Archive for November, 2010

Sounds of Silence

This is an article written by Elizabeth Wolfe Morrison and Frances J. Milliken of Stern Business School of New York State University. It explores the reasons for employees not speaking up against the top management and the organizational climates that prevent open communication.  An Industry Week survey showed that only 29 % of the first level supervisors feel that the company encourages them to express opinions. The authors of this article found from their own interviews that 85% of the MBA students were unable to express themselves in their organizations. I believe that the employees should come forward to create ways to communicate with the top management if there are no formal channels to communicate with the management. Many employees fear of losing job, but that is not the case all the time. Every organization and the management need employees to run the business.

It is true that quality of the decisions deteriorates if multiple prospective and alternatives are not considered. Also innovations always start from deviation. Unfortunately, in many organizations, management wants to precisely direct the employees and want to micromanage employees’ day to day work. I agree that it is a human nature that people want to control their immediate environment and the decisions that affect them. Being able to express themselves gives a sense of that control.

It is unfortunate that managers believe that employees are self-interested and untrustworthy. I believe that there is nothing wrong in being self-interest while contributing positively towards the organization. I also believe that personal growth of each employee will make a positive impact on the business of an organization. The other issue is the informal formation of “good old boys club” in the management. This happens when the top management team is assembled with the members who know each other beforehand and who are stable for a long time. In some cases, the top manager brings his clan from outside and not promoting internally. In this case, the long-term committed midlevel people and the other employees start to suspect the motives of the top management and the management starts to watch the employees. The communication and cordial relationship between the employees and the top management fell apart with time.

I don’t believe that breaking the organizational silence is hard or impossible. All we need is the change in the behaviors of the management and the employees. Managers should work hard to learn to accept negative feedback. Employees should come forward with their opinions without fear. Employees should know that each position in an organization is unique and they are not a burden to the company. Employees are the biggest assets and that cannot be thrown away easily by the top management.


Harvard Business Publishing: The Treadway Tire Company-Job Satisfaction and High turnover at the Lima Tire Plant

This is an interesting read on the foremen turnover with Treadway Tire Company’s Lima plant. The problems started at the beginning of the foremen placement. Foremen did not get a formal training to start the work or improve their skills. The informal training was also at the discretion of the general supervisor and area manager. This was a poor policy of the plant administration. Ashley Wall, the new human resources manager recognized this issue. She came forward a month-long rotational training program. This is a joke. Nobody can learn inside and out with one day with payroll and another day with human resources. Again when there was a shortage in budget, this program was taken out. I want point out that Nevada Department of Transportation (my employer) employed a rotational program for young engineers which last for 22 months.

The other issue was the conflicting interests of management, workers, and the union. The employment contract should be precise with the roles and responsibilities for each position including foremen. It looks that the foremen did not have much authority over the hourly employees while they were responsible to meet the target production.

The third issue was the career growth prospects. One General Supervisor admitted that though he recommended experienced foremen for promotion, Human resources focused on hiring outside college grads. I understand the human resources’ attempt to get more college grads into the company, but there should be balance between hiring outside grads and promoting qualified foremen. If people don’t see any growth potential, their moral and passion on work will be diminished.

Communication was another issue. Foremen felt they were isolated from the Lima plant family. It was a good gesture of Brandon Bellingham, the Lima plant manager, to introduce occasional social events. It was unfortunate that the general supervisors and area managers were not accustomed to such level of interaction. I see this as a plant wide problem or company wide problem that need immediate rescue.

Stanford Graduate School of Business: The Men’s Wearhouse-Success in a declining Industry

This is an interesting case about the management in the Men’s Wearhouse. George Zimmer, the founder and chairman, is the backbone of the company. Men’s Wearhouse was successfully expanding in the men’s tailored business clothing industry while many of the similar organizations were in consolidation or under financial distress. George Zimmer strongly believed in the idea of tapping the untapped human potential as the key to the success for any business. But it is difficult to quantify that potential for many businesses. Zimmer says that he cannot measure the value of human potential. He has a blind faith and trust in the value of human potential. In Men’s Wearhouse, reaching the human potential does not mean selling more cloths, but becoming a better spouse or significant other, becoming a better parent, becoming a better friend, becoming a better person.

Zimmer believe in the concept of servant leadership. Servant leadership forces a change of perspective from the traditional boss/employee relationship to service provider/customer relationship. In simple terms the people who are managed by a manager are the customers for that manager. Men’s Wearhouse specifies three key principles of servant leadership: to maximize the individual’s self-esteem, to listen carefully and to demonstrate understanding and the third one is to ask help in solving the problems. Mentorship and personal touch have been emphasized in men’s Wearhouse. Charlie Bresler says that until recently he knew every store manager and most assistant managers in the country. The management team travels around the country and visit each store. Similarly regional and district managers are also required to visit the store that fall within their territory.

Employee loyalty is encouraged in many ways. Employees are compensated above the industry norm. Promotions were totally from within the company except a few management positions. There are people who grew up with the company from a bottom level. The management team communicates with the employees through many channels. They publish a monthly newsletter. They prepare videos and sent those to the stores. The company had a number of formal meetings throughout the year in which training and development occurs. Most of the training and mentoring are led by Zimmer and Bresler.

HBR: The Layoff

This is an interesting case study about the behind the scenes of layoffs in Astrigo holdings. Several strategies were analyzed: first in first out, rank and yank, last in first out or lose a unit. In the first in first out scenario, Astrigo will lose people with institutional knowledge. Also there is a possibility of lawsuits against Astrigo based on age discrimination. In the rank and Yank scenario, supervisors may get rid of people of office politics victims. Also this is a lengthy and expensive procedure. Last in First out is the most convenient method for the administrators. Also Astrigo will not be burdened with huge severance pay. But Astrigo will lose newly hired highly qualified and energetic people. Also, it is unfair to layoff a new hire who chose to work for Astrigo when she had other offers from competitors.

Different divisions of the company want to have their interest taken into account in the process. Finance wants to control the cost. Legal want to lower the risks. HR hopes to ease the administration. CEO is concerned with the values. Bob Sutton advises that Astrigo should not prolong the layoff process for months. It should be done in one shot and rest of the employees should be assured that there will not be any layoffs. This process will help keep the moral from falling down to earth.

It is unfortunate that Astrigo holdings chose layoffs as their first option during the economic downturn. 5% across the board pay cut and more cut for the six figure earning people are some of the options that should be considered. Also it is important to note the Astrigo should keep the company as a non-volatile place. The increasing number of retiring baby boomers, who have a lot of wealth, do not want to invest on a volatile company. Layoffs certainly increase the volatility. Bob Sutton points out that it took almost 18 months to realize the savings of layoffs during the 2001 economic slowdown. Also when calculating the savings most companies failed to account for the cost of recruiting, hiring and training new employees when good time returns.

Jugren Dormann smashes that Astrigo has more than cost problem. The company appeared to have strategy, management and cultural problems. While rumors fly and moral sinks, two of the top managers are off having an expensive lunch in a private dining club with their families. This reminds me time when the GM and Chrysler auto companies’ executives flew in private jets to Washington DC to beg bailout from taxpayers for their companies.

WSJ: The End of Management

I had an opportunity to read this article authored by Wall Street Journal deputy managing editor Alan Murray. He recently published a book, The Wall Street Journal Essential Guide to Management. This article appeared on Wall Street journal on august 21, 2010. The main point of the author is that the concept of the corporate management was a great tool to organize people and allocate resources for the complex tasks in the 20th century and is now become obsolete. I completely agree.

I believe the society’s needs were increasing over the decades, but the available resources are not par with the increasing needs. This made the society greedier to capture the limited resources. The corporations who fed the rise of global middle class are now destroying the middle class. The same corporations who portrayed themselves as the champions of free market in fact created ways to get around the rules that made them corporations. The corporate management created a huge bureaucracy which is not capable enough to be flexible to the current rapid globalization, accelerating innovations, and relentless competitions.

As Clayton Christensen wrote in his book The Innovator’s Dilemma, the traditional corporate management studied the market, listened to the customer, and allocated the resources to capitalize the trends. But they missed the disruptive innovations that created new markets and opened up new customers. Another trend is the increasing complicated enterprises like Wikipedia and Linux operating system where there is no corporate management structure that runs the enterprise.

I think people want to be more intrinsically motivated in their work. That may be the reason they are not engaged in their work that reward a salary. Some dynamic organizations, like Google allow their employees to spend 20% of their time to work in any innovative products without competing for funds. The question in front of us is, can the traditional corporate management survive in the 21st century. I believe no. I don’t have any solid solution, but I believe that more wisdom at work will cure at least some of the deficiencies.

HBR: Level 5 Leadership

This is a fascinating article in Harvard Business Review authored by Jim Collins. Just after reading the case, I was thinking of the CEOs who left the banks with millions of dollars as their “termination package” while those banks were on the verge of collapse or collapsed in the recent economic meltdown. Hopefully somebody will write about them in a couple of decades titling, say, Level 0 leadership.

The legacy of Darwin Smith, the CEO of Kimberly-Clark, is extraordinary. He did not even show his ego after a director pulled him out and said that he lacked some qualifications. He quoted that he never stopped trying to become qualified for the job. Probably his intense search of leadership made him a legendary. Colman Mockler, who rescued the Gillette, is another Level 5 leader. It is so painful to know that he died on his office floor due to heart attack just minutes after seeing his public appearance. It is unfortunate that he did not survive to see the company he built to the top.

Al Dunlap, the CEO of Scott Paper resembles the many CEO of today’s businesses. He made $100 million for his 603 workdays. He achieved this by slashing workforce, cutting research and development etc. There was an article in the recent local news paper about the earnings of people in the United States in the last couple of years. People who made more than $50 million rose five folded from 2008 to 2009 while people in all other income levels lost their earnings in 2009 compare to 2008 ( I think there are too many Dunlaps exist today. The funny part is that Dunlap wrote an autobiography boasting himself. Lee Lacocca, who saved Chrysler from the bankruptcy, lost his leadership qualities when he gains fame. That resulted with 31% drop in stock during his second half of tenure.

I was not surprised that the Level 5 leaders don’t even claim their achievements. They feel luck is a main reason in their success. There are not many Level 5 leaders because those leaders don’t express themselves as great personalities. That may be the reason that those leaders are unable to come to the top. Usually people with “lip service” are able to sell themselves more at the interviews and able to convince the hiring authorities.

In my personal experience I had a few good bosses and a nasty one in my work. They all are midlevel managers in the organizations. I feel all those good managers had Level 5 leadership qualities. They showed humility and had strong professional will. Also they were very supportive of their employees’ professional and personal growth and well-being. I had a great pleasure working with them.

I am wondering how the Level 5 leaders balanced their career with personal/family life. This article did not go into the personal life of the leaders.

WSJ: For Lt. Withers, Act of Mercy has Unexpected Sequel

This is a fascinating article based on the decisions of Lt. Withers whether to keep two holocaust survivors and the search of two old-time friends by John Withers II, Lt. Withers son. The article is authored by Bryan Gruley and appeared on Wall Street Journal on November 25, 2003. It starts with picturing the horror experienced by the Jews under Nazi regime. It also touches the plight of blacks in the USA during the segregation era. Two young Jew men, Salomon and Peewee, escaped from the massacre of Nazis and end up with the Lt. Withers quartermaster unit. This article takes us through the life of Peewee and Lt. Withers. Lt. Withers was a black army officer of a quartermaster unit.

Quartermaster units had orders not to contact with the Jew prisoners. The US army worried that the supply conveys would pick up diseases and spread them to other army units. Lt. Withers, after seeing Peewee and Salomon, decided keep them with the unit and took care of those refugees. This is a decision Lt. Withers took against his superior’s order. Also he may end up abandoning his dream of doing PhD if he gets caught. The black soldiers kept these two Jewish men until they stand on their own. After a couple of years Lt. Withers returned to home from Europe. Peewee and Salomon presented a photo album with picture post cards.

A post card ends up with Lt. Withers son, john Wither II after 5 decades. He was already familiar with the names of Salomon and Peewee from his father’s war time stories. He started searching Salomon and Peewee. During the search he found out that Salomon had passed away in 1993. After several efforts Lt. Withers and Peewee met at Hartford, Connecticut Airport after 6 decades.

About two years after Lt. Withers went to Hartford for Peewee’s funeral. It was an emotional moment for Lt. Withers. Lt. Withers first got to know Peewee when he was 14. Peewee died at the age of 75.