way of doing, otherwise being the second successful one probably won’t get you too much.

Second, it was not the “process” of climbing Everest that captured people’s imaginations. It was the “goal” of climbing Everest that did. It is difficult to get people committed to a process. It is far easier to get them committed to a goal. The same goes in business. It is the goal that drives people to succeed, not the following of a process.

Third, just because you have a process that has proven to be successful in the past does not mean that it will continue deliver success every time. Less than a third of the expeditions attempting Everest are successful. Even well defined processes can fall victim to external environmental issues or potential team issues from within. Expecting to follow a process to get you to a goal without being prepared to deal with the unexpected or unforeseen enhances the probability of not being successful.

Fourth, even if only one or two out of the entire expedition actually get to the top of Everest, the entire expedition is considered a success. The goal is to get someone from the expedition on top of the mountain. If the goal was to get everyone to the top of the mountain, no expedition would be considered a success, and we would still be searching for the process to do it. The idea is to make sure that success is clearly defined and that everyone can participate in it.

I think it is reasonably apparent that it is goals that inspire people and it is the attainment of those goals that most people are measured against. Processes are good in that they provide a guideline on how to go about achieving the goal. But just like the weather on Everest, or the makeup and capabilities of the team attempting the summit, there are always variables associated with achieving the goal that cannot be accounted for in the process.

Processes are at their best and most useful when they are simple and allow for variances based on the environment surrounding the goal. It is only in the most repetitive of manufacturing production lines that a process can be fully relied upon, and even then it is subject to the vagaries of the humans doing the work.

As an example of this I would point to automobiles. They are produced primarily in a production line; however the quality of some cars can vary significantly. They are all produced by the same process, but some are acknowledged to be significantly worse than others. Hence the concept of getting a “lemon”, and the creation of “lemon laws” to protect the consumers unfortunate enough to have purchased one of “those cars”.

Business is lead and inspired through the use of goals. Processes can be of assistance in attaining those goals, but it is the goal and the measurement of progress against that goal that is important in generating progress. It is when business supplants goals with processes as its primary focus that the business will start to lose its way.

Customer Relationship, Efficiency, Performance, Travel

Is Travel Efficient?

I often travel for business. Maybe that is the reason that I seem to find myself writing about business travel so frequently. I used to think that travel was exciting and exotic. That was right up until the point where I actually started traveling, a lot. For those of you that don’t travel much, trust me, it isn’t that great. I noticed a new commercial on television (since there really aren’t any new shows out right now, I notice the new commercials during the reruns) extolling the virtues of a certain hotel for those that “get” to travel as opposed to those that “have” to travel. Cute approach, but definitely aimed at those that don’t know anything about traveling.

I think very few of us who have done any traveling actually feel like we “get” to travel. I understand that a certain amount of travel is to be expected, and might even be considered mandatory for the proper conduct of business. Even in the virtual world that we now work in, sometimes there is no substitution for being there in person. We can video conference, Instant Message, email or even call on the phone all we want, but it is just not the same as being there.

If we accept that there is a defined amount of travel that should occur, we now need establish some boundaries around it so that we can make sure that we are efficient with the use of our travel. Is too little bad for business? Can you travel too much? Do you get a good return for your travel dollar cost investment?

Remember that travel constitutes the entire amount of time portal to portal, and back that the trip encompasses. The two hour meeting that you attended may have been very productive, but was it worth the entire two business days of work time (including travel) that were invested in it for you to attend? Before we can answer that question I think we need to apply a “weighting” factor. Customer meetings are important. They are always more important than internal business meetings. Time with the customer is precious. The customer has only a limited amount of time available in their day and if they choose to spend any of it with you, it should be treated as precious.

On the other hand, internal business meetings occur all the time. I have discussed in the past that there seems to have been a blurring of the lines between what is a meeting and what is a conference call. This blurring if anything has devalued the time spent in meetings. Now multiple people choose to attend by video or conference circuit. It may be a meeting requiring time, travel and expense, but for several it is just another phone call.

For me travel is not a very efficient use of time. I look on with great admiration and envy at those on the plane that are able to open their PCs and work on their spreadsheets or presentations. I have tried to do it. Occasionally I try again to do it, just to see if something has magically changed and I am now able to work in a cramped, strange setting with 250 strangers sitting close by, with several of whom seemingly in succession needing to go to the bathroom. It is to no avail. For whatever reason I cannot get meaningful work done on an airplane. I have even tried to write articles for publication in this forum while spending twelve hours en route to Brazil, and was unsuccessful at it.

Perhaps it is the same internal programming that makes it difficult for me to work at home instead of coming into the office. For whatever reason I find that I am most productive at the office, in a professional environment. I seem to have the tools, space and environment that I find conducive to high productivity work when I am in a business office. I find that I am reasonably productive when I travel to a remote company location and can work from an office while there, as well. It seems to be the transit time where it is difficult for me to work.

It is possible that my productivity on a plane has decreased with the available room to work on a plane. There was a time in the dim, glorious past where a standard coach seat on a plane was a whopping thirty inches wide and there was a staggering thirty two inches of leg room for each seat, in coach no less. Now it seems that there is only twenty seven inches of seat room and twenty eight inches of leg room (if you are lucky). That means we the travelers on average have lost two hundred and four square inches of room on the plane. That is almost one and a half square feet. That is a loss of approximately twenty one percent of the space that we used to get to travel in.

For comparison’s sake, my laptop computer measures eight inches by twelve inches, or is approximately ninety six square inches. On average we have lost more than two laptop computers worth of room on the average airplane seat.

Isn’t it interesting how the cost of travel continues to increase but the space that our airline ticket now purchases has decreased so significantly?

I don’t know how I was going to relate the loss of one and a half square feet of space with my difficulty in being able to work on a plane. I don’t remember being particularly able to work that much better on the old roomier seats. Perhaps it is the now much closer proximity of other people who are also not working on the plane, but who do seem to have over active bladders that is affecting me.

I do however remember being able to sleep more comfortably in the old coach seats.

Regardless, what I find is that I am not as productive when I travel as when I am in the office. I suspect to some extent this is the case for everyone, with the possible exception of my daughter. She seems to be able to conduct her work, which appears to consist of the use of Twitter, Instagram, Facebook and any other number of social media programs, equally well from anywhere. Maybe that is the future of business as well, although I haven’t heard if she can study for her classes as well while on a road trip with her girl friends as she can in her dorm room, but she definitely can “tweet” up a storm.

This brings me in a roundabout way to the topic of if travel actually is efficient. I have had to think about this one for a while. We spend a lot of time and money on travel. Do we actually get our monies worth out of it?

I guess it really depends on a few contributing criteria as to whether business travel can be considered efficient and whether or not we think we are getting our monies worth for the resource investment. Criteria such as who is traveling, who are they meeting, what is the purpose of the meeting, how long is the meeting and how long will it take to get there (and back) should all come into play when looking at travel.

With a decreased productivity associate with travel, spending double digit hours in transit to attend an internal meeting that is scheduled for a couple of hours doesn’t seem efficient. On the other hand as I said earlier, meetings with customers would significantly change the balance of this equation.

I have mentioned travel and meetings with customers several times. That doesn’t mean that all travel associated with customers should be construed as necessary, or efficient. There are only so many dinners, sporting events and outings that you can take a customer to before you should expect some progress. Too many times it seems that we have the tendency to associate meetings with customers as progress. Meetings with customers are activities. As I said earlier, time with a customer should be precious, but progress is actually closing deals with customers and getting contracts.

What this means that in many instances it is difficult to know if the meeting with the customer is going to progress the desired result of a business contract or a product order, or if it will be just another activity.

I guess the bottom line is that travel, even travel to see customers is more expensive from an efficiency and work opportunity lost point of view than just the cost of the airfare and hotel. When you travel you have to put several other functions and opportunities on hold or at least in a lower priority state in order to focus on the travel task at hand. I think it might have been viewed in the past that travel was some sort of break from the grind of work and hence travel might have been something to look forward to.

It’s not.

And as business and the world in general speed up and virtualizes, I am not even sure that it is really an efficient way of conducting much of our business anymore. There is definitely a place for travel, particularly where customer contact is concerned, but I am not so sure about anywhere else.

Maybe I have just traveled enough and don’t want to “get” to travel anymore.

Accountability, Decision Making, Questions

Their Answer

Most of us in the business world these days would be classified as “knowledge workers”. We all have some members on our respective teams that may challenge this point, but for the most part this means that we make our livings and do our jobs predominantly by using our brain power as opposed to our muscle power. It doesn’t take a great deal of effort to sit behind a desk, but it does take a reasonable amount of knowledge to read, understand and appropriately act upon the information contained in a balance sheet or a profit and loss statement. When you think about it, this is interesting on several levels. This would mean that those with the most knowledge, and presumably the most experience would be the most valued employees. It would also mean that when someone asks a question that they would want the answer that is the result of utilizing the best brain power, knowledge and experience available.

Most people would think that this is obviously the case in business. The right answer is usually the best answer. Experience (as opposed to Knowledge) will teach that this is not always the case.

Answers are somewhat like ideas in that everybody has them in one form or another, and they are invariably proud of them. I have also heard that ideas are like children and that your own are always beautiful, whereas those of others are usually judged with a little more skeptical eye. Such is also the case with answers.

We are all usually very proud of the answers that we create (and will hence defend them vigorously from anyone that would have the temerity to posit a different answer), and we are all usually somewhat skeptical of the answers that others create (who will also vigorously defend them from any positions and questions that we have).

It’s funny how that works. We expect everyone to see and accept the beauty in the answers we have created, and we also expect everyone to accept and acknowledge any flaws we may identify in the beauty of the answers that others have created.

This brings me to the topic of “their answers”.

Whenever any question is posed, it is always best to “reflect” as Mark Twain would say, before answering. Is the person asking the question looking for the best, most knowledgeable answer to the question, or are they looking for a ratification of their answer to the question. Are they looking for a solution or are they looking confirmation of their solution.

It is possible that their answer and the best answer are one in the same, but that is probably not probable since after all, it is their answer at this point and not yours.

Another item to be aware of in the “answering the question” scenario is the forum in which the question is asked. This can provide a significant clue as to if a true answer is being sought as opposed to the confirmation of an answer already divined. It is a good bet to assume there is an inverse relationship between the desire for a genuine answer and the size of the audience in which the question is posed.

That means that if someone calls you on the phone and privately asks you a question or your opinion on a topic, they are probably looking for you to provide them your answer. If they send out an email with a wide distribution, or pose the question in some sort of a group or public forum, they are probably looking for you (and possibly others) to provide them “their answer”.

People who provide the desired answer in the group forum will have a tendency to see their response reinforced and those that don’t will usually be challenged to provide supporting logic.

It took me a while to learn this as a new hire directly out of graduate school. In school when you are asked a question you are relatively sure that there is usually a “correct” or “best” answer. It can be open to some opinion, but this is usually the basis of our advanced educational system. We are in essence trained to provide our view of the best answer.

What we miss here is that not everyone provides the same, best or correct answer, even in school. In business there is usually no predefined correct answer that is the accepted response by which all others are measured against. So there is no way to determine who actually had the right answer until the topic under discussion has actually come to pass and the proposed answers can be measured against the reality that has occurred.

This is where experience can come in to play. People who have matriculated up into leadership positions where they are enabled to ask questions have usually gotten to those positions by answering the past questions posed of them correctly more often than not. This past positive reinforcement of their answers is one of the key ingredients associated with the potential defensive reaction to other answers that are not entirely aligned with their own.

Put simply, people who have been right in the past have a tendency to think they will continue to be right in the future. They like trust and support their answers.

Herein lays one of the dichotomies of leadership: sometimes leaders have to temper some of the very traits that enabled them to attain the leadership position. What leaders must recognize is that as they have risen in the management ranks by their very success they have both moved further away from the issues that demand answers, and they have become responsible for a greater breadth of issues that need and demand answers. Most leaders no longer have that direct and intimate interaction with the issues that affect their businesses. They need to learn to rely on those members of their teams that do.

Very few of us get to be right all the time. A leader has to have faith in the answers that they generate, but the leader must also encourage the team to generate the best answers, not their answers. Moreover, the leader needs to know when someone else has generated a better answer. The leader has to learn to step away from generating all the answers (the very process that got them to the leadership position) and learn to trust others (the future leaders) to start generating the answers.

Leaders will always generate their answers. The key is for that leader to accept and expect their teams to potentially generate something other than their answers. It takes a strong leader to ask questions and accept something other than their answers. Letting go of their answers and listening to their team’s answers is the way things can get changed. It is also the way that an organization continues to find the best answers to its questions.

Accountability, Achievement, Commissions, Compensation, Performance

It’s Not a Tip

It’s that time of year again. Spring is in the air. Birds are beginning to sing. Bees are beginning to buzz. It’s that time of the year when everyone’s thoughts turn to their favorite topic. It is the topic that they have actually been thinking about all winter. Yes, you are correct. It is time for the annual bonuses to be calculated.

People who are not fortunate enough to be sales people and on a direct sales commission plan, are usually on some sort of an annual management bonus plan. This plan can be complex or simple. It can have multiple factors associated with it, or possibly just a few. It is in essence a methodology for those that are not associated with direct sales to be able to either positively or negatively participate in the performance of the business or organization.

I have seen many different sales commission plans and many different performance incentive plans. One of the conclusions that all of this performance based compensation experience has led me to is this:

The simpler the compensation plan the better, for all involved.

It doesn’t matter if it is a commission plan based on orders for a direct sales person, or a management performance bonus based on the attainment of specific goals. The simpler the better. We need to remember that simple does not mean “easy”. Simple means that there are specific defined objectives and directly correlated rewards associated with obtaining those objectives. It has been my experience that selecting the appropriate goals and objectives that drive the desired behaviors and performance is not an easy task.

Sales commission plans are in general a little bit easier to figure out than are management incentive plans. There are usually some very specific and well defined numbers associated with the desired goals. These can include items such as orders, revenues and margins. The numbers achieved are divided by the goals and the performance percentage is hard to argue with and is well understood.

Management performance goals are a little bit trickier. The further into the organization away from senior management that you go, the smaller that individual’s ability to affect corporate performance. Based on this fact you would think that actual corporate performance should not have a great deal of affect on the majority of management incentive receivers. On the other hand everyone is contributing to the organizations performance. If the overall organization does not achieve its objectives and goals, it is difficult if not problematic to provide a management bonus to the individual team members.

However, it should also be noted that most sales people do in fact receive some portion of their commission structure rewards at performance levels that are less than one hundred percent achievement of their targets. It would not be difficult to accept the need to provide some sort of similar type management reward for partial goal attainment that works along those same lines.

The point behind all this stage setting is pretty simple. Notice how everything I have discussed up to now is based on the measured attainment of specific defined objectives. When you attain them you get paid and when you don’t attain them you don’t get paid. It should be a well understood arrangement for all involved.

As an example I will hearken back to a simpler time. A time when we were in school. A time when we did our school work and we got grades. We should all remember that time. Depending on where you went to school, a passing grade could either be a “D” or a “C”. I will note as an aside that neither of these letters were acceptable when it came time for my parents to review my report card. There were no acceptable excuses. It’s funny, but I sometimes hear the same words when speaking to my children regarding their scholastic performance. I wonder where they are coming from.

In any event, a certain numeric percentage of the available one hundred percent were assigned to these grades. That meant that regardless of how hard you may have worked, if you didn’t achieve the sixty or seventy percent threshold, you failed to achieve your objective and received no credit for the course. This was a given.

It is not unreasonable to expect any commission or bonus plan to also employ certain threshold before any compensation occurs.

Just to be clear, if commissions and bonuses are based on the achieving of specific goals, it should be expected that a certain threshold will need to be attained before any commission or bonus is paid. Below the threshold, regardless of how hard the individual works, nothing will be paid.

Many organizations follow this policy. There are also those that do not. It is best to be aware of the policy when either setting or participating in a compensation structure.

I have been in several organizations in the past where individuals have commented that they worked incredibly hard in the previous year, and that they were hoping for a good compensation check.

I couldn’t help but look at these people with awe.

I would always ask if they were aware of the specifics regarding the commission plan or the management bonus plan. They would say “yes”. I would ask if there was anything so qualitative (as opposed to quantitative) about their percentage attainment of their goals that would make it difficult for them to measure how they performed against their goals. They would say “no”. I would then ask how they could expect anything but the correctly calculated amount. They would then again reiterate how hard they worked.

I would then inform them that what they were expecting was not a calculated performance bonus, but a “tip” similar to that which is provided to someone who provides a personal service. Much like the wait-person that brings the food, but must suffer due to the poor performance of the kitchen, or the cab driver that must deal with unexpected traffic when the ride is in a hurry. They performed their work as well as could be hoped for, and even though the objectives of a hot and timely meal, or arriving in time to catch a flight were not achieved, quite possibly to factors outside of their control, they would still expect a tip for the service they rendered, especially if they worked hard.

I would then inform these people that to my knowledge most organizations do not participate in the practice of “tipping”. They pay for achievement. People need to know that going in. I think that for all of us hard work is a given and is expected. A bonus is just that. Something extra that is predicated on the measurable performance and achievement against defined goals and objectives.

It may take hard work to achieve the goals and earn a bonus. But in business if you don’t achieve your objectives you usually won’t get a “tip” just because you worked hard.

Accountability, Analysis, Data, Expectations

Forecasting

No discussion of forecasting would be complete without some back handed comparisons to those people who actually make their living by forecasting, namely weather forecasters. There are others that also can be said to make their livings this way. People who are in the stock or commodity markets are in effect forecasting the upward or downward movements of prices in the markets based on whether they buy or sell at any specific time. But when it comes to forecasters, it is the weatherman that everyone immediately thinks of. Believe it or not this idea fits into my general business and sales approach to topics. I think it is pretty apparent that if you forecast in business as accurately as weather-people (need to be politically correct here) forecast the weather, you won’t be in business very long.

I heard a great weather-person related joke the other day. It goes:

When I die I want the television weather-person to be the one that lowers my casket into the grave. That way they can let me down one last time.

To be honest it has been a challenging period for weather forecasters here in Texas. Probably not so much in the other parts of the country. Elsewhere in the country it seems that any forecast that contains the words “cold” and “snow” has at least a reasonable chance of being correct. Here in the last week we have had sunny warm spring like days, rain, sleet, ice (yes ice, they immediately shut the entire state down when anyone anywhere in the state gets ice) and snow. Sometimes we have had multiple selections on the same day. We have had almost fifty degree temperature swings between the sunny warm highs and the snowy cold lows in just two days. Still, you would think that based on either the officially certified coin flipping or dart throwing weather predicting process that appears to be used, that the laws of probability and statistics would have to take over at some point and they would get at least one forecast right.

It is against this publicly recognized futility in forecast accuracy that we need to look at forecasting within the business environment.

Successful business is predicated on properly setting expectations. If you set your customer’s expectations properly, and then meet them, they will be satisfied. We all know that a satisfied customer is a good thing. If you set the stock analysts’ and business press’ expectations about how the business will perform, and then meet them, the price of your stock will probably go up. We all know that an increasing stock price is also a good thing. If you set the expectation with management regarding the performance of your business, and then you meet it, you will probably get to keep your job and may even be asked to take on more responsibility. Keeping your job is also a pretty good thing.

Setting expectations is also known as forecasting. It leads to a thing called “predictability”. Predictability is usually a desirable thing in business.

Good business forecasting is all about breaking down the complex (in this instance, “the business”) into its component pieces (such as “revenue”, and “costs” and things like that) and working the individual forecast for each one. You can then combine these individual forecasts into the overall business forecasts.

It also provides you an excellent insight into which specific components may need to be looked at for potential adjustments should the total forecast not meet what may be considered acceptable levels of expectation by management.

Expectations are funny things. They can cut both ways. Businesses usually want to set expectations that are difficult but achievable with senior management. Senior management usually wants to set the expectation that it requires more from the business than the obviously easily obtainable expectations that they are currently being provided. Senior management will then in turn try to set expectations for the overall business performance with the analysts and market that are believable, and the analysts and market will decided whether or not they will believe them.

This all takes us back to forecasting. Expectations are set with management through the use of forecasts. There are forecasts for revenue. There are forecasts for costs. And then there are the resulting forecasts for margin or earnings. Hopefully there is a relationship between the revenue and the cost forecasts so that margin and earnings can in fact be realized.

As an example of forecasting, in Texas you know that in May it is going to start getting hot. By June it will be hot. It will probably stay hot until September and that by October it might start to not be so hot. This is known as “Climate”. In general you can expect this. You can look at historical averages and trends and see what the various highs, lows and precipitation were for specific days, but you don’t know what they will be this year. That specificity is known as the weather.

The closer you get to any specific date, the more accurate your forecast can and should be for that dates weather.

The same should apply for businesses. At the beginning of the year there is a general expectation of what the “climate” should be for any specific business. This is based on past performance and the desires for growth (or contraction) in the component markets and businesses. As data comes in and performance evolves the forecast for any specific piece of the business will begin to come more and more into better focus. Unexpected events and unforeseen issues can always occur and cause the accuracy of the forecast to change, but in general, the closer you get to a specific date, or target, the more accurate you should expect the forecast to be.

The key here is that the forecasts should always be based on the factual data. If it has been cold and snowy in the northeast for the last few weeks, and there are still several feet of snow on the ground, then no matter how badly senior management would like to see sunny, spring like temperatures it is probably best to stay with reality. Understanding the business equivalent of “in the summer it’s hot and in the winter its cold”, regardless of the specific day to day variations, is an important aspect of accurate forecasting.

Forecasts are designed to inform people of what they need to know and hear, not what they want to know and hear. They are keys to setting expectations of the business’ performance and targeting areas for attention when expected performance does not meet the business needs. When a forecast is missed it will have a ripple effect throughout the business.
When a weather forecaster misses a forecast there is a possibility that someone may get wet when they thought they would be dry, or they may be cold when they dressed for warmer weather. When a business misses a forecast the financial performance of the entire organization can be brought into doubt. This usually results in actions that must be taken to bring the financial performance back in line with expectations. These actions can usually be distilled down to one of two things: increasing revenue or decreasing costs.

The need for decreasing costs is never a fun forecast for the people in a business.

Customers, Sales, Solutions, Value

Sometimes You Don’t Sell

Sales people are an interesting lot. So are customers for that matter. When you put the two of them together there is no telling what will happen. Many times sales people have been conditioned to try and sell the next new shiny widget as the solution to all customers’ problems. Customers usually have a whole raft of out dated, earlier release, vintage, dull clunky widgets that could be the source of their current issues and unhappiness, which they had previously bought from the same, or other sales people. They might even have some earlier generation doo-hickies and possibly a thing-a-ma-bob or two. It will be the wise sales person that recognizes when yet another product purchase may not be what the customer wants or needs.

Widgets, doo-hickies, thingamabobs and even whatchyamacallits are all recognized product terms in the high tech business sector. It took me quite a while to master this vernacular. Pay close attention and you too could end up being technology prosaic master.

We all seem to have been conditioned to the idea that new products, new equipment or new technology are the answer to all customer issues that are usually the result of the old products that they previously bought. It is conveniently forgotten that the old products were the answer to the then previous issues. And so on and so on back in time.

Now I can see where a new product might be an answer to a customer request. I want a new car, or I want a new house might be one of those customer requests that fit this description. I don’t think I have ever heard a consumer say that they want a new electrical generating plant. They may not even want more electricity. They want to run their refrigerator or possibly their air conditioner (a particularly high level requirement for hot summers here in Texas). They don’t usually ask for a new phone system. They want to play “Words with Friends” (or some such other application) on their smart phone.

The point is that customers rarely request for a specific product or a new technology. They ask for a solution. These requests are normally phrased in the form of: “I need to do more…” or “I need to spend less …” In many instances it may in fact be a new product that is the answer to their needs. Something that runs faster, or reduces operational expenses is almost always available in the market.

But what happens when the customer already has plenty of capacity? They don’t need to go any faster. They may not want to buy another product because the products that they currently have work just fine. Still, they feel they have a need. If they feel they have a need then they do have a need.

When it comes to customers, perception is reality. Even if their perception does not match anyone else’s.

Sometimes sales people need to take a step back from trying to sell the next shiny widget, and get back to solving the customer’s problem.

I have talked about value many times in the past. Customers will exchange their money for something that they perceive to have value for them. All too many times sales people associate that “value” with some sort of physical product. However customers will only associate value with a product if it solves their problem. And sometimes it is not a new product that solves their problem. Customer value lies in the solution that is provided to them, whether it has a product or some sort of associated equipment or not.

Successful sales is based on the precepts of trust in the relationship between the buyer and seller, as well as the belief in the expertise of the selling entity in the solving the buyer’s issues. Vendors who focus solely on the sale of the next shiny widget eventually find themselves supplanted by someone else whose focus in on solving the customer’s problem or need. This inevitably comes about when the customer no longer trusts the vendor to be looking out for the customer’s best interest, but rather is focused on closing the next sale.

It is too easy to say the next release, next generation or next product is the solution that the customer needs. After all, it is most likely what the competitors (both incumbent and non-incumbent) will be saying. It is more difficult to look beyond the equipment sale and look at customer need and solution, but that is where both the customer trust and customer value are built.

Sometimes a customer may just need to be shown how they can better or more efficiently use the widgets that they have already purchased. At other times it may be issues associated with how the previously purchased widgets have been applied. Sometimes the current widget just needs to be fixed instead of replaced.

The approach here is for the sales person to make their customer’s problem their own problem. This can be done figuratively where they put themselves in the customer’s shoes and do the right thing for them, or it can be literally where they take ownership of the customers issue outright in a legal transference of responsibility for the source of the customer’s issue and thereby solve the customers issue by taking it away from them. In the figurative solution the sales person solves the problem as if it were their own problem. In the transference solution the sales person makes the customer’s problem their own problem and then solves it.

Sometimes when you put yourself in the customer’s shoes, either literally or figuratively you find that selling them something may not be the preferred or even desired solution. In this case the value that the sales person brings to the customers lies in the expertise that they bring to bear on the customer issue. Sometimes the solution is to externalize the issue (from the customer’s point of view) so that they don’t have to solve the problem. From a customer’s point of view having a problem taken away from them, either figuratively or literally means that they don’t need to worry about it anymore.

I have found that in the longer run customers will pay much more for the value that this peace of mind brings them, than they would for any specific product that may be the next shiny thing in some sales person’s kit bag. If a sales person can figure out how to actually remove an issue from their customer’s business, they will find that they don’t really have to sell any specific products, as the solution will be all that matters to the customer.

Communication, Leadership, Relationship, Self Analysis

Verbal Volume and Value

The “conversation” is a key aspect in business. That statement should elicit a collective “Duh!” from all those that read this. I think I am going to go a little bit deeper here. With all the electronic communications, email, Instant Messaging, Texting, etc. I think we may have lost some of our ability to have a viable and valuable conversation. Certainly it appears that some of the rules for conversations have changed, or perhaps better said they are now being ignored.

And it is not just conversations that I am going to address. It can be conferences, consultations, deliberations, dialogs, dissertations, disputes, discourses, meetings and reviews. You name it. Any place or time where people verbally exchange ideas is going to be the topic here.

That was some pretty nifty work with a Thesaurus, don’t you think?

The interesting point about electronic communications is that everyone is essentially equal. We all get to use the same electrons and bits and bytes in our electronic communications. We can all use CAPITAL LETTERS when we want to yell or make a point. It is almost impossible to interrupt anyone in an electronically communicated discussion. We can all use as many words as we want or like when positing our comments to each other. We can all ignore what someone else has written and blithely go on about our agenda in the electronic conversation as if the other participants had not said a thing of value. There are however some basic rules such as name calling and cursing are probably not viewed as entirely acceptable to name a couple, for electronic communication conduct, but by and large everyone gets to play as long as they play nicely, share, bring their own crayons and don’t color outside the lines, too much.

In short it is a pretty fair forum for discussion. However it is not real time and it is relatively slow.

Now let’s go to the real time, high speed, human to human, interactive discussion, verbal version of communications. It’s called a conversation or maybe even a discussion. The electronic discussion rules definitely don’t apply here. At least I don’t think they do. And sometimes this seems to have put me at an apparent disadvantage when it comes to dealing with those people who seem to think that it is okay to use the verbal equivalent of of some of the electronics conversation rules of conduct.

There are those that will use the verbal equivalent of underlining, bold or CAPITAL LETTERS, ie. Yelling or raising their voice in the discussion to make their point at almost any time. There are also those that will employ the verbal equivalent of not reading the other participants messages before sending their own. This is usually demonstrated by their interrupting when they have something to say while someone else is already talking. And then there are those that will engage in the verbal equivalent of trying to monopolize all of the available electrons, bits and bytes for communications. The idea here being that if they never stop talking you do not have the opportunity to present your positions, ideas or arguments and you lose by forfeit.

What is also interesting to me is that it is not three different kinds of people that employ these types of conversational domination. It is usually just one kind of person that employs these three conversational tactics.

It is also an incredible bore.

I am by no means the best of conversationalists. I do try to have relevant information and input, and I am not afraid to disagree on points of content. I will almost always try to wait for someone to stop or pause before I try to take up my side of the conversation. I also work pretty hard at not yelling as I have found that it usually doesn’t improve the effectiveness of the content I am trying to communicate.

What has me concerned is the apparent number of people who DO NOT feel the same way about verbal communications as I do.

It seems all too often that there are those that are applying their electronic communications protocols to their verbal communications interactions. They will interrupt. They will speak louder so that they can talk over the top of your discussion points. They will attempt to overwhelm the conversation just in the sheer volume of verbiage that they will put forth, effectively limiting the available time for your input.

It’s either that or they are just effectively being rude.

I was recently in a discussion where one of the participants was employing all of the aforementioned tactics for dominating the conversation. They wouldn’t listen. They would interrupt. They ran on and on and wouldn’t allow the opportunity for anyone else to provide input.

I was at one point both impressed and awed by that capability. Not so much the content, which was by my reckoning just management type blather, but the ability to inhale in such a way as to not interrupt their ability to keep talking. I surmised that they had either mastered the ability to inhale through their ears while still talking, or alternatively had an extra internal air bladder organ of some sort (similar to the air bladder that is used by someone who is playing the bagpipes) where they would use it to keep talking while they inhaled.

The point I guess I am trying to get to here is that trying to dominate a conversation really does no one any good, and it will probably just make people write strange things about you (in their Blogs and other places). Having a predisposed agenda or solution in reality negates the value of a discussion. It is reasonable to have a position that you want to either put forth of alternatively defend, but interrupting, talking over, or just outright ignoring other parties to the discussion removes everyone from the discussion.

It becomes less than a discussion or a discourse. Possibly more like a diatribe.

Turning up the volume of what you have to say (being louder than everyone else) doesn’t make your opinion better or position stronger. Increasing the volume of what you are saying (saying far more than anyone else) doesn’t make what you are saying any more convincing. Value comes from the resolving of differences, not the subverting or overwhelming of everyone else’s opinion.

A small hint here. If you are in a discussion and you recognize that not many other people are talking, there is a good chance that you are being “that person”.

There is an old quote (there is always an old quote for just about everything). Epictetus, the ancient Greek philosopher said:

“We have two ears and one mouth so that we can listen twice as much as we speak.”

It is probably a good rule to follow if you want to have a healthy and mutually valuable discussion.

Asia, Humor, Markets

Big In China

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I think we are all aware of the position that China now holds in the economic world. It is the most populated country on the planet with approximately 1.37 Billion inhabitants. It has the second largest economy (behind the United States) as measured by Gross Domestic Product (GDP) at $9.3 Trillion per year. China is also the leading manufacturing nation in the world responsible for the production of approximately 22.4% of the goods manufactured on the planet. I think you see where I am going here. China is an important player in both the economic and political global landscapes. So, imagine how I felt when I logged into my Blog to read the comments my last couple of articles engendered and saw a plethora of comments that originated in China.

I was ecstatic. I had made it. My work had gone global.

I have blogged about business and sales leadership for several years and have generated more than two hundred articles. I enjoy writing them and try to draw on personal experience as well as direct observation in creating them. I get paid nothing for writing them and do it only because I enjoy it and consider it a great outlet.

I have also had the opportunity to work in China and at one point managed a joint venture with a Chinese partner in Tianjin, China. Tianjin is a reasonable sized city about an hour and a half by highway east of Beijing, China’s capital city. A reasonable sized city in Chinese terms translates to a population of approximately 14.7 million people. It is both an amazing and interesting place. I enjoyed it a great deal.

They also had some really amazing golf courses there.

In any event, when I checked my Blog comments I had twelve to fifteen comments that originated in China. These comments were sprinkled in amongst all the other very useful comments that were designed to inform me that I could buy cheap Uggs shoes, or cheap Louis Vuitton bags, or replica Cartier jewelry and all manner of other cheap products with ease since I had my own web site.

There were also several comments informing me that for some sort of nominal fee all manner of individuals would undertake the here to fore herculean task of driving more traffic to my web site since that was the obvious reason that everyone who was anyone would have a web site. It seems that traffic to your web site is the way people keep score of your success on the web.

I actually think it is associated with how you can monetize the value of your site, but since I did not start Blogging for any real monetary reason, I don’t pay too much attention to these solicitations.

In amongst the veritable blizzard of internet generated detritus were these pearls of Chinese comments on the almost indescribable value of my business and sales observations and musings. I thought this was very cool. What was even more interesting was that they were rendered in my comment section in the original kanji script.

There was カナダグース レディース who said:

“カナダグース-レディース/]カナダグース レディース”

Which according to the infallible Google translator application either means:

“You are truly a gifted and insightful business individual”
or,
“Please buy our surplus cheap dog food as it is now safe for consumption by your precious pet.”

I guess it depends on the dialect they are using.

I don’t know about you but I know which one of those translations I am going with.

There was also ヴィヴィアン ピアス (no relation to カナダグース レディース – I think…) who also opined:

“ヴィヴィアン-ピアス/]ヴィヴィアン ピアス”

Which is also has two possible translations, again according to Google translate:

“The wisdom of your comments is a thing of beauty”

Or possibly,

“We offer cheap Louis Vuitton bags and many people who can increase the traffic to your lowly, largely ineffective website.

There were many other similar comments. These were just a random sample of the ones that I received from individuals based in China. As I said it was gratifying to receive such excellent recognition for my work on an international scale.

For many years I had heard that China was an important and emerging market. They were part of the “BRIC” set of countries that were viewed as the important markets of the future (“Brazil, Russia, India, and China”). I think that it is safe for me to say that based solely on my personal web based interactions with China that they are no longer an emerging power when it comes to internet based comments and solicitations. They definitely appear to have already arrived.

Now if I can just get these strange programs offering dog food and assistance with driving web traffic to my web site off of my PC that I seem to have gotten when I tried to reply to the obviously intelligent comments that my new admirers in China left for me.