Luis was not having fun. He remembered how difficult it was for the company to make payments on the third machine.
“Management is about making resources productive. This third machine is not productive. The floor space it sits on is not productive,” I said.
“But we paid a lot of money for that machine, and our company cannot get out of its lease for this space. And what are we going to do if we need the machine?” Luis objected.
“Anyone can manage an idle machine. What are you going to do?”
Luis began an aggressive calling plan to get his money collected, put holds on new orders for customers who were past due and began requiring deposits on large orders. Nothing happened at first. Luis stayed off kilter for the better part of two weeks. Slowly, he calmed. Payments began to come in, not enough to have a party, but enough to breathe.
“Management is about making resources productive,” I repeated. The first thing to manage is capital. Next are your physical assets.
“Our building, our equipment?” Luis confirmed.
“The first decision is to decide what is necessary. You haven’t thought about that since this company was a start up. Back then, you thought about it a lot. You outsourced some production until you could afford your own machine. Then you bought a second machine. You moved into a new building so you could bring in a third machine.
“Now, you can’t keep the second machine busy. You tell me, what is necessary?”
“Where’s the money?” I asked.
Luis looked at me and squinted. “What do you mean, where’s the money?”
“Look, you asked me to come here and help you straighten out this mess. Where’s the money?” I repeated.
“That’s the problem, there isn’t any money,” Luis replied.
“Yes, there is, there always is. Luis, the first resource a manager has to manage is capital. But before you can manage it, you have to find out where it is. Sometimes you think you know where it should be, but if that’s not where it is, you can’t manage it.
Sometimes your capital is tied up in a machine. Sometimes your capital is tied up in unbilled work in process. Sometimes your capital is tied up in Accounts Receivable. Once you find out where your capital is, only then can you manage it. So, where’s the money?”
A raw nerve had been struck. Luis shuffled some papers on his desk. “It’s here,” he said, pointing to the third column in his AR aging report. “It’s over 60.”
“Well, now we know where it is, we can manage it.”
“Goals. Who needs ’em?” asked Yolanda. “Every year, I set goals. It’s kind of like my New Year’s Resolutions. By the end of February, I can’t even remember what they were.”
“Oh? So, tell me about your resolution for this year.” Yolanda looked a bit uncomfortable.
“Well, I haven’t exactly worked it out, yet. Until I am sure, I would rather not go blabbing it around.”
“Have you thought, perhaps, that’s why your New Year’s resolution never works?”
“What do you mean?”
“Yolanda, your New Year’s resolution never works, because you never committed to it. You never clearly defined it. Did you ever write it down?” Yolanda was silent. “Here is the management skill. Goals work just like New Year’s resolutions. If you really want to make a change, write it down. Then say it to yourself out loud. Then say it out loud in front of a group of people. And if you really want to make it stick, give that group permission to hold you accountable for the goal. Take that written goal and post it somewhere public, where you see it every day, where others see it every day. You can start with a 3×5 card taped to your mirror.”
What is your resolution this year? What major thing do you want to achieve? Have you written it down? Have you shared it with your team? I am curious. What do you do to keep your goals visible throughout the year?
“The difference in the two jobs was night and day,” Caitland explained. “The higher paying job had a better title. Managing Director, I think. The other company had lower pay, a lower title, but the work was more interesting, more challenging, in the end, more satisfying.”
“What was it about the work that made it more satisfying?” I asked.
“The Managing Director job was just that. I managed and I directed. Actually, it was a glorified supervisor position. Very frustrating. I was supposed to make sure the work got done, but I felt like I was putting my thumb in the dike. I could easily see better ways to achieve the goals, systems that we could create to more effectively solve the same problems over and over. But my boss was resistant. He said that creating those systems would be a waste of time, there were always too many exceptions.”
“And why was the other position more satisfying?” I repeated.
“A lot less stress, even though we produced more than double the output of the other company. It’s funny, I never fixed a problem while I was there. I only focused on systems. I would fix the system and the system would fix ten problems. We seldom worked overtime, but were much more productive.”
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As we wind into this holiday season, Management Blog is winding down its publishing year. We will see you in January 2024. Until then, have a Merry Christmas. Enjoy the time with family and friends. See you soon. -Tom
“As a manager, if all you can offer is money, what kind of issues do you constantly face? More importantly, if we are trying to get some work done around here, how can we bring out the best in people?” I repeated.
Caitland hesitated. “I guess my experience is from my first few jobs. Money was the only reason I worked. It’s how I put myself through school. The only reason I worked was for the money. And if I got a better offer, more money, for another job, I jumped on it.”
“Did you ever take a job, based on compensation, that you wished you hadn’t taken? Even though the money was better than your previous job?” I pressed.
She nodded her head. “Yes, but, in my mind, I told myself they were paying for a lousy job and that’s why the money was better. Funny. They were paying for a lousy job.”
“And have you ever taken a job that was so interesting that the money didn’t matter?”
Again, Caitland nodded. “Yes, don’t tell anyone, but this job, I would work for free.”
“So, tell me, what’s the difference in the work?”
“But, you can’t make your living if you only work for free,” Caitland pushed back.
“No, we do have to survive. We need food and shelter. And we will work to make sure we have those things in good supply,” I replied. “But if that is the only meaning someone gets out of their job, what do you think happens?”
“That’s easy. If they find another job that pays ten cents an hour more, they’re gone. Or worse yet, they come back and try to negotiate for more money every other week.”
“So, as a manager, if all you can offer is money, what kind of issues do you constantly face? More importantly, if we are trying to get some work done around here, how can we bring out the best in people?”
“Thinking about your team, what is it that you think people really want out of their job?” I asked.
Caitland was looking for the trick in the question, but her answer jumped out, shaking her head, “It’s money. Just ask them. Especially today.”
“So, you think money is the prime motivator?” I followed.
“You mean, it’s not,” Caitland baited.
I smiled. “Have you ever heard of Encyclopedia Britannica?”
Caitland nodded. “My parents owned a set. When I was a kid, we used to copy out of it, for our homework assignments. We had a special heavy duty bookshelf. Those books weighed a lot.”
“And what happened to that company?”
“I’m not sure. When CDs came out, there was a company called Encarta. A whole encyclopedia on a CD.”
“And what happened to that company?”
Caitland stopped. “I’m guessing they are out of business, too. Now, I just use Wikipedia.”
“And how much money are the writer’s paid to work for Wikipedia?”
Caitland smiled.
“Caitland, you have been a manager for a while in this company. I know you’ve received awards, plaques and certificates for things you have done. But I only see a couple up on your wall,” I observed.
“You’re right,” she said, leaning over to open a long file drawer. “Look at these. I actually think it’s company policy to only give out awards that fit in file drawers.”
“But, aren’t you proud of the recognition?”
“You, know, it’s nice. But after a while, the plaques are all the same.”
“How so?” I asked.
“You want to know what really makes me feel a part of the team, I mean the management team. Every Wednesday, the three top executives in the company go to lunch. Two months ago, they asked me to go with them. In that lunch, they shared some exciting news about a new product launch. It made me feel an important part of what’s going on around here. I would trade all of my plaques for more of those conversations.”
“That’s it?” Rose looked puzzled. “But, I work with a bunch of engineers. I am their manager. The engineering team looks to me for advice, guidance and direction. Given a problem, they look to me for the solution. You are suggesting that I just ask questions?”
“Rose, how did you land this job as a manager of a bunch of engineers? Was it because you are so good at solving engineering problems?” I asked.
“No, I am not even an engineer, though I think I have an aptitude for it, that’s not my area of expertise.”
“Then, how did you land this job as manager of engineering?”
Rose stopped to think. “This is the third department assigned to me in as many years. The company has a trouble spot. They make me the manager. I come in and get things organized, figure out the team, who is strong, who the ringleaders are, who needs to go. For about a year, I work with the strongest team members and pick one to take my place.”
“So what’s your plan here?” I wanted to know.
“Same thing,” Rose nodded. “Get things organized, figure out the team. Pick the strongest one to replace me. It will take about a year. I have already been told not to get too comfortable, the company is already working on my next assignment.”