“He said that I was undermining his authority, that if I had anything to say to one of his team members, I needed to go through him and he would deliver the message. Otherwise, he said, Hands Off.” Sylvia was off balance. “I didn’t know what to say.”

“What did you say?” I asked.

“Well, I told him I was sorry, that I didn’t realize I had overstepped my bounds on his team and that I would try to be more considerate in the future.”

“And how did he respond?”

“He started talking about professionalism and that if I had worked where he used to work, that I would have been written up,” Sylvia replied.

“So, this place where he used to work, was this some sort of policy, that managers could only engage people one layer down in the organization?”

“Exactly. He said that if I had worked for a real company, I would have known that.”

“Muriel is a line worker, who reports to her supervisor, Vince, who reports to me. Muriel has been here for six months. I am certainly not her supervisor, but I am the Manager Once Removed for her team. Her team is a very important element of my system,” Sylvia explained.

“What’s the problem?” I asked.

“I was talking to Muriel, just asking how things are going, about how she has adjusted to working here. That’s when the fireworks started.”

Sylvia had my curiosity. “Tell me more,” I prompted.

“Her supervisor, Vince, remember that Vince reports to me. Vince walked by, interrupted us, began grilling me on our conversation. I tried to tactfully excuse Sylvia from the discussion, but she had a scared look on her face.”

“What did Vince say?”

“I pulled him into my office so we could talk in private. He said that I was undermining his authority, that if I had anything to say to one of his team members, I needed to go through him and he would deliver the message. Otherwise, he said, Hands Off.”

From the Ask Tom mailbag:

Question:
You describe Requisite Organization often using manufacturing examples. How can I apply this in my service business?

Response:
I use manufacturing examples, because most people, even outside of manufacturing can visualize the roles that people play in that environment. So, let’s look at the organizational structure in a service environment. This service environment might be carpet cleaning, pest control, plumbing, air conditioning.

Stratum I – (Time Span range – 1 day to 3 months) Technicians who perform the direct service to the customer. Their day to day Time Span task assignments typically range from one day to one week in the performance of a route. Your most effective technicians will have longer Time Span task assignments to cultivate a route of repeat customers and maintain those relationships.

Stratum II – (Time Span range – 3 months to 12 months) This layer in the organization would act as a coordinator, making sure that all customer assignments are appropriate routed to appropriate technicians. This role would also deal with the inevitable changes in technician schedules and customer requests. The tools of the coordinator would be schedules, checklists and meetings.

Stratum III – (Time Span range – 12 months to 24 months) This layer would be responsible for the design and implementation of operational systems in the organization. This would include the selection and implementation of computerized dispatching, development of equipment preventive maintenance systems, training systems (both initial and recurrent), identifying recurring problems in the technician delivery systems and making appropriate changes to the systems to prevent those problems or mitigate the damage from those occurrences.

Each of these roles becomes necessary as the organization grows in customer count and employee headcount. Simultaneously, depending on the business model, administrative systems (finance and record keeping) would be developed to support the technical operations.

Different business models will dictate the specifics of the organizational infrastructure, but these roles can always be calibrated using Time Span as a metric.

From the Ask Tom mailbag:

Question:
What’s the difference between a supervisor and a manager? And why does there have to be one Stratum difference?

Response:
Elliott Jaques is one of the few researchers who recognized the power and the necessity of the “first line manager” or the supervisor. Companies who give this role short shrift do so at their peril. For a complete discussion, I will yield to Herb Klopowitz, posting for the GO Society.

From the Ask Tom mailbag:

Question:
We used to be the big dog in the construction business. We had the technical specialties that others couldn’t deliver, but now our market is almost stopped. There is still work, but the projects are further apart and the bidding competition has sliced margins razor thin. We have had to let some people go, but we went from cutting fat, to cutting muscle and now we are in the bone.

How do we put structure around multiple disciplines when we have to choose which discipline to keep? We can’t ask a VP of Risk Management to manage a project. And to terminate the position only adds to the chaos. You cannot cut your way to prosperity. How do we stop the chaos and improve efficiency when we are still contracting.

Response:
You are not cutting your way to prosperity. You are cutting your way to survival. Residential construction may have found a bottom, though September new home sales dropped 3.6 percent. Commercial construction is still behind the curve with significant downside ahead. If you think your market is shrinking, buckle up.

Last year, I took my clients into a meeting and asked them to project 2009 revenues. This was after the brew-ha-ha with the first stimulus, so some reality had set in. Across the board, all revenue projections were downgraded. I had the numbers inscribed on a 3×5 card and set in front of each participant. Then, I asked them to take another 20 percent off and explain how they intended to adjust their overhead to stay in the black. There was pushback, never happen, they said.

As I visit my clients today, those cards are still posted around. We talk about that exercise.

Here is the process of survival.

• Eliminate (everything that is not necessary)
• Simplify (everything that is too complicated)
• Combine (things that go together so we can consolidate responsibilities)
• Outsource (whatever you can to reduce your fixed overhead related to a function, especially part time functions)
• Automate (the things that are left. Don’t automate things that should have been eliminated in the first step)

Credit to Timothy Ferris Four Hour Work Week

From the Ask Tom mailbag:

Question:
How does one shrink their company and know what services or actions or processes to drop? If we’ve been doing things a certain way for a few years and now, cannot continue, yet our accounts/clients/customers are used to things a certain way – how do wean them off those things?

Response:
Your customers may be used to things a certain way, and they will soon become used to things in a new way. They are going through the same market strains, no surprises.

But how do you make those decisions. Finished cutting the fat, we now cut the muscle. What are those goods and services that will no longer be provided? What are those goods and services that must be retained?

What are those goods and services that create the profit that allows your company to survive this period. One of my clients could not imagine how to cut overhead lower than $700,000 per month. Today, that overhead is $70,000 per month. What has remained is ONLY those goods and services that customers are willing to pay for, in sufficient volume to create a profitable business. Everything else that is not necessary, must go.

From the Ask Tom mailbag:

Question:
I agree that if you have a Stratum III manager covering a role for a missing Stratum II supervisor, it will only be a temporary fix, but what if we are truly in for a long dig out of this recession and the situation won’t change for a while?

Response:
Shades of the “new normal?”

Every minute the manager is being a supervisor is a minute spent away from systems work. The good news is, with lower volume, there will be lower pressure on your systems. Even still, you face the dilemma of a manager with less challenge.

So, take advantage of the situation on two fronts. Time Span can help break down Stratum II supervisory tasks into Stratum I contributions. This will be an opportunity to find your Stratum I team leaders who have the capability to grow into Stratum II supervisors over the next few years.

The other front is true Stratum III systems work. During this period, with less pressure on your systems, your manager, even while covering supervisory tasks, should take advantage of this time to find system efficiencies. Lean initiatives, identifying constraints, reviewing sequence, eliminating unnecessary elements.

But, there isn’t time in the day?

I remember something my father told me as a student in college. “Son, if you can’t handle a full course-load and a part time job, then maybe you don’t deserve to go to college.”

From the Ask Tom mailbag:

Question:
Using Elliott Jaques, Requisite Organization, I can see that we let go two important supervisors earlier this summer. We didn’t have a choice. Our business volume is down and it was necessary to lay them off. The managers in those departments now have daily and weekly responsibilities for production output. They now have to work directly with the production teams. As I look at things now, to me, this looks like the “new normal.” I don’t know if I will ever go back. In fact, we are looking at a couple of other supervisor positions if things don’t turn up.

Response:
Having a manager cover a supervisor role on a temporary basis may be necessary. Requisite Organization helps us understand the difference between the two roles and it helps us understand why this can only be a temporary solution.

We can all accommodate situations for a short period of time and in these times, it is necessary. Long term, however, your manager will become bored with those supervisor responsibilities, attention to detail will slip and you will have some dysfunction on your hands. And that will occur even at a lower volume level.

Your current situation may appear like the “new normal,” but things will change again. You need to discuss the temporary nature of these role assignments, and acknowledge the short Time Span nature of the goals. Also talk about the temporary discipline that will be necessary during this time, to monitor checklists, create schedules and conduct production meetings. That’s what supervisors do.

Also understand, that while your manager is playing the role of the supervisor, your systems are being neglected. If your systems are strong, you will survive this, but you still need to have periodic “system checks” to make sure they are still working.