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New Company model: OA5

The key to good management is knowing whatís fundamental to success and whatís not.

Companies with effective employees and good products usually do well.

That might seem like a blinding flash of the obvious, but look around your company and see how many activities are at least one level removed from something that improves either the effectiveness of the people or the quality of the product. When I refer to product, I mean the entire product experience from the customerís perspective including the delivery, image and channel.

Any activity that is one level removed from your people or your product will ultimately fail or have little benefit. It wonít seem like that when youíre doing it, but it is a consistent pattern.

Itís hard to define what I mean by being "one level removed" but you know it when you see it. Examples help:

Not fundamental

These "one off" activities are irresistible. You can make a convincing argument for all of them. You couldnít run a company, for example, without a budget process. Iím not suggesting you try. But I think you can focus more of your energy on the fundamentals (people and product) by following a simple rule for all the "one off" activities.

Rule for "one off" activities: consistency. Resist the urge to tinker. Itís always tempting to "improve " the organization structure, or to rewrite the company policy to address a new situation, or to create committees to improve company morale. Individually, all those things seem to make sense. But experience shows that you generally end up with something that is no more effective than what you started with.

For example, companies tinker endlessly with the formula for employee compensation. Rarely does this result in happiness and more productive employees. The employees redirect their energies toward griping and preparing resumes, the managers redirect their energies toward explaining and justifying the new system.

The rule of consistency would direct you toward keeping your current compensation plan- warts and all- unless it is a true abomination. The company that focuses on fundamentals will generate enough income to make any compensation plan seem adequate.

The best example of a fruitless, "one off" activity that seems like a good idea is the reorganization. Have you seen an internal company reorganization that dramatically improved either the effectiveness of the employees or the quality of the product?

Sometimes there are indirect benefits because reorganization is a good excuse for weeding out the ninnies, but that hardly justifies the disruption. The rule of consistency would say itís best to keep the organization as it is, unless thereís a fundamental shift in the business. Add or subtract people as needed, but leave the framework alone. Let the employees spend time on something besides reordering business cards.

Many of the " one off" activities start taking care of themselves if youíre doing a good job with your people and your products. A Company with a good product rarely needs a Mission Statement. Effective employees will suggest improvements without being on a quality team. Nobody will miss the Employee recognition Committee if the managers are effective and routinely recognize good performance. The budget process will suddenly look very simple if youíre making money (by focussing on your products).

As far as consistency goes, I would make an exception for changes that are radical enough for "reengineering" a process. It is the fiddling I object to, not elimination or major streamlining.


Out at Five

I developed a conceptual model for a perfect company. The primary objective of this company is to make employees as effective as possible. The best products usually come from the most effective employees, so employee effectiveness is the most fundamental of the fundamentals.

The goal of the hypothetical company is to get the best work out of the employees and make sure they leave work by five oí clock. Finishing by five oíclock is so central to everything that follows that I named the company OA5 (Out at five) to reinforce the point. If you let his part of the concept slip, the rest of it falls apart.

The goal of OA5 is to guarantee that the employee who leaves at 5 PM has done a full share of work and everybody realizes it. For that to happen an OA5 company has to do things differently than an ordinary company.

Companies use a lot of energy trying to increase the employee satisfaction. Thatís nice of them, but letís face it-work sucks. If people liked work theyíd do it for free. The reason we have to pay people to work is that work is inherently unpleasant compared to the alternatives. At OA5 we recognize that the best way to make employees satisfied about their work is to help them get away from it as much as possible.

An OA5 company isnít willing to settle for less productivity from the employees, just less time. The underlying assumptions for OA5 are:

Staying out of the way

Most people are creative by nature and happy by default. It doesnít seem that way because modern management is designed to squash those impulses. An OA5 is designed to stay out of the way and let the good things happen. Hereís how:

  1. Let the employees dress any way they want, decorate their work places any way they want, format memos any way they want. Nobody has demonstrated that these areas have any impact on productivity. But when you "manage" those things you send a clear signal that conformity is valued above either efficiency or creativity. Itís better to get out of the way and reinforce the message that you expect people to focus on whatís important.
  2. Eliminate any artificial "creativity" processes in the company, such as the Employee Suggestion Plan or Quality Teams. Creativity comes naturally when youíve done everything else right. If you have a good e-mail system, a stable organization chart, and an unstressed workplace the good ideas w2ill get to the right people without any help. The main thing is to let people know that creativity is okay and get out of the way.

What does an OA5 manager do?

"Staying out of the way" isnít much of a job description for a manger. So if you want to be a manager in an OA5 company youíll need to do actual work too. Here are the most useful activities I can think of for the manager:

  1. Eliminate the assholes. Nothing can drain the life force out of your employees as much as a few sadistic assholes who seem to exist for the sole purpose of making life hard for others.
  2. Make sure your employees are learning something every day. Ideally they should lean things that directly help on the job, but learning anything at all should be encouraged. The more you know, the more connections form in your brain and the easier every task becomes. Learning creates job satisfaction and supports a personís ego and energy level. As an OA5 manager you need to make sure every person is learning something every day. Here are some ways :

Collectively all these little things create an environment that supports curiosity and learning. Imagine a job when after youíve screwed up your boss says, "What did you learn?" instead of "What the hell were you thinking?"

  1. Teach employees how to be efficient. Lead by example, but also continuously reinforce the following behavior in others:


A culture of efficiency starts with the everyday things that you can directly control: clothes, meeting lengths, conversations with co-workers and the like. The way you approach these everyday activities establishes the culture that will drive your fundamental activities.

What message does a company send when it huddles its managers together for several days to produce a Mission statement that sounds something like this:

"We design integrated world-class solutions on a worldwide basis"

Answer: it sends a message that the managerís canít write canít think and canít identify priorities.

Managers are obsessed with the big picture. They look for the big picture in Vision Statements and Mission statements and Quality programs. I think the big picture is hidden in the details. It is in the clothes, the office supplies, the causal comments and the coffee. Iím all for working for the big picture, if you know where to find it.

Finally- and this is the last time Iím going to say it- weíre all idiots and weíre going to make mistakes. Thatís not necessarily bad. I have a saying " Creativity is allowing yourself to make mistakes. Art is knowing which ones to keep."

Keep your people fresh, happy and efficient. Set a target and get out of their way. Let art happen. Some times idiots can accomplish wonderful things.