Management Stories

There’s a story that’s going around about the janitor at Carnegie Hall who had been there for 20 years. He’s 45 years old. He was cleaning up the restroom, and a guy in a business suit went up to him and said, ‘You seem to be an intelligent fellow. For 20 years you’ve been cleaning the toilets. Why don’t you do something with your life and get another job?’ And the janitor said, ‘What? And leave show business?’

It’s all in how we view the situation and perceive what we’re doing that determines our satisfaction and fulfillment on the job.

Source: Resolving Workplace Conflict: 4 Ways to a Win-Win Solution by Dr. Tony Fiore | Leader Values

No Comments » Posted by Administrator / Organizational Behavior / HR and Personal Improvement and Purpose / Meaning

In 2005, the National Basketball Association’s Houston Rockets were looking for a talented player to add to their roster. The usual scouting reports and analyses delivered a list of names. Some of them were unavailable or too expensive, and others did not seem like the right ft for the team.

Then, using advanced analytics capabilities, the Rockets’ general manager identified a player named Shane Battier as the one the team most needed.

Not everyone was convinced. By most conventional measures—points scored, rebounds, blocked shots—Battier was simply an average player. But Houston’s analysis went one step further. The organization was able to measure how other team members performed whenever Battier was on the court. By that standard, Battier stood above his peers. Whenever he was on the court, no matter where he was playing, his teammates got better and his opponents got worse. Battier has gone on to be a star with Houston.

Source: Creating an Agile Organization by Peter Cheese, Yaarit Silverstone and David Y. Smith | Accenture Outlook Journal #3, 2009

No Comments » Posted by Administrator / Management and Organizational Behavior / HR

In 1945 the Raytheon Company faced a tremendous demand for magnetron tubes to power the new radar system used to detect enemy aircraft. One day when a Raytheon engineer named Percy L. Spencer stepped too close to a magnetron tube, he noticed that the chocolate bar in his pocket had melted.

Other engineers had noticed the same thing, but didn’t give it much thought. Spencer, on the other hand, despite having only a grammar-school education, was intensely curious. He tried placing popcorn kernels in front of the tube—and a few minutes later, for the first time since cave-dwellers tamed fire, human beings cooked food in a new way.

A year earlier, anyone might have laughed at the idea of Raytheon selling ovens driven by magnetrons to restaurants and, eventually, households. “Absurd!” “Ridiculous!” “We’re in the defense business!” The Raytheon organization took a chance and listened to Percy Spencer. He wasn’t just a resident weirdo providing comic relief—on the contrary, Spencer’s input was constantly solicited, and he eventually served as a senior member of Raytheon’s board. In this case, his idea was rewarded with a shift in production, and within two years the company took the first Radarange® to the market.

History books rightly credit Percy Spencer with the invention of the microwave oven, but in fact his story also includes dozens of unsung heroes, starting with members of Raytheon’s management. They’d hired and promoted Spencer despite his lack of education. They didn’t chastise him for playing with his food in the middle of a serious engineering laboratory. They listened to him and built the Radarange—and then they searched within that market for new discontinuities.

Raytheon tried licensing the technology to other companies, such as Tappan Stove. (Its $3,000 refrigerator-sized microwave ovens were sold to customers with gigantic commercial kitchens, such as on ocean liners, that had to heat a lot of food quickly.) Raytheon then purchased its own domestic-appliance distributor, Amana Refrigeration, in 1965. In addition, Raytheon continually encouraged engineers to tinker with the magnetrons. Finally they figured out that an expensive, military-grade magnetron unit was somewhat over-engineered for the task of thawing frozen steaks and popping popcorn. They developed a smaller, cheaper, simpler, safer and more reliable oven for household use. Amana’s first countertop microwave oven, sold for $495 in 1967, represented a serious discontinuity in household kitchen behavior. In taking risks, Raytheon and Amana were uniquely prepared to take advantage of the huge societal discontinuities of the 1960s: urbanization, women entering the workforce and families devoting less time to meal preparation. Again, it seems obvious in retrospect: cheap and ubiquitous ovens, microwaveable food categories representing $75 billion in annual sales based on the premise of quickly thawing and cooking food. But at the time, the discontinuous mindset at Raytheon and Amana gave them long-term dominance in the home microwave oven business. There are plenty of other examples of unconventional thinkers thriving within traditional companies: Art Fry and Spencer Silver invented the Post-it note while working at 3M, and teams at Apple, amazon.com and General Foods invented the iPhone, Kindle and Tang, respectively. On the other side of the coin, there are also plenty of examples of people like A.P. Giannini—mavericks and free spirits who made their fortunes as entrepreneurs because they were not rewarded in traditional organizations. To encourage a discontinuous mindset, companies must have the proper reward structure to make the maverick’s suggestion of new ideas worthwhile.

Even today, many companies claim to encourage creativity and innovation, but their measurement and reward systems rarely support it. Creativity is messy. It leads to mistakes. (In Raytheon’s case, it took nearly 20 years of mistakes and “not-quite-enoughs” before the microwave’s big payout.) However, measuring results, rather than effort—and rewarding certainty, rather than potential—forces out the unconventional thinkers. It promotes those with modest aspirations, those who are slow and plodding. Reward mediocrity and you never exceed the mediocre.

Source: When the Trend Is Not Your Friend | Jim Singer, Jeff Piluso | A.T. Kearney

No Comments » Posted by Administrator / History and Innovation

The EOQ formula dates back to the Industrial Revolution and a 1913 article by Ford Whitman Harris, a self-trained engineer at Westinghouse Electric Company, in Factory: The Magazine of Management, a relic of another era. The article showed how to balance the fixed cost of ordering or producing a batch of goods with the cost of carrying the inventory between order periods. Graphically displayed with cost on the vertical axis and “lot size” on the horizontal axis, the elegantly simple solution occurs at the intersection of the upward sloping straight line (for inventory carrying cost) and the downward sloping curved line (which reflects the decreasing “setup” or “one-time ordering” costs spread over the batch size). The formula allowed a manufacturing manager to find the optimal lot size given the input parameters of per-unit carrying cost and per-batch fixed costs.

Today, many practitioners think that the EOQ embodies a way of thinking that’s no longer relevant. In reality, however, the trade-off between inventory carrying cost and setup cost remains. Taichi Ohno, father of the Toyota production system, knew that — as does anyone with a deep understanding of “factory physics.” Ohno’s innovation was to reframe the equation to solve for setup time rather than lot size.

Inspired by American grocery stores where consumers “pulled” products from a shelf that was continuously replenished, Ohno concluded that the optimal lot size was one unit. So, instead of trying to find the lot size that balanced setup cost and inventory carrying cost, Ohno sought to drive down setup cost to a low enough level to justify his ideal of a single unit for the lot size. To achieve his vision, Ohno turned to his industrial engineer, Shigeo Shingo, and challenged him to find a way to reduce a stamping press setup time of 12 hours to less than 10 minutes. Shingo and his team succeeded — and, as they say, the rest is history.

Source: Reframing Your Business Equation by Tim Laseter and M. Eric Johnson | strategy+business, Summer 2009

No Comments » Posted by Administrator / History and Management and Miscellaneous and Operations

A fable from the East tells of an emperor and a zen monk who came face to face for the first time. The emperor ruled over a kingdom that practiced Buddhism and the monk was eager to meet with him, looking forward to sharing tales of enlightenment.

But when they met, the emperor decided to test the monk by saying to him: “When you look at me, what do you see?”

“I see a Buddha,” answered the monk. And what do you see when you look at me?”

“I see a pig!” countered the emperor. Waiting to see the monk’s reaction, he said no more.

The monk pondered for a moment, then said:

“A Buddha sees a Buddha; a pig sees a pig!”

Source: Our Cranky Critic- Self-Talk & Public Speaking: What One Reveals About the Other | by Saskia Shakin

No Comments » Posted by Administrator / Leadership and Management and Organizational Behavior / HR

An ancient Chinese story, retold by Phil Jackson, coach of the phenomenally successful Chicago Bulls basketball team, makes this point rather more emphatically. In the 3rd century BC, the Chinese emperor Liu Bang celebrated his consolidation of China with a banquet, where he sat surrounded by his nobles and military and political experts. Since Liu Bang was neither noble by birth nor an expert in military or political affairs, some of the guests asked one of the military experts, Chen Cen, why Liu Bang was the emperor. In a contemporary setting, the question would probably have been: “What added value does Liu Bang bring to the party?” Chen Cen’s response was to ask the questioner a question in return: “What determines the strength of a wheel?” One guest suggested that the strength of the wheel was in its spokes, but Chen Cen countered that two sets of spokes of identical strength did not necessarily make wheels of identical strength. On the contrary, the strength was also affected by the spaces between the spokes, and determining the spaces was the true art of the wheelwright. Thus, while the spokes represent the collective resources necessary to an organization’s success-and the resources that the leader lacks-the spaces represent the autonomy for followers to grow into leaders themselves. In sum, holding together the diversity of talents necessary for organizational success is what distinguishes a successful leader from an unsuccessful one: Leaders don’t need to be perfect, but they do have to recognize that their own limitations will ultimately doom them to failure unless they rely upon their subordinate leaders and followers to fill in the gaps.

Source: Leadership Ltd: White Elephant to Wheelwright by Keith Grint | Ivey Business Journal, January/February 2005

1 Comment » Posted by Administrator / Leadership

A sales manager was deciding which of two salespeople to recruit. Passing over a ball point pen, he said, “Sell me one of these.” The first salesperson took the pen, examined it and said, “This is a very good pen. You will note the transparent barrel which indicates the color of the ink as well as showing when it is about to run out. There is a stopper at the end to prevent the ink seeping out. The top fits well on the pen and covers the nib so that you can clip it in your inside pocket without fearing ink will stain your shirt. When you remove the top, it fits neatly on the other end so ensuring that you do not lose it. It also balances the pen well for writing.”

The sales manager was impressed and passed the pen to the second salesperson. He took it, snapped it in half and said, “You need a new pen.”

Source: Ken Langdon | TheWorkingManager

1 Comment » Posted by Administrator / Marketing / Sales

The field of neuroscience has been especially helpful in expanding our understanding of the role of emotions in decision-making. Research shows that while emotions are essential for decision-making, they can also lead us far astray in ways we may not anticipate. Antonio Damasio, one of the world’s leading researchers in neuroscience, helped design a seminal experiment that assessed the role of emotions in decision-making. It is known as the Iowa Gambling Task.

Participants are seated at a table on which four decks of cards have been placed. The players are given $2,000 in play money and told that the object of the task is to make money. Some cards, they are told, will give them a payout — as much as $100 — while others will signify penalties, sometimes several hundred dollars. They can choose cards from any pile.

What the players do not know is that the gains and losses from two decks – the bad decks – are negative, while those from the other decks – the good decks – are positive. Each deck has different cards, with different payouts and penalties. The bad decks, on average, offer higher payouts but even higher penalties. If a player were to pick ten cards in a row from a bad deck, he would expect payouts of $1,000 and penalties of $1,250, leaving a net loss of $250. If the player were to pick ten cards from a good deck, the payout would be $500 and the losses $250, giving a net gain of $250.

The players are hooked up to equipment that detects fluctuations in heart rate and skin-conductance, both good measures of emotional arousal. They are also asked to describe what they are thinking as they draw cards.
At first, players draw cards, randomly noting the outcomes. However, as soon as a player draws a penalty card, his or her emotions are activated. After a few cards, it is possible to observe the increase in emotional activity when players are about to choose cards from the bad decks, even before the players make any comments about these decks. In fact, players start to prefer the good decks and avoid the bad decks before they are able to articulate what they are doing or why they are doing it. The explanation for their behavior usually comes 20 or so cards after their behavior starts to change, and as much as 30 cards after their emotions are signaling that they have concerns about the bad decks.

The order of their responses is as follows. First they exhibit an emotional response to the penalty cards. They then exhibit emotional responses whenever they draw from the bad decks. Then, they start to avoid the bad decks, without being aware that they are doing so. The process is clearly subconscious. In the next stage, they begin to articulate a preference for the good decks, without being able to say exactly why. They have a gut bias. Finally, players explain that they are avoiding the bad decks because the gains are consistently less than the penalties. From then on, they only draw from the good decks.

This experiment not only demonstrates that our emotions are part of our decision-making process, but also how powerfully our emotions can influence how we think. Indeed, emotions appear to lead the process, even in an exercise as unemotional as drawing cards from decks. The order of the decision-making process appears to be as follows. The process starts with inputs from the environment: the information from the cards. The next step is an unconscious emotional reaction. This is followed by behavioral change in line with the emotional reaction. Then we become conscious of the feelings that are driving the behavioral change. These are our gut feelings. Finally, we are able to make a decision by reasoning. Eventually, most players avoid the bad decks entirely and are able to give a rational explanation of the differences between the decks.

Source: How Emotional Tagging Can Push Leaders to Make Bad Decisions by Sydney Finkelstein and Jo Whitehead and Andrew Campbell | Ivey Business Journal, January/February 2009

No Comments » Posted by Administrator / Leadership and Management and Organizational Behavior / HR

An exercise and known as ‘Stephen Covey’s Big Rocks’. Imagine a bucket. Put three or four big rocks in. “Is the bucket full? ” “No” you reply. “Of course not” I say and put some smaller rocks in it to fill in the gaps. “Full now? “, “No”. I put in some sand, then some water. It’s full.

So, what’s the learning here? It’s to do with the order. What would happen if you’d reversed the order? Put the water in first, then the sand, then the small rocks. There would be no room for the big rocks. These big rocks are the important things in your life. You need to schedule them first, not try to squeeze them in after arranging the water (writing pointless reports), sand (unnecessary travel) or small rocks (staff meetings where no-one listens and everyone looks at the clock).

What are the big rocks in your life? For many it’s things like family, time to watch the children grow up, time to write that novel, time for themselves, time to make a difference. You decide. You identify 3 or 4 things you believe are important. The 3 or 4 things that will make a difference at your funeral.

Source: Real Time Management by Byron Kalies | LeaderValues

No Comments » Posted by Administrator / Career / Employment and Organizational Behavior / HR and Personal Improvement and Purpose / Meaning

In this experiment, five monkeys are put into a large cage. There’s a stool in the middle of the cage and a banana is hung from the ceiling above the stool. Outside the cage, an observer has a hose filled with ice water. It hardly needs mentioning that monkeys like bananas better than ice cold showers.

Within a few minutes, the most daring of the monkeys climbs on the stool to get the banana. This effort immediately engenders an ice cold shower for all of the monkeys. Several minutes later, another monkey tries, with the same result. The monkeys quickly learn the relationship between “get on the stool” and “an ice cold shower” and choose a way to protect themselves. As soon as one monkey even tries to go near the stool, the other four jump on him, screaming and gesticulating, to stop him before the observer gets the “signal” to spray them all with ice water.

Some time and several fights later, all the monkeys have learned the rule, and become quickly indifferent to the stool, as if it weren’t even there. The defensive tactic they had imagined becomes superfluous. The banana stays where it is, safe and sound on the ceiling. Life in the cage is organized around this new reality.

At this point in the experiment, the observer takes out one of the monkeys and replaces him with a new monkey (one that doesn’t know anything about the cold shower). The new monkey immediately climbs on the stool to get the banana, and after a moment’s hesitation, the four others jump on him. The new monkey learns a quick lesson, without any action on the part of observer. The ice cold shower is no longer necessary, and the banana rots nicely on the ceiling.

The experiment continues. Each of the original four monkeys are replaced, one after another, exactly like the first replacement. Each time, the scene repeats itself: the new one tries to climb on the stool, is jumped on by the four others, until they are sure he has learned his lesson.

The rule “no one should climb on the stool” is a lesson that new monkeys learn in this group that is specific to this group and to no other.

In the end, none of the five monkeys knows why they should not get on the stool, yet they defend the law with more vehemence than the original five. No one knows that, in fact, it was a quite effective way to avoid getting an ice cold shower. None of the new monkeys ever got the ice cold shower. They were stopped before the shower came. Even though the original reason has disappeared, the rule has become a norm for this group. A self-perpetuating norm, kept in place by interactions, and never questioned.

Source: Original source unknown but I saw it a long time ago in a CGE&Y publication.

2 Comments » Posted by Administrator / Organizational Behavior / HR