subject: The Best Of Times, The Worst Of Times [print this page] We are facing the melt-down of the Western banking system, for who knows what reason. Obscene salaries and bonuses coupled with quarterly results thinking could have some bearing on the mess we find the economy in.
Apparently the CEO of Lehmans, the first US bank to fall over recently - had earned a quarter of a trillion dollars over 10 years. If that isn't obscene I don't know what is. No-one is worth that kind of money. If it was his own business fine, but as an employee, no way. And if he was earning that kind of money, presumably his senior management team would be on similar compensation packages. It doesn't take a rocket scientist to work out that with those kinds of salary packages, that company needed to do a LOT of business.
I think there is widespread corporate confusion between growth and greed. And in that case, a singular lack of controls and accountability. Is he going to pay back part of that package now he has caused so much misery. I won't hold my breath.
For most of us in business, the larger economic situation is out of our control, we can get angry and frustrated, but we can't really change much. So we have to find ways to STAY IN BUSINESS until some form of sanity prevails.
I know from personal experience of working with teams over a twenty year period that there are a million ways of saving money; finding more efficient ways of doing things and even coming up with ideas for new products or services - yes - even during a recession.
Some Do's and Don'ts
DON'T PANIC and start frantically laying off good staff. It is a very short term solution. If however you DO decide staff need to go, don't lose front end staff, look at your management structures. How many managers do you REALLY need?
DO acknowledge a few facts:
FACT 1:
The hierarchy is dead. We no longer have the time to work in such a cumbersome fashion; we have to get as much information and decision making to the front end of our organisations as quickly as we can. Hierarchies create power-bases; power bases stifle speed of response and power bases totally stifle creativity.
FACT 2:
Our employees are our only competitive advantage - few organisations have any products or services that their competitors don't already have. And even if they do have some magical product or service that no-one else has, that advantage will not last for more than a millisecond.
FACT 3:
Today's employees are demanding to be included in decisions which affect them, and in a world where there is already a huge shortage of skilled people, if we don't involve our people, it will be at our peril because someone else will. And since it costs approximately two and a half times a person's salary to replace them, hanging onto our good people makes excellent business sense.
The 4 x I's of good business:
a.Involve - get people together and be honest with them and let them be honest with you. Ask them for ideas and input. After all, their jobs and futures are on the line too. It is in their interests to find efficiencies and they will, so long as it doesn't mean losing their job!
b.Improve - ask the question, what are we doing in 4 steps that we could do in 3 or even 2. And what are we doing that we could illuminate altogether? A what are we NOT doing that we should be doing?
c.Innovate - ideas, ideas, ideas, ideas - there is no such thing as a stupid idea.
d.Implement - we don't have years to implement ideas, we have weeks. Get going, keep experimenting, try different things. Review, review, review.
When I present at conferences I tell my favourite story.....
'An organization realized it needed to put on a night shift. They chose the men and the manager and got going. The manager stayed with the shift until he felt everyone knew what they were doing and he was comfortable that they were achieving target, more or less.
A couple of years passed. The results on the nightshift were OK, not brilliant but not terrible either. The manager decided to pop in to see his guys one night and was staggered at what he saw.
Once the guys were without a manager, the first decision they made was 'we don't need all of us to get these results, how about half of us sleep for the first half of the night while the other guys manage production, and then we'll swap?'
After a while someone came up with an even better idea.
Why don't we use all that scrap material over in the corner and create a business on the side. So they did. One half of the team ran the company production and the other half ran their private business. They even had a company in which each were share-holders. And this had gone on for a couple of years.
Management did what management would do. They fired everyone on the nightshift.
What a shame they hadn't thought to ask the nightshift how they had achieved these results, and put those same production processes throughout the entire company, and made everyone in the company a shareholder. What a difference that could have made.'
Your employees know where the waste is. They know where the improvements are. But we have to make it worth their while to let us know. After all, the traditional way of working and managing people is to find ways to GET RID OF PEOPLE, not a great deal of incentive then for employees to come up with ideas!!
Get creative and get inclusive. Make it worth your employee's while to let you know how things can be done better!
And as for the global situation. Once this crisis is over, and eventually it will be over. Let's try and put in place systems where people do NOT earn obscene salaries; let's put in place systems where people are paid bonuses for improved results, but have to pay BACK a part of their salary package if the results are poor! That would make a few people think twice before taking risks with other people's money.
But mostly, let's learn from this situation and make sure we don't repeat it in another 7 years, which is what we as humans seem to keep doing ad nauseum.
