Tag: LEADERSHIP

LABOR REVOLUTION

Todays’ workers are like the trees in life, i.e., they communicate with each other and provide for the needs of society.

Books of Interest
 Website: chetyarbrough.blog

“The Problem with Change” 

By: Ashley Goodall

Narrated by: Ashley Goodall

Ashley Goodall (Author, organizational consultant, served as a Senior VP at Cisco for 6 years and HR at Deloitte for 14 years.)

As an experienced Human Resources manager, Ashley Goodall addresses “The Problem with Change” in 21st century corporations. In the first chapters of his book, Goodall focuses on corporate change brought on by industry consolidation but later broadens his assessment of business management based on his experience and opinion.

Goodall argues today’s businesses need to build from the bottom up rather than the top down.

Arguably, today’s business enterprises become highly successful because of their employees and the way they are managed. As has been true since the industrial revolution, growing a business requires employees. The way employees are managed is slowly changing, in part because of changes in American capitalism. In America, a labor revolution has begun with the growth of knowledge workers and technology. In earlier times, business management was successfully managed from the top down.

Henry Ford (1863-1947) American industrialist who successfully created the incredibly successful Ford Motor company with top-down management.

Top-down management has become much less effective in the 21st century with knowledge workers who have a better understanding of their contribution to the success of a company than their CEOs. Goodall infers many American corporations continue to operate from the top down based on one criteria of performance–return on assets (some say profit, others say costs of doing and staying in business). The mistake of top-down management in modern times, is that return on assets is compromised because of its narrow focus on balance sheet numbers.

Goodall explains “The Problem of Change” is compounded with industry consolidation because top-down management diminishes the effectiveness of an acquired company’s knowledge workers.

Workers are only viewed as cost centers, not revenue producers. Goodall notes an acquiring corporation compounds their cost of acquisition and diminishes profitability by losing knowledge workers. “The Problem of Change” is both for the acquirer and the acquired. There is loss of motivation by workers who feel threatened by job loss and loss to the acquirer because too little value is given to the contribution made by knowledge workers.

Being employed in a capitalist society is part of one’s identity.

To lose a job, is a major loss for one’s identity. Goodall explains an acquiring company could benefit from consulting employees on their future after acquisition. Patience of the acquirer, and transparency with employees could inure to the benefit of both. Questions should be asked of employees about what their experience can contribute to the acquirer’s future plans. The acquirer should take some time to evaluate acquisitions before reorganizing.

Goodall refers to experimental studies that show how animals confined to a cage are shown how to escape a shock by jumping out, while other caged animals are not shown how to escape. Their responses are different. The uneducated animals presume the shock has become a part of their lives and choose to cower in their cages. An acquiring company needs to be transparent when acquiring a company so employees can make a rational decision to either jump or accept change. How many employees are cowering in their cages rather than leaving a company or having a company change their way of managing knowledge workers?

Empowerment is in the hands of an employee when he/she has an opportunity to explain what they can do for an acquiring company. With patience and transparency, the acquiring company may find that a particular team of knowledge workers may have an idea that will offer bigger opportunities.

Here is where Goodall explains how teams of knowledge workers are key to corporate success. Humans are social creatures. Whether introverted or extroverted, we wish to be a part of something bigger than ourselves.

In this technological age, the complications of work and life are beyond the comprehension of most individuals. It is natural for workers to seek help from other employees to understand their job and how it contributes to a company’s goals. That natural tendency leads to the development of teams, particularly in more technological companies. There is a synergy in teams that comes from one individual who likes doing something while others don’t. (Coding, for example, is a laborious and boring process for some but a fascination for others.)

In a corporate acquisition, the acquirer can choose to be transparent about their objectives with employees. An acquiring company can capitalize on existing teams or generate movement toward creating new teams in line with the needs of the new company. Of course, it can also lead to the exodus of employees who realize they do not fit the new company’s culture. What Goodall infers is leaving a company is better than living as a cowering employee that does not fit the new company’s culture.

Goodall ends his book by characterizing workers like transplanted trees.

Trees communicate with each other through their root system. Some trees flourish better than others based on when they were transplanted. If they were transplanted when young, they flourished; when older, they still grew but had fewer branches and leaves. All still offer a product needed by society. Todays’ workers are like the trees in life, i.e., they communicate with each other and provide for the needs of society.

BUSINESS MANAGEMENT

“Drucker” is an interesting book about an important 20th century professor and storied business consultant.

Books of Interest
 Website: chetyarbrough.blog

“Drucker” (The Man who Invented the Corporate Society)

By: John J. Tarrant

Published in 1980–No picture available of the author, John J. Tarrant.

Peter Drucker was a world-renowned business and government management consultant in the mid-twentieth century. John J. Tarrant’s personal memoir is about Peter Drucker’s business and government management beliefs. A lack of approval or acknowledgement of Tarrant’s book by Drucker reinforces one’s belief in Tarrant’s objectivity.

With my personal experience as a neophyte business manager in the 1970s, Peter Drucker was a business consultant we studied in management development classes.

There were several group meetings with other managers in the company for which I worked. In those meetings we discussed Drucker’s views on business management and practice. Drucker had a profound effect on me and how I managed my part of the business.

A fundamental point made by Drucker is that a business’ manager must focus on strengths, not weaknesses of people reporting to him or her.

The principle of that focus is that every manager is charged with setting goals while recognizing he/she needs to build around personal weaknesses with direct report’ employee’s strengths. The point is that a manager and/or employee in an organization is unlikely to know all there is to know to achieve a company’s goals. Drucker argues the purpose of business is to sustain itself by achieving determined objectives. It is not about profit but about sustaining a business’s future. That principle applies to government departments as long as they continue to serve the needs of the public. When businesses or government departments fail to preserve their future or purpose, they deserve dissolution.

What Tarrant notes in his memoir is that Drucker believes government departments do not have the same incentives as businesses and tend to become self-perpetuating when their original purpose is achieved. Businesses disappear or go bankrupt because they do not generate enough revenue to sustain their future. Drucker suggests government departments rarely disappear. They become self-perpetuating. They are protected by public taxes, not the principle of free market revenue. Tarrant infers Drucker believes government departments should be dissolved when their goals are achieved.

Tarrant categorizes Drucker as a conservative but not in a 21st century Republican sense but in a belief that government tends to waste public taxes because their goals tend to evolve from service to the public to employment-preservation. Government departments should not exist as an employment haven without public purpose.

Tarrant notes Drucker voted as a Democrat. As an Austrian born American, Tarrant notes, he only voted for a Republican President twice in his lifetime. Drucker is alleged to regret having voted Republican the two times he did. One was for Nixon and the second I can’t remember. This is not to suggest Drucker was partisan because his focus was on management, not politics. “Drucker” is an interesting book about an important 20th century professor and storied business consultant.