From the Ask Tom mailbag –

Question:
You talk about how important it is to match a person’s capability with challenge in the role. You also say that as people grow and mature, so does their Time Span capability. What do you do with talented people when promotional opportunities are limited?

Response:
It’s a dilemma for every organization and why it is important for every company to stay “green and growing.” When personal opportunity stops, it is inevitable that you will lose that person. This can be traumatic, or it can be planned.

Look at any McDonald’s store. Inside you have a team of motley teenagers flipping burgers, sizzling fries and making chocolate shakes (my favorite). While I often joke that any employee who shows up for their shift five days in a row can be the manager, the long term potential for advancement is limited. For most companies, the prospect of short careers and high turnover would not be desirable, for McDonald’s, it’s their business model. Traumatic, or planned?

For McDonald’s, it’s planned, predictable and normal. For most kids behind the counter, it’s their first job and 1-2 years is all that’s expected. Any company with limited opportunity for advancement has to face that fact. Managers-Once-Removed (MORs) should be trained to look for the signs and be prepared for those coaching conversations. As a rule the company should gear its training programs to handle the normal course of turnover and gear it’s systems to accelerate proficiency in performance. That’s why fry baskets have timers and hamburgers are cooked on conveyor chains.

So, if the organization can stay green and growing, perhaps it can create those opportunities internally. But rarely for everyone and rarely forever.

I don’t talk much about Cross Functional relationships. It’s advanced stuff. But when it rears its ugly head, it’s a mess. Cross Functional relationships are, most often, defined in the organization by a dotted line. Dotted lines create ambiguity. Ambiguity kills accountability. Get rid of the dotted lines on your organization chart. They are killing you.

In Cross Functional relationships, two managers, most often in roles at the SAME Stratum, work together, but neither is the manager of the other. In this example, YOU are the manager, so it is your problem to define their working relationship. And you cannot define their working relationship with a dotted line.

Most organizations don’t know how to define this relationship, so it is often left undefined and that is where the trouble starts. It looks like a personality conflict or a breakdown in communication, but it is a structural problem because YOU did not properly define the relationship.

Elliott Jaques (Requisite Organization) specifically defines these Cross Functional relationships so we can get on with the work. This replaces your dotted lines.

Cross Functional Relationships

• Prescribing relationship
• Audit relationship
• Coordinating relationship
• Monitoring relationship
• Service getting relationship
• Advisory relationship
• Collateral relationship

On the face of it, defining these relationships, up front, resolves the dotted line, resolves the ambiguity and creates accountability.

Who can call who into a meeting?
Who can instruct who to do something?
In a disagreement, who decides?

Over the next few days, I will talk about each of these relationships and the clear accountability between the people in a Cross Functional relationship.
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Our next online program – Hiring Talent is scheduled to kick off August 1, 2011. If you would like to find out more about the program or pre-register, follow this link.

“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.