Good Feel For People

The human resources department of one large company I worked for traveled to the various manufacturing sites leading management seminars. I can still remember one where they put up one of those consultant’s 2×2 matrices. They compared “feel for people” versus “intellectual control of emotions.” Good and Poor. Of course, the top right box was good in each category. 

That is something for which we can strive as leaders of organizations whether non-profit, or profit, or church, or wherever 3 or more are gathered for a task.

I thought of this when I read Axios (one of my two favorite news sources) Finish Line newsletter about the private equity firm KKR. If you don’t know KKR, think the Richard Gere character in Pretty Woman.

The big picture: KKR operates what it calls “Centers of Excellence,” including one focused on human capital. One of its goals is to learn how to identify great leaders, whether current CEOs or future CEOs, for the sake of driving outsized returns. The focus is more on psychological traits than on résumés. Behind the scenes: KKR has discovered that having a genuine sense of empathy might be the key identifier, according to Pete Stavros, KKR’s co-head of global private equity. For example, does the person exhibit a sense of responsibility not only for shareholders and top executives, but also for the most junior of employees? In other words, a North Star of: “My people, my problem.” Other signals could include a company’s safety record or employee engagement scores. The bottom line: This might sound squishy, particularly to spreadsheet obsessives. But private equity might be one of the last industries to recognize the importance of corporate culture — and how that culture can beget capital.

Podcast Manufacturing Leadership

Gary offers observations on the continuing saga of former GE executives running Boeing changing the culture from engineering-driven to Wall Street-driven. Also thoughts on good manufacturing leadership.

Some people have nothing to lose in the game. They have no skin in the game.

The Milton Friedman school of economics says top executive need to have stock in the company so that they have skin in the game. Of course, that led to excesses like Jack Welch at GE and his protogés at 3M, Boeing, Home Depot who all ruined thriving companies by playing financial games in order to maximize their stock options in short term gains. Did they have skin in the game? Well, would they lose anything if the stock didn’t perform? Probably not much since they also negotiated large salaries and golden parachutes.

Skin in the game would have been if Elon Musk had sat inside the Cybertruck when they shot at it to test the bulletproof construction.

Soul in the game is when you care. Robert Pirisig writing his essay on quality in Zen and the Art of Motorcycle Maintenance talked of the mechanic who cared about the quality of his work. Obviously the executives at Boeing had no soul in the game.

Turning The Giant: Leadership Challenges in Control and Automation

October 2003. We had a couple of issues of our new trade publication, Automation World, out into the world. There were two user conferences the same week that month. Foxboro (Invensys at the time) held its meeting in Houston. Emerson Process gathered users in Orlando.

Co-founder Jane talked it over with me. “I’m more acquainted with Emerson, so why don’t I go there, and you go to Foxboro?” OK. I found myself in Houston while she was in Orlando.

TLDR—I was in the midst of product meetings when my phone rang. Jane. “You’re got to get here.” What? “They want to talk with you.” So, I found a department store in downtown Houston to buy a shirt and underwear. Online, I found a way to fly to Orlando and then back home from there.

I wish I’d have had this new book, Turning The Giant: Disrupting Your Industry With Persistent Innovation, by former Emerson Process CEO John Berra then. I knew very little, well actually almost nothing, about Emerson at that time.

Marketing Director Bill Morrison conducted a person tour of everything at the exhibit hall. And thus began a 10-year relationship with many really smart and nice (at least to me) people. And I saw a lot of technology development over those years along with increasing market reach.

And Berra is the only other man I’ve run into who also played Bellomy in The Fantasticks in community theater.

After he retired, I asked John if he would write a column for Automation World, which he did until the month I left the magazine. 

Berra’s book takes a look at his career in control and automation with the stories of companies he worked for and how Emerson Automation all came together. The central theme looks at overcoming challenges (Giants) leaders will face and must overcome. It’s interesting for those of us within the industry. It is also useful information for new would-be leaders about how not everything goes smoothly and what to do about it.

Since I reported post 2003, I’d have liked more details. I understand he had to fit it into his theme, though. Even if you were an ardent Emerson competitor back in the day, it’s worth a read for the background of today’s market. And the leadership lessons are worth the price of the book.

You Can’t Inspect-in Quality

I took a position as quality assurance manager at a manufacturing plant early in my career. I had been doing product development and had turned down a quality manager position a couple of times. But, this was open and seemed like it could be good.

It took only a few days for me to discover W. Edwards Deming. 

I found myself battling:

  • The chief designer who specified the minimum specifications possible for materials;
  • The manufacturing engineer who bought tooling then washed his hands when they didn’t perform;
  • The purchasing manager who bought components and raw materials from the cheapest source;
  • The general manager who overrode me when products from his good friend failed to meet spec;
  • People on the shop floor who wanted to do a good job versus a system that confounded them.

I lasted a year, then I found a position elsewhere in product development and engineering.

These memories came flooding back to me when I read that the official Boeing response to yet more problems with the 737 Max program was to do more inspections.

Oh, for crying out loud! From what I’ve read, the source of the problems with the system and program management was the CEO’s office. The board needs to begin fixing things at the root. And then bring in someone strong in a power position to change the system. It doesn’t take a genius to see where shortcuts were taken along the line in order to get production (and sales) ramped up.

You don’t achieve quality from inspection. At that point, it is too late. Fix the system. Advice from 45 years ago.

What Happened to Microfinance, or Is It Time to Reevaluate Your Processes?

I bought into the microfinance system almost 20 years ago. An avid reader at the time of Leo Babauta’s Zen Habits blog, I joined his group lending $25 to people around the world to support their nascent businesses. We used Kiva.

For many years, repayments came in regularly, and I would re-loan the money. I don’t know when I first noticed that the loans were not going to people but to organizations. And the repayments became infrequent. It would be months before one of my $25 loans was repaid in order for me to loan again.

Meanwhile there came a barrage of daily (or more often) emails from Kiva to loan more.

I was growing suspicious. Didn’t know why. But something had changed.

I also started to read little snippets about microfinance not always working.

Then came this article in MIT Technology Review. What happened to the microfinance organization Kiva? A group of strikers argue that the organization seems more focused on making money than creating change. Are they right? By Mara Kardas-Nelsonarchive.

“The Kiva users noticed that the changes happened as compensation to Kiva’s top employees increased dramatically. In 2020, the CEO took home over $800,000. Combined, Kiva’s top 10 executives made nearly $3.5 million in 2020. In 2021, nearly half of Kiva’s revenue went to staff salaries.”

Despite this income, Kiva turned over CEOs almost as fast as the Cleveland Browns turn over quarterbacks.

All this to suggest that we all need to reevaluate our processes and patterns periodically. Sometimes our path had turned into a rut leading somewhere we don’t wish to be.

This works for leadership, as well. It is good to have people question processes from time-to-time. The process that worked ten years ago may be detrimental today.

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