Friday, March 09, 2012

I Wrote This In 2006. There's Been A Lot Of Effluent Under The Bridge Since Then. I'm Still In Business

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.


julie said...

Yesterday, I hired some people to fix my roof. Maybe it's premature, but I think they'll do a good job. Mainly because their initial presentation came across exactly like you described - courteous, timely, well-documented, and they have thanked me several times for giving them business. They gave a strong impression that their business - and their customers - matter to them. Which is a huge relief, because I've encountered enough contractors who didn't seem to care to last a lifetime. Granted, that's only been a couple but they were enough to keep me gunshy about hiring anyone to do anything for my home.

Gordon said...

I wonder sometimes if social conventions aren't behind the problem. Nowadays someone who builds things is socially inferior to someone who flies a desk. It's especially true in manufacturing. Tell someone at a party that you build injection molds, and watch their eyes glaze. Tell them you're a vice-president at a pithy non-profit, and you're a hero.

Once upon a time, Minneapolis was run by people who built things and made things. Folks like Pillsbury and James Ford Bell (General Mills). Companies like 3M and Cray located here.

We don't make flour here any more. Ford closed its 80-year old plant here a few months ago. Small manufacturing moves further and further out.

But we have lots of consultants, ad agencies and non-profits, so the cocktail circuit is robust.

Casey Klahn said...

Don't get me started on management. Mine are doofs, too.


Dan Patterson said...

It seems so simple, to do work that someone wants or needs and to respond quickly and professionally to questions. Commenter Gordon nicely summarized a social anthropology topic to which the answer might be that humans fear success and are adept at inventing methods of self-sabotage.

For all the self-important, furrowed-brow, oh-so-smarts that wring the joy from work - from accomplishment - there are market openings for people who do what other people want or need.

Sixty Grit said...

Management sucks!

Wait, I'm self employed.

Never mind...

Titus said...

I definitely agree with Sixty here. Management can be a drag, but this post is incredibly enlightening.

Ric Locke said...

Titus, it's a great post, but "incredibly enlightening"? You must not get out much.

People can accomplish a lot in groups, but two is the most who can cooperate. Three people constitute one club and one outsider, and it gets worse from there. Groups require coordination, so that each member contributes. A big group is more like a machine than a person, and somebody's got to drive.

Unfortunately, and for many reasons, we've established a system whereby the driver gets the side-meat, and everybody else gets hoof and horns. That can still work, right up to the point where the driver also gets to pick the route and destination, and at that point it falls down.

We -- the human race -- simply haven't had time yet. What you're looking at is evolutionary forces trying to develop people who can live in an industrial culture, and that needs a million years or so.


Sixty Grit said...

Titus, you work in HR. You are overhead and part of the problem. It would be different if you actually produced product or profit.

Bilejones said...

Any organization of more than ten people seems to include (or trigger the latent virus) one politician.
Any organization of fifty people includes five politicians and at least one certifiable psychopath.

Bilejones said...

Any organization of more than ten people seems to include (or trigger the latent virus) one politician.
Any organization of fifty people includes five politicians and at least one certifiable psychopath.

Anonymous said...

You wise comments about business are so simple and refreshingly practical they are perfect advice for anyone who is struggling in a small business, and I have been a small business counselor for over 16 years.

Thank you for encapsulating your considerable knowledge and comprehensive hands-on experience so succinctly, and thank you for doing it in such a user-friendly and understandable way.

I will keep your no-nonsense advice handy the next time I am in a meeting with an entrepreneur who is anxiously wondering why it’s so hard to figure out where all the “short cuts” to success are.

I loved your response to clients who remarked that “someone else was cheaper.” I also particularly enjoyed your general disregard of the dreck aimed at small business that is generated by government bureaucrats and university talking heads. Clueless, useless, and wasteful are words that come to my mind on that score.

Thank you again for being so generous with your remarkably direct and prescient ideas about what makes a small business successful. They should be well-heeded by any business owners reading your blog.

Bob in Manassas, Virginia USA

SippicanCottage said...

Hi Bob- Thanks for reading and commenting and for your kind words.

Jess said...

Your post accurately reflects that thoughts that run around my head daily.

I get a little resentful when I think about the huge amounts of money I've generated, which disappeared in pits created by bureaucracy and hype. There were better uses, such as rewarding employees for their work, or adding benefits. They deserved better; especially when you consider they made it happen and those that wallowed in the gravy would be confused by the description 8d.