Stonekettle Station’s List of Things You Shouldn’t Have to Tell Business Leaders

Business.

Like you, these days I hear a lot of things about business.

Particularly I hear a lot of things about American business and what we can do to make more of it, more product, more jobs, more money, more opportunity, more business. You hear it on street corners among the unemployed. You heard it during the recent elections. The new Congress has gone on and on about it – and then focused on denying Americans access to healthcare and making sure a handful of women don’t get government funded abortions.

The President focused on it during the last State of the Union address.

Talk of business dominates the media.

No wonder, of course, it’s been a bad decade for American business, this first ten years of the new century – which is damned peculiar if you think about it as American business usually thrives under a Conservative wartime administration.  The country may go to hell, as it did during Vietnam, but business – especially those who supply the beans and bullets – more often than not make out like bandits.

Well, until the economy tanks, that is.

During Vietnam, that implosion didn’t happen until the mid 70’s, after the conflict was over and the bill for a decade of war came due – right about the same time OPEC began flexing its muscles.  We went into a  fairly ugly recession but it didn’t really last all that long. Energy prices and consumption reached a new balance and the country, including business, had enough capital reserve at all levels that we could recover pretty quickly without any great loss of prosperity. Things really got cooking when Reagan arrived in Washington and cranked the military/industrial complex back up to 11.  He could do that, mostly because America was between shooting wars at the time.  Of course, Reagan was borrowing against the future, betting that the expanding economy would create enough wealth to pay the bill on his investment.  It didn’t, and we’re still paying premiums on that dead horse, but it sounded good at the time and for a while there it even looked like he might pull it off. Instead it turned out to be the classic Ponzi scam, as usual.

This time around, however, the shit hit the fan early on in the conflict.   We were already hip deep in two wars when the housing bubble burst.   Exacerbating the situation is the type of conflict we are fighting, i.e. a war of pacification. It’s a war of boots on the ground, of occupation, small arms and body armor and individual citizen soldiers and of hearts and minds. It’s a war of remotely operated drones and smart weapons and ideas.  What that translates to is that the usual self-licking ice-cream cone of the military/industrial complex that would during a more traditional conflict drive the economy and keep a large workforce of American businesses happily cranking out ships and tanks and bombers, is instead not hiring. Or rather, they are hiring only a small cadre of highly specialized technicians instead of the massive semi-skilled workforce they once would have.  This war costs the country just as much, if not more, than a traditional conflict – without even the momentary economic benefit of a wartime workforce or huge plus-up in military forces to draw off the unemployed. It’s making a small handful of very large defense contractors richer, but that war expenditure isn’t trickling down very far. Lay that on top of the Wall Street implosion, which managed to destroy not only the Monopoly money created in the mortgage bubble but a significant chunk of America’s real wealth too.  The astounding thing was how many Wall Street firms were nothing but smoke and mirrors, empty shells like a Hollywood movie set made up almost entirely of that same Monopoly money, when the bubble burst they didn’t just go bankrupt, they evaporated.

Some of these old and venerated companies, companies such as Lehman Brothers, were, in the end, no more real than Enron or those billion-dollar DotComs that consisted of little more than a couple of Power Point slides, a handful of longhairs, and a Ping-Pong table.  Nothing they built lasted, if indeed they actually built anything at all. When the bubbles burst they simply vanished without a trace – no different than those fly-by-night telephone scam operations whose offices are an endless series of false fronts and fleabag motel rooms.  Most of the their white collar workforce ended up on the street, but the CEOs? The CAO’s? The COOs? The movers and shakers? Sure, someday they might even be held accountable. Someday.  But, most? Well, they just moved on to other offices and other businesses and learned not one damned thing.

And why should they? Business rewards the very executives who destroyed those self same companies – and will destroy the next one, and the next one, and the one after that. See, because most of them just don’t care. Unlike the titans of industry of years past, this generation of jackasses does not build, they don’t make, they don’t create, they leave no legacy. They take.  Ultimately, this mindset will destroy American business, because these so-called executives are teaching the next generation to be just as greedy and self-serving and as destructive as they are. 

The lesson of Wall Street is this: Get while the getting is good, get rich, get out, and let the peons deal with the resulting mess.

There are a lot of things that can be done to turn around this downward spiral, but much of it depends on teaching the next generation of business leaders, embedding in them things that should be self obvious to every business executive, but apparently are not:

- If you show no loyalty to your employees, you have no right whatsoever to expect any loyalty in return.  Period. There was a time when people expected to work at a single company their whole lives, so why don’t they anymore? Because if you act like a mercenary, so will your employees. Because if you treat your employees like the enemy, they’ll will be the enemy.  If you don’t trust your employees, they won’t be trustworthy.  And most especially if you engage in unethical behavior, so will your employees – you steal from investors, your employees will steal from you. You’re the leader, your people are a reflection of you.

First Corollary: If your people hate coming to work, they’ll find excuses not to work. 

Second Corollary:  You can’t do more with less, the only thing you do with less is less.  Your people need tools, training, and assets. Give it to them, even if you have to pay for it out of your bonus.

- Build a better mouse trap. The world is full of crappy products and crappy customer service.  If a customer wants crap, they can always find it cheaper elsewhere.  If you want people to beat a path to your door, don’t make crap. The product matters.  Your customers don’t give a good goddamn about your process, they are interested in only one thing: Product. Quality matters. People will pay more for it. Customers will seek it out. Reputation matters most especially. Lose yours, and the end is near.

First Corollary: If you produce a faulty product, make good on it promptly.  Admitting your mistakes, and then fixing them, will do more for your bottom line than any other single thing you can do. Period.

- Motivational Posters have never motivated anybody. Ever. That’s your job.  If you put up motivational posters, you’re basically saying that you can be replaced by a piece of cardboard printed with a trite slogan (and you probably have other bad habits too). Something else, Motivational posters are insulting – and not just because you spent $120 on a framed picture of two guys in a canoe while your people have to scrape for office supplies to do their jobs. You’d motivate them more if you ordered the whole office pizza for lunch and used the remainder to stock the supply closet.

- If you don’t invest in your company’s future, your company doesn’t have a future. 

- You can innovate, or you can talk about innovating. To paraphrase General Douglas MacArthur, you can’t bomb half a bridge. Either innovate or don’t. If you innovate, fund it, follow through, or don’t innovate because you’re just wasting company assets.

First Corollary: There’s nothing worse than an outfit that spastically keeps changing direction.

- If you acquire a failing business, don’t adopt their business model.

- Business consultants have no interest whatsoever in improving your business. Seriously, if your business was running smoothly, you wouldn’t be giving them money, would you?

- Suck-ups, Kiss-Asses, and Yes-Men make lousy managers, don’t cultivate them.

First Corollary: If your people are only telling you what you want to hear, you should start worrying immediately.

- If you outsource technical expertise and capability, you’re capitalizing your competition. There was a time in America when big manufactures made most of their product components themselves.  Then came a concept called RONA, Return on Net Assets, it’s a ratio – the ratio of profit to company assets.  In simple terms: If you can maintain a steady level of income while at the same time significantly reducing company assets, you massively increase profit – which was the original idea behind outsourcing.  This goes wrong any number of ways (not including the loss of jobs at home), but the worst is when an industry ends up creating their own replacement, which basically describes American manufacturing’s relationship to Asia. First they make the car parts. Pretty soon they stop making car parts, and start making cars. Eventually they realize they don’t need you anymore. Ditto computers. Ditto everything else.

- Beware the serial CEO.

- Don’t teach your grandmother how to suck eggs, i.e. MBA’s shouldn’t be making engineering decisions, or telling programmers how to code, or making medical treatment decisions, or etc and so on. Being fluent in jargon does not equal actual knowledge or experience. You have experts for a reason, listen to them.  If you’ve outsourced all your expertise, better learn to speak Chinese.

- Nobody ever understood a subject from looking at a couple of Power Point slides.

- Meetings don’t produce solutions. Good meetings identify problems and outline issues.  Problems are solved after the meeting by two guys shooting the shit in the hallway.  If you encourage people to talk to each other, you’ll have more solutions and less problems.

- If you spend most of your time in meetings, you’re not really doing anything. Just saying.

- Information Technology is a science, not an art. Hire actual IT people, degreed, certified, or otherwise credentialed.  Don’t hire your nephew just because he’s “good at that Facespace thing.”  IT is the core of modern business. IT makes you global. IT is the single most important division you have – don’t agree? Remember that when the federal regulators subpoena your email for the last three years.

First Corollary:  If you outsource IT, you’re giving an outsider full access to every single secret you have, make damned sure you know who you’re getting in bed with. Better yet, don’t outsource IT, hire good people and give them a reason to be loyal. Remember I said this when the federal regulators come knocking.

Second Corollary: There is nothing more debilitating to efficiency and the bottom line than a lousy database design.  Hire somebody who actually knows what they are doing and can prove it, pay them well, give them the tools they need. Make damned sure they listen to the users.

Third Corollary: Your webpage matters. It is your public face.  Hire somebody who actually knows what they are doing, i.e. a professional webpage designer.  Here’s how you tell: if the prospective designer enthusiastically agrees with your idea for a flaming, rotating logo that flashes in jittering colors and plays the company song written by your brother-in-law, don’t hire him.  Oh, and put your goddamned phone number on the top of every page in a large font.

Fourth Corollary:  Worry less about your employees surfing Craigslist on company time, and more about the fact that the most visited addresses detected by your nanny software are job search sites (or Wikileaks).

 

and finally and most importantly:

- You. Are. Not. Entitled. To.  A.  Bonus.

If you get one, make damned sure it’s because you earned it.