Author Archives: Tom Foster

About Tom Foster

Tom Foster spends most of his time talking with managers and business owners. The conversations are about business lives and personal lives, goals, objectives and measuring performance. In short, transforming groups of people into teams working together. Sometimes we make great strides understanding this management stuff, other times it’s measured in very short inches. But in all of this conversation, there are things that we learn. This blog is that part of the conversation I can share. Often, the names are changed to protect the guilty, but this is real life inside of real companies.

Easier to Live With the Problem

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“Things are getting tight,” Brett explained. “This market is a lot different from a year ago.”

“Yes,” I replied.

“The phone doesn’t ring anymore. We only prepare two or three bids a week, now instead of two or three a day. So, it’s no wonder that our sales are down, backlog dwindling.”

“It’s quite a problem. I am glad you are happy with it.”

Brett shifted in his chair. “Happy, I’m not happy about it.”

I smiled. “Sure you are. You know, it doesn’t have to be this way.”

Brett shifted again. “What do you mean? I just told you that our market has changed. Getting sales is tougher.”

“What would you have to do to maintain your sales volume, even if the phone doesn’t ring?” I asked.

Brett looked puzzled. “Well, we would have to get out of the office, go out and look for new customers, but we are already doing some of that. It’s just hard to do.”

“So, you are happy to have this problem. It’s a lot easier to live with the problem of lagging sales than it is to make the necessary changes that create sales in spite of the market.” -TF

It’s Your Committee

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From the Ask Tom mailbag:

Question:

I need to design an SOP (Standard Operating Procedure) for procurement of goods and services and inventory management.

We have the Factory Manager and the Purchasing Manager who are more interested in establishing their supremacy.

We need to design a clear cut process that supports our systems.

Response:

The Factory Manager and the Purchasing Manager are only doing what you told them to do. The Factory Manager is to produce a high quality product as efficiently and profitably as possible. The Purchasing Manager is to purchase raw materials and services that meet the minimum specification at the lowest possible cost.

Sometimes those agendas are in conflict. This is actually normal.

However, it is your responsibility to integrate these two agendas, meet their essential requirements and orchestrate the solutions where there are differences.

  1. Convene a committee. Make it clear that it is YOUR committee and that while you are asking for input and analysis, YOU will make the final decisions as to what will be included or excluded from the SOP.
  2. The committee will contain three or five individuals. The Factory Manager, the Purchasing Manager and an additional Administrative Manager at their level. If the Factory Manager and the Purchasing Manager each need an assistant, then you have five on the committee.
  3. The Factory Manager and the Purchasing Manager will be tasked with separately creating a list of requirements and submitting them at a meeting (without you) to be conducted by the Administrative Manager. The Administrative Manager will be tasked with collecting those requirements, holding a discussion and writing the first draft of the SOP.
  4. You will review the first draft and submit your written comments back to the committee so the Administrative Manager can complete the final draft.
  5. You convene a meeting to congratulate the team for producing the SOP.
  6. Schedule a review meeting for 90 days to review how the SOP has worked and solicit input for additional changes. The SOP should be calendared for review every 6-12 months.

Keep us updated. -TF

Things Change

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Pre-registration for our online program Working Leadership Online will close this Friday, July 25. Pre-registration earns you a $50 coupon. We anticipate the program to be underway August 9.
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“I know we are missing a couple of Managers,” admitted Derrick. We intentionally allowed these positions to be open. We thought we could get by.”

“And now you are paying the price,” I responded.

“I guess we thought our systems were solid,” Derrick hopefully floated.

“Perhaps they were, but things change. Your systems have to be constantly monitored, constantly tweaked. Not only did you lose the predictability of your momentum, but it cost you backtracking to re-locate the source of the problem. That’s why you felt, at times, that you were playing Whack-a-mole.”

“So, what’s the next step?” asked Derrick.

“Two-fold. You have to keep a handle on the Whack-a-mole and you also need to find a new manager.” -TF
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July 25 Pre-registration closes ($50 coupon)
July 28 Standard Registration
August 9 Kickoff and Orientation

Not the Time to be a Superhero

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“You have two out of five manager positions in place on a daily basis, so when you have a problem, you think you are fixing it when you are NOT fixing it,” I offered.

“What do you mean?” Derrick asked.

“When you have a problem, you think you are fixing it. In fact, you have a supervisor in play to make sure the problem gets fixed.”

“So, the problem is fixed,” Derrick insisted.

“No, the problem is fixed, but the system is still broken. You are missing three of five Managers, so you are not paying proper attention to your systems.

“You see, Derrick, when you have a problem, everyone scrambles to fix the problem. Even experienced Managers put on their superhero cape and leap in front of their biggest customer to save the day.

“What they need to focus on,” I continued, “is not the problem. They need to focus on the system. Why didn’t the system prevent that problem? Or at least mitigate the damage from the problem? Their role is NOT to fix the problem, but to fix the system.” -TF

Two Out of Five

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We will be closing registration soon for our Online Leadership Program. For those who don’t get into this session, we will start a waiting list for next time.
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Derrick located a copy of the org chart. “A little out of date,” he remarked.

“It’s time stamped only three weeks ago,” I said.

“Yeah, well, it’s still out of date.”

“So, if I think you have a system problem, where should I look on the org chart?” I asked.

“All these people are the ones who are doing the work, and the supervisors make sure the work gets done. You have to be looking at our managers,” Derrick observed.

“Yes, and I see you have five manager positions. Those are the ones responsible for creating the systems inside your company.”

“That’s why it’s a little out of date. One manager got promoted to Vice President and we figured he could still cover his old position. This manager, here, got an offer from another company, and we decided that we might be able to do without for a while. And this manager, our controller, wanted to move to the northern part of the state. And with the internet, she does her work from home.”

“Let me get this straight. You have five manager positions, monitoring your systems, yet only two out of five actually show up for work here?” -TF

Predictability and System

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“I understand how we calculate profit, but what does that have to do with my organizational chart?” Derrick asked.

“You design a predictable profit into your price, but what is it that keeps your profit predictable when you actually deliver your product or service?” I replied.

Derrick was thinking. “It becomes predictable when we are able to do the same thing over and over, the same way, with the same methods, in the same amount of time, with the same amount of scrap.”

“And how do you make all that happen over and over?”

“Well, we have designed a system and we train everyone to work the system.”

“And so, if something is happening with the predictability of your profit, what’s wrong, where do you look?” I continued.

“Something has to be wrong with the system,” Derrick nodded.

“So, where do you look?” I insisted.

“We should try to find out what’s wrong with the system.”

“Remember, I said that your problem is seldom a what, almost always a who?”

Derrick grinned. “So, that’s why you want to look at the org chart.”

Systematic Profit

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We will be closing registrations for our online Leadership program next week. If you have an interest, please let us know.
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Derrick was still puzzled, but scrambled through some papers on his credenza. Finally, he produced an org chart, at least a version of it, with several scribbled notations.

“Will this do?” he asked.

I shook my head. “It’s a start.”

“So, what are you looking for?”

“Derrick, you offer a price to your customers for your services?”

“Well, they tell us what they want, or need, then we have to take it through our estimating department. It’s not that simple, takes a day or so to produce a price based on a set of specifications.”

“And in that estimate, have you marked up or included some specific amount that should be profit on the job? Either gross profit or net profit?”

“Of course. We want to build in 10 percent for overhead and 10 percent for profit in addition to the direct costs. At least that’s the theory,” he stated flatly, rolling his eyes.

“No, it’s not just theory. Your livelihood, your business success is tied to those numbers. This is not a game.” -TF

Question to think about. Where in your system, do you specifically determine how much profit (gross or net) should be made, either on a project or within a time frame?

It’s Not a What

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“The reason we called you in, is that we have a margin problem,” Derrick explained.

“How do you know?” I asked.

“Easy! Revenue is up and profit is down.”

“How do you think that happened?”

Derrick took a moment. “We’re a bit stymied. Every time we think we found the problem, and think we have it fixed, at the end of the month, the numbers tell the same story. Revenues up. Profit down.”

“I tell you what I would like to see. Could you get me a copy of your org chart?”

“Our org chart?” Derrick looked at me like I was from Mars. “I said we have a margin problem, why do you want to see our org chart?”

“Derrick, you have looked all over the place trying to discover what is wrong. Your problem is not a what. Your problem is a who.” -TF

The Misbehavior Conversation

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We have had great response to our online Leadership Program (target date – August 9, 2008). Only a few seats left. Get the details.
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My thanks to Larry and CSA for their responses to yesterday’s question about undermining authority.
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Here’s my take.

Undermining authority comes in many flavors. It could be naive behavior, thinking that it is helpful. It could be meddling behavior, a supervisor with nothing more interesting to do. It could be something to prove, disagreement with vision or disagreement with methods. It could be malicious, absolutely intentional as retribution for a past oversight from authority.

Your question leaves out detail, but your next move is the same no matter how unintentional or down-right mean and nasty the motive.

Your next move is a conversation and the sooner, the better. This is the Misbehavior Conversation.

If you want to fire the guy, you don’t need my help, so I assume you want the behavior to improve. You will need a quiet place. Here are the elements and the time frames for each step.

Observation. Describe specifically, without judgment, what you have observed. Be a reporter, no emotion, no opinion, just the facts. (10 seconds).

Impact. Describe the impact this is having on the team, the department, the company, the customer. (10 seconds).

Your contribution to the problem. (Yes, you have to assume some responsibility in this problem). As his manager, it is likely you were not clear when you created the roles and responsibilities. You likely have seen this behavior for some time, but you haven’t said anything, hoping that the behavior would go away. If you’ve kept quiet, then you have given permission. (10 seconds).

What’s at stake. There are many stakeholders who have some skin in this game. It is not just this supervisor and one or two people. Your customer is the biggest stakeholder. (10 seconds).

Consequences if no change. Do not forget this step. If there are no consequences, then I don’t know why you are having this conversation. (10 seconds).

Your wish to resolve. Tell this supervisor that your intention is for things to improve. (5 seconds).

Ask for a plan to correct the behavior. (5 seconds). Don’t fall for the trap of telling this supervisor what must be done. The plan for improvement must come from his lips. So shut up and listen. (10 minutes).

Agreement on follow-up. This is an appointment to check on progress. Get your calendar and set a specific time, within seven days of this conversation.

This is not a long conversation. You will notice that you only get to talk for one minute compared to ten minutes for the other person. Note the solution to the problem must come from the other person. The most important skill is listening and asking questions. -TF

Undermining Authority

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From the Ask Tom mailbag:

Question:
What is the best way to explain undermining authority to a supervisor who is doing it to another supervisor? Also, can you give me examples I can use?

Response:
Before I offer direct advice (yes, I have some specific thoughts), I would like to extend the opportunity for feedback from fellow readers. If you have some advice, please post a comment. -TF