Showing posts with label Corporate Citizenship. Show all posts
Showing posts with label Corporate Citizenship. Show all posts

Wednesday, July 16, 2008

The Missing Link

Pardon my absence. I know it has been a long time. It has been an eventful time for me. I have been working like a dog, interviewing for a new employer (to include creating and delivering a presentation in front of my potential peers.) I have been working on my MBA, and both instructors had high demands and higher standards. All along, I have been unable to actually form opinions on the books I have read or ideas that I have processed. Something was missing. I thought of this blog often, but I did not want to write here while I still felt adrift.

Now I think I’ve got it. I have that missing link that will allow me to begin tieing together the loose ends of my thoughts.

First, the dilemma: how can we keep the best parts of capitalism (freedom, motivation, competition, market efficiency, etc) while correcting the worst parts (poverty, lay-offs, oppression, pollution, exploitation, unnecessary stress, etc…) Of course, Socialism, Communism, Isolationism, and various Theocracies address some of these points, but they always wipe out the most important and beautiful aspects of capitalism. I have yet to see a successfully implemented system that eliminates oppression.

The biggest problem I see with capitalism is that there is not a logical limit defined. Once you begin a capitalist venture, you can never arrive at a point and say “I have acquired enough, and now we can just coast.” The whole point of capitalism is to continue to grow indefinitely. A new company can grow their market share with innovative products and marketing. Once commercial can cause market share (and the holy grail of capitalism, profits) to jump in significant amounts. However, every market has a limited amount. Eventually, you can no longer make a large leap of profits by growing you market, because there isn’t enough undecided customers in the market to grab.

This would be a time to rest on your laurels and say, “We did it. We maximized our market share. We can just do what we do best and enjoy the ride.” However, the nature of Capitalism insists that you do something to continue to grow something, and ultimately increase your profits. If you do not, then you will either be sued by your investors or gobbled up by competitor. To stand still in Capitalism is to be run over.

Most companies punish people in order to grow profits, eventually. The easiest way to show growth in a stagnant market is to layoff employees. When you show a significant loss of salary and benefits on your financial statements, investors see growth. Unfortunately, you are laying off human being who have debts, families, and feelings. When someone gives a large portion of their life and immense effort to a company, and their reward is a pink slip, that experience can be dark and disgusting. I know from experience.

We like to demonize CEO’s during layoffs, and criticize them for making millions wile laying people off who make $40,000. It has been said that if a CEO would just forgo a few million for one year, he could save the jobs of hundreds, maybe thousands of employees. However, it is not completely a CEO’s fault. It is the nature of the system. If the CEO reaches the point where a layoff is necessary to fix the financial statement and he chooses to save those jobs out of kindness and a sense of responsibility, he is legally liable. He will immediately be sued, fired, and disgraced for not making the decision that capitalism demands: grow the profits and damn the labor.

If you cannot grow your current market and entering a new market is too expensive, then you must cut costs. Capitalism demands it. We must ship out factories overseas. We must layoff huge numbers, and then hire some of them back next quarter. We must force people to do the work of two employees, with less time and tools available. We must take away the free coffee and increase the health insurance premiums while cutting bonuses, overtime, and promotions. If you don’t like it, there’s the door.

There are two business authors who offer a new perspective on the problem and its solution. In both cases, the authors point out the folly of focusing on costs and instead demonstrate means of increasing productivity. In other words, work smarter rather than meaner.

The first author is Dr. Eliyahu Goldratt. His book The Goal is a parable for the business world, and lays out an argument for his Theory of Constraints. The parable describes a plant manager whose career is on the line. While his company wants to cut back, he slowly discovers a methodology to improve the productivity of his plant without cutting costs or adding expenses. The Theory of Constraints is the key: finding the parts of a business process that add expense, and then solving the problem using strategy, timing, or reordering.

The second author is Dr. Jac Fitz-Enz. His work The ROI of Human Capital: Measuring the Economic Value of Employee Performance points out that if we view our labor as having value just as our plant & equipment, cash and equivalents, and other assets have value, and if we look to appreciate those assets through investment and maintenance, then we will have more fulfilled employees. To paraphrase Dr. Fitz-Enz, no amount of compensation can restore the soul of a life spent in mindless toil…Fulfilling work is a reward for the individual and the enterprise…Providing fulfilling work will develop and retain the most productive workers and allow the firm to enjoy the most loyal customers.”

I don’t have it all figured out yet, I just have a piece of the puzzle that enables me to complete some nagging thoughts and take a new perspective on the problem. Capitalism can be saved and improved not by cutting costs, but my improving productivity and investing in people.

I will leave you with a final thought from Dr. Fitz-Enz that I found enlightening. He draws on work from Nobel-prize winning economist Theodore Schultz when he points out that in the industrial age, we moved materials through our business processes to create a marketable product. Now, in the information Age, we do not move materials. We move information which tells us when and how to move the materials. Perfect productivity can be viewed as a circle. When you gather the factors of productivity, you begin to close the circle by learning what data is needed, when, where, in what form, and to whom. The circle is completed when we transform data into information, and eventually into intelligence.

Saturday, May 10, 2008

Fat, Forty, and Fired

Another random encounter has turned out well for me. While entering the local library one day, I glanced at the “Friends of the Library” bookstore that is in the lobby. For some reason, a certain title leapt out at me: “Fat, Forty, and Fired” by Nigel Marsh.

I have purchased hundreds of books and checked out hundreds (maybe thousands) from the library over the years. I have been given books that were hand-selected by intelligent and well-meaning people. I have had books assigned to me by well-educated and researched professionals who were sure that the assigned book was exactly right. Google, Amazon, Borders, and InformIT.com have spent billions on the technology to suggest the perfect book for me. What a waste of time, effort, and money by all of us.

I cannot understand why, but the most memorable, impressionable, and important books in my life have almost all been discovered by a random chance encounter. The predictability of this occurring is slightly higher for me than the average person because I am a bibliophile and spend so much time perusing book shelves.

I do not pretend to have any statistical skills, but I would guess that the chances of finding an important and memorable book purely by accident would be pretty rare—almost as rare as lightning-strikes and lottery-wins. I guess I am just a lucky guy. I sure hope a publisher stumbles on this and realizes I am an untapped goldmine (publishers can email me at lslobodzian [at-sign] gmail [dot] com.

When I purchased “Fat, Forty, and Fired” I expected it to start by describing a situation similar to my own and end by leading me to some needed wisdom and perhaps a roadmap for my future. However, it sat on my bookshelf for months, untouched. Graduate school, work, family, and laziness all conspired to allow dust to collect on the book (and the many others in my “to-read” pile”.) Finally, the timing was right. I had time to read, and I was open to receive Marsh’s message.

I reference many books a month, in addition to the email, articles, white papers, and pages of technical manuals I read on a daily basis. However, I rarely read a book cover-to-cover. If I make the effort to stick with a book, it is the highest praise I can pay the author. For my own sake, and I hope some of you as well, I should take the time now to highlight why I think this book was worth sticking through.

First, I must point out how dissimilar I am to the author. Nigel Marsh is an ad executive and CEO. He is well-traveled, has many influential and wealthy friends, and has made more money in a single year than I have in a decade, I am sure. He was born in England and lives now in Australia. In many ways, he lives in a world that I cannot relate to and suspect that he doesn’t truly know anything about the world I live in. Also, I am not quite forty yet.

On the other hand, he is quite down-to-earth and as I read him I felt like we were not that far apart. He wasn’t born rich and he has to work hard to maintain his lifestyle-it could all be taken from him quickly if he is not vigilante and a little lucky. He is realistic about money, and has faced the possibility of poverty or something near it.

Nigel Marsh strives at being a family man, strives to progress in his professional field, and he strives to make his life meaningful. In the end, that is where Nigel and I meet. He has an interest in Corporate Social Responsibiltiy (CSR), making the world a better place, and raising his kids to be meaningful and productive, as well as happy and healthy.

Nigel opens the book as a guy who wants to be a good family man. He ends up working too much, missing time with the family, and then being either emotionally distant or short-tempered with everyone. I, too, find myself on such a merry-go-round of feeling guilty while working late and missing my family till it hurts, and then getting home to yell and scream and then sit silently in front of a TV. Later, I feel guilty about over-reacting and making children cry and beat myself up inside. Perhaps I make it up to them for a day or two. Eventually, the demands of work initiate the vicious cycle all over again.

We are better Fathers than some men because we at least live with our kids, we make an effort to control and improve ourselves, and we genuinely care whether we are helping or harming our kids. However, good-intentions are not enough with parenting and we both know that. Part of this book is a journey to becoming a better parent.

Nigel is overweight. Pudgy. Out-of-shape. Me too. He has a life-long love of running and generally being active, and wished he were doing more for his health and appearance. Me too. Nigel finds that the time-demands and stresses of work and family make exercise almost impossible. Me too. Nigel’s book is partially a story of inspiration and how-to for the overweight has-beens who aren’t ready to give up yet.

Nigel is a goal-junkie. Me too. We both love to set goals and achieve them, big and small. In fact, goal-setting is our modus-operandi. We both have difficulty understanding how people can continue on for entire lifetimes with few, if any, goals set or achieved. Working on our goals gets us out of bed, gets us through hour after hour, and in our darkest moments prevents us from doing rash and regrettable things. Goals gives us a steady supply of hope, and we are keeping a tight lock on Pandora’s box.

The biggest surprise in the book is that Nigel is an Alcoholic. Me too. He doesn’t reveal this until the middle of the book, and I didn’t see it coming. His alcoholism is probably the greatest contributing factor to my reading the book all the way through, though it is only occasionally mentioned. His experience and struggles with sobriety were reaffirming for me. I will use his example and wisdom to continue to build my sobriety.

At page one, we find Nigel in the darkest days of his life: he has continuing issues in his family that are caused by him, his employer is closing the doors, he is overweight, getting too old to start over at anything (in some people’s minds,) and has an un-addressed drinking problem.

Marsh is apparently well-read, as he has sprinkled his book with quotes and concepts from all over the literary map. History, philosophy, science, theology, and general culture are all represented as he makes a point or draws a big picture. As an example, he quotes an idea from Steven Biddulph’s book Manhood where the argument is made that every man should be required to take his fortieth year off. This would force some reappraisals, rediscoveries, new discoveries, and perhaps change life for the better.

I love this idea. I have always loved the notion of the sabbatical. While I was growing up, I would hear of Priests and Teachers I knew taking a year-long sabbatical after ten years of work, and I have often fantasized about doing the same thing in my own career “someday”. Like many teachers and clergy, I would use that time primarily to further my education. I would also take a trip of a lifetime with the words “adventure” and “exotic” being the key concepts. And I would spend time developing a skill such as playing a musical instrument, painting, writing, or learning a language. Best of all, I would find as many opportunities as possible to include my family and friends in these activities to enrich the experience and the relationship.

Nigel gets laid-off and instead of job-hunting, he decides to take a year off to fix his personal life. He sells his large home and moves to a smaller one. He trims his expenditures and simplifies his life. He takes on responsibilities around the house that he had avoided, such as bathing the kids and taking them to school. He writes and draws. He admits to his alcoholism, quits for good, and attends AA. He learns a lot along the way, and makes it laugh-out-loud funny.

Another major connection I have to Nigel is his goal of a long swim, the Bondi-to-Bronte beach swim (akin to a nautical marathon) in Sydney, Australia where he lives. Nigel is not a strong swimmer or very experienced in the open sea, and as I mentioned before, he is waaaay out of shape. But he sets this goal and starts chipping away at it. At first he can barely swim the length of the pool, but he takes us through an inspiring story of tenacity and ignorance that pays off, but with an unexpected twist that I won’t spoil.

The connection is that I have set the goal of running a marathon this year. October 2008, the Waddell and Reed Kansas City Marathon. I have set the smaller goal of finishing a few 5k’s this summer. I was well on my way last November when I severely-sprained my ankle and was unable to train at all for a few months. Of course, there is the laziness, the overworked, the family-life, and the pain factors that have been excuses for a lack of training. As it stands, I can barely run 3 miles without stopping. But Nigel’s book has fueled my motivation and helped me visualize the attainment of my goal.

The most important tidbit that Nigel provided was how he would set out a running course, and he would walk when he couldn’t jog. He urged himself on by setting small goals along the way, such as, “Run from here to that tree, then walk.” I took away from that the revolutionary concept that it is okay to walk part of the course. In the Marine Corps, it was drilled into me that if I was going to walk instead of run, then I might as well hand over my undeserved male-genetalia and then find someplace to curl up and die. When you are 20 years-old, in fighting shape, and training for combat, that is probably true. When you are 34 with two kids, a stalled career, in the midst of a demanding Graduate program, and 50 pounds heavier than you were at 20 (some of that is additional muscle, right?) then it is okay to walk a little. The point is getting off my gluteus maximus and putting it in motion. After a few months of walk-jogs, Nigel was up to full runs like he used to do, and his body began to show results. I expect the same results. Walk-jog may be embarrassing and humbling, but it is better than sit-and-click (which always leads me to crunch-and-munch.),

Fat, Forty, and Fired is a raucously funny book. There are many times that I laughed out loud, and I rarely do that when I read even if the material is humorous. Marsh has that British humor that I love so much, though I can’t describe it well. He reminds me of Mil Millington, author of the internet classic “Things My Girlfriend and I have Argued About”. The book is not only funny, it is inspiring on many levels—for fathers, for professionals, for men in general, for husbands, for fatso’s, for alcoholics, and for workaholics. To top it all off, there is a payoff for the business community as well.

If I was qualified to make such a remark, I would say that this is one of the most important business books ever written. Nigel has been the CEO of two different agencies. His insight on how to cope with work and life is an important issue to address.

Of course, work/life balance does show up on a 10K report, and it doesn’t result in the kinds of lawsuit and publicity that ethics and security garner lately. Therefore, it is rarely addressed. However, were it to be prioritized and more successfully approached, we could all predict the profits and cost-savings that we would reap from the higher morale and reductions in turnover, burnouts, and health-problems. For instance, any temporary losses in productivity from allowing an employee to coach a team or attend a kindergarten musical would be dwarfed by the cost-savings in health-insurance premiums over the long-term if we assume that family neglect leads to self neglect, resulting in cardio-vascular deterioration over a short career.

Marsh quotes Biddulph as saying: “Our marriages fail, our kids hate us, we die of stress, and on the way out we destroy the world.” At first glance that may seem over-exaggerated, but I don’t think it is far off the mark. Surely, there is a better way to conduct capitalism. I think that Nigel Marsh points us in the right direction.

Marsh quotes Daniel Petra, former CEO of Microsoft in Australia, as reported in the Sydney Morning Herald regarding the life of a CEO: “They have no friends other than work; they have no relationship with their spouse; their kids don’t care about them; they have no hobbies. They lead very insular, single-dimension lives and they don’t have the courage to admit it.” I’ll bet you could apply that on some level to many other professionals. It certainly helps to define the standard of a professional lifestyle to avoid.

Very little of the book offers insight in how to conduct business, but the few paragraphs that apply are absolutely timely and important. The most important lesson that Nigel Marsh teaches us, from his experience as a CEO, is that his position carries with it some responsibility to his employees. All too often, a CEO is overwhelmed by the responsibility to shareholders, analysts, regulators, and the press. Little thought is given to what their roles as senior employee and leader means to the people who make the company work. Marsh offers that a CEO’s primary role is “providing meaning.” He elaborates by saying, “I believe a CEO’s primary responsibility is providing meaningful employment. That doesn’t mean he or she doesn’t have to make the numbers or make difficult decisions. It means he or she has to provide a point for the employees.”

Early in the book, he made a similar point when he said, “I don’t care what they teach you at business school; I view the primary role of any CEO as providing meaningful employment, not taking it away. Any idiot can cut costs; it’s building something valuable (in all senses of the word) that’s the real challenge.” (Added emphasis is mine.) I have long held this belief, and I am glad to see a business leader say it. Finally, there is evidence of intelligent life at the top.

The business guru Jim Collins in Good to Great used the analogy of an organization as a bus. If someone is in the wrong seat on that bus and not contributing, you may consider having that person switch seats on the bus, rather than throwing them off the bus. Of course, discipline problems and ethical issues need to be thrown off the bus. However, if the issue is competency or motivation, you may discover that the employee was forced into that seat and would gladly perk up or contribute more meaningfully from a different seat.

To couple this concept with Nigel’s statement, I think that CEO’s are just playing a numbers game through quarterly lay-offs that is more expensive over the long-term (and more damaging to our economy, which the CEO and shareholders depend on to make a profit.) Rather than a lay-off, a corporation would be better served to redeploy the unproductive employees into a new endeavor (move their seat on the bus.)

The stock price takes a hit in this case, due to the continued expenditure of salaries and benefits. However, those layoffs usually result in a large severance payment to each employee that doesn’t return any value to the stock price, and if your business grows again in the future (as your shareholders expect it to) then you will incur the expense of hiring similar people whom you laid-off previously. In case of two local companies I know personally, the same employee is often hired twice or more over the years by the same company. Perhaps my math is off, but if we could avoid the expense of severance and rehiring, and simultaneously gain some profit or research by redeploying them, wouldn’t we beat our competition while boosting our image, satisfaction, and contribution to GDP/GNP?

Thank you, Nigel Marsh, for a funny, inspiring, and wise book. I discovered it by accident and purchased it second-hand for $6, but it has become one of the most valuable books I own and is added to the short list of great books to re-read.