Objective or Subjective?

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“Our company has adopted something called Management by Objectives. MBO they call it,” Sara reported.

“And why did your company adopt that strategy?” I asked.

“There were some who said that our appraisal system was too subjective, that it needed to be measurable. So everyone had to sit down and make up some objectives.”

“And why do you think your company made that decision?”

“Some of the managers were uncomfortable making judgments about a team member’s performance. There were squabbles, disagreements and the whole thing turned into a big distraction.”

“And how is MBO working out for you?”

“Well, it has just as many downsides as the old system,” Sara replied. “Some people get so focused on their own objectives, they forget about the other people they work with. Cooperation gets stopped dead in its tracks. And sometimes the objectives are not really in the control of the team member. We seem to spend more time talking about how unfair the system is than we do about improving individual effectiveness.”

You Decide

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“You decide,” I said. “You decide what you want to improve on.”

The class had just completed a survey, looking at strengths and weaknesses.

“You decide, if you would like to focus on and improve an area of weakness. Or you may decide to focus on and improve an area of strength.

“Correcting a weakness only creates a mediocre performance. Building on a strength creates mastery. You decide what you want to improve upon.”

Negative Feedback

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“I don’t think it’s me,” Marion repeated.

“You are angry at the person who gave you the negative feedback and you would like to ignore the feedback,” I confirmed.

“Besides, even it were true about me, I can’t change, that’s just not me. I couldn’t do it. Out of the question. I don’t see how anyone could do that.”

I looked at Marion. Without a word. Silence.

“But if you could change, what would you do first?” I asked.

Best Perspective of the Candidate

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Byron was a bit unsettled. “Do you mean that I should read those resumes? I’m not the hiring manager,” he stated flatly.

“No, and we already established that the hiring manager is too close to the position, is threatened by the hire and does not have enough perspective to see the correct talent pool. That is why it is your role.”

“But, I am not the hiring manager,” he continued to protest.

“No, you are the Manager Once Removed. Are you threatened by this hire?” I asked.

“Well, no, this position is two levels down from me.”

“Exactly, and do you have better perspective on what is really required for success in this position?”

Byron nodded. “But reading resumes. I don’t have time to read resumes and this is not my hire.”

“I am not asking you to make the hire. That is still Ron’s job. Your role in the hiring process, as the Manager Once Removed, is to create the Talent Pool. You create the Talent Pool of qualified candidates. Ron makes the hire from the Pool.”

Early Decisions in Hiring

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Ron settled in a chair across from Byron, his manager. We exchanged appropriate pleasantries and set the context for the conversation. Byron finally drilled in.

“Ron, you know I don’t think these three candidates are qualified for the position,” Byron started. “But you said these were the only ones who fit our budget.”

“Yep, I know things are tight around here,” Ron replied. “I figured I could save the company some money, bring in one of these people. I could show them the ropes, take them in under my wing and everything would be fine.”

“Were there other candidates that were too expensive for us?” Byron asked.

“Sure, we had seven other resumes, but they were no bargain. We would have to pay full boat for any of them.”

We thanked Ron for his time and he left Byron and I to debrief.

“Byron, I don’t know, but my guess is that there are seven resumes of candidates that we need to look at. So, tell me, why do you think Ron is having difficulty with this hire, looking at the wrong talent pool of people?”

Byron was troubled, but the fog was lifting. “I think Ron was threatened by those resumes that he described as too expensive. You are right. Some of the salary requirements are close to what Ron is making. And I don’t think Ron has enough perspective to truly understand what will be required in this supervisor position.”

“Byron, let me recap. This whole process started at the bottom with Irene, the receptionist, through another supervisor and finally to the hiring manager. None are making good decisions in this selection process.

“So, who should be driving this? Who is left? Who understands what is truly required and is not threatened by this hire?”

“Do you mean, me?” Byron asked.

Focused

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“You are right,” Byron continued. “The things that hurt us now, are decisions we made a couple of years ago when times were good. It seemed like a good idea at the time. We didn’t think very hard about some of our bone-headed moves.”

“And, now?” I asked.

“And, now we have to get lean. Maybe really lean. It may get worse. We have to be able to take a couple more punches and still be able to maneuver, be able to take advantage of opportunities, but it’s difficult.”

“What is so difficult about it?”

“Well, now, everything has to be focused on a result. If it doesn’t produce a result, it has to go. It’s not pleasant. In many cases, we have to learn to say NO! In the past, we tried to figure out what TO do. Now we have to make decisions on what NOT to do.”

Best of Times

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“I’m not sure what happened,” Byron explained. “Our company was voted the number one employer two years ago. We have the best employee benefits, we have the best equipment, we have roomy workspaces, our sales people get trip incentives. All of a sudden, to stay profitable, we have to lay some people off. The mood around here turned south very quickly.”

“Times have been good?” I asked.

“Up ’till now.”

“What happened?”

“Sales have been off. Suddenly all these great things about our company are costing us out of business.”

“When were the decisions made that put you upside-down on your cost structure?”

Byron had to think back. “Three or four years ago, I guess. Those were the best of times.”

“It’s in the Best of Times that we make our biggest mistakes.  A little success can create a whole lot of overhead.”**

—
**Red Scott’s Cardinals

An Idle Machine

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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?”

Make Assets Productive

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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 is the Money?

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“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.”