Author Archives: TheManager

Stop Managing Activities and Start Seeing Results

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Keep Everyone Busy So You Can Kill Creativity

In the current economic climate (one that we’ve dubbed The Great Necession), it seems that companies are so concerned about productivity that they’re forgetting about innovation and creativity.

Whether we’re all trying to cover our asses as managers or whether we truly believe that micromanagement and piling on the busy work is the key to survival during The Great Necession, we have become obsessed with ensuring everyone still employed is constantly busy.

Understandably, many workers are doing their job and that of their laid off former coworkers; though even this doesn’t explain what we’ve observed over the past several months in workplaces across America. Too often to be a coincidence, we’ve watched in disbelief as more and more managers unnecessarily micromanage the activities of their charges in an effort to magically drive more output.

We’ve become so concerned with keeping everyone busy that we don’t leave time for our employees to be creative or creatively solve problems.

Manage the Results, Not the Activities

Often because they don’t fully understand the goals, junior managers fall into the trap of managing or micromanaging the activities of their subordinates. When desperate, even seasoned leaders will sometimes scramble to drive productivity through the micromanagement of daily activities.

The Great Necession has created more than a little desperation in the workplace.

The key to reaching your team’s goals as leaders is to clearly identify the goals and then monitor and manage the output of those contributing to the achieving of these goals. When you try to manage the inputs (the activities) instead of the outputs (the results), you most often find you’re driving fast, though in the wrong direction. Additionally, you cannot hold your subordinates accountable for the results that the overly-managed activities attain.

When you tell someone not only what to do, but also how to do it, you own the results – good or bad.

We Need Creative Problem Solving to Solve Our Current Problems

Left to their own accord, people will always find ways to do it cheaper, faster, better and safer. If you’re micromanaging their activities, you leave them no time to improve your products or processes; and thus, no time to help pull your company through the tough times.

As leaders, it rests on us to guide our companies through this economy. Your people are counting on you to do just that. It’s time to lead again: Resist the temptation and stop managing the activities and just manage the results. It’s easier. Of course, do this only if you want creative solutions to your company’s problems.

NY Times Hardcover Business Best Sellers – September 2009

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New York Times – Hardcover Business Best Sellers – September 2009

 

Ten months and counting for Malcolm Gladwell’s Outliers as it continues to dominate the NY Times best seller rankings. To read our review of this outstanding book, check out our July 2009 best seller rankings.

 

Though not showing the staying power of Gladwell yet, two authors were able to hold their Top 5 rankings from last month: Mezrich and Ramsey. We have no comment on Ramsey’s “work,” expect to say that it likely should be moved from the NY Times business rankings. (How does dolling out credit card debt elimination advice to consumers with below average intelligence qualify as a business book?) Regarding Ben Mezrich’s The Accidental Billionaires, we can actually recommend this read for those of you looking for something with a little more entertainment than “how to” advice. We enjoyed Billionaires almost as much as we liked Mezrich’s earlier offering, Bringing Down The House, and we were pleasantly surprised that we walked away feeling we learned a little something.

 

We have no plans to read anything written by former Lehman VPs (A Colossal Failure of Common Sense) or how Bernanke prevented the second Great Depression (In Fed We Trust), though we do welcome your comments about these final two of this month’s Top 5.

The Top Five – NY Times Business Hardcover Best Sellers September 2009 (to view the entire list, follow this link):

 

This
Month

 

Last
Month

1

OUTLIERS, by Malcolm Gladwell. (Little, Brown, $27.99.) Why some people succeed — it has to do with luck and opportunities as well as talent — from the author of “Blink” and “The Tipping Point.”

1

2

THE ACCIDENTAL BILLIONAIRES, by Ben Mezrich. (Doubleday, $25.) How two Harvard undergraduates created Facebook.

2

3

THE TOTAL MONEY MAKEOVER, by Dave Ramsey (Thomas Nelson, $24.99.) Debt reduction and fiscal fitness for families, by the radio talk-show host.

3

 

4

A COLOSSAL FAILURE OF COMMON SENSE, by Lawrence G. McDonald and Patrick Robinson. (Crown Business, $27.) The inside story of the collapse of Lehman Brothers, from a former vice president of the firm.

8

5

IN FED WE TRUST, by David Wessel. (Crown Business, $26.99.) How Ben Bernanke and his Federal Reserve colleagues worked to prevent another Great Depression.

 

 

TheManager’s Leadership Book Review

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Don’t Bring It to Work – Breaking the Family Patterns That Limit Success, by Sylvia Lafair, PhD

I absolutely love it when an expert in a non-business field brings their knowledge to the business world. Whether it’s a former all-star athlete turned successful businessman (ala Julius Erving), or a rehabbed musician turned stock trader (ala Guns N’ Roses’ bassist Duff McKagan), they almost always provide interesting and important perspectives on how we conduct business, and how we lead and manage others.

One of the biggest problems in business today is that we already have all of the answers and we feel don’t need any new blood changing the way we do things. I’ve always been fascinated by the closed minded who fail to embrace or even believe that someone from the outside – armed with a fresh perspective – can make a positive impact. The fact that so many continue believe this despite the myriad of examples of outsiders who successfully bring change is nothing short of astounding. Dr. Sylvia Lafair is one such example of an outsider successfully delivering change.

Lafair, a former family therapist who now serves as the president of Creative Energy Options, Inc., brought her expertise to the business world and with it a unique point of view about office politics, leadership and workplace roles and relationships. From working with dysfunctional families to years of providing leadership training and insights into workplace behavior and relationships for corporations like Microsoft, Dr. Lafair operated in the greatest leadership laboratory of all time: The real world. In the process, she also penned a great read that captures the very essence of what’s holding so many leaders back: Their reliance on destructive family patterns. Her book, Don’t Bring It to Work, shows us that our behavior cannot exist independently from our interpersonal relationships, despite the facade we think we portray.

Charity Isn’t All That Begins At Home

If you buy in to Lafair’s premise, then virtually everything that’s holding you back at work is closely related to the role(s) you play at home. Whether you are a persecutor or pleaser at work, chances are you play this role in your personal life, as well. In fact, according to Lafair, you are basically compelled to play the same role at work that you do at home – you are simply more comfortable this way – unless you can be made aware of your behavior, understand it and then transform yourself by taking appropriate actions. (By the way, if you don’t buy in to this premise, then you’re likely a rebel at both work and at home; which means, of course, that Lafair is still right.)


Certainly, it’s not that uncomplicated; and bravo to Lafair for not trying to insinuate that we simply live in these roles and those are our only issues. Equally important to the role you play are the roles of those around you. If you are not aware that you are a slave to your personal patterns, then you are likely to have conflict with those who do not fit into your “ideal.” As Dr. Lafair puts it: “When our colleagues and bosses don’t match our expectations, we realize this in a matter of seconds, and just like that, the seeds of conflict are sewn.”

Unlike the typical easy-read coping tomes such as The Five Dysfunctions of a Team and Who Moved My Cheese, this book requires real dedication from the reader. In other words, it is not for the casual passerby who just wants to polish this or that about their behavior at the office. Just like real change, this book requires work.

The Recommendation

There is no doubt that I recommend this book, I do. My dilemma is whether it is more leadership, self-help or team dynamics. The truth is that Don’t Bring It to Work can help your personal and professional development much in the same way as Stephen Covey’s 7 Habits does. Just as 7 Habits applies as much to your home life as it does to your work life, so does Don’t Bring It to Work. And, just as Covey’s work is as much about leadership as it is about personal improvement, so is Lafair’s.

The mix of real world examples with a sometimes textbook feel (likely from the massive amount of footnoting early on) is actually very well done. I especially applaud Lafair for her inclusion of a recap called “Takeaways” at the end of each chapter. Because the concepts are sometimes very deep and the material sometimes very new to the reader, having this brief recap at the end of the chapters is very helpful.

While many can benefit from this book, I especially recommend if for two specific people: First, for the young manager who is tiring of seeing his colleagues promoted at greater frequency; and second, for the self-actualized leader who cannot seem to find anything wrong with her style or approach, yet her team is still a mess.

(To order Don’t Bring It to Work, visit Amazon.com.)

The Truth about Cash for Clunkers

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Leadership Decision Making and The Law of Unintended Consequences

Certainly you’ve heard the axioms “nothing happens in a vacuum” and “for every action there is a reaction” before. We’re pretty sure that every thinking adult not only understands these sayings, but also believes them to be true.

Cause and effect, means and ends, seed and fruit cannot be severed; for the effect already blooms in the cause, the end preexists in the means, the fruit in the seed – Ralph Waldo Emerson

RWE is correct, but he fails to mention that each cause actually has multiple effects; every mean leads to numerous ends; and that each seed can bear bushels of fruit. Cause and effect, like means and end, can imply both good and bad outcomes; and both scenarios – unlike the planting of a seed – often create results that are unintended and unforeseen.

The law of unintended consequences is not a new phenomenon, and it’s especially not new to government action. History has shown at every turn that government intervention, regardless of the benevolent intention, leads to numerous unforeseen and unintended consequences. Certainly, some of the outcomes are beneficial, though the vast majority are not.




The Truth about Cash for Clunkers and The Law of Unintended Consequences

In a nutshell, the US Government created a program that requires taxpayers to spend $3 billion help 750,000 people to buy a new car. The program, officially the Car Allowance Rebate System (CARS) though more commonly known as Cash for Clunkers, was created solely “to energize the economy; boost auto sales and put safer, cleaner and more fuel-efficient vehicles on the nation’s roadways” – this, according to the government’s official cars.gov website.

While nearly everyone in Washington was breaking their arms patting themselves on their collective backs after just two weeks of CARS, the truth is that this program, like all government programs, has already spawned numerous unintended consequences (and none of them positive). Here are just a few:

  • Kelley Blue Book analysts are predicting a bubble in used car prices as a result of the CARS program. This means the cost for a used car is going to be higher, creating a burden on the working poor and lower middle class.
  • Charities are reporting that donations of used cars are down 20% since the start of the CARS program.
  • Already hurt by the economic downturn, used car lots are seeing an additional 20% drop in sales since the beginning of the program – these lots are more often owned by local businesspeople and not large corporations.
  • Some independent auto repair shops – precisely the kind that would service an older car – are reporting up to 25% decreases in their business.
  • Because of the increased demand for many models, car dealers are not discounting beyond the required manufacturer’s rebate. This means that all consumers are paying more for these models.
  • Economists blame the drop in overall July retail sales on the CARS program; arguing that consumers spent on new cars, but cut their spending elsewhere – deepening the recession the program was meant to help stop.
  • The top new model sold so far under the Cash for Clunkers program is an SUV – the Ford Escape – and two large trucks (Ford’s F-150 and Chevy’s Silverado) and a Jeep are among the Top 10 new models sold. (Hardly the pro-green movement for which the government was hoping.)
  • 750,000 working automobiles will be taken out of service and replaced with 750,000 new vehicles. The process of manufacturing each new car (when you account for the acquisition of all material required) is a much more polluting proposition than driving each old car until its natural demise.


It’s clear that Cash for Clunkers will do little, if anything, to stimulate the overall economy; but what about the nation’s car dealers and manufacturers? While dealers are making more per car sold and manufacturers are seeing their inventory backlogs shrink, both of these benefits will likely be short-lived.

The increased demand created by the CARS program cannot be sustained without better economic news. The dip in overall July retail sales signals to us that the end is not as near as we had all hoped. Instead of kick-starting the US Auto Industry, Cash for Clunkers likely pulled ahead many consumers who would have purchased later this year and in 2010. This means many dealers should look for softer than expected new car sales from September through the end of the year.

For the manufacturers, it seems they never learn. Ford announced this week that as a result of the “success” of the program they are ramping up production in the US. While this should be good news for the economy, it likely signals that Ford will be cutting production more than usual this November and December. Rather than enjoying the higher prices brought on by the momentary (and sure to be short-lived) spike in demand, Ford plans to run with the standard Detroit playbook and chase demand by building more cars, trucks and SUVs in the next couple of months. It’s as if Ford is proclaiming “Forecasters be damned, the recession is over.”

…

The leadership lesson in all of this is that the world is always more complex than it seems on the surface. Whether we’re talking about the US Economy or the five people in your workgroup, there is an equilibrium that must be considered before major changes are enacted. Understanding how these changes will affect all stakeholders is an important first step towards reaching your goals; but it is only a first step.

It is equally important to make assumptions about the unintended consequences that will inevitably define the success or failure of any major project, program or transformation. While you’ll be wrong more often than you’re right, just knowing that unforeseen outcomes are expected will make you a better leader – if for no other reason than you’ll be better prepared to manage the unanticipated results.

Cash 4 Clunkers Causes Conservatives 2 Clamber 4 Gov’ment Cheese

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Cash 4 Clunkers Causes Conservatives 2 Clamber 4 Gov’ment Cheese

An interesting sociological experiment and a great leadership lesson has emerged from the US Government’s Cash For Clunkers program: We observed the previously fiscally-conservative put their hands way out, looking for their version of Government Cheese.




It is difficult to get a man to understand something, when his salary depends upon his not understanding it.

We love using this quote by Upton Sinclair because it explains so much about how humans, even staunchly conservative ones, act when money is involved. We understand why so many car dealers are fiscally conservative: They want to keep their hard-earned money in their pockets and not in the government’s. We get it, and we agree with them. What’s interesting here, however, is the nation’s car dealers – mostly old, rich white guys – argue against virtually every welfare program and any government involvement in their businesses. But, when it’s their turn to suck from the government teat, they will knock you and me down to get theirs.

No one doubts that without the collective efforts of NADA member dealers …, the cash-for-clunkers program would not exist today. – National Automobile Dealers Association Chairman John McEleney

We certainly don’t doubt it. It seems that greed trumps principle. The same businessmen and women who routinely vote against liberal candidates were salivating last week while lobbying for President Obama and the Democratically-controlled Senate to pass legislation putting another two-billion tax dollars in their pockets. Do they have any sense of who will pay for this? Do they care?

WIIFM – What’s In It For Me?

Not that we expected the nation’s car dealers to react any differently than virtually anyone else would, we just thought it was interesting what strange bedfellows can be made when there’s something in it for someone. In a weird way we half expected that at least the conservative members of the NADA to remain so… Wow, are we naïve.

Young Managers Working in a Small Business: What Can They Do To Get Respect From Below and Above?

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For Young Managers, it’s not Just About Gaining the Respect of Subordinates

One of the most common questions from our readers concerns how they as younger managers can lead older subordinates – all while maintaining respect and sanity. Where we felt we could help, we’ve provided these youthful leaders advice and guidance as recently as last month when we responded to a question posed by a reader named Sourabh from Mumbai, IN. He was curious how he could convince a firm he was interviewing with to hire him despite his age. Prior to that, we’ve explored possibilities for other young leaders in responses dealing with young business owners, leading grizzled older subordinates, and also how a young manager can keep from being run over. Recently, a new reader found our site and posed her own questions after exploring our advice about how a first time manager can gain respect:

Hi, I stumbled across this site as I was searching for some help. … I am not only the manager but the youngest technician at my company. … I work in a small family owned salon where everyone is on top of each other all the time. Here are my concerns that I am hoping you will be able to help me with:

As I mentioned, I am the manager of the salon but unfortunately I don’t get any respect from some of the older employees as well as the employees that are around my age (25). It seems that no matter what I ask them to do or how I say it, as soon as my back is turned I am a “bitch” etc. My requests usually go ignored until the very few times I have yelled at my employees. Which trust me is not many. I have worked for people that were demeaning and constantly yelling and my goal when getting this position was to be assertive but fair and never intimidating. It is getting to the point where if things don’t change I might snap.

I know I am young but I put in more paid and unpaid hours into the salon than any other employee. I work really hard to make us the thriving spa we are becoming and it frustrates me when people cannot reciprocate. I spend the majority of my time (when I am not with my own clients) ordering the supplies that the techs need, coming up with marketing ideas to make their books more solid, building our website, etc. But all I get back is arguments over why they have to do this special for the price I gave them when they want to charge more, or complaints when things they need aren’t ordered (they usually don’t tell me what they need I have to figure it out myself).


I am becoming resentful because I feel like I am constantly doing for them with no respect being given back to me. With the employees that are my age I am just blatantly ignored or told I am being a bitch. But when everyone wants something i.e. to leave early or come in late the next day all the sudden they are calling me “Miss Manager…”

How do I get the respect I not only desire but deserve?

My boss is way too nice to everyone. It really is out of control. I love her and consider her a great friend but at the same time my role as manager has been blurred by her as well. Sometimes I feel like I am not the manager just her personal assistant. She doesn’t want me to reprimand employees when it needs to happen.

How do I establish with her what my role as manager is?

I have asked her this question before with no real answer. I don’t think it’s fair for me to be telling the staff what to do but unable to say anything when things are not getting done. It would be one thing if she dealt with the issues but she is way too nice for that. I get upset because the employees take advantage of her and I don’t like watching that happen without being able to do anything about it.

Please help!!! – MM, USA

Ms. MM, may we call you M? Our apologies on the length of time it took to effort a response, but your questions were so specific and your situation so intriguing that we wanted to ensure we got this one right. (Not that we don’t try to answer all questions correctly, it’s just that you so completely described your issues that we felt compelled to reciprocate just as completely.)

We’ll tackle your issues and questions one at a time, and in the order you presented them…

I work in a small family owned salon where everyone is on top of each other all the time.

It’s always easier to manage large than it is to manage small. We often laugh when we hear about the tremendous “leadership” provided by this Fortune 500 CEO or that one – when you’re armed with a seemingly unlimited budget, surrounded by Yale and Harvard MBAs and staffed with more Administrative Assistants than Congress, you’re going to have very little trouble executing – provided, of course, that you have a brain, a plan and your ego in check.

Contrast this to a young manager trying to get the most from a group of high school graduates and having to do all the heavy lifting herself. It’s clearly easier to manage large and we feel your pain, MM.

It seems that no matter what I ask them to do or how I say it, as soon as my back is turned I am a “bitch” etc. My requests usually go ignored until the very few times I have yelled at my employees.

On the surface, it seems to us that there is no consequence for either insubordination or inaction by the employees. People yell when they are out of options, and if there were consequences at your workplace, you would certainly never have to yell.

Our advice here is two-fold. First, never yell again. When you lose your cool with someone you are telling the world that you are not in control and that you can be controlled by others. In your case, you are ceding your power to your employees and they are likely getting a big laugh at your expense. Second, it’s time to sit down with the owner and create your version of an operations manual. This manual need not be fancy, but it must detail the policies and procedures for the company, and especially the consequences for poor behavior. (Of course, no business rules are worthwhile if they’re not enforced.)

I work really hard to make us the thriving spa we are becoming and it frustrates me when people cannot reciprocate. I spend the majority of my time (when I am not with my own clients) ordering the supplies that the techs need, coming up with marketing ideas to make their books more solid, building our website, etc. But all I get back is arguments…

This piece of advice is probably going to seem odd, but it might be time to empower this team to make many of their own decisions. Where possible, ask the techs to carry some of the weight. For example, if you like to order supplies on Fridays, then create and distribute a simple Supply Order Form to everyone on Wednesday, and ask them to tell you what they need by Thursday night. Those who fail to order the proper quantities and run out could be docked the express shipping charges or the retail price difference required to get their supplies in on time.

For the marketing decisions, encourage all complainers to provide you with what they would like to see next month. Do this in a non-confrontational, sincere manner in front of everyone, and be sure to give serious thought to their ideas. If you choose to implement one of their marketing schemes, be sure to let everyone know before, during and after the promotion that the idea came from so-and-so by thanking them regularly. They will likely take ownership and do everything in their power to make sure it is a success.

But when everyone wants something i.e. to leave early or come in late the next day all the sudden they are calling me “Miss Manager…”

There’s a Latin term that applies to this situation, M: Quid pro quo. Literally, this means “something for something,” and in business it means “scratch my back and I’ll scratch yours.” Each time one of your charges is looking for a special favor, you have a golden opportunity to do some coaching.

If the employee is the loyal, hardworking sort, then you grant their favor (when possible) and you reinforce their good behavior by saying something like “I have no problem letting someone who accomplishes so much go home early now and then.”

When the person requesting the favor is someone who has made your life miserable, you should take time to explain some of your needs before deciding whether or not to grant their request. For example, you might say something like “I appreciate that you would like to arrive late tomorrow, though I think you’d agree that allowing special treatment to someone who rarely cleans up their own work station sends a bad signal to the rest of the team. If you were in my shoes, what would you do?”

quote

How do I get the respect I not only desire but deserve?

This, M, might be the real question. Certainly, we feel that if you’re able to incorporate the advice we’ve provided so far, you will begin to build respect with your team. Of course, respect is a lot like love: The more you give, the more you get.

Make a pact with yourself to begin each day by respecting your team. This means listening to their ideas (especially the hair-brained ones), and soliciting their opinions about the company’s direction on issues that are important to them (even if you don’t care). As you begin to respect them, they will (eventually) begin to respect you.

While this is a great first step, the behavior of your team could very well be only a symptom of the real problem. From what we can gather from your comments, the underlying problem you face likely has more to do with your relationship with the owner than it does your relationship with your team.

The Real Question is How to Gain the Owner’s Respect

Let’s get some facts about someone who owns their own company on the table: Right or wrong, the owner is the boss. The goal of every company is to make money for the owner. If the owner is crazy and wants you to waste money, for example, you have two choices: Get another job or waste the money. It’s not passive aggressive behavior to give the owner what they want – even if it’s not in their best interest. This is not to say that you shouldn’t attempt to do what’s right; though in the end the owner is the owner and you are just an employee. If the owner wants to allow people to take advantage of her, that is her prerogative (and not your concern). Like the customer, the owner is not always right, but they are always the owner.

M, your issues may appear like they start and end with your subordinates, but in fact, they seem to be caused by the company owner. In our opinion, you are suffering from a lack of respect for your leadership from your boss; and this lack of respect transfers onto your fellow employees. Now, before you march into her office and demand some R-E-S-P-E-C-T, you need to understand that the owner’s behavior is consistent with someone who wants to please everyone. In her effort to please her employees, she is unwittingly minimizing your authority.

quote

How do I establish with her what my role as manager is?

While the owner certainly thinks you’re qualified, she has likely been continually undercutting you since the day you were promoted – and all of this undermining was occurring without her knowledge. She possibly has no idea what she’s doing, and that’s why we think it might be time to have a very serious, though friendly, meeting with her.

We suggest you seek the guidance of others before acting, though our advice is to sit down with the owner at an offsite location (to minimize distractions) and to ask her a few pointed questions. In a concerned, friendly tone, you may want to ask her:

  • Do you value me as a leader?
  • Do you believe I possess the necessary skills to manage the team?
  • Do you think I am capable of growing the business?
  • What are your expectations of my roles and responsibilities?
  • What are your goals for the business and how do you see my role in that?

Based on her answers to these questions, you should know where you stand. If the meeting is going well, you may want to finish with a simple statement about how much you love working for her, how much you respect her, but how you sometimes believe her leadership style is diminishing your effectiveness as a manager. Explain to her that in order for there to be rules, there must be consequences. Without consequences, or her backing, you will not have the respect of the employees.

Not surprisingly, once the owner begins to respect your leadership, so will the employees. Unfortunately, this reverse is also true (as you discover every day). On the bright side, if your boss chooses to keep the status quo, you can mimic her style and become “too nice” in an effort to win over your charges. Because it’s always easier to change your style from “strict” to “relaxed” than the other way around, you stand a good chance of still becoming a semi-effective leader even without your boss’ respect.

NY Times Business Hardcover Best Sellers – August 2009

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New York Times – Hardcover Business Best Sellers – August 2009

Nine months and counting for Malcolm Gladwell’s Outliers as it continues to dominate the NY Times best seller rankings. To read our review of this outstanding book, check out our July 2009 best seller rankings.

Rounding out the rest of this month’s list, we can only recommend Jim Collins’ How The Mighty Fall – because we simply cannot find time in our busy schedules to read the other three. If we were forced to read one, however, we would likely sit down with Ben Mezrich’s The Accidental Billionaires. If it’s anything like Bringing Down The House we can be assured of a mostly accurate, highly entertaining read. The Total Money Makeover, by contrast, appears as appetizing as stale bread; and we can certainly wait until December for the updated version of The 4-Hour Workweek.


The Top Five – NY Times Business Hardcover Best Sellers August 2009 (to view the entire list, follow this link):

This
Month

Last
Month

1

OUTLIERS, by Malcolm Gladwell. (Little, Brown, $27.99.) Why some people succeed — it has to do with luck and opportunities as well as talent — from the author of “Blink” and “The Tipping Point.”

1

2

THE ACCIDENTAL BILLIONAIRES, by Ben Mezrich. (Doubleday, $25.) How two Harvard undergraduates created Facebook.

3

THE TOTAL MONEY MAKEOVER, by Dave Ramsey (Thomas Nelson, $24.99.) Debt reduction and fiscal fitness for families, by the radio talk-show host.

5

4

HOW THE MIGHTY FALL, by Jim Collins. (Jim Collins/Harper­Collins, $23.99.) Companies fail in stages, and their decline can be detected and reversed

2

5

THE 4-HOUR WORKWEEK, by Timothy Ferriss. (Crown, $19.95.) Because life isn’t all about work.

7

Leadership Lessons from the US Government and the Cash for Clunkers Program

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Cash for Clunkers: What we can learn about Leadership from Bureaucrats?

Whether you agree or disagree that the US Government should be in the business of incentivizing the populace to buy new cars, the fact is that the so-called “cash for clunkers” program simply demonstrates that our government, like all governments, does not employ an overabundance of thoughtful leaders.

If the goal of the program, also known as the Car Allowance Rebate System (CARS), was to encourage the sale of 200,000 new vehicles, then it has been a smashing success. In fact, the one billion dollar program that was scheduled to run for the next three months ran out of money in less than a week. Oops.

“It has succeeded well beyond our expectations and all expectations,” commented President Barack Obama.

Thoughtful Leaders “Do the Math”

Just who in our government was setting these expectations? We all knew the program, which pays dealers up to $4,500 per vehicle to junk old cars traded in for new fuel-efficient cars, only had enough money for about 200,000 such transactions.

  • There are roughly 20,000 new car dealers in the US.
  • That equates to 10 clunker deals per dealer.
  • The average dealer can sell 10 cars in about 3 hours.

We’re actually surprised the program lasted as long as it did given that the demand for new cars in the US has been depressed for more than a year. One could argue that the US auto industry, which is currently selling about 500,000 fewer new cars each month that it did just two years ago, has more pent up demand than the housing market. Prior to the Cash for Clunkers program, you were more likely to catch the Swine Flu than you were to get New Car Fever.


Now, for the Real Ugly Truth about CARS

It’s clear we didn’t plan well enough for the execution phase of this program. Not only did the government drastically underestimate the potential acceptance of CARS, but they’ve been failing (unsurprisingly) to keep up with the very basics of their own program.

Just a couple of quick examples:

TheManager signed up weeks ago at the Cars.gov website to be alerted when there were updates to the program. By our tally there have been dozens of such updates, though we’ve received none of the promised email communications. No biggie, and certainly not surprising.

Now we learn that the website created by the feds to handle dealers’ claim submissions has taken up to an hour to process each transaction. Additionally, there are reports of repeated rejections as dealers spend countless hours submitting and resubmitting data. A little more of biggie, but again, not surprising.

So, who are we Entrusting with CARS?

Let’s not forget that this is program between the government (think: no accountability) and car dealers (think: Rudy Russo in Used Cars). You wouldn’t trust either of these groups to babysit your kids let alone run a now multi-billion dollar program designed to make the world more fuel-efficient. (Congress added $2 billion to the program today.)

Seriously, there are great people who work for the US Government and there are certainly great people who manage and own new car dealerships in America… there just aren’t enough of them in either profession.

The CARS program requires that the clunker “be crushed or shredded so that it will not be resold for use in the United States or elsewhere as an automobile. The entity crushing or shredding the vehicles in this manner will be allowed to sell some parts of the vehicle prior to crushing or shredding it, but these parts cannot include the engine or the drive train.”

Who will inspect this crushing and shredding? Who will ensure that none of these vehicles is resold inside or outside of the US? Who will ensure that no unscrupulous dealers submit false claims? If we are relying on the goodness of mankind to ensure everyone, including the government and car dealers, does the right thing then we are being more than a little naïve.

Thoughtful leaders, of course, take pride in not being naïve. The government could certainly use a few more thoughtful leaders.