Newsletter August 2002A
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Version in Newsletter Format August 2002A

CEOs SIGNED ON THE DOTTED LINE:
Are We in for Change!

Now that the CEOs of public companies have officially signed on the dotted line, it means that everyone has signed. As business owners, investors, and partners in the economic till, the fact that one individual is now signing for a large corporation somewhat makes the playing field change for everyone. This is true trickle-down economics.

Let's take one major role of a manager: to be proactive about what is on the horizon. This includes challenges to face and solutions to bring the organization to remain competitive. If you are not at least partially correct, and you don't keep pace with change, you, too, may become a casualty of the business superhighway.

The most significant change will be how CEOs will become accountable for the cumulative actions of every employee in their firms. This is true in firms ranging from the small to the multinational conglomerate. Already, we see graduating students of MBA programs and business schools anticipating futures in smaller business and less in the corporate world. This signing on the dotted line will mean not everyone is going to surrender their own John Hancock just for a million or two. Accountability will be etched on the foreheads of every person in the "need to know" circle.

This accountability will lead to a need for better systems and structure to facilitate the gathering of information with checks and balances. The new level of personal responsibility will lead to shifts in strategic planning. Unfortunately, most executives are grossly ill-prepared to make such shifts. If everyone knew how to plan properly, there would not have been such a mess in corporate America. Furthermore, those who say that strategic planning is a waste are those who don't know how to do it right.

Hiring controls will become more comprehensive. All employees, and especially knowledge workers, must be skilled at noticing discrepancies in numbers and when decisions are out of sync with reality. Literally, because the CEO signed on the line, so did the entire management team. Some CEOs, to meet the signing deadline, had all their VPs and executives sign another form of liability. If the underlings think they're safe, they probably should think again. Any CEO worth a grain of salt will have an employee pulled out in shackles with the slightest hint of wrong doing. The liability will flow down to the lowest level of management.

If this is the new culture, then ethics will once again become an issue studied and a new type of attitude will be expected from everyone. Yet little will change except the cosmetics unless our values change.

There will even be a second tier of changes rippling through the business climate as a result of the above shifts.

1. Vendors will be looked at as partners to help in the crime solving area and another methodology to limit exposure. If your firm outsources the function, they are accountable.

2. This new attention to detail in will also have an impact on feedback loops that will inevitably deliver information on whom within the corporation is hitting the numbers (honestly) and what vendors should be kicked out on the street.

3. You can't help establishing cost controls if so many people are watching the corporation more closely. Individuals will be thinking, how can we deliver what we do in a faster and more efficient approach. A person that diets with charts and graphs makes different decisions than one that does it on the fly.

4. Technology will be allocated to system design so that gathering information is less human and more mechanical. Take the person out of the loop and hopefully the numbers will improve in accuracy.

5. Organizations may actually become even more educated. Just 25 years ago you were top of the class with a business degree. Now it's an MBA with some executive education that's filling some important positions.

6. Leadership and management education will change and many new derivatives of how to solve the problems will surface. Most will be the same old, in a new package. Those who offer real hard core strategies and tactics will lead their firms to higher ground. How will you notice the good ones? Look beyond the surface to the bottom line. If the results are there, they're doing it right.

7. The CEO will not be the only person watching the firm like a hawk. Virtual CEOs will pop up all over the company. These will be people that will think and act like the person signing on the dotted line.

8. Accounting will continue to move more toward a JIT (Just In Time) environment. We've seen it in the credit card and the debit card. The same is true of electronic funds transfers. This last series of hits took too many executives and investors off guard to the point they will be looking to see hard funds. Governments lost hundreds of millions and so did many firms around the world. There will be a distrust of D&B numbers and financial reporting for some time to come. Easy solution: PAY ME NOW and you finance it.

For those still willing to stick around, learning real strategic and tactical business tools, accounting and the development of systems and tools that facilitate information accuracy and reliability should be part of your new learning future. If you're in a decision-making position or one day aspire to run your own ship, put up your sails and your jib, because the speed of change has just gotten faster.

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GET OUT OF THE WAY: Managing Managers

"Is there anything you need from me?" the supervisor asks his new manager. Of course at this point there may be an item or two on the agenda that needs filling, but this question indicates a problem. The expectations of the two are quite likely to be all wrong. Generally, when one hires a subordinate manager, they do so expecting that problems are going to disappear...no more headaches, no more fires to extinguish. New managers, on the other hand, are often too afraid or too unaware to say, "You haven't given me the tools, direction and systems by which to fix the problems. Yet, I'm afraid you'll find me incompetent if I ask a lot of questions." These attitudes are the culmination of years of practice where management gives people instructions and gets out of the way too soon. So the two are commencing down a path of failure.

Before you get out of the way, there's a lot to consider. Don' t make assumptions about what people already know. Your responsibilities are to hire the right people, and let them go only after a proper education is supplied. That means give them the right tools. You must know the goals of the corporation and direct the manager toward achieving them. Once you've prepared the proper groundwork, then you can stop hovering. Harvey Mackay's 1988 book, Swim with the Sharks Without Being Eaten Alive, tells readers, "That's what managers are supposed to be able to provide. Motivation. Goals. Resources. Leadership. But not restrictions. Not being told what to do. Not rules. Oh God, how Americans hate rules." In other words, there is a difference between guiding and hovering.

Second, everyone knows that the odds of the new manager being successful diminish without proper direction. Manuals, books even training programs on how to develop teams will do nothing if the parties are not on the same page. Someone has to be the guidepost and coach of the new employee. Soccer players don't usually deliver the ball from one end of the field to another with one broad sweeping kick. They tap the ball down the field and pass to others. It's a process that takes time, thought, and persistence. The same is true of managing managers. The expectation that a manager even has the skills, because they worked at another firm even in the same industry, is no grounds for knowing it's new directives.

Third, problems do not go away just because there is new management. You know it and have lived it. So, where the solution? It's in the process of hiring through the months of working. It's a shift in the supervisor's perspective that hiring and placing new management actually takes more time in the beginning to reap the rewards of the future. Not the opposite.

One the flip side, the American can-do attitude has nothing to do with achieving goals. Worldwide, when placed into a fighting position, humans will band together to achieve greatness. Looking more closely, the best qualified must step up to the plate and implement a process of leadership that moves people into a system and direction for superior results.

The message for new management: don't point your finger at the supervisor. It's your responsibility to get what you need and get results. If a supervisor just pushes you out the door to fix the problems, either get paid twice as much since you're doing their job, too, or walk right out the front door, because the firm is setting you up for failure. Managers must know enough to ask for directions or to put together a plan of action that allows the guidance until you're on your feet. Both our 8 and 9 year olds are on their way to black belt in Tae Kwon Do. While discussing the timetable for achievement with his master, the 9 year old asked about the 10 private lessons he had accumulated and how he should use them. To that the master said, "One private lesson a month would be perfect, because I can keep you on track along the way. I'll review your progress, tell you what you need to do next, and then you can practice it during the month." The same should be of relationship between management.

Here's a summary of the message for the supervisor:

Yes, getting out of the way for certain people will prove to be one of the best decisions you've ever made. Some people just learn quickly. For the traditional hire who has tremendous potential, managing with a little guidance will go a long way.

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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 david@davidgoldsmith.com

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