Category Archives: Accountability

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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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.

No Formal Structure Required?

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From the Ask Tom mailbag –

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:
If life were only that simple. Let’s break this down over the next couple of days.

You don’t need a formal structure.

You have a structure. Every company has a structure. Structure, or organizational structure, is simply the way we define working relationships between people. Org structure is a mental configuration, usually starting with the mind of the founder (or current CEO). But, everyone else in the organization also has a mental configuration of those working relationships as well.

We translate that mental configuration to a piece of paper, with boxes, circle and arrows and call it an organizational chart. It’s a two dimensional representation of that picture we have in our heads. Important in that org chart is the way we define two things –

  • Accountability
  • Authority

In the working relationship between two roles in the organization, what is the accountability and what is the authority (to make decisions or solve problems the way we would have them solved)?

So, on the face of the statement made by your leadership guru, I would disagree. It is important to define the working relationships and to put them on a piece of paper so we can discuss them. The purpose for the discussion is to ensure that what the founder, or CEO, thinks is pretty close to what everyone else thinks. Without that agreement, friction occurs in the form of personality conflicts or communication breakdowns.

Undergrowth

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“It’s strange,” Byron said. “A couple of years ago, we were on top of the world. We were the industry leader, now, with COVID and supply chain issues, things are tightening. You just never know.”

“So, this was not predictable?” I asked.

“No, our growth curves just showed, no turning back. I mean, it wasn’t hockey stick growth, but continued growth just the same. We just didn’t think we would ever have to pull in our horns.”

“So, Byron, what’s the purpose for a forest fire?”

“What do you mean? How can a forest fire have a purpose?”

“From an ecological sense?”

Byron thought for a minute. “I have heard that when a forest becomes choked with undergrowth, a fire can clear it out. Though it appears devastating, that’s what brings on new growth.”

“What could that tell us about business cycles?” I probed.
“Sometimes the market gets overgrown and has to be cleared out?” Byron tested.

“Yes, in fact, if you look at macro economic climates, you will see very distinct cycles. Occasionally, there has to be a clearing of the undergrowth. So, what if you looked at your own internal business cycles, within your own company. What do you now see?”

Byron pondered. “I see that, as we grew, some of the things we created weren’t good for the long term health of the company. They seemed like a good idea at the time, but, perhaps, we were just creating undergrowth.”

Spares?

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“Looking at the future,” Glen contended, “we are desperately looking for that new something that is going to help replace some our declining lines of business. We find something, we gear up for it, commit some people to the project, but so far, all of those projects have failed. We end up pulling the plug.”

“Who have you committed to these new projects?” I asked.

“Well, they are new projects, so we generally take those people that we can spare from our core project lines.”

“Are these your best and brightest people?”

“Well, no. Our best people are still running our core projects. But we can usually spare a couple of people from one of their teams.”

“So, you are trying to cobble together a launch team, in an untried project area, where unforeseen problems have to be detected and corrected, and you are doing this with spares?”

Like Herding Cats

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“So, how long could they keep that up?” I repeated. “As long as nothing changed, how long could your team simply repeat what they did the day before?”

“Well, forever,” Nathan exclaimed. “But things do change.”

“Bingo!” I said. “Things do change and that is what management is all about. Customers change, technology changes, raw materials change, processes change, even our people change. Management is all about change. Change is your guarantee of a never-ending employment opportunity as a manager.”

I smiled, but Nathan didn’t appreciate my jovial attitude.

“I think I am tuned in with that. So, why am I having so much trouble with my team. They don’t listen to anything I have to say.” Nathan’s head swirled as if his thoughts were making him dizzy and he was trying to stabilize.

“Here is the problem,” I replied, waiting until Nathan’s eyes were settled. “Everyone talks about managing change, as if it is the prime directive. We manage this and we manage that. Here is the clue. People don’t want to be managed. People want to be led. Oh, there is still plenty to manage, processes, systems and technology. But try to manage people and it will be a bit like herding cats.”