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.

In a Hurry to Hire

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“Here it is,” Kristen announced. “I couldn’t find the job description, but here is the job posting that we put on the internet.”

“So, you don’t know if you have a job description?” I asked.

“You know, we were in such a hurry to get this posted, I don’t think we actually wrote a job description.”

“So, how will you evaluate the candidates who respond?”

“That’s why I asked you to look at the profile assessment. Everything is there. That’s why I think we have a good candidate,” Kristen curtly replied.

“Oh, really,” I mused.

“Yes, based on this personality profile, I think this is someone I could really work with.”

Work Moves Sideways – Release and Pace

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“It happened again,” Peter grimaced. “We just got a large order with a tight deadline. We went to expedite the order and turns out there are projects stuck in the middle of our system.”

“What do you mean stuck?” I asked.

“I mean stuck,” Peter replied. “We run a just-in-time shop. We don’t order materials until we have a project, and some of those materials have lead times, so we have a bit of coordination to do. If we have a material with a three day lead time that we can’t schedule that project for tomorrow.”

“So, what’s the problem?”

“Supply chain. We know we will have the material in three days, so we release the project to the floor so when it’s time for those materials, the materials are there. Until they’re not. We found out that material is out of stock from our supplier with a three week lead time, not three days. But the project is already on the floor. Without the material, the project is stuck. And, it’s big and heavy, stuck in a staging area waiting on material. We can’t move around it, we can’t move over it. It’s stuck. Now, we have a highly profitable project, lots of gross margin that we can’t start because the other project is stuck on the floor, for the next three weeks.”

“How often does this happen?” I wanted to know.

“With supply chain the way it is, more and more,” Peter shook his head.

“What have you learned so far, about what to do and what not to do?”

“Well, for one thing, never release a project to production until we have all the materials in hand. That will keep things from getting stuck. Also, a couple of workstations are very quick and sometimes get ahead of themselves, pushing out too many assemblies, stacking them in the way. The guys in that work cell are so proud of their output, they don’t see they create a problem. I think we may have to idle that process during portions of the day so things don’t stack up. Weird that I would have to tell that team not to work so hard.”

Work Moves Sideways – Output Capacity

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Every system has a output capacity over time. If a machining system requires twenty minutes to complete a process, it can produce no more than 24 units in an eight hour shift, and that’s if nothing goes wrong. If there are variations in the process that require setup time, the capacity moves down from 24 for each twenty minutes of setup time. If a tool, in the machine, gets dull, that twenty minute process might increase to 23 minutes and reduce the output capacity.

Sales may have no similar constraint, and arrive back at the office with sales orders for 175 units promised by Friday. You do the math. Some of those sales orders will turn into back orders and some of those backorders might turn into canceled orders. What’s the problem?

The problem is that we have a discrepancy between the output capacity of sales and the output capacity of production. It may look like a communication breakdown or even a personality conflict between the sales manager and the production manager.

There are several levers you might use to optimize the output capacity of the two systems. You might need one less sales person. You might need to schedule promise dates. If the market is strong and sustainable, you might need two of those machines to increase the output capacity of production to 48 units per eight hour shift.

Work Moves Sideways – Outputs and Inputs

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“Sales is complaining again,” Marlene announced. “They say all the leads that marketing gives them suck. They say they don’t even want the leads from marketing. If that’s the case, then why do we need the marketing department. Sales says that marketing is just a waste of their time.”

“Interesting,” I replied. “Then, what is the purpose for marketing? If you were in sales, what would you say is the purpose for marketing?”

“That’s simple,” Marlene said. “Leads. Marketing creates the circumstances where we identify people who have the kind of problems that we solve.”

“And, isn’t that what our marketing department does?”

“Yes, and no. The marketing department uses a variety of campaigns, trade shows, press releases, giveaways and social media to create inquiries. They are very proud at the number of leads they deliver to the sales team.”

“Then why the complaints?” I asked.

“The sales team has a very specific customer profile they identify as the ideal customer. Most people who don’t fit the profile, don’t buy. Last week, at a trade show, marketing gave away an iPad in a drawing in exchange for a business card. They got sixty business cards and turned them in as leads. When sales followed up, they found sixty people who didn’t fit our ideal customer profile. Waste of their time.”

“So, the sales team is looking for a very specific input, that meets several criteria for your ideal customer. But, the output of your marketing department is a list of people who want a free iPad? Your outputs and inputs don’t match.”

“Exactly,” Marlene nodded.

“So, if that’s the problem, how are you going to fix it?”

Want to Scale?

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From the Ask Tom mailbag –

Question:
We want to scale. We know scaling starts with sales, but every time we push our sales volume, things get wobbly. We spend time on the things that are wobbly and realize our sales have dropped. How do we get to the next level?

Response:
While we can be descriptive about the stages a company goes through, understand that in real life, those stages have blurred edges. Transitioning from one stage to the next often happens in fits and starts as you described.

No Man’s Land
Too big to be small and too small to be big. As your sales volume increases, it strains all the other systems in the company. Each system has an output capacity, limits based on its constraints for throughput. And, while each individual system has throughput constraints, so does the entire enterprise.

Except in rare technology business models, most companies that move to the next level also see an increase in headcount. It simply takes more heads to manage all the systems and sub-systems required to satisfy the increase in sales volume.

The complexity of one project sets a pattern. Two simultaneous projects can often be managed the same way as the single project. Three simultaneous projects requires more resources, but it is not much more complex than two simultaneous projects. But, 50 simultaneous projects is another level of work. A project manager cannot punch through 50 simultaneous projects the same way as three.

As sales volume increases, production struggles. As production struggles, some sales promises get delayed, substituted or broken. Sales volume silently recedes until somebody notices.

There is no magic bullet short of understanding what is different. When the organization is small, we keep track of things in our heads. When the organization grows, we have to create a system. And a single serial system is critical to profitability, but still, does NOT mean you have all the ingredients to scale. One system begets another system and soon we have multiple systems and sub-systems. Many companies stay stuck here, some fix it.

Why is Culture Important?

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From the Ask Tom mailbag –

Question:
What is culture? Everyone talks about it, says how important it is. I know it is there, but it’s one of those warm and fuzzy concepts that’s like nailing jello to the wall.

Response:
Culture is that unwritten set of rules that governs our required behavior in the work that we do together. The culture cycle can be understood as a reinforcing system, recursive through four descriptive stages.

  • Beliefs and assumptions, the way we see the world.
  • Those beliefs and assumptions, typically unwritten, drive specific behaviors (for better or worse).
  • Driven behaviors, or cultural behaviors are tested by the consequences of reality.
  • Those behaviors that survive the test of consequences become our customs and rituals. Those customs and rituals reinforce our beliefs and assumptions, the way we see the world. The cycle begins again.

Every company (or social group) has a culture. That culture may be intentional or it just happens, but every company has one, and has the one they deserve. Culture is critical because it impacts the social structure, the way it operates and its impact on each individual. Culture determines the way you enter a group (company), how an individual is selected for the group. Induction includes the customs and rituals of orientation. Culture determines how roles are defined, assigned, formed, re-formed.

Culture determines any system of merit, performance management and review, individual development, career path, coaching and mentoring. Movement in the organization is impacted by systems of promotion based on accountability and authority. Compensation is designed, crafted and executed according to the way we see the world, the company and its business model in the competitive platform on which the company plays.

All of these elements are critical to a person’s understanding and self-perception. And most people in modern nation states exist inside a cultural system that impacts self-definition, not only the way a person sees the world (beliefs and assumptions), but the way they see themselves. Psychological healthy people are a product of psychologically healthy organizations.

Working Together

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From the Ask Tom mailbag:

Question:
You have talked about managers and systems. And you’ve described the most important system for a manager as the People System. What’s inside that system?

Response:
There are three primary accountabilities for any Manager.

  • First, is that the Manager is responsible for the output of the team. I don’t listen to excuses that some team member failed to perform, or some other team member fell short. I hold the Manager accountable for the output of the team.
  • The element that supports that output is the ability of the Manager to assemble the team together. This has a great deal to do with identifying and selecting talent.
  • Once assembled, the Manager must lead the team to work together, competently and with commitment in pursuit of the goal.

Failure in any part of this system falls to the Manager.

What’s Wrong With My Org Chart?

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“What’s wrong with my org chart?” Ron wanted to know.

“You tell me,” I said.  “An org chart is just a piece of paper with a picture of the way you think.”

“What do you mean?”

“Organizational structure is simply the way we define the working relationships between people.  Org structure is a mental construct, your mental picture of the way people ought to get on together at work.  You drew the picture.  What did you have in mind?  You tell me where the friction is?”

“Okay,” Ron started.  “Just this morning, the sales manager called a meeting with the marketing manager to talk about their expenses to date related to the budget each submitted at the end of last year.”

“And?”

“And, the marketing manager said it wasn’t the sales manager’s business to see how marketing dollars are spent.  She tactfully refused to attend the meeting.  She said the sales manager was NOT her manager and declined to go.”

“What was your response?” I asked.

“I had to admit, the marketing manager has a point.  The sales manager is not her manager.  When she took the position, we were very clear that it was her department.  She has very clear objectives and unless she is off track, we expect her to run things without interference.  But, still, declining to go to the meeting seemed a little insensitive.”

“So, when you think about their working relationship, how do you see it?  Clearly, neither is each other’s manager.” I said.

“Well, they seem to get along fine, at least until this meeting thing,” Ron shook his head.

“Let me be more specific in my question,” I replied.  “How do you see these two questions? –

  • In their working relationship, what is the accountability for each of them?
  • In their working relationship, what is their authority?

“Well, when you put it that way, marketing should coordinate with sales, and sales should coordinate with marketing.  We have significant trades shows we attend that eat up a lot of marketing budget.  Our trade show booth is generally staffed with people from the sales department.  So, the two departments need to coordinate together.  The company has a high vested interest in their coordination.”

“And, in their working relationship, what is their authority to make what decisions?”

“Each department has a department budget, submitted each year and approved by their manager?”

“Same manager, between the two of them?”

“Yes, our VP of business development is the manager of both,” Ron clarified.

“How clearly have you spelled out their accountability and authority in the work they do together?  You just explained it to me, how well have you explained it to them?”

“But, they are supposed to work together, shouldn’t they be able to figure it out?” Ron asked.

“Apparently not.  You think you understand their working relationship, in fact, on your org chart, you drew a dotted line.  So, the situation looks like insensitivity, when the friction is because you failed to define the accountability and the authority in that dotted line.  You put the dotted line there for a reason, but failed to define it.”

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Hard to Find Good People

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“I hear you finally extended an offer today for a Project Manager,” I said.

“Yes,” Colleen replied. “This has been one of the toughest searches ever. It was difficult to find anyone who wanted to apply. And, their first question was about working from home.”

“How did you make the decision, that this was the candidate to pick?”

“First, he actually agreed that he would work in the office. And, he seemed really enthusiastic. Said his last job was a dead end, that he was looking for more challenge. I liked his attitude.”

“And, his experience,” I pressed.

Colleen hesitated. “Well, he said he had been a project manager before, so we will see.”

“And, the length of projects he has under his belt?”

“Most of his projects were about three weeks in length. I know it’s not the same as our projects, which last nine or ten months, but he knows how to use Excel, so he should pick up our project management software pretty easily. I mean, project management is project management.”

“You didn’t see a mis-match on the length of projects?” I asked.

“Well, yes, I knew that might be a problem, but he was still the best candidate, and he didn’t ask to work from home.”

“So, tell me, Colleen, what could go wrong on a three week project, and what could go wrong on a ten month project?”

Good? Leadership

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From the Ask Tom mailbag-

Continued from yesterday –
Question:
I recently had a conversation with a leadership guru that stated that you don’t need formal structure in a small business, if you have good leadership. He indicated that you don’t need documentation, role descriptions, or even much for KPIs.

Response:
The problem with “good leadership” is that it becomes person dependent. We are juggling three balls in the air.

  • Leadership
  • Small Business
  • Good Leadership

Leadership
Leadership vested in a single individual, is person dependent. It may work in a small business because there aren’t that many people. A handful of people can follow a single individual, because if there is any doubt as to who has the authority to make a decision, the team can just ask the leader. That also means the leader must be available (proximity). But, if all decision making must go through the leader, as the company grows larger, what happens to the speed of decision making. Slows down, or stops.

Small Business
All decisions going through the leader is a hallmark of a small business and assures that the business will remain small. If all problems have to be solved by the leader, as the company grows larger, what happens to the speed of problem solving? Slows down, or stops.

Good Leadership
Good leadership requires competent management skills. Good management requires competent leadership skills. You can’t have one without the other (please, no discussion about leader vs. manager). Effective leadership, among other things requires clarity. Poor leaders will be uncertain in their decisions and communicate ambiguity to the team. Good leadership requires clarity. So, if your leadership guru says all you need is good leadership, I might agree, but only if that definition requires the formalization of things like role descriptions, documentation and KPIs. That’s what good leadership is, it’s clear.