Humor, Out of Context

One man's humor is another's insult.  Or cruelty

I've seen this principle in action in business repeatedly, and learned the lesson myself -- the hard way.

I had a peer who worked with me at a prior employer who was quite funny.  The problem was, his humor was built on the backs of others on the management team.  Whenever we were together, he was cracking jokes at the expense of whatever executive wasn't in the room.  Everyone would laugh...nervously, and we all wondered what he was saying about us when we weren't present.  When he finally left the company, I didn't miss his acidic wit.

Another peer at another employer was extremely quick-witted.  He always had a smart comment on the tip of his tongue, usually very funny.  Unfortunately, sometimes those quickly delivered remarks would offend.  Eventually, they caught up with him -- he probably ticked off his boss one too many times -- and he ended up being exiled to the corporate equivalent of Siberia.  At least he didn't get fired, which could easily have been the result.

My own bad experience with humor came as a result of a poorly executed practical joke.

My HR manager was working with the Operations VP to put together a list of employees who would have to be laid off -- the result of a large and unexpected downturn in the business, and a grim prospect.  Predictably, the HR manager felt we should select employees for the layoff based on past practice, while the Operations VP wanted to be able to select the weakest performers.  And the two of them didn't get along well, which added to the tension wrapped up in the discussion.

I listened to this argument go back and forth several times, and finally called a meeting to settle it -- just the three of us in my office.  But the HR manager was late.  In his absence, I decided to try to turn the situation into a joke.  It would relieve the tension a bit, I reasoned.

When he walked into the office I closed the door and said:  "Fred, we've decided to eliminate your position.  Joe (the Operations VP) is here to escort you out of the building."

He stood there for about fifteen seconds, mouth hanging open, until I said:  "I'm just kidding."

We all laughed, but his laugh was...uncomfortable, and I could tell he didn't appreciate my attempt at humor.  I considered it just a bad joke, and apologized.

Then I forgot about the incident.

A year later, the HR manager (by then a former HR manager) was suing the company, and one of his central claims related to his "cruel and inhumane treament" based solely on this incident.

Our attorneys told me that while the fifteen seconds of discomfort he'd experienced might have been a small thing, it wouldn't play well to a jury.  Eventually, we had to settle the claim -- which irked me greatly -- and the situation became an embarrassment.

Humor is great in the workplace -- it lightens moods, builds comraderie, and makes the day more bearable.  But it can also be a sharp-edged tool that can bite you quickly if lines are crossed.  My lesson learned:  Think before you Joke.

Other Recent Posts:

Vice in the Workplace

When you have to fire someone...

Watch Out for that HR Manager!

People Flail before they Crater

Exceeding Your Authority

 

If you enjoy the ideas presented in my blog posts, then check out my novels. Corporate Thrillers LEVERAGE, INCENTIVIZE, and DELIVERABLES are all based on extensions of my basic experiences in the world of business.

Vice in the Workplace

Humans can be strangely self-destructive creatures.  They smoke, drink, drive like lunatics, and take all kinds of crazy risks.  And the behavior isn't confined to their leisure time -- they engage in their vices at work as well.

As a manager, you need to keep in the back of your mind that this kind of stuff is going to happen in the office and in the factory.  If you manage long enough, you will see it.  Guaranteed.  

I am no longer surprised by some of the strange and wild things that go on in the work environment.  Prostitution, substance abuse, porn, violence and intimidation, it's all out there.  I've come to the conclusion that when people think they have the opportunity to engage in this stuff, and they think the chance of being caught is relatively remote (and sometimes, don't seem to be able to stop even if getting caught is likely) it's going to happen.

So how about a few stories to illustrate the point?

Story one.

At one of my employers, I kept hearing persistent rumors of drug dealing going on out in one of the production areas.  Of course, our internal investigations (which were conducted mainly by asking people to confess or tattle on their co-workers) lead nowhere.  It wasn't until we teamed up with the police, and put someone in the plant undercover, that we found the evidence of what was going on and had the primary participants arrested.  An expanded version of this story is the backdrop for one of my latest novels Empowered, which should release late this year.

Story two.

I once had a salesman working in my business unit who had a pornography problem.  A rather big pornography problem.  This came to light when he brought his laptop into the IT department complaining about slow response times.  Not surprisingly, the cause of the slow response was huge amount of porn jammed onto the hard drive.  I later discovered this was the second incident, the first one had stopped with the IT manager giving him a stern warning.  His explanation?  "I only watch in on my own time."

Story three.

Perhaps the most telling example, this situation happened a number of years ago when my employer switched computer systems.  As part of the process we replaced the dumb terminals on the production floor with full-blown computers, complete with open access to the world wide web.  Within days, the employees in one of the production departments figured out how to log onto the machine anonymously, and surf the internet's plethora of porn sites.  We didn't realize what was going on until some genius started printing pictures and posting them (when no one was looking) on some of the bulletin boards.  Needless to say, we had to block internet access on all those computers.

People are a mischievous lot, and love to indulge in all kinds of vices.  So anticipate it, imagine how company assets could be abused in it's pursuit, and follow your nose.  Regardless of your personal opinion about the "rightness" or "wrongness" of indulging in these things, if you allow it to happen under your watch, you're likely to suffer plenty of political damage.

Other Recent Posts:

When you have to fire someone...

Watch Out for that HR Manager!

People Flail before they Crater

Exceeding Your Authority

Time Kills Deals

If you enjoy the ideas presented in my blog posts, then check out my novels. Corporate Thrillers LEVERAGE, INCENTIVIZE, and DELIVERABLES are all based on extensions of my basic experiences in the world of business.

When you have to fire someone...

Is there a good way to fire someone?

Probably not, but there are ways that are respectful, and others that are cruel.  Or stupid.  And yes, you can go too far trying to be "kinder and gentler" -- in situations when it puts you or the company at risk of a lawsuit.

As a senior executive, particularly one running a highly seasonal and cyclical business, I found myself in this situation a lot.  I've listed a few do's and dont's from my own personal experiences below.

Do:

 

  • Directly participate.  It is disrespectful to the employee, and cowardly to avoid the termination just because it's going to be difficult.  You owe it to the person to be there, and not just delegate the dirty work to HR or someone else.  When you look back on these traumatic events, participating goes a long way to allowing you to maintain your self-respect.
  • Be honest, up to a point.  Firings, because they have a huge impact on people's lives, can become the focus of legal action.  Make sure you tell the employee why they are being fired -- exactly what you would say in court -- but try to keep things general enough that you aren't feeding the person amunition for a complaint.  By being honest, you're giving the person being fired the insight they might need to avoid a repeat of the situation with a future employer.
  • Be generous.  A fair and reasonable separation package is certainly one element of that.  Your personal assistance (contacts, recommendations, etc.), if appropriate, is also important.  The employee is probably going to have a tough time for some months ahead, both financially and emotionally.  Do what you can to east their suffering.
  • Use a downturn as an opportunity to clean house.  Select your weaker contributors when things go south, even though their performance might not ordinarily have warranted termination.  It is your best opportunity to strengthen your team.
  • Document.  Sooner or later you're going to get sued for wrongful termination.  Make sure you've got what you need to justify your actions.

 

Don't:

 

  • Suprise the employee.  If the person is surprised they're being terminated, then something broke down somewhere in the process.  If the situation is egregious (theft, assault), then any semi-intelligent person would understand why you would go directly to termination.  On lesser problems that have festered over time, there should be a history of discussions concerning the key issue.
  • Let the employee hang around afterward.  Even if the termination is justified in the employee's mind, they are likely to still be angry.  There is no upside to letting them stay at the office (or factory), and pollute others with "their version" of the "truth".  On very rare occassions, I've violated this rule, but only with employees I thought I knew extremely well, and believed I could count on their professionalism.  Even then, on two occassions, it bit me.
  • Refer to anything related to a protected class.  Be extremely careful what you say.  You're not firing the person because of their age or race (I certainly hope not, anyway!), but people are looking for clues that this is exactly why it's happening.  An innocent statement ("You're too slow getting things done," for example) can sound like it is age, race or gender discrimination to the recipient ("They fired me because I'm too old to move quickly").
  • Cross previous precedents.  If you paid out a previous employee's vacation on termination, don't withhold the same from the next termination without a very good and clear reason.  This is another mistake that will likely land you in court.  Consistent rules applied consistently are your defense.
  • Trickle out cuts over time.  When the terminations are related to a business downturn, make sure to cut fast, cut deep, and try to avoid going back to the well.  It is better for everyone, especially the "survivors," to have it happen once and early.  Otherwise employees live in an environment of fear, waiting for then next axe to fall.

 

While nothing said above will make firings easy, if you follow these guidelines, at least you will:  maintain your own self-respect, complete the firings with the maximum amount of compassion possible, and cause the least amount of damage to the organization due to lawsuits and ongoing terror.

Other Recent Posts:

Watch Out for that HR Manager!

People Flail before they Crater

Exceeding Your Authority

Time Kills Deals

Control the Venue, Control the Law

 

If you enjoy the ideas presented in my blog posts, then check out my novels. Corporate Thrillers LEVERAGE, INCENTIVIZE, and DELIVERABLES are all based on extensions of my basic experiences in the world of business.

 

Watch out for that HR Manager!

If you're a manager of some sort, eventually you will have to let an employee go.  If you are a general manager, eventually you'll have to let an HR manager (or a company attorney) go.  This is the most dangerous person you can release from employment, because of everything they have access to (your personal thoughts and strategies, the companies polices and practices, not to mention any scandals).  And if they're an unscrupulous type, you're in for a rough ride.

First, a few comments about letting people go (firing, releasing, laying off, or whatever you want to call it).  It's hard.  Over the years, I've had to do this many times, for many reasons.  In a few rare instances, I felt morally justified -- when the employee was caught stealing, or when I discovered the person had lied about something (like their degree, for example).  In most cases releasing an employee felt like crap.  Sometimes the situation arose because the employee just wasn't the right fit for the organization, sometimes because they couldn't get the job done despite a hard effort, but mostly it was because the business cycle was running the wrong way and we needed to shed costs.

I ususally wanted to make the departure as honorable and as painless as possible.  I tried to always participate in the termination meeting, both to support the direct supervisor, and to let the employee know that in most cases it wasn't their fault.  We typically paid a reasonable severance (at least when the person departing wasn't stealing), and provided assistance to locate a new job.  Wherever I could, I tried to act as a personal reference for the person.

Once in a great while, extending a hand allowed the person leaving to bite me.  People sometimes hear what they want to hear, and a meeting where compassion was supposed to be shown could sometimes turn into a source of ammunition when the employee later decided to sue the company.  Most of these suits were formulated as EEOC complaints -- not because the termination was unfairly or improperly brought against a person because of their membership in a protected class, but because it was so easy for the employees to go after the company in this fashion.  Honestly, I can't remember a single instance where the EEOC found the employee had cause, although a couple of them still ended up with nusiance settlements basically to prevent the expense and wasted time involved in a trial.

On two occassions, I did have a senior HR manager go after the company.  Both situations were unusual, and one was downright bizzare.

In the first instance, I determined the HR manager wasn't capable of handling her job, but rather than terminating her, I offered a lesser position in the department (with no impact on pay).  I'm sure it was a blow to her ego, but I thought it was the "right" thing to do.  Her response?  Gather as much information on a scandal that was brewing in another part of the company, and then demand (through her lawyer) an enormous settlement.  The threat of the scandal becoming public through a trial eventually caused the company to settle at a level I thought was obscene.

In the second incident, my senior HR manager was caught approving her own raise less than thirty days after her hire.  She claimed no knowledge of the situation, and the next day we started to receive a series of similarly forged increase forms for other members of my senior staff.  I'd had a handwriting expert check the signatures on the original fake document, and there was no doubt it was her -- the other forms were a "red herring".  When confronted, she produced a letter -- proportedly from a group of disgruntled employees who "confessed" they were just demonstrating they could "mess with" our HR system.  Of course after she was fired, the letters stopped and there were no further issues.

I learned an important lesson from these two incidents: HR personel (and company lawyers) have unusual access to sensitive -- potentially embarrassing -- information.  You'd be well advised to be cautious about what you allow them to become directly involved in, and if you must terminate one, you'd better be doubly cautious.  Act decisively, don't give the person a chance to collect documentation to blackmail you with later, and definitely don't skimp when it comes to separation compensation.

Other Recent Posts:

People Flail before they Crater

Exceeding Your Authority

Time Kills Deals

Control the Venue, Control the Law

Dealers & Distributors

 

If you enjoy the ideas presented in my blog posts, then check out my novels. Corporate Thrillers LEVERAGE, INCENTIVIZE, and DELIVERABLES are all based on extensions of my basic experiences in the world of business.

People Usually Flail before they Crater

I've commented before in this blog about how some (most?) subordinates tend to hide problems until they become big, festering wounds, and how this is a problem for supervisors.

But it isn't just an issue for a boss to deal with -- it is an organizational problem.  One that is firmly rooted in our own capacity for self-deception.  Call in unbridled optimism, or perhaps delusional positivism, whatever you name it, it's dangerous.

This is a problem I sometimes found myself falling victim to.  It usually starts with complete and total commitment to an idea, particularly if that commitment is in the face of stiff opposition.  In my case, my biggest vulnerabilities were in acquisitions I advocated, or people I championed.  The problem is caused by the huge, overt commitment you must make at that stage in the project -- tying your ego to the project.  In a sense, you "become" the goal just to get the damned thing approved.

Later, when things start to go sideways, you start to look for a ray of hope to keep yourself encouraged.  For example, once I championed a new manufacturing method, and had to make some tough hurdles (financial and physical) to achieve project's targets.  One of the project's key elements, a new welding technique, early on started having problems.  Instead of going to our back-up plan immediately (which would have looked like a "loss"), I insisted we keep hammering away at the preferred method.  There were little bits of positive news, which I grasped like a life-ring, that kept me going down that path far too long.  Of course, the results were much worse than if I'd just been logical and rational, and punted on the new method right away.

And that's the profile -- holding onto hope beyond hope, until it is too late to do anything but crash and burn.  I had a similar experience with a general manager I put in place in a troubled acquisition.  The guy seemed to be the perfect fit, and he tested extremely well on all the profile tests we put him through.  I wanted to believe, and needed to believe in him.

Unfortunately, he didn't  know what he was doing.  He created problem after problem by his short term actions, while continuing to sell me on his long term vision for the business.  In the end, he had to be removed, and the business was in much worse shape than if I had acted sooner.

How the company handles failure and punishment is a key factor in this behavior.  When the firm searches for the guilty (and often punishes the innocent!), people are much more likely to hold onto hope that "everything will somehow work out," and keep plugging away at a hopeless cause.  It's a strong argument for companies focusing on what went wrong in the process, rather than who's guilty, when a problem crops up.  That orientation will certainly encourage earlier disclosure of problems, and less flailing and cratering.

But part of the behavior is inherent in the person, too.  Highly achievement-oriented people don't typically do well with failure.  They are prone to falling into the cycle of "Polly-Anna-ish" positivity that leads ultimately to a gigantic mess.

 

Other Recent Posts:

Exceeding Your Authority

Time Kills Deals

Control the Venue, Control the Law

Dealers & Distributors

Managing Country Risk

 

If you enjoy the ideas presented in my blog posts, then check out my novels. Corporate Thrillers LEVERAGE, INCENTIVIZE, and DELIVERABLES all present extensions of my basic experiences in the world of business.

Exceeding Your Authority

I had a deal I was once trying to push through in Argentina.  The country was one with a lot of potential, but also one where we'd made our mistakes over the years.  We seemed to be perpetually stuck in the number two position in the market.

But there was an opportunity to turn it around.

I was negotiating a joint venture with the country's largest and best distributor -- one who was currently working for the competition.  The project would give us greater market coverage, strong service and support capability, and besides, I liked the guys we would be working with.  The deal was already approved, authorized and supported by the CEO and the board of directors.

There was one obstacle standing in the way -- a current distributor who had an overly large territory, and no ability to really cover it.  Trouble was, he had a father who was an attorney, and he was nearly impossible to negotiate with.  I was willing to buy the distributor out of his contract, but he couldn't seem to name a price.

So I sent in a Brazilian -- a man who ran our factory in that country, and was a much more patient and persistent negotiator than I was.  I figured if he couldn't bring this distributor to heel, no one could.

But the deal was extremely frustrating -- even for my patient negotiator.  Finally, after three days of hard talks, my representative called me.  It was eleven at night, and I could tell he was exhausted.

"I've got him to agree to take a much smaller, more reasonable territory surrounding his office, but it's going to cost us.  He wants a quarter of a million dollars to agree.  And I need an answer now -- if we hesitate, he'll likely reverse himself, and it will be back to square one."

The larger deal was worth at least ten times that quarter million, but I didn't have any room to spare in my board approval to bury the this expenditure.  And I could only authorize twenty thousand dollars (an absurd amount for a guy running a $300M business, but, regardless, it was the case).

I could have called my boss or the CEO or CFO at home, to seek the authorization.  The situation was complicated, and would have taken a lot of time to explain.  And all of them would have probably tried to alter the terms of the deal, which likely would have sent everything back into chaos.

"Ask for forgiveness, not permission."  We've all heard this rubric, and sometimes it even seems wise.  I wanted the deal, and with this final step, it would be sealed.  "Get it signed," I told my guy, figuring I would smooth things over tomorrow with the powers that be.

But asking for forgiveness, particularly where the rules are quite clear (like what you are authorized to spend) might not be such a good idea.

The next day I spent a very uncomfortable hour in the CEO's office, trying to justify why I didn't call him.  Then I got the same treatment from the CFO.  It wasn't until later, however, that I realized how close I came to getting fired over this flagrant disregard for the formal delegation of authority.  Luckily, my performance had been good enough up to that point, that it outweighed my offense -- but just barely.

So when faced with your own version of this situation, tread carefully.  It's nice to bravely assert you should "ask for forgiveness, not permission," but doing so is likely to put your career at risk.

Other Recent Posts:

Time Kills Deals

Control the Venue, Control the Law

Dealers & Distributors

Managing Country Risk

One Design Partner can be Worse than None

 

If you enjoy the ideas presented in my blog posts, then check out my novels. Corporate Thrillers LEVERAGE, INCENTIVIZE, and DELIVERABLES all present extensions of my basic experiences in the world of business.

Time Kills Deals

Deals come in a variety of forms -- from a simple direct sales transaction, to an incredibly complex multi-country joint venture.  One rule I've seen unerringly repeated during my years in business is Time Kills Deals.

To illustrate the point, I'll offer two examples -- at the extremes.  

In the simple sales transaction, I have a bid to a customer currently to do some assembly work for him.  He received the bid last week, provided some immediate feedback, which caused me to slightly change the proposal.  Now I'm waiting.  As I wait, I keep thinking of things I should have done differently -- Should I have included the lubricating oil in the bill of materials?  Was I overly optimistic about the time needed to do the job?  As time stretches on, I am slowly getting less enthusiastic about winning the business.  If he comes back with a counter, I'm already less inclined to be flexible now.

On my customer's side, he's checking his other options, evaluating other new suppliers, even possibly reconsidering his current supplier.  The more time that goes by, the more likely he is to find an attractive alternative, or just push the project down his priority list and never return to it.

Time is the enemy of the deal.  Will it happen?  Last week I was 90% sure it would.  Now I'm at 75% and the number is dropping with each passing day.

I've been involved in numerous acquisition negotiations, and here the impact of time is considerably more insidious.  In addition to second thoughts about the transaction, with large complex deals, time tends to raise suspicions about the "other side."  And once doubts enter the picture, people look closely for any evidence that support their suspicions.  

During one such negotiation, I proposed salaries for two new joint venture partners -- ones that were to take effect after the deal was done.  They probably suspected I was trying to pay them too little (although it was considerably more than they were paying themselves).  When they balked, I became concerned the partners were only in the deal for what they could get out of it in the short term.  As time went on, the deal drifted further and further apart, with more suspicions being heaped up on both sides.  Eventually, the deal died.

The same thing happens in my novel DELIVERABLES, although in that case, there's someone tossing wrenches into the works to speed along the development of suspicions and distrust.

That conventional wisdom -- get that sale closed, now -- certainly holds doubly true for larger and more complex deals.  If you want to complete them, you need a sense of urgency.

Other Recent Posts:

Control the Venue, Control the Law

Dealers & Distributors

Managing Country Risk

One Design Partner can be Worse than None

The Way Things Start is usually the Way Things End

 

If you enjoy the ideas presented in my blog posts, then check out my novels.  Thrillers LEVERAGE, INCENTIVIZE, and DELIVERABLES all present extensions of my basic experiences in the world of business.

Control the Venue, Control the Law

Once upon a time, there was a manufacturing company from the U.S. heartland that wanted to do business in Saudi Arabia.  This company knew that to be successful in the market long term, they would need a local partner to manufacture certain parts of the product and distribute it.

Over time the manufacturing company and their partner did well in the Kingdom, growing their business and eventually dominating the market.  Then a funny thing happened -- the partner decided they wanted more markets, and demanded exclusive access to the much of the Muslim world.  The manufacturer objected, and a long discussion ensued, but when the agreement with the partner expired, it was not renewed.

Not to be stymied by the manufacturing company, the partner stole all the designs, trade secrets, manufacturing know-how, and even the manufacturer's marketing material, and started their own business competing directly with the manufacturer.

Not surprisingly, the manufacturer threatened to sue their former partner.  But a funny thing happened -- it seemed that years ago, when the original agreement was signed, it was agreed that any legal dispute between the parties would be arbitrated in the U.K. according to Sharia Law.  And any abitration award would have to be enforced through the Saudi courts.

The manufacturer investigated, and ultimately came to the conclusion that they had only a moderate chance of succeeding in the arbitration, and a very low chance of enforcing an award through the Saudi courts.  They gave up, and had to deal with a new competitor -- one they had put in the business and supplied with all the knowledge and expertise they needed.

The end.

I ended up dealing with the fallout of this situation, and I can't tell you the number of times I wished the original drafters of the contract had insisted on U.S. Law, and U.S. Courts.  It meant the difference between being able to defend ourselves, and holding a losing hand that cost millions.

So here's the lesson -- when negotiating a critical agreement, supply the attorney to draft the document, and never give up the law that will be used to interpret the contract, or the place where the dispute will be settled.  Nine times out of ten, it probably won't bite you personally, and seven times out of ten, there won't be a legal dispute, but the one time it happens can be extremely painful.

If you find my series of blog posts on LESSONS LEARNED interesting, check out my fiction.  Many of the same ideas are presented there in an entertaining and highly readable form.  Try LEVERAGE, INCENTIVIZE, or DELIVERABLES at these links.

 

Dealers and Distributors

Here is a good work lesson. It's pretty specific, but definitely isn't obvious -- sometimes it's a good idea to have contractual agreements with your dealers or distributors, and other times it isn't. And where you do have contracts, it is critical that they conform to local laws.

Within the United States, commercial contractual arrangements are regulated by state laws -- either the general commercial code for that state, or more specific statutes governing your type of relationship. In many states, it seems like the laws were set up to favor local car dealerships in their "struggles" with automotive manufacturers. They cover things like notice periods on cancellation, cure periods, and the buyback of inventory. Because these laws vary considerably from state to state, it is important to know what you can and can't do before you start to do anything that impacts territory, length of the agreement, renewals, inventory requirements, and similar things.

But what's a supplier to do? Learn the details of fifty different laws -- laws that can change seemingly at the drop of a hat? Can't you write a contract with your dealer/distributor that is universally valid in the U.S.?

If you try going that route, it's likely the agreement will be so weak, that you'll be completely hamstrung. One advantage of a universal agreement, however, is it does set expectations for you and your distribution partners. And you only have one agreement to learn (and remember). If you make the contract too restrictive, however, it is likely some paragraphs won't stand up in some states.

If there's no contract, then general commercial law in the state prevails -- which might be even more disadvantageous to the supplier.

So what's the best strategy?

In the United States, I suggest having a very knowledgeable attorney write a universal contract -- one restrictive enough to give you some options when your distributor doesn't perform.  You also need to have that attorney check the relevant state law before you make an major changes in a relationship.

Outside of the United States it is a different ball game altogether. Laws in the U.S. vary a lot. Internationally, they vary even more.

In one instance, I was sued by an international dealer for hundreds of thousands of dollars for "brand development" he had supposedly done on my behalf. Of course, we were cancelling him for non-performance, but in this particular country, since we had a contractual commercial relationship, he could come after us. And he did. And it cost big bucks.

I later learned that if we hadn't reduced the relationship to a contract, we would have been subject to general commercial law, and the "brand development" stuff would have been excluded.

Outside of the U.S., you will, unfortunately need to ask a local attorney what is the best policy. It is a slow, tedious and expensive process, but done correctly, it can save you bundles later. Absolutely don't just take your U.S. agreement and have your non-U.S. distributor sign it -- you could be setting yourself up for some huge problems down the line.

Managing Country Risk

I was burned in Argentina. And in Saudi Arabia. China, too. Personally.

I've watched others within companies where I've worked experience disasters in India, Pakistan, China, Libya, etc.

These disasters were mostly commercial issues. Mostly related to legal maneuvers by either the government itself, or advantage taken by local business people utilizing leverage through their local governments. Mostly it was limited in scope, but only through good fortune.

Most of these countries have a history of business train-wrecks. They go back on promises, change the rules, toss agreements aside when it is convenient, or use their legal system to take advantage. Then they "reform", claim they are anxious for direct foreign investment, invite capital back in. And then the cycle happens again.

Why these situations happen ranges all over the map, and could undoubtedly fill volumes.

My work lesson was in how you deal with these types of opportunities/problems as an individual manager. So here are my thoughts, developed through a couple of trips through the school of hard knocks.

1. Just say no. If a country has a history of fleecing foreigners, or of foreign investors being mistreated, it will probably happen again. If possible, just stay out altogether.

2. Limit your exposure. Put as little in the country as possible. Take out what you can (particularly cash) whenever you can.

3. Find a solid partner. A manager, an investor or an adviser. Get someone who can see trouble coming and help you develop a plan to deal with it.

4. Verify. Trust must be earned in such places, never assumed. Check out the reputation of anyone you will be dependent upon.  And double check anything important they tell you.  If you don't hear if from multiple independent sources, assume it isn't true/correct.

5. Control the venue. Contracts are great, but they are even better if you control where they will be enforced. Don't accept a third world court venue where you will lose simply because you don't understand the local law, can't access to resources, and will have zero sympathy with a jury.

6. Anticipate problems. Use history, current events, and advisor information. Put together plans to deal with issues before they happen.

7. Communicate with your superiors. Sooner or later something bad will happen. It's important they are aware of the risks before a bomb drops.

International business is hard. But for many companies, it's essential to success and can't be ignored. Appropriate caution and preparation will prevent a disastrous or, at the least, a very unpleasant experience.

 

If you enjoy my blog posts, check out my novel, LEVERAGE, now available at Amazon, and Barnes & Noble.

One Design Partner can be worse than None

Over the years, I've used a lot of methods to get customer input for new products or services. Surveys, focus groups, partnering, or just winging things without any customer input at all.

But what works the best? Or the worst? What are the trade-offs?

The "experts" insist getting maximal customer input will give you the best results. In my (not so) humble opinion, I think that is the path to mediocrity. And it still may be the best path in many cases.

The biggest businesses successes I've seen, have been development projects where the "inventor" has a game changing idea, and relied mostly on his/her own instincts and thoughts to design it. But there is an inherent bias in looking at big successes developed using this method -- you rarely hear about the failures! I'm aware of a few spectacular failures, and many many other smaller ones. I'm just guessing, but I believe a lone inventor is more likely to come up with an idea that is revolutionary, but also more likely to miss the target completely. It's a higher risk proposition, with a greater potential reward. If you're going to use this development method, your organization better have an exceptionally high tolerance for failures.

Conversely, projects where I sought multiple inputs from customers through surveys, focus groups, and the like, tend to "regress to the mean". By that phrase, I mean you tend to develop a "jack of all trades, but a master of none" -- a device or service that does a mediocre job of satisfying a broad range of needs, but doesn't excel in any particular dimension. My personal experience is the design ends up loaded with options and variations, and cost go too high. Additionally, customers are usually pretty poor at understanding radically different solutions to their current problems, and so they tend to push you back toward the familiar.

So how about partnering? That seems like it might be a good compromise -- some customer input, but still enough innovation to allow a big hit.

My personal experience is this combination results in the worst of both worlds.

There is still the home-run aspect of the lone inventor scenario, moderated only slightly by having a second voice involved in the project. But the partner organization tends to pull your development efforts toward their particular needs and idiosyncracies. If they represent the market at large, you win. In my experience, they will lead you to an ideal solution -- for them. And usually a miss for almost everyone else.

On one particularly large and expensive project I managed, we used a customer partner for the development. The customer insisted on safety, maintenance, and operating parameters for the product that added significant costs. Once we finished the development and started trying to sell it to others, we discovered the customer-partner's payback economics were significantly different than those of other organizations. And some issues other potential buyers had were not a problem for the partner, and so were ignored. The project was ultimately shelved, probably a couple of years later than it should have been, and a couple million dollars, as well.

So while customer input can reduce the risks of project failure, it can also reduce the reach and level of innovation you might otherwise achieve. As to partnering, I can't think of any time it would be an improvement over the extremes -- broad customer input or none.

If  you enjoyed this blog post, consider taking a look at some of my fictional works such as Leverage, Incentivize or Deliverables, where my experiences in real world management are taken to the extreme.

The Way Things Start is Usually the Way Things End

Business relationships are usually at their easiest, their friendliest, and their lowest friction, in the beginning.

People tend to be on their best behavior when building relationships. People are exploring the potential partner's thoughts and beliefs, and know their own are being probed as well. People tend to be focused on what they can gain from the relationship, and what they must give. And they normally do it cautiously.

If there is conflict at this stage, it is a clear warning of what likely lies ahead.

This lesson was probably most clearly pointed out to me several years ago during the negotiation of a share purchase in another company -- a partnership. The target firm needed cash, and we were looking for geographic expansion -- it looked like a natural fit. We needed the owners to stay with the business, and they were keeping half the stock.  On paper, the arrangement should have worked. The first round of discussions went fairly well -- but I got significant push-back when the subject of salaries came up.

When you own your own business, you set your salary. There were two owners in this business, and neither of them had paid themselves much over the last several years. They were expected a big payday with our share purchase, and when I suggested a market-based salary for the both of them, the loss of control and the pay level immediately became an issue.

Through several additional meetings, it became clear that "market" to them meant an outrageously high number they heard whispered by the owner of a similar business. I produced data, they resisted. The dispute took the agreement to the brink of dissolution.

It should have been a warning. But, alas, I was going to have to learn this lesson the hard way.

Rather than tabling the deal, I pushed forward. I developed counter arguments, more data, and ultimately compromised, giving them most of what they wanted.

It was a mistake.

Over the next ten years, the same pattern was repeated over and over in a tumultuous relationship that ultimately ended with one owner quitting, one being fired, and the business going into serious decline. The willingness to fight over every detail, demonstrated by both owners  in those first few meetings, played out over and over again on variety of subjects like a bad nightmare. It was the conflict, more than any other factor, that caused us to fail to make the kinds of improvements originally envisioned when the deal was cut. Conflict that undercut trust.

My advice? If the relationship starts bad, no matter how theoretically attractive the project/deal is, drop it. The way things start is usually the way they end.

If you enjoy my blog posts, check out my novels: Leverage and Incentivize.


Don't Get Suckered by that Sexy Idea

I'm sure I'm not the only one who's been sucked in by a cool-sounding idea. They tend to float past at just the moment you think you need them -- when a brilliant move will extend your already great reputation, or when their successful implementation will save you from a problem you're struggling with.

Caveat Emptor -- While the idea might not necessarily be bad, your ability to rationally and dispassionately evaluate it probably is.

Yes, I've made this mistake. More than once.  If it sounds too good to be true, it almost certainly is.

The problem are the "want" and "need" aspects. When we want and/or need a success, we are pre-disposed to ignore contrary arguments, brush aside risks, listen to advocates, and vilify critics.  And what worst is -- we don't recognize it.  We usually want the "sexy idea" to be the right thing badly enough that our rationality is compromised.  You need a way to know you're in the process of being suckered.

My advice:  Watch carefully for your own criticisms of critics of the project. If you find yourself saying things like: "She's not a team player." or "He's always so negative." you're already pulling the wool over your own eyes.  Attacking the person, and not their argument, is a classic signal that something is wrong with your position.  Remember -- it takes guts to oppose. Agreeing is almost always the easier path. When someone criticizes a direction or path -- especially if they are going against someone higher up in the organization -- there's usually a good reason for it.

In my novel, Deliverables, the protagonist is suckered by CIA agent -- and because he dislikes his boss, and is only to ready to believe the worst about the man, he is an easy target.

One of my former associates used to say: "I love it when the facts and my pre-conceived notions come together". Just make sure when they do, it isn't wishful thinking, or the seduction of a sexy idea driving the convergence.

If you find my blogs interesting, you might enjoy my novels. Check out Leverage, Incentivize, and now Deliverables, too.

How much "New" is too much?

American corporate culture celebrates the new, the radical, and the innovative. In our lifetimes, we've seen some incredibly ambitious projects roll to success -- projects following the "go for broke" theme. Things like the personal computer, the Apollo program, amazing medical advances, and many many more innovations. We love being pleasantly surprised by that new device that rocks our world, and so we love hearing about positive progressive change -- even if we're not personally the type of person to immediately adopt the latest and greatest.

But is going for broke the best way? Or are we focusing on the few winners, and ignoring the many losers in this game? Should we swing for a home run with every pitch, or would it be better to try for singles?

On the broad playing field of countries and cultures, the answer isn't clear. Radical innovation and ambitious projects have served America and American companies well -- resulting in irregular fits and starts in particular firms or industries, but in overall steady progress. The often-sited norm in Japan -- that of smaller, steady, incremental gains, also seems to have allowed their companies to succeed on the world playing field. In some years one process may appear to work better than the other, but over longer time horizons, the approaches seem to be about even.

When we look at the micro level -- at the circumstances surrounding those engaging in the projects -- the picture is radically different. The big-bang method produces a few spectacular successes, but many more failures than the incremental approach. That means if you are an innovator, project leader, or investor in organizations engaged is such projects, your chances of ending up on the losing end of the process is much higher. The hero of my novel, LEVERAGE, plunges into a murder investigation where his experience and skills ill equip him for the work. It is all "new" to him, but he blunders ahead hoping for his "home run". The results are predictable.

I'm not advocating only engaging in small incremental change projects either. They tend to distract you, pull your focus in many different directions, and make life very complicated. And they aren't nearly as fun or as inspiring.

As in many areas of life, there is a golden mean.

My rule of thumb, learned through many experiences of success and failure on projects, is never try to innovate significantly along more than two dimensions. A new product is a great project, it has only one "new" dimension. Make it a new product for a new market -- and you're pushing it. New product, new market, new manufacturing process -- you're courting disaster. You get the picture.

Imagine you have only a ten percent chance of a failure along any of your "new" innovation dimensions. With only one "new" dimension, your chances of success are 90%. If you introduce two "new" dimensions, the chances drop to 81% (90% times 90%). Add another "new" dimension, and the odds of success on the project drop to 73%.

And let's face it, our ability to accurately assess the chances of success at the outset aren't all that great. I've always had a chronic bias of underestimating risks. I suspect most other people do as well.

So spend a little time thinking about the "new" dimensions in your innovative project, and assess the chances of failure along each of these. Then double that estimate to counter your natural bias (or whatever factor your personal history suggests is reasonable). If you're happy with the resulting odds -- go for it. But you just might need to consider a safer, and more incremental, approach.

Before the Project Becomes Yours...

Ever "inherit" a project? Ever inherit one where the expectations seem unrealistic? Or just plain crazy?

Yeah, I've had a few of those, too.

So what do you do? Your boss labels the project an "opportunity" for you, a chance to show your stuff? It's a vote of confidence. Or is it? Could you be a scapegoat being positioned to take the blame for someone else's brain fart?

Perhaps, while the expectations may look high, you agree it's a noble endeavor -- noble for the company, that is.

But is it good for you?

Maybe. But maybe not. It all depends on how you handle things. And how you handle things never matters more than before you first take the reins.

What are the choices?

You could dive right in and start problem solving -- that's probably your natural reaction. It certainly was mine. You rationalize that there's no time to waste, or that you can learn on the fly by doing, digging, and reacting.

You could review project status -- testing the level of available resources against the targets you will measured on. You can also check to make sure the right people are deployed in the right roles. You could formulate a new pathway to a successful project conclusion. All of these actions are useful steps, but not where I recommend you start.

Before the project becomes yours, you should review the justification. Review the original project documents. Carefully check over the write-ups, the financial analysis, and all the presentations -- especially any given to senior management or the board of directors. Test and evaluate the underlying assumptions. There is no more important place to start. Why? Because I've observed that the vast majority of projects are either already destined for success or failure before they've even begun.  Expectations are everything, and like it or not, you're performance is likely to be measured against the already existing expectations no matter how easy to achieve, or how unrealistic.

Someone in senior management wants to do something (for example: open a new plant, or perhaps close an old one). Do you think they waited for a thorough analysis to support their intuition on the desired project? Most don't. And even if they do, they, or at least their staffs, already know what the "right" answer is. They often bend and twist the analysis to support their preconceived ideas. I've seen it happen over and over again. The number of times I've seen objective analysis drive the decision (without any pre-existing "intuition") could be counted on two hands.

If you're inheriting the project, it probably comes complete with plenty of assumptions -- some that aren't particularly realistic or well founded. If you don't raise the red flag early and often, they become your assumptions. You will own them, just like whomever you are relieving.
Test every assumption, especially the ones that look risky. Bring up your concerns with bosses at every opportunity. Call foul if you can. Better to say -- "This project is never going to pay off" on day two, rather then being assessed as a failure on day two hundred when you couldn't work a miracle.
Of course, you have to play politics as you do this. If you just inherited your boss'es pet project, and he drove all those crazy assumptions, your hands will be (at least partially) tied. But do what you can to protect yourself and your reputation from the faulty assignment.
And remember -- silence is viewed as agreement. Always.

My heroine in INCENTIVIZE faced a similar situation when she audited Matrix Corporation's East African mining operations.  In that case, her only mistake was to raise her concerns with the wrong manager -- the site President.  The results were disasterous.  You can check out INCENTIVIZE further by clicking on this link.

 

 

 

Express Concerns until Success is Assured...

I once had a guy who worked for me, say: "This project is the best one we've ever done". He made this statement to our CEO during a review meeting.
I silently cringed when I heard this -- not because the execution of the project hadn't been pretty good up to that point -- but instead, because he was just setting himself up for huge criticism if even the smallest thing went wrong. At the same time was receiving very little credit for the brag -- an eye-roll over his stupidity, rather than an 'atta boy.
This incident helped me learn an important work lesson -- it is safer and more prudent to raise issues about any project or activity going on within your area of responsibility, than it is to communicate any certainty of success. There are several reasons for this.
  • Until the project is at its end, unexpected things can happen to derail success. You are better off having people recognize there are risks, than for them to be counting on an easy win. Call it the psychology of disappointment -- it is better to be a last minute hero.
  • If it doesn't look a little bit like a struggle, then you won't get as much credit. Overcoming significant obstacles is more highly valued than cruising across easy finish lines. Perhaps unfair, but definitely human nature.
  • It gives you a platform to show off your thinking and managing skills. Issue -- analysis -- action. Management loves to see this process self-initiated by an employee. Just remember not to stop at the Issue stage.
Yes, there are downsides -- you will sometimes get help you don't want. There will be suggestions from higher up that you know won't work. Often, senior intervention will be clever, but the timing will be bad, causing you to back up and redo something already finished. There might be a resource assigned to "help" that will make the task more difficult, rather than easier. You could even lose the project if you overplay your hand. That's why you should use this technique with a light touch. Use it sparingly, but use it. And never, never, ever brag about work still in progress.
So what happened to the guy and his project? He ran into a problem from an unexpected angle soon after making his famous statement. The problem added huge complexity to the project, increasing costs and delaying it significantly. Eventually the project had to be abandoned. And the CEO brought up the statement made in that review meeting regularly until the employee eventually left the company a couple of years later. It was the impression about that employee that became stuck in his head -- and certainly not the impression he wanted to make...
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Why Job Candidates Lie

Some people can quickly assess others. Others take a long time to get a clear picture. Many more think they can make a quick judgment, but are often wrong.

One place where the chances run particularly high that we will "get it wrong" is during the interview process.

In interviews, the normal reality is for the candidate to be in hardcore sales mode. "Doing your homework" as a job candidate means understanding what the company is looking for, and trying to "morph" your education, experience, and personality into the required mold. If you can make yourself into an ideal candidate, then at least you get to make the call when it comes time to take or reject the job.

Doing this is probably in the best interests of the candidate, and as a result, I don't fault them for it. It's always better to be in the drivers seat. The downside is, of course, many people end up in companies and positions that aren't well suited to them.

Why does this happen?

Because candidates don't recognize and/or accept the implicit responsibility they are taking when "morphing" for interviews -- they take on sole responsibility to evaluate their fit with both the job and the employer.  Then they make poor judgments.  Or they abdicate the responsibility completely.

But doing that is a mistake.

By "morphing", the candidate must take responsibility to assess fit. The company can't do it -- you're not really letting them know who you are. Otherwise, you're just asking to end up in a job you hate.  Yeah, I know candidates are sometimes desperate for any job they can get, but just recognize that if you ignore the "fit thing" chances are good you'll eventually be looking again.

And even when the candidates accept the responsibility for assessing fit, they often don't execute it very well.

Candidates often see what they want to see, or look only for the things that were missing from their last job. And they systematically rely on their own observations alone, rarely asking for outside opinions or evaluating external sources of information.

So here's a wild idea -- why don't candidates ask to see references from employers? Why not check social media to find out what their bosses and coworkers will really be like? Why not independently track down former employees and ask them why they left, and what the environment was really like? The companies check candidate's backgrounds of employees, so why not the other way around?

 

To find my novels, follow the link below:
To read my blog on Corporate politics, follow the link below:

 

 

Sometimes in Business, You Have to Eat Your Own Children

This piece of advice was offered to me by one of my many bosses.  And while the notion "eating our own children" sounds bizarre, or perhaps even a little comical (and knowing this boss, it was intended as comical), there is wisdom in the underlying message.
 
The point of this lesson is:  We become overly attached to our own ideas, and we have to be willing to let them go, or even be proactive in destroying them in favor of something better.
 
   I remember a book I read a few years ago (years after I learned this lesson) which nicely illustrated an aspect of this concept.  The book was Clayton Christensen's "The Innovator's Dilemma".  In it, Christensen gave us example after example of companies that became highly attached to specific products, technologies, market channels, and ways of doing things. Those products, technologies, market channels and ways of doing things served the companies well -- sometimes for generations.  In a sense, they became the sacred bedrock on which the companies operated.  Or, you could think of them as the company's "children".
 
  In more of a micro-cosmic way, the same thing happens with each of us.  We become attached to those behaviors which seem to work, and avoid those which don't, getting stuck in our own ruts.  Those beliefs become like "children" to us -- magical formulas for success.  But like the larger corporation, we often cling to those magic formulas long after they cease to work.
 
   So why "eat your children"?  As my former boss used to say -- it is better to eat them yourself, than have them eaten by others.
 
Discarding old ideas and embracing what is new and innovative launches us into a process of renewal and re-invigoration. If we are on the lookout for the pitfall of becoming too attached to our "children", we can avoid the painful disasters that come from clinging to outdated ideas, products, technologies or channels.
 

   To find my novels, follow the link below:

 

Completed Work

This tidbit of thought was contributed by a former boss of mine.  He originally referred to it as "Admiral Rickover's Theory of Completed Work", but a can't vouch for the reference to the admiral.

The "theory" goes as follows:  A person should never bring only a problem to their organizational superior (boss).  Instead they should bring the problem, their analysis, the possible ways of solving the problem, and their proposed solution.

Another way I've seen this stated is to never "delegate upward".

Why is this rule important? 
Managers are busy, directors busier, VP's...well, you get the idea.  No one appreciates having additional work tossed in their laps -- especially difficult, time-consuming work.  I can remember getting "suggestions" from employees and thinking "okay, you've done one percent of the work, and now expect me to do the other ninety-nine".  If you have hundreds of employees, the task of "solving" all of these problems becomes impossible.

Finding a problem is not a credit to you.  Analyzing it at least makes you appear smart (assuming you don't make a huge mistake).  Developing alternatives makes you appear smarter.  Offering your recommendation shows courage.  In a world where the employee has limited opportunity to "show what they've got", completed work is one of the easiest ways to do so.

Now What?

I've been puzzling on where to take future posts on my Corporate Politics Blog.  Over the past two years, I've plumbed the depths of my knowledge and insights on the original topic, and feel there is little more to add (although, I'm summarizing subject in a new book, which I hope to release in the next couple of months).  And I haven't seen any recent articles on related subjects that have tickled my fancy -- things that I can put my own particular spin on.  In short, I'm out of material for now.

What I do have, however, is a incomplete series of posts I started and abandoned on my personal blog.  The posts cover my Work Lessons Learned, a series of conclusions I drew over many years about how the world of large corporations works.  They are extracted from a work-in-progress which I've tentatively titled LESSONS LEARNED THE HARD WAY.  The book (which isn't going to be published anytime soon) is a series of thirty strange or bizzare stories -- ones I personally experienced while managing in large corporations.  The lessons are what I discovered as a part of those experiences -- usually a result of making mistakes, sometimes big ones.

Starting at the end of this week, I'll begin posting some of these "lessons learned".  There are more than a hundred of these little tidbits in the draft book, so the series will on-going for quite some time.  And while the reader won't get to see the details of what led me to these conclusions about the business world on this blog, the lessons themselves will be explained in greater depth than in the book.

And hopefully they will be both entertaining and useful to readers.