Among the many tasks of a CEO probably the hardest and most beneficial is to obliterate SHEEPWALKING. The term comes from this post by Seth Godin who defines it as what happens when you hire “people who have been raised to be obedient and [give] them a brain dead job and enough fear to keep them in line”
The opposite is: ‘At first, it seems crazy. There’s too much overhead, too many cats to herd, too little predictability and way too much noise. Then, over and over, we see something happen. When you hire amazing people and give them freedom, they do amazing stuff. ” – also quoted from Seth’s article.
Here’s why it’s so hard. Running a company you’ve got way to many things to do. You’re looking for things to control. You don’t do it consciously but creating a culture of sheepwalking is a comfortable way to run a company and think you are in control. In fact, you really are in control. And that’s the problem. The things you can control in a company don’t guarantee success. At best they only prevent catastrophic failure. At worst they cause the failure albeit slowly so you don’t realize what’s happening.
Why? As I’ve said before, business is like sex where success depends on the interaction between you and the other person. The control you think you have in your company is all about you – not about the other person and it limits the kinds of interactions and responses your company will have. Plus it limits the types (and number) of people you’ll be attractive to.
This may have worked in the old days when the markets didn’t change very much, and the types of interactions were limited. But that’s not true anymore.
Takeaways:
[tags]Small Business, Entrepreneur, Management, How to be CEO[/tags]
I came across this in a letter by Jim Womack, author of Lean Thinking and, to hear him tell it, one of the developers of the Toyota Way. The graphics are mine – which is why I’m not a graphic designer.
All value created in any organization is the end result of a lengthy sequence of steps – a value stream.
These steps must be conducted properly in the proper sequence at the proper time.
The flow of value toward the customer is horizontal, across the organization.
All organizations … are organized vertically by department … because this is the best way to create and store knowledge and the most practical way to channel careers.
He goes on to say that managers are judged by metrics that apply within their departments. But no one is actually responsible for the horizontal flow of value [toward the customer]. This is the problem big companies face.
So why are small companies better than big ones?
Because you have your hand in everything. YOU (the owner/founder/entrepreneur) are responsible for the horizontal flow of value.
So why are small companies worse than big ones?
Because you have your hand in everything. When the company grows to the point where some organization by department is useful, the owner/founder/entrepreneur is better at building the product than building the company. So emergencies, inefficiencies, and other stuff happens which takes you away from managing the value flow. So you end up with the worst of both worlds. No departmental support and a poorly managed value flow.
Takeaway:
[tags]Lean Thinking, Small Business, Entrepreneur, Management, CEO Skills[/tags]
I’m not advocating it – just asking you to think what the ramifications would be. Knowing how your absence would affect your company gives insight into what role you really play.
The extremes are:
Everything would go to hell in a hand basket. -OR- Not much would be noticeable at all.
If your absence would result in the first, then you are not functioning as the CEO – no matter what it says on your business card. You are performing work, not running the company. You’re selling, making product, raising cash. So when you stop, even for a short time (and a week is, in the grand scheme of things, a short time) things grind to a halt. Your company becomes a football team without a quarterback.
If a week’s absence would not be noticeable – CONGRATULATIONS! You’re functioning as the CEO (either that or you’re a bum and should get a real job). This is not to say you’re not needed. Rather that the things you’re needed to do don’t have such immediate consequences. You’re like the owner of the football team. You’re deciding if you should replace the head coach or not, working out salary allotments and future draft choices. Your work is what ultimately propels the team to a championship and then a dynasty. Even the best quarterbacks don’t have that kind of effect.
Back when Bill Gates was CEO of Microsoft, he routinely took a week off every year – until things started moving so fast he had to take two weeks off each year. He used the time to read and think about where the company was going and what new technologies were on the horizon. Here’s what he said about it:
Ours is a very fast-moving field. You have to be able to step back from it. Many years ago, I decided to take a week every year and absorb myself in thinking … ahead. I get colleagues to put together what PhD theses I should read, what products I should play with, what memos I should look at. So, it’s been, except for sleeping a little bit, day and night all by myself uninterrupted.
Of course, there are other things a CEO does besides take time off to think. And you probably can’t take a whole week. That’s because most companies of our size don’t need a full time CEO. So you play several roles – part time team owner, and part time quarterback. Not to mention sales person, delivery driver and janitor. That’s all needful and good. But the danger is you’ll not commit to putting in the amount of CEO time the company really does require because it never seems urgent enough. How much time do you take to read and think? When do you do the other things a CEO does? You can’t build a championship team, never mind a dynasty if you don’t.
Takeaways:
[tags] Small Business, Entrepreneur, Management, How to be CEO,CEO Skills[/tags]
Solving problems is a typically American approach. We see the West to be conquered, the space race to be won, the journey as a destination, the problem to be solved. And to be sure, there are problems in your business. But just solving them is at best a short term fix and at worst a recipe for disaster. Here are a few thoughts about why.
Continuous improvement
Great companies don’t become great, or last a long time because they solve problems, meet goals or complete the check list. Great companies know there is no finish line. There is no plateau, no solution. There is continuous improvement. Always getting better. Usually in lots of small, incremental ways. Developing new ideas, most of which are not sexy and seem almost insignificant, but move you constantly – not to a better place but; in a better direction. Toyota knows this, while GM and Ford do not. [Thanks to Andrew Leonard for the link]
Jim Collins has documented this idea in his books, Good to Great and Built to Last. Solving problems gives you a mind set that you can stop when you find the solution. Continuous improvement is a mind set about moving forward a little every day.
Polarity
A polarity is something that looks like a problem – but only if you don’t have a long enough time frame. It’s a polarity because what looks like the solution is better in some ways but actually worse in others. The classic example is the distinction between centralized control and decentralized control within a company. Whichever end of that spectrum you’re on, the other side looks better. Centralization has efficiency but stifles creativity. Decentralization pushes authority down the ranks but at the cost of alignment. Companies with a short-term view point swing from one extreme to the other as soon as they’ve forgotten the bad points of the other side. Barry Johnson explains this distinction and what to do about it in his book Polarity Management.
Don’t just Solve Problems – Prevent Them
I’m not trying to say your business doesn’t have problems. Of course it does. But when you find one, don’t just solve it. Take the next step and prevent it from happening again. That requires finding out the real cause – not just a scapegoat. And then making a change in how you operate. This process often looks too tedious for entrepreneurs who are too busy making things happen to figure out how to make them happen better. But if you make the change, you’ll institutionalize a way of learning from mistakes, and make fewer of them – or at least you’ll make different ones.
Takeaway:
Most business of our size get started because a person can make something or sell something. As the market responds, they need to build a company to meet the market demand. In the early stages they can juggle it all. But at some point the company needs a CEO. What does that mean?
The two things about being a CEO are:
1. Produce Results
2. Choose the Right Results to produce
How to Produce Results. By definition, the CEO is an executive. That means you don’t produce results yourself. You did that before the company needed a CEO. As CEO you produce results by organizing others to be productive. That means you devise, implement, monitor, and adapt systems within the company to help the group produce more than any one of you could on your own. To see all the systems I’ve identified so far click here. But think about that last phrase for a minute. It’s your job to help the group produce more than any one of you could on your own. It can be a noble calling when you think about it.
How to Choose the Right Results. This is a dance between your vision of the company and external forces. The primary force is your customer’s desire – what they value. But there are others whose desires you must accommodate: investors if you have them, employee’s needs and skill sets (and the pool of potential employees if yours is a growing company) the technology “space”, regulatory agencies, etc. Your job in this capacity is to see the big picture of where the company can go, then fall back to #1 to devise a way to get there. In short, you’re monitoring trends outside the company, and interactions of the company with the outside world.
This leads to the following observations.
CEO Time.
A company of any size needs some CEO time. But most small companies don’t need a full-time CEO. That means you’ll be spending some of your time selling and doing the technical aspect of producing or managing. It’s important for your sanity and that of your employees that everyone – especially you – knows when you have the CEO hat on and when you’re functioning in some other capacity.
CEO Skills.
I think it was Peter Drucker who said the tools of an executive are meetings and reports. You need to develop skills in using these tools. You have to develop the right reports for your company and the stage it’s currently at. And you have to understand your business model or you won’t be able to see ramifications of the trends shown by the data in those reports. Meetings include every one-on-one conversation as well as when groups get together. There are different kinds of meetings for different purposes and they need to be run differently.
CEO Priorities.
A CEO must work on what’s important not just what’s urgent. That means you have to plan space in your calendar for CEO time. Time to work on the important stuff. Don’t let that time get crowded out by the emergency-du-jour. Your company will need more CEO time as it gets larger. And if you compare two companies the same size, the one which is growing faster or changing more needs more CEO time.
CEO Instinct.
You must know when to go with your gut and when to go with analysis. It generally works like this. You can analyze the past. That analysis only helps plot the future when the future is an extension of the past; when you’re doing “more of the same.” When you need to make a revolutionary jump you need to go with your gut. Apple computer did this when it launched the Macintosh – a product that analysis showed was going to put their cash cow (The Apple II) out of business. They did it again when they launched the iPod which didn’t bankrupt any existing products but did take them into a whole new business.
But as soon as you make a gutsy move and launch a revolution, the future is now past. So analyze the hell out of what you’re doing and change, adapt, revise as necessary. Two more examples from Apple. They launched the Mac thinking it would be used for spreadsheets, database and word processing. Instead desktop publishing became it’s killer app. They did enough analysis to recognize this early on and exploit it well. Likewise with the iPod. Launching it was a gut move, but the frequency and timing of improvement (different sizes) and enhancements (selling songs and now video) requires analysis.
Takeaways:
[tags]Small Business, Entrepreneur, Management, How to be CEO,CEO Skills,Leadership[/tags]
There’s a real gulf between an entrepreneurial business where you can do anything through harder work and an ongoing sustainable business that is run through good management technique.
- Bob Jones, owner The Chef’s Garden
I think that says it all.
Being a leaders means people follow you. That’s all. If you look historically at the leaders that people followed fiercely, you’ll find some of the most destructive, self-serving, and vicious leaders in government, religion and yes business. Hitler was Time Magazine’s “Man of the Year” in 1938 and Joseph Stalin was picked twice (1939 and 1942).
Having said that, I know you can’t run a company without getting people to work together in ways that multiply the effectiveness of each individual. Management is required for that. Management without leadership will do better than leadership without management. But leadership (though overrated) is also part of running a company well. And it’s the topic of this post.
In spite of what you hear from people who want to sell you seminars and books, leadership comes in all kinds of styles and personalities. Some leaders are not at all charismatic. (Dwight Eisenhower was also Time’s Man of the Year – in 1944). What all leaders have in common is the ability to communicate their vision clearly and consistently. How can people follow you if they don’t know where you’re going? If they could see the vision without you, they wouldn’t need you to lead them. You do have a vision, don’t you? If the word “vision” sound too much like consultant-speak, substitute “a direction you’re leading the company in”
Hint, “More sales and bigger profits for me!” is usually not a very inspiring vision, at least to other people. But there’s probably some reason you chose to look for profits in this particular company at this particular time. For most entrepreneurs there’s some passion there (god knows it’s not logic that keeps us going all the time). That passion can be inspiring to others. Tap into it for your vision/direction.
Don’t get discouraged if you feel like you’re repeating yourself. In fact, if you aren’t bored hearing the same things come out of your mouth again and again, you aren’t repeating yourself enough.
Takeaways:
One frustration I have with my clients is that we talk about things that are important for them to do and they won’t make time in their schedule to do them. They won’t say no to the urgent so the important gets put off. I understand this attitude.
We entrepreneurs are motivated, make that inspired, by the possibility, the new idea, creativity. Typically we hate the boring, the routine, the predicable. Just think what I could miss if I scheduled 2 hours every Tuesday to review reports! I could miss a call from an important client. A employee might have a question that only I could answer. I might get a new idea for a whole new product.
The problem is these things do happen, but not on schedule. So Tuesday gets taken up with annoying interruptions and questions others should be answering. And the reports never get reviewed and problems never get solved because you want to stay available to whatever might happen.
Can you imagine raising kids like this? We won’t plan dinner time because who knows when anyone will be hungry or get an idea for a really inspiring meal. Bed time? No way. What if some great idea occurs at 10pm. Time to get up? No! People will be too tired from staying up waiting for that great idea. School? Too regimented. We’ll home school them so we can teach them exactly when they’re curious and ready to learn. If you ran your house that way, you’d never even be able to schedule a vacation.
The truth is, as much as we hate to believe it, some routine, some schedule actually opens up more space to be creative and accomplish more. Schedule routine meetings (short and frequent) with your key people and the interruptions will go down. More time there. Block out time to review reports regularly and you’ll see (and solve) problems when they’re small. That helps you accomplish more.
What if a client calls or an emergency comes up while you’re in a meeting or some other scheduled even? It’s actually rare that something comes up that you can’t put off for a few hours, and when one of those things can’t be delayed, you’ll know it.
Creativity? You can’t schedule that. But you don’t have to drop everything just because you had an idea. Figure out a way to capture those ideas (carry note cards and a pen or a mini-voice recorder) and schedule time to work on them later. You may find out that by waiting the good ideas improve, and the bad ones become more obvious and waste less time.
Takeaways:
I read somewhere that many of the clients of Dominatrixes (what is the plural of dominatrix?) are CEOs – people who spend all day calling the shots and answering to no one. They have a psychological need to be bossed around, but obviously need to go outside of work to get that need met. But I don’t care about your private life, or what his name is. I’m talking business reasons you might need a Boss.
Seth Godin has a great post on this topic. It’s geared toward free agents but much on the list applies to entrepreneurs. He summarizes by saying:
“The main thing a boss does, though, is give you the momentum you need to get through the stuff that takes perseverance. The main thing that ends the career of a Free Agent is the lack of a hand pushing on the back, someone handing out assignments and waiting for the deliverables. Who keeps you going when you don’t feel like doing it?”
When Scott Adams (who writes Dilbert) left his job in a cubicle (yes he really had one – for a LOOOONG time), he called it “Boss diversification” because now every customer was a “boss”. Nice way of thinking about it, but the problem is that customers don’t care about your success as much as a boss does. So if you have trouble prioritizing and staying on track, then you need a boss. How do you get one? Here are some ways.
1. Actually get one. Keep ownership of your company, but give up the CEO job. This works for people who really love and excel at one of the critical tasks: Product design or sales or writing code. And you have to have the right CEO and work hard on that relationship because you’re wearing two hats – because as a sales person, you work for her, but because you’re the owner, she still works for you.
2. Give some real power to your board. Most small companies don’t have a strong board if they have one at all. This is a mistake.
3. Hire a coach from the ICF referral service [Disclaimer - many years ago I was president of the ICF. Since I left, the organization has grown 10 fold. Coincidence? You decide]
4. Become your own boss. This is the hardest one of all. Pretend you were your own employee. What would you monitor, how often? What tangible results would you expect? Which ones would you demand?
Guy Kawasaki has a great post on how to fire someone. I was conflicted by one point that he makes: his dismissal of the idea that you should fire someone quickly. He says you should give them a second chance. Reading it, I realized I think both things are true. How can that be?
This got me thinking about what an employee needs to succeed. I came up with 3 things. Thing Number One is entirely out of your control (and not completely, but generally not under the control of the employee either). Thing Number Two is entirely under your control not that of the employee. Thing Number Three is under both your controls. Details in a minute.
But here’s my take on second chances. When you give a second chance, you must explain the problem and then change something and expect an improvement. At the minimum, you change to increased monitoring, but the things you must change are aspects of Thing Two and Thing Three that are under your control. If you see improvement give another second chance and another and another.
However, as soon as you realize the employees failure is due entirely to Thing Number One – get rid of him or her immediately. It won’t get any better, and you’ll just prolong the agony.
An employee needs three things to succeed
1. The right personality traits. This includes what is commonly called “motivation” and “attitude” but it’s more specific (and less judgmental) than that. Some people are good at multi-tasking, others plow through one thing at a time till it’s done. Some people see the big picture and can’t be bothered with details – others can’t see the forest for the trees. Some people are naturally curious, some are not. Some are fast learners, some are not. By “right personality traits” I mean the right ones for the job. Most people’s traits are right for something – but no one’s are right for everything.
Personality traits are hard enough to discover about yourself, let alone another person in a job interview. But the best way I’ve heard of is to work with a team to come up with a list of traits for each position (this goes beyond the job description). Then in the interview, when you ask questions like “Tell me about your first job?” or “What was your favorite vacation?” you can look for those traits. It’s your job as the boss to determine the kinds of traits needed for each position and do your best to match the person’s traits to the job.
In this article Inc Magazine calls this Behavioral Interviews and gives some tips on how to do it.
And personality traits are almost impossible to change. If someone isn’t a good fit in this area a large company may have other areas to move them to where they fit better. If you don’t, you’d best let them go as quickly as you figure it out. This is the basis for the fire rapidly rule that Guy Kawasaki puts down.
2. Skills & Experience. This stuff is mostly trainable – though no amount of training will make someone a super star. And wisdom can not be had without experience, which takes time. This is the area you give the most second chances in. (Is most second chances an oxymoron?) If you don’t see any improvement, then the cause is likely #1 or #3.
3. The right environment. This is the job of management. The ideal “environment” is one where people have the support and systems they need to be successful. By that I mean, if you hire me to paint a wall, it’s your job to give me the equipment and the paint – or the authority to buy them. If I have to buy them, then you need to allow time for that, and if you tell me to pick the color, you better accept my choice. This is the area that is the biggest problem for small companies. Partly because each manager is wearing so many hats and partly because its a skill they don’t get much training in.
So the first thing I do when an employee isn’t working out, is use that as a mirror to see if I’ve been delinquent in setting up the right environment. Obviously you can’t revamp your whole production line for each new hire. But the more effort you put into designing the right environment, the easier it is to find a good employee to work there. Consider McDonalds. Behind the line, they’ve designed equipment and processes specifically for their menu. As a result, they hire teen agers, retirees, people who can’t speak English, lots of part timers and yet every McDonalds on the planet tastes the same. Can you do that in your facility?
Takeaways:
I don’t usually write about big companies because the stuff is not applicable to us small-frys. But, as you may have heard, Bill Gates is leaving the day to day work at Microsoft to devote more time to philantrhopy. It turns out there are some lessons we can use – in large part because Microsoft was a small company recently enough that some of us can remember. Bill Gates and I actually share the same birthday (but he’s a year younger – the whippersnapper).
Here are links to two very interesting article by great writers who’ve been intimate with Microsoft for decades.
Robert Cringely quotes Jeff Angus saying that Microsoft’s management “system” in the 1980′s was basically to guess at unimportant decisions and base important ones on trying to emulate the more powerful people in the organization. Cringely says it’s still the same today.
” Almost nothing operational was written down…The tragedy wasn’t that so many poor decisions got made — as a functional monopoly, Microsoft had the cash flow to insulate itself from the most severe consequences — but that no one cared to track and codify past failures as a way to help managers create guidelines of paths to follow and avoid.”
This prompts the question “How did the company get so big?”
Joel Spolsky shares a very interesting story from when he used to work there, and had to have his work reviewed personally by Bill Gates.
“Bill Gates was amazingly technical. He understood Variants, and COM objects, and IDispatch and why Automation is different than vtables and why this might lead to dual interfaces. He worried about date functions. He didn’t meddle in software if he trusted the people who were working on it, but you couldn’t bullshit him for a minute because he was a programmer.”
Then Joel goes on to imply that technical expertise matters more than managerial ability, and disses “the MBA who believes that management is a generic function.”
I actually have no idea how Microsoft got so big. I think it was a combination of timing; being smart enough to exploit the timing; having a good enough product; great marketing; and being ruthless. But that’s just my opinion. Your company is not going to be that big, and it’s not Microsoft, so how they got that big is not the lesson for you.
The one for you is that management IS an generic function – to a point. And the smaller your company, the sooner you hit that point. But conversely, the larger you want your company to grow, the more you need to systemize (or genericize) management. The three levels of management is one way to systemize it.
Takeaways:
[tags] management, growing company, Microsoft, Bill Gates [/tags]
President Clinton was the keynote speaker at the NAA conference last week. He posed 4 questions to the audience:
The speech was basically a call to think of what we do in light of it’s larger impact on the world.
Being that the NAA is an association of landlords, the concept of using our clout to make buildings more environmentally friendly came up. It made me realize that in 15 years as a member I’ve never heard the NAA address any environmental concerns nor, in fact, any topic that related to our impact on the world at large.
This is typical of business, and it got me wondering why? I think there are two parts to the answer.
1. Living in the Now (aka short sightedness). Business people are very focused on the immediate so they often see investment as expense. That is they look at the immediate consequenses which may be negative, and ignore the future effects which may be so positive they outweight the negatives.
2. Competition. When you have competition, doing something “because it’s right” can put you at a disadvantage cost wise. This can even put you out of business. This is true even when doing “what’s right” would pay off big time in the future. Ironically, the solution to this often involves government regulation to “level the playing field”. Yet business people often see only the short term negatives of any intervention and ignore the long term positives (see reason #1).
I think it’s time for this to change, and companies run by smart people will be able to use this to their advantage. Here are some examples:
Being Green
Is it just a coincidence that the color of the environment is the color of money (at least in the US)? The June 2006 issue of the Harvard Business Review has an article about the profits companies are realizing by building green buildings. It’s available for a limited time here.
Minimum Wage
Henry Ford made history by paying his workers $5 a day (twice the going rate). The reason? Among other things it allowed his workers to afford his cars. No business in history has survived very long without a market. As I write this, the minimum wage in America hasn’t been raised in 10 years. Real wages for most workers have remained flat during that time. Yet expenses haven’t. How much better would your bottom line be if your market had more spendable income?
A few companies are known for providing actual real living wages for even the lowest employees on their totem poles. Costco is one that’s usually cited and it’s kicking Sam’s club’s butt. Starbucks provides health care for all workers – even part timers. The Container Store pays twice the average wage for it’s retail workers and gives them 10 times as much training as the norm.
What do companies like this know that others don’t? That in this environment, providing better pay and benefits allows you to attract (and keep) the best workers. How much is that worth?
Of course to make this work, you have to manage better – not just pay better.
Don’t even get me started on Health Care
It’s ridiculous that America spends more on health care (as a percent of GDP) than any other industrial country and ranks 32nd in the health of it’s citizens. How much more profitable would you be if your employees were healthier? What if your customers were healthier? Does it really make sense that people stay in jobs they hate because they can’t get health insurance if they move? Does it make a level playing field that GM has $1500 of health care costs in every car and Toyota has $110?
Why has business been so reluctant to demand an overhaul of the system?
Oil
We knew back in the 1970′s that our dependance on oil was a problem. Jimmy Carter proposed funding research into alternative fuels. But we didn’t follow through. 30 years later we’re paying for it. And not just at the pump, we’re paying with the environment and with the power that oil money has given to countries and even terrorists who aren’t exactly friendly.
Doesn’t it make sense that American inginuity that put people on the moon, could be harnessed to solve a problem like this? And in the process we would be creating high paying jobs, and new technologies we could export to the world.
Takeaways:
[tags]Bill Clinton, President Clinton, NAA, Oil, Environment, Minimum Wage, Business, selfish [/tags]
A system is a set of parts which accomplish something by relating to one other. Drive a bolt through a pair of blades and the three parts form a system we call scissors. As a scissors they’re more than two blades and bolt. Systems have meaning beyond their parts.
What does a business system look like?
What if you don’t have systems?
Then you depend on really good people who “get it.” You’ve probably got a few people like that. The most frustrating thing for entrepreneurs is how hard it is to find good people who get it. It’s usually easier to systemize than to find more of them. Plus when you don’t have systems, the good people can’t move up as the company grows – so you’re kind of stuck.
Why don’t more companies systemize?
The first reason is they don’t know how. No one’s ever taught them about it. It’s not really that hard, though it does take some tedious work at the start before you see the benefits. But boy is it worth it.
The second reason is they don’t think it will work because of all the exceptions and special cases that happen in their company. I think these special cases are what makes a small company strong. I agree if you had to make everything routine, then systemizing would do more harm than good. But systemizing the right way will take those special cases into account. The result is the right people will do the right things a lot more effectively.
Examples:
I know of a small law firm with 6 attorneys who were partners. Each day they spent an hour dividing up the mail. That’s 30 hours a week, 1,500 per year that they weren’t able to bill for. Once they were able to define some rules about where the mail should go they could off-load that job to an administrative person. They key is that they defined the exceptions that in certain cases the admin couldn’t make the decision and had to show it to a partner. Also when the partners first looked at their mail, they looked for exceptions that had slipped through – if they found one they either dealt with it or dealt with in and made a change to the rules. This increased their billable hours by much more than it cost for that admin position.
I know of a publishing company that sold ad space in a directory. The two owners were the main sales people and they used to cut so many special deals that they cut all the invoices themselves. They felt no system could handle it. To systemize, they made a list called The A List. It included names of all the customers who’d gotten a special deal. It wasn’t as long as they thought. The bookkeeper was instructed to cut invoices in the normal way for everyone who wasn’t on the A list. Of course they also had to define what “the normal way” was. That helped a lot. Then the owners would spend time only on invoices for the A-list people. Only the two partners were allowed to put someone on the A list or take someone off. The result? They spent less time on invoices AND since they trusted the system more, they were able to make fewer special deals and still keep customer happy.
Some systems are more complicated than these, but a great many are not.
Takeaways:
An effective schedule is composed solely of Routine, Rocks and Reserves. You should be able to look at your calendar and see them.
Routine.
This is missing from most entrepreneur’s schedule. It’s the routine meetings and regular times you review reports. Of course you don’t have time for this. There’s too much happening in your day. And all those damn interruptions. What you don’t realize is that if you have the right routine it minimizes the interruptions and the surprises. But you may have to give up the adrenaline addiction, so it won’t feel the same.
What is the right routine? More than I can go into here but check out Mastering The Rockefeller Habits by Verne Harnish. It involves doing certain things daily, others weekly, monthly and quarterly. You can do them by phone when traveling so there’s no excuse. And they don’t take a lot of time but they must be done consistently.
Rocks.
These are the important things that are never urgent. The name comes from a story told in First Things First by Stephen Covey. (Buy it used at Amazon for a penny.)
The gist is that if you want to fill a bucket with some rocks, some gravel, some sand and some water, you need to put the rocks in first and let the other stuff flow around them. Your rocks are the projects you want to get done but can’t find time for. Pick one. Two at the most. You need to put rock time on your calendar just like you would any important meeting. Work on them till they’re finished then move to the next rocks. In a year, you’ll get much more done than if you try to work on thirty at once a little at a time.
For some people, rocks are the production time they need – this is true for lawyers, graphic artists, phone sales people and the like. The key to these rocks is to schedule time that’s uninterrupted and keep it that way. Don’t check email, don’t answer the phone, make sure the others in your office know not to knock unless there’s blood or fire.
Reserves
Once your schedule has the routines and rocks in it, there should be space. That means you have to be selective about scheduling your rocks. Don’t fill up the schedule. Leave that space alone. The holes in your calendar are your reserve. They will fill up. Some problems and emergencies will arise (fewer than when you didn’t have routine, but some will.) More importantly, some opportunities will show up and you’ll now have time to take advantage of them. That’s what reserves are for.
Takeaways:
The job of a manager is not to control people. And it’s not to cut costs. It’s to set up an environment that allows people to do their best. By environment, I don’t mean cushy chairs, beautiful artwork, free food and foosball – though that may be part of it. I mean the right job descriptions, proper training, reporting structures and monitoring that are useful rather than frustrating. Useful in doing what the company is supposed to do – provide value to the customer.
Read this article by Joel Spolsky. Ignore the techno babble (it’s written for programmers) but concentrate on how it shows what managers did to make it impossible for employees to do a good job. The managers didn’t try to do this – it happened because they were trying to do something else (cut costs or control people) and didn’t know what their job was.
Takeaways:
[REMINDER - today at midnight is the deadline for the Whole New Mind give-away]
Suppose you’re ready to make a change. Perhaps you’ll stop solving your employee’s problems for them and empower (require) them to suggest solutions along with the problems. Maybe you’ll start delegating in a more formal way and restrict yourself from following up except for the milestones you’ve previously agreed on. Maybe you’ll start recording decisions that get made in meetings, or writing down action items.
You think you can do this, after all the changes mostly involve your behavior and you’re the boss. You think it might feel weird but you’ll just jump in and ride out the weirdness – like when you gave up smoking, or started working out.
Big mistake. For two reasons. One is social, and the other is social.
#1 – Work is a social place. When people interrupt you with a problem, it’s not just because they don’t know what to do. There’s always another component to it. Perhaps they want permission. Perhaps they just want to interact with you. Maybe they want to be noticed. Whatever it is, if you just change your behavior without explanation, they’ll miss that other part that’s gone away. They’ll wonder if they did something to make you mad. They’ll be less communicative and wait for it to blow over.
#2 – People (even you) are social creatures. You’ll do better with support. We rarely change all at once. If you explain what you’re doing and why, people will help you keep the change going. You can even agree on language they can use to keep you on track – it’s important they know how to talk to the boss.
Takeaways:
This is one of the side benefits to using a coach or consultant to make the changes. Instead of it being your idea, you can “blame” it on the coach. That makes it easier to rally round the change and for people to confront each other in a constructive way to keep the change going.
Last week I wrote about not buying people’s time. If you’re not buying time, you have to know what you are buying. This is harder than buying time, so we buy time as a cop out. It’s hard for two reasons.
One is we often don’t know how to explain what we want but “we know it when we see it”. Assuming for a minute that our knowing it when we see it is consistent (and it often isn’t) it still helps to explain what we want, so the other person knows.
The other reason is we don’t know how much is enough or when the job is done. Most knowledge work is like that. If I’m painting a room it’s obvious to me or anyone watching if I’m done, and before that, how much I have left to go. If I’m doing a marketing report, or researching competitors on the web, how do you know when you’ve done enough? It could go on forever. Generally what happens is you do it till something else becomes more urgent. Sort of like on Thanksgiving when you eat till the game is on. Then you doze in front of the game till you’re hungry. Then you eat till it’s time to take a nap etc.
So try this. Imagine your employees worked the night shift. And you came in every morning and never saw them.
How would you know what they’d done?
How would you know who did a good job?
How would you know how much work was left to do?
Try that for each person’s job. Write down your thoughts. Discuss with them.
You won’t get all your answers doing this exercise, but it will help.
Takeaways. Describing expected results and managing that way does the following:
Systems that support, not hinder what people do, and allow them to do it better. Most of us don’t think of systems that way. Instead we feel they hinder the “real” us. But, as Seth Godin says here, “If process makes you nervous, it’s probably because it threatens your reliance on intuition. Get over it. The best processes leverage your intuition and give it room to thrive.”
I’ll take it a step further and say it takes creativity to define good systems. A good system is one that accomplishs what the company needs at the same time supporting each person in doing what she or he is uniquely qualified to do. A good system takes time and testing (as well as intuition) to develop. It needs to be tweaked and adjusted. And when the people change (a good system will make it easy for people to move up and move on and replace them) the system needs to change as well.
Takeaways:
When you hire a accountant or a lawyer or someone who charges by the hour, do you really want those hours? Does it make sense that if you ask a question they don’t know, and need to research you should pay more than if you ask one they know off the top of their head? Does it make you wonder if they take longer than they have to? More importantly does it keep you from calling them because you wonder if your call will be worth the $150?
There are other ways to structure your relationship – value based billing, a set fee for retainers etc. But that’s not really why I’m writing this.
I’m writing because of your employees.
Are you buying their time? Do you really want to? Wouldn’t you rather have productivity than hours on the clock? But how do you pay for only that? At the extreme, it’s probably impossible. You can’t make every job a piecework job, nor would you want to. But if you think about your rules and policies, you can come a lot closer to your real goal. Here are some things to think about.
Personal calls and other business.
Are employees “stealing” from you when they make personal calls at work? Only if you’re buying their time. After all you make them don’t you? What if the call to arrange child care, or car repair actually puts their mind at ease and makes them more productive. Maybe they’re doing you a favor.
Sick Days
This includes mental health days. Do you really want someone at work when they’re sick – especially if they’re contagious? Which is better – take a day off, get better quicker or “work through it” at half pace for several days in the office?
Coming in late and leaving early
If their work is done, does it really matter? In some cases, yes. The phones have to be answered and customers served at posted business hours. Some meetings and such have to be done on schedule. But if someone is finished, why should they sit around looking busy till closing time? Back in the 80′s when on-site gyms and company barbecues were all the rage at high tech companies, one employee of such a firm told me how it worked at her place. She said people would spend 80 hours a week or more on the premises. But with the work-outs and socializing and stuff, they never really got any more done than folks who worked a normal work week. More is not always better, less is not always worse.
Won’t people take advantage of you?
If that’s the case, something’s wrong. Either you have the wrong people, or the wrong environment or both.
Takeaways:
Work is defined as moving objects at or near the surface of the earth, or telling others to do so. The first is uncomfortable and ill paid, the second is more enjoyable and better paid. – Old Joke (which isn’t as funny in the new economy).
Management is actually the job of coordinating effort so that an organization can perform better as a group than the individuals can working on their own.
If you think about that sentence, you’ll discover that the point of management is performance, in other words the goal is results. And you’ll see that the tools at management’s disposal are the tools of coordination: prioritization, allocating resources, communication, support. You’ll also see that a lot hinges on your definition of the word “better.”
Briefly, the three levels of management are these:
Foreman
This is the name usually used in factories or construction work – but it applies everywhere. It’s a person in charge of a small crew who is also a worker on that crew. It addition to doing the work, the foreman is responsible for leadership and intra-crew decisions such as scheduling, making sure the crew has enough supplies, etc. But the foreman cannot change the direction or makeup of the crew nor can he/she make major decisions about the crew’s assignments. The foreman is usually given a task for the crew to perform – he helps organize the crew to accomplish the task, but can’t modify the task.
Executive or Middle Management
These managers are responsible for organizing others to accomplish tasks. They are usually given (or help define) goals and they decide / prioritize the tasks needed to accomplish those goals. Then they work to assign ways that the tasks can be accomplished within constraints of budget, staffing levels, equipment etc. Middle management is often responsible for coordination between groups. In practice many managers (especially in technical fields) divide their time between actually doing management work and being workers or foremen (doing other work that needs to be done).
Upper Management
This level is responsible for setting strategic direction, and also is concerned with how to best utilize funds, new product decisions, how to read and address trends in the market place. Profitability goals and long term vs short term trade offs are the purview of this level of management, as are exit strategy decisions.
Foreman or 1st level managers tend to ask When? What? and Where? because they are responsible for getting stuff done. Middle managers ask How? and Who? because they are given a goal and have to muster resources and assign them often within budgetary constraints. Top level mgmt asks WHY? because they are responsible for the strategic purpose of what is being done.
Takeaways:
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