Tuesday, June 26, 2012

Shoot the Innocent

Today I heard some news about a company that I have been acquainted with for quite a few years; several years ago a much larger company bought them.  Everything was going well, or so it seems, but, as with many companies these days, the big company was struggling in these tough times.  Last week the big company, which has a history of never really merging with anyone, just buying them and keeping the smaller companies at arms length, sent some folks around to the smaller company and fired a bunch of people.  The newly unemployed were given no real notice and in some cases were told to be out of the office ‘by 2 pm.’  (It was then 9 am.)  

One thought before I comment on this behavior and try to draw a leadership lesson from it; the large company routinely complained, as do most large companies, that mergers are difficult.  They also complained about rising overhead costs.  It doesn’t take a math wiz to figure out the problem: the rising overhead costs are because they kept buying up companies but not really merging them into the parent company.  The benefit of mergers is that 1) there is some sort of synergy between what the two organizations do AND 2) there is a natural efficiency following the merger because support functions - administration, accounting, legal, human resources, etc., can be merged and economies of scale will over time reduce overhead costs.

But, if the parent organization refuses to actually merge the companies – as is often the case with many large companies (defense contractors are notable case studies) – then those economies never take place.  Add to that the growing sense of ‘us versus them’ that will be found in both the parent company and the acquired company, and the impossibility of maximizing synergy if there is not a ‘team mentality,’ and you easily can see why mergers are so difficult.  As my father would say: ‘of course it’s hard if your doing it wrong.’

As for the leadership lessons to be drawn from the above: begin with the simple rule that it never pays to make enemies for no reason.  There are now a fair number of folks (those fired, and all their friends) who will spread the word that that big company is run by jerks and, if given half a chance will seek to emphasize that point.  Sometimes bad publicity can’t be avoided.  But generating it on your own through your own executive actions is never a good idea.  It may make for good drama on a soap opera, but being rude to people, and firing them without warning or regard to their lives or their own situation is never a wise thing in real life.  Surely this decision was not made the day before.  I assume it was made in light of quarterly forecasts and some projections of future contracts (or lack thereof).  Common decency would demand that people be treated fairly and given some ‘heads-up.’  These folks weren’t.  The Golden Rule applies: treat folks the way you would wish you (or your wife or brother or son or daughter, etc.) might be treated.

Have a plan.  When most acquisitions take place the buyer usually has one view of the future.  That view rarely includes your business sector ‘tanking.’  But it should.  Good planning always asks the question: “What do we do if Plan ‘A’ fails to achieve its goals? And “What happens if our assumptions are incorrect?” Most planning (corporate and governmental (the military is for the most part an exception)) fails to ask these kinds of questions.  That’s because most planning is awful – particularly among large corporations the executives suffer from severe hubris and firmly believe that they really don’t need to engage in disciplined planning. (It is perhaps comforting to know that this is a worldwide problem – I believe that the large numbers of MBAs and Lawyers on most boards is a key factor.)  If you want to try to fix it you need a small but dedicated planning staff – and you need to trust them.

Finally, Communicate with your people.  In the case I mention above, one of the factors may have been (I’m surmising) that there was a fair amount of paranoia on the part of the big company that the people in the small division would steal data (customers) if given too long a warning period.  Of course, if that really is the case they are going to have the customer’s names anyway, but by giving people no notice they effectively eradicated any sense of loyalty that might have endured once their former employees walked out the door.  On the other hand, if they had told people what was happening, the cash flow problems or contract problems they had, etc., perhaps someone might have found a way to help offset some of the issues.  Trusting your people is essential if you want them to work hard for you.  And not trusting them will eventually guarantee that they won’t work for you at all.

Good companies are led by good leaders.  Some bad companies are led by good leaders, but they usually turn them into good companies.  Bad leaders can turn a good company into a bad one – quickly.  But if you practice simple, sound, quality leadership and you will find yourself on the right track.  Just remember the Golden Rule.

Saturday, June 9, 2012


I read another ‘leadership’ tract the other day and the author went on and on about the need to ‘empower’ your people.  Unfortunately, the author had no clue what that really meant.

The dictionary says that ‘to empower’ means ‘to authorize’ or ‘to give and individual or organization the legal authority to do [something].’  Unfortunately, many leadership gurus, and many purported ‘leaders,’ believe that empowering stops right there.  Tell someone they are ‘empowered’ and then get out of the way.

In fact, you will hear some ‘tough-guy’ leaders who will opine that it’s a good way to identify ‘the real leaders,’ that once ‘empowered’ the real leaders will ‘grab hold of the reins and really take charge.’  (Fill in you favorite leadership metaphor.)

The problem is it’s wrong.

Good leadership is a heck of a lot more than telling someone he has the authority to do something.  Good leaders make sure their people have the tools to accomplish the task.  And what are those tools?

Do they have the right training?  If you tell someone to balance the books, particularly in a corporate environment, they probably need some accounting expertise.  They may also need some legal certification.  If the task at hand concerns making aircraft, you might want to ensure they have a certain level of experience in precision manufacturing.  If the task at hand is building a skyscraper, you might want to make certain they have the right equipment.  Or the money to buy or rent the right equipment and the right people.  Are they properly funded?  Can they be reasonably expected to accomplish everything assigned with the people, equipment, funds, facilities, etc., you provided?

And what is it that the ‘empowered’ are supposed to accomplish?  Have you been clear in communicating your goals?  And are you clear in what is really expected?  Have you delegated authority or are you trying to shift blame for something you believe might fail?  Are you trying to pass off responsibility?  Good leaders delegate, they grant their subordinates as much authority as they need; but good leaders never try to delegate responsibility.

When it comes time to assign a task to someone, it is very helpful to keep a short checklist available:

The Goal – What it is that you expect him to accomplish – Real ‘Metrics’
The Timeline – No kidding, when do you expect him to finish
The Assets Assigned – People, Equipment, Facilities, Support Offices, Additional Funds, Intellectual Property, etc.
When the Assets become available – hard dates, that others in the organization have been told
The Plan has been communicated to the rest of the organization – The major failing of any effort to ‘empower’ one of your people – you forget to let others ‘in on it.’
Assurance that you are delegating authority, but not responsibility, that you will support him and work to his success, that you, in the language of the day, ‘have his back.’

If you tell someone to build a wall but give him no money, no help, no shovels and no bricks or stones then I have to ask what you are really doing. You may be engaged in an experiment to see if the individual is imaginative enough to figure out a way to make the wall with no help and no assets.  But that is not about building a wall, it is about testing for creativity.  The real goal is not the wall, the real goal is the ‘score’ on the test.

But empowering one of your people so that they may accomplish some task – big or small – means that you also commit yourself to ensuring that they have the tools to succeed.  Failure to do so is your failure, not theirs.