Witness the recent successes of SAS Institute, the world’s largest privately owned software company, and Xilinx, a maker of computer chips. Both companies struggled mightily through the dot-bomb crisis with the same slumping growth as their competitors, but they avoided layoffs – and the loss of service, product innovation, and development that often come with them. The result: ‘SAS made a killing in the middle of the downturn,’ says Pfeffer, by attracting customers frustrated with the dwindling services offered by their competitors. In 2005, Xilinx was named the No.1 high-tech company to work for by Fortune magazine. Both companies successfully weathered the recession and are still hiring.
Too many managers have itchy trigger fingers when it comes to layoffs. In one survey of 720 companies conducted by the American Management Association, 30 percent said they’d been forced to hire back people they’d laid off or to use them as contractors. Sometimes, of course, layoffs can’t be avoided, but before managers take such a drastic, morale-destroying step, they should consider the myriad other, cheaper ways to cut costs – trimming travel budgets, say, or executive pay. Believe it or not, it might even save them money.
Myth 4. Mergers are a good idea
It is no secret that the vast majority of mergers fail to deliver their intended benefits – about 70 percent, according to some estimates. What’s incredible, though, are the sheer numbers of executives who keep trying them anyway. ‘Everybody says they know the data but it’s not going to happen to us,’ says Pfeffer. The bankers come knocking, the PowerPoints go up, the smell of blood is in the water, and companies close their eyes and take their leaps of faith. ‘If a doctor tells you that 70 percent of the time this is going to make things worse instead of better, and people keep doing it anyway, well, that’s crazy,’ says Sutton.
Most mergers fail to live up to expectations for one of three reasons: The companies are too similar in size (DaimlerChrysler), they are too geographically distant (SynOptics and Wellfleet Communications), or their cultural differences run too deep (AOL-TimeWarner). Hewlett-Packard’s merger with Compaq in 2001 is an example of the perfect storm: Two companies of roughly equal size, one in Silicon Valley and one in Houston, struggled mightily with their fundamentally different cultures. (One example: HP employees used voice mail to communicate; Compaq used E-mail. ‘So they literally couldn’t talk to each other,’ says Sutton.) The result? A tailspin that resulted last year in the ousting of CEO Carly Fiorina.
Still, there are a few companies, like Cisco Systems, for example, that seem to be exceptions to this merger rule. Since 1993, Cisco has acquired a total of 108 companies without a major hiccup. Its secret? Senior managers have looked at what went right and wrong in other companies’ mergers – and used the evidence to their benefit. They have avoided the pull of the big deal, focusing instead on smaller, targeted acquisitions. They have learned to trust their instincts: ‘When you’re going through the negotiation process, it’s like dating,’ says Dan Scheinman, the company’s senior vice president of corporate development. ‘If you don’t like someone you’re dating, getting married doesn’t solve the problem.’ Most important, the company practices what it preaches: ‘A lot of companies treat [mergers] as an event: “We did it; we’ve got the press conference; we’re done,’’ ’ he says. ‘For us, we’ve got the acquisition, then the next step, then the next.’ Evidence-based management seems to work: Nearly half of the 10,000 employees Cisco has acquired in the past 12 years have stayed with the company.
Myth 5. Life and work should be kept separate
It is a truism that dominates almost every office building in the country. Intraoffice dating and marriage are no-nos. Jobs aren’t offered to people who ‘smile too much’. Senior partners frown on dogs or kids in the office. ‘You should consider your coworker your enemy,’ former CEO James Halpin of CompUSA once told his employees.
But wait. Why are businesses so determined to keep work and life separate? There is certainly plenty of evidence that companies willing to gray the line between work and play aren’t suffering as a result. Google, for example, asks employees to spend 70 percent of their time on the company’s core business, then gives workers the remaining 30 percent to work on other projects related to new business – something akin to what they would do for fun. Does it work? The proof may be in the pudding. Out of this ‘free time’ Google News, Google Earth, and Google Local have emerged.
Southwest Airlines has gone a step further – tossing the old maxim about intraoffice relationships to the wind. About 2,200 of the 32,000 employees at the company are married to someone at Southwest. ‘We’ve talked to our employees from Day 1 about being one big family,’ Colleen Barrett, the company’s president, told the authors. ‘If you stop and think about it for even 20 seconds, the things we do are things you would do with your own family.’ Southwest sends birthday cards and letters of congratulation on the anniversary of each employee’s hire. The company acknowledges when employees’ children are sick or when there has been a death in the family. And the message seems to be getting through: One study of the major carriers in the U.S. airline industry found that Southwest employees did, in fact, talk about the company as if it were an extension of their family. They use ‘we’ to describe their employer. Southwest attracts 30 or more applicants for every job opening. Driving a wedge between work and life is a fool’s errand, says Pfeffer. ‘The idea that you can separate those two is just impossible.’ The more companies that realize it, the sooner work won’t have to be a four-letter word.
Source: Justin Ewers, U.S. News and World Report, 19 March 2006. Copyright 2006 U.S. News and World Report, L.P. Reprinted with permission.
Why most managers are plagiarists
by Lucy Kellaway
A few years ago, William Swanson, head of the world’s biggest missile maker, sat down to write a little book containing the secrets of his greatness.
There is nothing unusual about this. Most chief executives like to dispense potted wisdom, and many think their aphorisms worthy of publication. Mr Swanson’s rules, of which there were 33, were slightly above average for this lamentable literary genre. The content was the usual mixture of platitude, wishful thinking and plain dullness but the style was lucid enough, and the jargon content low.
To give you a flavour – rule 32: do not ever lose your sense of humour. This is clear, though tedious and unhelpful. Moreover, one suspects Mr Swanson did not follow it himself as putting out a collection of maxims shows one’s sense of humour has been lost long ago.
His company, Raytheon, distributed more than one-quarter of a million copies of Unwritten Rules of Management and the great Warren Buffett apparently liked it enough to request a couple of dozen extras.
The story would have ended on this happy, if somewhat uneventful, note were it not for a young engineer who spotted that 17 of the rules bore an uncanny resemblance to a book called The Unwritten Laws of Engineering published in 1944 by W.J. King. The young man wrote this up in his blog. From there, the story made it into newspapers.
Mr Swanson squirmed a bit and tried to laugh it off, but last week was told by his board that he had erred and was to be punished by forgoing his pay rise for the year. However, they said they still considered him to be a terrific leader and declared he could continue with his job regardless. Red face, small slap, but otherwise business as usual.
So what do we learn from this odd tale? I dare say there are at least 33 managerial maxims that this touches, but observing rule six (below), I’m going to limit mine to seven.
There are no new management rules under the sun. Peter Drucker said most that was worth saying on how to manage a long time ago. Since then it has all been endless repetition. If a CEO’s maxims are true they are bound to have been said before, often.
Management itself is about plagiarism. This is the first great rule that anyone serious about making it as a manager must learn: make sure you take the credit for other people’s actions and ideas. Not all of it perhaps, but a h
ealthy slug. Given this basic fact of management life, Mr Swanson’s crime looks rather less serious. Copying out someone’s words seems less grave than routinely passing off your colleagues’ ideas as your own, as most managers do without thinking, every day.
An exception to rule one. If you have made a mistake, reverse plagiarism kicks in. The secret now is to try to make someone else the author of what you have done. This can be hard, and Mr Swanson failed horribly. When the New York Times challenged him with his copying habit, he said he had given the 1944 book and his notes to a staff member to write the presentation, so he had no idea how much of it was not his own words. Which is lame, even as lame excuses go.
If you wish to copy out someone else’s work, change the word order around a bit. King wrote: ‘Be extremely careful of the accuracy of your statements.’ There were surely other ways of getting across the same – unremarkable – view. But this is the phrasing that Mr Swanson plumped for: ‘Be extremely careful of the accuracy of your statements.’
If you have ignored rule four and got caught copying out of management books, do not give the standard excuse, as Mr Swanson did, that he had absorbed the material unconsciously through a lifetime’s reading. This does not wash at all. I have read dozens of management books in my life, and cannot recall a single thing from any of them.
If you insist on listing maxims, 33 is far too many. Ten were enough for God, but seven is better still.
Boards should not sit on fences. Sack me or back me is surely the nature of these things. If the Raytheon board considered him to have done something badly wrong (which I do not think he did, in the scheme of things) they should have sacked him. Otherwise he should have blushed, apologised and moved on.
And now for a principle I have plagiarised from the New York Times: fat cats get off scot free yet again. Kaavya Viswanathan, the 19-year-old Harvard student whose much-hyped novel contained large chunks copied out of other books, has become a national villain and her writing career is ruined. Meanwhile, 57-year-old Mr Swanson, who is responsible for 80,000 employees and to the military who use his kit, has shown his integrity to be gravely wanting but has been allowed to carry on regardless.
I do not accept this. What he did was less serious than what she did. Novels are meant to be fresh – that is the point of them. We know business leaders talk a lot of guff. Whether it is their own guff or someone else’s seems not terribly important.
In the booklet, Mr Swanson expressed the hope that after reading it ‘maybe you too can become a leader of a company’. In the – frankly inconceivable – case that anyone was helped in this way, I hope this little story may have taught them something even more useful. Writing a book of maxims is an exercise in vanity and a hostage to fortune. The real upshot is that Swanson now looks an idiot.
Which leads me to my final, breathtakingly obvious maxim: looking an absolute idiot is not the thing if you are trying to be a business leader.
Source: Lucy Kellaway, FT.com, 7 May 2006.
The mainstream is a current too strong to think in.
Paul Shepheard, in What is Architecture
CHAPTER 6
* * *
MASTERS OF MANAGING?
Education, n. ‘That which discloses to the wise and disguises from the foolish their lack of understanding.’
[Ambrose Bierce, The Devil’s Dictionary, 1906]
If there is a message to all of the above, it is that management is a practice, learned in context. No manager, let alone leader, has ever been created in a classroom. With this in mind, Chapter 6 takes a close look at ‘management’ ‘education’.
Who are the ‘masters of managing’? Some excuse for education. MBA programmes are not much better, argues Henry Mintzberg in excerpts from his book Managers not MBAs: about Jack’s turn in an apocryphal Harvard case study classroom; with a list of some rather worrying impressions left by MBA education; some surprising data about the performance of Harvard’s best CEOs; and, to wrap it all up, the comparison of an MBA student who dropped in to his office, with someone who came in to clean the bugs out of the light fixtures. Guess who shed more light on management.
Philip Broughton, as a recent MBA, has shed considerable light on his compatriots in this topsy-turvy economy. So does Andrew Policano, in a comment about the rating games played by his fellow MBA deans. The latter sounds like the numbers games played by CEOs – in spite of all those new courses on ethics. So maybe it’s time to educate for real.
Managers not MBAs
by Henry Mintzberg
Jack’s turn
[In lecture courses, students] are waiting for you to give ‘the answer’ … What we say with the case method is ‘Look, I know you don’t have enough information – but given the information you do have, what are you going to do?’1
‘Ok Jack, here you are at Matsushita: what are you going to do now?’ The professor and eighty-seven of Jack’s classmates anxiously await his reply to the cold call. Jack is prepared; he has thought about this for a long time, ever since he was told that the case study method is supposed to ‘challenge conventional thinking’. He has also been told repeatedly that good managers are decisive, therefore good MBA students have to take a stand. So Jack swallows hard and answers.
‘How can I answer that question?’ Jack begins. ‘I barely heard of Matsushita before yesterday. Yet today you want me to pronounce on its strategy.’
‘Last night, I had two other cases to prepare. So Matsushita, with its hundreds of thousands of employees and thousands of products, got a couple of hours. I read the case over once quickly and again, let’s say, less quickly. I never knowingly used any of its products. (I didn’t even know before yesterday that Matsushita makes Panasonic.) I never went inside any of their factories. I’ve never even been to Japan. I spoke to none of their customers. I certainly never met any of the people mentioned in the case. Besides, this is a pretty high-tech issue and I’m a pretty low-tech guy. My work experience, such as it was, took place in a furniture factory. All I have to go on are these twenty pages. This is a superficial exercise. I refuse to answer your question!’
What happens to Jack? I’ll let you guess. But from there, he goes back to the furniture business, where he immerses himself in its products and processes, the people and the industry. He is an especially big fan of its history. Gradually, with his courage to be decisive and to challenge conventional thinking, Jack rises to become CEO. There, with hardly any industry analysis at all (that would have come in a later course), he crafts a strategy that changes the industry.
Meanwhile, Bill, sitting next to Jack, leaps in. He has never been to Japan either (although he did know that Matsushita makes Panasonic). Bill makes a clever point or two, and gets that MBA. That gets him a job in a prestigious consulting firm, where, like those cases study classes, he goes from one situation to another, each time making a clever point or two, concerning issues he recently knew nothing about, always leaving before implementation begins. As this kind of experience pours in, it is not long before Bill becomes chief executive of a major appliance company. (He never consulted for one, but it does remind him of that Matsushita case.) There he formulates a fancy high-tech strategy, which is implemented through a dramatic program of acquisitions. What happens to that? Guess again.
Readers [of Kelly and Kelly’s book, What They Really Teach You at the Harvard Business School] are probably asking – read the case and do that analysis in two to four hours? Harvard’s answer is yes. Students need to prepare two to three cases each day … So [they] must work toward getting their analysis done fast as well as done well.2
The impression left by MBA education
Managers are important people who sit above others, disconnected from the work of making products and selling services. The higher ‘up’ these managers go, the more important they become. At the ‘top’ sits the chief executive who is the corporation (even if he or she only arrived yesterday).
Managing is decision making based on systemati
c analysis. To manage, therefore, is to deem. It is more science than art, with no mention of craft.
The data for such decision making comes from brief convenient packages of words and numbers, called cases in school and reports in practice. To make decisions, the numbers are ‘massaged’ and the words are debated, perhaps with some added consideration of ‘ethics’.
Under these managers sit their organizations, neatly separated like MBA programs into the functions of finance, marketing, accounting, etc., each of which applies its own repertoire of techniques.
To bring these functions together, managers pronounce ‘strategies’, which are very special and, however mysterious, can be understood by people who have been taught industry analysis and given the opportunity to formulate many of them in a case study classroom.
The best strategies are clear, simple, deliberate, and bold, like those of the heroic leaders of the most interesting case studies.
After these MBA managers have finished formulating their strategies, all the other people – known as ‘human resources’ – must scurry around implementing them. Implementation is important because it is about the taking of action, which managers must control but never do.
This implementation is, however, no easy matter, because while the managers who have been to business school embrace change, many of those human resources resist it. So these managers have to ‘bash bureaucracy’, by the use of formulaic techniques, and then to ‘empower’ whoever is left to do the work they have been hired to do. This no manager must ever change.
To become such a manager, better still a ‘leader’ who gets to sit on top of everyone else, you must first sit still for two years in a business school. That enables you to manage anything.
Management- It's Not What You Think! Page 11