Voices from the Flats – Things You Shouldn’t Have to Tell Business Leaders
By Jim Wright of Stonekettle Station
I’m a retired US Navy Chief Warrant Officer. Nowadays I live in Alaska where I spend most of my time working in my woodshop or fishing. I occasionally consult for the Military. I have delusions of becoming a full time writer – or conquering the universe, whichever is easier…
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Business.
Like you, these days I hear a lot of things about business.
Particularly I hear a lot of things about American business and what we can do to make more of it, more product, more jobs, more money, more opportunity, more business. You hear it on street corners among the unemployed. You heard it during the recent elections. The new Congress has gone on and on about it – and then focused on denying Americans access to healthcare and making sure a handful of women don’t get government funded abortions.
The President focused on it during the last State of the Union address.
Talk of business dominates the media.
No wonder, of course, it’s been a bad decade for American business, this first ten years of the new century – which is damned peculiar if you think about it as American business usually thrives under a Conservative wartime administration. The country may go to hell, as it did during Vietnam, but business – especially those who supply the beans and bullets – more often than not make out like bandits.
Well, until the economy tanks, that is.
During Vietnam, that implosion didn’t happen until the mid 70’s, after the conflict was over and the bill for a decade of war came due – right about the same time OPEC began flexing its muscles. We went into a fairly ugly recession but it didn’t really last all that long. Energy prices and consumption reached a new balance and the country, including business, had enough capital reserve at all levels that we could recover pretty quickly without any great loss of prosperity. Things really got cooking when Reagan arrived in Washington and cranked the military/industrial complex back up to 11. He could do that, mostly because America was between shooting wars at the time. Of course, Reagan was borrowing against the future, betting that the expanding economy would create enough wealth to pay the bill on his investment. It didn’t, and we’re still paying premiums on that dead horse, but it sounded good at the time and for a while there it even looked like he might pull it off. Instead it turned out to be the classic Ponzi scam, as usual.
This time around, however, the shit hit the fan early on in the conflict. We were already hip deep in two wars when the housing bubble burst. Exacerbating the situation is the type of conflict we are fighting, i.e. a war of pacification. It’s a war of boots on the ground, of occupation, small arms and body armor and individual citizen soldiers and of hearts and minds. It’s a war of remotely operated drones and smart weapons and ideas. What that translates to is that the usual self-licking ice-cream cone of the military/industrial complex that would during a more traditional conflict drive the economy and keep a large workforce of American businesses happily cranking out ships and tanks and bombers, is instead not hiring. Or rather, they are hiring only a small cadre of highly specialized technicians instead of the massive semi-skilled workforce they once would have. This war costs the country just as much, if not more, than a traditional conflict – without even the momentary economic benefit of a wartime workforce or huge plus-up in military forces to draw off the unemployed. It’s making a small handful of very large defense contractors richer, but that war expenditure isn’t trickling down very far. Lay that on top of the Wall Street implosion, which managed to destroy not only the Monopoly money created in the mortgage bubble but a significant chunk of America’s real wealth too. The astounding thing was how many Wall Street firms were nothing but smoke and mirrors, empty shells like a Hollywood movie set made up almost entirely of that same Monopoly money, when the bubble burst they didn’t just go bankrupt, they evaporated.
Some of these old and venerated companies, companies such as Lehman Brothers, were, in the end, no more real than Enron or those billion-dollar DotComs that consisted of little more than a couple of Power Point slides, a handful of longhairs, and a Ping-Pong table. Nothing they built lasted, if indeed they actually built anything at all. When the bubbles burst they simply vanished without a trace – no different than those fly-by-night telephone scam operations whose offices are an endless series of false fronts and fleabag motel rooms. Most of the their white collar workforce ended up on the street, but the CEOs? The CAO’s? The COOs? The movers and shakers? Sure, someday they might even be held accountable. Someday. But, most? Well, they just moved on to other offices and other businesses and learned not one damned thing.
And why should they? Business rewards the very executives who destroyed those self same companies – and will destroy the next one, and the next one, and the one after that. See, because most of them just don’t care. Unlike the titans of industry of years past, this generation of jackasses does not build, they don’t make, they don’t create, they leave no legacy. They take. Ultimately, this mindset will destroy American business, because these so-called executives are teaching the next generation to be just as greedy and self-serving and as destructive as they are.
The lesson of Wall Street is this: Get while the getting is good, get rich, get out, and let the peons deal with the resulting mess.
There are a lot of things that can be done to turn around this downward spiral, but much of it depends on teaching the next generation of business leaders, embedding in them things that should be self obvious to every business executive, but apparently are not:
– If you show no loyalty to your employees, you have no right whatsoever to expect any loyalty in return. Period. There was a time when people expected to work at a single company their whole lives, so why don’t they anymore? Because if you act like a mercenary, so will your employees. Because if you treat your employees like the enemy, they’ll will be the enemy. If you don’t trust your employees, they won’t be trustworthy. And most especially if you engage in unethical behavior, so will your employees – you steal from investors, your employees will steal from you. You’re the leader, your people are a reflection of you.
First Corollary: If your people hate coming to work, they’ll find excuses not to work.
Second Corollary: You can’t do more with less, the only thing you do with less is less. Your people need tools, training, and assets. Give it to them, even if you have to pay for it out of your bonus.
– Build a better mouse trap. The world is full of crappy products and crappy customer service. If a customer wants crap, they can always find it cheaper elsewhere. If you want people to beat a path to your door, don’t make crap. The product matters. Your customers don’t give a good goddamn about your process, they are interested in only one thing: Product. Quality matters. People will pay more for it. Customers will seek it out. Reputation matters most especially. Lose yours, and the end is near.
First Corollary: If you produce a faulty product, make good on it promptly. Admitting your mistakes, and then fixing them, will do more for your bottom line than any other single thing you can do. Period.
– Motivational Posters have never motivated anybody. Ever. That’s your job. If you put up motivational posters, you’re basically saying that you can be replaced by a piece of cardboard printed with a trite slogan (and you probably have other bad habits too). Something else, Motivational posters are insulting – and not just because you spent $120 on a framed picture of two guys in a canoe while your people have to scrape for office supplies to do their jobs. You’d motivate them more if you ordered the whole office pizza for lunch and used the remainder to stock the supply closet.
– If you don’t invest in your company’s future, your company doesn’t have a future.
– You can innovate, or you can talk about innovating. To paraphrase General Douglas MacArthur, you can’t bomb half a bridge. Either innovate or don’t. If you innovate, fund it, follow through, or don’t innovate because you’re just wasting company assets.
First Corollary: There’s nothing worse than an outfit that spastically keeps changing direction.
– If you acquire a failing business, don’t adopt their business model.
– Business consultants have no interest whatsoever in improving your business. Seriously, if your business was running smoothly, you wouldn’t be giving them money, would you?
– Suck-ups, Kiss-Asses, and Yes-Men make lousy managers, don’t cultivate them.
First Corollary: If your people are only telling you what you want to hear, you should start worrying immediately.
– If you outsource technical expertise and capability, you’re capitalizing your competition. There was a time in America when big manufactures made most of their product components themselves. Then came a concept called RONA, Return on Net Assets, it’s a ratio – the ratio of profit to company assets. In simple terms: If you can maintain a steady level of income while at the same time significantly reducing company assets, you massively increase profit – which was the original idea behind outsourcing. This goes wrong any number of ways (not including the loss of jobs at home), but the worst is when an industry ends up creating their own replacement, which basically describes American manufacturing’s relationship to Asia. First they make the car parts. Pretty soon they stop making car parts, and start making cars. Eventually they realize they don’t need you anymore. Ditto computers. Ditto everything else.
– Beware the serial CEO.
– Don’t teach your grandmother how to suck eggs, i.e. MBA’s shouldn’t be making engineering decisions, or telling programmers how to code, or making medical treatment decisions, or etc and so on. Being fluent in jargon does not equal actual knowledge or experience. You have experts for a reason, listen to them. If you’ve outsourced all your expertise, better learn to speak Chinese.
– Nobody ever understood a subject from looking at a couple of Power Point slides.
– Meetings don’t produce solutions. Good meetings identify problems and outline issues. Problems are solved after the meeting by two guys shooting the shit in the hallway. If you encourage people to talk to each other, you’ll have more solutions and less problems.
– If you spend most of your time in meetings, you’re not really doing anything. Just saying.
– Information Technology is a science, not an art. Hire actual IT people, degreed, certified, or otherwise credentialed. Don’t hire your nephew just because he’s “good at that Facespace thing.” IT is the core of modern business. IT makes you global. IT is the single most important division you have – don’t agree? Remember that when the federal regulators subpoena your email for the last three years.
First Corollary: If you outsource IT, you’re giving an outsider full access to every single secret you have, make damned sure you know who you’re getting in bed with. Better yet, don’t outsource IT, hire good people and give them a reason to be loyal. Remember I said this when the federal regulators come knocking.
Second Corollary: There is nothing more debilitating to efficiency and the bottom line than a lousy database design. Hire somebody who actually knows what they are doing and can prove it, pay them well, give them the tools they need. Make damned sure they listen to the users.
Third Corollary: Your webpage matters. It is your public face. Hire somebody who actually knows what they are doing, i.e. a professional webpage designer. Here’s how you tell: if the prospective designer enthusiastically agrees with your idea for a flaming, rotating logo that flashes in jittering colors and plays the company song written by your brother-in-law, don’t hire him. Oh, and put your goddamned phone number on the top of every page in a large font.
Fourth Corollary: Worry less about your employees surfing Craigslist on company time, and more about the fact that the most visited addresses detected by your nanny software are job search sites (or Wikileaks).
and finally and most importantly:
– You. Are. Not. Entitled. To. A. Bonus.
If you get one, make damned sure it’s because you earned it.
This was great….I just sent the link on to my sons that are management with a note that IF they took your advice they, and their company/employees, would be a guaranteed success. Thanks for the post and keep them coming!!! (maybe I should be sending a link to your post so the White House would read it???)
This is well written. It is right to the point and very inclusive. Recognition that the workers are the ones that took the hit with no parachute to save them and minimal prospect of finding other meaningful employment utilizing their skills. This editorial fully encompassed the view that has brought us to this part of history. I hope that we can pull ourselves out of it all. It is not a good position for the U.S. to be in. I have watched the CEO’s etc. who do not consider the under employees needs to get the job done.
Knowing that change will begin with me and it is slow has been a patent phrase for me. We didn’t get in this pickle barrel overnight and we won’t get out quickly. We need to keep diligent and engaged. We need to help our fellow citizen/neighbor. We can
Keep the thought of writing a book. Guest blog again.
Marry me. [That’s a joke, son. Alas.]
Fabulous!
Great article. You really nail what is wrong with modern American business.
The biggest problem for our country is the disregard for the American worker. Even from their fellow workers! It’s all been part of the ongoing campaign to squash unions.
I was lucky enough to work for a tech company in the 80’ies that actually valued all employees before it was taken over by huge old tech corporations. What’s amazing is that people still have reunions every few years because it was such a unique and good experience during its heyday.
It came from the top management who were all WWII vets who understood “team work”. It was leadership with respect for everyone and an expectation that we would do our jobs the best we knew how.
We had some mid level fancy MBA’s and they were kept in check by the top guys. I’ve worked with a lot of “fancy MBA’s” and it seems that a sort of contempt is bred at these schools. Part of the training is to turn out very competitive people but instead of competing against another business a lot of these folks use their competitiveness internally within the company against their peers and the “underlings” whom they manage. What’s lacking is leadership. To be a good leader means you earn the respect of you followers.
I count 16 boldface headers. Each is equivalent to a chapter of material. Write, Jim, write. You just acquired a permanent reader.
Amen on outsourcing IT. My contribution would be, a high school diploma and a Microsoft certification does not an IT manager make.
When calling for help on credit cards ect ya can hardly understand what is being said.They may speak English but it is so bad it is hard to understand what is being said .
Very well done. You are right. All of the things you said so well shouldn’t need saying, but we have an entire generation of “leaders” that need to act on them.
,,so true about the computer/semiconductor industry – and Reagen Econonmics!! Rather than get better at home, they shipped those jobs off to China for the short term profit , and sold them the old equipment to make a fast buck…and then lost the market to them.. too bad, cuz I really enjoyed my 25 yrs in Semiconductors….
Great post!! For some time now I have been concerned about our ability to continue to be the innovators of the world. It is one of the key components that has allowed the US to have the largest economy in the world. But we have been decreasing our support of education and basic research for years. Guess who has been increasing their research funding? China. The US standing in math and science skills falls every year and we have those in DC that want to do away with the Department of Education.
But actually producing goods seems to have gone by the wayside in this country and all that is left are services (many are harder to outsource but not all) and speculation. The is very disconcerting. Adam Smith (founding father of economics) was very concerned about speculation. Why? Because speculation is not only unproductive but can actually be very harmful to an economy. Hence, the financial crisis which had many variables but was in part caused by the speculation of Wall Street.
Well, you say “Its a good thing that we got that all cleaned up!” Except nothing has been done and those too big to fail banks have only gotten bigger. Wall Street is back to its speculation and it is business as usual.
Large companies do not innovate, small companies do. The big boxes and other large corporations get stuck in the status quo. If we want to stimulate the economy then we need to focus on small companies and individuals not Wall Street and other large corporations.
And for final measure we should really redefine how we measure economic progress. This idea of continuous growth is not sustainable on a finite planet.
Ah, but alas I am preaching to the choir once more. : )
Excellent logic, points, writing, and article, Mr. Wright. Thank you.
Now if you could just turn it into a Power Point presentation, I’ll order from our overseas office suppliers, folders with the company logo embossed on them, lime green paper (you know, green for the new “go get ’em” attitude we’re going to be following), and pens with motivational quotes written along their length.
We can, while we’re waiting for the order to arrive (I think we should go ahead and pay the extra for express order and delivery, no?) schedule meetings with all the vps for next week; with all the vps and upper-management supervisors the week after; with all the vps, upper-management supervisors, and middle-management supervisors the following week; and with all the vps, upper-management supervisors, middle-management supervisors, and lower-management supervisors for the week after that. I’m guessing the meetings should take all day.
I just know they’ll all be suitably impressed with the care taken to impress them with the Power Point presentation and accompanying goodies, and they’ll all be well-motivated as they lead the company’s other employees on to make this company grow and, more importantly, us prosper. 😉 beth.
These lines made me laugh. Keep writing! Good post.
“Suck-ups, Kiss-Asses, and Yes-Men make lousy managers, don’t cultivate them.”
“- You. Are. Not. Entitled. To. A. Bonus.
If you get one, make damned sure it’s because you earned it.”
Aaaaahhhh…. common sense. We know it when we see it and we’re deeply lucky if our company leadership has any. Wouldn’t it be lovely if good business was still the norm?
OT, That Crow Woman, Having a tough day and thought of you and your shout out: http://www.youtube.com/watch?v=WQKcnRsPO&feature=related
Carry on….(and thanks)
George Harrison: Here come’s the Sun. My link didn’t work but the song does in my soul for me right at this moment.
http://www.youtube.com/watch?v=WQKcpmnRsPO&feature=related
Common sense, Business 101, basic knowledge… so you’d think, right?
I am amazed at how many managers, directors, VP’s and officers don’t get this stuff.
Chunks of wisdom in that post! Thanks!
Jim;
“If you spend most of your time in meetings, you’re not really doing anything. Just saying.”
Yes, I remind myself of this the two days a week I seem to spend in nothing but meetings.
http://www.despair.com (I love this site!)
click on “mugs”
Scroll down to:
Meetings
None of us is as dumb as all of us.
AKM, please encourage Jim Wright to shop a book to publishers, start his own blog and/or be a return guest blogger.
His voice is strong, clear and sensible. Business leaders – particularly young ones – need to hear him.
Thanks for inviting him to post here!
Jim does have his own blog and it’s a very good one. It’s linked by his name. stonekettlestation.com
And yes, I’ve invited him to post here again!
Stop it, you’re making me blush 😉
You sound like you’re taking a page or rather, adding a page, to Lee Iacocca who has never been shy about his opinions, many that I agree with
– If you show no loyalty to your employees, you have no right whatsoever to expect any loyalty in return Very very true and when you treat your employees decent you get loyality.I hope everyone here is keeping up with what is going on in Wisconsin Jim I just went to your blog and you are right up there with AKM So thanks for this post and your blog. Hopefully more will see and read it.
Thanks!
Ah, some common sense! Thank you for the fun and informative post.
Very well thought out, informative article. Very struck by this part:
“…the worst is when an industry ends up creating their own replacement, which basically describes American manufacturing’s relationship to Asia. First they make the car parts. Pretty soon they stop making car parts, and start making cars. Eventually they realize they don’t need you anymore. Ditto computers. Ditto everything else.
And as you said, the sad thing is the people making the deals, making the big bucks, don’t care about the product or what is down the road for America because they are just interested in $,$$$,$$$,$$$. And there are so many of our representatives in Congress who are rationalizing what is happening so they can $benefit$ from an economic ideology that doesn’t work.
Loved your post.
Well put!
Very well said. Why is it that basic common sense like this is so uncommon?
Well said.
I so wish I could forward this to my current employers. They do not value their employees in the least bit and expect everyone to call off, steal or just do as poorly as possible, The only management meetings that I have been to, 2 in three years, it was a study in what not to do, disparage your managers, scream at them how pathethic they are and basically demand more and more with less and less, I am one of the only few women managers there and the sexism and pay inequity is off the charts. The one time I brought it up resulted in 4 months of continual abuse and threats. I do keep documentations for future use if need be but for the meantime, go to work and take it for the time being. There are no jobs in OHIO! But I keep sending out resumes and hope for the best,
Well said! I wish the CEO’s, CFO’s, and COO’s of the corporations I’ve worked for had read and understood these points. One was a publicly-held corporation, the other a private, family-run S-corp with thousands of employees. None of their executives cared for or trusted the employees, seeing them as fungible property to cast aside if any asked for better working conditions or exceptions to the rules made to basically enslave them. Rigidity was the defining characteristic of both workplaces.
Everyone except those at the very top, worked with second-rate equipment right down to the chairs in which they had to stay seated in all day long except for the briefest of personal-needs breaks (one corp actually timed bathroom breaks — demanding that we keep it down to three minutes!).
They eventually outsourced most of the work.
One COO told me when I asked for raises for my staff that “he’d rather pay the receptionists” more than the people actually doing the work of the corporation because “they are our public face. Besides, I need to attract and keep pretty people out front. I can always find replacements for the knitty-gritty stuff.”
When people ask me why I won’t seek out jobs in cubicles or offices any longer, I simply shudder and cringe. I made that mistake twice in my life. Won’t do it again. Simply cannot face that grim warehousing of talent. When I see some of the folks I once worked with who got out ahead of or after I left, we have sort of a celebration – a survivor’s enthusiasm. Everyone of us has done so much more after leaving those greed-factories. Self-respect mean more than dollars.
Oops – Self respect means more than dollars.
Pretty damn good; certainly written from experience.
I think it could’ve (as a Post) ended with “Beware the serial CEO.”, thereabouts. Full stop. Period. Blam!
I ‘sense’ the IT trail-out is from part of the experience – not that I would disagree – but it starts to get into “another subject” (link/next Post/whatever.) The ‘Outsourcing’ bullet started it, aptly, and the earlier powerpoints, longhairs, and ping-pong tables kinda exposed a ‘bit’ of a derisive tone: probably well-deserved but now we’re talking 2 arenas, the dot.com/MBA term-sheet Co.s and ‘Big’ business (that, to a degree, helped fuel/fire the pseudo venture capital(ists.)
Very insightful.
Well written article. Thanks.
Excellent post! Thank you.
Thank you. I agree. You are a writer. Very good read.
Yes, you’re a writer. A damned good one, too. (Is it alright if I share this to my faceplace?)
Great post…thank you, Jim Wright!
I commented recently about how the tycoons of the past took great pride in doing exactly what Jim is saying the CEO’s of today should be doing…innovating. They took much of the money they made and reinvested it into their companies, and their goals were to create a legacy of products, not merely pad their bank accounts.
Think about the people of the late 19th and early 20th centuries who developed railroads, automobiles, photography, the film industry, television, air travel, etc. People like George Westinghouse, Andrew Carnegie, Alexander Graham Bell, Thomas Edison, Henry Ford, George Eastman and the Vanderbilts all left a considerable legacies to the world. Yes, most of them became wealthy, some even obscenely so, but all were determined to leave something concrete to future generations. Today’s ‘tycoons’ are all about obtaining the greatest amount of personal wealth possible in the shortest amount of time and, if they need to hurt or even destroy a lot of people in the process, well then it’s just too bad for them.
However you may feel about Bill Gates, he at least has created new technology that has changed the world and, more importantly, has donated much of his wealth to improving the lives of other people, setting up foundations that do good around the world. He’s also working with Warren Buffett to convince other billionaires to donate the majority of their money to charity. I don’t recall too many Wall Street executives who are doing that kind of thing with the outrageous bonuses they are demanding from the companies that were only recently bailed out by our tax money.
And our wonderful Republican representatives in Congress are working SO hard to make sure those billionaires get to keep even more of their money, even if they have to raise taxes on the rest of us to do so.
PERFECT!
Put a Made up Rethuglican name on this and Quiity would probably adopt it as her own. Should be required reading for the right,if they can actually read.
Actually, there was once a Jim Wright, a congressman from Texas – but he was a Democrat and was a Speaker of the House.
Trivia moment….:)
Congressman Wright got Newted or Delayed and was forced to end his career by “moralists” from the religious wrong.
Wonderful presentation. I’d say that you ARE a writer.
VernD