Middle management

Middle management

Summary: there's always someone who can retroactively prove he warned you of the certainty of failure

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TOPICS: Oracle
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Do you know why Ford can't make a Volvo despite owning the company? Both the Five Hundred sedan and the Freestyle station wagon are Volvos made by Ford, and they're good cars, but nowhere close to the originals.

Do you know why Sun can't seem to monetise its research? Niagara, ZFS, Dtrace, these are the world beating technologies you've heard about - and you'll be hearing about stuff like Thumper and Pulsar soon enough, but there are hundreds of other great ideas, There's always someone who can retroactively prove he warned you of the certainty of failure. like the Piazza impromptu desktop interaction software, that you'll probably never hear about.

Why?

In both cases the answer is middle management response to the forces driving the organization.

In big public companies like Ford and Sun the thinkers, whether in the labs or the executive suite, can turn astonishing new ideas into breakthrough technologies or strategies only to see these defeated by middle management. why?

Well, talk to the roadblocks and what you'll find is that these are mostly sensible people doing a difficult job in which the risk of change, however small it may appear in other eyes, almost always outweighs the certainty of slow decline that goes with just continuing to do what worked yesterday.

Fundamentally the problem is one of corporate incentives: middle management is charged with "execution," getting the job done, bringing in the numbers. Want to lose your credibility at either company? make yourself responsible for a breakthrough product or strategy that fails - in big organizations there's always someone who can retroactively prove he warned you of the certainty of failure if what you do goes wrong; and it doesn't matter if that's a sales compensation policy change, or a part that becomes a million car recall; there's always someone.

In some ways being a middle manager is a lot like being a sysadmin: hands off is best; if it worked yesterday, it'll work today - provided no one changes anything.

Bottom line? Companies like Ford and Sun often innovate through spin-off and acquisition: an acquired technology worked yesterday; for somebody else, of course, but it worked - it's proven, the initial lawsuits are over and it's safe to adopt. So Ford's first generation Volvos are better Fords and crappy Volvos - the next generation will be closer, and as long as Volvo continues to innovate, Fords will get better too. That's their strategy and Sun's isn't a lot different: some of the most promising people get pushed out of the company where they turn into zealots developing their new ideas, often with back room help from senior Sun players - and then bring those ideas back to Sun along with their own middle managers when Sun buys them back in.

It works, sort of, but it's incredibly wasteful. What we need, what both companies need, is a way to reduce performance pressure on middle management while reducing the barriers to successful innovation. In the short term flattening the management structure does that -because if you can't take them along, getting rid of them works too.

But in the longer term that fails, because someone has to do the management job - so here's my idea: flatten the organization a bit by narrowing individual middle management jobs enough to accommodate perhaps 20% more players promoted from the junior ranks. Then give your newly overweighted mid ranks a slush fund and an additional job: spend 20% of their time working somewhere outside of their own areas in the organization with a clear focus on making new ideas, new technologies, and new strategies work. In other words, reduce the pressure with one hand, and with the other create the conditions needed for an institutionalised, in house, skunk works mentality to spread throughout the business.

Topic: Oracle

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  • Crappy Volvos

    My wife's Ford 500 is a pretty good car - remarkable for a first-year model. Your FORD and Volvo comparison would be better if you chose FORD and Jaguar. FORD quietly spent ANOTHER 2 billion dollars on that Jag-hole last year - and told the workers that we didn't make a profit (duh-uh!). The FORD/Jag story is the opposite of Volvo - take a REAL crappy car, spend WAY too much money and get a decent car (number 3 on the quality ratings).

    The Volvo IT department was almost as large as FORD's when they bought it. The ratio of sysadmin to computer was very high - and the costs were astronomically high too. I guess crash testing is an intensive IT activity! Ford has been integrating them - and cutting some, for a while now. They now use standard loads and tools so IT costs have come down.

    Volvo never had a great small car. Their legacy was family sedans. Today they have the S40 - which is a FORD Focus by any other name. Volvo has done their own modifications and it's selling. Is it crappy?

    Volvo never had any SUVs - their legacy was station wagons with all-wheel drive. Today they have a decent SUV crossover the S90. Is it crappy?

    Just which Volvos do you have trouble with? The S60 is the FORD 500 platform - but I haven't seen any quality issues with that one.
    Roger Ramjet
    • ooops, guess I wasn't clear

      I said, or tried to say, that the 500 and freestyle are great fords and crappy volvos - not that volvos are crappy or the 500/Freestyle bad. (a case of
      averaging up for Ford).
      murph_z
      • Not sure that's so true

        With the new 2007 model year, things like side-curtain airbags are becoming standard on FORDs. Isn't that MORE like Volvo?
        Roger Ramjet
      • OT: Great car is subjective

        What makes a Volvo better than a Ford?
        - Reliability?
        - Safety?
        - Ergonomic design?
        - aesthetic design?
        - performance?
        - efficiency?
        - fit & finish? (nicer looking plastic)
        - brand recognition?
        - value? (costing twice as much?)
        - not made in the USA or Canada?

        It's amazing how many people on the east coast will buy a Mazda Tribute and love it but would be offended if you suggest they even look at a Ford Escape.

        Anyway, you have to be more precise Murph. Especially when comparing products in completely different price ranges.
        Erik Engbrecht
        • The comparison isn't central to the argument

          But - all of the above except where it's made. I'd prefer a made in Ontario or Michighan instead of Belgium (Ghent) - and routinely tell people looking at products like the Mazda 3 to get the Ford instead.

          however.. what I'm talking about here is that Ford has to buy companies like Volvo to get past the barriers to change imposed by middle management. In effect, they've outsourced both innovation and market testing and not because they don't have great engineers, but because they can't get in-house change pushed along very quickly.
          murph_z
          • Platform Commonality vs Innovation

            Manufacturers like to have to high level of commonality across their products. This makes sense because it avoid duplicate engineering effort and leverage economies of scale in manufacturing and procurement.

            The problem is when the number of market segments being served becomes too broad. There are technologies that can be put into a Volvo in a cost-competitive manner that cannot be put into a Ford - at least not yet.

            The problem is the closer a Volvo is to a rebadged Ford, the more money Ford makes on selling the Volvo. The question changes from "How can I bring the technology in a Volvo the the mass market?" to "How can I market the technology in a Ford as a premium car like a Volvo?"

            In the short run this works. Most people buy premium brands based on reputation/prestige. As long as Volvo maintains its prestige people will pay for it, even if all they're getting is a badge and some heated seats. Except eventually the prestige wears off. Look at Lincoln and Cadillac (well, Cadillac is rebounding...and if Lincoln would have continually evolved the LS and expanded it could have rebounded, took, but instead it pretty much abandoned it).

            I'm not saying middle management isn't blameless. I'm saying many American companies have a hard time saying "I'm going to accept a lower margin on this than I have to in order to get experience producing technolog X, because I know technology X will produce profits in the future."

            With all the technologies Sun in cranking out, I don't think they have that problem. Sun's problem is schizophrenia.
            Erik Engbrecht
    • Volvo never had any SUVs - because it did not need one outside of the USA!

      Only US market forced that need. All other world (nmajoprity) does not need SUV's as they are special purpose cars which average American does not seem to understand or understands opposite way.

      The fact is that Volvo had to adopt something in order to gain market share. SUV's were well seling cars.

      However, I would like to see popularity of SUV's when they become safer - that is after 2009 when by common agreement between manufacturers they will be required to have equal deformation in accidents as any regular passenger car. Now that means they will be softer and thus safer not only to passengers and driver, but also to everything around.

      If one still thinks harder is safer than the one confuses safety with irresponsible driving.
      FirstNLastN
  • Personal struggle with FORD IT middle management

    I have been fighting the "good" fight with FORD IT MM for a long time now. The risk-adverse feeling is very strong. I give credit to FORD and their "Way Forward" plan for soliciting ideas from the workers and actually considering them (President Mark Fields thanked me for my last one). But that is top management, and that's a different story.

    I have had to work my proposal through top-down (CIO) and bottom-up (supervisor) to actually get any traction. The middle management have the same refrain - "Business Case!", which means that you have to do the research to show that your idea saves X dollars - before it gets considered. Not being a financial forecasting and research expert - I am struggling. Never mind that FORD IT spent half a billion dollars on Everest (and is now suing Oracle). Never mind that FORD IT spent over $100 million on Tivoli (that STILL doesn't work). Never mind that FORD IT buys hundreds of IBM X-series servers that cannot produce a crash dump - even though it's a prime requisite for starting an IBM service call. FORD IT wastes millions - and I have to quantify/justify that my idea SAVES money.

    Funny thing is - this is giving enough exposure with the management to some day BECOME middle management. Nothing like going from being a part of the solution to part of the problem . . .
    Roger Ramjet
    • OT: What parts of Tivoli?

      I don't know how much we spent on it, but we use Tivoli for backup/recovery and aside from being slow when recovering large numbers of small files it seems to work great. But then I don't personally deal with it...I say "I need a backup taken right now" or "I need this directory restored to it's condition as of June 12" and it just gets done. But I'm friends for the lead on it and he seems pretty happy with it.
      Erik Engbrecht
      • Exactly

        You are using TSM - Tivoli Storage Management. I am of the opinion that this is not the greatest backup solution. One full dump and many, many incremental dumps makes recovery dog slow. I also wonder if it is fine-grained enough - it seems that you can only backup an entire volume - instead of having rules to apply to different directories (like Netbackup).

        FORD bought the whole Tivoli mess. Application distribution, Monitoring, etc. You know, one click and something gets done! Appallingly bad software is how I would describe it . . .
        Roger Ramjet
    • Empire building

      I worked on projects for Irish government departments (population 3 million) and UK government departments (population 20 million).

      Pretty much every time in Ireland, a good system was achieved by minimal hardware and software and people to support this simple solution. (like a regular PC in the corner as a server for government documents for a given department).

      The UK equivalent involves a high powered CIO with a massive team and literally tons of redundant hardware. 60 million addresses doesn't take up that much space on a hard disk!

      The bottom line is that the Irish solution cost a fraction of the UK solution (the population difference is relatively meaningless).

      Also the UK government has presided over the most appalling screw ups on new IT systems, and still they keep to the same formula.

      I think the problem is that the UK government is big and bloated. Lots of interested parties and hangers-on. And this is the same with your Ford example.

      Strategic claptrap: armies of people implementing ridiculous "policies".
      stevey_d
      • ridiculous policies

        Previous poster presented a great example of this. Why should every project be evaluated using Net Present Value techniques.

        If everything is going to be evaluated on this basis, you don't need a manager, just a cell in spreadsheet... is [money generated by idea] > [cost of implementing idea].

        Let me guess if the project saves $1,000,000 it will be agreed to, if the project will lost the corporation money, it will be rejected.
        Wow you've got some sharp sharp executives there my man.
        stevey_d
  • Alternative purpose for middle management

    Frequently where I work it seems like the purpose of MM is preventing people below them from being turned into cannon fodder.

    The ones who actually manage to do more than that don't stay middle management for long.

    Making middle managers human shields tends to make them very conservative.
    Erik Engbrecht
  • The "official" name for it is SkunkWorks.

    Murph, your about my age (give or take a decade <g>) so you are old enough to remember the phrase "SkunkWorks".

    Given enough time, what's old becomes new again...
    No_Ax_to_Grind
    • He he freedom through "unofficial" projects

      I've seen some amazingly complex and devious examples of this.

      The funny thing here is that managers would be infuriated to find out about them, but often it's the skunkworks projects that save the corporation!

      Staff actually *LIKE* work and want to keep their minds busy, and often know what's best for the corporation and staff end up fighting management who do not listen to the staff. (dysfunctions of management, information flow from top down only).

      In some ways it would be a shame to work in a corporation with perfect managers, since this would make Skunkworks redundant.
      stevey_d
  • "But we're different!"

    In addition to fear of change, or perhaps re-enforcing it, this battle cry is what's usually heard even when a proven innovation (proven by another division) is proposed.
    doctorrickb
    • All too true! (NT)

      .
      Erik Engbrecht
  • Fear of Change

    I think this article makes the point well. In a tech environment that is struggling with outsourcing where do you find MM leadership beyond the limited - saving jobs role? MM have the task of driving down corporate sales pitches to the financial sector, into real tasks for people to accomplish (how many Sys Admins can save a multiple of their salary every year in cost cutting - year after year?).

    With the "work harder who has time to be smarter" approach, we find ourselves in a dwindling team size with larger tasks to perform with the CEOs talking revenue gain to the "Street" for this quarter. Is it any wonder with this environment that MM hides and is afraid to scurry into the corporate gunsight as the next cost cutting "opportunity"? Also - have you ever noticed any company anywhere that touts that it cut costs as their sole means of success... being successful long term?

    Good idea on the extra coverage to allow for experiementation - but it will not be funded - quarter results need to come out in a few weeks and we need to juice the numbers - not plan for next year.
    Jim888
  • CEOs more concerned with managing their stock options than the corporation

    I don't think the blame can be entirely laid at the feet of one bit of lower management. If you read Sun Tzus 'Art of War' (it is just like all good management books at the end of the day - common sense), then the General (CEO) is responsible for everything below him.

    But it's my feeling that most CEOs are more concerned with personal wealth than the joy of driving a corporation to victory.

    1. Listen to your staff.

    2. Don't blame your staff. If you use blame, you won't do anything to fix real problems. Most staff enjoy work, have nothing better to do, and *could* do nothing all day. They do do their jobs, otherwise western economies would have crumbled by now.

    3. Mobiles and Internet use particularly web-surfing and Instant messaging can be like drugs, with the individual fighting their own nature to stop using them so much. Blaming the individual does nothing, especially when the workers catch the manager doing the same ten seconds later!
    Ban it if you can't control it. Mobiles are as pervasive as IM. Workers can get lonely in cubicles and so on, so maybe group working would be preferable.

    4. How many "managers" know what their staff are doing? Hardly any these days. If you play Freecell all day instead of knowing what your staff are doing, how can you praise effort and achievement?
    Using the "stick" part of "stick and carrott" on it's own makes an organisation sick. You should hardly ever use the "stick" (see 2), and use the "carrott" all the time to show you know what people are doing. You also need to logistically plan their efforts against work that needs doing. If you don't know what they are doing, you can't plan at all.

    Even if all the right things are done, the corporation can still hit an iceberg. That's life.
    However, I think that most large corporations are rubbish at getting a job done. (I'm in favour of minimal government because they are also rubbish at getting a job done)

    So if you do management right, it's easy to clean up in the marketplace.
    stevey_d
    • No, CEOs manage the company to increase...

      ... the value of their stock options.

      Base their incentive on stock options and they will lay off essential staff because the market applauds with a hire share price.

      Base their incentive on profits and they will lay off essential staff to improve the short term bottom line.

      CEOs remain for (what?) 5 years, so they want to maximize income before receiving their golden parachutes. If the company is driven into the ground, a successor can gain a retention bonus to see the compnay through bankruptcy.

      Most companies would be better run if CEOs received no incentives, just straight, unalterable salaries.
      Anton Philidor