I read something that made me pause my series about systemic organization problems. I was reading Churchill's History of the Second World War, when I came across a passage that was right out of my own heart. (My managerial heart, that is.)
From Volume 4, Chapter XXXI: Suspense and Strain:
(Sir Stafford Cripps, the Lord Privy Seal, proposed) … that as Minister of Defence I should have associated with me, as advisers, three persons of the calibre of the Chiefs of Staff who would supervise the Joint Planning Staffs and would be free to devote the whole of their time to military planning in its broadest sense. These three were to form an independent War Planning Directorate, which would keep under review the whole strategy of the war and consider all future operations; and for these purposes they were to supersede the Chiefs of Staff Committee. In each theatre of war there would be a single Commander with full power over all the naval, land, and air forces. These Commanders, advised by a small joint staff, would be responsible directly to the War Planning Directorate. …
This was in truth a planner's dream.
The new Directorate, concerned solely with planning and armed with full powers of direction and control, would be free to go its way without distraction by the daily cares which beset the Chiefs of Staff in controlling the forces over which they exercised command. These manifold cares would continue to be left to the Chiefs of Staff and the staffs which served them in their individual and collective capacities, while the supreme command elaborated its strategy and plans in splendid isolation.
I judged (the proposals) to be misconceived in theory and unworkable in practice. The guiding principle of war direction is, in my opinion, that war plans should be formulated by those who have the power and the responsibility for executing them. Under the system which we had evolved in the hard school of experience the need for inter-Service planning was fully met by the Chiefs of Staff committee and its subordinate bodies, in which those carrying the responsibility for execution came together to make jointly the plans which they were to carry out. The establishment of a War Planning Directorate divorced from the Service staffs responsible for action would have been vicious in principle, for it would have created two rival bodies, one responsible and one irresponsible, yet both nominally of equal status. It would have confronted Ministers with the constant need to disregard the advice of one or other of these bodies. It would have led at once to immediate and violent friction. Was an admiral to be appointed to the Planning Directorate with power to tell the First Lord how to move the Fleet, or an air marshal "of equal calibre" to criticise by implication the Chief of the Air Staff? It was easy to see the dangers and antagonism inherent in such a system. Any clever person can make plans for winning a war if he has no responsibility for carrying them out. Such ingenuity and resource is to be encouraged in the members of planning staffs, so long as they are definitely and effectively subordinated in status to the Service chiefs who carry the executive responsibility.
Of course, planning needs some distance from execution, but not divorced from it. In our government departments we have whole hordes of civil servants responsible for 'policy,' without experience with practical execution and not under, but above those responsible for real work and real results under real conditions. It is difficult to imagine something more diseased than policy makers and planners removed from immediate reality and immediate responsibility. Are you too sensitive to be a salesperson? Go into marketing. And if you are too sensitive for marketing, go into public relations.
The old saying is: Those who can, do, those who cannot, teach. We could say as well: Those who can, do, those who cannot, formulate policies.
My favorite sentence in the quote above: Any clever person can make plans for winning a war if he has no responsibility for carrying them out.
Monday, December 8, 2014
Thursday, November 6, 2014
Executive psychopaths
Our fourth type of systemic problem was pictured as:
In a Chinese palace garden a school of fish jumps out of the water in gracious arcs, their scales glistening in the sun. The fountains behind them produce a rainbow. In a gilded boat, rowed by servants, the prince looks about in great satisfaction. Even the fish jump for him. A big carper lies gasping and dying on the bottom of the boat before his feet. He studiously avoids to look at it.
This is a simple condition. Simple in the sense of straightforward and recognizable. It is capitalism in the eyes of socialists: egotistical and parasitical behavior of the capitalists. In practice it is not that common. The parasites are usually the owners at a distance, the absentee landlords, the continuously shifting stockholders. If the owner is also the director, there is usually more of a sense of continuity and in the course of many years, personnel may even become a bit of family. The more extreme form in the image, is more likely when the ownership of the organization has been inherited by the spoilt children or grandchildren of the founders and there is no restraining influence from the rest of the family.
A similar form may manifest itself when a company is taken over by a corporate raider who just wants to maximize profit in the short run. The common trick is to lend money to the company at exorbitant rates and book the proceeds as tax-deductible interest instead of dividend.
In the public sector we find in it countries who have a dictator or a powerful megalomanic president. Huge palaces are built (Khadaffi, Saddam Hoessein, Erdogan) or others extreme forms of conspicuous consumption (Imelda Marcos).
The solution is simple, but difficult: kill the parasite. The next step is not simple: prevent the next parasite in taking over.
Anyway, megalomaniacs and psychopaths do die. You can hasten that by mass attack or conspiracy. But if the winner takes all, the same play is acted out. The throne and the palace make the despot.
If the big solution isn’t possible, only the small solution remains: leave. If you are not allowed to leave: flee.
Directors who are in the game of maximizing shareholder value and whose payment is tied to share value in any form, are a hardly less pernicious variant of the royal parasite, even if they have a MBA and also otherwise an impressive resume. The easiest signals to recognize them are:
Many wealthy people have been competent, hard-working and lucky - at least not unlucky. Some of them have been only lucky. We may be envious, but we shouldn’t be carried away by our envy. But wealthy psychopaths are a scourge.
In a Chinese palace garden a school of fish jumps out of the water in gracious arcs, their scales glistening in the sun. The fountains behind them produce a rainbow. In a gilded boat, rowed by servants, the prince looks about in great satisfaction. Even the fish jump for him. A big carper lies gasping and dying on the bottom of the boat before his feet. He studiously avoids to look at it.
This is a simple condition. Simple in the sense of straightforward and recognizable. It is capitalism in the eyes of socialists: egotistical and parasitical behavior of the capitalists. In practice it is not that common. The parasites are usually the owners at a distance, the absentee landlords, the continuously shifting stockholders. If the owner is also the director, there is usually more of a sense of continuity and in the course of many years, personnel may even become a bit of family. The more extreme form in the image, is more likely when the ownership of the organization has been inherited by the spoilt children or grandchildren of the founders and there is no restraining influence from the rest of the family.
A similar form may manifest itself when a company is taken over by a corporate raider who just wants to maximize profit in the short run. The common trick is to lend money to the company at exorbitant rates and book the proceeds as tax-deductible interest instead of dividend.
In the public sector we find in it countries who have a dictator or a powerful megalomanic president. Huge palaces are built (Khadaffi, Saddam Hoessein, Erdogan) or others extreme forms of conspicuous consumption (Imelda Marcos).
The solution is simple, but difficult: kill the parasite. The next step is not simple: prevent the next parasite in taking over.
Anyway, megalomaniacs and psychopaths do die. You can hasten that by mass attack or conspiracy. But if the winner takes all, the same play is acted out. The throne and the palace make the despot.
If the big solution isn’t possible, only the small solution remains: leave. If you are not allowed to leave: flee.
Directors who are in the game of maximizing shareholder value and whose payment is tied to share value in any form, are a hardly less pernicious variant of the royal parasite, even if they have a MBA and also otherwise an impressive resume. The easiest signals to recognize them are:
- They have no knowledge of and experience in the primary process: producing real services and products for real clients. They have rather a general background in economics, finance or law.
- They stay at most a couple of years in the same function. They leave before the long-term effects of their short-term interventions become apparent.
- The external directors excuse their being overpaid and pampered by the mantram that the market requires this to attract and maintain top people.
- As cost-cutting is so difficult and painful, they have to be recompensed for such unhappy working conditions by extra bonus payments.
- They thrive in times of high unemployment.
- They have glib personal assistants.
Many wealthy people have been competent, hard-working and lucky - at least not unlucky. Some of them have been only lucky. We may be envious, but we shouldn’t be carried away by our envy. But wealthy psychopaths are a scourge.
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