Of GLC Transformation, Deadwood, Management Contracts etc… Part 2/3

11 Jun

Continuing from where we left off in part 1/3.

b: What do we do with deadwood?

The one thing I am so sure off, and it therefore drives my choices and action in life, is that there is such a thing as the day of judgment and on that day we are going to have to account for every action we have taken. And the very first hadith in Iman Bukhari’s collection quotes the Prophet saying “Actions are judged by intentions.” The preservation of Dignity is a big responsibility encumbered on to each and every leader.

Now how does this lead to the deadwood question?

The capitalist philosophy of maximizing shareholder returns is to exert as much pressure as possible on the leadership teams of organizations such that they act by finding all possible avenues to improve performance and one of the major areas where “efficiency” can be squeezed are the “orang lama” or better stated “deadwood or in most cases, expensive wood, maybe not dead.”

As a CEO eloquently put it to me just a couple of nights ago – “I have targets to chase, these people are slow and incapable so I have no choice but to get rid of them.”

My question which I did not ask is:

a. who hired these people?

b. were they bad when they were being hired

c. if they were bad, what sort of hiring policy did you have in place and if they were good, what happened to make them bad?

The reality is that when people are hired, they are not in anyway deadwood. It is the leadership and culture, that overtime , accommodates complacency and incompetence. In reality we as leaders grow this so called deadwood. We fail to manage for performance and define the lower boundaries of acceptable behavior.

And when we fail in our leadership roles and a new set of leaders come in, these deadwood pay the price for it.

The reality is when a new CEO comes in, he wants to run fast and in a direction that he is familiar with. It is unlikely that his employees have been used to either running as fast as him or in his direction. If they were indeed able to run as fast and in the direction, the new CEO wouldn’t be there would he?

As a CEO who has turned around a company or two, I have faced this situation and had to manage through it for real. So this is speaking from experience.

Where the business is simply too small for the number of employees, then there is no option but to down size or right size. This has got nothing to do with deadwood but simply managing capacity. Yet in this right sizing, it is so important to preserve the dignity of the people who are being separated.

Irrespective of how much money is being paid as “compensation,” our identities are so strongly intertwined with our jobs. After all, when we meet people and introduce ourselves, don’t we always introduce ourselves in association with our job. Removing the job is like removing identity to which our dignity is attached too.

Now the second scenario and the more common one is where it is about speed and direction. For this I try to slot people into a matrix. On the horizontal axis: is ability to perform and on the vertical axis: is willingness to learn.

As long as people are at minimum either willing to learn or able to perform, I take it on myself to give them room and space to learn how to run faster. Only those who are both unable to perform and unwilling to learn as the ones I part company with. But again, the mechanism is not a VSS but on a performance basis. And yes, it may mean lots of cases that end up in the industrial court, but here is my issue, how can I use shareholder funds to “payoff” people who are neither willing to learn nor willing to perform?

The reality is, once people see that the leader is serious about performance and holding people accountable for performance, people do buck up very quickly. As the saying goes, “shoot a couple of lame dogs and the pack starts running well.” They may moan, groan, gossip, bi@#h about you, but as long as they perform it doesn’t matter. After all, time is the great healer and once people realize that they can indeed run and in my direction, all the negative behaviors give way.

Most new CEO’s are being put in untenable positions, a least for those who believe that they will one day have to answer to a higher authority and that authority is not the shareholder. We can choose to ape the capitalist game exactly the way they play it, but remember, for them there are no consequences!

To be continued – Management Contracts – Part 3/3


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