with the way he was waving his hands around, I was starting to worry for my safety. “I take it you’re finding them less than cooperative?”
He shrugged. “That’s one way to put it. We need concessions on wages, benefits, and pensions just to keep ourselves in the game, and we need serious concessions on the company’s ability to schedule shifts, move people from shift to shift, and have unionized employees be able to take more ownership of the day-to-day supervision of the crews and themselves. We have so much supervisory and employee time tied up in figuring out how the collective agreement applies to the smallest activity, we can’t get any work done. It’s killing us! The shop stewards know it, the union rep knows it, the employees know it, but we’re still stuck in this impasse, spending hours discussing grievances instead of producing stuff.” His hands were waving furiously again, and he paused for breath with what could almost be described as a hysterical note.
“And as if that’s not bad enough,” he continued after a minute, “managing the nonunion staff is even worse. We have this complicated performance management system. For starters, it’s based on a bunch of what we call ‘competencies,’ which are really just fuzzy descriptions of the skills and abilities people in different positions are supposed to be able to demonstrate. The real kicker is that every person gets rated on what is effectively a bell curve. That means that even if you have ten great employees, theoretically you can rate only one or two of them as great, most as average, and you’re supposed to stick a couple of people at the bottom. It’s having bizarre effects, where good people don’t want to be on projects or teams together because it decreases their chances of getting a good rating. Whenever it’s performance review time, people scramble to ingratiate themselves with their performance coaches so they don’t end up on the wrong side of the bell curve. Before the review, there’s horse trading among the managers; they move people around on the curve so it all fits. For employees, the process creates all kinds of suspicion, sabotage, and back-biting, and it encourages them to focus on the short term, not what’s right over the long term for the company. Everyone knows that the system isn’t working, but we sort of make it work by not following the rules completely, which makes it even more confusing. Still, good employees have been trickling out the door for the last three years. Based on everyone’s assumption that I’m just here to close the place, I’m expecting it’ll soon be a flood.”
I clucked my tongue. “Ah, yes, sort of what used to get called stack ranking. Wonderful system for creating chaos and completely undermining the company.”
Will grimaced. “Well, I’m glad you like it, ’cause it’s certainly killing me.”
I raised an eyebrow. “Surely Hyler isn’t the only division that uses this at Mantec?”
He snorted. “We’re not. I’ve run up against it several times, but the other situations were different; we weren’t about to go over a cliff. I basically ignored the system and treated it like background noise, figuring that it would make my results a little worse, but that overall, things would improve. But after spending eight weeks back at Hyler, I’m starting to wonder if this damn performance management system hasn’t been causing a lot more problems than I realized.”
“Interesting,” I said, trying to look as if I was thinking about things. I wasn’t really, at least not in any intense way. I’d seen many types of these programs back when I was still active in business. They all had a significant flaw no one really wanted to address. “But didn’t you have to work within that system yourself?” I asked him.
“Funny thing is, no, I didn’t. I was a special projects guy, reporting to Ralph. My teams formed and disbanded based on what I was working on. I never had a performance review, and neither did my teams. We were judged based on the short-term success of the project or the change we’d introduced. And because I had a way to manage that, it seemed to work out most of the time. Now that I think about it, though, we did lose some good people over the years in other places in the company. Never understood it then, but now . . .” He fell silent, watching the dog and little boy wrestle.
I thought it best to keep him focused, so I said, “Run along and get me another beer, Willie. While you’re doing that, think about what else is causing you headaches at Hyler.”
He disappeared into the house and returned in a couple of minutes with more beer and a bowl of corn chips. I made him go back for dip. When he was settled again, he said, “There’s another performance management problem, though it didn’t start that way. It’s how we deal with our sales team.”
I closed my eyes and interrupted. “Let me make a guess on this one. You have a good-sized sales group, and in these challenging economic times they’ve come under a lot of pressure around pricing. They’ve been discounting your products, most likely with the appropriate approvals, and it’s helped sales. So much so that your volume isn’t down all that much, but profit is way down, maybe even in the red. You talk to them about it, but you can’t seem to change their behavior. Besides, it’s better to be selling product and keeping people busy and the company in the marketplace than not. But you’re losing money. Plus, a big part of your salespeople’s compensation is based on commission, and the commission is calculated on the total sale, not its profitability. So while you’re in the red as an operation, you’re paying big bonuses to your salespeople. Like the old joke goes, you’re planning to make it up on volume.”
Will was shaking his head. “It took me a month to figure that out. No one has been looking at whether we’re making money on an order-by-order basis. No one even knew how to do the basic calculation. When we figured it out, no one seemed to understand what it meant, and their biggest concern was that if we change the bonus program, the salespeople will quit. They don’t seem to get that we’re paying our sales crew to put us out of business!”
I laughed at that. “You know, Willie, I was kind of hoping you could come up with something new for me.” I sighed, rather theatrically. “I guess I need to get used to being disappointed.” I finished my beer.
He shook his head. “Yeah, yeah, you have a tough life. We young people are a big disappointment. We’ve all heard that story.” He smiled at me like the Cheshire cat. Overall the effect was a little creepy. “But the good news is, since you’ve seen this all before, you’ve also solved it all.”
This time there was no need to put theater into my sigh. “Well, the solution, if you want to call it that, isn’t that complicated. But it sure as hell ain’t easy.”
FOUR
Will Gets Some Perspective
MY CONVERSATION WITH Martha reminded me of an important life lesson: trying to wrap your head around a new idea can be downright painful. It requires you to think about something in a different way, from a different angle, and our brains aren’t wired that way. What appears to have kept us alive for the last many millions of years is this: we figure out something that works, and then we keep doing it. We might have figured the thing out rationally, but more likely we came to it accidentally, or through trial and error. Whatever the case, our brain locks on that process or method, and from then on, all of our brain power is directed toward doing it over and over and over again, in exactly the same way. We resist change because the way we do the thing works, and we don’t necessarily have time to screw around with something different. Our survival might depend on it. We fool around with a crazy new method for curing meat, the meat spoils, and the whole family starves the next winter. We try planting some new crop, it fails, and the family has nothing to eat the next winter. You get the picture. The whole “starving” downside is a powerful deterrent to making a change.
The problem is that this approach assumes our environment will stay the same; that we won’t face new situations or new problems like, say, superbugs and global
