Intimidation!
Someone sent me the poster below. Even as a cat lover, I have to admit it raised a hair or two on the back of my neck.
Has anyone ever worked for a boss that used intimidation as their management style? Something for all small business owners to remember—it destroys all semblance of teamwork.
Board of Directors??
Enron, WorldCom, AIG, Lehman, Merrill Lynch, Big 3 automakers, bank after bank…and on…and on. Failed, and failing, companies all—and the employees and shareholders (not to mention the public at large) would like to string up all the executives of the failed companies to the nearest “hanging tree.”
Yet, I have seen very little mention of the roles played in these failures by their Board of Directors. The buck does not stop with the CEO; it stops with a company’s directors. A board of directors oversees the assets of the company for the good of the shareholders. More specifically, the board of directors is the highest governing authority within the management structure at any publicly traded company. It is their job to:
- Select a chief executive to whom responsibility for the administration of the company is delegated.
- Evaluate his/her performance regularly and set compensation (including bonuses) accordingly. (We can hardly blame a CEO for taking a huge bonus from a failing company when it is handed to them by the board of directors).
- Govern the organization by broad policies and objectives.
- Ensure adequate financial resources (where were the boards before the bailouts?).
- Account to the stakeholders for the products and services of the company.
- Provide for fiscal accountability. Yes, this is one of the primary duties of the directors. In fact, the Sarbanes-Oxley Act introduced new standards of accountability on the board of directors for any company listed on U.S. stock exchanges. Under the act, internal control is now the direct responsibility of the directors…for all the good that has done in recent weeks and months
The executives of the failed and failing companies in the U.S. are often just incompetent, or self-serving (a few are criminals), but the boards of these companies is where the blame should ultimately lie. Directors of public-traded companies receive substantial compensation for sitting on a board, and many of them have certainly been derelict in their duties…or lazy…or stupid…or all of the above. Many of them serve primarily to rubber-stamp the actions of the CEO (the person they hired), without demanding that he/she perform successfully.
Someone needs to hold the Board of Directors, of these failed companies, accountable for the poor performance of their respective CEOs. If no one in government cares, then it needs to be the shareholders.
If you own stock in any company, do not let others select the board members for you—do your homework and vote for the member you think would be best for the company, and its shareholders. Better yet, become an activist and make sure the best people possible are nominated for your company’s board.
Now, where’s the nearest hangin’ tree………
MBWA–For Managing in Troubled Times
I have always been a strong proponent of “Managing By Walking Around” (MBWA). I have studied the concept, and written about it, but, more importantly, I have practiced it for several decades. I have experienced the benefits…and there is no downside. For me, informally talking with my employees frequently, whether individually or in small groups, is the single best way I found to build cohesive teams that can fulfill a common purpose.
Never has this been more important than it is today. Employees are constantly bombarded by the negativity of mainstream media sources (we all know bad news sells best), and consequently, rumors abound. That is why it is up to each small business owner to spend as much time as possible communicating with the people who make their business run. Sadly, big business has lost site of the power of this simple act. HP was probably the last big corporation to formally practice MBWA, and that was many years ago.
Of course, just walking or wandering around, by itself, won’t do it, you also have to talk to people—everyone—and make sure your message is consistent, or you will quickly be disregarded. Keep your employees informed about the realities of your business, both the good and the bad. Nothing dispels rumors and fear like the unvarnished truth. Nothing builds trust and respect like factual, frequent information—the sharing of everything that is going on.
Just as important, you have to listen to your employees. All employees talk amongst themselves about the business, and usually they know things about your business that you do not…so, ask them what they think. Ask them what the business can do better. Ask them what you can do to help them do their jobs better. Be sure to really listen to what they have to say, and then thank them. Of course, you do regularly thank them for their contributions anyway—don’t you?
The same holds true for people outside your organization…your customers, suppliers, creditors, bankers, investors, board members, etc. Pick up the phone and call them from time to time. Where appropriate, ask how you can help them. Everyone connected with your business needs to hear from you—everyone is anxious about what is happening, and when they are fully informed and connected they also can help you, and your business, in ways you may never have thought of.
Frequent and consistent communication not only makes for an informed organization, but it provides the basis for meaningful communication between everyone. This is what fosters innovation.
Doesn’t all this MBWA stuff take a lot of time? Well, it does take a dedication of time consistently spent out in your workplace, but not as much as you might think. If you make it part of your daily routine, and your overall management style, MBWA will become second nature and a part of your business culture—and it definitely beats the hell out of “meetings.”
Do you MBWA? If not, give it a sincere try—spend more time with the people who make your business successful. You can make everyone in your organization feel they are a real part of your business. This is what can give you a better chance of winning during the recession…and beyond.
My Book
Any business crisis can be managed before it becomes fatal . . . Be Your Own Turnaround Manager tells you how. Click here for more information.