Dealing with Organizational Bureaucracy

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Article originally published in the Philadelphia Business Journal on October 23, 2018

How many of us have worked in bureaucratic organizations in which overly-prescriptive policies, procedures and controls approach the point where employees are micro-managed, and encroach on time better spent running and growing the business and providing a great customer or client experience? Unfortunately, too many of us.

Early in my career, I was introduced by the senior leadership of my company to the management tool called “management by objectives,” or MBOs, as it is commonly referred to within industry. This is a system in which employees document their own objectives as well as those that support their boss’ objectives and so forth, up through the reporting structure of the organization, all in support of the objectives of the company. This process was overly time-consuming.

Each year we wrote detailed business plans – documents which not only outlined the objectives of a business, but also outlined detailed strategies to accomplish those objectives. Due to changes in the business environment, many business plans became obsolete after they were written. Perhaps that’s why they often just sat in a desk drawer or in a bookcase in someone’s office until a year passed and it was time to write the next business plan.

Many of us are required to write lengthy reports, communicating to our bosses our activities and results accomplished during the month or quarter. Shouldn’t we only be focusing on communicating what’s important? Is there a better way of informing upper management of this information?

MBOs, business plans and monthly/quarterly progress reports serve a purpose. The question is how can that purpose be most effectively served with the least amount of bureaucracy, and without taking a leader’s time away from operating the business?

To address the issue of burdensome bureaucracy in my company, when I became CEO I reduced written detailed reports sent to me to the minimum, focused on what was important. Written reports consisted of a one to two-page executive summary, not on pages deep within a multi-page report. The amount of verbal reporting was increased. This had the benefit of increasing the dialogue between leaders and their direct reports, and also made for better decision-making and understanding of the issues facing the business.

How many of us have worked in organizations that required approval by the next level up for decisions that we should have been trusted to make? Unfortunately, too many of us.

As I rose up in leadership positions of increasing responsibility in my company, I rebelled against the requirement that I review all travel expense reimbursement submissions of my direct reports to ensure they had adhered to policy. I never performed these reviews – I just signed off so my employees could be rapidly reimbursed for their travel expenses. That saved me a significant amount of time which I spent on more productive tasks.

I had the philosophy that if I couldn’t trust my employees to follow my company’s travel policies, or if they didn’t have the common sense to inform me that they were violating a policy for a good reason, I didn’t want them working for me.

Did a direct report ever ask for forgiveness after an action was taken versus asking for permission before taking the action? Yes, of course. However, if they were exercising common sense and good critical judgment, I would celebrate and not sanction them.

I never held my direct reports accountable for the individual expense line items between the revenue line and the net income line on the P&L statements for which they were accountable. They were free to manage their costs as they saw fit to meet their revenue, net income and growth goals. If they weren’t capable of managing the resources available to them to run their business, they were not the right people in these positions.

Challenging policies, procedures and controls is a good thing. Some policies address issues that no longer exist, and now only increase bureaucracy and hamper the operation of the business. When policies no longer serve a useful purpose, they need to go.

On occasion, policies, procedures and controls are put in place because of actions by an employee that violated a policy. Avoid the one size fits all solution to this type of issue. Deal with the offending individual, but don’t shackle the rest of the organization by adopting policies that impose unnecessary controls that impede leaders from doing their jobs. The less a leader with good critical judgment is constrained by overly burdensome rules and bureaucracy, the better the performance of their unit and the company.

Stan Silverman is founder and CEO of Silverman Leadership. He is a speaker, advisor and nationally syndicated writer on leadership, entrepreneurship and corporate governance. Silverman earned a Bachelor of Science degree in chemical engineering and an MBA degree from Drexel University. He is also an alumnus of the Advanced Management Program at the Harvard Business School. He can be reached at Stan@SilvermanLeadership.com. Follow Silverman on LinkedIn here and on Twitter, @StanSilverman.

To Improve Results, Benchmark Sister Operations Within Your Own Organization

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Article originally published in the Philadelphia Business Journal on July 23, 2018

I recently attended a conference at which the general manager of a business unit within a large company described how he was able to achieve a significant turnaround in operating results by benchmarking sister operations in his organization. He broke all accepted paradigms about what was possible. The adage, “don’t tell me it can’t be done – find a way to do it” came immediately to mind.

After his presentation, I asked how successful other general managers within his company were at applying his approach to improve the results of their business units. He responded that although he was willing to share his approach, no other general manager bothered to internally benchmark what he did to achieve the turnaround. He said there wasn’t a culture within the company to benchmark other operating units.

External benchmarking competitors is important to determine a company’s competitiveness in the marketplace and learn about best practices within the industry. However, it can be a difficult process to externally benchmark competitors due to the frequent inability to get the data that is needed.

Internally benchmarking sister operations that are achieving great results within the company is much easier. The data is available. So why isn’t it done as a matter of course?

Internal benchmarking is not part of the corporate culture

As with many other techniques to improve operating performance such as the process of continuous improvement, delivering a great customer experience or empowering employees to make decisions, internal benchmarking is not part of the leadership mindset in some organizations.

The CEO needs to be held accountable by the board to bring this mindset to the company and make it part of their culture.

Bonuses are based on business unit results and not corporate results

If there is no incentive to share what works across all business units, a huge opportunity is wasted. The shareholders don’t care about the results of individual operating units. They care about the results of the entire company.

Bonuses should be based both on individual operating unit results and corporate results, so there is an incentive for sharing what works within an operating unit with other operating units. When benchmarking improves the results of a business, it needs to be celebrated throughout the company to encourage more benchmarking.

“By helping you, I diminish my own chance for career advancement”

Unfortunately, some business unit leaders feel that they are playing a zero-sum game: “If I help to make you look good, I will not look as good.”

It needs to be made clear that in fact this attitude diminishes one’s chances of career advancement and will have a negative impact on the individual’s performance review. The desire to help others within the company will have a positive impact on one’s chances for advancement.

“It is a weakness to apply successful techniques developed by others”

Business unit leaders who feel that benchmarking others diminishes their own stature lose out on opportunities to improve their operating unit’s results and limit their chances to advance.

Using the ideas and applying the techniques of others shows you are open-minded and are not limited by the “not invented here syndrome,” which is universally frowned upon by all effective leaders.

Some business unit leaders are not comfortable with change

There is a universal expectation that all leaders will move their areas of responsibility forward and not be wedded to the status quo. Leaders who resist change shouldn’t be in their jobs and need to be replaced anyway.

Internal benchmarking and operational improvement need to be key components of any organization’s culture. It’s a source of competitive advantage.

Stan Silverman is founder and CEO of Silverman Leadership. He is a speaker, advisor and nationally syndicated writer on leadership, entrepreneurship and corporate governance. Silverman earned a Bachelor of Science degree in chemical engineering and a MBA degree from Drexel University. He is also an alumnus of the Advanced Management Program at the Harvard Business School. He can be reached at Stan@SilvermanLeadership.com. 

Breaking Paradigms to Create Competitive Advantage

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Article originally published in the Philadelphia Business Journal on July 10, 2018

In December 2015, I wrote an article headlined, “Don’t tell me it can’t be done. Find a way.” The article is about an event that changed how I viewed the necessity of breaking paradigms to create competitive advantage. That event influenced my leadership style, and still does so today. This is an update of that article.

As the leader of your organization, how many times do you hear from employees that something can’t be done? When I am told this, I now respond, “Don’t tell me it can’t be done. Find a way to do it.”

When I was the president of my company’s Canadian subsidiary, I led the team attempting to financially justify a new manufacturing plant to supply one of our products to a small geographic market in Alberta. There were insufficient revenues and cash flow to achieve a rate of return on the investment needed to justify the plant’s construction.

The CEO of our company challenged every standard design parameter of the plant. Due to his challenge, we changed our paradigms and redesigned the plant to reduce its capital cost and the number of people needed to staff it. The rate of return increased to above the threshold to fund the investment, and we were given approval by the board to build the plant.

This new plant design became the model for future plants of its type and gave us a very significant competitive advantage in the marketplace. The thought process we went through to design the plant was foundational to the company’s subsequent continuous improvement philosophy.

As depicted in the film “Pearl Harbor,” soon after the U.S. declares war on Japan after the attack on Pearl Harbor, President Franklin Roosevelt orders the Joint Chiefs of Staff to strike back by bombing Tokyo. These military leaders offer reason after reason why it can’t be done – the U.S. long range bombers don’t have the necessary range from the nearest U.S. base on Midway Island; Russia won’t let the U.S. launch from Russian territory, etc. Roosevelt says to them, “Don’t tell me it can’t be done”.

What Roosevelt did was challenge the existing paradigms of his military leaders. He wanted them to be innovative and think out of the box. It took the assistant chief of staff for anti-submarine warfare to do so, an individual you would not necessarily expect to come up with a solution to this challenge. He proposed that B-25 bombers carrying extra fuel be launched off an aircraft carrier that would sail within a distant range of Tokyo, reducing risk to the carrier. After launch, the carrier would turn back, and after the bombing run, the planes would fly to China and land there.

This bombing mission over Tokyo is enshrined in history as the Doolittle Raid, named for Army Air Corps Lieutenant Colonel Jimmy Doolittle, who trained the pilots and led the bombing mission. Even though the bombing mission did little damage to Japan’s military capability, it provided a needed boost to American morale, and at the same time showed the Japanese that they were within the reach of American bombers.

When “something can’t be done,” there is usually a creative path forward that can achieve the result desired, or a similar result that might serve the purpose originally intended. Your corporate culture must encourage out-of-the-box thinking and risk-taking for this process to take place. Collaboration among people from different operating units, technical disciplines and business units are sometimes needed to find the path forward, as occurred when the assistant chief of staff for anti-submarine warfare came up with the idea of how to bomb Tokyo.

I have learned that if accomplishing the original goal proves to not be doable, a path can be found to accomplish 80 or 90 percent of that goal, which is better than not accomplishing it at all.

Leaders, whenever you are told something can’t be done, challenge your direct reports to find a way to do it. To those who are tasked to find that path, think outside the box and challenge existing paradigms. You will be surprised at what you can accomplish. 

Stan Silverman is founder and CEO of Silverman Leadership. He is a speaker, advisor and nationally syndicated writer on leadership, entrepreneurship and corporate governance. Silverman earned a Bachelor of Science degree in chemical engineering and an MBA degree from Drexel University. He is also an alumnus of the Advanced Management Program at the Harvard Business School. He can be reached at Stan@SilvermanLeadership.com. 

9 Ways to Build Effective Business Teams

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Article originally published in the American City Business Journals on March 27, 2018

There is no shortage of advice offered to business leaders on how to build teams and lead effective organizations.

As a business leader climbing the ranks of my company and eventually reaching the position of CEO, I have learned much from my own experiences. I have also observed other leaders and learned from them.

I offer the following list of what to do and what not to do if one wants to be an effective leader and build a thriving business.

1. Communicate to your team what you are trying to accomplish

The Holy Grail of any business should be to become the preferred provider of products or services to its markets — the company that customers and clients go to first. Develop strategies with your team to be on a journey to become that preferred provider and share with all employees why this is important.

2. Choose your employees wisely

Your employees represent you and your company. The results they achieve or fail to achieve and the ability to work cohesively as a team have a direct impact on your reputation as an effective leader. Ensure they have common sense and good critical judgment and can see themselves as others see them.

Choose direct reports that you can trust and whowill be trusted by fellow team members. Don’t tolerate individuals who play destructive politics at the expense of others. These people are toxic and can cause significant damage to your business. Fire any employee who acts in this manner.

3. Don’t undercut those in your organization

Empower your people and give them the authority to do their jobs. Give them space to disagree with you. Insecure leaders hold their people to a tight script and lash out if they say the wrong thing. If questioned why a member of your team has a different viewpoint than yours on an issue, just say you respect that view, but this is the direction the team is going.

If, however, a direct report cannot get onboard and impedes the direction you are taking, you need to part company with them, but in a respectful way, so they can maintain their dignity. Personally tell them, face to face. Jointly write the announcement. You will be judged on how you handle their departure.

4. Don’t criticize a team member publicly

If you don’t like their performance, talk with them one-on-one. Public criticism not only undermines that individual and their ability to do their job, but it is also a bad reflection on you.

Public criticism destroys their ability to get things done. Put yourself in their position. Would you want to be publicly criticized by your boss?

5. Chaotic organizations are ineffective

Build a stable team. Chaos is bad for the organization. People need to build working relationships and trust among team members as well as those they deal with outside the company. Frequent turnover prevents this from happening and inhibits the achievement of your objectives.

Customers will be reluctant to believe any commitments made by an individual who has been undermined by their boss because he or she may only have a short tenure. They will think, why cut a deal now, when I might be able to cut a better deal with the next individual who is appointed to that position?

6. Engender trust by being consistent in your policies and decisions

You need to be readable by your employees. This provides them with guidance on how to act in various situations. Being consistent also engenders trust with those you deal with outside the company.

7. Don’t hire people who lack credibility to do the job

It is a bad reflection on you, the leader, if you send a lightweight to do a job that requires an experienced heavyweight. You also harm the reputation of that individual if you give them an objective they don’t have the skills and experience to accomplish.

8. It’s okay to admit you were wrong and change direction

If an initiative you previously committed to becomes impractical or has unintended adverse consequences not initially foreseen, it’s okay to admit you were wrong and to change direction. The worst thing you can do is continue to pursue a bad initiative because of a previous commitment. Not acknowledging issues is a sure way to lose trust, and once trust is lost, it is hard to gain it back.

9. You want to be respected and not feared

Respect keeps lines of communication open. Fear shuts them down. You want everyone in your organization, regardless of position, to feel comfortable in sharing things with you. You can’t resolve issues if you don’t know what they are.

Leaders who self-aggrandize are insecure and lose respect of their organization. It’s not about you. It’s about serving your customers, and how well you do that brings long-term sustainable success to your company.

Stan Silverman is founder and CEO of Silverman Leadership. He is a speaker, advisor and nationally syndicated writer on leadership, entrepreneurship and corporate governance. Silverman earned a Bachelor of Science degree in chemical engineering and an MBA degree from Drexel University. He is also an alumnus of the Advanced Management Program at the Harvard Business School.

You Are Competing Against Apple (And May Not Even Know It!)

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Whether you are in a consumer business or B2B, the quality of your customer service experience with your company is key to generating loyalty and referrals. Many businesses believe that they are good at customer service, but that level of good may not be good enough.

To many customers, their expectation of good service is based on the best service they have received from anywhere. For example, if they have an iphone, they have Apple’s level of customer service in mind as a standard when they deal with you, too. Therefore, even if you are in a totally unrelated industry to Apple’s, customers’ expectations are high because they are not just based on your company’s service quality or even on your industry standards, they are comparing your service with a global expectation of the best experience they received anywhere. Relative to Apple, this means that they want easy access to your “geniuses”, a relatively quick fix or at least quick attention to the issue, and a smiling personality to handle everything.

Achieving this, may be less difficult than it sounds. It starts with refocusing your perspective away from your own standard to the broader one. Explore service you receive from every company and take note of especially outstanding experiences.

Ultimately great customer service starts with leadership setting the tone at the top. Leadership must set an example of quality and not waver from setting a high bar. Leadership then must support their customer service initiative by training everyone in techniques and expectations, as well as giving people authority to solve problems for peak customer satisfaction, reminding them that they are competing against Apple every day.

4 Powerful New Year’s Resolutions For Leaders

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As the calendar flips to 2015, many people will be making New Year’s resolutions. Many of their goals will be personal, some will be professional, but regardless of their nature, creating goals is often an innate characteristic of an effective leader. Here are four suggestions for New Year’s resolutions to better create and maintain an effective leadership culture at your organization:

1. Become a better listener. Resolve to listen to new ideas and approach every suggestion with an unbiased and open mind. Your employees and peers will appreciate it, and it will make everyone better at their jobs.

2. Respect! They say that respect is not given, but earned. Have you earned the respect of your employees through effective leadership? Perhaps. But just as importantly, have your employees earned your respect through hard work, smart ideas and great initiative? If so, and you haven’t communicated it, the new year is a great time to start.

3. Re-evaluate. Are you rubber-stamping another similar plan for 2015 or will you try some things that are new? For most organizations, complacency can be a death sentence. Have confidence in testing some new things, even if some might fail. Especially if things are going well, don’t be content to sit back because business is fickle and things can change at any moment.

4. Stick to your principles. Even as effective leaders maintain an open and honest dialogue about the goals of their organization, it’s crucial that these goals happen through the prism of your own—and by extension, the organization’s—core values. When was the last time you thought about your core values? If it’s been a while, re-establish them. Employees appreciate and can rally around a leader and an organization with a strongly communicated mission and goal.

Stan Silverman is a writer, speaker and advisor on effective leadership. He is the Leadership Catalyst at Tier 1 Group, a firm of strategists and advisors for preeminent growth. Silverman is vice chairman of the board of Drexel University, a director of Ben Franklin Technology Partners of Southeastern Pennsylvania and former president and CEO of PQ Corporation. Follow: @StanSilverman. Connect: Stan@SilvermanLeadership.com. Website: www.SilvermanLeadership.com