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Archive for April, 2009

Doing The WalkAround

Wednesday, April 8th, 2009

In my book Without Warning, I present that C-Level Executives often are at a disadvantage to understand their organizations and how they really work. When this occurs, Silent Problems tend to form, which commonly morph over time, eventually becoming toxic in nature. So what was initially just aa problem becomes a significant problem with unintended consequences.

What is the solution?

First, having a open-door policy is not enough. You must invite honest input from across the organization and be willing to listen. Yes, listen! This is often difficult, especially when the plate of “to-dos” is high and you’re running between meetings. And when you listen, you must ask questions. This will bring clarity and significance to the issue. Secondly, the term Management By Walking Around (MBWA)was popularized many years ago. It was a buzz term that resonated, yet has had less impact that it should. Part of the challenge regards the art and science of the MBWA. One of the best overviews of developing a successful MBWA comes from the blog Seedership, which refers to it as “Walk the Front Line.” They suggest:

Don’t start walking the front line without telling people what you are doing.  It is important they understand why you are asking questions.  Without this disclosure, you will create a lack of trust or make it feel like you are trying to find something they are not telling you.

Do be honest and encourage others to walk the front line with you.  Talk to different people and compare notes.  The more people you can touch, the better the information you will gather.

Don’t schedule time to sit with people.  This allows for preparation and often prevents you from getting the real story.  The purpose of walking the front line is to get a true picture of the experience your organization is providing.  This includes the very good, the good, the bad and the very bad.

Do walk around as part of your regular routine.  Catch people in the moment.  Walk around at different times during the day.  Listen to and watch what they are doing. 

Don’t ask – “How can I make your job easier?”   The reality is these people have the hardest job in the company - dealing with the customer.  Don’t provide a false hope by making them think things will get easier for them. 

Do ask – “What can I do to make you more successful?”  When you ask this open ended question, you will receive the information you need to be successful.

Don’t spend this time talking.  Your job is to listen.  Sit back, take good notes and listen to what these people have to say.  Even if you think their idea is not a good idea, your job is to listen.

Do engage in the conversation.  Ask additional questions.

Don’t let this be the only time they see you.  Once you sit down and begin to ask questions, you have created an expectation that you will act.

Do something with the information you gather.  The biggest mistake you can make when walking the front line is not doing anything after you walk back to your desk.  This is demoralizing to an organization and a good way to be an ineffective leader.

And – take time to say thank you.  Send a note to the people that gave you ideas.  Tell them what you are going to do with the information they provided.  This will show you are truly interested in what they shared. 

Problems may be challenging, Silent Problems can and often turn toxic. Walking the line is one means to identifying problems early. I urge you to create and embrace this first line of defence system.

Brilliant or Absurd?

Tuesday, April 7th, 2009

Every once in a while a story emerges and you say to yourself, “What were they thinking?” And then you realize that they obviously did their market research. They did their sales forecasts. And evidently figured out that it was worth the investment in money, human resources and capitol expenditures.  I’m talking about the announcement that GM (which is facing a date with bankruptcy or government bailout) is developing a prototype 2-seater vehicle called the PUMA in conjunction with Segway. This is how InformationWeek described the vehicle.

GM and Segway rolled out an electric two-wheel, two-seat prototype vehicle in New York on Tuesday. Built for use in congested urban environments, Project P.U.M.A. (for Personal Urban Mobility and Accessibility), as the vehicle is called, combines several technologies demonstrated by GM and Segway.

The 300-pound, zero-emissions vehicle is powered by a lithium-ion battery and dual electric wheel motors. It features all-electronic acceleration, steering, and braking; vehicle-to-vehicle communications; digital smart energy management; two-wheel balancing; and a dockable user interface that allows off-board connectivity.

“Imagine small, nimble electric vehicles that know where other moving objects are and avoid running into them. Now, connect these vehicles in an Internet-like web and you can greatly enhance the ability of people to move through cities, find places to park, and connect to their social and business networks,” Larry Burns, GM’s VP of R&D and strategic planning, said in a statement.

There are numerous aspects of this story that are exciting and scary.  Here is my Absurd point of view. Here a car company that has too many product lines to support already is introducing a new product that will cost hundreds of millions of dollars to introduce, market, place into production, distribute and support. Its easy to say there obviously is no leadership at the top end of this organization. Or, are they brilliant? Here is a product that potentially reshapes transportation for high density marketplaces. It’s fuel efficient. It’s a little quirky. It’s a Toyota Prius on Steroids. Which is it,  Brilliant or Aburd?

Here are some questions I want answered from GM.

  1. The press release is more than suspect. Is this simply a publicity event illustrating why GM deserves (and I mean deserve) bailout funds from you and me.
  2. While you were developing the PUMA, what development activities were sacrificed, if any?
  3. Is this the most exciting new product you have in the pipeline?
  4. How does the PUMA fit inside a massive and oftentimes missive organization like GM.
  5. So what…

Over the next weeks and months, GM will be front page news on a regular basis. The PUMA, no matter how nimble should not distract from the real issue on the table. Is GM a viable business going into the future.

The Next Shoe to…

Monday, April 6th, 2009

Its been a year since BearStearns was brokered in a last minute deal. California institution IndyBank followed. Then Lehman Brothers, AIG, Washington Mutual and others. Today, the marketplace has stabilized and rebounnded off its lows. We’re out of the woods - Right?

Over the past week, its encouraging to see signs that things are improving, however I have to wonder if another shoe could fall.  If you’re reading this post, you likely know someone whose credit card limits have been lowered - substantially. In years past, credit cards were an efficient and effective source of capital and provided the necessary cash flow to start and grow a business. Its also been a source of capital for consumers in good times and bad. That source in many instances has dried up and no longer a credible source of money.

And this is where the next shoe comes into play. To regain its footing, the marketplace needs consistency and adequate financial resources.  Do we have this? There is an interesting article over at Forbes. Steve Forbes interviews Meredith Whitney, one of few that saw the mortgage exposure and resultant financial meltdown of a year ago.  Its well worth the read. She may very well be foretelling a Without Warning Event.  At least now, we should be aware of the potential for such an event.

Blinded By The Fees

Saturday, April 4th, 2009

From Bloomberg They were blinded by the fees they were earning” in placing their own clients’ money with Madoff, Galvin said of Fairfield Greenwich. The firm ignored “any fact that would have burst their lucrative bubble,” he said in the complaint.

The Madoff Securities ponzi scheme is classic.  It utilized deceipt, avoidance and a fair amount of dancing around the issues to avoid getting caught.  And to reinforce the desired outcome, he used money, in the form of fees, to keep awkward inquisitions at bay. 

Last week, I wrote here about how some of Wall Street’s sharpest analysts were silenced by their employers.  A growing number of analysts who were either critical of the financial sector or were early raisers of red flags in the mortgage market are getting the cold shoulder from their employers, which has led to the analysts being forced out or silenced. Highly regarded mortgage analyst Laurie Goodman, who when she worked at UBS was one of the first researchers to sound the alarm about the dangers of the subprime market, is said to have drawn the ire of UBS brass as her clarion calls crimped the bank’s ability to sell billions in bonds backed by subprime loans.

Likewise, there is an interesting discussion over at the Harvard Business Blog titled, “Are Business Schools to Blame?”  I make the case that Silent Problems are a core problem relative to mortgage crisis, financial meltdown… I wrote:

Interesting, yet terrifying discussion. Predicting how humans will react under a given set of circumstances is difficult to simulate, even more difficult to predict. I believe that each of us has a Bozo switch inside us that given the right incentives, following the right leaders, and society encouraging us along the way, can be extremely distructive. Barbara Kellerman illustrates these points perfectly in her book, Followership. My second point ties back to a theme I discuss at length in my book, Without Warning, which relates to silent problems. Organizations will never be perfect organisms. They will always have silent problems on the sidelines being avoided or neglected. I propose how to dislodge these silent problems out into the open for people to see and deal with. I firmly believe that every MBA class must address the silent problem theme, because its the good apples inside the organization that must be held responsible for disclosing the bad apples that are present. This is the watchdog we need and must embrace.

The “Silence” theme transcends each of these scenarios.  Silence is not “golden” but rather its toxic. Organizations must break the Silence theme - period.

Leading with Passion

Friday, April 3rd, 2009

Over the past 6-months, there’s been an ongoing dose of dire news. What was maybe fun and exciting a year ago, may now be drudgery. Where hope was eternal, pessimism may exist. One of the most challenging aspects of this global recession is keeping your game face on, leading with conviction, and maintaining the passion about your business and its future. I wonder however, how many leaders may have lost their passion.  After all, downsizing an organization is one of the most difficult acts a leader may be forced to do. 

  • The training programs designed to make your team a world competitor are shelved.
  • Your R&D program is scaled back
  • New product introductions are delayed
  • The products you were developing for years may no longer be positioned for success or relevant
  • Supply chains that were opitimized for efficiency and cost grow squeeky, as many suppliers may no longer be viable
  • Customers place orders later and later, and demand instantaneous delivery
  • Everyone pounds their fist, expecting everyone to listen and react

The result, many entrepreneurs and business leaders are playing for survival, not necessarily success.  And I wonder, have some lost their passion? And if the passion is gone, will it come back when economic times return to normal?

In every recession, there are many casualties.  To survive this one, leaders must find and maintain the passion for their business.  If it wanes, the likelihood for success, also wanes. Unfortunately, I convinced the passion quotient is a Silent Problem inside many organizations today.

On a Lighter Note

Thursday, April 2nd, 2009

Let me see, AIG, Merrill Lynch, Bank of America…  The list of CEOs that made a few big mistakes during their leadership tenure has grown significantly during the past year.  Unfortunately, a few bad apples goes a long way in destroying the trust quotient most CEOs deserve and this economy desperately needs.  Most are honorable, hard working and talented.  They do everything they can to grow their businesses profitably, so they’re able to employ people that produce goods and services the marketplace wants. Well today I was forwarded a new website at http://www.notallceosarejerks.com/  It’s worth a quick look, because 95+ percent of all CEOs are worth knowing and being our friends.

With all of the bad news about the economy, it’s time to turn from the gloom and doom, to a more positive state of mind. Lets all make this the next wave.  Let’s praise those that are working over time to make the future a better place to live and work.  Let’s make this Without Warning event a positive one.

Supply Chains Remain At Risk

Wednesday, April 1st, 2009

Every month, we hope we’ve turned the corner in this economic recession.  Although it feels like we’re getting towards the bottom, there is no sign of a recovery in sight - at least not yet.  More importantly, every day we stay down here in this recession, the more at risk our supply chains become - domestic and international.  For instance with GM and Chrysler on life support, if either of them fail, they could take a large percentage of their supply chain partners down with them.  This concern also applies to international supply chains. Today, Bloomberg reported:

Asian economies excluding Japan will expand at the slowest pace in 11 years in 2009 as the global recession weakens trade and stimulus plans take time to revive growth, the Asian Development Bank said yesterday.

“We can’t rule out the possibility that we’ll have to cut our projections further,” Masahiro Kawai, dean of the ADB Institute in Tokyo, said in an interview today. Recoveries in the U.S. and Europe “are crucial for Asia, as is a pickup in domestic demand within the region,” he said.

South Korean exports declined 21.2 percent from a year earlier, faster than February’s revised 18.3 percent slide, the government said today. Hyundai Heavy Industries Co., the world’s largest shipbuilder, said last week orders in the first two months of this year fell 85 percent.

Asia excluding Japan will grow 3.4 percent this year, less than half of a September estimate of 7.2 percent, the ADB said yesterday. The lender expects Thailand, Malaysia and Singapore to contract. South Korea, Taiwan and Hong Kong will also shrink.

“Across the region, factory closures and job losses are rising, ” the ADB said.

Taiwan’s Hon Hai Precision Industry Co., the world’s largest contract maker of electronics, cut 116,000 people from its workforce during the fourth quarter of 2008 as profit fell, according to company filings released yesterday.

Other statistics today also pointed to a deeper slowdown across Asia and the Pacific.

The Supply Chain At Risk issue is possibly the biggest silent problem sitting on the horizon.  I’ve encouraged companies I work with to assess the future viability of their supply chain partners.  If any are at risk, they must identify and create alternate suppliers, even if their costs increase.  After all, not having access to a 5 cent part that shuts down your business will be hard to justify to your customers.  Secondly, this is also an excellent opportunity to reach out to companies that you haven’t done business with in years.  Inform them you are financially stable and able to take care of their business needs.  Now go make it happen.

Be the one to see it coming!

The first leadership book to point out the problem, then hand-deliver the solution.

Without Warning - Rondey Johnson

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