Archive for January, 2008

When the CEO goes Adrift in the Channels of Business Communication

January 29, 2008

Inspired by some recent comments posted by Don, here’s a little story that might drive home some of the points I’ve tried to make in my posts filed under the Never Fail to Amaze category. The names of the companies mentioned here are fictitious but the events really happened.

I was working for EFG Company. We were a mid-sized firm in the throes of slumping sales and profits. The CEO had recently met with the Board of Directors as well as some consultants that they had brought in to help pull things out of the doldrums. The stockholders were not happy with our financial results. We were all waiting to see what new directive would be coming down the pike. Something goofy always seemed to happen after these events.

It was January and the beginning of a new fiscal year as well as our newly mandated “breakout” period. Each week and particularly at the beginning of the month, we’d have a management meeting to discuss the forecast for the month and the progress towards meeting it. The customer service manager would always report on open sales orders. The sales forecast was a key indicator and driver of the upcoming month’s activity. As the customer service manager led us down the open order list, the CEO frantically interrupted in an excited manner, “What’s going on with these NABCO orders?” he snapped, “This can’t be right. These orders are down 50% from last month!” The customer service manager replied that the NABCO orders were received electronically and that was what the latest data exchange indicated. “That can’t be right,” reiterated the CEO, “I recently spoke with NABCO’s president, Don Black. He told me that orders would be unchanged.” The customer service manager repeated that the orders had always been received electronically and were always right on the mark. The CEO was unimpressed. “I want a full investigation into this and a report back tomorrow. Either you’ve made a mistake or you’re obviously not getting the right information.”

NABCO had been a customer for several years. They were a huge corporation and we only had dealings with one of their smaller divisions. As a supplier to NABCO, we were probably in their “peanuts” category. They represented about 10% of our sales. We all knew that the orders from their plant in Kansas City were received via EDI. We could not understand the CEO’s fixation on the issue.

The next day, we met again. The customer service manager reported that the electronic data exchange had been verified and the orders were correct. “I don’t believe that!” interjected the CEO, “You can’t just rely on electronic data. Don Black told me that the orders hadn’t changed. That’s the whole problem here at EFG. There’s too much reliance on electronics and data. We need more personal relationships with our customers. You’d better develop a personal contact at NABCO and get the straight dope!”

Ah ha! It was the old “develop personal relationships with the customers” catchphrase. That must have been the latest mandate and “Programme du jour“ dictated by the board and consultants. Based on prior history, we figured that this new focus on customer contact development was being triggered by a requirement to increase EFG’s sales and market share. EFG hadn’t prospected any new customers or developed any new products in years. It made sense that the board would push for this.

Sales had always been within the personal purview of the CEO. He fashioned himself as a sales “guru” but never really accomplished anything. He must have received a strong message of disapproval and strict marching orders. We middle managers knew that since the blame for poor performance always had to be shared, (You know how bad things always roll down hill.) we’d catch the brunt of it all. If the new theme pushed by the consultants was developing personal customer relationships, then the original context of that message or to whom it was being aimed was irrelevant. WE needed to correct OUR behaviors. The CEO would teach us. We now understood what “wild goose” we’d be chasing and why.

So the following day, we met again. This time, the customer service manager reported that he had spent most of the previous day tracking down the NABCO buyer who was in charge of our account. The EFG salesman who had originally landed it was long gone and the contact files were outdated. This was compounded by the fact that NABCO had a huge bureaucracy and their buyers had turned over many times. When he was finally able to get through a live person, they confirmed that all NABCO orders to suppliers were sent electronically via EDI and correct as transmitted. As a side note, the customer service manager reported that the NABCO contact seemed miffed that their EDI process would even be questioned. NABCO had spent a great deal of time and money developing a paperless data exchange. Strict adherence to NABCO’s EDI system was a condition of doing business with them. They wanted no more and no less of the materials that they ordered. “Well I spoke with Don Black again yesterday,” scowled the CEO, “He’s the president! He said that there was no problem with our orders. You’re not talking to the right person. If we only produce at 50% of last month’s orders, we’ll miss our sales quota with NABCO and lose the account! You’d better start getting some better contacts. This is why we’re failing!”

The circus continued for another week during which a tremendous amount of time and energy was expended tracking down everyone at NABCO we could think of to verify the data. Our operations folks even went as far as contacting a night shift foreman at NABCO’s Kansas City plant to verify their production requirements. Our CEO was furious. HE had the correct information from HIS contact – NABCO’s president. WE were incompetent and unable to develop personal contacts with the customer to validate it. When the incessant scolding from the CEO had reached its apex, the customer service manager sheepishly asked if he could personally contact Don Black to determine the reason for the apparent disconnect in the information. The CEO became even more infuriated by the mere thought of that. How could anyone dare question the information provided by the president of NABCO? Besides, Don Black was HIS contact. WE were supposed to develop our own. WE were the one’s who were to blame for lack of sales.

In the end, we produced to the NABCO orders that had been received via the EDI transmission. We followed the same process we had for years. There were no non-conformances or production shortfalls reported back to our firm. NABCO’s orders remained down for months. In time, all of the tension and tempers finally subsided. The CEO never broached the subject again. He just suddenly stopped talking about it. We simply moved on to a different fire drill. Overall, EFG sales never increased that year.

I would have loved to have been a fly on the wall during those conversations between our CEO and the president of NABCO. I’m sure that the channels of communication in the areas of cutesy small talk regarding professional or college sports, golf, yachting, summer homes on Cape Cod, villas in Tuscany or whatever CEO’s and presidents converse about were clear and concise. A “personal relationship with the customer” had probably been developed. Did the president of NABCO actually know (or even care) about NABCO’s purchases from our company? Was an increase in sales or new products even discussed? Wasn’t that the whole point of developing the personal contact?

Unfortunately, when it came to the day-to-day business dealings between our firms, our CEO (that brilliant “Titan of Industry”) did not seem to understand that communication at that level was better left to an agreed upon tested process and those who operate it. It was his job to increase sales and not to meddle in the ordering process. Who was really failing here?

And you wonder why I never fail to be amazed?

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A Lost Chapter from the “Double Secret” Handbook for bad Executives

January 20, 2008

Found in the mailroom in an interoffice envelope with the sender/receiver names left blank. The mailroom guy slipped it to me. We both got a good laugh.

Chapter 9 Teaching the Simpletons about Simplicity

It’s time to take a good hard look at the mindset of the lower level management and workforce within your company. Have you ever wondered why they just don’t get it, why they just can’t make things happen as quickly as you’d like or why they are perpetually failing? The answer is so blatantly obvious – they just don’t realize that everything is simple! They are the ones that make everything so darned difficult.

Perhaps you’ve just read the latest trendy book or article on the subject of success or attended a two-day seminar in Palm Beach or Jackson Hole. Maybe you’ve just come into the organization from another company that is considered successful. In any case, you were hired to “raise the bar”, to go from “better to best” and to search for “greatness”. You now know all of the secret buzzwords and acronyms and have memorized all of the key performance indicators. But the biggest secret of all is how simple it all can be – just like it was all spelled out in the articles, books and seminars or at your former company.

The workforce can’t see the forest for the trees. They haven’t grasped the concept that all are things simple. They’ve wasted their time on day-to-day tasks and just getting by. They’ve made being successful hard. The employees need motivation and a new direction. They need to be imbued with your confidence that it’s all quite simple. They need to become true believers as you have.

Let’s start with a new mission statement – a gut wrenching revelation from on high. Something like, “Folks, we’ve been complacent for far too long. We need to be more successful. All we have to do is be like other successful companies. It’s all quite simple. We’ll do what they do and we’ll be successful as well.”

There, now that you’ve communicated your new vision, it’s time to “talk the walk” or “walk the talk” or “walk the walk” or whatever one does next. Your attitude toward simplicity is key here. Here are some tips and tactics to help communicate just how simple this will all be. Your actions will speak volumes about your commitment.

– Don’t make a big deal about attending meetings. Just flit in and out. Your attitude about meetings will communicate the simplicity of it all. Stay only long enough to make a pronouncement or two about the items needing change. As an example, “The MALCON metric at XYZ Corporation is 9. We’ll need to start measuring ours against that benchmark. I’ll expect a progress report every Monday morning.” Make sure to never stick around to discuss the details. You’ve made it simple enough. So what if they’ve never heard of the MALCON metric before or even know how or if they can calculate it. It must be simple if XYZ Corporation can measure it. It’s just a number and your company’s needs to be the same or better.

– When you set new requirements or interject your words of wisdom, do so with the same aloof aura of self-confidence. While you talk about change, crunch on a mint or look out the window to feign disinterest in things so utterly simple. You need to show the workforce that it’s all quite matter of fact. The rest is up to them. They won’t want to be embarrassed by appearing not to think it’s simple as well.

– Not that you ever would anyway, but never ask in depth questions about how things are done or what is takes to change anything. Only ask for commitments on when the changes will be made. If they complain, tell them that they’ve worked too long and hard on making things difficult. Now they need to work smarter on making things simple. (How about that for a motivational line?)

– Never discuss the need for additional resources to change things around. Simply put, the resources are right there. Make it clear that you’re talking to those resources. So what if XYZ Corporation or the company that you just came from had more resources to facilitate change. You’re not comparing your company’s RESOURCES to XYZ’s or any other companies’ for that matter. You’re only comparing your company’s RESULTS to theirs. Tell the complainers that comparing results is “apples to apples” but that comparing resources would be “apples to tomatoes.” There, see how simple?

– If you decide that the workforce really needs help with the concept, suggest they read those trendy books about cheese or fish or some other food groups. You’ve read all of these books. They were simple to understand. After all, you understood them. You know the difference between apples and tomatoes.

Always remember that declaring all things to be simple is your department. Making things happen might be more difficult – but that’s their department. You’re doing your bit. It’s time that they stepped up to the plate and did theirs.

PS We never said that SIMPLE meant EASY. Don’t tell them that! If word gets out, watch out for the flying tomatoes.

Have you ever felt like you’re digging your own grave?

January 11, 2008

Consider this: Remember the last time you watched one of those movies where a hostage, POW or some other captive is forced to dig a deep hole while surrounded by armed antagonists? You just know what’s about to happen. So does the poor schmuck who’s digging the hole. That’s about way we all feel right now.

If you’ve kept up with my posts, you know that the division we work for has just been sold to a competitor. We functional managers of the division (but by no means considered part of the executive level of the corporation that used to own it) have been charged with providing data to the new owner, closing out transactions for the old owner and transitioning things over for both. I’ve personally been involved in the entire process since being sworn to secrecy three months ago and will be until the new owners figure out how to integrate the division into their fold. There are other divisional middle managers from other functional areas that are in the same boat as well. To one extent or another, our knowledge, hard work and experience has helped consummate the sale and will be essential during the transition.

Our former employer, from whose payroll we were just severed (PS with no severance pay), had the expectation that all of our additional work to support the sale was just “business as usual” and part of our normal duties. Our new employer expects us to conduct business, learn and adhere to their policies and procedures and manage all ongoing tasks as “business as usual” within short order as part of our normal duties as well. Both old as well as new employers expect a smooth transition from one enterprise system to another within a few months. There is even a transitional service agreement between both companies that spells out the specifics as well as a timetable. It looks like they are expecting a complete cut over by May. Of course there is no mention of what happens to us. It’s all about continuity and “business as usual” – and making that happen no matter what it takes.

We all know what’s coming. A huge Fortune 500 corporation with unlimited resources has purchased us. They are a competitor as well and located in another state. Our division’s products and marketing channels will quickly be assimilated into their structure. This will result in redundancies galore. They do not plan on keeping any staff in our locale. They already have planty. Our clerical folks and support staffs are frantically looking for other jobs before time runs out. We are charged with keeping them happy, loyal and “excited” about the new arrangement. Many of us (including yours truly) are heavily into the job market as well. Those that are not, are just plain foolish or independently wealthy.

We’ve just met with new owners and are now on their payroll. During the “love in”, we were given an overview (basically a slick made for TV commercial) of their corporation. That was just about it from their side. Questions flew about severance pay if (rather when) positions are eliminated. The response? They’re “working on it”. Questions about retention agreements have been answered similarly. Several of us have even been asked if we are interested in relocating. We, in turn, have asked about relocation policies, our future status within the organization and expected timing should we opt to accept. The response? They’re “working on it”. You see WE need to be patient. They are very busy and they’ve only had a few months to plan this all out.

Shortly after the meetings, we were told that the transition process needed to be sped up. It is now imperative that our division be integrated into their business as quickly as humanly possible. When asked how we’re progressing, we answer that we’re “working on it”. That answer seems to be unacceptable. There appears to be lack of patience on the part of the new owner. We’ve got to do what needs to be done to make this happen faster.

The endgame? We’re sensing that the sooner we complete the transition, the sooner they can cut us all loose. May is not that far off and it is the agreed upon deadline. They know full well that everyone is looking for other employment. If someone leaves now, there is nothing extra for the new owner to pay out. After all, they’re still working on the severance plan. If they can integrate and transition faster, why bother to offer anyone a retention agreement. As for those of us asked if we were agreeable with relocation? Perhaps it was just a “teaser” to entice us to work harder. We just don’t know and they’re not telling us. All we do know is that everyone expects “business as usual” to be hurried along.

Dig faster! Dig faster! Dig faster!