The cost of drinking the Kool-Aid

Kool-Aid

Now with tax season winding down, I finally have some time to reflect and write about recent events and provide my spin on these.

In any corporate environment we all know of those individuals who have attained their positions either by

  1. Selectively being drafted from upper management for their sympathetic views
  2. Taking shortcuts to achieve short-term results, neglecting long-term consequences

The first type of promotion is what’s known as Empire Building. This comes about when senior management wants individuals around them willing to “go along” with their direction and corporate outlook on how to best serve the interests of the company. Interests of the company in Empire Building more often than not will miraculously coincide with Senior Management’s own self interests. These interests can take the form of Bonus’, Stock Options, Board Positions, Fringe Benefits and Gold Plated Pensions. The least amount of resistance that they can have while attaining these interests the better.

The second type closely mirrors the first, but is distinguished only by the individualistic approach to the end result. WIIFM (what’s in it for me) Managers see employees and subordinates as tools and assets to employ in attaining the quickest, most cost effective, and most personally rewarding path to success. They often do not take into account longer term issues such as quality, impact on brand, societal impact and human cost of their decisions.

Many out there would see nothing wrong with either approach and tout that it is often necessary to employ these tactics to achieve the results the market expects. “Market Expectations” is another name for a Giant pitcher of Kool-Aid. Once we drink from the Kool-Aid pitcher as an organization we start to rationalize the decisions we make to make the market happy. Trouble is, this can’t and won’t last forever. What’s often left in the wake of pandering to the market and drinking the Kool-Aid, is broken trust, lost resources and damaged lives.

As owners and managers, we have a fiduciary and moral duty to think long-term on how to best achieve sustainable and realistic results that elevate our companies and staff as a whole. It’s not a 100-yard dash, it’s a marathon. Play to finish.

Some recent examples of “Kool-Aid” corporations:

Volkswagen takes $18 billion hit over emissions scandal Friday, April 22, 2016 02:03 PM EDT Toronto Sun

Mitsubishi Motors mileage scandal widens, U.S. regulator seeks information TOKYO 
— Reuters

General Motors will pay $900 million to settle criminal charges related to its flawed ignition switch that has been tied to at least 124 deaths. CNN Money

Till next time.

Rick Barbosa

 

 

Getting up from “Under the Bus”

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Recently, although it has happened to me before, I let my guard down and confided in someone whom I though I could trust (in a business sense). This information (not proprietary or classified)  was meant as an aid to improve performance prior to any real actions being taken. I was under the impression that the party in question wanted to understand what others where thinking so they could make preemptive corrections, thereby avoiding any confrontations.

It didn’t turn out that way. Instead the party in question confronted the accusers and followed up with proof by using my name in the process. Blind sided as I was to hear of the incident, I knew I needed to react the right way and learn from this mistake. I owned my error and proceeded to acknowledge the issue with those affected. I can’t expect the same level of trust from the group, nor would I give it if I had been betrayed. Wounds will heel, but going after the person who betrayed my trust would just make two wrongs.

When you are in the middle of a situation like I was, how you respond and own it says a lot about your character. I hope to regain this groups trust over time, but I know that individual responsibility and accountability are the hallmarks of my practice. What we do after we screw up is just as important as learning from the screw up.  All of us at times fall prey to this type of betrayal. It’s how we learn to cope with it that sets leaders apart from the rest. We must hold ourselves to the same if not higher standards, as those we manage and consult, otherwise we risk hypocrisy.

Dusting myself off,

Rick Barbosa

 

 

5 Things Owners should never say at work

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Today’s business owners have it tough. Increased competition, controlling costs, and finding new customers has never been harder. How do you keep it together?

Most successful business owners know that hiring, keeping and motivating good staff is the key element to ensure your businesses prosperity and theirs. This sense of contribution is vital to the workplace. If employees feel they are not a part of the company then they become complicit in their work and attitudes. This complacency spreads like a virus and affects morale and productivity, and eventually profitability.

After being around many family and owner managed businesses, I’ve had the pleasure of experiencing some of the most dreadful phrases uttered in the workplace. These phrases drive employees to complacency and eventually out the door. If you ever get the urge to say these, take a step back and remember that you can’t do it alone and that you need good people around you.

5 Things Owners should never say in the Workplace

  1. This is my Company, if you don’t like it you know where the door is
  2. Remember who signs your Pay Cheque
  3. You should be happy to even have a job
  4. I don’t pay you to think
  5. I can find a replacement for you next week

‘Till next time

Rick Barbosa

Why kicking the can down the road is never a solution.

Kickthecan

If you’ve ever owned a dog, or even raised a child, you know the best way to teach someone is through consequences. If someone is allowed to keep doing something harmful but never has to answer for their actions, what incentive is there to change behavior? None. So why are we still hearing about a sluggish economy or Greece, Portugal, Spain etc… It’s because know one has made them answer for their actions. We keep trying to avoid the inevitable by only making the inevitable worse. We need to take cues from nature. The strong must be allowed to survive. Keeping the week dangling only hurts the herd as a whole. The “Herd” in this case is our economy. We need to recognize that it’s the well managed companies who have always had to fend for themselves that lead us out of recessions. Instead of allowing them to reap the rewards for doing the right things, in comes the government and big labour to save the day. They artificially prop up losers for their own personal benefit, not societies. By allowing companies, governments and people to fail we are doing them a better service. By making them face the consequences of bad decisions we ensure they will never make them again.

Those who do not know history are doomed to repeat it.

Rick Barbosa

 

Morality and Business-Why your business needs strong Moral values

Full disclosure, I am Catholic, but this will not be a sermon or call to convert. I have the greatest respect for all religions that have a strong ethical and principled basis. Being involved in the business world I have come across many situations that were difficult for me personally as well as spiritually. I often had to carry out restructuring initiatives and projects that would “make us more competitive” only to see the lasting and damaging impacts on the communities and families in the area. When I first started out, I did not question or dig into the rationale or true cost of many of these decisions. Whether it was my naïve mindset at the time, or just my desire to drink the cool-aid and not rock the boat to keep my job, I wasn’t sure.

With age comes wisdom and the confidence to start asking questions. My Brother-in-Law was studying philosophy at the time when we were discussing the turmoil in Europe and America. He pointed out that no country or business is an island. What we do for the “good” of the business impacts everyone and has a profound impact on the rest of society. This is especially true today in the interconnected world we live in. Greed and the ever mounting pressure on companies to grow their businesses at any cost and at unreasonable and unsustainable metrics, has led to the turmoil we see today.  The great surge in outsourcing in the 90’s has led the U.S Economy to be primarily a buyer of goods, rather than a maker. The enormous displacement of workers has left cities, people and countries reeling in the aftermath.  Those very companies became hated,  former employees and vendors negatively impacted the very brand image and products that were being made by them. Some were vilified to the point of closing and never opening again. The “smart guys” are not always so smart.

What is the real cost of saving 50 cents per piece or increasing your margins by 5%, when the outcome could be unsafe product or terrible customer service that will impact the very people you displaced? I am not suggesting that we all become tree-hugging socialists and don’t make any money or reward ourselves for the risks we take. I am simply advocating that we take into account all parties including employees, customers and our communities at large when we make business decisions. These qualitative numbers are often the most overlooked numbers when analyzing business decisions. Great accountants take these into consideration as well.

Remember, what goes around comes around!

Your friend,

Rick Barbosa