There’s an essential management rubric that I go overboard to impress upon newbie supervisors: the No-Surprise Rule.
It’s simple: Don’t let your boss be caught flat-footed by something you should have let him know about. Unfortunately, sometimes the simplest concepts are also the easiest to overlook. I can’t tell you how many managers—myself included—have failed to heed it, occasionally with disastrous consequences.
Today’s object lesson comes from Merrill Lynch CEO Stan O’Neal. He’s getting bounced by his board of directors, essentially because he forgot the rule. As The Wall Street Journal reported, “The 56-year-old CEO was negotiating the terms of his forced departure [Sunday] afternoon in the wake of a multibillion-dollar write-off he announced last week.”
O’Neal seems to have been a difficult person to work for. That’s not uncommon for CEOs, but probably even more the case with large, public companies. “Some former colleagues say O’Neal’s talent and steely drive came with a tragic flaw,” the Journal reported.
“He didn’t much engage in debate, kept his own counsel and had little use for the kind of strong-willed subordinates who might have helped him steer clear of the subprime troubles that brought him down.”
But that’s not what ultimately brought him down. Merrill Lynch announced last week that it would write down $8.4 billion in the third quarter, “$7.9 billion of that connected to its revaluation of mortgage-related assets—the largest loss in Wall Street memory.” The problem is that O’Neal had originally told the Merrill Lynch board that the loss would only be $4.5 billion.
“What bothered the board was that the size of the loss went up at an alarming rate,” a source told the Journal.
“If anything,” the Journal reported, “O’Neal should have ‘over communicated’ with his board about Merrill’s problems, this person said, but O’Neal didn’t walk the board through the reasons for the write-off’s increase as much he should have.” O’Neal also made some other missteps, but it was letting his board be surprised by things like this that did him in.
I’m always surprised when I see veteran managers and executives forget this essential element of corporate survival. I remember starting a job and telling my new boss that I would communicate to her everything I thought she might be remotely interested in until I had a better sense of what she wanted to know. I thought it was better to overdo it at the start, and I was right. We ended up having a great relationship, largely on the strength of our personal communications.
Still, I’ve forgotten the rule at times—always to my regret. It’s never pretty when you do slip up, especially when the boss wonders why she’s the last one to find out something you should have made it a point to tell her. It’s tough to explain away.
Generally, you can’t.
If you’re lucky, you learn from the faux pas and live to manage another day. Stan O’Neal won’t get that chance—not at Merrill Lynch, anyway. But then, he’ll probably get a nice big severance package to ease the sting.
As the Times has discovered, “Many businesses are seeking to reduce their medical bills by paying for programs to help employees stop smoking. A decade ago, such programs were rare. But recent surveys indicate that one-third of companies with at least 200 workers now offer smoking cessation as part of their employee benefits package. Among the nation’s biggest companies, the number may be nearly two-thirds of employers.” The story goes on to quote Helen Darling, president of the National Business Group on Health, who says that “Tobacco cessation has been the hot topic for the last year.”
In fact, the workplace stop-smoking movement has gotten to be so common that we’ve even written about the next step in the health-monitoring process: battling employee obesity (“Will the Obese Be Penalized by Insurers Like Smokers?“)
“For businesses, it is a bottom-line calculus,” the Times story says of the smoking cessation trend.
“Spending as much as $900 or so to give a participant free nicotine patches and drugs to ease withdrawal, as well as phone sessions with smoking addiction counselors, can more than offset the estimated $16,000 or more in additional lifetime medical bills that a typical smoker generates, according to federal health data. That federal figure does not count the costs of absenteeism or the drain on productivity when smokers periodically duck outside for a cigarette.”
Oddly enough, stories like this one–although common knowledge to people in management, HR and the business world who have been paying attention–don’t become big news in many quarters until a newspaper of record like the The New York Times figures out what a lot of people already know and publishes a “news” story. And because the Times is one of those media outlets that helps sets the agenda for everyone else, my guess is that the big push to get employees to stop smoking will be something you’ll be hearing about a lot in the days and weeks to come (on local TV news programs, for instance, who tend to let print do their research for them).
Just remember one thing–you probably read about it here first.
I’ve always been skeptical of the advice that comes from so many consultants and “experts,” those people who want to tell you how to fix a problem or better run your business, despite the fact that they have never really done it themselves.
Don’t get me wrong; there are a lot of great consultants working for companies like Aon, or Mercer, or even IBM, all of whom have great experience and knowledge in their area of expertise. I’d hire them in an instant to give me some practical, focused business advice.
But there are a lot of other folks running around masquerading as “experts” and “consultants” who are just high-paid mouthpieces for the latest hot business trend. Like newly minted MBAs who jump directly into consulting without a single scrap of real-world experience, these people have no business telling you how to fix or run YOUR business.
The blog adds: “Whether Brown is an expert on disaster preparedness is open for debate. … [He] never worked in disaster preparedness before he was chosen for the FEMA job by President Bush.”
And it goes on to note that “In a particularly nervy move, the [press] release [from the Cotton Cos.] also draws parallels between the California fires and the 2005 hurricane that devastated New Orleans and much of the Gulf Coast—and tagged then-FEMA Director Brown as incompetent and unqualified.”
The Cotton Cos. press release goes on to say: “Currently, the brush fires are affecting hundreds of local businesses and have forced more than 500,000 people out of their homes. Of these 500,000 people, an estimated 10,000 of them have taken shelter at the local NFL stadium, Qualcomm, vaguely reminiscent of circumstances of Hurricane Katrina evacuees two years ago.”
If nothing else, you have to award chutzpah points to Michael Brown—“Brownie,” in Bush-speak—for trying to sell his “expertise” in disaster management, an area in which he had no real experience before he entered government service, and from which he was sprung after Hurricane Katrina for being “incompetent and unqualified,” as the Journal blog puts it.
Consulting is a big-money business, but like a lot of things in life, it should carry a “caveat emptor.” There are good consultants, there are bad consultants, and then there are the Michael Browns of the world: “experts” who seem to be in a class all by themselves.
Everybody talks about pay for performance—linking a percentage of an employee’s compensation to some specific, measurable goals—but not everybody likes it when it applies to them.
Just this week, a well-known business executive decided to leave his company’s employ rather than accept a new deal with strong pay-for performance components that were designed to better motivate him to meet larger company goals. He said: “I’d been there 12 years and did not feel motivation was needed. I didn’t think it was the right thing for me or the right thing for my [employees],” because it would have put too much pressure on everyone.
Yes, life is tough in the working world, even for New York Yankees Manager Joe Torre, the business executive who chose to turn down a one-year contract rather than accept a deal that guaranteed him less money ($5 million versus the $6.4 million he had been getting), but an opportunity to make as much as $3 million more (or $8 million overall), if he led the team to the World Series next year. He called the $3 million in bonus incentives “an insult.”
Joe Torre seemed to make this same point Friday when he said: “If somebody wanted me to manage here, I’d be managing here. That’s my feeling. Yes, it was a very generous offer, no question about it. It still wasn’t the type of commitment that we’re trying to do something together as opposed to what can you do for me. … It’s not the money that’s going to be the determining factor. It’s the commitment and trust. You can’t have one without the other.”
Pay for performance versus commitment and trust—does one exclude the other? Joe Torre thought yes, while the Yankees’ management thought no. There may not be a right answer here, but one thing is certain: Torre’s decision will fuel more discussion on how compensation systems can be better designed to get both workers and managers to work and sacrifice together to achieve a common goal.
“There has been a shift in the role of these meetings-with-food over the years,” writes NYT reporter Lisa Belkin. “In the ’80s, a 7 a.m. appointment was a sign that you were so important you had to start before dawn. We called them power breakfasts back then, and Masters of the Universe wanted to be seen at their regular table at dawn. More recently, however, they’ve come to feel like yet another symptom of an overstuffed day.”
Belkin even quotes a psychotherapist, Aileen McCabe-Maucher, who says that workers trying to cope with the breakfast-as-work phenomenon should apply a “last-days-on-Earth test” to the invitation. “I encourage clients to begin guarding their time and acting as if this week were the last week of their lives,” McCabe-Maucher said. “If so, would they really spend it wasting precious hours in boring unproductive breakfast or dinner meetings that yield zero results?”
This is great advice, but unfortunately, it’s highly impractical and misses the point entirely. The problem with work meetings at breakfast or dinner is that they aren’t invitations with an RSVP attached. For the most part, they’re command performances, where choosing not to attend isn’t a career-enhancing response.
Here’s a case in point: I once worked for a guy who loved to have breakfast meetings. He was a small-minded megalomaniac, an entrepreneur who owned the company and treated people like Kleenex. Getting invited to a breakfast meeting with him always made you wonder if you would get his Dr. Jekyll, the charming guy who was marginally reasonable to deal with, or his Mr. Hyde, the wild-eyed crazy-man who would spend an hour chewing your head off as you valiantly attempted to digest an omelet. After leaving his employ, I promised myself that I would never force anyone in my workforce through an unwarranted breakfast or lunch meeting again.
That’s the one part of this story that The New York Times completely ignored. Yes, meetings-at-meals speak to the issue of work/life balance, as the Times sees it, but I believe it’s more about a push for productivity run amok. It’s a consequence of a lot fewer people in many workplaces trying to do more with less, and having to schedule meetings at mealtime in a vain attempt to multitask, squeezing more productive time out of the day and just one step up from eating lunch at your desk.
In both cases, the culprit is the push to handle the overload of work within the parameters of an inelastic workday. It’s a bad workforce trend that no one should be happy about seeing again. Even if you like omelets—or your boss.
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