Saturday Odd Bits Roundup: Management Juice
by Miki Saxon
Tons of downer news these days and many managers have faced/are facing the trauma of laying off members of the team that they’ve worked so hard to build, so I thought some upbeat advice/information and stories to help you do your job better managing would lighten your weekend.
Business Week was kind enough to offer up a trove of stuff worth reading.
Some of the smartest ideas came from readers such as Autumn Parrott at Frist Center for the Visual Arts.
“We had a 25% budget cut. To help people understand the budgeting process, we formed a committee comprising only people who are not senior managers. It started conversations between departments and created a greater understanding of how our money is spent. People serve for a year. Each department gives recommendations like ‘we’re spending $70,000 a year on cleaning, so now everyone should clean their own offices and only use a cleaner once a week.’ One benefit of bringing in a variety of people is you don’t come up with the same ideas over and over again.”
This is a real winner. Sharing financial information below executive level is anathema to most bosses, but doing so increases employees’ sense of ownership which usually unleashes a barrage of cost-saving ideas.
There’s a great piece on trickle-up innovation where low-cost products developed for emerging countries are being tweaked for sale to affluent ones—the opposite of typical development.
There’s a lot more, but one in particular I’d like your opinion about before I say anything.
Please read Making the Case for Unequal Pay and Perks, come back and tell me what you think.
I’ll be posting my thoughts in a couple of weeks.
Image credit: flickr
March 22nd, 2009 at 9:53 am
Miki,
Very interesting article—but very old news. I guess the big companies, like those mentioned in the article, are just slow to catch on to the management trends of the last few decades. There is nothing “unorthodox” here. Management gurus and teachers have been preaching and teaching “open books,” “flat organizations,” “employee involvement” and “pay for performance” for many years. The thoughts and actions presented in this article are very “yesterday.” Small businesses (under 500 employees) have been doing these things for a very long time.
When times are good and profits are rolling in, all businesses—large and small—tend to build up the management ranks, and pile on the perks. Then when a down cycle inevitably shows up, management runs around like Chicken Little, and reading all the “studies.” Then they start slashing perks and laying off lower paid people…thinking they are managing the crisis. Wrong!
A good turnaround leader will follow the basic roadmap of: Controlling cash; killing any overt unnecessary expenses (like lavish parties, etc.); involving the front line people with information from the top, and soliciting suggestions from the bottom; and wiping out as many layers of management between the CEO and the frontline people as possible. Everything else is just “fine-tuning.”
This takes surprisingly little time, but it does require “leadership.” Unfortunately, very large businesses are so steeped in bureaucracy and cliques, that this roadmap is rarely followed, and phalanxes of “committees” are formed to do the work incompetent leaders should have been doing all along. Think General Motors!
Miki – Keep up the good work. I like what you have to say.
March 22nd, 2009 at 6:06 pm
Thanks, Bob. I can’t say I agree with you. Consultants talking and writing about stuff doesn’t mean it happens. Not in large companies and not in many smaller ones. There are thousands of bosses in companies of all sizes who wouldn’t dream of sharing financials with their employees or doing many of the other suggested ideas.
What did you think of Making the Case for Unequal Pay and Perks? I’d really like your take on whether it’s an accurate prediction of the future.
March 26th, 2009 at 10:57 am
Miki,
Of course, you are right—having knowledge, and applying that knowledge, are two very different things. But, my main point is this: big business is just now waking up to the existence of a different way to structure employee pay. The “HR Renegades”, with their “unorthodox” discoveries (as described in the BW article) is not “stop the presses” news. This discussion has been going on for years, and although I’m sure there are more small businesses that ignore the latest trends and techniques, than there are small businesses that implement them, I still believe “modern management” is more progressive in small business than in big business.
Regarding your question, “Making the Case for Unequal Pay and Perks,” many books have been written on the subject of employee pay. On the one hand, there is the entire school of “Pay Equity,” or “equal pay for equal work.” This is supposed to eliminate all biases in paying employees. Unfortunately, my research has shown me that employers (as well as consultants/specialists), who have implemented these programs have broken down the groups such that very little semblance of true pay equity is involved. So, although a noble gesture, true “pay equity” seems to be as elusive as it ever was.
On the other hand, there is the “pay for performance” school of thought. Actually, this form of compensation goes much, much deeper than just pay. In my recent book, I present a case history of a company that had a total walkout of all salaried employees—CEO to clerks. Taking on the task to salvage the company, I hired new people that met unusual qualifications: they had to be qualified for the job they were applying for; they had to be unemployed and available immediately; they had to work at sub-standard wages; they had to work while knowing the company could close at any minute; and they had to work without supervision. The team that came together produced a highly successful company, and it was not because of high pay, or performance bonuses (there were none). The team stayed together, and performed, because of mutual respect, trust, appreciation, and consideration—people were “valued.” To me, this is the truest form of “pay for performance.”
In my opinion, big businesses will not be able to create a successful formula for “pay for performance”—they are just too bureaucratic to make something like this work. They also cannot create the environment described above…pockets of people (teams or departments) can, but overall, bureaucracy and management egos will prevent company-wide success of this concept. So, my prediction for the future is that small businesses (some) may create successful “pay for performance” programs, but big businesses will blunder about, just as they did with pay equity.
I apologize for the length of this comment, but it is a subject that requires much discussion.
March 29th, 2009 at 2:54 pm
Hi Bob, I wasn’t ignoring you, just deciding the best way to handle the response.
First, you never need to apologize for the length of comment, I’m delighted that you felt the subject important enough to take the time to write it.
I don’t agree with all your thoughts about large companies because they are actually small specialty businesses grouped together under one umbrella. Of course, that doesn’t mean they’ll get it right. I do agree about bureaucracy, but I have seen that in small companies, too.
My major problem is with the whole “star” system of employee ranking and see this as exacerbating it.
I’m doing a full post on this tomorrow (3/30), but here is the short version developed during my twenty-plus years as a headhunter.
• 98% of stars are a function of their management and the ecosystem in which they perform, change any of the parts and the star may not survive.
• There is no star in any sport, business, media, etc., who can win if the team in a constant state of flux or low morale.
I’ve written many times previously about the dangers of ‘stars’ and will cite a few of the most pertinent in the full article.