I remember when I was a kid that one of the things that I really, really wanted was a Swiss Army Knife. I liked the idea of having a one size fits all kind of knife. If I wanted to whittle something I would have a small knife blade that I could fold out and whittle with. Likewise if I wanted to saw something I could fold out the saw blade and start sawing. The fact that it was a three inch blade with a non-locking mechanism wouldn’t stop me. If there was a two by four that needed some sawing on it I would be ready.
The same could be said for cork screw despite the fact that it would be more than a decade before I would be old enough to drink wine, however if my mom needed any help I would stand ready. There were also blade and Phillips head screw drivers for all the things I would build or repair while in the wilderness, awls for working the leather I would take with me camping, tweezers for removing all the splinters I would amass while roughing it and even a smaller back-up knife blade in case I broke the first one from too much use while in the woods whittling.
In short I guess it could be said that the Swiss Army Knife could do just about anything. This idea of being able to do just about anything had a significant coolness factor. The kid who had the knife that could do the most things that he would never use it for was obviously the coolest kid.
I have grown older (I don’t know of anyone who would be so foolish as to say that I have grown up) and I no longer have the same affinity for Swiss Army Knives that I did when I was younger. Like most guys I am now preoccupied with the number of functions that my favorite Multi-Tool can perform, that I will never use. The primary difference between then and now is that I can now afford a far more complex Multi-Tool than I could ever afford Swiss Army Knife then.
So what has all this got to do with business? Good question.
Reminiscing about my favorite old Swiss Army Knife got me to thinking about optimization for purpose and use. Those knives (and today’s Multi-Tools) are capable of doing just about everything. The problem is that they are not optimized, or really good at anything. The knife blade can be used to whittle, the screw drivers can drive screws, I wouldn’t know about the awl for working leather as I never had the opportunity to really try it, and the corkscrew will in fact remove a cork from a wine bottle. The problem is that it really doesn’t do any of those things very well. The functions are all there, but they are not optimized for their respective applications.
In business it is not about being able to do everything. It is about being the very best at what you do. You usually don’t ask your Finance and Accounting people to go out and sell your good or service. Marketers normally can’t count well enough to have them keep the business’ books. Sales people aren’t normally any good at anything else other than sales. You don’t ask people to do something that they may be able to do, but that they are not at their best at.
This is the same principle that governs the applicability of Swiss Army Knives in functional applications. Professional mechanics do not use them to work on engines. If they need a screw tightened they go and get the appropriate and specific screw driver that meets their specific need. Have you ever looked in the hardware store at the number of different types of screw drivers that there are? There is a reason for that. Each one is optimized for a specific screw tightening application.
My wife has never ever asked me for, nor asked me to buy her a Swiss Army Knife or Multi-Tool with a cork screw so she could open a bottle of wine. In fact I think she has at least two designer cork screws, one of which has an electric motor, whose sole purpose for existence is to only remove corks from wine bottles as quickly and stylishly as possible. The fact that a Swiss Army Knife or Multi-Tool could do so much more than just opening the wine seems to hold no allure to her.
This optimization for purpose and use should be applied throughout the business. Products should focus on being the best at what they are used for. Look at the screw driver example I used before. I’ll also illustrate this precept by using a hi-tech example from my past. I worked for a company that essentially made a chassis that would house a variety of application specific boards and blades (sounds like a Swiss Army Knife). Each blade was optimized for a specific application, and there were a lot of them to choose from.
Customers said that the number of different application blades could be confusing and suggested that the company undertake the development of a “universal” blade that would enable the customers to do several different applications instead of the usually capable and provisioned one. The universal blade came out … and it was a failure.
The resulting universal blade was much more complex, much more expensive and less functional on every application that it addressed even though it addressed far more applications than the single blade – single application counterparts. In short it could do just about everything, but it couldn’t do anything as well as each of the specific application blades could do it, and due to its complexity it was much more expensive to boot. Less optimized and more expensive is not a good business proposition for success.
The same would go for business processes. Processes are supposed to be a simplified, streamlined, consistent way of doing things that will optimize your efficiency. However when you try to create the “universal” process, much like the universal application blade, they end up not being optimized for anything and hence reduce efficiency in everything.
As an example, suppose you are addressing two markets, the North and South Poles. On the surface both are similar in that they are cold and have snow. But the North Pole is populated by Santa’s elves and they are primarily interested in candy and toys. The South Pole is populated by penguins who are primarily interested in fish and not being eaten by sea lions.
If you were to create a global process that addresses the needs of both the North Pole and South Pole markets it would have to take into account the specific and disparate needs associated with serving both elves and penguins. By the very nature of your markets at least half (and probably more) of your process would not be applicable to one or the other market. If you were to complicate things further by adding third market, say the Himalayas (again cold with snow) you would then have to add the processes associated with serving the populations of Sherpa and Yetis in the area. As we all know Sherpa are primarily interested in climbing and Yeti are primarily interested in leaving foot prints and not being seen.
Sherpa and Yeti, elves and penguins all live in similar markets (cold and snow) but I don’t think that a universal process can be put together to efficiently address each of these markets’ specific needs. It would seem to be much more efficient to create and optimize a process for use in each specific area.
Business is about addressing specific markets and even more specifically, specific customers and their specific needs. The better that you can do that, the better your chances of success both with that customer and in that market. Swiss Army knives and Multi-Tools are cool, but people, and customers, who have a specific need are not looking for all the other functionality that comes with the more complicated or diverse solution. When you start to hear the siren song of the universal product or the universal process it may be best to emulate Odysseus and find a way to maintain your direction and focus on the optimization for purpose and use that your customer really wants, and that has been the cornerstone of business success.
Skeptics and Pragmatics
When in doubt about where to start on a topic, I almost always turn to the best companion a writer of any kind can have, the dictionary. Webster’s dictionary defines “skeptic” as a noun, and “a person who questions the validity or authenticity of something purporting to be factual.” There are a few other definitions, but this is the first one on the list.
The etymology of the word (to be honest when I did some of my initial research I wondered why anyone would want to know the “study of bugs” with association to “skeptics”, but it turned out that I had confused “Entomology – the study of insects” with “Etymology – the origin of words”. Silly me.) comes from the name taken by the disciples of the Greek philosopher Pyrrho, who lived c.360-c.270 B.C.E., and is related to skeptesthai “to reflect, look, view”. In any event, you can see where the word came from and how its meaning was formed.
So what has this to do with business, you might ask since that is what I usually write about.
It has to do with the fact that skeptics and skepticism are normally viewed in a negative light when it comes to business. Management usually wants you to fall in line behind their plans and start executing them. Skeptics are viewed as hindrances to the progress of management’s plans. The plan is done. Let’s get on with it. If we had wanted your opinion we would have asked for it.
Leaders on the other hand will usually seek out those that “reflect, look, view” and “who question the validity or authenticity of something purporting to be factual.”
Please don’t get me wrong. There is a time and a place for skepticism and there is a time and a place for action. However it is always the time and place to ask if you are doing the right thing.
Plans must be continually questioned and revised. Processes must be continually reviewed and renewed. Just because something looked like it would work one day does not mean it will look and work the same at a later date.
The problem is that for the average manager it is easier to continue on with an existing plan, even a bad existing plan then it is to make the effort to revise the plan, or even develop a new plan and to change directions. I don’t know why this seems to be the case in business, but it has been my experience across most of my business career. It seems the risk associated with trying something different is felt to be greater than the risk of continuing to do something wrong.
This brings us to our second word for the day: pragmatics. Much like labeling someone a skeptic in business as a negative characteristic, being labeled a pragmatic seems to have taken on a similar context. It doesn’t seem that anyone has ever been told they are pragmatic enough. You only hear about people being too pragmatic as if that means that they are not capable of somehow grasping the bigger picture.
I think this is similar to the conundrum associated with “whelming”. You often hear of people being overwhelmed when they have too much to handle. You sometimes hear of them being underwhelmed when they are not impressed. You never hear of them being just plain whelmed.
Going back to Webster’s dictionary, for “pragmatic” we get an adjective this time, “of or pertaining to a practical point of view or practical considerations.” When we look at the source or study of bugs associated with this word we get from Latin pragmaticus “skilled in business or law” and from the Greek pragmatikos “fit for business, active, business-like; systematic”. There’s more, but I think you get the picture.
A pragmatic is someone who is skilled in business with a practical point of view. Now the catchphrase here is “practical”, so here we go again. Practical according to Websters another adjective: adapted or designed for actual use; useful. Now we have a pragmatic as someone who is skilled in business with a point of view that is adapted or designed for actual use.
So enough already with the word-smithing.
What all this has led up to is a couple of questions: How is it that the skeptic, the one who wants to see deeper into the topic seems to be perceived as an obstacle to progress as compared to the individual who never questions authenticity and validity? Why is it that the pragmatic, the one who wants to do things designed for actual use is seen to be perceived as not inspiring enough to lead?
Business seems to have evolved over time away from some of these basic tenets that in the past have been the basis for success. History is littered with examples of some very hard lessons that were learned, or more accurately, relearned at great expense, where the skeptic or the pragmatic were ignored, but were in the end proven correct.
I remember working for a company where all of the management and all but one of the stock analysts were convinced that the company and its stock price would only go higher. It was a market boom. Everyone needed to get on board or be left behind.
There was however one analyst who kept saying that the market was overbought and the business model did not even support the existing business and stock levels. He was a skeptic. He was ostracized and ignored.
When the market, and stock crashed and thousands lost their jobs he was proven far more accurate than anyone was even comfortable discussing. The company went from being the market leader to having gone out of business in less than ten years.
I also recall the reviews by the public and the analysts about the banks that were described (rather derisively) as “pragmatic” when they did not participate in the new burgeoning “sub-prime” mortgage market. There was great money to be made. They were going to miss out on the new found fortunes. When the market crashed, and took down most of the economy with it, it again proved that the business practice of making mortgage loans to those that had a high probability of being able to pay back the amount of the loan they received was still the best practical model. It seems that eventually sound business practice will be proven out.
Skeptics and pragmatics, of one type or another need to be sought out and encouraged. They idea of not taking things at face value and doing things that are designed and adapted for actual use should never go out of style or favor. We need to remember that just because someone is a skeptic does not mean that they are an obstruction to be overcome. Just because someone is pragmatic does not mean that they cannot be a visionary and inspirational leader.
Leaders today need to be looking for skeptics and pragmatics for their teams. After all, chances are that at least one of them will be proven to be one of the leaders for tomorrow.
Defining Success
I started this topic quite a while ago and put it away as I could not comfortably come up with a method to address the topic. I now have a daughter in college and it seems to have taken on a new life for me.
We all want to be successful and even more so want our children to be successful. I didn’t want this discussion to be purely an analysis of numbers and trends, but rather the relationship to both the opportunity and probability of “success” and more importantly the definition of success. For so long, so many of us have defined “success” as going to school, then going to college, graduating, getting a good job with a major company and going on from there.
Is that really the proper definition of success in today’s world?
We normally associate the attendance of and graduation from college as a prerequisite of success. I was reading an article about relative graduation rates for students in the US who attend college. It showed that the graduation rate could be directly correlated to the cost of the college. That means that the more expensive the college tuition (Private school vs. Public institution) the more likely it was that the student would graduate with a bachelor’s degree in 4 years. I guess that means that if you want to up the odds of your kid graduating from college that you had better send them to an expensive school.
The problem is that they are now all expensive. Very expensive.
It showed that on average about two thirds of students entering a Private institution of higher learning graduate with a degree in 4 years (actual number is 64%), and that about one third of students entering a public institution of higher learning graduate with a degree in 4 years (actual number is 37%). It also shows that the gap closes significantly if graduation data is reviewed after 6 years instead of 4. Private school students hit 3 out of 4 graduating (actual number 78%) and public school students hit 2 out of 3 (actual number is 66%).
Stepping it back a little further, and out of my own curiosity, I looked up the percentage of high school students that graduate from high school and enter college. This number comes in at about 70%. It is interesting that in these difficult economic times that this number is now at its all time high (actually it was set in 2009, but 2010 was at almost the same level). Being something of a math-guy, I multiplied the two numbers together and came up with the fact that less than half the people that go to high school actually graduate high school and college (even after 6 years of college).
Okay, so what.
When is the last time you have hired, or you have heard of someone being hired into an organization without a college degree? If less than half the people entering school graduate college, chances are they won’t be hired by a corporate organization. That doesn’t mean they aren’t successful. It means they are doing something else.
This got me thinking a little bit further on the topic.
I did what most people do these days. I went out and “Googled” the percentage of college graduates that are actually hired into a position that requires a college degree. I make this distinction because some graduates will take positions that do not require a college degree to perform the work (check out the baristas at Starbucks), and others will not find work (check out the “boomerang” kids returning from college to live at home).
As we all might expect this number varies with the status of the economy. In 2006 and 2007 approximately 85-90% of college graduates found work. In 2010 this number dropped to only 56%. 22% of 2010 college graduates took jobs that did not require a college degree. In total 78% of 2010 college graduates found work, but many of them were “under employed”.
That means that of the people who start school, a little less than half actually graduate college with a degree. Of those that graduate college, a little more than half (or a quarter of the total that started) actually find a job that requires a college degree.
A little more research – again with Google’s help, revealed that of those that find work as a college graduate new hire, 46% – again almost half, will leave their jobs (either of their own volition or at the company’s direction) in the first 18 months of employment. The information I found goes further to indicate that while 46% leave, only 19% of those that stay will be successful, with successful being defined as advancing up the corporate chain with increasing responsibilities and a (hopefully) fulfilling career. To me that means that 35% (the 54% that do not fail less the 19% that are actually successful) of college graduate new hires remain employed but are again not what we might successful.
So let’s recap. If we have 100 people who start school, approximately 70 of them will graduate high school. Of those 70, approximately 50 will graduate college. Of those 50 college graduates, approximately 28 will find a job that requires a college degree in today’s economic climate. Of those 28 that have found work, approximately 13 will leave their jobs in the first 18 months of their employment. Of those 15 that remain employed, approximately 5 will be what we as business leaders might call successful.
According to our preconceived notion of success, only five percent (5%) of the people will be successful.
Now I have had to pause here for a while because there are so many different directions that I can go with this type of information and analysis. We can look at the societal or cultural reasons why almost three quarters of those people starting school won’t graduate from college and will most likely be excluded from consideration for positions in our companies. We can look at what causes almost half of those that we do hire to leave. We could also look for the presence of similar characteristics in the successful five percent and see how we might be able to teach and train people on how to utilize these success attributes.
Or we could ask if we have the right definition of success.
The comedian Craig Ferguson had what I thought was an incredibly insightful as well as very funny monologue addressing what he called the “deification of youth” where he noted amongst other things that youth also meant a lack of experience. (http://www.youtube.com/watch?v=ROJKEwYEx8Q) And a lack of experience to me means that you don’t know what you want yet. How can people be successful, when they lack the experience to know what they want to be successful at?
When we judge success we have a tendency to judge it from our own perspective and experience (because we are not young, we have experience), and not everybody has the same perspective. As time passes and we gain more of the “experience” that Craig Ferguson mentioned our perspective also changes. Not everyone who starts school is destined to be a leader in business. Not everyone who plays golf is destined for the PGA, or now senior PGA tour.
Of the two I think it is now the golf one that bothers me most.
Many, simply by the choices that they make will opt to be something other than what “we” may currently define as successful in business. We see this in the generational definitions that are currently in vogue. Generation X, Generation Y, Baby Boomers, etc. all have their own definitions of success. We as business leaders need to understand these differences and try to adapt to them as well as try to adapt them to the goals of business. Not everybody will meet our definition of success, but that doesn’t mean they won’t be successful.
That doesn’t change the fact though, that I want my daughter to graduate from college…and get a good job.
Why Ask Why
Have you ever asked yourself why you are doing what you are doing, right now, in the office? Most of the time we spend in the office seems to be composed of a pleasingly familiar set of activities that we have been doing for quite a while. We continue to do what we have been doing usually because at one time or another it worked on a problem. We received the positive feedback we were looking for and incorporated it into our routine. Not to sound too trite but I think we can all agree that today, and looking forward, the business world does not look anything like routine.
Believe it or not I was too young to really remember the 1960’s, but I have read about them and have watched innumerable movies that were set in the period. This of course makes me an expert on the 1960’s. After all this intensive research, and all the popcorn and sodas associated with watching the research, I think you can distill down an entire decade in American history into a two word sentence:
Question everything.
The reason that I have taken this half century retrospective (gosh, is it really fifty years ago?) is that it may be time to dust off the “Oldie but Goldie” catchphrase and start ruthlessly applying it to business.
It is easy to start down a simple road in business. The problem is that almost no road remains simple, or straight. There are always twists and turns, and probably even a few loop-the-loops in every business road.
I’m sorry; I got carried away with my metaphors there. I’ll try to keep that sort of behavior to a minimum.
My point is that every business needs to continually ask itself why is it doing what it is doing. Just because it started down what it thought was the right road a while ago doesn’t mean that it is still the right road today. Again, this is pretty basic stuff, but when it all gets boiled down to the basics, business is really pretty simple.
Business is about customers.
Now despite what the courts or politicians may rule or claim, businesses are not people. I think it is much the contrary, in fact I think it is the opposite: People are business. The business can’t ask itself why it is doing what it is doing, but the people can.
This brings us back to the comfortable routine that the majority of people in business have day in and day out, going down the road that they started out on some time in the past. The easy path, the path of least resistance is to continue down the path that we are on. A plan, program or model may have been put in place and work begun. Chances are that time has passed. At the risk of propellering off into rampant triteness again, if time has passed, chances are that times have changed.
The only real constant in business is customers.
When we begin to ask ourselves why we are doing what we are doing, any question we ask that does not have the word “customer” in it, and does not focus on how to bring value to the customer is probably a wrong question to ask. It will be this single minded approach to how we address changing what we do and why we do it that will enable businesses to navigate the necessary changes in directions, and different roads that must be traversed.
Small businesses are usually held up as models of outward facing, customer oriented businesses. I think this is probably correct. I also think that this is probably not due to any deliberate focus or business magic. I think the reason that small businesses focus on the customer is because they don’t have anything else to focus on. They are small businesses. By definition they do not have much in the way of internal infrastructures, or any of the other trappings of large businesses. They only have an idea or product and customers, so by default that is all they focus on.
It is usually not until a business becomes large and somewhat successful that it begins to focus on things other than customers. This is also the appropriate time to start asking the difficult questions. If you ask yourself the “why are you doing this / is it for the customers’ benefit” question, and you either can’t answer it or associate it with a customer value, then you need to start looking deeper at what you are doing.
Companies seem to begin to lose their way, and their customer focus when they start to concentrate on better ways to do things instead of doing things better. It’s a subtle but important difference. Focusing on a better way to do things means you are shifting your attention to how you are doing something. Focusing on doing things better means you are still focused on what you are doing.
In most instances (but admittedly probably not all instances) your customers will not be particularly interested in how you do something. They will definitely be interested in the result of what you have done. To put it another way, do you really care how a company builds a car? If the company uses all manual processes or a fully automated production line, does that materially affect your buying decision on the car?
Speaking only personally at this point, I don’t remember asking the car salesman those questions the last time I bought a car. I was more interested in the resulting product, its safety, reliability, efficiency, and most importantly if I thought I would look cool driving it.
This again is a good time to bring us back to asking ourselves why we are doing what we are doing. We need to always focus on and keep in mind if what we are doing is providing value to the customer, or if we are doing it for some other reason. Are we internally focused on our own systems, programs and processes and trying to hopefully provide ourselves value or are we focused on improving what we provide to the customer and providing them more value. It may sound a little strange but we need be relentless and ruthless when it comes to customer focus and what we are doing. If we don’t, when we take our eyes and minds off that customer for whatever period of time while we focus on some internal aspect of how we do things, someone else who is focusing on that customer will take that customer away.
The next time you walk into your office and begin your normal start of the day routine, you probably ought to ask yourself “why”.
Vacations
I have spent most of my time writing about business and leadership and work. I going to veer off into a little bit of a different area here and write about what is supposed to be the antithesis of business and work, and that is vacations. Vacations are part of your total compensation package. Vacations are supposed to be the time that the company pays you not to work, to recharge your batteries so to speak, to get a tan. Vacations are something that we seem never to have enough available time to properly take. Vacations are an interesting concept in that they truly seem to vary in definition and application from company to company and definitely from culture to culture.
For example, I don’t think I can remember taking a vacation that lasted longer than a week. I think part of this stems from the idea that we all like to view ourselves as far too important to the ongoing operation of the business to be gone from our roles for periods of time extending beyond this. Equally I think there is a fear that if we do take a vacation that extends beyond a week, we may have it proven to each of us that we are in fact not so crucial to the efficient operation of the business and that they can get along just as well and possibly even better without us. There is also the possibility that if some people are gone from their job for more than a week that they will need to be retrained on how to do their work when they return.
The other issue associated with taking an extended (greater than a week long vacation) is the inability of the business to leave you alone for greater than a week. I have been on two-day vacations where I have gotten calls (usually more than one) from the office. It is interesting to note that these calls while on vacation have seldom originated from my team but rather invariably come from management. It seems that here management believes that if they are not on vacation, then no one should be on vacation.
The exception to this no extended vacation trend at least in the United States seems to occur toward the end of the year when many in business start reviewing how many vacation days they have, that they are going to lose if they do not start taking vacation. In the past many companies allowed their employees to carry over their unused vacation days into subsequent years if they were either unable or decided not to take all their vacation. This resulted in many people having an inordinate amount of vacation available to them, and created a significant exposure to the businesses. I think at least part of this practice came from the idea that when businesses had layoffs that they had to pay the severed employee for their unused vacation. If you had saved up a bunch of unused vacation days it was like guaranteeing yourself extra severance pay, should you need it.
Businesses countered this “banking” of vacation days by disallowing the carrying over of unused vacation days between years. The desired result was the reduction of the vacation exposure to companies and the encouragement of employees to adopt the attitude of either “use it or lose it” when it came to their vacation.
This seemed to work, but only up to a point. After so many years of not taking vacations a culture had almost grown up around the concept of not taking vacations. This approach to not taking vacations didn’t change, and in some instances and locations it still hasn’t changed. The result is that as the end of the year approaches many employees find themselves with several days of vacation that they still must take or lose.
People will not accept the loss of vacation days. This event is seen by the employees as comparable to giving the company free work days as the company no longer compensates them for, nor allows them to save the unused vacation days for future use. This invariably leads to people taking extra days of vacation around the end of the year holiday season in an effort to use up their vacation.
Fortunately most people take their business phone with them during these vacation periods just in case either their team or management need to talk with them. It seems some habits die hard.
It is hard to believe that taking a vacation has become such an effort or an afterthought when it seems to be such a prized portion of each employee’s compensation package. What was once seen as a time to relax and recharge is now yet another source of stress associated with making sure that all vacation days available are in fact taken.
This does not seem to be either the situation or such an issue in other countries and cultures around the world.
In Europe time off is not referred to as vacation. It is called holiday. A slightly different nomenclature than what we are used to in North America but still functionally useful. For those of you not familiar with this term, there is a descriptive term for European vacations that you may be a little more familiar with.
It is called “August”.
It seems that almost everyone in Europe goes on holiday (vacation) in August. It’s true. If you don’t believe me, just try and arrange a business meeting or complete a business task there during August. In Europe when they go on holiday, they are gone. And unlike here it does not seem quite as acceptable to try and contact them when they are on holiday.
This is actually not a bad idea. If everyone knows that everyone else is going to be out of the office during a specific time that becomes the ideal time for them to be out of the office as well. Since everyone is on holiday at the same time no one is left in the office to be concerned about any potential lost productivity.
There are similar types of vacation or holiday times in countries around the world. In Brazil there is Carnival, which for the longest time I thought was Portuguese for “February”. In reality it is approximately a week long holiday associated with the Easter – Lent season. However it appears that it takes approximately a week to prepare for, and if properly enjoyed, may take as much as an additional week to recover from. This period could in fact be considered a holiday.
In Asia the Chinese New Year is another extended holiday season. It is usually a multi-day celebration that begins on the first day of the month (usually February) and extends approximately 15 days to the first new moon. Again an extended holiday period that usually serves as a basis point for the taking of vacation. Have you ever tried to get much done during the Chinese New Year in Asia?
The culture seems to be changing here in that people are now encouraged to take their vacation. What it appears that we need is some sort of cultural or specific “holiday season” or event (other than the Thanksgiving and Christmas seasons) to provide an impetus for people to take their vacation. And while management may have succeeded in getting people to take their vacations, management must now take the lead in demonstrating and understanding that when people are on vacation that they should not be called with issues regarding work.
Bon Voyage.
Do The Math
I can’t tell you how many times I have kept myself, my team or my business group out of trouble by doing something as basic as simple math. You know, adding, subtracting, multiplying and dividing. The sort of math that we were all supposed to learn starting in elementary school. It seems many of us think that we now have computers or other people who are responsible for this sort of activity. In just about every business that I have been in, it has always been brought home to me that knowing and understanding the numbers is everybody’s job. In almost every instance where this tenet has been forgotten or ignored, things have turned out badly.
I think part of the issue may stem from the fact that we don’t seem to use real numbers anymore. In the spirit of speed, or simplicity, or possibly laziness, we leave all the appropriate zeroes off of our numbers when we work with them for business. So now when we are working with say, twenty four million, six hundred thousand dollars (a reasonably large sum by just about any standards), instead of writing out $24,600,000 we put down $24.6 M. I know and you know they mean the same thing. However, I probably have $24.6 in my wallet. I know I don’t have $24,600,000.
Perhaps this trend has promoted a more relaxed attitude toward the numbers. Twenty four point six as opposed to twenty four point seven is only point one difference, right? It’s a rounding error. In reality its one hundred thousand dollars. How many more people could you hire or what more could you do if you had an extra hundred thousand dollar rounding error in your budget or in your wallet?
This example is just one of many possible reasons why people and businesses may have evolved this tendency toward what seems to be a more lackadaisical view of the numbers. There are probably many more. The point here is that the numbers and the math behind them represent the scoring system for the business game. It has been my experience that business eventually always boils down to the score.
In most other games you get to start tied with your opponent at zero and start counting upwards. The scoring only goes one way. Those that score the most usually win. The one exception that comes to mind here would be golf. It seems I never miss the opportunity to mention golf. In golf everyone starts at zero and starts counting and it is the one with the lowest score that wins. The point here is that you cannot do worse than zero. That is not the case in business. In business you can in fact end up with less than you started with.
This is called a “loss”, as in you have lost money.
Here in comes that math thing I mentioned at the start. Not only are there things that add positively to your score (this is called “Revenue”) unlike other games, in the business game there are things that can be and are subtracted from your score (this is called “Costs”). In sports you have a “loss” if your opponent ends up with a higher score than you. In business you end up with a loss if costs you more to provide your good or service than you get paid by customers for the good or service.
Here’s the kicker: the numbers don’t lie.
Bill Parcells, the famous football coach is credited with the following quote, when asked if his team was actually better than their record indicated. He said: “You are what your record indicates you are.” If you lost ten games and had a losing record that meant you were a ten game loser with a losing record. It didn’t matter how well you played. The numbers didn’t lie.
Any time you are looking for ways to improve your or your team’s performance, start with the numbers. Do the math. Look at the revenue (value) that you or the team generates or is responsible for. Don’t generalize regarding what you affect. Don’t try to take credit for associated work. Don’t claim “enablement” of someone else’s revenue. Be specific. Math is about specifics, not generalizations. Games have specific scores. Look at the costs you or your team generate as well. These are going to be the reductions to the score. You can’t hide them. They too must be figured into the score.
Leadership is about recognizing what needs to be done before it needs to be done.
Anyone can recognize that something needs to be done when the score indicates that the business is losing at the game. It is the leader who will have already done the math that will anticipate that something will need to be done. They will plan for it so that they can take full advantage of any potential opportunities and minimize and mitigate any potential risks.
The math is really pretty simple. If you want to change the business score there are basically two things you can do: Increase the positive score (revenue) or reduce the negative score (costs). Just about everything you can do to affect the business will fall into one of these two categories.
The usual seduction occurs when the manager focuses on only one or the other category. It is very difficult to grow an unprofitable business into a profitable one. Costs tend to grow along with the growth in revenue, hopefully at not the same rate, but they do grow. If you started out unprofitable and tried to grow without changing anything else, chances are you would still be unprofitable after any growth.
On the other hand it is impossible to cut costs all the way to prosperity. You can reduce costs to profitability (hopefully) but you cannot reduce your way to growth. However, a business left unchanged will continue on in the same direction, in the same manner that it has before. I have referred to this phenomenon in the past a business momentum. There have been too many instances in the past of managers not taking or delaying appropriate actions on the cost side in either the hope or expectation that something would change of its own accord.
It usually doesn’t and the score only gets worse.
It takes both the “pluses” and the “minuses” to change the score in a business. It takes looking at what has happened and using it to anticipate what will happen next. It takes the numbers. And if you are going to utilize the numbers you are going to have to do the math.
Investment firms have a wonderful disclaimer that states that past performance is no guarantee of future success. This is true. However in business it is a good indicator that without a change to the elements that make up that business’ scoring system on both the plus and the minus side of things, of what can be expected. When you start changing the factors that affect the score, you definitely need to first do the math.
Facilities and Information Technologies
In the past I have looked at several different disciplines within the business organization. Sales, Marketing, Finance, Research and Development and even Human Resources all have their roles and responsibilities in the organization. There are a couple of key support organizations that should also be examined; Facilities and Information Technologies (IT), and unless you want to have an office in an abandoned warehouse and communicate via semaphore (that’s the waving of flags to pass messages between ships) or smoke signals, you need to be aware of and know how to work with them.
The facilities group is a reasonably simple group to identify and locate in the business environment. Simply find the second nicest offices in the building. Chances are these will be the facilities group.
Why the second nicest? Very simple. Facilities is normally wise enough to understand that the senior corporate executives will expect to have the nicest offices in the building. They will want the biggest offices on the highest floor with the best views out the windows. If someone else has them, the executives will want them. This will cause unrest and unhappiness. It is best just to give executives what they want. Everybody knows this, including the Facilities group.
And who will be the ones to give the executives the offices that they want? Correct, it will be Facilities. They are the group that is in charge of all the buildings and all the stuff that goes in all the buildings. Once they have decided who gets the very best offices – the executives – they then get to decide who gets the second best offices. The only people who can over-rule Facilities decisions regarding who gets what office are the executives, and since chances are that the executives are all content and placated in their offices Facilities pretty much at this point has carte blanche to decide who gets what.
With this kind of power with respect to office allocation it is only logical that they should place themselves only slightly below the corporate executives in the office pecking order.
Also expect Facilities to place their offices as far away from the corporate executives as is possible. They usually do this in order to minimize the opportunity or even the chance that a corporate executive may actually wander over to their area just to make sure that they do in fact have the second best offices in the building and not the actual best offices in the building. This will mean if the executives are on the top floor, facilities will be in the basement. If the executives are on the east end of the building, facilities will be on the west, and so on.
Why is all this important you may ask? Remember on average you will be asked to move your office location every one to two years. Also remember to take advice like this with a grain of salt as it is also estimated that 76.43% percent of all statistics are made up on the spot. I however have found this to be a reasonably accurate estimate on the number of times I have moved my office in my career.
With that in mind, it may be a good idea to identify who the Facilities representatives are within your organization and to foster a relationship with them. This relationship will be good for you in that it may help you and your team when it comes time for you to move, and it can be good for Facilities as they want to build relationships with both the current and future leaders of the organization.
The next group to be aware of is the Information Technologies team. No one is ever really sure where their offices are. Their offices are normally in a part of the building that is cordoned off from the rest of the mere mortals in the organization, usually behind a security door or special access badge reader of some sort. This is usually claimed to be done in the name of making sure the communications infrastructure of the organization is kept safe from terrorists and other employees of the business, but one can never really be sure.
I have walked by these doors on several occasions and thought I have heard the sound laughter and music, but as these doors also appear to be somewhat sound proofed I was never quite sure so I have written it off to an over active imagination.
The Information Technology team members are also easily recognizable by the number, quality, complexity and sophistication of the electronic gadgets that they have in their possession. The Information Technology team members are usually the people with the coolest mobile phones, with the latest time saving applications on them, and the ability to have you stricken from every corporate directory with but a single call or key stroke. Now that is power.
For those of you that are wondering, IT are the people that are responsible for your phone and computer networks. If you want to have a quiet day in the office just go and insult the IT leader in your area. It will be surprising how seldom your phone will ring, or dial tone will be present when you go to make a call.
If you want to reduce the number of emails that you have to deal with, just send an email to management which is critical of the IT team’s performance. You will also find that when your email is not working and you call the toll free hotline for immediate technical support that they will direct you to the website where they will ask you to send them an email detailing the issues that you are having with your email.
There is currently a détente between most Facilities groups and most IT teams in that Facilities is responsible for enabling IT to have office space behind closed and locked doors where goodness knows what goes on, and IT is responsible for making it impossible for all but the very most senior executives to ever establish real time contact in the form of a phone call with anyone from the Facilities group. If this relationship were found in nature it would be called social symbiosis.
The reason that I bring IT into the discussion about the Facilities group is that every time you move your office you also have to reestablish all of your network connections so that you can get email on your computer and that your phone will ring when someone calls you at your new office. If you move every one to two years on average, that can turn out to be a significant amount of time spent with the Facilities and Information Technologies groups.
Without exception I have found the professionals associated with the Facilities and IT groups to be some of the most helpful individuals in any company I have been in, I have also found that it does not hurt to bring them “tribute” in the form of a written thank you for the effort that they have invariably expended on my behalf to make the vast majority of my office moves while not enjoyable, at least that much more tolerable.
International Travel, Beer and Cabs
A recent international business trip reminded me of several axioms that I had learned on past international trips but for some reason seemed to have forgotten. When I mention international trips, I mean real international trips. Not trips to our neighbors to the North or South, but trips over oceans and to different continents. Trips where you get to sit next to people for eight, ten, twelve hours at a time while traveling. Those are the kind of international trips I am talking about. In fact it can’t really be considered an international trip unless you go to a place where you can order and drink a beer that you have never heard of before, and the actions that are perpetrated on the highways during the natural order of conveyance (what we would call driving) scare the hell out of you.
I’ll start with the more pleasant of these two aspects of international travel, the beer. As time has passed I have found myself ever more comfortably in the rut of preferring to drink beer as my social beverage of choice. It is estimated that beer was invented some 7000 years ago. There have been ancient Sumerian poems written about beer that are more than 6000 years old. Some anthropologists argue that it was the invention of beer (along with bread) that was the base line cause for the rise of human civilization and technology. I guess if you are going to have to survive on something as boring as bread you better have something tasty to wash it down with.
7000 years is a long time to have in the perfecting a beverage. I think we have gotten pretty close in some instances, and maybe not so much in others. I think the last great advancement in beer-kind was when we went from “beer” to “cold beer”. Mixed drinks have come and gone. Martinis were popular, then they were not. Then they enjoyed another resurgence, but then fell out of style yet again. And this was all just last month. The same can be said about various other drinks based on bourbon, gin, vodka and just about any other distilled spirit you can think of.
The one exception to this rule would be scotch. One should never mix scotch with anything. Alone and unmixed scotch is almost undrinkable. Mixing it with anything is the one thing that does in fact render it truly undrinkable. I suppose mixing scotch with water, or ice (frozen water) is acceptable as it serves to dilute scotch’s almost undrinkable nature.
I have digressed. Each culture has its local preferred beer. I have found that part of the fun of visiting these foreign countries is to sample the local brews. It usually surprises my hosts and creates a common topic of conversation. I have learned that in foreign countries Budweiser is considered an imported exotic brew. Now I have nothing against the good people of Anheuser Busch, in fact when I am home I have been known to partake of many of their products. Despite the “man-law” that you “don’t fruit the beer” I seem to have developed a certain partialness to one of their lime infused beers. Again I have digressed. This seems to be a common thread when I talk about beer.
My foreign hosts invariably try to order me one of these types of beers when I visit. Why would I fly thousands of miles just to drink the same beer that I can easily get at home? I want to try the favorite local beer. Almost without exception it has been a very pleasant experience.
In Ireland the fresh Guinness from the tap does in fact taste different than the Guinness we get here in a bottle. The bottled stuff here reminds me personally of shoe polish in both its color and taste. The stuff in Ireland is truly wonderful. The same can be said about Hite beer in Korea, Cerpa in Brazil and Steinlager Pure in New Zealand. They are great tasting beers and there is certainly a reason why they are popular brands in their home countries. I strongly urge everyone who travels to sample the local foods and drinks when traveling. Since civilized business people have been drinking beer for thousands of years, it is a great ice breaker, conversation starter and usually results in a pleasant discovery.
The only real problem with the beer in foreign countries is that you usually have to go somewhere in that country to get it. The act of going somewhere for beer, or anything else for that matter usually involves getting in a car and venturing out on the roads, with the local inhabitants. There is nothing that can prepare you for this, short of going to your favorite amusement park, getting on the roller-coaster and demanding that they run at least five other roller-coasters at the same time, on the same tracks, all in different directions. I don’t ask to drive these roller-coasters, and I certainly know better than to try and drive in a foreign country. When visiting foreign countries I don’t drive, I take cabs.
First of all, contrary to my wife and children’s opinions, I do know how to drive. I know most of the rules of the road here in the US, both the written and unwritten ones. The unwritten ones seem to include such gems as “Don’t make direct eye contact with someone you are passing” and “Turning on your signal to move into another lane is seen as a challenge to anyone else to try and speed up so as to occupy the space in the lane you are intending to move into”. I think we are all reasonably familiar with these rules and many others when it comes to driving here. It seems to be part of the “sport”.
However, nothing can really prepare you for riding in a cab in a foreign country. I am not casting aspersions or trying to denigrate any people, places or things. What I am saying is that, in general and with a few noted exceptions, that upon entering a cab in a foreign country you should be issued a blindfold and a cigarette when getting into the back seat.
While this idea may conjure up images of facing a foreign firing squad, it should not. First of all a firing squad ends reasonably quickly, while a foreign cab ride can go on for hours. A more accurate comparison would require a firing squad with guns that either would not, or could not operate properly, people who might not know how to properly operate or aim their guns and multiple conflicting orders being issued from a multitude of incomprehensible commanding officers.
Amidst all this, after a certain amount of time, many loud noises and several near misses later, you would then be required to then pay this firing squad an unspecified amount of money and to thank them for their time and effort on your behalf.
The foreign cab issued blindfold would more properly be so that you couldn’t see what was going on around you on your way to wherever you were going, and the cigarette would be to calm your nerves, even if you didn’t smoke.
Mark Twain is quoted as saying: “All generalizations are incorrect, including this one”. I would say that in general he is correct. One notable exception that I have encountered to the international driving free for all that I have experienced has been in Australia. While travel on the roads there does seem to have a tendency to take on certain aspects of a game of high speed bumper cars, you are actually expected to ride in the front seat of the cab, next to the driver. Perhaps this passenger proximity has a mellowing effect on the drivers. Perhaps it is the funny accent all Australians claim we have when we speak English there. Whatever it is, they seem to drive in a manner that I can more readily comprehend.
That, and they have some really great beer there too.
Drop the Rope
Business, like life is about growing. Pretty deep, huh? Actually it is probably more aptly described as pretty trite and stale. In so many instances we seem to associate business and professional success with acquiring an ever growing reporting structure. The more people you have reporting to you, the greater the size of the pyramidal organizational chart that you sit atop of, the more successful you must be right?
This acquisitive approach to organizational dynamics is probably the leading cause of more lost business productivity that just about any other topic that I can think of. The time that is lost to the business based on the various organizational structuring, restructuring, acquiring and defending from being acquired, plans and discussions has to be boggling in its magnitude. I think it may be the largest driving factor in the zero sum gain practice of business and office politics.
As an example, if you and I are peers, there are essentially two ways that I can advance in the organization with respect to you, and others in the organization, given the ever reduced nature of opportunities as you advance up the organizational structure. I can do something that truly merits my promotion into a next level up vacancy, or I can arrange it so that your team, or even better, you and your team report to me, then either I have been de facto promoted or you have been de facto demoted. Either way I am now relatively more important than you (and presumably others in the organization) based on the new reporting structure and my increased span of control.
Most of the time these sorts of restructurings and reorganizations are couched in terms of “increased efficiency” or “improved corporate alignment” or some other type of corporate speak.
Having been a veteran of these resource wasting political machinations I can honestly say that I have come up with a new approach to dealing with them. It may not actually be a new approach. It is the approach that I choose to use when I find myself in these political and organizational responsibility free for alls and tug of wars. There may be others that have chosen to use this approach, only I haven’t run into one of them yet. I have termed it “Dropping the Rope”.
In many of the business environments that I have previously been in, if you were not openly or aggressively looking to expand you span of control within that organization, you were viewed as an internal organizational target for acquisition to enable the expansion of someone else’s control.
What a “dog eat dog” view of internal organizational politics. Either fortunately or unfortunately, depending on which side of the acquisition process you have been on, with a few exceptions it has tended to be an accurate perception, at least for me.
Dropping the rope, as the name implies simply means that there is usually nothing to be gained in openly opposing these sorts of restructurings. Pulling against a force that you may, but more probably cannot counteract, is a waste of your effort. I have written in the past that ego is good in that it drives us to work harder in order to avoid failure and to achieve our goals. I have also written that there are times where one must check their ego at the door because it causes us to pursue unproductive goals. I believe that these sorts of political turf wars are some of those unproductive times.
That does not mean that you should just roll over every time someone makes a political foray into you area of responsibility. Far from it. It is always good to directly check with your reporting structure to vet out what is in effect business management sanctioned and what is just curiosity. Once you have verified that a political reorganization is going on, the time has already passed for counter arguments. If you have not been involved in the restructuring decisions any resistance to them will be viewed as an unproductive professional tantrum and obstructionism. It is time to drop the rope and get on board.
I have been careful to classify these events as a political reorganization. Reorganizations for the purpose of cost reduction, or to get closer alignment to the customer’s business structures are usually clearly defined as such. They also usually entail some sort of a reduction in staff. If there is a restructuring going on that does not involve a reduction in staff you can usually guess that it is political in nature. And as such it will probably not add value to either the business or its customers.
Therein lays the key. In a time when the business is internally focused on a political reorganization focus even harder on the value that you and your organization brings to the customer. If part of your value proposition is affected in the impending changes, simply identify it and clearly document that it is being transferred to a new responsible party.
Instead of taking time away from the customer based charter, instead of putting together all sorts of irrefutably logical reasons why the decided change should not in fact happen, instead of taking it personally that a responsibility that was once yours is now going elsewhere, focus on the customer and let it go. It is hard to believe but these things do have a way of working out.
I hope this sounds like the now logical but formerly painful, ranting, frustrated voice of experience. I have learned to trust in my abilities. I would suspect that you have as well. My experience in these situations has usually been that when I officially transition the function or responsibility in question, in due time I am contacted and requested to resume responsibility for it. Political expediency has a way of giving way to functional performance. The most recognized and valued performance in business involves customers and their money. A temporary political internal focus in a business will always give way to a need for customer performance.
Dropping the rope in an internal, political organizational tug of war quickly removes you from the distraction. It gets you out of the arena in question. It cleanly severs your ties with the responsibility in question. It enables you to remain professional and keeps you from being viewed as an obstruction to the desired organizational change. It allows you to stay focused on the customer.
Staying focused on the customer is everyone’s job. Periodically organizations do have a tendency to become internally and politically focused. These periods by necessity always pass. When they do it is usually those that have stayed focused on the customer based substance of the business, and not those that have been focused on the internal politics of the organization that tend to profit in the long run.
Professionals
I think we all like to think of ourselves as professionals. In the truest sense of the word, since we all get paid for what we do, we are professionals. If we didn’t get paid we wouldn’t be called amateurs, we would be called unemployed. I’ve written in the past about what I think makes a leader in business. This time I am going to depart a little bit from that idea, but not too far. I am going to look at what makes a professional.
This may end up being one of my shorter discussions in that it doesn’t really seem to take a lot to define what a professional is. It does however take a lot to be a professional in business. It’s that execution thing that most people have a problem with. It is very much like golf (one of my favorite hobbies). Anybody can play golf. Get the proper equipment. Dress in attire that you would never normally own yet alone put on. Find a place called a golf course. Pay your admittance. Bingo, you are golfing. Very few however are golfers. I guess by extension even fewer are professional golfers.
I aspire to be considered a golfer. Since I have no illusions over the probability that I will ever be paid to play golf, I suspect that being a professional golfer is out of the question. Notice that I said I wished to be considered a golfer. Being a leader, being a professional, and by connected example being a golfer is really not something you can proclaim yourself to be. Others usually have to do it for you.
Being a golfer, like the other two, requires a little time and a commitment. It takes practice and an understanding of your own tendencies and behaviors. I have learned that getting mad or frustrated does not improve my golf game. It took me a long time to learn this. Sometimes I occasionally forget it after some unexpected turn of events or particularly bad break and my score then reflects this fact.
Professionals understand that similar events occur in business. Competition is fierce and occasionally may seem to be playing by a different set of rules. Management and staff may appear arbitrary and misguided from time to time. As the various television commercials enjoy pointing out, humans are not fully logical beings and seem to want to do things that from the outside looking in are misguided at best, but from the individuals point of view may have been a viable alternative at the time.
Regardless of whether the ball is in the fairway, the rough or a hazard, a golfer will always try to execute the best shot they are capable of in order to achieve the best score that they are capable of that day. Conditions change; people are not machines so their performance levels may vary from day to day. Just because you were able to par or even birdie a hole the last time you played it does not mean you will perform the same way or attain the same outcome this time. The experience helps but as they say in the stock market; past performance is no guarantee of future success. You have to try your best every time.
Professionals are those that understand that not every assignment may be in accordance with their opinion of a correct or proper strategy. They may not agree with the decision or direction that is being undertaken, but like the golfer, they do their absolute professional best regardless of the situation. They don’t complain or foment discord in the business ranks. They look at the situation, try to understand the direction and objective and do their best to achieve it.
They don’t get frustrated or mad that the business is doing something other than what they would prefer. They know that won’t help or improve their personal, their team’s or the business’ performance.
In theory golf is a pretty simple game. Get the ball in the hole in as few strokes as possible. Unlike so many other sports there are no opposing teams or people trying to keep you from your objective, and the ball doesn’t even move when you are trying to hit it. Despite these facts there are far fewer golfers on a golf course that there are people playing golf. You know them when you see them, and they don’t usually proclaim it. They just go quietly about their game, doing their best at all times. Their score usually reflects this.
Business as well is not rocket surgery (to mix metaphors a little, just for fun). While there is competition, their goal is not specifically to keep you from achieving your objective. It is more to achieve theirs. But like golfers on a golf course, there does not seem to be an abundance of professionals in business. You know them when you see them, and they too do not usually go around proclaiming their status. They just go quietly about their assignments trying to make sure that the business’ objectives are achieved. This includes even the assignments and objectives that they may not be fully in agreement with.
Especially those.