The Business Sensei

Seven Habits of Pointy-Haired Bosses

Scott Adams, of Dilbert fame, routinely features tales of bumbling managers. The popularity of Dilbert, and the degree to which it resonates with people, are a testament to his accuracy; indeed, Dilbert’s pointy-haired boss has become an iconic figure. Dilbert aside, however, I have observed that very few leaders are intentionally like the pointy-haired boss depicted in the comic strip. Rather, they engage in pointy-haired behaviors without realizing the effect they are having on the organization as whole. Let’s explore some examples of such behaviors and their unintended consequences.

1. Pointy-haired bosses break their own rules and figure either no one will notice or no one will mind because they are in charge. In one company, the CEO called everyone together to talk about the importance of really working hard and putting personal needs to one side in order to ship a product. At the end of the talk, he announced he was leaving for a two week vacation in Hawaii and wished everyone good luck. This did not go over well. One vice-president, who had apparently not been warned, almost choked on his coffee. When the CEO came back, two people had quit and the rest were up in arms.

2. The pointy-haired boss believes that he is separate from the group he leads. In fact, leaders are also group members, with a very important and well-defined role. Through their actions, leaders set the norms for their group. For example, the manager of a team at a large software company imposed a $.25 penalty for being late to meetings. When he was subsequently late himself, the team gleefully demanded he pay up. After a brief stunned moment, he tossed a quarter into the pot. No one complained about the fine after that. What the leader does is directly mirrored in the organization. When leaders find that employees are not living up to the standards of the organization, they often need to look in a mirror and see what example they are setting.

3. Pointy-haired bosses fail to recognize the culture they are creating. To be fair, it’s hard to see your own culture from the inside, and despite what many managers and CEOs believe, culture is formed not from what you say but from what you do. As MIT’s Ed Schein observes, “Culture is the residue of success: success in dealing with external challenges and success in internal advancement.” What behaviors are successful in the organization? What behaviors are rewarded? The very behaviors that people tell me they want to change are frequently the ones they are encouraging.”

4. Pointy-haired bosses lack an understanding of group/team dynamics. They like to say that their organization is “different,” and the research on group dynamics doesn’t apply. That’s like the people in early 2000 who said about the stock market that “This time, it’s different.” If you’re dealing with people, patterns repeat. It pays to recognize the patterns and understand how they are manifesting in your specific situation.

5. Pointy-haired bosses are often unable or unwilling to create a clear, compelling vision for their organization that gets everyone involved and excited. The best way to attract and retain top talent is to make people care about what the company is doing. That’s best done through painting a vivid picture of the outcome and creating clear goals.

6. Pointy-haired bosses motivate through short-term rewards and/or intimidation. They assume they know what their employees want, rather than taking the time to ask or to observe how people are responding. Short-term rewards and intimidation generate short-term spikes in performance, but build neither loyalty nor the desire to go the extra mile. Unfortunately, far too many people are willing to sacrifice the longer-term performance of their team for a short-term gain . In one company, the head of engineering “motivated” employees by inviting them to join him for happy hour in a bar on Friday nights. Had he asked, he would have realized that what the team wanted on Friday nights was to go home and have dinner with their families. Instead of motivating the team, he made them feel imposed upon.

Finally,

7. Pointy-haired bosses do not believe in asking for or accepting help. It’s not about asking for help, it’s about investing time and money to enable the company to accomplish its goals. The boss’s time is a resource; skilled leaders invest their time and the time and money of their business where that will produce the best return. Sometimes the best return is obtained by investing in an employee, sometimes by investing in a contractor.

Very few leaders deliberately engage in these Pointy-haired boss behaviors. Rather, their behaviors are the result of their own corporate success story. Therefore, for all that even one or two Pointy-haired boss behaviors can derail an organization, behaviors acknowledged to be counter-productive are very difficult to eradicate. Nevertheless, the ability of a manager or CEO to recognize these failings and invest in changing themselves is the true test of “great” leadership.

Published at FreudTV.

Just Lucky I Guess…

A great deal has already been said about the plane landing in the Hudson River last Thursday. What’s amazing to me is how many people have ascribed to luck the happy ending to what could have been a major disaster.

Was luck involved? Certainly!

It was lucky that the plane went down at a time of day when there was very little commercial shipping on the river. 

It was lucky that the ferries were out at the time the plane went down.

It was lucky that the particular pilot just happened to have the necessary and appropriate training to recognize what had happened and not panic. Instead, he remained calm and relied on his training to glide a passenger jet down to the river.

As the old saying goes, luck is when 10,000 hours of preparation meets a moment of opportunity. 

The lack of shipping and the presence of ferries wouldn’t have helped much if the pilot had lacked the skill to bring the plane down safely. It’s doubtful that he ever really believed that all that time he spent training, flying, and in a simulator would matter, other than for his own growth and development. What are the odds of a double-bird strike? What are the odds that just the right person was in the right place at the right time? Who could have known what would happen?

No one.

And this is the lesson for businesses. It’s easy to see what skills and knowledge are useful today. No one knows what skills or knowledge will prove useful tomorrow. Trends can change in a metaphorical heartbeat. When businesses cut training and development, or restrict the courses an employee can take (refusing to pay for a course unless a “clear” business need exists), that business is focusing entirely on the problems of today. It is not creating a workforce that is ready for the problems of tomorrow. Ready, in other words, to face unpredictable situations, unexpected problems, and unplanned for or unlikely circumstances.

On the other hand, those who have had the opportunity train and develop their skills, who have the freedom to explore their interests and learn the things that may or may not be obviously useful, are the most likely to come up with a good solution to an unexpected problem.

In the end, luck really does favor the prepared mind.

Killing the Goose

Despite claims to the contrary, lack of regulation does not cause people to commit crimes or engage in foolish actions. Nor is the presence of regulation a guarantee that people won’t violate the law or do something stupid: remember Long Term Capital Management for a perfect example of the latter. Just as no lock can keep out a thief who is determined to rob your house, regulation will not stop someone who is determined to cheat: remember Enron? How about Bernie Madoff? Regulation will, however, provide the grounds to prosecute those who do cheat. Attempting to prevent all forms of cheating merely overburdens the system.

So, if this is true, why do we have the toxic financial mess that has shaped the news for the past several months? After all, didn’t that come because of a lack of regulation on Wall Street? Well, not exactly. While better regulation might well have prevented things from getting as bad as they have, the lack of regulation is not the cause, in much the same way that the lack of a safety belt does not cause an accident; however, the use of safety belts reduces the harm caused by an accident.

What then is the cause? Sure, we’ve all heard the news about subprime loans and toxic mortgages. But those instruments had to come from somewhere. Wall Street tycoons? It’s easy to think of Wall Street as being dominated by wealthy investors who are making millions by selling bad loans, but even that’s not true. The vast majority of people on Wall Street are people just like everyone else: working men and women whose job it is to make money. Quite simply, just like any other employee in any other company, folks on Wall Street go to work each day and worry about paying the bills, taking care of their families, and doing their jobs.

Here’s the problem: what do you do when you are told to make money and the financial markets aren’t offering up opportunities? You can’t go to your manager or your investors and say, “Sorry.” That’s not what they want to hear, and if your goal in life is to keep your job, you are not likely to go there. Instead, you get creative. Just like any employee in any job, you look for an innovative solution to your problem.

Now the fact is most people are not evil. Most people will not knowingly and deliberately break the law. If there are clear regulations telling people not to go somewhere, they usually won’t go there. But if there are no regulations, or if the existing regulations are honored in the breach, that’s a different story. It’s not that people will set out to cause harm or do stupid things, it’s that focused on the short-term needs of solving their particular problems, they are easily blinded to the larger ramifications of their actions. Regulations, optimally, map out the territory: they define the box in which people should work. They prevent you from falling off a cliff and taking everyone else along with you.

So then is the cause of the problem people just doing their jobs and the financial meltdown all a tragic “oops?” No again. The problem is that the cause is not what we have but what we don’t have.

Each bull market, each economic boom, is carried forward by some form of leadership. In the 1950, it was the electronics boom. In the 1960s, it was companies like IBM and Polaroid. In the 1990s, Cisco, Intel, Microsoft, Amazon.com, Yahoo, etc. Technology leadership leads to a flowering of innovation, and a flowering of innovation leads to technology leadership.  Improvements in technology lead to greater productivity and a stronger economy.

What about the bull market that ran from 2003-2007? Volumes have already been written about how little “boom” this economic boom packed. Although we did see some technological innovation during this period, for example Google, Taser, the iPod, and GPS (a technology with its roots in government spending – we’ll come back to that), for most part what we had was a commodities boom. The problem with commodities is that they don’t fundamentally change the world in the ways that technology does. They don’t leave behind a world of greater productivity or improved communications.

Now, there are many reasons cited for the commodities bubble of the past few years: China, OPEC, developing countries, etc. Let me suggest a different, and more basic, reason: there wasn’t anything else. The small amount of innovative technology we saw during that period was hardly enough to drive an economy or a stock market. But people still needed to make money; investment had to go somewhere, and it went to commodities and mortgages.  What happened to the innovation?

Over the past hundred years, almost every economic boom and bull market had its roots in government spending on either innovation or infrastructure. Without providing an exhaustive list, a few highlights include: railroads at the start of the twentieth century: government investment in land and track; automobiles in the 1920s: government investment in transportation technology during WWI; electronics in the 1950s: government investment in radar and military technology in WWII combined with the development of the transistor; mainframe computers in the 1960s: investment in computer technology as part of the space program; biotech in the late 1980s: government research grants in life sciences; and, of course, the Internet, which started life as ARPANet: another government program.

Quite simply, the government investments that formed the seed of so many prior booms didn’t exist: the money wasn’t there. The argument is often, and loudly, made that low taxes are a boon to the economy because people get to keep more of what they earn and this stimulates growth. While there is a nugget of truth in this, in that if taxes are too high to being with, then lowering them will have the touted benefits. However, it is also a fact that the economy grew more under Bill Clinton than under George W. Bush. Was this despite the higher taxes during the Clinton presidency, or because of them? The traditional answer is the former; the truth, I believe, is closer to the latter.

If taxes are taken too low, then something has to give. Typically, what gets cut is basic research. Even the wars in Iraq and Afganistan are not producing remarkable new breakthroughs in technology; at least, if they are, those breakthroughs haven’t become commercial yet. For the most part, it seems as if these wars are being fought with refinements of existing technology or off-the-shelf equipment.

Some level of taxes, therefore, provides the fuel for investment in innovation and infrastructure that generates the next economic boom and bull market. This is a rather different perspective on taxes than what is traditionally said. When taxes are being funneled into the economy, they lead to growth. Taxes are an investment. Now, I don’t have exact numbers on this, but when taxes are reinvested, the money we pay in taxes is returned fivefold in our 401Ks. When taxes are cut to the bone and there is no money to invest in the future, the money we save is taken tenfold from our 401Ks. Now, again, the exact numbers are open to debate; however, I will venture to guess that most of us have lost far more in our 401Ks and IRA accounts this year than we gained in the previous two years, and far more than whatever we may have saved in taxes over that same time period.

Unfortunately, when the economy is booming, people tend to assume that it will never end: just look at any bull market in history for an example of that behavior! All markets are driven by fear and greed, and the latter dominates at the height of a boom. People start thinking about all the money they are paying in taxes; they start to see that as money being taken away, not as the price we have to pay to keep the boom going. Like fear, greed causes behavior that people would never imagine that they could possibly engage in… until they do.

Regulation provides the framework and the controls to keep the economic engine operating within tolerance. Just as a governor on an engine keeps it from redlining or stalling, regulations on economic behavior help to prevent the type of meltdown we are now experiencing. Like an engine, the governor causes a small amount of overhead; there is some loss of power. That loss is the price we pay to avoid catastrophic failure. However, regulations alone can’t do prevent all forms of failure; we need an ample supply of legitimate and economically safe ways of making money to prevent widespread fraud and abuse. On the other hand, we can’t entirely do without regulation because no matter how good things are, there will always be Enrons and WorldComs. Fear and greed both lead to illogical behavior; it’s vital to have the fences in place so that the economy won’t run off the cliff in a panic or fall victim to excessive greed.

Once we’ve prevented the economy from crashing, or at least made it less likely, we can get the engine running at capacity. Taxes feed innovation which feeds the economy: taxes are, in short, an investment in our own future. It’s time to recognize that investments are more than just something we put into a 401K and forget about. Regulation, taxes, and innovation: they are all connected. Mishandle one, you break the others.

The Best Customer Service?

It’s definitely the time of year for parties. The economy being what it is, it’s also the time of year for stories about employers. Some of the interactions are more amazing than others.

The names are withheld to protect the silly.

Someone, we’ll call him “Ivan Tadeov,”  was talking about how the firm he works for provides cell phones to several thousand of its employees. The firm, a large, well-known New England company, will be referred to as the “Einstein Company.” 

The Einstein Company provides these cell phones so that key employees, particularly in sales, can be available 24/7. However, in order to save money, they recently decided to restrict the use of these phones to business only. In other words, employees are now being expected to carry around two cell phones: one for business use and one for personal use. 

The net result: at least some employees are (gasp!) leaving their work phone at work. How unreasonable of them!

A psychologist in the room, we’ll call him William James Hall, asked why people need to be available 24/7. Ivan replied that this way customers can always reach “their” sales person.

Dr. Hall: “Even at 3am?”

Ivan: “Even at 3am.”

Dr. Hall: “Why?”

Ivan: “It makes the customer feel good to know that they can always reach their sales person.”

Dr. Hall: “Psychologists deal with suicidal patients  and we aren’t available 24/7.”

Ivan: “Well, I guess the tech industry just has better customer service.”

Let’s look at this for a moment. We’ll leave aside for the moment the concept that restricting the phone usage to business calls only will save money. Most phone plans are fixed price for a given number of minutes. So long as people aren’t exceeding those minutes, it shouldn’t be a problem. Of course, I suppose the Einstein Company could be paying by the minute. Then again, if a large corporation that is buying thousands of phones can’t cut a deal with the phone providers, they really do have a problem. But let’s move on.

The first problem is that the Einstein Company apparently forgot why they provided people with cell phones in the first place: accessibility. By making the phone convenient and free, they removed the barrier to getting people to keep them on all the time. Sure, most people carry cell phones all the time; but most spouses take a dim view of having dinner, or other activities, interrupted. Also, people will generally turn off their phones when attending a movie, concert, fancy dinner, and so forth. By providing employees with free phones, Einstein Company successfully created a sense of obligation on the part of the employees to keep those phones on all the time.

And then, in one fell swoop, they removed that sense of obligation and made carrying the phone inconvenient. What next? Fire anyone who doesn’t answer the phone? What about people who travel outside of the coverage area? 

Even more interesting, though, is the concept of what constitutes good customer service. 

I can accept the concept that it might make some CEO feel good to know that he can always reach a particular sales representative at any time, but is that really going to help him? Wouldn’t it make more sense to talk to someone wide-awake and coherent, able to analyze his problem and help generate a solution? I would think that a company of several thousand employees world over can maintain a night shift. 

Fact is, getting your doctor at 3am or your psychologist or your massage therapist, or, for that matter, your car mechanic, child’s teacher, or ski instructor just isn’t going to happen. You’ll get a doctor at 3am if it’s a genuine emergency, but it’ll be whomever is on duty that night. 

Do you really want people short on sleep making critical decisions or attempting to solve a complex problem? People talk all the time about staring at a problem for hours and then solving it in five minutes… after they’ve had a good night’s sleep. 

Of course, if the problem isn’t that complex, or the situation isn’t that critical, why the 3am call?

The real point here is whether or not this 24/7 availability is actually benefiting the client. Are they getting the best possible help this way? Or are they getting an illusion of responsiveness that will actually delay their getting what they need?

A final thought… the reason you won’t get the psychologist (or the massage therapist) at 3am is that they’ve learned something critical: “you can’t give what you don’t got.” In other words, if you don’t take care of yourself, you can’t be of much use to anyone else. 

Something to think about.