BERKONOMICS

One of the CEOs I coach starts his day by walking the floor of his extended facility and checking in with managers and employees of the various departments, especially the call center.  He tries to feel the pulse of the company by the intensity of motion, the metrics of backlog, and the stated problems brought to him as he asks.

Is he a relic of bygone times, when employees worked in a single facility, managed directly by people who could see and speak to them in person?   In this age of remote work forces, self–managed contractors and employees, outsourced call centers and development, is this a dying art?

And does the presence of a caring CEO taking the time to check in personally change anything after the waves of his or her presence pass in the calm of departure?

Well, yes.

[Email readers, continue here…] Everyone knows when the CEO or senior manager stays in their personal office, especially when closing the door, that “something must be wrong” or “the person doesn’t care enough” or “what does he or she do all day?”

It is more than showing the flag when a manager or CEO spends time focusing upon the immediate issues of subordinates and offers resources to solve problems without the need for formal meetings.  It is a mark of corporate culture when everyone knows that those above are serving them in very visible ways by taking the time to hear and react.

But there is something more. A good manager can feel the mood and the level of business activity, but not easily from behind a desk or on the other end of a phone call.

It is one of the reasons that senior managers who travel to the workplace from afar and show their presence only several days each week are not as effective as companies grow and span of control increases.

Does management by walking around still work?  Is it as valuable as it once was before our communications systems became so complex and well defined?

Yes.  Yes. And yes.

Want the best way to create your core competency quickly and inexpensively?   Think like a startup, with little resources, a limited window of time, and few dollars to spend on expensive experts.

This insight comes from a fellow CEO who explains that he leverages his financial resources for growth by dividing his hiring decision into these two boxes.  He interviews for adaptability, creativity, intelligence, drive, and a cultural fit.  He believes that he or his managers can teach processes, taking advantage of the new hire’s fresh look and open mind.  He believes that the core of his company is the creative process, and therefore that must be his focus.

Then he turns to contracted outsourcing for his routine processes, those that require no creativity and are repetitive in nature.

[Email readers, continue here…] He cites the example of computer programmers.  He hires for creative ability, people who can be the architects as opposed to the simple coders of routines.  If properly supervised and quality controlled, he finds that it is easier and cheaper to parcel out projects to programmers or programming groups to perform the actual coding of projects pre–defined by his insiders.  He divides the tasks so that no subcontractor has all of the core knowledge in house as a protection against theft of intellectual property.

And he concentrates on the management of creativity, the core of his business.

There are obvious advantages to this.  Costs are variable and can be curtailed easily in tough times.  Management time is focused upon the creative aspects of the business.  On the other hand, depending upon the length of a project, an inside employee may be cheaper in the long run, and quality control easier to manage.

Business management is a series of trade–offs. Here is one to consider carefully as you leverage resources including cash to grow the business.

In my early journalism classes, I was taught the five “W’s” of good news stories, and that most should be in the first paragraph at that.  Who, what, when, where and why are the five, with sometimes a “how” thrown in for those followers of the macabre.

But of the five, “why” is by far the most important for business leaders to consider and communicate.  Employees, contractors, even investors want to know why they are asked to make use of their valuable resource to support your effort.

Failure to explain why will scare away potential investors – other than closest friends and family.  The same failure will disenfranchise your workforce to a degree that most will give less effort to a project, and certainly with less enthusiasm.

[Email readers, continue here…]  Especially if a company is in trouble, perhaps with an urgent need to make a deadline, or facing a cash crisis caused by something your employees can help control, explaining the importance of the action required empowers all to work smarter and harder to achieve the stated goal.

I’ve recently experienced an example of this. One of my companies where I have an investment and am on the advisory board was in the midst of a sprint to close its acquisition by a larger company before the cash ran out and enterprise value plummeted.  Do you tell the employees about the pending acquisition early in order to focus them on increased performance to increase cash flow, or just keep the secret and hope that all would turn out OK and the acquisition proceed to an orderly closing on time?

We chose to tell the employees, with the obvious risk that some would be scared into looking for another job right in the middle of the acquisition process.  The effort worked, and all did come together to make it happen. No–one jumped, and the buyer closed the deal without a question.

When in doubt, don’t be shy.  Tell them why.  Your people will rise to the occasion.

Here is a variation of the “tree falls in the forest” question.  In past insights, we’ve looked at leadership skills, ways to enhance effectiveness, and how to develop creative ideas that motivate and propel your organization to greatness.  Here is the ultimate question for a leader…

You’ve heard the old saying that you can lead by fear or lead because people want to follow.  And you can lead by example as well.  Which works best in the long run?

I know from observational and personal experience that in normal situations, a leader is a consensus–builder, sure that everyone understands the mission and goal, and knows which duties each must assume to make it happen.  There are times when this obviously isn’t appropriate, such as in an emergency, financial or physical.  Then your associates will expect strong, firm leadership as reassurance.

[Email readers, continue here…] Even in the military, the best leaders, no matter what the rank, lead by consensus and by example – except perhaps in battle. Those in any enterprise who lead by fear find that they may be effective in the short run and completely the opposite over time.  Yes, there have been military dictators rising on occasion who did lead by fear.  Most all lost their positions, their following, and some even their lives.

The object is to have people follow, willingly.  Sometimes we call this “servant leadership,” the skill of subordinating yourself to the greater good, serving those who serve your customers or constituents.

Here’s a simple test.  Do your people come up to you as you walk among them, or lower their heads, turn away, or find a way to look extra busy?  Even if you think otherwise, if your constituents do any of these things other than look up or approach, you should identify this as an indication that you are a leader using fear.

It is never too late to change, even if it will take many interactions for your people to believe the impossible may have happened.  And if you are the charismatic leader that people follow willingly, keep on doing what you are doing.