Bob MacDonald on Business

Sage Advice for Superior Business Management

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The Five Most Telling Attributes of Business Mavericks

March 30th, 2014 · Business Management

Let there be no doubt that the winners in business are those who break the rules and chart new, creative courses of action. I’ve seen it countless times as a CEO of major insurance companies and it’s good to know that rule-breaking is alive and well in business. Often, these trailblazers are running new, entrepreneurial businesses, but just as often they head some of the biggest names in business. What these successful individuals all have in common is that they are branded as mavericks who seem to be willing and eager to cheat. But, it is a different type of cheating. These unconventional thinkers seek only to cheat on conformity to be able to do what others say can’t be done.

Think of Fred Smith, founder of FedEx, Steve Jobs, the guru of Apple, Inc., Bill Gates of Microsoft, or Richard Branson of the Virgin empire. CuriosityEntrepreneurs like these are noted first and foremost for breaking the rules; for challenging the tradition which says, “You can’t do that.” Still, true maverick rule-breakers are too few on the American business scene.

If you want to join these successful business rule-breakers, you’ve got to start by thinking like they do. And the first sign of a rule-breaker is relentless curiosity. The man or woman who “cheats” on the old, outmoded rules of business is constantly asking questions and challenging the way things are done. Good cheaters take exception to established procedures and mores.

Rule-breakers often exhibit other attributes as well:

  1. Willingness to adopt new perspectives whenever possible
  2. Openness to try new things and to do old things differently
  3. Compelling drive to act on ideas to test their true value
  4. Eagerness to listen to others and profit from their input, regardless of who gets credit
  5. Respect for and support of others when they propose new courses of action

Rule-breaking behavior requires an openness and willingness to look at the world in new ways. Rule-breakers know that new ideas need nurturing and support. But they know that thinking about a new idea is not enough. The true value of a good idea resides in its implementation. As 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.”

On the surface, rule-breaking doesn’t require any special skills. You don’t have to have an MBA from an Ivy League university. In fact, you don’t need a degree at all. But if it’s so easy to be a cheater, and the potential for reward is so great, why, then, doesn’t everybody do it?

The Will to Cheat Is Hammered Out of Us

When we’re young, we’re much more apt to be cheaters. Children commonly exhibit the cheater’s inclination to question why things are done the way they are. It’s natural. As soon as babies can talk, they ask, “Why?” It’s often irritating for parents because they don’t always have the answers. So the response is “Because.” Or, if the kid persists, “That’s the way it is. Go watch TV.”

Schools only exacerbate the problem. The educational system is founded upon the pedagogy of answering questions, not asking them. Students are rewarded for the proper rote playback of answers, not their ability to question the reasons for the answers or, sometimes more important, the assumptions behind the questions. The pressure to “go along with the crowd” is overwhelming for anyone, particularly kids in their formative years. Not surprisingly, most buckle under the pressure. A child is forced to see things the way their peer group does, dress as they do, talk as they do, and worse, think and act as they do. Pretty soon, a child’s willingness to question and break rules is exorcised as if it were a troublesome evil spirit.

Rule-Breakers on the Fringes

We have to recognize that daring to think and do things differently exposes us to risks as well as rewards. But you know what? Even though you may risk the ridicule and tsk-tsk of your friends, teachers, parents, business associates, boss, and an endless string of others; even though there is a risk that you’ll come up with a dumb idea for which you’ll be chastised; even though some may perceive you as a show-off or know-it-all; even though all of this may be true, when you finally succeed by doing things differently, the reward and personal satisfaction is so much better than the punishment, it’s not even a contest.

The only reason the downside exposure exists is simply to control you: to intimidate you so that you’ll be unwilling to be a rule-breaker and a creative thinker. The result? Many potential rule-breakers are afraid to engage in behavior that could potentially make waves. Instead, they lay low and avoid BeDifferentthe possibility of future embarrassment and pain. The bottom line is that, even though we start out in life as rule-breakers and cheaters, most of us become timid feeders in a sea of conformity before we ever get our first job out of college.

Fortunately, even if one is not a born cheater, cheating to do the right things can be an acquired talent, a talent well worth learning and practicing. To develop and nurture this talent for ourselves, we have to overcome the way our psyche has been bullied for so long in an effort to get us to stop asking questions. To achieve real success in our life and career, it is essential to recondition ourselves to challenge convention. I know that this is easy for me to say, but fortunately there pgreat examples of those who rock the boat and cheat to win.  And it is something you can do too; so long as you are willing to step us and step out to be different and do what others say you can’t do. Try it. You just might find it is fun and rewarding to be a maverick in a world where mediocrity is the accepted standard for most.

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Avoid the Risk of the “But for Me” Syndrome and Follow the “But for Them” Path to Success

March 23rd, 2014 · Business Management

Sometimes the attitudes engendered by success can turn that very success into failure.

In the 1970s and ‘80s Jim and Tammy Faye Bakker were the king and queen in the world of televangelism. Taking advantage of newly emerging satellite technology, they launched the PTL Satellite Television Network (PTL stood for: “Praise the Lord” or “People that Love”) Jim_Tammyin an abandoned furniture store in Charlotte, N.C. The cornerstone of the PTL Network was The PTL Show hosted by Jim and Tammy Faye. The show co-opted the format of the Tonight Show, with guests, music and entertainment all based on a Christian theme. Of course, the objective of the show was to solicit donations from viewers to support the Bakker’s Heritage Village Church and Missionary Fellowship, Inc.

Viewership of The PTL Show and subsequent donations grew rapidly. The increasing flow of funds into PTL allowed Jim and Tammy Faye to move their headquarters from the old furniture store to ultimately a 2500 acre combination theme-park, religious shrine and resort called Heritage USA in Fort Mill, S.C. (People were encouraged to buy time-share units on the property so they could be “that much closer to Jesus.”) At its pinnacle, PTL was collecting more than $5 million a month in donations. It has been estimated that, before their downfall, Jim and Tammy Faye collected almost $200 million from sincere, but gullible viewers. And there was a downfall.

Jim and Tammy Faye lived the lifestyle they felt befitted a king and queen. (This was about the time that PTL came to stand for – “Pass the Loot.”) It turned out that Jim and Tammy Faye were skimming so much money off the top of incoming donations it put the skimming efforts of Las Vegas mobsters to shame. In one reported incident Tammy Faye chartered a private jet to take her to New York for a power-shopping excursion. She bought so much “stuff” on the trip that a second private jet was chartered simply to haul all her loot back home.

But Tammy Faye wasn’t alone; Jim had his own excesses as king of PTL. He siphoned off millions in bonuses and lived a life of conspicuous consumption – with lavish church-paid homes, fancy cars, ostentatious jewelry and trips to exotic resorts – that made even the most perk-grabbing corporate CEO seem like a piker. But between the alleged rape of a 20-year old female church worker (with $300,000 in church funds paid to buy her silence) and charges of financial hanky-panky, poor Jimmy was forced to resign from PTL and was subsequently convicted of fraud and sentenced to 45 years in prison. The sentence was later reduced to 8 years. He was released after serving 5 years. Tammy Faye suffered her own bitter comeuppance, dying of cancer in 2007.

Making Sense of BFM

What makes this sad story relevant is that Jim Bakker’s defense to the charges against him was “but for me” the church would not have had the money to support its Christian works. He argued it was irrelevant that he and Tammy Faye had skimmed off a million dollars a month of the five million PTL was collecting, because, in his demented logic, the church still received four million dollars it would not have had, “but for me” and my efforts.

This “but for me” attitude used to justify taking excess rewards for the success of an organization may seem like convoluted logic – and it is – but unfortunately it is not uncommon. This is called the “but for me” syndrome and it can infect any successful leader at any level of an organization. The “BFM disorder often leads to the ultimate failure and downfall, of both the leader and the organization.

Success and adulation carry the spoors that can infect any leader with the “but for me” affliction. Once infected, the leader comes to believe they are entitled to the spoils of success, because without them there would have been no success. The real lesson to learn here is not that this “but for me” attitude can lead to criminal activity and to abusive excesses in the form of obscene corporate pay-packages and bonuses for the heads of large corporations. The real problem is that the “but for me” syndrome can infect the attitude and style of any leader – at any level. This leads to a loss of respect, credibility and effectiveness of the leader; even if the manifestation of the syndrome is something as simple as taking credit for the work of others.

A few years ago, while hosting a raucous card game at a golf-getaway for a few executives of a company I was leading, one of them – the head of marketing – showed obvious symptoms of the “but for me” syndrome. The atmosphere of the game was one of good-natured teasing and mocking, but when this guy was teased his response was, “Gee, I bring in $50 million in sales and I get no respect.” It may seem like a small thing, but what this guy was intimating was that — “but for me” — the company would not have such great sales. He was totally dismissive of the efforts of everyone else in the company and the marketing department. He truly believed that full credit should singlehandedly be his.

The sad part was that this guy – like most others – had no idea he had become infected with the “but for me” syndrome. Despite his ignorance, he eventually paid the price for this attitude because others in the company did recognize the “but for me” syndrome in him; he ended up losing the respect and support of those in the marketing department and the sales force and was forced out of the company.

This example is cited only to illustrate that to be successful in the long term, leaders at any level must be cognizant of, and be inoculated EmployeeContributionsagainst, the “but for me” syndrome. The way to do this is to consciously and consistently adopt a “but for them” attitude toward success. This way of thinking and acting allows the leader to accept the accolades and benefits of success, but on the condition that it is understood and acknowledged that “but for them” (the followers) success would not have been achieved.

I know one successful entrepreneur who led a company from start-up to national prominence. When people would shower him with compliments on the success of his company, his response would be, “Thank you, but I did not make the company successful.” What he could take credit for was creating the opportunity for others to be successful. As he would say, “It is true that “but for me” the company would not have started, but it is also true that “but for them” (those who joined the company and put forth their talent and effort) the company would not have been successful.”

What is important to understand is that the “but for them” attitude not only coalesces the support and commitment of the followers to work to achieve success for the leader, it also is critical to maintaining continued success. When followers see a “but for them” attitude in leaders, they take pride and ownership in the effort to achieve success, because they know they will be recognized for their contributions and share in the success attained.

The “but for them” attitude is the most powerful and effective antidote a leader can take to become immune to the “but for me” syndrome. The “but for them” way of thinking is engendered when the leader consistently operates on the basis of respect for the talent and value of the employee. This is accomplished by engaging the followers in the entire process of achieving the objective sought. Workers are empowered and encouraged to use their talent to “make a difference.” Communication between the leader and follower is a two-way street; ideas, thoughts and suggestions are allowed to flow both ways. Credit due is credit recognized. And most important, the rewards received for any success achieved by the organization are shared by all. It does not mean that the rewards are equal, but they are equitable. The leader does not benefit from and bask in the light of success unless “all of them” do as well.

Following these approaches to leadership engages the followers in the desire to see success achieved and motivates them to work for that success, because they know they will share in that success. The followers will respect, work hard and be committed to the success of the leader, because they know the leader believes that “but for them,” success would not be possible.

And the Moral of the Story …

Unfortunately, there is too much of a “but for me” attitude among leaders when it comes to taking credit for success and not enough of those who believe that “but for them,” success would not be achieved. Falling prey to the “but for me” syndrome of success offers a number of side-effects, none of which are positive.

Succumbing to the affliction of “but for me” opens the door to the rationalization of abuse and excess; and that can never be a good thing. Just ask Jim and Tammy Faye. Even worse than that, the “but for me” attitude breaks down and eventually destroys the relationship of trust and respect between a leader and the followers; two critical cornerstones if there is to be any chance for a leader to be effective and successful.

There is one more reason for a leader to believe and adopt a genuine “but for them” attitude when it comes to success – It is true!


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It Pays to Work Overtime as a Leader

March 16th, 2014 · Building Better Business Managers, Business Ethics, Business Management, Improving Your Business Leadership

If you want followers to make the extra effort for you, you have to work overtime to earn it.

You probably saw the news last week that President Obama has directed the Labor Department to revise rules pertaining to overtime pay requirements. The intent of the original set of rules was to exempt employers from having to pay overtime to “highly paid” workers, who were in a “supervisory” role. But as President Obama pointed out in his announcement, time, inflation, and abuse of the rules OVertimeby employers have caused this exemption to apply to workers making as little as $455 per week ($24,000 per year). By way of note, this amount is below what is considered to be the poverty level for a family of four. This means that millions of low-salaried workers – assistant managers at retail outlets, hospital orderlies, janitors, clerks at hotels and restaurant supervisors – who should be receiving overtime for hours worked are being unfairly excluded.

The President did not specify how high the threshold should be raised, but directed the Labor Department to develop a recommended increase that would take effect in 2015. Keep in mind, that just to match inflation since the last time the overtime rules were adjusted 10 years ago, would call for an increase to $553 per week. Increasing the overtime exemption level is within the purview of executive powers, so Congressional approval is not required, but that has not prevented the usual suspects from bringing out their long knives to complain and oppose the Obama directive.

House Speaker John Boehner (R-Ohio) leapt to the nearest microphone to proclaim that these new overtime rules would cause employers to lay-off workers and prevent companies from expanding. That, in turn, would cause unemployment to increase and damage the economy. Echoing this criticism, the National Federation of Independent Business released a written statement denouncing any rise in the overtime exemption level as “regulatory overreach” that would “crimp economic growth,” discourage employers from hiring new workers and force them to get rid of workers to avoid paying overtime. Tea Party groups have charged that this was just another attempt by the “socialist-leaning” Obama to interfere with the “free market” by confiscating money from risk-taking entrepreneurs and giving it to the poor.

I admit to being puzzled trying to follow the logic of these critics.

Here’s why: If the demand for the products and services of a company is so great that workers are required to work overtime just to keep up, shouldn’t this increased business generate sufficient additional revenues to cover costs? If business demand is high, but the employer does not want to pay overtime to workers, the option is to simply hire additional workers – even part-timers — at straight pay. Does it make sense for an employer to conclude that when demand is so strong workers have to work overtime, just to keep up with it, that rather than pay overtime, they lay-off workers who would qualify for overtime?

Of course, wiser minds might just as easily conclude that some nefarious brand of logic at work here. Is it possible that some employers could be gaming the system when it comes to low-income employees?

Absolutely. And here is how this sleazy trick looks in action:  The employer offers the worker a “salary” of $455 per week and then calls them a “supervisor” although in name only. Under this scenario the employer could require to employee to work more than 40 hours a week – at poverty level wages – without being required to pay overtime. Every extra hour of work demanded of the employee would be “free” to the employer, and the profits would go directly into his pocket. If that employee puts in an extra time 16 hours a week, the workers’ “salary” would fall below the current minimum wage.

Is it farfetched to believe an employer might actually adopt this strategy? I don’t think so, because it never ceases to amaze me the lengths that some shortsighted and greedy employers will go – supported by their well-lobbied political partners – to make a few extra bucks by ripping-off their lowest paid employees. These are employees who have the least leverage and political clout to defend them from this outright exploitation.

An Example of How its Done

Not long ago I was chatting with a guy who is a big player in the “hospitality business.” He owns resort hotels and restaurants all across the country and if owning several homes, his own private jet and a yacht the size of a small hotel is any indication, then he is very successful. (I think he viewed me as an understanding compatriot, because I had previously headed large companies.) Anyway, as we talked, he bitterly complained about the lazy, shiftless, disloyal workers who would steal from him every chance they got. Later in the conversation the subject switched to pay and required minimum wages. He proudly explained to me how he dealt with the irritating nuisance of having to pay his employees. One strategy he smugly admitted to using is that when an employee neared the top of a pay scale for a particular job (which would also qualify them for additional benefits); he fires them so he can hire new employees at entry-level wages and no benefits.

He was well aware of, and even bragged about, the way he was able to avoid paying overtime to his hintrootel and restaurant workers by putting a large number of them on “salary” at $450 per week and calling them “supervisors.” By hiring fewer workers than needed to get the job done in 40 hours and then structuring compensation that avoids paying overtime boarders on nothing more than a modern form of legalized slave-labor. It’s the kind of corporate behavior that causes employee campaigns for improved wages and rights to exist.

And this guy had the gall to complain that he has “bad” employees! How would you feel working for an employer like this? I know from personally interacting with a large number of his employees that they have no respect for him and have no motivation to be loyal or put forth any more than the minimum effort to keep the job. And these are the employees who interact with and are expected to provide good service to customers, so they will come back to his hotels and restaurants.

Some might suggest that since this guy is so successful with this “business model” that maybe the way to go is to rip-off your lowest paid employees. The counter to that is that if this guy would invest in his employees rather than exploit them, he would see turnover reduced, lower costs and workers more motivated to provide better service to customers, all causing his profits to increase.

There is an important lesson to learn here that goes beyond the abuse of low wage employees. The truth is that the government should not need to be in the business of protecting these or any other workers. And if employers would look upon workers as an investment in the future success of the company, rather than as an expense to be managed and cut, government intrusion would be unnecessary.

In the service industries – especially retail stores, hotels and restaurants where low pay is prevalent – the employees are the face of the company. The attitude and service they provide is the determining factor in customer satisfaction and whether or not they are motivated to return. The truth is that it is the employer who should be working overtime to create an environment that respects, appreciates and fairly compensates the worker in a way that motivates them to do their best, because doing so is in their own best interests.

If the attitude of the employer is that the employee is a cost of doing business and that they should get as much as they can for the least cost possible, then the attitude of the employee will be to do as little as they can for as much as they can get. Is it any wonder my hotel friend thinks his employees are shiftless, lazy and disloyal, when he treats them the way he does?

And the Moral of the Story …

Leaders and employers have a markedly better chance for success when they are willing to work overtime to demonstrate to followers and workers that they are considered as assets and an investment that is critical to future success.

The old philosophy and management rules – still held as gospel by many – that see employees as nothing more than “human resources” to be mined and worked for all their worth, is no longer effective in a competitive world. The leader or company that builds a culture designed to recognize, acknowledge, respect, challenge and compensate employees in ways that demonstrate a belief that they are critical to your success, will motivate those employees to work for your success. It may require the leader or employer to work overtime to achieve this objective, but the good news is that you will get paid for it.



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