Know-How Exchange : Strategy

Whilst not strictly applicable to the trucking industry, this was something that was brought to my attention by a friend of mine, Jasper. He is a lecturer in one of the Netherland's top universities. They, like most large institutions have a problem. It's called management.

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Jasper's management have decided that his students have the right to their exam results in the space of two weeks and not the previous three. So I asked him the obvious question:

Me: Now, ten years ago, they decided that the students had the right to expect their exam results in the space of three weeks? Am I right?

Jasper: Well, umm... yes. Actually it was more like five years ago.

Me: Are stress levels and absenteeism increasing because of this?

Jasper: I did notice a few more staff sick days.

Me: No surprises there, then. So what are the management doing to support you in this? Do they have to rush around more and find staff to deputize? Are they spending more time finding more and more expensive agency staff to fill the gaps?

Jasper: Oh, no. They don't do any of that.

So they just cancel the lecture then?

Jasper: Well, sort of ... yes.

Me: So your management are imposing deadlines on you and making things appear more efficient. After all they are happening quicker, aren't they?

Jasper: They have to and we aren't given the choice. The deadline is fourteen days now.

Me: Only the students aren't getting the education they deserve because they're getting fewer lectures. Because you have more stress and as a result are taking more time off - which is not being taken into account by the management.

In other words, the management are making everything efficient by making things happen faster. And on the other hand hampering the students in their learning. So that they passing their exams becomes harder?

Jasper: Well, I suppose it would have that effect.

Me: Because your management are asking you, the lecturers, to do something that they themselves are not prepared to do themselves.

Jasper: That is pretty much it, when you look at it that way.

Me: Do you suppose that this inspires the lecturers to do a good job?

Jasper: I guess not.

Me: What does this mean for the students?

Jasper: Their exam results won't be as good.

Me: So this attempt by your management to improve efficiency and clarity is in fact working directly against the principles of the institution they're working for?

Jasper: That would sum it up, I would say.

Me: Doesn't this show the sort of disconnect that can drive an otherwise healthy company into the ground because the accountants are at the wheel? They make arbitrary decisions about which they have not the slightest knowledge because on paper it looks sensible. Reasonable in the circumstances. Whatever management cliche you pick out at random. They make a decision, yet when the consequences are brought to light they shrug their shoulders and say "what can we do" and cancel the lecture without any thought of the consequences.

Jasper: Hmmm ....

Me: Now you know why I couldn't work with an institution like that.

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I am sure there are situations like that in your business. Because whenever anybody talks about money and prices and wages, they are always making a lot of assumptions. Those assumptions are always where the opportunities lie for efficiency improvement. Do anything else and you wind up with the absurd situation above.

In (or around) the year 1928 the Great Western Railway reduced their accident rate by 75%. You can imagine the savings - less equipment damaged, fewer drivers taken sick, all that kind of thing.

Did you know how it came about? The GWR introduced an 8 hour shift. Drivers stopped ramming locomotives into the buffers because they were still awake enough to notice the end of the line. Still awake enough to see the signal set to danger - or whatever else they would otherwise miss.

Nothing to do with money, everything to do with the **people** who worked for the company.

Or like my neighbour who regularly leaves his yard with 1-5 tons more than his vehicle is allowed to carry. No thought that his safety is at risk. No thought that the company's insurance would be invalid were it to collide with another vehicle. All these risks are taken because someone is under pressure to get their work done promptly - and prompt means cheap. They can't send out two lorries (too expensive) and they can't send the stuff out the next day (bad for image). So my neighbour has to take the risk. His attitude? "I have no choice in the matter". Why is it that management abuse this kind of loyalty?

Management is not about money, never was and never will be. Until management are weaned off their addiction to the bottom line, they won't be doing their job. Because as a consultant, if the question is about money I state that it is a question that hasn't been thought through properly. The real questions are never about money, they are always about people. Now people are a lot harder to understand than money - and this is as good a reason why management don't deal with anything else.

Dan Ariely's done a bit of research (most recently published in The Upside of Irrationality) about compensation & salaries, and no doubt some of these articles can be used to help describe the challenges for crafting the right compensation package:
https://www.businessweek.com/magazine/dan-ariely-how-to-pay-people-09222011...
https://www.huffingtonpost.com/dan-ariely/the-irrational-side-of-co_b_59216...