Bob MacDonald on Business

Sage Advice for Superior Business Management

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Is Corporate Culture Putting Your Job at Risk?

May 13th, 2013 · Building Better Business Managers, Business Management

Identifying the Malady of Management Malfeasance and put Your Career on a Successful Path

For those who have jobs and are in the midst of building a career, there are usually two issues that are front and center in their thinking: Is my job secure and does the company I work for provide an opportunity for personal growth?

These are good questions and the only way to really find the answers is to constantly asses the cultural environment, viability and potential of the company for which you work. Unfortunately, the answers will not be found in the past or even current performance and reputation of the company, but only by exploring and understanding the very fundamentals of how the company you work for is managed and led. Even if the company has achieved success in the past, if the company now seems to be going down the wrong path, then you should consider seeking your own path.

The good news is that employees themselves are in the best position to determine the future direction of the company and the potential opportunity for their own career growth. The key is to be observant and brutally honest about what is seen and experienced in the workplace.

It all starts and ends with the attitude and philosophy of management. What type of organizational culture is management seeking to build? Do they even care about creating a positive organizational culture? Or is it something to which only lip service is given? The answers to these questions will go a long way toward helping you determine the security of your employment and the potential for your future.

Obviously, the place to start is to determine if the management of a company is ethical. The use of the term “ethical” in this case is not about lying, cheating and stealing. If that is the modus operandi of management then the answer is simple. For the purposes of this piece, ethics refers to the attitude and operating philosophy of management. Do they speak with forked-tongue? Do they talk the talk of good culture, but operate in a closed, self-serving fashion?

A good example of management lacking sound ethics is a management group that incessantly talks about how important the employees are to the success of the company, but when black clouds are sighted on the horizon, the first actions of management are to “downsize” and “outsource.” When challenges arise, managers lacking true ethics quickly herd unsuspecting employees to the twin alters of downsizing and outsourcing, where they are sacrificed to the pagan gods of illusory profits.

If you work for a company where management holds the belief that costs will be reduced and profits increased when important functions (and the people doing them) are outsourced to those with no knowledge of the company and with no concern for its future or the future of its people, then it is reasonable to question your job security and opportunity. And, you should do something about it.

Let’s be honest and acknowledge that there are no requirements for management to be open and all-inclusive in their actions. In fact, in most organizations this type of attitude is accepted and typical. But, that does not make it right or, for that matter, the way to develop long-term success. And, such an attitude does not bode well for job security and opportunity.

Those who build business cultures that generate employee job security and opportunity are those who do the right things that are not required to be done; this is the essence of ethical leadership. They rise above average, commonplace leadership because they know that building healthy organizational culture is crucial to the success of the company and to their own future. That is the type of company that people not only feel comfortable working for, but more importantly one they can be their career futures on.

Of course, it is possible climb the corporate ladder working for a company that does not practice ethical management – many do – but to do so, an individual must be willing to sell their soul to this type of soul-less leadership. That may be okay for awhile, but you really have to ask yourself if you want to live your life that way. And, in all likelihood, your future and that of your company will be put at risk.

Here are a few tips and telltale signs an individual can use to determine if their job is secure and an opportunity for career development present.

Communication – Is the management of the organization open and honest in their communication with all employees? Is information about the company considered the exclusive purview of management? Is information provided on a regular and reliable basis? Are employees constantly caught off guard by the actions of management? Is the dreaded rumor mill the primary source of information for employees?

Trust – Do management actions build an atmosphere of trust? Are management actions – especially as it applies to employees – honest, constant and consistent? Can management pronouncements be taken at face value or do employees feel they have to question and read between the lines to determine what they really mean? Are employees comfortable trusting their future to the actions and interests of management?

Parallel Interests – Do employees believe that management makes an honest effort to align the interests of the company with those of its employees? If the company is successful, do the employees believe they will share in the success their efforts helped to create? Is the success of the organization the success of all or is it management that takes both the credit and the spoils for any success?

Power Sharing – Is power concentrated rather than shared? Is the management group so insecure and controlling that they must actually define themselves as the “leadership team?” Are employees given the responsibility for tasks, but not the tools or authority to achieve them? Do employees come to feel that what they do – unless they fail – is not recognized by management and that they are really powerless to make a difference?

Employee Value – Does management constantly talk about how important employees are but treat them only as pawns? Are employees the last to know and the first to be blamed, downsized or outsourced? Does management speak of respect, but take actions that often denigrate the value and importance of the employee?

And The Moral of the Story …

If you are serious about your job security and your future career, it is incumbent upon you to take control of your future. There is no security in allowing others to control your future. Taking control of your future starts by putting yourself in a place that gives you a future. And that means making a choice about the roads before you.

If you find yourself working for a company infected with the malady of unethical management malfeasance, you know you are in the wrong place. You have two choices. You can give up and give in and place your job security and future in the hands of leaders you neither trust nor respect. Or, you can take control of your own future by finding a place where your efforts are respected and offers the opportunity for you to be what you can be. It may not be easy, but it is always better to fail trying than to fail to try.

(Bob MacDonald is transitioning from his winter hideout in Key West, Fla. to his warm weather enclave (is it spring, yet?) in Minnesota. Hence, a repeat of this blog originally published March 15, 2010.)
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We Exterminate Rats and Cockroaches – Why Not Management Consultants?

May 5th, 2013 · Business Ethics, Business Management, Financial Services

Except for maybe bankers, can you think of any group more useless to business than management consultants? These people are a confirmation of the old theory that if you don’t have the ability to actually do the job then you can teach others to do the job.

I don’t mean to have a closed mind, but hiring a management consultant to tell you how to manage your company is like buying a horsewhip to get more horsepower out of your car. But, you have to give grudging credit to these clowns, because they have figured out a way to get the management of numerous companies to pay billions of dollars for their “advice.” And management consultants have found a willing host in the tissues of corporate management and have taken advantage of it.

The reality is that too many companies are being managed by too many hardcore bureaucrats who have no idea how to effectively lead. It has become an accepted cop-out for these weak managers to hire someone who has never run a company to teach them how to run a company. Talk about the blind leading the blind!

Management consultants have been able to disguise the fact that they bring no real value to an organization. They have accomplished this sleight-of-hand through the creation of a whole new argot of buzzwords which enables them to charge ridiculously excessive fees in order to translate the meaning of this language. We have all heard the words and phrases like “best practices,” “synergy,” “concentric,” “methodologies” and of course the all-time favorite “granular.”

I recently read (well, I didn’t read it, but did see it) a report from one of the leading consulting firms that was titled, “A Multi-granular Linguistic Model for Management Multi-criteria Decision-making.” (I did not make that up!) Need I say more? What incompetent, insecure bureaucratic manager would not be willing to pay millions (of company money) to learn the secrets in a report with such a title?


Big fees are another way management consultants hide their uselessness. Once when I was running Allianz Life we had a decision to make regarding a specific market segment. It was no big deal, but the Lords of Allianz in Germany told me that we should retain McKinsey & Company to provide consulting assistance in making the decision. (At the time, Allianz SE was the single largest customer of McKinsey; paying them scores of millions each year to help them run the company.) We had no interest in bringing McKinsey in, but in order to placate our bureaucratic masters at Allianz SE we agreed to have McKinsey bid on the project. When the bid came in, before sharing it, I asked the executive group what they felt such a service should be worth. The consensus was, being generous, maybe $50,000. The McKinsey bid was $460,000. Only in America could a company have such arrogance. The irony was that Allianz thought it was a good deal and were disappointed when we laughed McKinsey out of the office.

Management consultants have four standard plays – synergy, best practices, downsizing and outsourcing – in their playbooks. They use these strategies and the supposed efficiency and cost cutting they will generate in order to justify their obscene fees.

I was witness to this playbook in action. One of the truly incompetent bureaucratic executives at Allianz of North America paid management consultants literally millions of company dollars in an effort to synergize, downsize and outsource the company to success. In the process, not only were millions of dollars wasted on management consultants, but employee morale was destroyed, efficient operations reduced, marketing became a confused process and expenses actually increased. Later, Allianz had to spend even more money to unwind these misguided efforts. The only winners were the consulting companies. Fortunately, the executive responsible for this waste lost his job and was allowed to “retire.”

I don’t mean to pick on or single out Allianz; they are just one of hundreds of companies that fall prey to the illusionary promises of management consultants. Like other companies infested with a bureaucratic culture of management they are highly susceptible to the illusion of management made simple by tactics.

Now don’t get me wrong, I am not against a manager or executive seeking advice and input from others to be successful. It is a sign of a strong leader to be open to input. But it is a cop out to pay millions of dollars to outside gunslingers – who can’t shoot straight themselves – to take the burden of managing off your shoulders. I favor a different approach. Anyone can benefit from having a mentor, but few can benefit from a consultant. There is a difference. The mentor cares about you while the consultant cares about the fee.

A good example of this approach would be to build a board of directors whose members have varied, actual, successful, hands-on experiences managing and leading a company. As directors these individuals care about you and the success of the company. If used properly, they can be an effective sounding-board for you and other executives in the company. (Not to mention at a whole lot less cost than a management consultant!) And, one does not have to be a CEO to benefit from a mentoring system. In fact, the concept of mentoring can be built into the very culture of the company.

The bottom line is that management consulting can be very effective in the leadership of a company, but it should be an internal not external process.

And the Moral of the Story …

If the management of a company believes it needs to bring in management consultants to teach and help them manage the company, then they should not be in charge of managing the company.

When you see a company constantly seeking outside help to run the company and, in the process, paying thousands, if not millions of dollars, to management consultants, then you are looking at a company with a poor internal culture, managed by weak, incompetent bureaucratic executives stumbling down the road to ultimate failure.

(Bob MacDonald is transitioning from his winter hideout in Key West, Fla. to his warm weather enclave (is it spring, yet?) in Minnesota. Hence, a repeat of this blog originally published September 20, 2009) 
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The Maverick’s Creed: If It’s Not Broken, Fix It

April 28th, 2013 · Building Better Business Managers, Business Management, Personalities in the News

Real change springs from knowing what is and seeing what it should be.

On April 19, Al Neuharth died at age 89. He will mostly be remembered as the inspiration and founder of USA TODAY, but he was more than that. Al Neuharth was – for good and bad – a classic business maverick. By definition a “business maverick” is one who learned what they know in one Al Neuharthindustry and then knowingly go against what they know. Only someone with an insider’s intimate knowledge of a company or industry, an intuitive inquisitiveness to question the system and the courage to challenge it, can bring about real change. The maverick’s value is to be instinctively dissatisfied with what most see as the only way, because they have always done it that way.

It is not easy to be a business maverick. They live in a world where their ideas and actions are, at least initially, greeted by a negative reception that ranges from disregard to disdain. They are chastised and castigated as a heretical turncoat and traitor by those in their industry who believe the way things are being done is the way things should continue to be done. Those most vociferous in ostracizing and denigrating the maverick are those they have worked with or competed against. It has been reported that Ben Bradlee, the former editor of The Washington Post, once referred to Neuharth as a “mountebank.” That is a “polite” way for Bradlee to suggest that Neuharth was nothing more than a fraud, charlatan and huckster. Such aspersions are a way of life for those business mavericks who “go against their own kind.”

A Closer Look at the Man behind the Newspaper

Al Neuharth had all the traits of the typical business maverick: That is one who is often impetuous, impatient, outrageous, abrasive and vain; mixed with a dose of creativity and innovation. The typical business maverick is, in fact, stimulated by the acrimony of controversy and uses the level generated to gauge the impact of their actions. Their attitude seems to be: If others are not threatened by what they are doing, they are not doing enough. The maverick has no problem – and actually seems to relish – picking fights and poking a stick in the eyes of traditionalists who come to loathe them. (Truth is they have to be this way if real change is to come about.)


What ignites the maverick is the belief that a company or industry – one that they know intimately and care about – needs, for its own good, to change. It is the detection of this need to change and a dedication to doing what needs to be done that shields the maverick against the tumult of disparagement heaped upon them by critics who view any change as a threat. For the business maverick, the greatest reward and validation is when those within the industry who have been the most critical begin to imitate and adopt the changes as their own.

Al Neuharth met the definition of a business maverick in all ways. He was a child and product of the newspaper industry, entering it when he was 19. He started a sports newspaper in his native South Dakota which promptly became an entrepreneurial flop. Undaunted, he took a job at the established Miami Herald and diligently worked his way up and around the newspaper business making newspapering his entire life. As he reached the pinnacle of power in the industry he turned against all he had learned and all that was accepted in an effort to bring changes to the industry. Even though the newspaper business still appeared to be healthty and highly profitable.

At a time when all newspapers were local, he wanted to go national. When the industry was black and white, he wanted color. When stories were long, deep and often ponderous, he wanted short, simple and understandable. He believed that reading a newspaper should seem like a conversation, not a lecture. The result was USA TODAY. Derided as shallow, hollow and frivolous, the stalwarts of the newspaper industry mocked USA TODAY as an insignificant interloper and jeeringly referred to it as “McPaper.” (It is ironic that those who most opposed what Neuharth was doing mocked his ideas by comparing USA TODAY with another company that had changed its industry.)

Despite the attacks, resistance and a decade of losses, we know the rest of the story. Not only did USA TODAY attain the highest circulation in the usatodayindustry (The Wall Street Journal has moved slightly ahead now, but only after another business maverick assumed control.) it also became the most profitable newspaper in the industry. In fact, those who were most critical of Neuharth and his approach were soon forced to pay the highest compliment when they began to fall all over themselves trying to copy his changes. What was first considered heresy has become newspaper doctrine and it is why Al Neuharth will be remembered and celebrated: he was a changer, not the changed.

Your Call to Action

The life of a successful business maverick is exciting, challenging, exhilarating, rewarding, fun and lonely. The business world is designed to seek and welcome conventionality not unorthodoxy, but it is the maverick who is the catalyst for change when change is needed. In the end, the successful maverick does not submit to conformity, but rather forces others to comply. Think of Fred Smith, founder of FedEx, Steve Jobs, the guru of Apple, Bill Gates of Microsoft and Richard Branson of the Virgin empire and Al Neuharth of USA TODAY; they all started as mavericks and ended as legends in the business world.

If you dream of experiencing the excitement and accomplishment of a business maverick, the good news is that it requires no unique talent or skill that you probably don’t already possess. All it takes is to start thinking like a maverick. The first sign of an embryonic maverick is relentless curiosity. The maverick is constantly asking questions and challenging the way things are done with an impatient eye to how they can be done better.

Business mavericks often exhibit other attributes as well:

  • The willingness to adopt new perspective whenever possible.
  • The openness to try new things or do old things differently.
  • The confidence to respectfully resist the opposition of others and act on new ideas to test their value.
  • The eagerness to solicit and listen to the ideas of others and learn from their input.
  • The tenacity to see your ideas through to conclusion.

Being a business maverick demands an openness and willingness to look at the world in new ways. A lot of people think of new ideas and how they want things to be, but that is not enough. To come to fruition, new ideas need to be nurtured by someone who is willing to resist conformity, go against the grain and stand up to the naysayers. As the longtime management expert Peter Drucker said, “Ideas are cheap and abundant. What is of value is the effective placement of these ideas into situations that develop into action.” And that is the job and value of the business maverick.

And the Moral of the Story …

Many have the dream to be an entrepreneur, but few express the desire to endure the nightmare of being a maverick. One is seen as a “Crown of Glory” while the other is a “Crown of Thorns.” But the truth is that both are needed. Being both an entrepreneur and a maverick might be the best of all worlds, but that is rare. There have been many successful entrepreneurs who were not mavericks and many acclaimed mavericks who were not entrepreneurs. The entrepreneur is needed to make it and the maverick is needed to fix it.

Al Neuharth tried and failed at being an entrepreneur, but he was a great maverick. Like all great business mavericks he understood intimately how the system worked, understood the way the system was working (at least the way people wanted it to work), recognized the system could work in a better way, and he fixed it. All hail the business maverick!

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