Tag: managerialism

Incurious George and the cult of managerialism

The BBC’s scandals illustrate how management layers diffuse responsibility in modern organisations

“Do you not read papers?” Thundered the BBC’s John Humphrys to the corporation’s Director General during an interview over the broadcaster’s latest scandal.

That exchange was one of the final straws for the hapless George Entwhistle’s 54 day leadership of the British Broadcasting Corporation where the Jimmy Savile scandal had seen him labelled as ‘Incurious George’ for his failure to ask basic questions of his subordinates.

Humphry’s emphasised this when discussing the Newsnight program’s advance notice of the allegations they were going make;

You have a staff, but you have an enormous staff of people who are reporting into you on all sorts of things – they didn’t see this tweet that was going to set the world on fire?

A lack of staff certainly isn’t the BBC’s problem, the organisation’s chairman Chris Patten quipped after Entwhistle’s resignation that the broadcaster has more managers than the Chinese Communist Party.

George Entwhistle’s failure to ask his legion of managers and their failure to keep the boss informed is symptomatic of modern management where layers of bureaucracy are used to diffuse responsibility.

In every corporate scandal over the last two decades we find the people who were paid well to hold ‘responsible’ positions claimed they weren’t told about the nefarious deeds or negligence of their underlings.

Shareholders suffer massive losses, taxpayers bail out floundering businesses and yet senior executives and board members happily waddle along blissfully content as long as the money keeps rolling in.

If it were just private enterprise affected by this managerialism then it could be argued that the free market will fix the problem. Unfortunately the public sector is equally affected.

Managerialism infects the public service as we see with the BBC and it’s political masters  and the results are hospital patients die, wards of the state abused, known swindlers rob old ladies and agencies continually fail to deliver the services they are charged to deliver.

Again the layers of management diffuse responsibility; the Minister, the Director-General and the ranks of Directors with claims to the executive toilet suite’s keys are insulated from the inconvenience of actually being responsible for doing the job they are paid to do.

Managerialism and incuriousity are fine bedfellows, in many ways Incurious George Entwhistle is the management icon of our times.

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Here’s where the fees go

Goldman Sachs is taking on new partners, showing how lucrative their fees are.

Becoming a partner of Goldman Sachs is a path to riches and is admission into the highest elites of the Western World’s corporatist society.

The Guardian looks at the process of becoming a Goldman Sachs partner from joining the company as an ‘analyst’ or ‘associate’ through to achieving the highest partner level.

What’s notable about the story are the layers of management and their grandiose titles; the position of “vice-president” being a case in point where it is the next step up for associates and analysts rather than the seat of power such a title suggests.

The sheer number of these vice-presidents and Managing Directors, estimated in the hundreds by the Guardian, is another notable point. The fact there are nearly 500 partner positions in the firm indicates just how fat the fees must be to pay these people.

If Goldman Sachs and their clients were private companies their fees and remuneration would be their own business. Since the Global Financial Crisis, Goldman Sachs and its too-big-to-fail competitors now are explicitly underwritten by the world’s taxpayers.

That should make us all concerned at just how much our grandchildren are going to have to pay for the generous lifestyles of today’s banking elites.

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Double guessing the boss

What do the BBC, the Chinese government and Australian banks have in common?

Two interesting articles, one from English media writer Nick Cohen and the other from American journalist Eveline Chao, show how effective fear is for driving self censorship.

Eveline’s story, Me and My Censor, tells of her relationship with the Chinese Government censor appointed to monitor the publication she worked for in Beijing.

As well as having to avoid the 3Ts – Taiwan, Tibet, and Tiananmen – there were also a range of other delicate issues an active writer could find themselves being censored for as she relates in this conversation with her censor Snow;

We couldn’t use the cover image I had picked out for a feature on the rise of chain restaurants, because it was of an empty bowl, and, Snow told me, it would make people think of being hungry and remind them of the Great Famine (a period from 1958 to 1961 when tens of millions of Chinese starved to death, discussion of which is still suppressed). Even our Chinese designers began to roll their eyes when I related this change to them, and set them to work looking for images of bowls overflowing with meat.

Snow had learned the hard way about the power of imagery to upset the party functionaries. Snow explained why when she urged Eveline didn’t illustrate a story with a graphic showing stars;

I once published, in a newspaper, a picture of a book put out by the German embassy, introducing China and Germany’s investment cooperation. The book’s cover had a big stream on it, half of it the colors of the German flag, half of it red with yellow stars. I decided since it wasn’t a flag it was okay, and sent it to print. Our newspaper office was slapped with a fine of 180,000 yuan [today, around $28,000] and I had to write a self-criticism and take a big salary cut.

Self criticism and big salary cut – the things that middle managers fears regardless of whether they work in the Chinese Communist Party, the BBC or a bank.

The same fear of upsetting those in power is discussed in Nick Cohen’s article on the BBC’s disastrous and scandalous decision to pull a documentary exposing Jimmy Savile as a child abuser. Cohen quotes an interview where George Entwhistle, the executive responsible for pulling the program, was interviewed on the matter.

When Entwistle implied that the editor of Newsnight had no need to worry about his bosses circling over him like glassy-eyed crows, Evan Davis did what any sensible person would have done and burst out laughing.

Nick Cohen’s point was emphasised to me during the week when a former bank worker mentioned an executive had been disciplined for letting slip the bank was running several instances of a cloud computing service. Apparently the press and regulators could have been in the room where he discussed this.

Another example is a big organisation I’ve been regularly writing on where staff members regularly say “this is not a place where you question management.” An acquaintance that recently started there had to agree that they wouldn’t mention anything about the organisation, ever.

The problem with this self-censorship is that it quickly becomes destructive. In the United Airlines dead dog case, staff  subject to arbitrary whims and discipline of management  avoid taking decisions which often escalates situations where common sense would quickly find a simple solution.

It also means people jump to conclusions. Eviline relates the story of the tourist story;

One month, we ran a short news brief with figures on the number of mainland Chinese tourists that had visited the United States in 2007, and Snow flagged the number for deletion. We wondered what dirt we had unwittingly stumbled upon. Which government bureau oversaw tourism figures? What were they hiding? Finally, I called Snow, and learned that the numbers we had cited were for the number of Chinese tourists worldwide, not just in the United States.

So much for the would-be plot. Chagrined, I had to announce to my colleagues that we’d made a mistake.

A culture of secrecy also creates an atmosphere of distrust with every decision being analysed by staff, customers and outsiders for what nefarious motives lie behind even the most innocuous management decision.

Eventually those organisations become insular and inward looking with only those perceived as being ‘safe’ allowed to move into responsible positions which further entrenches the culture of secrecy and blame.

This is not healthy, but it’s where many of our government departments, political parties, sporting organisations and business are today including the BBC, Chinese media organisations and Australian banks.

For the disrupters, this is another competitive advantage.

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Heroes of Capitalism

When did it become acceptable for airlines to humiliate passengers and customers on national television?

The few times I watch television these days is either when the footy’s on or the rare occasions that I surface from my interweb connected man cave and stumble into a room where someone has a TV running.

And so it was tonight when I happened to wander out to witness a terrible airport “reality” show – this one being an unoriginal, third rate Australian effort where Tiger Airlines shows how it stuffs around and humiliates its passengers. In Australia, Channel Seven considers this to be prime-time TV “entertainment”.

What was striking about the show was how Tiger Airlines’ check in staff humiliated a pensioner and her young son who hadn’t printed out their boarding passes.

The “fee” for not carrying out a basic task which reasonable people would expect would be part of an airline’s service is $25 a head at Tiger Airlines – one could ask what the Australian Competition and Consumer Commission’s position is on excessive fees being used to pad airlines’, or banks’, profits but that would be asking too much of Canberra’s worlds best practice doughnut munchers.

As result the poor lady was expected to front up with another $50 – money she didn’t have. So Tiger Airlines’ check in staff wouldn’t let her board and Channel Seven’s camera crew gleefully filmed her desperate tears and shocked son.

Eventually a bystander took pity on her and gave her $60. At least someone in the terminal had some decency and compassion, qualities neither the Tiger Airlines staff or Channel Seven camera crew have in the tiniest way.

No doubt somewhere in an anonymous glass tower some arsehole has a job as a manager at Tiger Airlines and has a KPI that includes how many poor mothers they can reduce to tears.

When the arsehole Tiger Airlines manager gets its annual bonus for making the required number of victims passengers weep, it no doubt goes to lunch with the Channel Seven executives – another bunch of arseholes – to slap each others’ backs and tell themselves what great heroes of capitalism they are.

The question that bugs me is when did it become acceptable to humiliate your customers? No doubt Tiger Airlines think it’s good publicity and Channel Seven think it is good entertainment.

We live in interesting times when our business leaders think it isn’t good enough just to take customers’ money but that it’s also necessary to humiliate them as the managements of both Channel Seven and Tiger Airlines seem to be rewarded for doing.

Fortunately in these corporatist days we still can vote with our wallets and turn off the muck we find offensive – that’s why decent people shouldn’t choose to fly Tiger Airlines or watch Channel Seven.

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Are you a worthy customer?

Some businesses aren’t worth worrying about as customers.

“Those companies are not going to be winners in the long term. We’re very happy to work with the fastest growing companies in the world; the companies who understand that people are core to who they are,” says Daniel Debow, Vice President of Salesforce’s Work.com at the recent Dreamforce conference.

Debow was talking about companies that aren’t interested in social software, or those who don’t have the infrastructure or management culture to implement changes which reflect the modern workplace.

When writing about social and cloud services one thing that jumps out is just how unprepared many businesses, big and small, are for changes that are happening in both the workplace and the market.

The story of Work.com reflects those changes – the idea behind Rypple and Work.com, which was born out of Salesforce’s 2011 acquisiton of Rypple, is that workplaces are inherently social.

“We spend as much more time with the people we work than with our families. It matters to us what our workmates think” says Daniel so Work.com gathers the social intelligence within the business to give people real time feedback on their performance.

The Rypple idea lies in the inadequacy of existing HR software and management practices. Daniel says, “today this model we have it’s totally not reflective of the reality of how people work; people are more connected, they’re collaborative, more realtime.”

This collaborative and realtime way of doing business challenges the structures in many businesses and the methods of a lot of managers. Many are ill-equipped to deal with a more open and transparent way of managing their teams.

In fact, software like work.com and its competitor Workday make some of those older style managers redundant, particularly those whose roles involve little more than box ticking and following the strictures of the company’s procedure manual as this can be done better by a computer program.

The problem for many organisations, both private and public, is they have become more focused on cossetting and protecting the box ticking bureaucrats of middle and upper management rather than delivering service to their customers and supporting their staff responsible for keeping clients happy.

Something that jumps out when you talk to entrepreneurs like Daniel Debow and others building new social and cloud companies is their lack of interest in selling to those organisations, their view is the old school companies are dinosaurs on the path to extinction.

Dinosaurs though lasted a lot longer than we often think and the same is true of the current generation of zombie companies being kept alive by government or investors too scared to book the losses which the failure of these enterprises would entail.

While those dinosaurs are going to be a drag on our economies for the next decade or two, the real opportunities – and rewarding work – is with those businesses who want to change and aren’t run for the administrative convenience of their managers.

The question for many business owners and managers is whether companies like Rypple or Workday could be bothered selling to you. If you’re not, it’s time to consider your exit strategy – or lobby your local politician for some subsidies.

Paul travelled to Dreamforce courtesy of Salesforce.com

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Walking the floor

Getting out of the office and seeing what your customers and staff are doing is a neglected management fundamental.

“He walks the site three times a day,” said awed contractors about a construction project manager – who we’ll call Rob – that I encountered as a cadet Engineer in the building industry. Getting out of his site office and seeing what was going on made sure dodgy contractors or inexperienced trainees like me couldn’t slow down his projects.

Slate Magazine’s story of how the Wendy’s hamburger chain changed the US fast food industry recalls how Rob would successfully run his projects and the importance of hands on management.

Jim Near was recruited as president by his friend and Wendy’s founder Dave Thomas to get the business on track after over-extending in the mid 1980s. Slate says of Jim’s hands-on management style;

Near liked to stalk through the dining areas of his stores examining people’s trays. If customers were leaving fries, he’d go harass the fryers: Were they serving the potatoes too hot? Too cold? Not using enough shortening? And he would sit in his car in the parking lot, surveilling the activity at the drive-thru window.

That obsession sounds like Steve Jobs and its no-coincidence; Jobs, Jim Near and Rob the project manager gave a damn about the product that was being delivered. Rather than sitting in an office obsessing over paperwork and meeting artificial KPIs, these effective leaders got out and saw what the realities were in their business.

Probably the best example of this “management by walking the floor” ethos was Bob Ansett who built up the Australian Budget Rent-A-Car business in the 1970s. Every senior manager was required to spend a couple of days a month working on one of Budget’s rental desk dealing with customers.

That policy forced Budget’s executives to understand the business, just as Jim Near was described as ““a ketchup-in-his-veins type of guy” through working at every level in the fast food industry.

One of the many conceits in modern management is the idea that everything – from building high rise towers, running car rental companies or operating a hamburger chain – is like selling soap. This philosophy ignores that every industry has its own characteristics and even selling soap has its own unique challenges in different markets.

It’s easy to think everything works as described in a 1980s business school textbook when you have artificially constructed KPIs and layers of managers to deflect responsibility.

Over the last quarter of the Twentieth Century we saw customer service become disdained in the Corporatist business culture which favours accountants and lawyers as managers who rely on marketing people and lobbyists to protect them from the reality that they aren’t really very good at running their companies.

Now that era has come to an end and the times now suit those who listen to customers and the marketplace. Walking the floor and paying attention to what the public are saying about us on new media are competitive advantages.

While the corporatists lobby their friends in government for subsidies and protection, entrepreneurs and genuine business builders like Dave Thomas, Jim Near, Steve Jobs and Bob Ansett have the opportunity to seize the markets that are being neglected.

There’s never been an excuse for not listening to the customer and today it’s more important than ever.

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Management by fear

Dictatorial managers are killing organisations in an era which rewards openness.

The sad story of the passing of Bea, the Golden Retriever who died while in the care of United Airlines portrays a fundamental problem in many organisations’ managements – the rule of fear by middle managers.

A telling part of Bea’s sad tale is how her owner Maggie Rizer was treated when she went to collect her two dogs from United,

When we arrived in San Francisco to pick up our dogs we drove to the dark cargo terminal and on arrival in the hanger were told simply, “one of them is dead” by the emotionless worker who seemed more interested in his text messages.  It took thirty minutes for a supervisor to come to tell us, “it was the two year old.”  Subsequently we requested that our dog be returned to us and were told that she had been delivered to a local vet for an autopsy. Whatever thread of trust remained between us and United broke and we then insisted that she be returned to us for our own autopsy by our trusted veterinarian, Shann Ikezawa, DVM from Bishop Ranch Veterinary Center. Over the next two hours the supervisor’s lie unraveled as it became clear that Bea was right behind a closed door the whole time and he had been discussing how to handle the potential liability with his boss who had left and sticking to the divert and stall tactic that they had been taught. Eventually Bea was returned and we drove her to the vet at midnight.

The ‘divert and stall’ tactic took over two hours for Maggie and her partner to get around.

When I recently flew United I saw a similar attitude from the cabin crew, their lack of initiative and beaten attitude was noticeable. As I said in the post;

Overall the cabin crew seem tired and beaten, while they aren’t rude or unpleasant one wonders if they have all received too many stern memos from management about being friendly to customers.

Those stern memos have a corrosive effect on a business where every employee worries more about being sanctioned for breaking a rule or directive rather than helping customers.

Eventually the entire organisation becomes risk adverse and focused on protecting staff, or management’s, interests rather than looking after those of customers, shareholders or taxpayers.

Too many organisations are like this, where the staff are motivated by staying out of trouble rather than helping and adding value to their customers.

Making staff fear you is one way to run a company, or a nation, but ultimately those who are scared of the leaders lose all initiative and the empire collapses because every decision has to be sent to head office as the minions are scared to do anything that will be bring the Imperial Displeasure down upon their hapless heads.

From ancient Rome to the Soviet Union empires have fallen because of this, in today’s private sector companies that run on fear are ultimately doomed, including the ones who can tap into government subsidies to kick the can down the road. Even public sector agencies where this attitude reigns will change when the chill winds of austerity blow through their corridors.

One staff member taking a little bit of initiative probably would have saved Bea the golden retriever. One supervisor taking responsibility and helping Maggie Rizer would have avoided the PR disaster United now have.

In an economy that’s radically changing, inflexibility and slow decision making are possibly the worst possible traits an organisation can have. It’s time for dictatorial managers, along with control freak politicians and their public service directors, to let the reigns go on their staff.

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