Monday, March 09, 2009

Management 101 (From 2006)

I'm not in the advice business. I'm willing to talk about what I'm doing. That's different.

I have no formal business training. I'm not sure it matters much. It would be nice if they could train you to be able to run something effectively right out of the gate, but it seems unlikely. All the advice I got from business educated persons while running businesses wasn't just worthless, it was actively bad.

It may be because I've always been in the construction industry, more or less. It's different in many respects from other industries. When I went to college, there was no such thing as Construction Management. It was a blue collar profession right to the top.

I read Adam Smith and F. A. Hayek to get the big picture. I have no use for Keynesians or Marxists. Keynes says bang on the side of the TV to get a good picture. Marx says steal the TV, and then break it so no one can watch it. Then we'll all be happy. The world doesn't work that way. As far as getting the small picture, I just paid attention. I've learned some harsh lessons along the way, but never as bad as educated persons did alongside me. I've seen some colossal errors made due to hubris. I just plug away, generally. I've always made the most money doing things most everyone thought were crazy when I began. I could fit it on one page in pencil and all the numbers added up. That kind of crazy.

I have absolutely no use for show-biz management. Lee Iacocca and Donald Trump and all those guys with the laser pointers and the Rah Rah speech couldn't find their ass with a map and flashlight in the real world. They either build houses of cards and sell them before the wind blows, or allow you to point a camera at them while they run things into the ground for amusement. That's why they're telling you how to do it at $450.00 a ticket in a seminar. It beats working.

When I was working at a large commercial construction company, every once in a while, I'd be sitting in a meeting room with a fat sheath of figures of doubtful accuracy and utility, pressed into my hand by some inkstained wretch who had the BIG ANSWER. Move things from column A to column H, and all would be well. Institute Protocol F to counter Bad Behavior M and we'll lay in the clover. Make Target X and Bank C will give us a toaster.

"You do realize that something happens outside of this building, don't you?" I'd ask.

These gentlemen thought that the building of large and complicated things out in the landscape from Canada to Florida and Martha's Vineyard to Sausalito existed simply to give them figures to Rubik around on their desktop. They did not realize that they existed to support the actual operation. They thought they were the actual operation. Everyone in the government makes this same mistake, 25 hours a day, 11 days a week, by the way. A quarter of a billion dollars was going through that business a year. Very few of my colleagues had ever seen one bit of it generated.

They ran that place into the ground.

I was a middle manager. I helped make them a lot of money while everyone else lost it by the bushel. They hired consultants to restructure, and the consultants were instructed to ask me how I did it. I sat in front of them and got the same feeling an ugly puppy must get when the vivisectionist visits the dog pound. Some things are not amenable to being pulled apart for inspection. The components only work when they are working together.

I told them I didn't do anything. I let other people do it. I told them that when the customers called, we always answered the phone, and asked them what they wanted. I told the estimators to accurately determine what it would cost us to perform the required work. I submitted the bids on time and told the customer I wanted the job. If they said someone else was cheaper I instructed them to hire them, and to please keep us in mind for the future. I kept accurate track of how we were doing, and made sure we charged for all the work we performed. And I directed that we deliver the jobs on-time no matter what. When I ran out of one kind of work, I looked for work that was similar to the kind we already knew how to do. I hired good people and I trusted them, while expecting a lot from them.

That was it. They seemed disappointed. They were looking for a slogan of some sort, I think. They promoted me, and I left.

I'm trying every day to make the thing I made yesterday, only better. Or faster. Better and faster is even better. If I can't make money at it, I am disinterested in giving a congressman $1000 to get a set-aside for me, or a law passed against my competition. I'll do something else. The market is wise because the market is everybody's wisdom together. The market will tell me what to do. The customers tell me what to do. I listen imperfectly, because I am imperfect, but I get it eventually. I'm going too slow, and doing a poor job, but it's always getting better.

I show up every day, and work as hard and as smart as I can. I've been told that this pays off in the long run.

Who told me that? Why, everyone that has nothing to do with the government, a university, or a newspaper or television, that's who.


Boy on a bike said...

Amen to that.

Anonymous said...

It must be awesome to be the only person in the whole frickin' universe who knows how things work.

Andy said...

The job isn't the job anymore, is it? The job is getting the job, and after that, why bother?

Aquinas Dad said...

My first job after I left the army was a computer call center job. I got it as a sop tp hiring veterans, because I didn't know much about computers at the time. They spent 2 weeks showing me how to look up answers in a database and how to add my own, how the phone system worked, and how to get a higher-level guy when I thought I was in over my head.

6 weeks later I am the #1 guy in number of calls, first call fix, minimum call time, and customer satisfaction. That was true every month until I left 9 months later. The company was paying some guy $6,000 a week to make the other workers like me do a better job - after 90 days, he finally interviewed me. When he asked me how I became the top guy so fast (the previous top guy had been doing it 5 years) I told him the truth;
"When the phone rings, I pick it up. I ask questions before I try to fix anything. If I don't recognize the problem, I look it up. I remember what worked the last time. If that doesn't work and there are no other answers in the database, I escalate."

I got a call from another company telling me they wanted to hire me (I was a Kelly Temp!) I went to the company I had been #1 at for almost a year and said I would like to be hired or I would take this other job. They said,

"We have a policy - you have to temp for 52 weeks before we hire you."

I never looked back.

gemma said...

I love you. You have taken away the headache I have from reading all the nonsense about this current economic picture. Your message is what everyone needs to hear right now. Blow the smoke away and get down to it. What are you doing in 2012 by the way.

Eric said...

It's simple. But it ain't easy.

Janet said...

Marvellous stuff.

This kind of foolishness is not restricted to business and government either. It happens in unions, in colleges, in churches, wherever leadership gets disconnected from the real process and thinks that it is at the core.

I'll give just one example. At a college I taught at, there was an employee newsletter. A new administrator or lab technician got a full-page bio. A new professor got a paragraph. It was obvious that teaching was considered a peripheral activity.

Joan of Argghh! said...

Yes, I have been an employer and employee. I think there is value on both sides of the equation. I can honestly say no employer has ever lost money from hiring me.

But I've lost years and years to crappy employers.

An Edjamikated Redneck said...

I've always felt that there was a legal way to steal money in this country.

Become a consultant.

Boots said...

What is a consultant, anyway? Somebody who uses your watch to tell you what time it is.

Windy Wilson said...

"Lee Iacocca and Donald Trump and all those guys with the laser pointers and the Rah Rah speech couldn't find their ass with a map and flashlight in the real world." That's wrong, but they really can't find their asses with the map and flashlight. They can't find their asses if you tied their hands behind their backs.

You're right about the urge for sloganeering, During my sojourn in Aerospace the Department came up with a program to cut down on rework: "Do it Right the First Time". It came with an hour presentation by the Department Manager, during which she repeatedly said, "do it first the right time", and little 2 1/2 by 4 inch cards with "Do it Right the First Time" printed on them. We were supposed to attach them to things we returned for rework or correction.
No one ever actually used the cards, as we the ordinary employees were trying to engender a feeling of being on the same team instead of competing between departments. Some of the cards appeared as little signs at people's desks changed to "Do it First the Right Time."

Windy Wilson said...

Oh, and I think this single blog post eliminates the need for every MBA program in the US. MAYBE a few could be kept to provide training in financial reporting, but that would only encourage the attitude that sales and manufacturing exist to provide numbers for them to crunch, and the idea that moving numbers from one column to another actually solves problems in the real world.

I actualy heard a manager once say that "this overrun will disappear in two months after we rebaseline."

crossed atlantic said...

This post is so good I cannot wait reading all the comments to post my own. Why don't more people get it. TANSTAAFL. Even typing this post is extremely frustrating, knowing all the fancy bullshit that is being peddled by people who somehow end up in positions of power. Even writing it down to explain what is going on is making me despair. A real world exists. Supply and demand exist. Being disciplined and doing a good job at something that is in demand is all we need to do. Prices will equilibrate and direct us to the most useful enterprises. There will always be some people looking for other things to do at different places, people entering and exiting the formal economy. What government does is mess tremendously with this optimizing system. It creates expectations that can not be fulfilled, it twists incentive structures so wasteful activities are undertaken, it prevents readjustment after errors, it rewards profligacy, sloth and dependency. It claims to have superior knowledge and crudely destroys carefully saved caches by prudent citizens. It slowly saps the spirit, dampens creativity and limits our freely chosen options by forcing a suffocating blanket of cowardly tyrannical bureaucrats on us.

All for our own good. So we can have "free" (compulsory) "education" (as determined by our betters in government) and "free" "health services", which will slowly encompass all activities in our lives, because, surely, everything we do is related to our health and longevity.

What a nightmare.

SippicanCottage said...

Marvelous comments. I'm totally going to walk around all day saying:

Do it first the right time!

I have a good friend in the construction industry. His slogan is:

The excitement is building!

I told him he should change it to:

The excitement is billing!

But no one listens to me.

An Edjamikated Redneck said...

He can't use The Excitement is billing in construction.

That phrase is owned by the legal field.

Pogo said...

I love this post.

I got out of taking care of the elderly in nursing homes in part due to the idiots from the gummint who used to come in and scrutinize every pot and pan and shoelace and cup of water.

They didn't have the slightest idea that actual people worked there.

Thud said...

Sipp...I second "the excitement is building".I get to work in the morning and a wall has to come down or go slogan needed,just a hammer and trowel(no sickle).

Damien said...

You may feel the urge to erase this post, but by the time you're done you will have read it at least once.

So here some food for your thought. How about I say you are all marxists with your blind on? You have been successfully enthralled into dismissing Keynes. Friedman is your God, yet he is the ideologist behind your friends in the top management. Hayek says build the TV so whoever your boss is can hypnotize you into complacency. Smith had no idea about no TVs.

There you go.