Assignment # 10:

A COURSE UPDATE

My main goal for this course has been to provide all of you with provocative material that will help you to rethink not just what your company is doing, but how you might individually contribute to its on-going profit-power, reinvention process. This course has hopefully been less about what I want to teach and make you accountable for and more about helping you think more about what is important, relevant and possible for both you and your employer.

Instead of having a set syllabus from the outset, I have been trying to re-shape my general starting theme of how to "Reinvent Distributor Profitability" based on your discussion board comments. My biggest disconnect, I think, was for me to have started off with a CEO-level, strategy course for independent distribution companies and then realize that most of you are mid-level managers who aren�t working for a distributor.

As I then tried to make mid-course corrections, my biggest challenge has been dealing with the lead, lag, lead problem of: creating assignments, seeing how the discussions go, and then re-creating the next wave of assignments before discussion on the first wave is complete. You may have noticed, by example, that I was using "slide 9 in slide show #10" at my site that outlined an eight-step, service reinvention process, as an organizing tool. Assignment 7 was aimed at defining, measuring and achieving basic service brilliance (steps 2-4 on slide 9). I was planning to then progress into "how to sell intangible service value to get paid for it and use it as a base for creating win-win replenishment deals".

Your collective discussion comments had, however, a fair amount of "how do I get my boss, other departments, etc. to change", so I changed tack in assignments 8 and 9. In assignment 8, I went back to "what�s important to you" questions old and new (?). Then, in assignment #9, I tried to address what you might still be able to change within your department and maybe along a service process that comes through your department" assuming you might not be able to change your superiors� un-spoken assumptions for how to run the organization. Let�s call this challenge: "Leading from the Middle".

We are now looking at a time constraint, the semester will soon be over. Will #10 be our last assignment; it will depend upon how fast the class gets through this and posts discussion thoughts.

Here then are my incremental objectives for this 10th assignment. Let�s go back to where we left off in assignment #7 in which we were using the process in slide #9 in slide show #10. The next step(s) in the process is to sell and get paid for service value, but let�s personalize it.

    1. How do you sell the intangible value of what you are doing and get raises, promotions and new interesting projects?
    2. Instead of taking customer buy-sell relationships to the next level, we might still discuss how we "lead from the middle" to help tops and bottoms to rethink their beliefs which are often based on flawed, dated and unspoken assumptions.
    3. And, how do we anticipate and deal with the political/power system pushback towards any change efforts? Politics is necessary in any competitive environment; we should all strive to keep this activity at a balanced, lowest frictional cost level.

For background reading for these three objectives, skim through the following documents (and one personal story) that you can find on the web, and post whatever points or concepts speak to you and why.

For turning your annual performance review into a continuous year-round process that keeps your activities more aligned with how your boss gets paid, succeeds and therefore values you, please read the following short article and my personal war story that follow. Here�s the link to a short article on turning negative "performance reviews" into positive longer-term events: http://www.nytimes.com/2004/05/02/business/yourmoney/02advi.html.

A PERSONAL STORY ON SELLING YOUR FOCUSED, TIMELY (SERVICE) VALUE TO YOUR BOSS.

When I first got out of business school in June �74, I went to work for a wheeler-dealer fellow who was building a chain of primarily printing paper distribution companies in the mid-west by acquiring tired old family businesses. He was, and still is, a remarkable fellow who was long on vision and ambition and always short on time for digesting all that he pursued. He was necessarily a great delegator, and I was someone who couldn�t say no, so I was quickly and happily buried under assignments.

He sent me initially to Peoria, Illinois to be the acting assistant branch manager of a division that had about 35+ people that had been a chronic loser ever since he had bought the business 5 years earlier. I nominally reported to the branch manager and then to a group vice-president, both of whom were a generation older and grizzled veterans of the industry. But, I was the main man�s protégé; had his ear; and he was willing to try new stuff to solve chronic old problems that were not responding to old solutions.

Six months later, in December, I received an unexpected, late-evening phone call from both the CEO and the group VP who I reported to. They had been doing year-end evaluations of all of the managers in my group and thought that they should review me too. The gist of the five-minute call was: "Hey, you are working hard (60 to 70 hours per week) and learning fast. Keep it up, and we are giving you a 10% raise that is going into our budget processing that we are also doing."

I was pleased. I hadn�t expected anything to change for at least a year, so a 10% raise was great news to a kid with a mountain of college and grad school debt and one business suit to his name.

Fast forward to December �75. I had now been working at this distribution chain for 18 months. I had played a huge role in successfully turning around the Peoria division and had been promoted back to the St. Louis HQ to fill the new position of corporate sales manager. We had, at the time, 6 companies in 6 cities with about 50 full time sales reps and only 3 part-time, titular, branch-level sales managers. ("Sales management" was still a low-key, art form subject area in the early �70�s that emphasized golf lessons and time-and-territory management. Most reps were former warehouse people who had promoted up through the ranks in the 50�s and 60�s.)

In mid-December, the CEO invited me to sit down for a formal year-end, performance review that was a significant negative experience. The CEO pulled out a pad of paper on which he had written about ten items for which he thought I was (solely?) responsible with A to F grades attached. It was the first time that I had seen the list; some of the items were responsibilities that I hadn�t known were mine. There was no relative weighting of the tasks, no hint of how to measure progress and no set deadlines for completion. It was more of a wish list of problem/opportunities that anyone on the management team would like to see go away.

This was, in retrospect, a case of an over-subscribed, deal-maker trying to do the right thing on the fly having a visit with a naïve, workaholic, super-pleaser, control-freak kid who always strived for A�s on everything.

I didn�t say much, because I was so shocked and upset. I later went through a range of emotions from quite negative to eventually thinking about what can I do to manage my boss so this doesn�t happen again, and we can literally be on the same page. I went back and suggested the following ideas:

  • Boss, I was quite upset about our visit, but it�s mostly my fault for not being more organized. To get more organized, though, I need your help on a few things.
  • Let�s make a list of what you want me to do in the next 3 to 18 months, because most things don�t take 12 or less months to do and all end at fiscal/calendar year-end.
  • Let�s weight them by importance � A,B,C-, and let�s assign urgency or completion dates.
  • Then, allow me to grab you for at least 10 minutes every month and/or whenever you want to add or modify responsibilities or projects to my list, which happens a lot, because we are growing rapidly and developing holding company capabilities for the first time. (This "where do you want to put it on the priority list" was a vital tool. From then on, instead of quick verbal exchanges, we would review the entire list that was too much to humanly do and then we would do updated triage. This would force him to decide which wishes would be starved or reassigned to make way for new, more important or urgent things. This was often a frustrating experience for a guy who wanted everything done yesterday.)
  • As for incentive pay, I suggested that I get paid in some way that was aligned with how his bonus was calculated. Because we had a lot of bank debt due to our growth by acquisition, the bank had a covenant that restricted what he could pay himself based on profits divided by inventory and receivables, the bank�s main asset collateral.

These new, working-together-better agreements worked sensationally and became catalysts for a new generation of operational innovation plays. I created a "return on controllable assets" ROCA form for each of the six profit centers which I reviewed with the management teams at the six divisions even though the "division Presidents" did not "report to me" and did not have incentive plans based on ROCA. I pointed out that this was the formula by which the CEO got paid and now me, so if they wanted to please their boss they shouldn�t ignore these numbers. I even recommended that they lobby the CEO for a similar pay plan to replace the still fluid, sometimes subjective, year-end treatment they had been getting. Because they all still had commission-able accounts that they had had for years, they were over-focused on just growing margin dollars. (Key point: the best way to overcome historically-rooted, dated assumptions and beliefs is to create new metrics that reflect new realities and keep "dialoguing" about what we need to do differently to close the performance gaps. The hard core, old believers just want the new data to disappear, but we have to gently keep pressing the new data and the new gaps that they underscore.)

Once I got everyone looking for new, creative solutions that were bounded by improving: ROCA, target customer niche service metrics and key account growth numbers; things really started to improve. Even though I was a staff guy to whom the division Presidents did not report too, none of them could argue with the comparative performance improvement numbers from all divisions that I started sharing amongst them. They all started to listen to my ideas for "pushing the wheel of learning". I was leading without line authority.

I also consistently grabbed my fast-moving boss for the formal, monthly 10-minute review which was preceded by sending him a simple progress report that I typed up with the real-time "to do" list chart attached. After a few months, he even said: "Look, I know you are doing a great job, you don�t have to remind me every month." So, I skipped one month, but then went right back to doing them. I reasoned that:

  • Out of sight is out of mind and taken for granted.
  • Automated reminders make people consciously notice something and register some positive thought about the sender; they make the invisible visible, the intangible, tangible and more valued.
  • You should keep selling until the customer even complains about being tired about hearing how good and valuable you are for their bottom line.
  • Here�s a political tip that will help you on a quiz link below. Give as much credit to your boss for whatever good is being accomplished as possible.

Formal Discussion Question Set #1: Have any of you succeeded or failed at trying to find out more accurately:

  • What your boss really expects from you;
  • How they weight all of your assigned responsibilities;
  • When they expect certain things done and on what measurable basis?

Have you asked them what they need from you for them to look better and make more; how you can better align your activities for mutual progress in the organization?

Assume that your boss is your customer who determines: "value"; what�s a fair, competitive price (salary) to pay; and whether they want to make a next level commitment with you (promotions and/or new, more important assignments). How do you make what you are doing visible on a repetitive basis to make the intangible, tangible and valued? Any comments, stories and/or questions on these matters?

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Back to incremental objectives 2 and 3 �leading from the middle and dealing with political/power pushback to any change � here are a few readings. For each of them your assignment is to flag the one or two things that speak to you the most and either comment or question them in the discussion board.

For "leading from the middle" skim the following which are arranged from the shortest (most fun) to the longest and most tedious:

When we lead from the middle, we will run into both "tops and bottoms" (superiors and subordinates) who will disagree with our views. They seem to have hardened belief systems of their own that seem to be statements of fact, but are actually missing any current facts. To create new understanding we have to first help them surface where their beliefs come from. "The ladder of inference" is a good discussion tool to use in a politically deft way: Here�s a link to that tool at two different interesting sites for would be change agents:

http://www.masterfacilitatorjournal.com/inference.html,

http://www.corporateoutlaw.com/slide2.html.

Because politics is a reality, here�s a quick nine-step quiz to take on how politically savvy we are:

http://www.politicalsavvy.com.

I was able to find two business professors on the web who seem to be going after the "lead from the middle niche". Here is a link to the one who is more succinct:

http://www.babsoninsight.com/contentmgr/showdetails.php/id/594.

Here also is a link to a more verbose, generalized piece by a guy who has written books on the "lead from the middle" topic. Skim this one at best:

http://www.gwsae.org/executiveupdate/2002/October/leading.htm.

For a systems theory view on how "tops, middles and bottoms" do politically dysfunctional dance routines with each other and how to stop the nonsense, skim through this slide show that outlines the main concepts from Barry Oshry�s ground-breaking book, Seeing Systems (�95).

http://courses.lib.odu.edu/commhealth/pstepano/seesys.ppt.

DISCUSSION QUESTION SET #2: As a reminder, all I want each of you to do is flag the one or two things in all of these readings that speak most to you and your operational context. Then, figure out how to post: a case, a problem, an insight or an additional question about them. Remember, I would rather have all of us spend time on what you are ready to learn and use, than to discuss what I think is important to all of you.

End of Assignment 10.