BERKONOMICS

As a manager, you have a number of critical tasks that are general to your position as opposed to specific to your industry.  These include ensuring the continued health of the organization, setting the moral compass for your stakeholders, providing for succession by training and documenting, leading the effort in compliance of regulations and safety needs, and … elimination of all possible bottlenecks that impede the efficiency of your organization.

The definition of a bottleneck in your business is one that constricts the flow of work from one area to another in the flow of product or service through your organization.

[Email readers, continue here…]  A bottleneck in your organization’s flow of product or service can happen, shift, or disappear quickly.  Common to all bottlenecks are three factors:

1. All product, labor, and cost before the bottleneck are impeded from creating maximum efficiency by being forced to slow output or build inventories. This is a costly loss for any business and one that should be a focus for your management as soon as identified.
2. The bottleneck itself strains to keep up with demand, often to the point of reducing its own efficiency in the process of attempting to keep up with demand.
3. All processes after the bottleneck are slowed for lack of flow into their zone of control and waste time, money, space and output, always resulting in reduced revenues and profits.

You can be the bottleneck.  If people are waiting for you to respond to a question or make a decision about design, process, spending for a core need, or any of tens of critical decisions, you are creating a slowing or stoppage of work before you and idle resources behind you.  If this describes you at any moment in your day, you should consider removing yourself from the bottleneck list by delegation, reduction of your non-critical workflow, or (heaven forbid) increasing your hours of production.

If failing to hire a critical employee is the cause of reduced efficiency, you must act quickly to either make an effective hire or alter the environment that creates the urgent need, all to remove that bottleneck.

And if an inefficient or undersized machine or department or process is creating a backup of critical path work flow, you must address this as an urgent matter whose cost is much more than the cost of the machine or person needed, but the amplified cost of the lost output it affects.

You, as a successful manager, must be attuned to and responsible for elimination of all forms of bottlenecks within your span of control.  Watch for, and stamp out, all those you identify as soon as you find them.  The effect of your action is magnified several-fold at the output stage of your business, leading to increased customer satisfaction and increased profits.

Reduce the emotion; reduce the threat of lawsuit.

You’ve certainly experienced the angry outburst from an associate or employee who has just learned of an event that the person took as “unfair,” no matter how rational the explanation by the decision maker.

Most emotional responses to decisions in business are generated not because the person making the response feels the decision was unwise, but rather unfair.

So I’ve created the “Fairness Doctrine,” as a stated element in the cultural fabric of businesses where I am involved.  Simply stated, a decision or action that affects an individual must be made with consideration of the affected individual’s view of the fairness of that decision.  This doctrine is a variant of “do unto others” but with a twist.  The recipient of the decision in this case usually has little opportunity to respond in kind (“as you would have them do unto you”).  It is this frustration coupled with the simple outcry of “That’s not fair!” – that can affect the culture of a company in ways never considered by the original decision-maker.

People sue others and their companies usually because they feel emotionally that they have been treated unfairly, not just because they were affected financially.

[Email readers, continue here…]  Firing a person considered a key associate without any advance warnings or public revelation for the reason, such as the need to consolidate or downsize, is a good example of setting up such a groundswell of accusations of unfair treatment.  Public dressing down of an employee in front of associates is inhumane and often generates a negative response from all who witness or hear of the action.  Closing a highly effective department, shutting down a marginal company, canceling a promising project all are good examples of management setting up a visceral response of “unfair” among those affected.

I have often addressed the issue of maintaining the dignity of the individual in a business environment.  The two are linked: the fairness doctrine and treatment of an individual with dignity, no matter how distasteful the decision implemented.

So my advice is to take the time to establish the reasons for pending actions – if not in an emergency environment.  Speak privately to employees who are in danger of being fired, documenting the discussion to the employee’s file.  Open up to the general group with facts that might later affect them, even at the risk of losing one or more to a hunt for a new job.  Most employees and associates, treated with respect and dignity, will respond with understanding and lose the emotion that might have accompanied receiving the later news of a negative event.

In fact, many times over the years, I have seen whole companies rise to new levels of efficiency, creativity, and sense of urgency when informed of the alternatives being considered by a board or management.

At the risk of losing talent not targeted, it is only fair to treat people as intelligent beings capable of understanding the dilemmas faced by management, and sometimes able to find solutions to problems not seen by those in control.

It is not common for the CEO of a rapidly growing company to think of slowing down the furious pace enough to have each manager (including the CEO) document the job process managed, as well as see to the documentation for each process managed below.

And it is even more of a challenge to consider documenting the tribal knowledge of a company’s key employees.  Examples include forcing the entire sales and customer support team to use a single database such as SalesForce or Sugar or Act to document the interactions with prospects and customers, or using “REM” statements liberally inside software code to notify future coders of critical information contained and reasons for making code branches, assigning variables with unusual names or more.

[Email readers, continue here…]  As CEO, have you made a list of your critical chain of advisors, including bankers, accountants, industry advisors, and more?  Do you have a “secret spot” for critical information someone might need if you were incapacitated or worse?  Especially when we are young, we feel invincible, and documenting tribal knowledge seems a chore with no reward.

Then inevitably a key employee gives notice and we begin to worry over what knowledge we will watch walk out that door, wonder how we will recover in the short term and grow out of the problem in the long term.  We worry that asking our subordinates to document their processes will look like the first step in removing them from their job. And we worry over lost productivity during this effort.

But if we make this a part of the culture of the corporation starting at the top and from an early point in the life of the organization, this process becomes an accepted way in which managers learn and leave behind, able to move up the chain with minor disruption both in the job left behind and the job assumed.  It makes for a smoother process for seeking outside hires by providing a model for the job specification to be written.

And it allows everyone to better appreciate the organization, understanding the limits of each position and the duties performed, avoiding conflicts between managers when in the future changes are made in the organization and in personnel during periods of growth or even downsizing.

Tribal knowledge is an asset of the corporation, to be protected as much as cash in the bank.