StaffNet Consulting and Placement Group
I admit that I made management mistakes during my 30 year career. However, I wouldn't change "too many" of these errors as making a mistake in business is an invaluable learning experience as long as it is corrected early and analyzed as a team. You can read about the "New Coke" that was introduced in 1985 in business books, but there is nothing like living it and therefore learning from it. Also, while it is "in vogue" to talk about your mistakes as a business leader, I want to try and demonstrate the real "fallout" from these mistakes and the root cause(s) and not just the mistake itself. In the final analysis mistakes are caused by only two reasons....Reason 1 - Doing something without looking at all possible options (but doing something)....Reason 2 - Doing NOTHING AT ALL. Certainly we all have witnessed that the greatest mistakes of all are caused by those that do nothing at all. Listed below are "most" of the "categories" of the mistakes I made in my career. My hopes are that you will see and appreciate each "category" and when you see the beginnings of these same mistakes at your company you will be able to take quick and decisive action.
- THE "BATTER UP" MISTAKE...Baseball is a game of players, coaches and "lastly" umpires...in that order. The fans "pay" to watch the players and have no interest in watching the coaches or the umpires and understand that "all" players will swing at and miss the ball. The greatest ball players of all time were wrong (out) 70% of the time but still made it to the "Hall of Fame". Early in my career at our company 'We" had a habit of "pointing a finger" at those that made mistakes. I will state the obvious that "mistakes" are a great way to learn....as long as those mistakes aren't repeated and don't cause significant harm to you clients, company, employees, stakeholders and vendors. However, the real "damage" caused to an organization that "punish" mistakes is that some/most of the other managers and employees quickly learn that "What is the best way to avoid making a mistake?"...The answer is..."DO ABSOLUTELY NOTHING". If you do absolutely nothing...it is impossible to make a mistake but it is also impossible to contribute to the good of the company. By punishing mistakes, many of our employees quickly learned that if they risked nothing and attempted to changed nothing....they never made mistakes. In addition the real damage was caused by our company turning into an organization of "umpires" and "players" as opposed to an organization of "coaches" and "players. " That is, those that did nothing were quick to call "strikes and outs and errors" on the real "players" in organization. Our company was quickly outpaced by the fast moving IT industry and our competitors in the 1980's, when there was great opportunity. We quickly "evolved" to learn from our mistakes and ask others "why haven't you made any mistakes lately" and "how have you made our company BETTER, FASTER or MORE PROFITABLE?". After this "epiphany" our revenues doubled within a three year period.
- THE "STAN MUSIAL" MISTAKE...Stan Musial never was able to coach a baseball team as he would hit baseballs and say "Do it just like that" without coaching, teaching and mentoring others. Another one of my errors was to promote my best sales reps and technical reps to management positions and have them supervise others due to their client/technical skills. In 1988 as we began to grow and I realized I could no longer "manage" the sales staff on a daily basis, it made sense to me to promote the best performing sales reps and technical reps to "fill that void". However I quickly learned that being great at Sales or Technical support had little to do with managing a sales or technical team. What I did learn was that all great sales representatives have an acceptable level of "greed" that makes them more concerned about themselves than for the company. My new Sales Managers continued to sell on their own and just said watch me....and my new Technical Managers continued to love to role up their sleeves with new technology and keep all the information to themselves and prove that they knew the most. Management is an "art" and not a "science". It requires patience, mentoring and selflessness. Some of the best sales and technical reps I've ever worked with were very selfish people (but in a way that benefits a company). The real "damage" was that I continued to manage the sales teams on a part time basis and our results suffered as the sales and technical team didn't have the leadership required to truly compete in a challenging and changing IT marketplace. FOR THOSE OF YOU UNDER 50..STAN MUSIAL WAS ONE OF THE GREATEST BASEBALL PLAYERS OF ALL TIME BUT FAILED MISERABLY AT COACHING BECAUSE HE COULDN'T UNDERSTAND WHY SOMEONE COULDN'T HIT A BASEBALL LIKE HE COULD!
- THE "WHY DIDN'T THE CHICKEN CROSS THE ROAD" MISTAKE...If you never cross the street you will never get hit by a car or be hurt. As all business owners do at some point, we relied TOO MUCH on legal/consulting advise and certainly there are times when we wish we relied on it more. However, one of my mistakes was getting legal/consulting input "before" a process is discussed, outlined, mapped out, financed, and implemented with our managers. In 30 years I never had a lawyer or consultant say to me "You don't need my input". Too many times I received legal/consulting advice that slowed our process of change (without good reason). Lawyers aren't trained to come to decision or conclusion. Certainly, if I was to ask a lawyer/consultant "How can you assure me I won't get hit by a car crossing the street?" most lawyers/consultants will reply "Don't cross the street at all!" (after they say let me review this issue). Technically that is a correct answer, but most lawyers/consultants don't understand the goal of business is to grow revenue with calculable risk and assist in the process which requires some degree of challenge. The real damage was legal input didn't allow us to change quickly enough and to do basic things in a timely manner. Legal input and advice is invaluable in many situations...It is up to the leader to decide when to ask for that input!
- THE "NEXT IN LINE PLEASE" MISTAKE...It is "easier" to promote people you already work with to fill a void. There are certainly positive aspects of this approach. It does promote good moral when an insider is promoted and certainly you know what you have or don't have "at least" at that time of the "promotion". Small companies loose people all the time as they cannot offer career path growth compared to larger organizations. GE proudly states they terminate the bottom 20% of their managers each year and bring in new blood. A small company doesn't have that luxury. I thought I was doing justice to my company and my employees by promoting the "next in line" for positions in sales, operations, accounting, purchasing, collections etc. My mistake was that I provided these promotions without requiring advancement in knowledge, results, education, certifications, etc and the promoted employees expected to be paid to the same level as their predecessor. LESSON...If you provide a promotion/salary increase to an "insider" you should have the same expectations of that person as you would for any "outsider" or new employee and also have the courage to look to the outside for greater levels of expertise. I learned to hold off any salary increase or "official promotion" until the promoted employee could prove to us that he/she could do the job.
- THE "WHY DOES TIGER WOODS STILL NEEDS A COACH" MISTAKE. Earlier in my career if we had a "Super Star" performer in any position, I would have a tendency to "manage" that person less aggressively assuming they could maneuver without my direction and had a great understanding of the "basics" of their responsibilities. Due to my "lack of coaching", that person would often find some type of obstacle that would frustrate them to the near point of resigning. My mistake was assuming that because that person was a "Super Star" they didn't need guidance, fine tuning and a sense of "team" with the organization. Even Tiger Woods has a swing coach with him at all tournaments and meets with him every day to discuss some subtitles in his swing or stance that needs improvement. Certainly we all agree that Tiger Woods swing coach is not the worlds best golfer (or even close). His coach's skills are different and distinct and are based on seeing areas that need improvement and positive change in others....large or small. That is the value of a coach as opposed to a manager. A "coach" can instinctively see when something is wrong and work to correct it. A "manager" will just say "work through it" until you figure it out.
- THE "FIELD OF DREAMS" MISTAKE..."Build it and they will come." This holds true only for Kevin Costner. There were a few times when we were doing very well that we decided to pursue newer technologies (The IT industry is well known for its rapid pace of change) to provide and sell to our clients knowing that we had to enter a learning curve as with most products. We spent significant funds well before we realized any revenue from these new products. Instead of cross training our technical staff on these new technologies we hired "product specific" technicians that wouldn't be generating revenue for months. Instead of using the manufacturers locations for training we purchased demo equipment for training. Instead of continuing to sell existing profitable products we quickly began to sell the newer products that we were not skilled at installing, supporting and designing. Further, many of these new products weren't field tested in multi-product environments. The real damage was that we dropped existing profitable lines just to be able to say we have the latest and greatest products for our clients.
- THE "BUTCHER SHOP" MISTAKE. No one ever goes into a butcher shop and says "Give me some amount of hamburger and whenever you can". There was a time in the earlier part of my career where I would use words and terms such as "as soon as possible" "right away" and "immediately". These words have no "measurable" definition and mean different things to different people. In the IT Integrator business we dealt with multiple vendors for thousands of different products. We were purchasing product for orders without "measuring" the last date of receipt. As with most business, we weren't paid until an order was configured, delivered in whole and working. We put "defined" measurement systems in place to make sure all product was shipped at the same time (based on the last available product) which significantly increased our cash flow and client satisfaction. This also resulted in our adoption of "continual process improvement". THINGS THAT GET MEASURED IMPROVE!
- THE "CHARLES DARWIN" MISTAKE. Early in my career, as we were an IT integrator I made the assumption that all new sales and administrative hires had to "evolve" from the computer industry. It made sense as computers were difficult to learn and sell (this was the 80's and early 90's) As we grew, we continued to struggle with one of the basics of business....which is finding new business opportunities and clients. As we were based in New Jersey (Pharmaceutical/Engineering Capital of the US) we had maxed out with pharmaceutical companies and were in need of a new client base. Our existing sales reps were "phone challenged" and had difficulty with the basic business act of getting on the phone and "cold calling". They preferred to stay in their comfort level of talking with existing clients and trying to increase revenue through them. We needed to sell to more commercial enterprises outside of pharmaceuticals and this was also a time when significant funds were given to education to enhance students computer literacy and we wanted to enter the education marketplace. It was recommended by a new manager to consider hiring individuals that came from a "cold calling" industry and already had that skill and teach them the computers and hire teachers to sell computers to the education industry and also spend the required time to teach them computers. Needless to say, this approach worked as we had a group of people that understood the art of cold calling and were not disappointed with a "NO"...and no one is better at selling to an educator than another educator. We quickly witnessed as clients felt very comfortable with ex educators as their sales reps and the ex educators naturally "sold" our products and services from an educational approach and were willing to give our clients as much "extra study time" as needed. We continued to grow. We learned what we already new....The greatest challenge in selling any product or service is your ability to get "in front of a client" and make that client see the value in your efforts.
- THE "WHO'S ON FIRST" MISTAKE...Too much authority without matching responsibility creates confusion among clients and employees resulting in frustration and resentment among with no or little authority. Too much responsibility without matching authority creates a "quick line out the door." As we grew and promoted from within I continued to give out additional authority to our managers and directors. However, as I handed out more authority I never matched that authority with greater responsibilities. As a result we never knew "Who's on first" or "Who had the ball". In addition the real damage was that most people were very content with having greater levels of authority without increased responsibilities. An example was that as our operations managers had increasing authority for pricing and scheduling....I never gave them increased responsibility for client satisfaction, scheduled completion dates, repeat business and profitability. As a result, our clients and sales teams complained more and profits decreased. As our administrative departments received greater authority for pricing and policy formation and product flow they never had increased responsibility for enhanced levels of information flow and continual process improvement. As a result, we never received faster and more reliable amounts of information. They viewed their role as being required to telling us where we've been and not where we are going. An important business lesson I learned is that when you increase a managers authority you also must increase their amount of responsibility to get things done. In addition, I came to realize that if any person came to me and said "I am frustrated"....the problem was usually due to an imbalance of "authority" and "responsibility". The people with too much "authority" never complained. ALWAYS ALWAYS ALWAYS "match authority with responsibility". This is a key to building a company and an "entity".
- THE "ANNIE IS RIGHT" MISTAKE...THERE REALLY IS A TOMORROW....There was a time in a five year period from 1989 to 1994 that our revenues were growing by over 30% per year and our profits were increasing by 50% per year. On paper we looked great, business articles were written about our success and vendors were knocking our doors down to do business with us. However, virtually all this growth came from existing clients to the point where one client represented over 15% of our overall revenue. Eventually tomorrow comes and all clients purchase less for varied reasons. This happened to us in a relatively short period and since we didn't spend enough time looking for new business when our existing clients were growing significantly, we had to scramble to find new business under the stress of loosing existing clients and profits. The real damage created was that the loss of these clients and the inability to replace them quickly resulted in loss of profits, sales reps and overall confidence in our operation. Any good company should always be cultivating today's and tomorrow's clients. Any good company should be spending at least 30% of its resources and time on tomorrow regardless of their "momentary" success.
- THE "DAVID HIRING GOLIATH" MISTAKE. For 30 years we sold, supported and serviced computer equipment to large corporations and institutions of higher learning. We sold equipment from IBM, HP, and Cisco Systems, to drop a few names. The representatives from these large companies would walk through our "small company" hallways and talk of the great deals they are handling. As we have all seen every "few years" most large organizations "eat their own young" and significantly reduce their workforce. In some cases I was surprised to witness some talented people were "reduced" or decided to quit on their own. I thought I was a "fortunate" by hiring these sales reps/managers and getting them on our payroll. Not once or twice, but three times we tried this and each time it failed. A person who works for a "named" company has the privilege of being able to use his/her employer's name to gain access to potential clients. This is not the case at a small company. Also, the same reps from large companies and manufacturer's expected a "cast of thousands" to attend sales calls with them...One for the Presentation...One for Technical Discussions...One for Scheduling. This is not the case in a small company. Sales reps have to be able to handle a wide array of responsibilities as additional resources are assigned only for future sales calls after the client has been qualified. Lastly, sales reps from large manufacturer's aren't trained in the entire sales/implementation/billing cycles. We actually attempted to hire sales reps from large global manufacturers on a few occasions with the same failed results. YOU WILL HIRE THE BEST PEOPLE FOR THE POSITION WITH THE BEST TOOLS AND UNDERSTANDING ONLY IF YOU KNOW THE "REAL" CHALLENGES OF THAT POSITION!
- THE "KYRPTONITE IS SUPERMAN'S ONLY WEAKNESS" MISTAKE. Everyone knows that Kyptonite is the only weakness Superman has. A "fatal" weakness to be sure. Yet, no one ever tried to figure out why or try to cure Superman of his "fatality"...as long as he kept saving the world, was more powerful than a locomotive and could leap over tall buildings in a single bound. There was a time earlier in my career (and when we were a small company) that I focused too much on what a person "couldn't do" than what they "could do". Every person in every organization can claim strengths and weaknesses. I have had the privilege of working with great people. Once I realized part of my job was to exploit their strengths and find a "work around" their weaknesses we became a better company. Everyone knows of at least one sales representative that was great at sales but terrible at administrative follow up. It is important to note that for a "manager" to over look you "weakness", you have to have "significant" strengths.
- THE "MIRROR MIRROR ON THE WALL" MISTAKE Who is the fairest of them all. Some of the best business advice I ever received was my father. He said "Always hire someone that can do something you can't". While it's great advice that I always try to practice, the reality is that the average manager is intimidated by people that fit this description for the fear for "one day" loosing" their job or being over shadowed. This is true in any company. During my tenure, I witnessed us hiring inferior technical specialists and inexperienced sales reps. Certainly small companies don't have the same candidate pool that global organizations enjoy, however there are many experienced people that want to work in a smaller company where their contributions are readily noticed. The real damage from this is a company of "average" people and new employees that require significant "on the job" training. We addressed this issue and continued to grow our company but this needed to be reinforced every day. MANAGER'S NEED TO HAVE THE CONFIDENCE AND COURAGE TO HIRE PEOPLE THAT BRING IMPROVEMENT TO YOUR COMPANY. THE ABILITY TO DO THAT IS IN ITSELF A UNIQUE LEADERSHIP SKILL!
- THE "IF IT LOOKS LIKE A DUCK" MISTAKE. This is a quick and easy one but best applies to the employees in sales and technical departments. Usually if you suspect a sales/technical rep should be terminated after a few months....terminate. I made a mistake early in my career by allowing under performing sales/technical reps to stay on our payroll in the hopes of them "turning around". The reality is that in most industries, sales reps do not provide real revenue generation in their first few months of employment. However, the reality is that while a sales rep is not producing revenue they should conversely be making significantly more phone calls/prospect meetings than anyone else. The mistake I made was allowing my sales managers to tell me "the sales rep is just about produce" and I would allow another "period of time" to go past even though phone calls or meetings were not done to my satisfaction. In 95% of the cases where I suspected a problem after a few months, the sales reps were terminated (or resigned) by the end of their first anniversary. The real damage is the loss of profits and the reality that even the Sales Managers would give up on the sales rep and allow them to flounder. I learned in 1992 that if a sales rep is not performing (define performance anyway you like) after 3 months, they will not succeed.
- THE "KING HAS NO CLOTHES" MISTAKE. I worked with many of the same people for 30 years. One mistake I made was allowing some to share equally in the success of the company even though their contributions were limited. In any small company, after many years, you go to parties, graduations, and weddings with these same people and you get to know almost everything about them. You actually spend more time with them than with your own families and indeed a mistake I made was treating co-workers like family where their problems converted to be my problems.....that is to say, as our business model changed (as it did every 3 years) I was willing to over look their obvious short comings as I placed a premium on loyalty and not performance. I quickly came to realize that I wouldn't hire some the same people at this stage in our growth if I were to interview them at that point in time....and indeed they couldn't do anything I couldn't do. I had a significant number of people I hired in the mid '80s that tripled their salaries in a 10 year period and became managers due to my "Next In Line" mistake. I quickly came to realize that everyone "has a level of incompetence" and it was my job to know where and when that occurs and make changes accordingly. I also learned the obvious....that a co-workers loyalty is best experienced when times are tough. THE REAL IMPACT OF THIS WAS THAT DUE TO MY THINKING THAT LOYALTY WAS MORE IMPORTANT THAN PERFORMANCE, WE LOST MANY TALENTED PEOPLE WHEN THESE GREAT AND TALENTED PEOPLE REALIZED THEY COULD NOT ADVANCE IN OUR COMPANY OR WE LOST THEM WHEN THEY LOST RESPECT FOR THEIR MANAGER. ALWAYS PLACE A PREMIUM ON PERFORMANCE! LOYALTY IS IMPORTANT, BUT YOU WILL ONLY EXPERIENCE REAL LOYALTY DURING CHALLENGING TIMES!
- THE "THE DOUGHNUT DAY" MISTAKE. Earlier in my career I attempted to manage "too often" by consensus. Certainly this sounds great if written in a book. Managing by consensus does work on occasion in certain select circumstances. In 1991 we purchased another IT company 30 miles away. We purchased the company primarily for access to its client base and it's strong sales force as we intended to merge all it's departments with ours. I met with the owners of the new company to ask their opinion as to how to best acclimate their employees to our culture. The new companies Operations Manager always was asking for perks for her people such as "casual day", "summer hours", "commitment to raises" etc. One day I met with her and conceded most of what she wanted. She thanked me and on the way out she said..."Next time I want to discuss Doughnut Day Friday's for my people", and her request for small favors for her people never stopped. A great manager must make decisions based on a totality of the information provided and acknowledge that sometimes (most times) this may have nothing in common with the consensus of his/her team. I was fortunate to work with people during most of my career that respected my final decision and supported it as if it were their own. The mistake I made was also tolerating those other managers that did not support my final decision and too many times asked for opinions realizing that many people couldn't or wouldn't act in the best interest of the company. I quickly learned not to ask for other opinions for most "day to day" issues but to be extremely clear as to the reasons for my final decisions to the entire organization and how it will impact our clients and our company. In turn, all of our employees came to realize that "What was best for the company...was best for them".
- THE "KEEP IT SIMPLE" MISTAKE. Sometimes the answer to a business problem is right in front of you......but you can't see it. People like to make business issue complex when in reality they are simple to fix....but just difficult to find. In 1995 as our business continued to grow, our expenses began to increase for reasons that confused many of us. I took the first approach of looking to decrease the number of people on our payroll. I held a meeting with the managers of our sales, purchasing and distribution groups with the hopes to eliminating personnel. As I called out names to eliminate I would get reasons why we couldn't eliminate those positions such as "We can't cut him....he loads the trucks with all the equipment we order improperly"..."We can't terminate her....she expedites all the orders that we ship improperly"....It was obvious that a significant portion of our increase in expenses were due to "errors" being made throughout the company in the placement of orders, configuration of orders and shipment of orders. In fact, it turned out that over 30% of the orders we placed with vendors and then shipped to clients had an error that needed to be corrected. We spent time to make sure our "errors" were reduced significantly and quickly realized a reduction in expenses.....and we did not have to eliminate personnel as our revenues continued to grow. THE BEST WAY TO DECREASE EXPENSES IS TO FIRST ELIMINATE ERRORS IN YOUR COMPANY!
- THE "IF IT'S NOT BROKEN....DON'T FIX IT" MISTAKE. There was a time mid 1995 when we were achieving our goals and satisfying our clients demand for quick service. When there was a call for service we would have to verify warranty status...payment status...spare part availability status with the vendor, etc. While the clients never complained, there were a few competitors that were able to do all their verification in half the time. They did this by implementing vendor software solutions and having vendors that their site on a full time basis. Our systems seemed to be working but not as quickly as the other competitors. We realized that while we were willing to spend time on "fixing processes that were broken" we also had to spend at least as much time on "fixing processes that weren't broken" and commit to "continual process improvement". We quickly adapted newer systems and continued to grow.
I consider many mistakes I made an invaluable experience. These are a sampling of the mistakes I made and these same mistakes helped make me a better leader, which I now share with many of my corporate clients. In the final analysis the one and only mistake that is fatal to any organization is the "mistake" of doing NOTHING!
Let StaffNet-Work for you. Please visit us at http://staffnetconsulting.com and email me at sjwilk@staffnetconsulting.com or call me at (908) 963-9000.
+Steven Wilk is Executive Director of +StaffNet Consulting and Placement Group.
