Newsletter July 2002A
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Version in Newsletter Format July2002A

ENRON, WORLDCOM: Who's the YOU?

As management educators looking at the woes of Enron, WorldCom (4 Billion), Merck (12 Billion) Global Crossing, ImClone and others, we ask ourselves, "What can we learn here?" And we're reminded of a line in the movie, The Path to War, a recounting of the events that moved America into the Vietnam War and kept us there during the presidency of Lyndon B. Johnson. Johnson is angry at himself and those around him for their poor advice. Clark Gifford responds to Johnson's rantings and misgivings about not having ridded his cabinet of the previous administration's advisors with a smack-on-the-side-of-the-head response, "They only advised you; YOU decided."

In the recent cases of accounting disasters that have left retirement funds empty, smaller companies strewn about like bowling pins, and our markets in a tailspin, actually naming the YOU is like being blindfolded and swinging at a pinata with a stick. But to find our lessons, pinning down the YOU is an important exercise. Let's look at three areas: leadership, stakeholders, and accounting practices.

Leadership/Executive Management sets the ethical bar in a company and is ultimately responsible for the company's behavior. Ideally, you want high ethics and low tolerance of ethical deviations. This means that you're more likely to have employees that follow your form of ethics if you follow the same rules. Asking others to be honest with customers and employees only to skip out of the office or overlook something of question places your firm in a questionable direction. If top management sets high standards, but also doesn't have the systems or knowledge to ensure that those standards are reinforced across the board, their shortcoming may eventually lead others to make the same human decision. In the case of Enron, Global Crossings, WorldCom, Tyco and the others, it's tough to make a case that only a handful of people actually knew what was going on financially. The firm and key management built these houses of straw over time. While others seek to find out if the destructive activities were intentional and furtive or blatant ignorance, in the end, the buck stops with leadership. YOU is leadership.

Stakeholders, specifically investors, have to stop pointing fingers and assigning blame. In small companies, the investor is usually the owner who is very close to the company and understands its "ins and outs." As companies get larger and the investment pool broadens, the investor becomes farther and farther away from the company, relying on reports and advice from others. However, that distance is still no excuse for greed. Remember when dot.coms (or the Dutch Tulip Mania of the seventeen century) were sprouting up as the newest snake oils, promising vast returns to investors while they reported vast losses on their balance sheets. The investing consumer, vendors and other stakeholders kept pumping a healthy supply of good money and services into these bottomless pits of hype. If the company isn't making any money, stakeholders can't make any money either. YOU is all of us.

There's black. There's white. There's accounting. Accounting practices are fuzzy. Yet accounting is how we record past activity and view our daily position. Each number tells us something different and choices are made upon this data. Yet, if you hired three different accountants to process your tax returns, you could end up with three different stories and three different tax liabilities. We've met accountants who've wanted to do lots of things to numbers: re-arrange, re-classify, and even "massage" them. Think of the world economies and how they're hinge upon the gray shades of accounting. While there are definite rules to accounting, when there is so much leeway, so many options before the accountant from which to choose, is it any wonder that we don't know where to draw the boundary lines between reality and criminal? Should we also let Congress decide on how accounting should be restructured bearing in mind that balanced budgets are rare and are often the result of taking from one pot and reclassifying it (think Social Security System)? General accounting practices is our third YOU.

It's at this point that we traditionally offer you some tips to improve your situation. Unfortunately, this is a massive problem where things won't be changing overnight and most decisions require a complex understanding of business, politics, economics and leadership. We might see some top executives make the move from mansion to big house of another type. We'll see more companies scrutinize their books more carefully and step forward to say, "Oops we made a mistake," such as Microsoft and others in recent months. But for now, expect the status quo and look to these areas to make your own difference:

Arthur Andersen may be partially to blame for a few of the "public statements," yet there are other firms that never used their services. Arthur Andersen is not a person; it was a group of people making decisions daily that were acceptable within the firm.

Two or three years ago, we all would have agreed that the new era was big business, tech stocks and digital anything. Today, while we still remain open-minded about the types of products and services that come to the marketplace, we must be careful not to be fooled by the hype. Remember to do your homework and listen to your gut, because while others may advise you, in the end YOU decided.

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THE ESSENTIAL EXECUTIVE TOOL:
Planning To Find More Time In A Day

While none of us will find more time than the 24 hours that exist in a day, over-worked (and sometimes over-whelmed) executives want to know how they can find more time to enjoy family, friends, or favorite activities. Planning is the answer.

But finding the time to plan is a Catch 22 proposition. If you have poorly designed systems, you will be putting out fires all day, hence no time to plan. The longer you go without systems that produce the time saving results, the more problems will continue to rob you of time to do those things that are important. Many people know that if you put $2000 in your IRA from 20 years of age to 30, you will accumulate over $1 million in savings at retirement. Yet if you start the same retirement program at age 30, you will accumulate far less money. We know that we should allocate more money to retirement earlier, but very few actually act; the same holds true with the expenditure of time.

Take a look at how you can find time by saving only a few minutes each day:

Here are 14 tips on what you can do to find time:

1. Scan your current time management system and ask yourself if you are using it properly. The issue with many people with "time" problems is not the lack of time but the lack of using the tool to achieve the goals. First off, time management systems are designed to be done the day or night BEFORE, not during the morning of the day you're about to start. Your daily "to-do" list should be numbered from most important to least as a ranking system. We all know that by taking care of the most important items first, you achieve results and avoid wasting time on clutter that gets you nowhere. If you have not heard of Steven Covey's first things first or the graphic that shows that we must address the most important not the most urgent item, then you need to hit the books.. We would also like to add that most likely the item you should be doing is not on the list as you may not even be aware of the need for it to be accomplished.

2. What can you delegate to others? Too often we take on projects and tasks that don't belong to us, because we haven't properly trained others and/or haven't implemented systems that properly assign responsibilities while at the same time offer predictable reliable results from the people assigned to the task.

3. Budget your time…literally. Assign an estimated time frame for each prioritized task that needs to be completed in the office. Be realistic about how long it actually takes. By setting time gauges you may find that you have over booked a day. We recommend allowing at least 20% to 30% of your day to allow for variances. Such items as returning phone calls, a customer drops by, or just the unexpected happens.

4.Grouping similar activities saves time. Group "like" activities together. If you know that you will be conducting 10 personnel reviews, you would most likely pull all 10 employee files at once, not make 10 separate trips to the filing cabinet. Yet often we make unnecessary trips for other activities, because we don't batch tasks to save time. Planning your day in advance easily helps you see like tasks.

5. Don't let meetings chew up your days. Set time limits where necessary. Properly plan meetings so that they are exchanges of progress and benchmarking tools rather than lengthy, verbose time wasters. There are several types of meetings, and yet the one most likely to cause wasted time is the type where everyone should have brought their ideas to the table before they entered the room not once the meeting had started.

6. Turn off email pop-ups that cause you to react at inopportune times. They're no different than having someone barge into your office uninvited. Shut off instant messaging and hold calls when you need small blocks of time to complete activities. Then you can return to non-emergency interruptions at your convenience. Again, grouping return phone calls and making them strictly to the point saves time.

7. Set goals for yourself. Make strategic plans for your firm. Develop systems and hire good people to carry forth the goals and plans. Reduce interruptions from staff by developing systems that direct the flow of operations and by educating people so that they can make sound judgment calls regarding minor issues on their own.

8. Take control of clutter and find ways to file and locate important items that take up valuable work space and mental space. Research the array of filing systems and select one based on how easily accessible the information is to find. The physical sight of your office will tell you and everyone else that you waste time digging out from under the avalanche of mislaid information.

9. Utilize customer resource management tools such as ACT or Goldmine software that organizes your digital communications. Notes taken during correspondence are available at the press of a button, rather than after the search through stacks of papers or file folders.

10. Use the can! Get rid of anything you can't file.

11. Use a computer dating system like the one here. All files should start with a date with the following structure. Year-Month-Day or an example would be 02-07-31. The reason being is that dated items stand out much quicker than the text, as we tend to know when something is created. Secondly this dating system keeps all your files in chronological order. In traditional dating systems 01-05-02 and 05-16-01 would appear in reverse order on your screen. By placing the year first all your 2001's will be together, all your 2002's will be together and in date order.

12. Try Tiger Software for organizing your paper filing systems. It uses the structure of an internet search engine to file and find files. We use it and can find most files within seconds.

13. Those of you who do not use headsets, get one now. The tool allows you to use both your hands to work while talking, and if you talk with your hands like David does, this allows you to express your emotions.

14. Cut ties with negative people especially, if they work for you. They easily suck more time away from your daily routine than many of the other items above. We as people do better work when we are challenged and excited than when we are around the living dead.

As a final note, priority management, strategic and tactical planning (including project management), and systems and standard procedures are the best ways to "create" time. Any other way means that you're most likely pushing something else off the plate that will come back to bite you in the future. Schedule blocks of time dedicated to learning more about these areas so that you can gain control over time, rather than having time control you.

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David & Lorrie Goldsmith are founders of the Syracuse based MetaMatrix Consulting Group Inc. Their firm specializes in consulting, executive management education and speaking services. They can be reached at 315-476-0510  888-777-8857 or emailed at dgoldsmith@davidgoldsmith.com

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