Passion, People and Principles
post # 259 — December 12, 2006 — a Strategy post
In most companies and firms, it is taken as a matter of unexamined faith that the organization must grow. A related article of faith is that size matters — in marketing, in recruiting, in profitability.
The “growth and size†school of thought has some eminent supporters. Jack Welch of GE famously believed that to be a viable competitor an organization had to be number one or number two (measured by market share) in its industry. Many contortions of analysis have subsequently taken place by companies (or divisions within companies) trying to redefine their market so that they could claim to be the first or second biggest in that market.
Wall Street analysts seem to care about little else but growth when valuing share prices, and CEOs respond to this strong signal. Even if they can’t grow “organically†(or maybe especially if they cannot grow organically) CEOs eagerly seek out “deals†to expand their empire.
To this day, academic institutions teach the decades-old “Bermuda Triangle†theory of industry structure, which says that you can only survive by being either the biggest overall in your industry or be small and dominate a focused specialty. (The Bermuda triangle is the space between small and large where most firms disappear, apparently.)
I do understand the need for growth that derives from the fact that employees seek promotion opportunities, and that to hold on to good people the organization must grow in aggregate size (unless it is prepared to get rid of its senior people with enough frequency to make way for the juniors!)
In spite of all this, I have my reservations.
I worry that all these good reasons for seeking growth get turned into a mania for *ANY* growth, where the measure of success becomes growth at all costs, not **wise** growth. I don’t believe all growth is good.
For example, if two average quality firms of average size merge, is the bigger entity really more competitive? Do customers and clients REALLY re-allocate their business based on who’s the biggest firm?
And if you think growth is needed to provide opportunities for employees to advance their careers, what good does it do to grow by bringing in large numbers of senior lateral hires who then occupy the very positions that the juniors were aiming for? Or, how does it help to create opportunities for junior people by launching totally businesses involving totally new disciplines in totally different geographic areas? The given reason for growth (provide opportunity) is often a façade for other reasons (empire building, the belief that being big helps attract customers.)
My biggest concern is that most strategic plans place a greater emphasis on growth and size than they do on quality.
I have seen as many (perhaps more) companies get in to trouble by trying to grow too fast than by growing too slow. “Too-fast growth†can lead to a lack of discrimination in chasing business, unwieldy and unmanageable structures and a poor, low-quality “if it moves, shoot it†culture.
There’s a paradox that some really great firms understand: – If you really operate day-to-day by having the primary goal of “being the best†, then growth and size may indeed result since the marketplace will notice and reward your extra value. Quality LEADS to growth and size, but only if growth and size are secondary.
It’s pretty clear that firms (and individuals) that put growth and size AHEAD of quality (that would be most businesses) will end up with weaker reputations and will, in the long run, be likely to get **less** volume and growth. Putting volume and growth first may be self-defeating. Yet it is how most firms are actually run.
Let’s play fair here. It happens to us as individuals, too. It’s easier to measure our success on volume (did I get more work) as opposed to how fast we are building new skills. How many of us can honestly say we put getting better ahead of getting more?
What do you think of these questions:
(a) Do most companies place size and growth ahead of quality and getting better?
(b) Is this, ultimately, bad for them?
(c) What, if anything, can be done about that (or is it inevitable and irresistible)?
post # 258 — December 11, 2006 — a General post
Have you taken stock of your career “balance sheet” lately? Even if your career looks healthy and your income statement is great, you still need to worry about your assets — your skills and your relationships.
My latest podcast episode, entitled How’s Your Asset (based on a chapter from my first book Managing the Professional Service Firm), explores how you can continuously improve your career by developing new career assets instead of just milking your existing job skills.
- 01:31 — Evaluating your career balance sheet
- 01:54 — Knowledge and skill as a professional asset
- 03:51 — Your other asset group: client relations and reputation
- 04:47 — The measure of client relationships: quality vs quantity
- 05:15 — The dangers of the career path of least resistance
- 06:34 — Asset-building vs Asset-milking
- 08:48 — Moving Towards a Solution: The Personal Strategic Plan
- 09:08 — Make your skill set specific
- 12:51 — Why counseling skills trump technical skills
- 15:04 — Accelerate your asset-building
- 16:49 — The four kinds of debriefing that promote learning
- 20:31 — Five questions to plan your career
You can download How’s Your Asset or sign up to receive new Business Masterclass seminars automatically with iTunes or other podcast players. (Click here for step-by-step instructions on how to subscribe.) My seminars are always available for download at no cost.
post # 257 — December 8, 2006 — a General, Strategy post
I just received an email from Atta-ur Rehman in Pakistan, who writes:
Many times in your podcasts you refer to “Professional Firms”. I’ve not been able to understand what exactly you mean by the term. Aren’t all businesses like professional firms? Could you please clarify it for me or refer to me some definition that you might already have on your website?
Great question, Atta. I had a stronger opinion twenty years ago what the term meant, but nowadays I’m not so sure.
Of course, many years ago, the term “profession†or “professional†had a sociological, cultural or class meaning — there were only a certain number of ‘learned’ professions (medicine, the law, the religious ministry). A lot of effort went into defending membership in this privileged group — doctors, lawyers and priests were special (they claimed) but everyone else was in BUSINESS (Yuck!) or were a lesser breed (nurses, for example).
Part of their claim was that they had a superior commitment to service instead of commerce, but very few people believe that any more. Nevertheless, a great deal of time and money has been spent by other industries trying to get recognized as ‘real’ professions.
When I began my work in the early eighties, I used the term “professional service firm†to mean businesses that (mostly) gave advice — not only law, medicine and priests, but including consulting, accounting, advertising, public relations, engineering, executive search, financial advisors of all kinds.
The central thing that these industries have in common is that (in principle) they do CUSTOMIZED work — they do not sell the result of standardized processes. They hire “knowledge workers†(although not everybody thinks that’s synonymous with professional workers) to apply education and training to create different outcomes for different clients.
However, even this definition gets “fuzzy.†What happens when so-called professional firms start taking a process-intensive approach and create customized outputs with a standard process? At the commodity end of many professions, it doesn’t take an advanced degree to produce really valuable outputs — just some good systems, databases, training and a high-school degree. Is that still a professional service?
Then comes the challenge that you hint at, Atta. Many of us think that being a professional has nothing to do with what degrees you have, what industry you are in, or what position you hold. Maybe the REAL meaning of professionalism is close to what the priests, doctors and lawyers were SUPPOSED to have, except that it applies to ALL of us in all industries: a moral commitment to be of service and to run our organizations to high standards based on unwavering values.
Viewed this way, maybe Atta is right. Aren’t ALL industries like professional firms? Does the term professional business mean anything anymore? Does it mean anything to say some people are to be categorized as professionals and some as something else?
What do the rest of you think? Have we outlived the usefulness of “professional service firm†or “professional business†as a helpful categorization?
post # 256 — December 7, 2006 — a Managing post
In yesterday’s blogpost on leadership the central points, which all the subsequent commenters seemed to endorse vigorously, were that the key to being an effective manager was to be interested in people, and… and… and… (drumroll, please) you can’t fake that stuff! It’s either genuine or you’re not going to be an effective manager.
In my experience, there’s too little reflection and examination on the consequences of those points, and too much glib advice (including by me) that you “should” get interested in people.
I think that misses the whole point about not being able to fake it. People array along a continuous spectrum of how genuinely interested they are in other people, and how comfortable they are in relating to other people on an intimate one-to-one (“drop the mask, be human”) basis. Given different underlying characters and personality tyupes, maybe we need to stop pretending that everyone CAN become ‘interested in other people.’ If you really can’t fake it, then what use is the advice that you should “get interested?”
Very frequently when I am doing a seminar or consulting about effective management, people look at the list of what effective managers do and they say things like “That’s not too hard – why doesn’t everyone do that?” And the answer is that it’s not too hard if you are genuinely interested in other people. But it is my experience that, in real life, only a minority really are. That’s not a moral failing, or a lack of skills – it’s about relatively fixed personality traits, in my view.
For example, some people have high social needs – they revel in being part of a lively, active circle. Others, just aren’t wired that way. They’d prefer to cuddle up with a good book rather than go to the bar or the pub with the ‘gang.’ Some people REALLY enjoy listening to the details of other people’s lives. Others, meaning no disrespect, just don’t want or need to know.
So, here’s the point for discussion. If you can’t fake a sincere interest in people, what’s the point of advising people to do it? Should we shut down all the management training programs or restrict them only for people who first pass an attitude test?
post # 255 — December 6, 2006 — a Managing post
I just heard a fabulous presentation on leadership by Craig Weatherup, former Chairman and CEO of The Pepsi Bottling Group.
The group he was presenting to had just spent much of a day debating whether a leader needed to have “charisma†so it was almost a shock for many in the audience to meet this low-key, self-deprecating “down-home†man. He may now own and live in (just as a summer home, mind you) a 110-room mansion formerly owned by the Rockefeller family, but he still comes across primarily as the humble (and loyal) graduate from the regional college (Arizona State) that he also is.
Among his messages was the importance of actually, really, sincerely, “don’t even try to fake it†caring about people. Again and again, he stressed the view that you can only be an effective leader if you view it as a privilege to serve in that role.
Describing various times when he had to lead Pepsi, his employees, his Board, the bottlers, and others through times of change, he said he was only able to bring everyone with him because they trusted him. When asked why he thought people trusted him, he said that he had worked very diligently for all his life to connect with people as individuals, not just people in a role. Just as one small (or not so small) example, he made it his business to talk with fork-lift truck drivers whenever he visited the company’s bottling plants which he did regularly.
People trusted me, he said, because they knew me. They knew I cared about them. You can’t fake that, he said. That’s what gave me the power to lead.
WOW!
post # 254 — December 5, 2006 — a Managing post
There’s been a lot of press about Pfizer’s decision to cut about 20 percent of its US sales force as a cost cutting measure. (That’s about 2,000 out of about 10,000 people.)
Leaving aside for the moment whether or not this is a good decision (though see my co-author Charles Green’s interesting insight on this, entitled Pfizer, Doctors, Sales and Trust), there was a challenging aspect pointed out to me in an email by Nick Saban. He wrote:
A good friend of my family works as a sales rep for Pfizer. She told us that on or around December 18th, the company will notify its entire US sales force if they are or are not being terminated VIA EMAIL. I am not interested in condemning Pfizer, per se, and I realize my information may not totally be accurate. However, this begs two questions, really.
First, are we to a point in our society that face-to-face delivery of bad news is so uncomfortable that is it being replaced by email (and probably text messages soon)? I suppose this is akin to the old pink slip, but termination notices by email, phone, or anything less than face-to-face are just completely dehumanizing to me.
Second, from a practical standpoint, how does a company notify a 10,000 person strong national sales force regarding who will stay and who will go? Email certainly makes this easy, cost-effective, and works out bugs in timing. But are there other methods that could possibly be as effective, yet be more respectful towards the people being cut?
Great questions, Nick, and eternal ones. By complete coincidence, I was killing time over the weekend watching some old English TV shows that I have on DVD (a 1991 episode of “Drop the Dead Donkey†to be exact) and the entire plot of this sitcom (!) was about a group of fellow-workers waiting to find out which of them were going to be fired as part of a cost-cutting program. (Great topic for a comedy, right?)
Different time, different country, different context —- same issue.
So, let’s accept Nick’s challenge. Let’s not debate whether large-scale layoffs are a good idea, fair, or anything else. Let’s address his question. If you know you’re going to have to lay off a large number of people, what’s the best way to do it? Short and sweet or slow and thoughtful? An email blast all at once or have everyone talk to their manager (which would take quite a bit of time)?
I actually think I can make a case for the virtues of the email approach. I once wrote that all business decisions contain a finite amount of pain, and you get to choose — either a lot of pain for a few people in a short period of time, or a little bit of pain for a larger group of people over a longer period of time. Guess which (in general) I would recommend? You got it — if you HAVE to choose, I think it’s better to get things over and done with as soon as possible. And if that means it has to be relatively impersonal, then that’s what it’s got to be.
The choices aren’t perfect. Of course we would all want to be more human and respectful. But leaving everyone in doubt as to whether they’re in or out isn’t very respectful, and it could take forever to arrange one-on-one’s for 10,000 people (or even just the 2,000 who are going to get the chop.) It’s the scale that causes the problem.
That’s one view. Anyone else want to offer a perspective on this tough managerial topic? If you have no choice but to layoff 2,000 people, is there a better way to do it?
post # 253 — December 4, 2006 — a Careers, General post
“Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent.â€
— US President Calvin Coolidge
What does it take to insure a lifetime of fulfilling and exciting career choices? With all due respect to Calvin Coolidge, more important than even persistence and determination is the passion that inspires persistence and determination.
My latest podcast episode, entitled No Regrets, explores how to coordinate your own Personal Strategic Plan for a passionate career that drives true success.
Timeline
00:30 — Formative and important career advice.
02:05 — The power of passion, drive, and determination.
04:05 — Five questions for the continuous revision of your own Personal Strategic Plan.
06:00 — Look to the recent past to find what would truly satisfy you.
06:49 — What determines the quality of our work lives.
08:38 — Play to your evil secrets. Don’t suppress them.
09:38 — The critical career choice you are facing right now
11:08 — Just how important is other people’s advice?
12:14 — Don’t sell: Buy!
You can download No Regrets or sign up to receive new Business Masterclass seminars automatically with iTunes or other podcast players. (Click here for step-by-step instructions on how to subscribe.) My seminars are always available for download at no cost.
post # 252 — December 2, 2006 — a General post
We’re already into December, which means November’s gone (!), which means it’s time to thank everyone who joined in here during the past month.
Again, it’s been an interesting, interactive month, and I’m grateful to all of you.
Commentors
Lora Adrianse, Jason Alba, Scott Allen, Stephanie West Allen, Tyler Allison, Andreas, Ann Bares, John Beck, Jim Belshaw, Leo Bottary, Breakingranks, Ed Brenegar, Duncan Bucknell, Tim Burrows, Paul Buseyne, Martin Calle, Tom Chandler, Colin, Robert Crampton, Dan, David, Jennifer Davis, Mike DeWitt, Bill Dotson, Lance Dunkin, Heidi Ehlers, Eric, David Ferrabee, Dean Fuhrman, Ed Gabrielse, Mike Gilronan, Paul Gladen, Michelle Golden, Marcel Goldstein, Mark Graban, Charles H. Green, Peter Gwizdalla, Isabelle Hakala, Ted Harro, Marc Hoppers, Amanda Horne, Lee Iwan, Ron K Jeffries, Juliet, Danielle Keister, David Kirk, Greatest American Lawyer, Steven Ledgerwood, Dave Lee, Ed Lee, Bruce MacEwen, Peter Macmillan, Manny, Marco Antonio P. Gonçalves, Susan Marshall, Arnoud Martens, A F Massari, Patrick McEvoy, Sharon McGann, Mel, Carol Metzker, Mike, Milan, Warren Miller, MillionDollarCountDown, Maggie Milne, Dan Murray, Arvind Nadkarni, Mark Needham, Erek Ostrowski, Yiannis Pavlou, Bill Peper, Jerry Van Polen, Steve Portigal, Russell Rensburg, Ric, Rob, Roman Rytov, Jon Sacker, Spencer Schmerling, Frank Schophuizen, Bryan I. Schwartz, Stephen Seckler, Shuchetana, Carl A. Singer, Andrew Smith, Sonnie, Mark Stevens, Tojo Thatchenkery, Fiona Torrance, Peter Vajda, Coert Visser, Michael Webb, Michael Webster, Alan Weiss, Ian Welsh, Susan Wittenoom, David Zatz
Blog Trackbacks
And a special thanks to the kind bloggers who have written about my Business Masterclass podcast series in November.
Podcast Trackbacks
Since the holiday season is coming, get your participation in early during December. We wouldn’t want things to slacken off, would we?
post # 251 — December 1, 2006 — a General post
Thank you to everyone who contributed to make these posts the most linked and discussed ideas in the month of November.
Are we too negative?
We’re criticizing way too much, pointing out the flaws in other people. …is it getting worse?
Why are some people so motivated?
If the key to individual (and organizational) excellence is a greater determination to get somewhere (and that seems to be the emerging scientific conclusion) then can such attitudes be bred in others or must they be ‘found?’
I’ve stopped reading
A while ago, I was asked which books I was currently reading, and I realized it had been a long time since I really sat down to read a book that I wasn’t absolutely required to read for work.
Who are the marketing experts in professional business?
Do marketers, particularly those in professional businesses, actually know anything?
We’ll follow the old man wherever he wants to go
Do any of you have examples of managers who led by force of personal example and willingness to go first? Managers who have been prepared to be personally accountable for their role?
If you still have ideas or opinions to add in to these or any other discussions on the blog, please join in!
post # 250 — November 29, 2006 — a General post
Regular readers know that I frequently write about the importance of feedback, and I am great proponent of asking for feedback from one’s clients.
As my first year of blogging winds to a close, it is time to practice what I preach and ask you, my readers, for your feedback: about this blog, and also about my podcast and my articles mailout.
I have been heartened and pleasantly surprised at the generous response when I have asked readers for your advice and suggestions in the past, in discussions like Help me with my strategy, Are we too negative?, and Creating Awareness — Advice Please.
I hope that once again you will be willing to take just a few minutes to let me know what works for you at DavidMaister.com, what doesn’t, and how I can make this site more useful and enjoyable for you.
You can find the survey at davidmaister.com/survey.
