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Principia for Business

Principia for Business

In this week’s guest blog, Ryszard Chciuk shares his Principia for business.

In my post The Future is Now I presented you why and how my after-sales team worked out its long-term plans, which most of business teachers call a vision. Today I am writing about the way we were going to bring us closer to our goals.

I am repeating myself: without the long-term plans, you are like a sailor who missed all his maps. You can use your compass, but you do not know where you will finally land on. Maybe it will be a deserted island. If you are a very lucky man, maybe you will land in a paradise. I am daring to give you one piece of advice: please, do not fool yourself, most probably you will break up the boat on the rocks. You and your crew have a little chance to survive the crash, it will be just pure chance.

Worse things happen if your team members do not follow the binding rules. I prefer to name them the main principles. Coming back to the metaphor. Before you abandon a port, you must equip your boat with precise maps and a compass. In 1492 Christopher Columbus had an astrolabe, compass, quadrant, and, instead of maps, his assumptions which directions to go. Finally, he was convinced he landed in “the Indies”, but fortunately for him (not for the original inhabitants), the ships made landfall on one of the Bahamian islands.

In real-life our maps are always uncertain, so before you start the journey, you should agree with your co-sailors a small number of basic rules to be strictly followed. For example, the captain is always right, you will keep watch till you are replaced by another sailor on duty, everybody is authorized to ask questions and make mistakes, the person in charge is not always right, and so on. Otherwise, all of you will fight against each other, instead of collaboration in the face of a turbulent market.

Those basic rules I name the main principles. Certainly, you are accustomed to calling them values, so I will explain myself. Most of the dictionaries, including The Cambridge Dictionary, define the first meaning of the word “value” as the amount of money that can be received for something. The second meaning of that word is the beliefs people have, especially about what is right and wrong, but it is only for the plural form. The three laws of Motion Sir Isaac Newton presented in the masterpiece called Principia (in Latin) and it is translated into Principles (in English). That’s why I ask my friends to follow the main principles instead of the values. Values and vision belong to the most overused – and least understood – words in the language of business. I want to avoid any ambiguities while talking about things of so high importance.

The most important for every organization is that all level managers and all employees subscribe to the main principles. It means, you as a manager, should employ only candidates who learnt the company values and agreed to follow those principles during the whole journey with the company. Later on, you have to observe potential breakers of the values and eliminate them. Otherwise, some employees may sabotage the whole organization. However, it’s not easy to discover the true personal values of a candidate during an interview. My advice is not to rely only on the information gathered by the human resources department. Use also your own intuition.

The most severe troubles for every kind of organization can be caused by people occupying more important posts. The company owner should keep it in mind when hiring top management. Do you remember the famous Enron case? In its annual report to shareholders, Enron listed its core values as follows:

  1. Communication – We have an obligation to communicate.
  2. Respect – We treat others as we would like to be treated.
  3. Integrity – We work with customers and prospects openly, honestly, and sincerely.
  4. Excellence– We are satisfied with nothing less than the very best in everything we do.

The actions of Enron’s senior leaders stood opposed to these core values. They quickly established a culture with values of greed and desire to maximize personal gain. It also appeared that Enron managers were supported by the renowned auditing company Arthur Andersen LLP. What was the result? Thousands of people lost jobs, their money collected on retirement plans disappeared…

I am writing this article because I want all of my friends to be aware of a potential threat. I have read about many leaders driving organizations into bankruptcy due to breaking their values. In the last decades of my life, it concerns mainly political leaders all over the world. It is unfair that dishonest leaders never pay the highest cost. Perhaps Enron’s CEO Jeffrey Skilling was one of few exceptions. He was sentenced to 24 years in prison (finally was freed after 14 years). Have you heard about reimbursing the victims of the Enron scandal?

As I explained in the post The Future is Now, my plan to build the best after-sales organization could not be executed if we employed people having bad habits. In other words, we would fail if new employees were accustomed to the principles which were opposite to ours.

Next time I will explain, what it meant in our daily work.

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Why Things Always Go Wrong

Why Things Always Go Wrong

Why Things Always Go Wrong

This week, Ryszard Chciuk gives us a recipe for success in his blog post on why things always go wrong.

Do you want to have a successful year? Do you want to become a better person? Listen to what Ron Slee is saying to you in his first vlog in 2021 and do it, because The Time Is Now. The time for reading books.

If you are able to read only one book during your whole life, and you want to achieve true satisfaction, both in business and life, read The Peter Principle: Why Things Always Go Wrong by Laurence J. Peter and Raymond Hull (both of them born in Canada of course).

The Peter Principle:

In a Hierarchy Every Employee Tends to Rise to His Level of Incompetence

What is incompetence? Perhaps you have heard of the nurse who says to the patient: Wake up! It’s time to take your sleeping pill.

First time I read The Peter Principle was in 1977. It was really funny to observe my superiors and colleagues through the Laurence Peter glasses. The book is written in the Mark Twain style so it’s OK to laugh, but you’d better take the content seriously. At that time nobody told me it would be the most important book in my life. Later on, I read it again and again, usually every few years. Also, I read it each time I had an opportunity to get a new job. Why? Nobody likes to make a fool of oneself. I also never wished to be an incompetent person. And believe me, it is not easy to recognize whether you are already only one step below your level of incompetence or perhaps not yet.

Each of us spends his life in a hierarchy and everybody is subject to the Peter Principle. As Peter Laurence claims, in time, every post tends to be occupied by an employee who is incompetent to carry out its duties.

You are not allowed to hurt your employee. So, be careful promoting him to another post, even he is very eager to. Imagine your best technician is getting a chance to manage a team of field technicians. For many years he was solving the most difficult problems with customers’ machines and he was proud of it. Are you sure he will also be happy and competent as a supervisor for another people? Maybe he is destined to become the Chief Diagnostics Specialist? I know, this is obviously about a career path and your HR department should be able to support you in this matter. Are you sure the HR specialist is still below his/her incompetence level?

Let’s jump out for a while from business. In democracy we have rights to vote. Why there are so many totally incompetent politicians occupying posts which are so important for the safety and well-being of the nation? Do you think you are still one step below your level of incompetence as a citizen of your country?

Are there any exceptions from the Peter Principle? The third chapter in the book has a title Apparent Exceptions.

What about super-competence? Standard incompetence is only a bar to promotion to higher post. If you are super-competent and your superior reached already his/her level of incompetence you will probably soon be fired due to the violation of the first commandment of hierarchal life i.e., the hierarchy must be preserved.

The people who have reached their level of incompetence are everywhere, so who turns the wheels? Work is accomplished by those employees who have not yet reached their level of incompetence.

The final question: is there any way to protect your own organization from reaching the total level of incompetence? Yes, two things could prevent this happening: that there should not be enough time available, or not enough ranks in the hierarchy.

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Do not decide lightly to read The Peter Principle. This is just a book, but I have to warn you using words of Raymond Hull:  The decision to read on is irrevocable. If you read, you can never regain your present state of blissful ignorance; you will never again unthinkingly venerate your superiors or dominate your subordinates. Never!

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The Future Is Now – Part 2

The future is now – part 2

The Future is Now Part 2

 

In his previous blog post “The Future Is Now” Ryszard  Chciuk presented the way his after-sales management team created the very important part of its strategy – vision. This week, in “The Future Is Now – Part 2” he will tell you what it was for.

The long-term goals work against each other, to a certain degree. Every head of every team is expected to clarify arising problems on a daily basis. Thus, the details from the reality are carving the final shape of our vision.

This vision was translated into a graphical representation, much easier to memorize. I changed the four long statements into four gears marked with symbols which are easily understood:

  • 1 – we are recognized as the best,
  • $ – we earn money,
  • ☺ – everybody is happy,
  • ! – we have no fears about the future.

Gears are to underline the interdependence of the four goals.

I communicated our long-term goals to all new workers of the after sales department. I illustrated it with many examples from the company life. It was usually taking place in the course of their first training led several weeks after starting the job. Later on, they could hear it again, and again, together with all employees of the dealership. It was part of my presentation during annual company meetings.

What was it for?

Imagine, you are a worker facing any serious problem, in the presence of the customer. You have to fix the problem right now, and you can’t get support from your superior. The future of our relations with the customer is in your hands. You force your brain to find optional solutions. The company expects you choose the best one. Don’t be afraid, you are equipped with a good tool, our vision. So, please check if the chosen solution brings us closer or moves us away from our long-term goals. Will the chosen solution satisfy our customer? Your decision will cost some money. You are aware that CFO and CEO are not happy when a field technician spends a penny without permission. So, will you take a risk or you will take a coffee break and wait until your superior lights up a green or a red light?

This kind of situation is not comfortable for any worker and his superiors. In my opinion it is better if the employee is not afraid to take a decision in such circumstances. Why? In general, company profit is generated on the front line, by salesmen and servicemen. They know better than CFO, CEO and any other supervisor, how to satisfy the customer with smaller money and how to fix customers’ equipment the most effective way. Finally, the front-line people create most of the company cost and they can save or waste a lot of company funds, if they want to. If you grant them trust and some authority, they become trustful and responsible. And vice versa.

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Perhaps next time I wouldn’t go exactly that way, i.e., to establish a vision for only my department. The idea was good for my people, for customers and for the company. Unfortunately, it caused me a lot of stress. Every time the company faces market turbulence, heads of departments and the board are acting according to the visions known only by them, if they worked out any. Those separate visions are usually incompatible. As a result of that, we fight problems in chaos.

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The Future Is Now

The future is now

The Future is Now

In his guest blog this week, Ryszard Chciuk reflects upon his years with his service management team and considers that the future is now.

Once upon a time, I and my new service management team decided to create the best after sales organization in our country. I am not going to tell you how to build something from scratch. It is about the most important thing: how to explain to all members of a team what we are going to achieve together within the next several years. Some authors of books for managers call it vision. I have a problem with this word because in my native language we sometimes have visions, usually after too many drinks. Also, I don’t recommend using that word while speaking to the front-line people. Instead of vision, I talked to them about our common long-term goals. Why?  Terms like vision, mission, values and strategy are irritating to many managers and plenty of employees. They become anxious about the future of their companies – and mostly they are right – when the highest management starts to talk about new market strategy based on new values, new vision and new mission. One can ask oneself: in the end, what’s it really all about? Is it about closing our decent business? Contrary to myself, in the story for English speaking readers I will use the word vision. Maybe you were luckier in your encounters with the prophets without true vision.

At that time, our parent company vision was To be the Model of Excellence and Care. Sounds nice, but how to present it to newly employed field technicians, mechanics, service supervisors, as well as parts and administration personnel? Unfortunately, the vision of our corporation was not translated into more specific version, understandable for all employees of the dealership.

My service team decided to work out the vision just for ourselves. Why?

I knew my department would grow very fast. It would be no time for an individual coaching. Written procedures did not exist. Creating a company culture was in progress. Our plan to build the best after sales organization could not be executed if we employed people having bad habits. As the result of that assumption, most of my new colleagues were very well educated, but totally inexperienced. And even worse, they were to work in the field, mostly out of a supervisor’s eye. They were allowed to make mistakes, if they did it with good intentions. How were they to discern what was right and what was wrong? They needed to know the main, long term goals of the after sales department, our vision of our future.

N.B. Few years after we implemented the idea of vision, I found a confirmation that it was a proper approach. In his Strategy Navigation-A Systems Approach to Business Strategy, H. William Dettmer mentioned: … the military has learned an important lesson that most businesses haven’t: how to shorten response time to unexpected developments and build flexibility into the system. They do this by avoiding detailed policy and guidance from the highest levels – micromanagement – concentrating instead on establishing the overall objectives and rules of engagement alone.

How did we achieve it?

To propose and discuss long terms goals for a team, its members would have to find the answers to the following questions:

  • Which long term goals of our dealership and corporation am I able to support as a member of the after sales department?
  • What is my greatest professional dream?
  • What would make me proud in 3-5 years from now?
  • What are the main competencies of our team?
  • What differences do we have and what will make our team different from the competitors in the future?

First draft of our vision was agreed by the core members of the service management team. Then it was discussed in details, during Q&A sessions with all of our people. We did it because people are more eager to follow the agreed rules if they had a chance to define them.

Finally, our after-sales department vision was as follows:

  • most of our customers recognize us as the best construction equipment service in the country
  • we generate profit which covers cost of employees’ personal development and provides financial liquidity of our dealership, when the demand for new machines is reduced significantly
  • the best employees and the best suppliers want to work for us or collaborate with our team
  • we are always prepared for unexpected changes and we implement them in the proper time.

Please notice: those four sentences are written in the present tense, because the future is just now. Every day, each worker can assess approximately how far we are from our goals. Every month or every quarter, employees get more accurate data about the performance of their small teams in that matter. It happens if you have worked out balanced scorecards for teams and single employees.

Next time, I will tell you, what it was for.

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The Law of the Carrot

The Law of the Carrot

Today’s post, The Law of the Carrot, is written by guest blogger is Ryszard Chciuk. In his own words:

For the first half of my professional life I worked for Hydrobudowa-6 SA. At that time, it was one of the biggest construction companies in Poland. There, I was responsible for technical availability of all kinds of heavy construction machines and equipment, mobile cranes and trucks. We needed them on projects like constructing long distance pipelines, subway stations, expressways, airfields, industrial buildings or pumped storage power plants. I was in charge of up to 440 people, including mechanics and field technicians, machine operators, truck drivers, procurement, warehouses, and administration.

In the period of 22 years, I learned how my colleagues, project managers, utilized machines and equipment and what they needed to complete their projects on time and within the budget. It gave me a solid foundation to undertake a commitment to create the best after-sales organization in Poland for my new employer, Volvo CE.

The core of my service management team comprised of several highly motivated people who shared my idea of service excellence. Together, we built a very successful service organization. Within 10 years, we multiplied the number of employees ten times, up to almost 150 people in 2013. We generated average service and parts sales growth 22% yearly. My team established new standards on the demanding, after-sales market.

The Law of the Carrot

Seven years ago, I decided to retire, though I have not fully accomplished my goal to create the best construction equipment service organization in my country. Since then, I have posted over one hundred articles on my blog (in the Polish language) to support all the people focused on service excellence. My blog is directed to the construction equipment users and service managers, because I see both groups as complementary parts of every construction activity. They should know their expectations, which are very often completely opposite. They should also understand their daily limitations.

When my guru Ron Slee asked me to write a short article for this blog, I decided to follow Steve Day, a guest blogger for Learning Without Scars: “I thought that I might write about something important that I did not focus on enough until way too late in my career”. In my case this is about motivation. Truly speaking, I hate that word. This is because my superiors used to do their best to demotivate me during almost all of my professional life.

As a deadly enemy of negative motivation, I always tried to motivate my people in a positive way. I spent a lot of time and energy designing and implementing motivational systems for many teams I was in charge of. Those systems were mostly based on financial incentives, though fortunately not all of them.

Since I got retired, I have had enough time to look back. I learned about the Law of the Carrot on the seminar of Andrzej Blikle (Professor in mathematics and computer science at the Institute of Computer Science of the Polish Academy of Science and in the years 1990-2010 the president and CEO of A. Blikle Ltd, a family firm established in 1869 in Warsaw, known for its luxury pastry shops). His Law of the Carrot says: “The sole purpose of each carrot is to make a stick out of it”.

When you are rewarded with a carrot, you seem satisfied (please pay attention that it works only for a very limited time). Your superior gave you a tasty carrot but now it’s already been eaten.

If you were not rewarded with a carrot you looked very unhappy. Almost imperceptibly a carrot transformed itself into a stick.

What about your improper behavior (according to your superior)? You are punished. It’s a stick motivation. Next time, you will do your best to avoid the stick on your back. It does not matter if the way you avoid punishment has a positive impact on your company. You feel as comfortable as when you are awarded with a carrot. So, this time a stick has transformed itself into a carrot.

Too many managers still believe people must be awarded or punished to work well. They say it is human nature to be lazy and dishonest. Of course, the manager himself is not lazy and dishonest. Conclusion: a manager is not a human being. Am I wrong?

I am ashamed I did not notice that my very fast-growing service team was the most effective and happy, during at least the first three years of building our countrywide organization (we began in 2002). Those times, almost all of us used to spend five days a week in service cars and hotels, solving problems of customers with their heavy machines, in the field, despite the weather, lack of parts stock and no administrative procedures. It was the time all of my team members including field technicians, service supervisors, and parts personnel were paid only monthly salary – no bonuses, no financial incentives, and no paid overtime. We did not register work hours. Field technicians decided on the spot, how many hours they were to work to solve customers’ problems, before going asleep. You do not believe it worked? Nobody quit during the first three years, though the core people could easily find better paid jobs. Then and later on, many new people were hired and almost all of them were brought on board by our team members. The only visible incentives for field technicians were mobile workshops, equipped with all indispensable tools, so that nobody in the market could compete with us – we were proud of our service vans.

How was it possible? We were pioneers and we felt like ones because we had a common goal to build something much better than anything we could observe around. That was power of internal motivation, neither a carrot nor a stick incentive.

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