Managing People

Beware of Key-Person Dependency Risk

September 7, 2018 by Nagesh Belludi

Beware of Key-Person Dependency Risk

Key-Person Dependency Risk is the threat posed by an organization or a team’s over-reliance on one or a few individuals.

The key-person has sole custody of some critical institutional knowledge, creativity, reputation, or experience that makes him indispensable to the organization’s business continuity and its future performance. If he/she should leave, the organization suffers the loss of that valued standing and expertise.

Small businesses and start-ups are especially exposed to key-person dependency risk. Tesla, for example, faces a colossal key-man risk—its fate is linked closely to the actions of founder-CEO Elon Musk, who has come under scrutiny lately.

Much of Berkshire Hathaway’s performance over the decades has been based on CEO Warren Buffett’s reputation and his ability to wring remarkable deals from companies in duress. There’s a great deal of prestige in selling one’s business to Buffett. He is irreplaceable; given his remarkable long-term record of accomplishment, it is important that much of what he has built over the years remains intact once he is gone. Buffett has built a strong culture that is likely to endure.

Key Employees are Not Only Assets, but also Large Contingent Liabilities

The most famous “key man” of all time was Apple’s Steve Jobs. Not only was he closely linked to his company’s identity, but he also played a singular role in building Apple into the global consumer-technology powerhouse that it is. Jobs had steered Apple’s culture in a desired direction and groomed his handpicked management team to sustain Apple’s inventive culture after he was gone. Tim Cook, the operations genius who became Apple’s CEO after Jobs died in 2011, has led the company to new heights.

The basic solution to key-person dependency risk is to identify and document critical knowledge of the organization. (Capturing tacit knowledge is not easy when it resides “in the key-person’s head.”) Organizations must also focus on cross-training and succession planning to identify and enable others to develop and perform the same tasks as the key-person.

Idea for Impact: No employee should be indispensable. A well-managed company is never dependent upon the performance of one or a few individuals. As well, no employee should be allowed to hoard knowledge, relationships, or resources to achieve job security.

How Far You’ve Come

August 2, 2018 by Nagesh Belludi Leave a Comment

While browsing through advertising genius David Ogilvy’s The Unpublished David Ogilvy, I stumbled across a mention to a 1964 letter of introduction that Ogilvy received from a gifted job-applicant.

Ogilvy calls this “the best job application letter I have ever received.” The first paragraph announces,

My father was in charge of the men’s lavatory at the Ritz Hotel. My mother was a chambermaid at the same hotel. I was educated at the London School of Economics.

Ray Taylor, that aspirant, became an Ogilvy & Mather copywriter.

It reminded me of a quotation from the American priest Henry Ward Beecher: “We should not judge people by their peak of excellence; but by the distance they have traveled from the point where they started.”

Idea for Impact: Appreciate how far you’ve (and others have) come.

We’re All Trying to Control Others

June 19, 2018 by Nagesh Belludi Leave a Comment

We're All Trying to Control Others

One of the realities of the human condition is that we’re all operating our lives by trying to make the settings around us—the environments in which we live, work, and play—to be just the way we want them to be.

However, we share these settings with other people, who themselves are trying to make their settings just the way they want them to be.

And herein is the source of a great many conflicts: as we control our worlds and our lives with the purpose of making them transpire as we’d like them to, we intercede with the controlling of others.

Conflict is not necessarily bad. It is a normal, fundamental, and pervasive facet of life. It is a natural outcome of what happens when our expectations, interests, viewpoints, inclinations, and opinions are at variance with those of others.

Every relationship is a minefield of conflict, and each instance of contradictory viewpoints brings new challenges.

The key to getting along amicably and resolving the problems of the world is working out how we can wisely facilitate our control of what is important to us without interfering with other people’s efforts at doing the same thing.

Idea for Impact: Life is negotiation. Getting what you want out of life is all about getting what you want from—and with—other people. Learning how to engage in conflict to get what you want without inflicting damage on the opportunities and the relationships is one of life’s essential and practical skills.

To Micromanage or Not?

June 12, 2018 by Nagesh Belludi Leave a Comment

Micromanagement—any unnecessary meddling in someone else’s responsibilities, decision-making, and span of authority—is one of the most common gripes that employees have about their managers. No manager’s participation, influence, and authority should chip value away from an employee’s work.

Nobody Likes a Meddling Boss

To Micromanage or Not? There’s a thin line between appropriate questioning and micromanaging. What characterizes micromanaging is not whether a manager is questioning the minutiae, but whether the fine points are significant enough to be probed into and to what end the manager is probing.

For instance, is a manager making a point of a certain inconsistent operating expense, or is the manager examining bookkeeping details that may help bring to light a bigger-level problem such as a defective accounting system? Asking questions doesn’t in and of itself signify micromanaging, as long as those questions lead to insights of some substance.

If a manager hones into some trivial detail and challenges it with an intention of establishing an employee’s error, it’s reasonable to assume that the manager is micromanaging.

When micromanaging happens in the area of the manager’s expertise, his nitpicking is usually provoked by an egotistical need to emphasize his knowledge or experience on the subject, especially if the manager is insisting on his pet course of action.

Idea for Impact: When tactically applied, micromanaging can be a powerful tool to get the right things done

The ability to pose broad, open-ended questions (try the Socratic Method) and help an employee uncover crucial details—and to do this without creating the perception of micromanaging—is a particularly valuable managerial skill.

The smartest managers I know of do away with as many unnecessary reports, reviews, and approvals as possible. They ask the right questions about the right subjects in the right tone to help refocus an employee’s attention while deferring to the employee’s decision-making prerogative. They don’t delve into the fine points of everything—they selectively micromanage only if they must.

Shrewd Leaders Sometimes Take Liberties with the Truth to Reach Righteous Goals

April 12, 2018 by Nagesh Belludi Leave a Comment

Shrewd Leaders Must Sometimes Take Liberties with the Truth to Reach Righteous Goals Duplicity must be decried when used to justify the attainment and exercise of power. However, sometimes, even principled leaders must put on an act to realize noble ends—infuse optimism to surmount hopelessness, win followers’ devotion to audacious new ideas, for example.

In the Zen parable that follows, a warrior motivates his followers in the face of desperate odds. He persuades his outnumbered army by flipping an unfair coin and proclaiming that they are fated to win the battle.

A great Japanese warrior named Nobunaga decided to attack the enemy although he had only one-tenth the number of men the opposition commanded. He knew that he would win, but his soldiers were in doubt.

On the way he stopped at a Shinto shrine and told his men: “After I visit the shrine I will toss a coin. If heads comes, we will win; if tails, we will lose. Destiny holds us in her hand.”

Nobunaga entered the shrine and offered a silent prayer. He came forth and tossed a coin. Heads appeared. His soldiers were so eager to fight that they won their battle easily.

“No one can change the hand of destiny,” his attendant told him after the battle.

“Indeed not,” said Nobunaga, showing a coin which had been doubled, with heads facing either way.

Idea for Impact: Moral Leadership Relates to the Integrity of Leaders and Their Intentions

A wise leader must be open to bringing deception into play to smooth the way to sound decisions and noble results.

As long as leaders use these methods to respectable purposes, and until people wise up to their methods, certain ends can justify certain means.

Postscript: The quoted Zen parable is sourced from the celebrated compilation Zen Flesh, Zen Bones: A Collection of Zen and Pre-Zen Writings, Shambhala Edition (1961) by Paul Reps. This book traces its roots to the thirteenth-century Japanese anthology of Buddhist parables Shasekishū (Sand and Pebbles) compiled by the Kamakura-era monk Mujū.

Ideas to Use When Delegating

January 24, 2018 by Nagesh Belludi Leave a Comment

Ideas to Use When Delegating The American industrialist Alfred P. Sloan once declared, “The most important thing I ever learned about management is that the work must be done by other men.”

A manager’s principal task is to get things done through other people. Therefore, delegation is one of the most important skills a manager can master.

In addition, being effective at delegation has benefits in many areas of life—enlisting a friend to repair a computer, or getting your kids to rearrange a bookshelf, for example.

Here are a few ideas for effective delegation.

Delegate every task that can be performed just as well by someone who is paid less than you are.
Pick people who can accept responsibility.
Match the person to the task.
Remember that the person performing the task may not do it as well as you do it.
Build employees’ confidence by assigning low-risk projects at first. By giving employees tasks that are right at the limit of their existing capability, or even just beyond, you can motivate them to develop their skills and knowledge.
Let employees put their own spin on the assignment. Learn to have faith in the ingenuity of your employees, and give much latitude in how they do things.
Delegate outcomes, not just tasks. Identify the precise problem and define exactly what you want your employee to do.
Confirm understanding. Don’t assume that your employee understands what we mean. Have the employee restate the outcome you’ve delegated in his own words.
Give a due date for the assignment.
Monitor what you delegate. Don’t meddle—an overly-engaged boss can create self-induced commotion. Effective managers delegate results when they can and interfere only when they must.
Learn to be patient. Expect employees to make wrong decisions. Spend time with them to learn why a decision was wrong and how to avoid it the next time, rather than reproach or assign blame.
Set the standards, but tell your employees what you’re willing to accept as tradeoffs of delegation. Offer to lend a hand wherever necessary. As Peter Drucker wrote in The Leader of the Future, “Effective leaders delegate, but they do not delegate the one thing that will set the standards. They do it.“

By learning to delegate effectively, you can create a work environment that is more time- and skills-efficient, foster creativity and opportunities for professional growth, and focus on the importance of managerial communication.

No Boss Likes a Surprise—Good or Bad

January 16, 2018 by Nagesh Belludi Leave a Comment

Never surprise the boss, particularly on potentially volatile issues that could affect your project’s timeline, budget, or performance.

Even good surprises can backfire. Many an example exists of employees bringing the boss what they believe were good news, only to realize later that that the surprises weren’t so good after all.

Consider the following example of a Boeing test pilot pulling off a shocking stunt on a prototype aircraft, much to the exasperation of his company’s leadership.

A Reckless Stunt That Created a Buzz

Boeing 707 Dash 80 prototype The Boeing 707 was America’s first passenger jet aircraft. Prior to the 707, which entered service in 1958, air travel was mostly limited to the affluent—and even they were hesitant about air travel’s safety. The 707’s in-service safety record and its economic characteristics quickly made travel more accessible and dependable. The 707 ushered in the Jet Age.

But for Boeing, today’s leading aircraft manufacturer, developing the 707 was a big gamble. The 707 had no orders, and Boeing embarked on its development entirely on the wager of its prospective commercial success. When the aircraft’s design commenced in 1951, Boeing’s estimated development costs were $16 million. That was roughly 20% of the company’s value, and more than twice its yearly profits—nearly all of which originated from military contracts.

The Demonstration That Was Far from What the Boss Had Authorized

Boeing built its first and only 707 prototype aircraft in 1955. The company’s leadership decided to show off the aircraft at Seattle’s Seafare Hydroplane races on August 7, 1955.

The display plan was to have Boeing’s Chief Test Pilot, Alvin “Tex” Johnston, do one low pass over the racecourse so that the airline executives, industry pundits, and government officials who attended the high-profile event could witness Boeing’s new undertaking.

Johnston had other plans. In his mind, the audience needed to be sold on the plane’s performance and safety. Seized by the impulse to flaunt the agility of the 707, Johnston had a little more in mind than just an unpretentious flyby.

During the in-air demonstration (see YouTube video,) with the aircraft soaring over Seattle’s Lake Washington, Johnston suddenly pulled back on the controls, and the plane started to climb at a speed of 400 miles per hour. Then, he did a complete 360-degree roll and flew the plane upside down for a moment. As the crowd watched in shock and amazement, Johnston did a second barrel role.

Overconfident Employee, Furious Boss

Alvin Melvin (Tex) Johnston, Boeing Test Pilot In the startled crowd was Boeing’s legendary president William “Bill” Allen. Allen, who had authorized no more than a simple flyby, thought that Johnston’s first barrel role was a mistake. When Allen witnessed the second barrel roll, he feared that either Johnston had lost his mind, or the aircraft was in grave trouble.

According to Robert J. Sterling’s Legend & Legacy: The Story of Boeing and Its People (1991,) Allen summoned Johnston into his office the next day. Allen demanded an explanation and inquired why Johnston had foolishly risked the company’s only prototype.

Pleased with his successful accomplishment, Johnston offered a simple explanation, “I was selling airplanes.” Johnston explained that he had previously tested barrel rolls on the prototype, and it was a safe maneuver. He hadn’t risked the aircraft at all.

Allen reproached Johnston and told him that he appreciated the efforts, but Johnston was never to do anything that had not been approved previously.

Never Let Your Boss Be Surprised by Bad News

If there is only one thing worse than delivering bad news, it’s not delivering bad news as soon as you know that some trouble is brewing.

No boss wants to hear about any looming issue from some third party—especially if it could be worrying—and put her on the spot with her peers and superiors.

When you fail to report any bad news, you are leaving your boss exposed to being blindsided with a potential problem, and the perception that your boss doesn’t have control of her organization.

Idea for Impact: A Good Employee is Predictably Excellent

The surest way to delight your boss is by setting the right expectations, discussing and coordinating on a plan of action, and delivering on her expectations of your performance.

When the status of important any project changes, make it a priority to bring your boss and other affected constituents up to date. If, right from the beginning, you’ve made the true picture clear, your boss may be less surprised with the bad and the good.

Never surprise your boss—just keep her clued-in on a regular basis.

Seven Easy Ways to Motivate Employees and Increase Productivity

January 10, 2018 by Nagesh Belludi Leave a Comment

If you’re a manager, you can become a motivator by inspiring your employees to high performance—and produce beyond the ordinary.

Purpose. Even the mundane can become meaningful in a larger context. Howard Schultz, the founder and CEO of Starbucks once said about providing propose, “People want to be part of something larger than themselves. They want to be part of something they’re really proud of, that they’ll fight for, sacrifice for, that they trust.” Sometimes that’s all people need to get their skates on—because nothing is worse than feeling that they’re are stuck doing a meaningless task.
Autonomy. Empower people to innovate and make decisions. Be clear about performance expectations. Reduce your direct supervision of their work. Don’t micromanage.
Appreciation. Reward your employees’ small as well as big successes. Recognition is easy and need not be expensive and time-consuming.
Involvement. Interact directly with frontline employees, observe their work, solicit their opinions, seek ideas for improvement, and work directly with the frontline to identify and resolve problems. Encourage employees to talk about the “undiscussable,” even if others don’t want to hear it.
Challenge. Put people in situations where they can grow, learn new skills, and gain new knowledge.
Urgency. Disregard command-and-control and, instead, become an expediter and facilitate your employees getting their job done. The pioneering management guru Peter Drucker encouraged managers to frequently ask of employees the one question that can initiate more improvement than any other: “What do I do that wastes your time without contributing to your effectiveness?”
Empathy. Care about your employees’ success and give them hope about their performance. Be sincere. Demonstrate you value differing opinions.

Idea for Impact: The bottom line on motivation is this: People know what motivates them. Ask them. You may not have any idea what they want.

A Sense of Urgency

December 18, 2017 by Nagesh Belludi Leave a Comment

The most successful managers I know are highly attentive of their colleagues’ sense of urgency and incessantly adapt to them.

In his excellent Steve Jobs biography, Walter Isaacson evokes Apple CEO (and operations wizard) Tim Cook‘s responsiveness and a sense of urgency:

At a meeting early in his tenure, Cook was told of a problem with one of Apple’s Chinese suppliers. “This is really bad,” he said. “Someone should be in China driving this.” Thirty minutes later he looked at an operations executive sitting at the table and unemotionally asked, “Why are you still here?” The executive stood up, drove directly to the San Francisco airport, and bought a ticket to China. He became one of Cook’s top deputies.

Idea for Impact: Bosses and customers often respond more positively to your focus on creating a sense of urgency before emerging problems erupt in a crisis.

Don’t Lead a Dysfunctional Team

November 22, 2017 by Nagesh Belludi Leave a Comment

The difference between functional and dysfunctional teams often boils down to effective team leadership. If you’ve been asked to lead a team, you’ll get more from your team members if you know what’s expected of the team, and manage your roles and responsibilities.

Define the charter. Find out what your customers want. Find out how much latitude your team has—decision-making, reporting procedure, access to resources and information. Make sure there’s organizational support for these matters.
Build on strengths. If team members are selected for you, determine what each person can contribute to the team’s effort. Ask members to identify their strengths.
Set ground rules. Discuss how the team will operate. Be clear about performance expectations. If necessary, write down the rules agreed upon by team members.
Develop a mission and goals. Get your team talking about what needs to get done, by whom, and when.
“Herd the sheep.” Part of your job is to be a sheepdog. Keep people together and herd them toward goals.
Break up conflicts. Disagreements are fine, even healthy, but outright hostility or anger is counterproductive. Stop the discussion, clarify positions, and try to find areas of agreement.
Avoid groupthink. Don’t compromise too much for the sake of consensus, harmony, and “esprit de corps.” Don’t settle on the lowest-common-denominator decision upon which everybody agrees.
Build bridges. Keep your sponsor, your manager, and each team member’s boss informed of the progress of the team’s assignment.
Be visible. Any crisis calls for constant, candid communication. Knowing how to step up your communications efforts to the right levels during confusion is a powerful tool in managing a crisis.
Captain the ship. You’re responsible for your team’s every outcome—good or bad. You are wholly accountable for everything that happens under your authority. Never pass the blame should things go wrong.
Make the work fun. Give your team lots of recognition. Celebrate the team’s accomplishments.
Establish freedom and autonomy. Empower team members to innovate and make decisions. Encourage all ideas and make sure that they are respected, no matter how strange they may sound. Micromanage only when you must.
Assess performance. Periodically, ask the team to rate its performance. Resolve any problems as quickly as possible.
Get stuff done. Don’t lose sight of your goals and your mission. The only thing that matters is the relevant results.

Managing People

Key Employees are Not Only Assets, but also Large Contingent Liabilities

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Nobody Likes a Meddling Boss

Idea for Impact: When tactically applied, micromanaging can be a powerful tool to get the right things done

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Idea for Impact: Moral Leadership Relates to the Integrity of Leaders and Their Intentions

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A Reckless Stunt That Created a Buzz

The Demonstration That Was Far from What the Boss Had Authorized

Overconfident Employee, Furious Boss

Never Let Your Boss Be Surprised by Bad News

Idea for Impact: A Good Employee is Predictably Excellent

Wondering what to read next?

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