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It has been over nine months since the last update. I have been busy. I may write an update soon. In the meantime, it occurs to me to share this strange fact: every workday, everywhere I go, I carry the final pages of Andrew Grove’s High Output Management. Lame but true.
High Output Management is a soft skills book written by an engineer-at-heart. Grove was CEO of Intel during their rise to prominence. Possibly he’s the reason you know the name Intel.
At the end of the book, he lists out homework. “You have trusted me enough to buy my book and read it. Now let me say a final thing: if you do at least 100 points worth of what you find here, you’ll be a distinctly better manager for it.”
I’ve been chipping away at his assignments since May 2012. So far I’ve earned 70 points. Every time I do an assignment, I write the date. I aspire to do one every two months. I guess the average assignment is worth ten points. So I’m doing less than two each year. Not brilliant. Here’s what I’ve done:
- 8-21-14 What are my outputs? 0 points (I made this one up)
- 2-25-15 Identify half a dozen new indicators for your group’s output. They should measure both quantity and quality of the output. 10 points
- 6-20-16 Install these new indicators as a routine in your work area, and establish their regular review in your staff meetings. 20 points.
- 10-11-15 and 12-17-15: Look at your calendar for the last week. Classify your activities as low/medium/high leverage. Generate a plan of action to do more of the high-leverage category. (What activities will you reduce?) 10 points each time
- 5-10-12 Forecast the demand on your time for the next week. What portion of your time is likely to be spent in meetings? Which of these are process-oriented meetings? Mission-oriented meetings? If the latter are over 25 percent of your total time, what should you do to reduce them? 10 points
- 8-13-12 List the various forms of task-relevant feedback your subordinates receive. How well can they gauge their progress through them? 10 points
- 8-11-15 GTD reread, review, and revamp 0 points (I made this one up)
Most of this work has been done for MassLandlords. The 2012 bullets were Terrafugia.
The December 17, 2015 assignment still is not done. This is the reason why I’ve been so busy. I am trying to get all of my time into high leverage activities. I can’t be mowing the lawn. Problem solved. I can’t be coding the website. Problem solved. I can’t be answering phone calls from customers. Problem soon to be solved.
Overall, this assignment has shown me that I am the biggest problem with MassLandlords. I’m the long pole in the tent, holding everything up. I’m supporting but I’m also delaying by being integral to every process.
The work to unload has been painful. Since last winter, I terminated two employees that didn’t work out. I also lost a cofounder on a side project. I missed (or am missing) two huge opportunities that I just don’t have time for. Every setback is another sharp turn downward on the startup roller coaster.
This is why I carry Andrew Grove around with me everywhere I go. I’m not yet where I need to be. But I will learn from him and others, and I will get there.
I’d like to share a surprising quote from the book Made in America, a sort of conversational biography of the founder and manager of Wal-Mart, Sam Walton, who said:
The larger truth that I failed to see turned out to be another of those paradoxes — like the discounter’s principle of the less you charge, the more you’ll earn. And here it is: the more you share profits with your associates — whether it’s in salaries or incentives or bonuses or stock discounts — the more profit will accrue to the company. Why? Because the way management treats the associates is exactly how the associates will then treat the customers. And if the associates treat the customers well, the customers will return again and again, and that is where the real profit in this business lies, not in trying to drag strangers into your stores for one-time purchases based on splashy sales or expensive advertising. Satisfied, loyal, repeat customers are at the heart of Wal-Mart’s spectacular profit margins, and those customers are loyal to us because our associates treat them better than salespeople in other stores do. So, in the whole Wal-Mart scheme of things, the most important contact ever made is between the associate in the store and the customer.
Those words were spoken in 1992 or before. Now 21+ years later, when you think of Wal-Mart, do you think of a role model for collaboration between corporations and employees? I don’t. Take, for example, this New York Times article from earlier this year, which makes a recent addition to a years-long story of Wal-Mart and wage disputes.
Walton goes on to say (back in 1992):
Theoretically, I understand the argument that unions try to make, that the associates need someone to represent them and so on. But historically, as unions have developed in this country, they have mostly just been divisive. They have put management on one side of the fence, employees on the other, and themselves in the middle as almost a separate business, one that depends on division between the other two camps. And divisiveness, by breaking down direct communication, makes it harder to take care of customers, to be competitive, and to gain market share. … Anytime we have ever had real trouble, or the serious possibility of a union coming into the company, it has been because management has failed, because we have not listened to our associates, or because we have mistreated them.
It’s been about a generation since Walton spoke those words, but they seem just as applicable today.
Anyway, if you’re keeping a reading list, Made in America is an easy read that I highly recommend.
For further reading:
Check out my previous post on one way how not to treat employees.
A company I’ve done some work for in the past recently lost a major bid. The super-boss called the entire team into a conference room and said, “You lost the bid, you’re all fired.” Some of the team had been with the company for over thirty years. The carnage hit multiple rungs of the ladder, from some new engineers all the way up to a vice president. All of them had been working hard right up until the meeting.
The particulars of the situation — how the message was actually conveyed, the extent to which there were equitable severance packages, the degree to which each may have failed to perform his or her duties — matter a great deal, and because I wasn’t there, I shouldn’t pass judgment. I can say, however, that the company culture could have grown in a petri dish. It was the worst I’ve seen of leadership in corporate America. The folks who were let go might rightly miss their lost paycheck, but at least they get a chance at a more ethical work environment somewhere else.
When it comes right down to it, the people associated with your business are your business. If your customers all quit, or if your employees all leave, you’ve got nothing. The effects of this are obvious from small-time real estate, where sole proprietorships only ever sell at book value (the cost of the house), all the way up through corporate America, where “succession planning” is a big deal.
Good companies recognize this by offering training and development. In terms of performance reviews, outside training courses, and other self-improvement perks, employees at mid-size companies like the one I mention above probably receive over $5,000 a year in improvement-related perks. At some companies, like UTC, benefits can be far more substantial. My favorite example is Toyota, who (although I can’t remember where I read it) didn’t lay off anyone at their US Sienna factory and instead set them in motion on a circular assembly line, honing and improving their techniques until the recession picked up enough where they were on A-work again.
Suppose GAAP required capitalizing employee training and holding it on the books as a form of goodwill. Then when you fired someone, you’d be forced to recognize the true impact of your decision: you’d have to write down all that training. Talk about restructuring charges.
Suddenly “you lost the bid, you’re all fired” might not seem like such a good idea. Maybe there’s another way to make some money with that team…
Previously I talked about hiring employees and gave an overview of a process that I’ve used to good effect in the past. The perspective there was straightforward: you’re a supervisor or a hiring supervisor and you’re bringing on someone to be a direct report, either for yourself or someone else.
Hiring bosses involves two perspectives, and depending on which best describes your situation you’ll look at it differently.
When you’re choosing who to work for
I think this must be rather frequently overlooked, especially by inexperienced employees. Having a job offer with compensation and responsibilities that match your goals doesn’t mean you should rush to take the job. Your relationship with your boss is going to be critical, and you want to know a little bit about him or her before you sign on. Even if you have to take the job, you should prepare yourself for what’s coming.
There are three things I’d suggest you think about:
- A lot of bosses got to be supervisors and managers by doing good work as individual contributors (sales, engineering, operations, etc.). This leaves them woefully unprepared to manage people. I think Warren Buffet said it, but I can’t find the source just now: it’s as if the final career step for an award-winning cellist was to become the business manager for Carnegie Hall. If your boss-to-be has never been coached, you’ll have to suck it up for a while even if you have the conversational grace to coach them yourself.
- Noam Wasserman wrote in “The Founder’s Dilemmas” that some people (he was writing specifically about entrepreneurs) go into business for wealth, but others go into it for control. It’s important to get a sense for what your boss is after. Behaviors in different situations can vary dramatically. I’ve seen middle-ranking managers make money-losing decisions because it expanded their influence within the organization. And I’ve seen others forego promotions in order to keep doing what’s best for the company. It’s usually easier to work in groups where one or fewer are motivated primarily by control.
- You’re going to spend a lot of your time doing what your boss says. I’m going to quote Buffett again here, because he’s right on: “I learned to go into business only with people whom I like, trust, and admire.” (“Warren Buffett on Business,” edited by Richard Connors, Wiley, 2010, p. 144). This is important in business partners, and if you can find it in a boss, you’ll learn a lot and enjoy the process.
In all these, try to talk to coworkers and the boss to determine their work history and how things have been going.
When you’re choosing a leader for your organization
The above considerations still apply, but you can be a bit more prescriptive when you’re in control of the hiring process. I like Jack Welch’s “Four E’s and a P” approach (Jack Welch, “Winning”):
- high personal Energy
- the ability to Energize others
- having Edge (making decisions quickly)
- Executing (getting results)
When they’re in charge of that group or company you’re hiring for, they’re going to be almost overwhelmed by demands on their time. Many of these will be important and urgent, and they need to be able to go, go, go. In their attitude, they have to be like FDR, chin up and positive, in order to inspire other people that the obstacles they all see can be overcome. And they can’t waste the organization’s time by sitting on decisions that need to be made.
Welch found that some managers that had these things still didn’t get good results. Maybe that’s because they work on the wrong stuff, or because they’re perpetual optimists, or because they’re very quickly making all the wrong calls. So he bundled up all that into the fourth “E,” execution, and looked at candidates’ track records.
“Passion” means they’re personally motivated to take your business and do something more with it than you asked or had imagined. This last is critical, especially for startups, turn-around situations, or other times of crisis.
If you can find all this in a would-be boss, you’re doing good for yourself and for your organization.
A wise person once said, “You must judge people, because the wrong man can kill you.” Hyperbole aside, the meaning is well met. You really want to get to know someone before you enter a relationship with them, be it as their supervisor, their subordinate, or sometimes even their provider.
In each of these scenarios you want to view the process as a sharply narrowing funnel, where subsequent stages are reached only if the lower-cost, earlier stages check out. Today I’m going to look at hiring employees, and later I’ll share some thoughts about picking the right boss and customers (yes, sometimes you get to choose).
Hiring employees is easy if you go about it right, but it can go horribly wrong and consume a lot of time if you put the cart before the horse. Here are the steps I recommend:
- Say in your job posting what you’re actually looking for.
- For instance, if you really won’t consider someone without a certain degree, don’t pretend to be more open-minded than you are. Say so. Just be careful that you don’t overspecify (this applies especially to corporate HR departments using bots to screen 25,000 resumes to zero).
- The goal here is to have a large number of people self-select out of the process, before you even know about it.
- Caveat: If you have more than 15 employees, it is illegal to inquire about the following:
- Race, gender, religion, family status, disabilities, and
- Ethnic background, and
- Country of origin (ask if they’re authorized to work in the US instead), per http://www.dol.gov/oasam/regs/statutes/2000e-16.htm
- Sexual orientation, per http://en.wikipedia.org/wiki/Employment_Non-Discrimination_Act
- Military service, per http://fhp.osd.mil/pdfs/userra.pdf
- Marital status, per http://www.unmarriedamerica.org/ms-statutes.htm
- Age, depending on whether they’re a contractor or not:
- If you treat everyone equally, you can ask about height, weight, club membership, or being a minor, per http://www.dol.gov/compliance/guide/childlbr.htm
- Caveat: If you have more than 50 employees and government contracts greater than $50,000, you also need an affirmative action plan.
- For most professional jobs, take both resumes and cover letters.
- Read them in small batches so you get into the mindset.
- Fill out a score sheet of your own design with each one.
- If they scored too low to be viable, make a note and put their materials aside.
- Use the telephone.
- Use email to invite high scorers to a low-key phone call. “Would you be available for a chat sometime Friday afternoon?”
- Beforehand, create a prompt sheet to remind you which key areas you want to hit upon.
- When the time comes, call them from a quiet place. “Hi, this is So-and-So from Acme Co. calling for What’s-Your-Name.”
- Small talk goes a long way towards getting the conversation going smoothly. Prepare to talk about something banal, like the weather, just to get them going. Ask them how their day’s been going so far.
- If the interview starts out shakey, try to keep them talking for at least 15 minutes. Especially with inexperienced hires, sometimes people need a lot of time to get their best foot forward.
- Ask open-ended questions from your prompt sheet, trying to fit them naturally into a conversation, rather than announcing stiffly that you “will now proceed to question three.”
- If your phone call reveals problems, make a note and put their materials aside.
- If their job is very technical, have a technical person speak with them a second time.
- Give up to an hour, if need be. Have the technical person use their own prompt sheet to hit all the key areas.
- If the technical call reveals problems, make a note and put their materials aside.
- Assuming the phone calls went well, arrange an on-site.
- These are hugely expensive. You’ll spend a couple of hours with them, give them a tour, and interrupt their day, yours, and your coworkers’. Do this only if you expect it will work out.
- Use the time on-site to test what they’re going to be doing. Ask them to prepare a presentation in advance, or draft something in CAD the day-of, or talk about accounting. Ask them to do anything within reason that will give you an idea of whether they’ll work well.
- Debrief with the team soon afterwards. Invite all employees who met the interviewee to the same debrief, regardless of their position in the company.
- As the hiring supervisor or HR person who brought them in, you’re probably still in favor of their getting an offer. Tell the group if this is no longer the case, and why.
- Assuming you’re still in favor, you must play Devil’s Advocate to ferret out the reasons why this person won’t work for the rest of the team.
- Communicate quickly.
- The best folks don’t wait around. If you want to give an offer, don’t wait, give an offer.
- If you’ve decided they’re not a fit, wait a day to give it due consideration and then say so in so many words. Don’t offer suggestions for improvement unless they ask.
- Keep records.
- If, heavens forbid, your hiring practices are called into question, you want to be able to pull up a document indicating that you’ve done nothing immoral or illegal.
- Review how many folks you screened at each step, and whether there were any expensive surprises toward the end of the process. Try to avoid those by rewriting the prompt sheets for next time.
You can adapt this process to suit your own business. And remember that the goal in this rigor is ultimately to save yourself time by weeding out candidates who won’t do and by getting quickly and fairly to the next great addition to your team.
For further reading, I recommend:
- Endurance, Shackleton’s Incredible Voyage by Alfred Lansing. A short section describes how Shackleton could size someone up after a few minutes, and the rest of the traumatic voyage proves that some people like Shackleton are superlatively good judges of character. For the rest of us, let’s use the funnel process.
- Winning by Jack Welch, for the “four E’s and a P” metric used to evaluate future leaders.