Tag Archives: management

Cash Ain’t Cash Unless It’s Cash

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“Where’s the money?” I asked.

Luis squinted. “What do you mean, where’s the money?”

“Look, you asked me to help you straighten out this mess. Where’s the money?” I repeated.

“We have a cash-flow problem, there isn’t any money,” Luis replied.

“Yes, there is a cash-flow problem, there is always a cash-flow problem. Luis, the first resource a manager has to manage is cash. 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 cash is tied up in a machine. Sometimes your cash is tied up in unbilled work-in-process. Sometimes your cash is tied up in Accounts Receivable. Once you find out where your cash is, only then can you manage it. So, where’s the money?”

A raw nerve was struck. Luis shuffled some papers on his desk. “It’s here,” he said, pointing to the third column in his A/R aging report. “It’s over 60.”

“Well, now we know where it is, we can manage it.”
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Registration for our online program Hiring Talent – 2016 is CLOSED out. No worries. We will offer another class the first part of March.
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Today’s post was inspired by a quote from the late Red Scott, “Cash ain’t cash unless it’s cash.”

Somewhere in the System

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“I know I am accountable for the output of my team, but we still have a ten percent reject rate. If my team would just try harder, the reject rate would come down,” Byron protested.

“Really? Just try harder means what?” I asked. “You told me your team was doing their best. Are you telling me, now, that they are not doing their best?”

“They seem a little down, discouraged. I know I have been on them. We need a 100 units of production each day and with a ten percent failure rate, that means we have to run 115, on average, to get our 100. If they would just try harder, they would get there.”

“I am going to make an assumption,” I said. “I am going to assume that your team shows up every day to do their best. If your team is doing their best, then there is something else in your system that is causing the failure rate. You are a smart guy. Get a big white board, draw out your system, get your team together and find it.”

The Enterprise as a Whole

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From the Ask Tom mailbag –

“Different functions in a business do different things, and they each have their own set of cultures, rules and ways to be measured. We need to respect this, and stop imagining that how it works for us is how it should work for everyone else. Each function needs to be managed in the best way to suit its purpose, and the business needs all of its functions to work well and respect each other and their methods and measures if the enterprise as a whole is to be successful.” Comment posted to Responsibility, Accountability and Authority.

Response:
This comment began by railing against management as command and control, ended up with a brilliant description of what management IS. To understand management, as a subject to be studied and understood, we have to step back. We complain that how management works one way, does not work in another way. We get wrapped around the axle.

In the differences, there are universals. Here is what I pulled out of the comment posted above.

  • Business is a collection of different functions. Each function will have its own set of cultures, rules and measurement systems. And those systems will have different characteristics.
  • Each function must have a purpose. All the discussion about goals and objectives ultimately arrive back at purpose.
  • Each function must work together, must be optimized and integrated for total organizational throughput. Out of balance systems create internal feasts and famine, starving and bloating. Some optimized systems remain appropriately idle waiting for constrained functions to catch up.
  • Management is about the whole organization, separate functions coordinated together for the benefit of the whole system. This coordination depends on discretionary judgement, making decisions and solving problems, in roles we call management.

As the organization grows more complex, it needs more management.

Operations and Command and Control

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“If only life and business were that simplistic,” Scott said. “If you work in operations then your job is about commanding and controlling the time, labor and technical resources towards an agreed output. For the jobs in operations, your vision makes sense. But, I think it is only a functional perspective, not a universal one.”

“You seem to think that operations is all about command and control,” I replied. “It sounds a bit mechanical. Tell me more.”

“Operations is operations. Pretty cut and dried. We have defined processes inside efficient systems. Line up the people, line up the machines, line up the materials. Pop, pop, pop. Predictable output. Yes, it is a bit cut and dried.”

“If that is all there is to it, then why don’t we have robots do all our work?” I probed.

“In some cases, we do,” Scott raised his eyebrows in a subtle challenge.

“Yet, even in the midst of defined processes and efficient systems, even in the midst of robotic welding machines, we still have people engaged in operational work. And in that work, as defined as it is, aren’t there still problems that have to be solved and decisions that have to be made?”

“Well, yes,” he nodded.

“So, inside a process you describe as command and control, there is still discretionary decision making?”

Scott continued to nod.

“So, it’s not all neat and pretty,” I said. “Not all tied with a bow. In fact, some days, the work gets downright messy. Even mature processes are subject to variations in material specs, worn machine parts, delays in pace. Command and control short-changes the discretionary judgement required to effectively operate a well-defined system.”

Inspired by a comment posted to Responsibility, Accountability and Authority

Management is a Contact Sport

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From the Ask Tom mailbag:

Question:
I have a manager who wants to work from home. Have you ever seen any statistics about productivity of people working from home? Does it work? Or is something lost?

Response:
The first two words from the mouth of any good consultant are, “It depends.”

Working from home works for some people, for some it doesn’t. The problem with most studies, designed or cited, is they are biased to provide a great article in a magazine about alternative methods of productivity.

One of the most powerful time management tools has to do with getting uninterrupted time for work that requires focus. Working from home can provide that time.

But what is the work of a manager? A manager is that person in the organization held accountable for the output of the team. The most important work of a manager is assembling the team, assigning the roles (and tasks in those roles), coaching behaviors, setting the context for the team and measuring output. Management is a contact sport.

Steve Jobs, designing his building, placed all the restrooms in the front part of the building, so that at least for some portion of the day, people were forced to intermingle. He knew that collaboration was paramount, people being in the same space, talking with each other, out of their cubicles. Building cooperation, team culture and team spirit is difficult to do from home. This is not a rah-rah concept. Team spirit is not the goal, but team spirit is required to gain collaboration, innovation, adaptation, awareness.

Individual output of anything truly great, is a myth. The real work of a manager is coordinating all that individual direct output into organizational throughput. Management is a contact sport. Tough to do from home.

How Does That Happen?

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“So, what’s the solution?” Arnie was puzzled. “I pressed hard, we made our numbers. I lost seven good people in three months. Five technicians and two direct reports.”

“Let’s start with that,” I said.

“Start with what?” Arnie asked.

“Direct reports. Most managers think they are managers so people can report to them. That is not the purpose of a manager. Your role, as a manager, is to bring value to the problem solving and decision making of your team members.”

Arnie pushed his glasses up. “Okay. I’ll bite. I even believe you. But how?”

“Remember, we talked about a shift? A shift in management behavior to get a different result?”

Arnie nodded, “Yes, a shift.”

“Here’s the shift. Do you bring value to a person’s problem solving and decision making by telling them what to do?”

Arnie looked crossways at me.

“Look,” I said. “I come in here to talk with you, as a manager. I really don’t know that much about how things get done around here, so do I tell you what to do, as a manager?”

“Not really,” Arnie replied.

“But, would you say, I bring value to your problem solving and decision making?”

“Well, yes. I mean, sometimes, you piss me off, but, yes, you bring value.”

“So, how does that happen? I don’t tell you what to do, yet, I bring value. How does that happen?”

“Well, you ask me questions.” Arnie stopped. “You ask me questions.”

Grooved Behaviors

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To be more effective managers, we cannot change our entire psychological makeup. We are who we are. But we can engage in more effective behaviors, shifts in our behaviors. Arnie was hell bent on accountability. Two managers and five production people lost to turnover, he was finally looking inward.

“As a manager, what can you shift to be more effective?” I asked. “I know you are under a lot of pressure and that you want to maintain a high level of accountability. What can you shift?”

“We are under pressure, and that’s why accountability is so important to me. When one of my team members makes a mistake, it’s a reflection on me,” Arnie explained.

“It’s more than a reflection,” I replied. “As the manager, I hold you accountable for the output of your team. They make a mistake, it’s on you.”

“That’s why I am so hard on them about their mistakes,” he defended.

“I understand, and how has that been working?”

Now, Arnie had to step back. His head was nodding. “You’re right. It seems the harder I press, the more mistakes get made, or the person ends up quitting.”

“Understand, Arnie, that you are under pressure,” I reminded. “And when we are under pressure, we fall into old behavior patterns, comfortable, grooved behaviors, even if they were not successful in the past.”

No Escape

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But there was no escape. “If I am the problem,” Arnie said slowly, “then what’s the solution?”

Calm settled. Arnie was no longer looking outside. There still might be a pang of defensiveness, a throwback of justification, but he was ready to explore the real reason for his turnover problem.

“Do you think you can totally remake your personality?” I exaggerated.

I got a chuckle. “No,” he replied.

“I didn’t think so,” I said, with a reciprocating smile. “But can you shift?”

“Shift?” Arnie asked.

“Shift,” I confirmed. “A subtle shift, that changes everything. You are who you are. That will not change. But can you shift?”

If We Paid Better Wages

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Arnie was quiet. He made his budget for the quarter. Along the way, he lost two critical managers and five of his best production people. Over a period of three months, it didn’t seem like a frenzy, but in the lookback, the numbers stacked up.

“Well, if we paid more competitive wages, we could attract a higher caliber of people, and perhaps our turnover ratios wouldn’t look.” Arnie stopped mid-sentence. He knew it was a well articulated excuse, and he knew I wasn’t buying it.

“What do you think the problem is?” I asked.

Arnie dropped his face and looked directly at me. The silence was long. Finally, his eyes grabbed a thought from the top of the room. “You are not asking me to go through personnel records, or walk the floor, trying to figure out what the problem is,” he started slowly. “You are sitting in my office, looking at me. You think I’m the problem?”

“And?”

His eyes went left, then right, up, left. “Outlast the panic,” I directed. “Be calm.” While his body was calm, his mind was racing, for escape, for avoidance, for denial.

The Numbers Are In

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“The numbers are in,” Arnie exclaimed. “We made budget. Took a lot of hard work, but in the end, we got the result we wanted.”

“I’m impressed,” I replied. “And how many body bags in the wake?”

Arnie looked puzzled, then he understood. He had hoped I wouldn’t notice, or at least, wouldn’t bring it up. “Well, there are those on the team, I mean, that were on the team, that just weren’t committed. Sometimes, you have to weed the garden.”

“So, you will accept some casualties along the way?” I prodded.

“In every battle, there are casualties,” Arnie suggested.

“Yes, and this isn’t a battle. This is a company, with work to do, under client pressure, with regulatory constraints and margin requirements. Why all the body bags?”