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If enacted, “Trumpcare” will fail…for the same reason Obamacare is failing

This week, another exception to my usual blog topics of management and workplace-related issues.

(However, considering access to affordable healthcare concerns virtually all U.S. workers and their families, I feel such an exception is warranted.)

So for today’s post, an open letter to Senate Majority Leader Mitch McConnell and his Republican colleagues on Capitol Hill.

In it, I expose a flaw in the GOP’s proposed healthcare bill…a flaw it shares, ironically, with Obamacare.


 

Dear Senate Majority Leader McConnell:

You and your Republican colleagues in the Senate are on the verge of making a mistake.

If enacted, “Trumpcare” will fail for the very same reason the Affordable Care Act (aka “Obamacare”) is currently failing.

Allow me to explain.

The Senate/GOP plan—like Obamacare—represents a “market-based solution” to the challenge of providing all U.S. citizens with access to affordable healthcare. But for any market-based solution to work, the market itself must meet certain, very specific criteria. Unfortunately, healthcare markets do not meet those criteria, and never will.

Specifically:

  1. Consumers must be able to enter and exit the market of their own free will.

As any economist can tell you, markets simply don’t work if you are forced to participate.

Think of it this way: If you need new jeans, but feel they’re over-priced, you could wear the old ones (or something else) until prices drop, or they go on sale. There’s nothing forcing you or anyone else to buy anything, so jean prices more accurately reflect actual demand. In the case of healthcare, however, this is rarely (if ever) true. If you suffer an attack of appendicitis or break your arm, for example, you’re forced to participate in the market whether you like it or not. You can’t wait until doctors lower their prices (or for the next open enrollment period). As a result, prices in healthcare market will always be inflated. Consumers will always pay more than they should, and suppliers will always be able to overcharge – and the market will never be truly efficient.

And yet the current Senate plan—like Obamacare—fails to account for this.

 

  1. Price information must be made available to consumers for the products/services they’re planning to buy BEFORE they buy them.

For a market to function at all, consumers must know how much things cost. This is obvious enough. For example, imagine trying to comparison shop for those jeans if no one’s willing to tell how much they charge?

Now under the proposed Senate plan (just like Obamacare), consumers would of course have access to pricing information prior to purchasing a healthcare plan. But this is only the half of it. Given that most of these plans have a deductible (often quite high), consumers must be made aware of how much specific health services cost as well, and prior to purchasing those services.

So, for instance, before selecting a particular treatment (like a mastectomy), a consumer needs to first know how much the surgeons and hospitals offering this procedure charge in order to get the quality care that they can afford. But under the current Senate plan (just like ObamaCare) this information will be difficult, if not possible to obtain – either because physicians/hospitals aren’t required to disclose it, or because they honestly can’t say, since each patient case is unique. Nevertheless, a market cannot function efficiently under such circumstances.

And yet the Senate plan—like Obamacare—fails to account for this.

 

  1. Consumers must be able to understand what they are purchasing.

Few of us are trained physicians. Yet this is what we would need to be in order to make truly informed healthcare choices. In the patient care market, however, consumers have always had to trust someone else completely (either their doctor, or their insurer) to tell them what specific care they do, or do not need. But a market cannot function efficiently when this is the case.

And yet the current Senate plan—like Obamacare—fails to account for this.

 

  1. Consumers must not be impaired, or otherwise prevented from behaving rationally.

For a market to function efficiently, consumers must have the mental and emotional capacity to act in their own best self-interest. They must be “of sound mind and body,” in other words. But healthcare consumers are often anything but. Try making a careful, reasoned decision with a dislocated shoulder, for instance. Or try shopping for a healthcare plan while you think you’re having a heart attack. Again, a market cannot—nor will it ever—function efficiently if consumers are under duress while making healthcare decisions.

And yet the current Senate plan—like Obamacare—fails to account for this.

 

To summarize, healthcare markets do not meet several of the most basic criteria necessary for markets to function efficiently. A market-based solution to the challenge of providing affordable healthcare to all will therefore never work.

In light of this, I would urge you and your colleagues to pursue a more tried-and-true approach. For example, you might consider some version of a “single payer” system that works so well in many other countries. The Medicare model that is very popular with millions of voters in this country (including Republicans, independents, and Democrats alike) is another possibility.

Thank you for your time, and please let me know if I can be of further assistance to you in this matter.

Kind regards, etc., etc.

 


 

Your thoughts?

Otherwise, see you next Friday…

 

Ignore that résumé?

For those of you familiar with my “Unconventional (mis)management non-wisdom” series of posts, you know that I devote each installment to some tried-and-true management principle, or pearl of management “wisdom.”

Specifically, I take pains to cast it into doubt, or otherwise debunk it.

For instance, in the past I’ve called into question such “indisputable” management dogma as:

(You can click on each to link to the specific post.)

 

So why do I go to the trouble? Is it because I have an axe to grind with the corporate world? Or do I just enjoy throwing stones at glass houses (or maybe that should be “corner offices”)?

Actually, far from it.

It’s simply the best way I can think of to demonstrate how very little—if anything—is known about good management, and its practice.

Consider it:

  • Maybe managing is still a relatively new—and therefore unexplored—science…
  • Maybe some core management principle (or principles) have yet to be discovered and/or described…
  • And maybe that’s why for every pearl of management “wisdom” you might come across there’s a successful business person, CEO, or manager who offers a compelling argument for engaging in precisely the opposite behavior

 

Take the importance of pre-screening job candidates based on their résumé, for example – which is the subject of this week’s post…


 

“I never read a résumé…”

It perhaps goes without saying that résumés are widely considered to be critically important to landing that dream job (or at least getting your foot in the door).[1] A professional résumé cannot be stressed enough according to consultant Judi Roo, because “well-written résumés produce results.”[2]

That’s not to say that recruiters spend a lot of time reading them, however. According to a recent article in the Harvard Business Review, the average time your future ex-boss spends looking over this document is around six seconds.[3]

Nevertheless, read them they do.

As The Harvard Business Toolkit explains, résumés are a critical part of the screening process, if for no other reason than to ensure prospective job candidates possesses the necessary qualifications.[4] And once an interview has been scheduled, it is furthermore seen as good practice for those conducting the interview to become familiar with each candidate’s résumé, or CV. According to the website Ask A Manager, any interviewer or hiring agent who doesn’t do this to prepare is just plain “bad.”[5]

So in light of all this, it is interesting to hear Barbara Corcoran’s thoughts on the matter. Corcoran is a successful American businesswoman, investor, speaker, consultant, syndicated columnist, and author. But many of you probably know her better as one of the celebrity judges on ABC’s reality-TV show “Shark Tank.”

And in a recent edition of the “Corner Office” series published by The New York Times, she had this to say:

“I never read a résumé until after the interview because you never know who wrote it, and you can be fooled by it. If you read a résumé, the interview is nothing but a business small-talk session confirming stuff you just read.”[6]

 

See you next Friday.

 

 

Endnotes

[1] “7 Unconventional ways to land your dream job” by David Williams. Forbes (online), July 23, 2104. https://www.forbes.com/sites/davidkwilliams/2014/07/23/7-unconventional-ways-to-land-your-dream-job/#4375ff2a1582. Retrieved June 22, 2017.

[2]“The Importance of a Well Written Professional Résumé” by Judi Roo. https://www.linkedin.com/pulse/importance-well-written-professional-resume-roo-resumes-judi-roo. Retrieved June 22, 2017.

[3] “Yes, Your Résumé Needs a Summary” by Jane Heifetz. Harvard Business Review (online), July 28, 2015. https://hbr.org/2015/07/yes-your-rsum-needs-a-summary. Retrieved June 22, 2017.

[4] Harvard Business Essentials Manager’s Toolkit, Subject Advisor: Christopher Bartlett. (2004), Harvard Business School Press: Boston, MA, p. 25.

[5] “Interviewers who haven’t even read you résumé” by Alison Greene. Posted February 4, 2012. http://www.askamanager.org/2012/02/interviewers-who-havent-even-read-your-resume.html. Retrieved June 22, 2017.

[6] “The Power of a Positive Attitude,” by Adam Bryant. The New York Times (Corner Office Series), June 4, 2017, p. B2. https://www.nytimes.com/2017/06/02/business/barbara-corcoran-shark-tank.html?rref=collection%2Fcolumn%2Fcorner-office&action=click&contentCollection=business&region=stream&module=stream_unit&version=latest&contentPlacement=3&pgtype=collection&_r=0.

Paradox of the week – Adam Grant

As many of my regular readers are by now well aware, I have a problem with contradictory or paradoxical management advice.

I have, after all, devoted an entire series of posts to the topic, which you can link to by clicking here.

But contrary to what you may think, it’s not just that I find this phenomena to be annoying.

Or frustrating.

No – my intent in bringing this issue up again and again (and again) is because it’s the best way I can think of to demonstrate how very little—if anything—is known about good management, and its practice.

I mean, think of it. If physicists or astronomers contradicted themselves as much as management “experts” do, how much stock would we put in those sciences? (For instance, imagine an astronomer insisting that “the sun revolves around the earth,” and then immediately offering evidence that the earth revolves around the sun?)

And yet not only do management scholars and “scientists” engage in this sort of contradiction all the time – they seem to be either completely unaware that they are doing so, or simply don’t care.

So before I get to this week’s paradox – I’d like to offer you the following thought to keep in mind:

Maybe managing is still a relatively “new”—and therefore unexplored—science. Maybe some core management principle (or principles) have yet to be discovered and/or described.

That would certainly explain why no one can seem to get their story straight when it comes to how best to manage a group of people. It would also account for all of the contradiction and paradox I’ve found in the management advice literature over the years.

It might even explain why good managers are so hard to find.

Alright, so much for the preamble. For this week’s installment, an example from Adam Grant’s 2013 bestseller Give and Take


 

Give and Take

Admittedly, Mr. Grant’s book isn’t about managing or management specifically. Instead, it’s part of a growing body of self-help literature focused on achieving personal success in one’s career, and in life.[1] Or, as the book’s jacket describes it, Give and Take is about “the secret to getting ahead.”

(Presumably, though, managers would like to “get ahead” just as much as anyone else does.)

So with this in mind, I offer the following for consideration:

  • In his text, Grant makes a strong case for being what he calls a “giver,” as opposed to a “matcher” or “taker.” The data suggests, he insists, that those at the top of the “success ladder” are generous people (p. 7).
  • But givers don’t get to the top if they’re giving just to be “nice,” or “altruistic,” Grant adds (p. 10). Those who put others before themselves fair no better (and often end up worse off) than the matchers and takers. Instead, givers who succeed “are every bit as ambitious [my emphasis] as takers and matchers.” (p. 10).
  • Nevertheless, on page 26 Grant contradicts himself. Any giving you might do that is motivated by ambition or the desire to succeed, he now asserts, will likely backfire:

But if you do it [become a giver] only to succeed, it probably won’t work.

 

See you next Friday.

 

 

[1] “’Self-help’ books set to fill publishers coffers in 2014” by Viv Groskop, The Guardian (online), Dec. 28, 2013. https://www.theguardian.com/books/2013/dec/28/self-help-books-literature-publishers-growth. Retrieved June 15, 2017.

 

Executive Pay

Recently, The New York Times published a list of the 200 best paid CEOs in the U.S. So for this week’s post, a few highlights from their rankings…

According to The NYT study (which was conducted on behalf of the news organization by Equilar), total compensation for top executives increased in 2016, after slipping the previous year. On average, pay packages for these CEOs increased by 16% relative to 2015. The average American worker, on the other hand, saw about a 2.5% percent gain in real wages.[1]

The big winner in 2016 was Thomas Rutledge, CEO of Charter Communications (a telecommunications company that you probably know better as Spectrum) according to Equilar.

Rutledge received a total compensation package of $98,012,344 last year, including a base salary of $2,000,000; cash bonuses totaling $7,651,397; stock awards of $10,086,658; stock options worth $77,980,740; and $283,549 in perks and other rewards.

Number two in the rankings—Leslie Moonves of CBS—made almost $30M less. He received $68,594,646 in total compensation, including $3,500,000 base pay, $32,000,000 in cash bonuses, $31,946,942 in stock, and $1,147,704 in other rewards.

Here are few other highlights from this list:

  • Nike CEO Mark Parker clocked in at #5 ($47,615,302 in total compensation) which probably comes as no great shock to you given that company’s success. What may surprise you, however, is that he was beat out for the #4 position by the Estee Lauder CEO, Fabrizo Frida ($47,691,779).
  • Safra Catz of Oracle was the highest paid female CEO in 2016 according to the study ($40,943,812 in total compensation), and the only woman to crack the top 10 (she was #8). Interestingly, Catz’s co-CEO at Oracle, Mark Hurd, made a bit more than she did ($41,121,896) – enough to earn him the #6 spot.
  • Howard Schultz, the well-known CEO of Starbucks, came in at #44 ($21,815,498 in total compensation) according to Equilar, putting him just behind current Wal-Mart CEO C. Douglas McMillon ($21,841,988).
  • Pepsi beats Coke when it comes to be executive pay, it seems: Pepsico CEO Indra Nooyli received $26,168,597 in total compensation (#30), while Coca-Cola CEO Muhtar Kent received $16,028,941 (#67).
  • Secretary of State Rex Tillerson was awarded $25,144,255 last year as CEO of Exxon Mobil (#31), before assuming his current duties. And a company you may recall from the Bush years, as well as the more recent Deepwater Horizon disaster, Halliburton’s CEO David J. Lesar, received $17,441,226 in 2016 (#92).[2]
  • The CEOs of health insurance companies were among those well represented in the top 200. Universal Health Service’s CEO Alan Miller received $19,823,149 (#59), Aetna’s Mark Bertolini received $18,653,231 (#74), and UnitedHealth Group’s Stephen Helmsley received $15,695,513 (#121).
  • And so were the CEOs of pharmaceutical companies: Regeneron Pharmaceuticals (#18), Johnson&Johnson (#50), Biogen (#90), Vertex (#93), Merck (#97), Pfizer (#98), Biomarin Pharmaceuticals (#100), Bristol-Myers-Squibb (#101), Amgen (#104), Abbott Laboratories (#111), Eli-Lilly (#139), and Gilead Sciences (#165).
  • And yes, Mylan’s much criticized CEO Heather Bresch even made the list (#188). She was awarded $13,269,928 in total compensation in 2016 – a year in which her company opted to raise the price of her company’s EpiPens by nearly 500%.[3]
  • Finally, Goldman-Sachs CEO Lloyd C. Blankfein received $20,204,374 in total compensation (#55).

 

Notably absent from these rankings were such celebrity CEOs as Tim Cook (Apple), Mark Zuckerberg (Facebook), and Elon Musk (Tesla).

As The Times points out, this can be attributed to the variety of ways in which executive compensation might be calculated. For instance, Equilar includes the full value of a stock grant in the year it was awarded, whereas others will spread the value of these grants over a multi-year period.

One of the organizations that does this is Bloomberg, and their 2016 list of the 10 best paid CEOs is worth comparing to Equilar’s. According to their assessment, both Mr. Cook and Mr. Musk make the cut – receiving $150,036,907 (#2) and $99,744,920 (#5) in total compensation, respectively. And in fact, the only CEO to make the top 10 on both lists was CBS’s Leslie Moonves. (He came in at #9 according to Bloomberg.)

But no matter how you slice it, all of these CEOs are extremely well compensated. And this, of course, is a source of growing frustration for most Americans. According to a 2016 study conducted by the Stanford Business School, seventy-four percent of Americans believe CEOs are overpaid…even though that same report found most Americans underestimate how much executives receive:

“The typical American worker believes a CEO earns $1 million in pay…whereas median reported compensation for the CEOs of these companies is approximately $10.3 million…” (p. 4)

Finally, it is perhaps worth noting that 50 years ago, the average CEO “only” made 20 times what their employees earned, according to The Times’ article. Today, it stands at around 350 times the average American worker’s salary – which The Times reports is $37,632 according to figures maintained by the AFL-CIO.

And Mr. Rutledge?

Last year he made 2,617 times that amount.

 

See you next Friday.

 

Endnotes

[1] https://www.bls.gov/news.release/empsit.nr0.htm. Retrieved June 8, 2017.

[2] In the run up to the 2003 Iraq War, Halliburton was awarded a $7 billion no-bid government contract. The organization was later accused of overcharging the Pentagon. From: http://news.bbc.co.uk/2/hi/middle_east/7444083.stm. Also, investigations carried out by the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling found that Halliburton was jointly at fault along with BP and Transocean. Halliburton subsequently pleaded guilty to destroying evidence after the April 2010 disaster. From: https://en.wikipedia.org/wiki/Halliburton#Sale_of_KBR. Both retrieved June 8, 2017.

[3] “Painted as EpiPen Villan, Mylan Chief Says She’s No Such Thing” by Katie Thomas. The New York Times, Aug. 26, 2016. https://www.nytimes.com/2016/08/27/business/painted-as-a-villain-mylans-chief-says-shes-no-such-thing.html?_r=0. Retrieved June 8, 2017.

Paradox of the Week – “Corner Office”

As some of you may know, on page two of the Business Section of the Sunday New York Times you’ll find a weekly feature called “Corner Office.”

It’s curated by Adam Bryant, and each installment consists of an interview with a different “top executive,” in which the two discuss management and leadership. And as you might expect, much of what is said consists of advice on how to best manage a business.

So for this edition in myParadox of the week” series of posts, a closer look at Mr. Bryant’s series and what it has to offer. But this time around I’m not going to focus on the contradictory statements or paradoxical assertions frequently offered by the executives he interviews – although there would seem to be no shortage of them. For instance:

  • In Mr. Bryant’s interview with Alexandra Wilkis Wilson (CEO of Glamsquad, an app-based beauty provider), Ms. Wilson confessed that one of the things she liked least about investment banking (her previous career) was the “long hours.” But when asked about what she looks for when hiring, she replied: “I look for people who are willing to put in the hours.”
  • In her 2016 interview, Jane Rosenthal (movie producer, founder and Exec Chair of Tribeca Film Festival) had this to say about her childhood upbringing: “She [Rosenthal’s mother] also always said to me that you can absolutely do whatever you want. It never occurred to me that ‘no’ was an option.” And yet later, Rosenthal explains why she majored in film and television in college, instead of acting: “My parents said no.”
  • And Beth Comstock (Vice Chairperson of GE) went on record as saying: “When you get teamwork right, its like magic because everyone has a role. You’re different, but you come together [my emphasis]…” But later she explains: “Tension is actually good. If everybody on the team thinks something is good, it’s probably not that good… I’ve lately tried to incorporate more tension…”

So yes, the contradictions are there if you look for them.

For this week’s post, however, I’d like to offer you something a little different. I’d like to take a moment to point out that contradiction and paradox seems to have become entirely acceptable to the management advice world. Far from being unaware of it, there would seem to be many out there who actually embrace it. And based on his column, I’d argue that Mr. Bryant’s is one such individual.

Here’s an example of what I mean: In October of last year, Bryant interviewed Austin McChord (CEO of Datto, a data protection company), and Mr. McChord is quoted as saying:

There is this trend, especially with millennials, where everything is awesome all the time. At Datto, very few things are awesome, and it takes exceptional achievement to receive an honest pat on the back.

And as a result, Bryant made an editorial choice to title this particular piece: “It’s Not Awesome Till It’s Awesome.”

Clever, to be sure. Catchy even. And it obviously calls to my mind the sort of homespun wisdom that former New York Yankees manager Yogi Berra might have offered. (Remember “It ain’t over till its over”?).

But does this really say anything useful/meaningful/insightful about managing?

No – of course not.

Consider it: What would be the reaction if an engineer or building inspector were to reply “It’s not ready until it’s ready” when asked whether a particular structure is safe to occupy? Or, imagine what might happen if your company’s chief financial officer were to stand up at a shareholder’s meeting and assert: “We won’t make any money until we turn a profit.” That might get a chuckle from the audience (if you’re lucky), but my guess is that those shareholders would expect a pretty robust analysis of the company’s finances to follow.

In other words, in either case such comments wouldn’t satisfy anyone, and would likely be considered inappropriate.

And yet when it comes to managing, these sorts of paradoxical quips seem to be seen not only as acceptable, but are often viewed as savvy business advice.

Here’s another one. After his 2011 interview with Robin Domeniconi (senior vice president and chief brand officer for the Elle Group), Mr. Bryant titled that “Corner Office” installment:

“Say anything, but phrase it the right way”

Sure, it sort of makes sense…I guess. But technically speaking, if you have to phrase things a certain way, you can’t really say anything.

My own introduction to this sort of contradiction/paradox being passed off as bona fide management knowledge came when I first read In Search of Excellence (1982), which is still considered one of the most influential management advice books of all time. In it, authors Tom Peters and Robert Waterman Jr. articulate 8 “core management practices” of successful companies. And one of those—the final, “summary principle”—is “Simultaneous Loose-Tight Properties.”[1]

Simultaneous loose-tight? What could that possibly mean?

According to Peters and Waterman, it is “the co-existence of firm central direction and maximum individual autonomy.” Or as they explain “having one’s cake and eating it too.”[2]

Well, forgive me for saying so, but I don’t buy it. Not because I think Peters and Waterman aren’t being sincere, though. I’m sure they mean what they say. But to me—as a scientist—it just doesn’t make sense. Or at least it doesn’t make any more sense that telling someone to “whisper at the top of your lungs.”

So how did it come to this?

Why, in other words, is it that what wouldn’t be acceptable in many other disciplines (such as math, engineering, or physics) not only seems to be tolerated, but lauded as insight by the management community?

In my opinion, it’s because when it comes to managing, no one has yet to figure any of it out in any sort of meaningful way. Good management. Bad management. We know it when we see it (sort of), but that’s about it. We have yet to come up with a defining principle (or principles) for what it really is, and how to practice it.

Yet.

That’s my thought for the week. But before I go, here’s a few more titles crafted by Mr. Bryant for his “Corner Office” interviews. I consider them all to be just as contradictory/paradoxical/nonsensical as those others – but let me know what you think. Or, if you’ve come across something similar in your own reading, or in your experiences as a manager, please let me know as well. (You can post your responses in the comment section below.)

And so…

Learn to See the Plan A in Your Plan B” (October 21, 2016)

The Truth May Hurt, but It Also Heals(March 18, 2016)

If it can’t be done, you haven’t tried” (Feb 12, 2016)

Find the Questions in Every Answer” (December 17, 2015)

Lead With Strengths, and Weaknesses” (June 30, 2015)

A Believer and Skeptic in One” (June 26, 2015)

Achieving Breakthroughs in Small Bites” (June 20, 2015)

Your Imperfection can be Your Strength” (August 9, 2014)

On putting it together (after taking it apart)” (July 5, 2014)

On achieving the unachievable” (May 15, 2014)

On making judgments instead of decisions” (May 3, 2014)

On putting your followers first” (March 22, 2014)

On embracing ‘organized chaos’” (February 8, 2014)

 

See you next Friday.

Endnotes

[1] Peters, Thomas, and Robert Waterman, Jr. In Search of Excellence. (1982) New York: HarperBusiness, p. 318.

[2] Ibid., p. 318.

26 Habits of Bad Managers: The Trump evidence

Two weeks ago I published a post titled: “100 Days (Or, 26 Habits of Bad Managers).”

As you may recall, my inspiration for those “bad habits” was behavior or actions taken by President Trump and/or his administration during his first 100 or so days in office.

And perhaps not surprisingly, I’ve gotten some pushback. For instance, one of you wrote:

I would love to see specific examples of the 26 bad habits you attribute to Trump. …I don’t see how a lot of these are accurate labels for [the President].”

So this week, I offer you just that for your consideration.

What follows are examples of specific actions (or tweets) by Trump or his administration, that I believe can be fairly interpreted as evidence of each one of these behaviors.

Now to be clear, I’m not saying that every single one of the 26 is necessarily a habit of Trump’s (although many appear to be). I would therefore hesitate to characterize them as “labels” that might be assigned to the President. Telling a single lie does not make someone a liar in my book. What I am saying, however, is that on at least one occasion during his time in office (or shortly beforehand), Trump has acted in a way consistent with each.

Perhaps my disclaimer from that post two weeks ago is worth repeating here:

  • I’m not saying Trump is a bad manager necessarily; it’s possible that he doesn’t manage his businesses the same way he seems to be running the country
  • I’m not saying that Trump does all of these things, or behaves this way all of the time
  • I’m not even saying that it’s not okay to engage in some of these behaviors on occasion. (It is, however, probably a bad idea to make them habits.)

And so…

 

Bad Manager Habit #1: Lack of credibility.

For evidence of Trump’s lack of credibility, one need look no further than Day One of his Presidency. Trump (and his spokespeople) repeatedly claimed that attendance at his inauguration was greater than Obama’s: http://www.independent.co.uk/news/world/americas/two-pictures-that-prove-donald-trump-is-lying-inauguration-crowds-washington-dc-womens-march-barack-a7539876.html.

…and that he won by the largest electoral college margin since Reagan: http://www.cnn.com/2017/02/16/politics/donald-trump-electoral-victory-claim/,

 

#2: Doubling-down on a poor decision.

Here, the two deeply unpopular (and failed) attempts by the Trump administration to ban travelers from certain Muslim-majority countries will suffice: https://www.bloomberg.com/politics/articles/2017-03-15/trump-s-second-travel-ban-is-blocked-by-u-s-judge-j0bk602s.

 

#3: Thinking/pretending you know more than you actually do.

In this video compilation, Trump claims he is better than anyone else at 24 different things, including “the military” as he puts it: https://www.youtube.com/watch?v=vzbHXKp6Y6I.

 

#4: Not taking your position seriously. Trump’s refusal to divest from his businesses while serving as our nation’s President smacks of putting personal interest above patriotic duty: http://www.reuters.com/article/us-usa-trump-finance-idUSKBN14V21I.

 

#5: Blaming others for your mistakes. When the Republican Healthcare Bill (AHCA or “TrumpCare”) failed to pass the majority Republican House the first time around, Trump assigned blame to the Democrats: http://www.cnn.com/2017/03/24/politics/donald-trump-health-care-blame/.

 

#6: Talking too much. His rambling press conferences: http://www.vanityfair.com/news/2017/02/donald-trump-press-conference-media.

 

#7: Thinking that everyone is against you. In October of last year, Trump claimed there was a “global conspiracy” against him: https://www.washingtonpost.com/news/the-fix/wp/2016/10/13/donald-trump-leans-in-hard-to-the-conspiracy-theory-of-the-2016-election/?utm_term=.29dcb1e2fcc7.

 

#8: Taking yourself too seriously. His gleeful interest in how poor the ratings were for the “The Apprentice” while Arnold Schwarzenegger was host suggests to me that he takes himself a bit too seriously: http://www.foxnews.com/politics/2017/03/04/trump-tweets-schwarzenegger-fired-by-his-ratings-not-by-me.html.

 

#9: Not listening. Trump’s decision to forgo daily intelligence briefings could be seen as an unwillingness to listen: http://www.cnbc.com/2016/12/12/trump-claims-he-doesnt-need-daily-intelligence-briefings-because-hes-a-smart-person.html.

And according to some, Trump may not be listening to US Generals: http://www.defenseone.com/politics/2017/02/winning-or-not-trump-doesnt-seem-be-listening-his-generals/135781/.

 

#10: Not following through on what you say. Trump seems to have decided not to prosecute Clinton, after all but promising to: https://www.nytimes.com/2016/11/22/us/politics/donald-trump-hillary-clinton-investigation.html?_r=0.

And then there is his reversal/flip-flop on Medicaid:

 

#11: Poor organizational skills. This is admittedly difficult to quantify, much less prove. Nevertheless, it seems at least some management “experts” feel Trump is anything but an able administrator: https://www.nytimes.com/2017/02/02/business/donald-trump-management-style.html.

 

#12: Poor work ethic. Trump golfs a lot for a new president. A lot. http://www.businessinsider.com/how-often-trump-golfed-during-first-100-days-compared-to-obama-bush-and-clinton-2017-4.

 

#13: Making threats. Idle, veiled, or otherwise. I’m tempted to cite Trump’s repeated threats to sue people, or threatening judges who rule against him, but his tweet on May 12 (8:26 am) referring to the recently fired FBI Director will suffice: “James Comey had better hope that there are no “tapes” of our conversations before he starts leaking to the press!”

 

#14: Blaming your predecessor for your own problems. “I have to say that the world is a mess. I inherited a mess.” From: https://www.bostonglobe.com/news/politics/2017/04/06/how-much-longer-can-trump-blame-obama/ocaP2Kis0dkWumAzA9wBKO/story.html.

 

#15: Lack of transparency. Trump’s recent threat to discontinue press briefings: http://www.slate.com/blogs/the_slatest/2017/05/12/trump_suggests_he_ll_end_press_briefings_threatens_comey_with_an_allusion.html.

 

#16: Spending a lot of time out of the office. Trips to Mar-a-lago have become somewhat of a norm: http://thehill.com/homenews/administration/328203-trump-on-pace-to-spend-more-in-first-year-on-travel-than-obama-did-in.

 

#17: Feeling threatened by your own employees. Trump’s decision to remove Steve Bannon from the National Security Council is thought by some to have been in part a response to feeling upstaged by him: “’I am my own strategist,’ Mr. Trump told the New York Post columnist Michael Goodwin…a pointed reference to what aides described as his growing irritation that Mr. Bannon’s allies are calling him the mastermind behind Mr. Trump’s victory…” From: https://www.nytimes.com/2017/04/12/us/politics/steve-bannon-white-house-trump.html.

 

#18: Creating a crisis to distract from other issues. Fairly or unfairly, the April bombing of Syria has been seen by some as a way of distracting the public from the struggles of the new administration: http://www.aljazeera.com/indepth/opinion/2017/04/donald-trumps-symbolic-strike-syria-170407122029617.html.

 

#19: Refusing to apologize when you’re wrong. Trump has refused to apologize to Obama for his baseless lie that the former President had Trump’s phones wiretapped (not to mention that whole birth certificate thing): http://www.vanityfair.com/news/2017/03/trump-refuses-to-apologize-drags-germany-into-wiretapping-lie.

 

#20: Repeated shake-ups of your closest advisors. April 7: https://www.wsj.com/articles/donald-trump-considering-major-shakeup-of-senior-white-house-team-1491588185. May 15: http://nypost.com/2017/05/15/white-house-counsel-could-be-first-to-go-in-staff-shake-up/.

 

#21: Nepotism. Trump has named his daughter Ivanka as an official White House advisor: http://www.cnn.com/2017/03/29/politics/ivanka-trump-white-house-job/.

…and son-in-law Jared Kushner as senior White House advisor: http://fortune.com/2017/03/27/jared-kushner-white-house-roles/.

 

#22: Making promises you can’t keep. Believe it or not, at one point Trump promised healthcare for everyone: http://www.thedailybeast.com/articles/2017/03/13/trump-promised-insurance-for-everyone-trumpcare-would-leave-52-million-without-it-cbo-says.

 

#23: Ignoring the facts. Trump’s executive order concerning climate change would seem to fit the bill here: http://www.ucsusa.org/news/press_release/trump-executive-order-on-climate-policies#.WRurX1KZM1g.

 

#24: Shouting down those you disagree with. (Media) “Any negative polls are fake news, just like the CNN, ABC, NBC polls in the election.” From: http://money.cnn.com/2017/02/06/media/donald-trump-poll-denialism/.

 

#25: Boasting about “your” accomplishments. It’s not uncommon for a President to laud one’s own accomplishments, but Trump has done so in a way that is perhaps particularly self-congratulatory. For example, on Feb 16, 2017, he couldn’t seem to help himself from pointing out that “I just got here” before going on to list his administration’s presumptive achievements: http://www.msnbc.com/hardball/watch/trump-brags-about-accomplishments-in-office-879189571517.

And on April 6, 2017, he boasted “I think we’ve had one of the most successful 13 weeks in the history of the presidency.” http://nymag.com/daily/intelligencer/2017/04/trump-boasts-historically-successful-13-weeks-of-presidency.html.

 

#26: Gloating. Trump continues to bring up his election victory well into his term, including at a recent rally in Kentucky: https://www.nytimes.com/2017/03/20/us/politics/donald-trump-louisville-kentucky.html.

 

And finally, a word to those of you who might be tempted to argue that Obama did something similar on occasion, or that Clinton would have behaved similarly in these circumstances. Keep in mind this isn’t a partisan thing; it’s a management thing.

Bad habits are bad habits.

 

See you next Friday.

 

Not a pretty picture

In the previous post in this series, I offered some background on the organization chart. How they came into being, and why their use has become so widespread.

But for all their apparent utility, these diagrams remain deeply unpopular.

According to David Packard (the late CEO and co-founder of the Hewlett-Packard Corporation), “after you get organized, you ought to throw your organization chart away.”[1] Robert Townsend, the former president and chairman of Avis Rent-a-Car once cautioned “never formalize, print, and circulate (your organizational chart).”[2] And according to biographer Walter Isaacson, Steve Jobs once exclaimed: “These charts are bullshit.”[3]

So why does the organization chart seem to rub so many people the wrong way?

 

Same as it ever was

To be sure, organization charts have been the subject of criticism virtually since their invention.

For example, in 1922 Henry Ford lamented that it “takes about six weeks for the message of a man living in a box on a lower left-hand corner of the chart [to reach top management].”[4] His complaint is a familiar one; the often painful sluggishness with which most corporations make decisions is frequently attributed to the process of passing information up and down the various “chains of command” that the org chart describes. As a result, the diagram has become a de facto symbol of the stifling bureaucracy and needless red tape that seems to plague so many companies.[5]

There are also those who blame org charts for inhibiting organizational improvisation and flexibility,[6] qualities thought to be increasingly important in today’s ever-changing marketplace. The rigid lines used to connect the various boxes on these diagrams all but project an unwillingness to collaborate, cooperate, or otherwise accommodate new ideas. Others would argue that most org charts are out-of-date almost as soon as they’re drawn up, such is the “speed of business.”[7]

And then there are some who would simply contend that organization charts don’t represent the “true” structure of a business, and thus are essentially irrelevant. As Warren Bennis (Distinguished Professor of Business Administration at the University of Southern California) observes, the org chart “masks as much reality as it is alleged to portray.”[8] This is perhaps particularly true when it comes to where real power and authority resides in an organization. For instance, the familiar anecdote that the boss’s secretary has just as much (if not more) power than the boss herself may cause you to smile not because it’s ridiculous to think so, but because it’s so often true.

 

The thing is not the thing

Of course, these criticisms aren’t really being leveled at the organization chart itself. Rather, it’s what they represent—namely, hierarchy—that so many people seem to object to. And organization by hierarchy is, of course, a much, much older concept.

An early reference to this organizational paradigm can be found in the Old Testament (~1491 B.C.). In the Book of Exodus (Chapter 18), Jethro advises Moses to organize his duties as a tribal elder along hierarchical lines, proclaiming:

21 Moreover thou shalt provide out of all the people able men, such as fear God, men of truth, hating covetousness; and place such over them, to be rulers of thousands, and rulers of hundreds, rulers of fifties, and rulers of tens.

22 And let them judge the people at all seasons and it shall be, that every great matter they shall bring unto thee, but every small matter they shall judge: so shall it be easier for thyself, and they shall bear the burden with thee.

The legendary warrior/general Sun Tzu also endorses organization by hierarchy in his treatise The Art of War, penned around 500 B.C. In it, he advises that an army be organized “in its proper subdivisions, (with) the gradations of rank among the officers.”[9] And around 400 B.C., the philosopher Socrates alludes to the concept of “management” as universal endeavor unto itself, as opposed to a set of skills specific to any particular enterprise. “The conduct of private affairs,” he writes, “differs from that of public concerns only in magnitude; in other respects they are similar.”[10]

These days, however, management by hierarchy is the subject of as much criticism—if not more—than the organization chart.[11] For example, given its underlying “command and control”-type mentality, hierarchy is a notion that many find offensive given modern society’s increasingly egalitarian and democratic views.[12] As Jack Welch (the former CEO of GE considered by some to be the greatest manager of the modern age[13]) once wrote, hierarchies “tend to make little generals out of perfectly normal people who find themselves [responding only to rank].”[14]

Harold Leavitt (Professor Emeritus of Organizational Behavior at Stanford University’s Graduate School of Business) is even more critical. He argues that hierarchies “breed infantilizing dependency that generates distrust, conflict, toadying, territoriality, backstabbing, distorted communication, and most of the other ailments that plague every large organization.”[15] He furthermore contends that they’re “inefficient,”[16] “slow, unresponsive, and inflexible,”[17] and that the reason we might not like hierarchies is because “they don’t like us.”[18]

 

The matrix has you

Given such widespread disdain, it perhaps not surprising to learn that over the years efforts have been made replace/modify/alter the org chart and/or the hierarchical form.

However, few to this day endure.

One of the more ambitious attempts was undertaken in the 1970’s, and resulted in what is known as a matrix organizational chart. According to this management paradigm, the hierarchical notion of “unity of command”—idea that each and every employee be assigned one, and only one supervisor—is relaxed. Employees, in other words, can be assigned multiple managers in a “matrix” organization. This modification was thought to more accurately capture the complex nature of organizational function in which authority is ambiguous, and divisions of responsibility are not always clear. It was also hoped that it might encourage cooperation and collaboration throughout the broader organization.[19]

In practice, however, the matrix-style organizational chart seems to lead to as many problems as it is intended to solve. For example, the overlapping bosses are thought to encourage turf wars instead of facilitating discussion and consensus. “Matrixed” organizations have also been blamed for fostering a general lack of accountability, as well as adding another layer of bureaucracy to organizational processes. In their studies of this organizational archetype, Raymond Hill and Bernard White concluded that matrix organizations are “exceedingly complex, ambiguous, and often frustrating environments in which to work and manage.”[20]

Another alternative to the pyramid-shaped organization chart worth mentioning is the “wagon wheel” or pizza-shaped org chart. Here, the CEO or business owner is located in the center of the diagram, with lines of authority emanating out from a central hub like spokes on a wheel.[21] Symbolically at least, this suggests that the CEO is not so much “the boss,” but a sort of grand facilitator, or hub of information. The more recent “holacracy” movement might be included as a variation on this theme. Here, authority does not reside so much with people, as with a “process.” And workgroups are referred to as “circles,” with “links” instead of managers.[22]

But again, these efforts have also proved to be short-lived, problematic, or simply have thus far failed to catch on.[23]

 

Flatter is better?

Perhaps the most enduring “re-imagining” of hierarchy is the so-called flat organization.[24]

As the name implies, this approach requires that all but the most crucial “layers” be removed from an organization’s hierarchy, thus rendering the chart as “flat” as possible. There are few (if any) middle managers, and even titles are discouraged.[25] Proponents of this organizational form maintain that it encourages decision-making at the lowest possible level – i.e. by those individuals closest to the problem or issue, and perhaps best suited to address it. Flat organizations are furthermore believed to encourage greater employee engagement at all levels, as well as a sense of “ownership,” thereby increasing overall productivity and efficiency.[26]

Nonetheless, precisely how “flat” an organization can be made remains an open question. Obviously, reducing the number of “layers” in any given hierarchy necessitates that those who do have management responsibilities be assigned more direct reports. Take that too far, however, and you either overwork your managers, or compromise their ability to be effective.[27] It is also worth mentioning that this organizational form is not really an alternative to hierarchy to begin with.[28]

Hierarchy is hierarchy, after all – no matter how “flat” you make it.

 

A necessary evil?

And then there are those who have simply come to embrace the concept. (Besides the prophet Jethro, Sun Tzu, and Socrates, that is).

Either having experimented with other organizational structures and found them wanting, or never having abandoned hierarchy in the first place, its proponents do not so much necessarily sing this management paradigm’s praises, however. Instead, they simply seem willing to accept its inevitability.

Organizational psychologist Elliott Jacques writes, for instance, that “managerial hierarchy is the most efficient, the hardiest, and in fact the most natural structure ever devised for large organizations. Properly structured, hierarchy can release energy and creativity, rationalize productivity and actually improve morale.”[29] But his is a guarded enthusiasm: “(we) might almost say that successful businesses have had to succeed despite hierarchical organization rather than because of it.” And this, of course, is faint praise at best.

Surprisingly, Professor Leavitt also appears to be an advocate. In Top Down: Why Hierarchies Are Here to Stay, he offers a number of reasons for hanging on to this notion of hierarchy. Organizing this way may fulfill certain basic human psychological needs, he offers, like “providing ladders for us to climb,” granting us a certain “illusion of security,” and may “add structure to our lives.”[30] Leavitt furthermore speculates that hierarchies could be “hardwired into the human brain” and therefore organizing according to bureaucratic principles may even be “inevitable.”[31] In his view then, management by hierarchy may not be so much a choice that we make, but something we must just learn to accept.

 

The elephant in the room…but not on the chart

So what are we to think?

Is the organization chart the single most helpful and efficient (if not necessarily most popular) management tool ever invented? Or is it an outdated symbol of all that is wrong with the modern corporate workplace?

The answer, it turns out, is neither.

The fault isn’t with anything the modern, pyramid-shaped, hierarchical organization chart depicts. It’s not what’s on the org chart, in other words, that is the problem.

It’s flaw lies in what (or who) is perhaps conspicuously absent.

 

 

Next in the series: Who’s your boss?

 

Endnotes

[1] “Lessons of Leadership: David Packard,” Nation’s Business, January 1974, p. 42.

[2] Townsend, Robert. Up the Organization. 1970. New York: Alfred A Knopf Publishers, p. 134.

[3] Isaacson, Walter. Steve Jobs. 2011. New York: Simon and Schuster, p. 223.

[4] “Origins of the Organization Chart” by Alfred Chandler, Harvard Business Review, March-April, 1988, p. 156-157.

[5] Bozeman, Barry. Bureaucracy and Red Tape. 1999. Prentice-Hall.

[6] “Org Charts: Finding what works for you” by Barry Moltz, American Express OPEN Forum, Feb 19, 2015. (Retrieved May 11, 2017.) https://www.americanexpress.com/us/small-business/openforum/articles/make-organization-chart-stronger/.

[7] “What is an organization chart?” (Subsection: Limitations of Org Charts) from Lucid Chart at https://www.lucidchart.com/pages/organizational-charts. Retrieved May 11, 2017.

[8] Bennis, Warren. Leaders: Strategies for Taking Charge (2nd Ed). 1997. New York: HarperCollins Publishers, p. 47.

[9] Tzu, Sun. The Art of War. 2002. Mineola, NY: Dover Publications Inc., Mineola. p. 40. (Estimated to have been written around 500 B.C.)

[10] Shafritz, Jay M. and J. Steven Ott. Classics of Organizational Theory (Fifth Edition). 2001. Philadelphia, PA: Harcourt College Publishers, p. 36.

[11] “Hierarchy is overrated” by Tim Kastelle, Harvard Business Review, Nov. 20, 2013. https://hbr.org/2013/11/hierarchy-is-overrated. Retrieved May 11, 2017.

[12] Leavitt, Harold J. Top Down: Why Hierarchies Are Here to Stay and How to Manage Them More Effectively. 2005. Boston, MA: Harvard Business School Press, p. 24

[13] “The Ultimate Manager” by Geoffrey Colvin. Fortune Magazine (archived), November 22, 1999. http://archive.fortune.com/magazines/fortune/fortune_archive/1999/11/22/269126/index.htm. Retrieved May 11, 2017.

[14] Welch, Jack. Winning. 2005. New York: HarperCollins, p. 116.

[15] Leavitt, op. cit., p. 1.

[16] Ibid., p. 22.

[17] Ibid., p. 24.

[18] Ibid., p. 25.

[19] Hill, Raymond E. and Bernard J. White Matrix Organization and Project Management Michigan Business Papers #64, 1979, (Division Of Research, Graduate School Of Business Administration, University Of Michigan, Ann Arbor, MI).

[20] Ibid., p. 4.

[21] Johnson, William C., Richard Chvala, and Frank Voehl. Total Quality Marketing. 1996. Boca Raton, FL: St. Lucie Press, p. 108.

[22] Robertson, Brian J. Holacracy: The new management system for a rapidly changing world. 2015. New York: Henry Holt and Company, LLC.

[23] “How a Radical Shift Left Zappos Reeling” by Jennifer Reingold, Fortune (online), March 4, 2016. http://fortune.com/zappos-tony-hsieh-holacracy/. Retrieved May 11, 2017.

[24] Lemons, Jane Fullerton. “Flat Management.” Issue: Flat Management. 2017. SAGE Publishing.

[25] “The Five Types of Organizational Structures: Part 3, ‘Flat’ Organizations” by Jacob Morgan, Forbes (online), July 13, 2015. https://www.forbes.com/sites/jacobmorgan/2015/07/13/the-5-types-of-organizational-structures-part-3-flat-organizations/#1e3e83c96caa. Retrieved May 11, 2017.

[26] “What Kind of Leadership is Needed in Flat Hierarchies” by Viviam Giang, Fast Company (online), May 19, 2015. https://www.fastcompany.com/3046371/what-kind-of-leadership-is-needed-in-flat-hierarchies. Retrieved May 11, 2017.

[27] This is a fundamental management paradox that I’ve discussed repeatedly in previous posts, including: “Flatten that span??” [Video post] and “It’s not what you do. It’s when you do it.

[28] “The Five Types of Organizational Structures: Part 2, ‘Flatter’ Organizations” by Jacob Morgan, Forbes (online), July 8, 2015. https://www.forbes.com/sites/jacobmorgan/2015/07/08/the-5-types-of-organizational-structures-part-2-flatter-organizations/#63b798686dac. Retrieved May 11, 2017.

[29] “In Praise of Hierarchy” by Elliot Jacques. Harvard Business Review (January-February 1990).

[30] Leavitt, op. cit., p. 32-36.

[31] Ibid., p. 44&13, respectively.

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