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Roger Martin
Dean/Scholar

Roger Martin

Roger Martin is Dean of the Rotman School of Management at the University of Toronto and author, most recently, of The Design of Business. His website is www.rogerlmartin.com

Fewer followers, better results

In response to this week's On Leadership question: This has been a tough year for many organizations, with fewer employees required to do more with less. 2010 looks to be more of the same. How can leaders of such organizations motivate their people as they head into 2010?

First and foremost, I have great empathy for those who have lost their jobs in this downturn, especially the primary breadwinners of families. There is much suffering going on in their lives and those of their families.

However, if we look at the perspective of organizational effectiveness, I simply don't think the problem suggested in the question is a problem at all. In fact, I think it is a real opportunity. In my experience, managers vastly overestimate the incremental value of an additional person and underestimate the cost. Typically they measure cost as only salary and benefits and maybe space. But the really big cost is coordination cost - the need to meet with that person to give instructions, to review work, to build consensus, to evaluate performance, etc, etc, etc.

I learned this the hard way in my prior life running a big strategy consulting firm. When we got busy, we hired more consultants to increase our capacity. But the net effect was always to reduce our effective capacity as we spent all of our time coordinating with the new hires, not serving our clients. In due course, capacity would go up as the value of these new hires exceeded their costs. But of course, that would be almost exactly the time we would bring on another bunch of new consultants and go through the same routine. I was never able to convince my partners that more people was not the solution but rather the problem.

When I came to the Rotman School, I committed to having fewer staff in every department than our similarly-sized competitive schools in order to be more effective than them, not to save money. For example, in the combined areas of websites, events, publications, media relations, marketing and communications, we have 7.5 total people including support staff. Because we do so well on that front (award-winning website and Rotman Magazine for example), people will ask me how much we spend on marketing consultants, design outsourcers and public relations firms. The answer: Nothing. Then they ask how many people we have on staff. When I answer 7.5 people, they think I am lying. They ask, how could Rotman have developed such a brand and such media and communications profile despite having such a small staff? My response: It is not despite; it is because. We succeed disproportionately well on this front because we have stayed disproportionately small.

Those 7.5 people know they are a small, elite team, and they spend their time producing outputs not producing memos; working on branding and communicating, not on holding meetings. If I doubled the size of the team I would expect no greater output and, personally, I would undoubtedly be drawn into more meetings with the 15 people.

So my advice to managers is don't think you have a motivation challenge. Think that your people have been freed up to be more effective. Encourage them, pat them on the back and congratulate them when they produce more output with fewer people in 2010.

By Roger Martin

 |  January 6, 2010; 5:32 AM ET
Category:  Economic crisis Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
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OK EAR0614, I am happy to provide data.

There are four women and 3.5 men. The median age of the group is 39. The median salary is $75K. The median number of days of actual holiday taken in 2009 (over and above the statuatory Ontario holidays and the UofToronto holidays - like between Christmas Day and New Year's) is 15. Two are married and six are not. The median number of years on the job in the group is 8.5. Over the past 11 years (my history at the School) there has been turnover of one individual, so turnover is effectively zero. UofToronto has excellent retirement, health and other benefits. Half of the group are members of a union.

In terms of outside commitments, they pretty much all have lots of those. Perhaps the most significant is one individual who has essentially adopted a village of weavers in rural Guatamala. He spent (in chunks) two months of 2009 in Guatamala helping the weavers better market and sell their products and building a school for their children - all with full support of the Rotman School. (I give him frequent flier miles when they help out) We are proud of him and his wonderful charitable work.

On the last point - number of hours worked per week - I think the number is big. Like their boss, they love their jobs and are obsessed about the quality of their work.

I hopw rhat answers your questions but let me know.

Roger

Posted by: deanmartin | January 8, 2010 6:47 PM
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So the author responded to some comments, but we still don't know the most important pieces of information - how many hours do the staff work on average (their count, not his!), how much leave time do they take (not accrue/earn, but get to take), what they are paid, and their basic demographics (age, sex, marital status etc.), turnover, and how all of this compares to the competitors he refers to. Because until he shows otherwise, my guess is that these are young workers who are willing to work a lot of hours while they don't have families or other committments to get ahead, for a little extra money, but few benefits like sufficient leave time, health insurance, or retirement benefits, since they are not yet concerned with them.

Posted by: EAR0614 | January 8, 2010 1:12 PM
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Autofan1 makes a good point. When I say employees, I don't mean to distinguish between managers and non-managers. I mean total people.

And indeed, a surplus of managers is often the problem. One of the biggest effectiveness boosts for the group I have been talking about occurred five years ago when the boss of the two most senior in the group (and boss of others outside the group) quit. I asked the two whether they wanted me to replace her or report directly to her boss.

They chose the latter. That reduced the compliment by .5 - and by the most senior member. Nonetheless, their effectiveness and happiness shot up and has stayed up ever since.

Roger

Posted by: deanmartin | January 7, 2010 2:21 PM
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It seems to me there is nothing new in this approach to business. At least since 1990 employees have been viewed as the first expense to cut in business. Thus, ship jobs oversees to lower labor costs,(it's interesting that businesses are looking at Vietnam becaust of rising labor costs in China), don't replace jobs lost to attrition or retirement, use existing employees to cover positions that used to be given to specialists.

The comments above well summarize the low morale, overwork, can't wait to leave attitude that is so prevalent today. Having no one to cover for vacation or sick time is a particular problem in my job, and my employer is a hospital.

I just wonder where this leads. A business completly automated with nothing but a couple of techs pushing everything to its limits for the manager?

The income gap will surely grow.

There is a moral bankruptcy prevalent in business today. The game is not profits, but the continual pursuit of maximizing profits. This is legal, but criminal.

-K

Posted by: kblackall | January 7, 2010 1:09 PM
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Again, if the costs of coordination are aligned with the managerial duties, e.g., "to give instructions, to review work, to build consensus, to evaluate performance, etc, etc, etc.," then what is the simlpest way to reduce those costs in a well functioning, highly productive team?

To put it plain and simple, this more a example of why we need fewer managers rather than fewer employees. Don't fool yourself into believing there remain sacred cows in the office in these difficult times.

Posted by: autofan1 | January 7, 2010 11:05 AM
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Note from On Leadership editor: The column's author, Roger Martin, replies to commenters:

I am intrigued at the bulk of the responses. (Though thanks Paul 5301 for getting it right and to 6thsense79 for asking the respondent to actually read the post before spewing.)

The bulk of the respondents make one or both of the following assumptions about the managerial position put forward in my post:

- It is a manifesto for cutting staff and outsourcing

- The intent is to be hurtful and exploitative of the employees

While it is clearly quite fulfilling to the respondents to make these assumptions, as is usually the case when a person imagines something to be there when it isn’t, it says more about that person’s perspectives than anything else.

Now if you actually read the post, it in no way advocates cutting staff and in fact argues against outsourcing. That is in your minds. No staff were cut at Rotman to ‘get down’ to 7.5 employees (the half being a fellow whose work is split evenly between website content management within the group and general IT outside the group). The School has grown six times in revenues while increasing from 3 to 7.5 in this group.

The point is to be more careful than employers generally are when they think about adding staff. Why do you think so many of those troubled companies got in a position that they had to lay of staff? It is because they weren’t careful when they hired in the first place. I would argue that companies big and small aren’t careful enough in thinking through their hiring – and that is as responsible as any other factor for the firings, which no one, myself included likes.

The intent (and, I would argue, result) rather than to produce hurt and exploited employees is to produce happier and more fulfilled employees. And employees are happy when they feel that they are being productive doing something they care about in an environment that is fair. I believe that the best way to do that is to think twice about hiring the next person and ask whether by being cleverer about how we do what we do, can we avoid adding a person and all the attendant complexity. When the answer is no, like it was about nine months ago in the Rotman team, we went from 6.5 to 7.5 members. But that group is happier, more fulfilled and more productive in part because it has 7.5 not 15 members.

So folks can make whatever arguments they want to make about outsourcing, sweatshops and managerial elitism. These arguments are about their own obsessions not about the substance of the post.

Posted by: Andrea Useem | January 7, 2010 10:33 AM
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I'll take a small team of high performing, experienced analysts and produce top quality consulting products faster and with fewer errors than I could with a larger team of less experienced analysts. Unfortunately, in many instances, consulting firms sell and reward head count, constantly trying to place more staff on the client's project, thus trying to boost revenue. It hardly ever improves the product and dilutes the attention of the really productive analysts.

Posted by: gjhinnova | January 7, 2010 3:09 AM
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What a bunch of corporatist drivel. Make less people do more...so corporations (and CEO's) do less and make citizens pay more.

That's elitism for you.

Posted by: pcw5150 | January 6, 2010 10:43 PM
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Of course, if everyone hires less, there will be more unemployed, so there will be more competition for jobs, so working people can be paid less and top executives can be paid more. This person knows that perfectly well. Business schools are generally geared to maximize the welfare of top execs, at the expense of working people. Most of these schools are a travesty to the tradition of honest scholarship at universities.

Posted by: twm1 | January 6, 2010 10:37 PM
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@shapeshifter - It's funny you mentioned Facebook. I think a lot of my friends don't use it anymore because their parents all signed up. Some technology is perfect for old people! "31+ folks in IT" have been around long enough to let their dreams pass them by. Can't recall any of the kids in primary school wishing they could stare at pixels for a living when they grew up. Wonder how many "31+ folks in IT" can do anything more than check their e-mail? Though you are right about one thing; nothing I say is absolute.

If you really are into shapeshifting, I've got the perfect song/video for you! AND if you don't enjoy it, it's probably because you're waaay too old, and you probably shouldn't be shapeshifting anyway.

http://www.youtube.com/watch?v=RF_v7ek5o-s

@NYmous - Really appreciate your comment about my comment! Hopefully you end up reading this comment commenting on your comment about my previous comment. I might steal a part of it and put it on my tombstone, or maybe a face tattoo: _ADVOCATOR OF STUPIDITY_

Posted by: steampunk | January 6, 2010 9:44 PM
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Lean staff can work great in a positive environment. But let me review for you what happened in my workplace: The boss (owner) runs a busy practice with four staff members. The staff brainstormed and implemented ideas to increase efficiency and cross-trained so we are still up and running when one team member misses a day of work. We worked very hard and even in a bad economy, monthly revenues increased. But the boss became greedy, lied and told us we weren't making sufficient profit so he didn't share the profits as he had promised, even cut our hours when we were working so hard every day we rarely had time for lunch. The staff were now expected to keep up the frenzied pace on less pay and not even a thank you. This is an excellent way to A) turn good workers into bad workers who will stage a work slowdown or B) drive all of the good workers away. When we forget that the workers are the ones producing the profits, it's easy to treat them like dirt.

Posted by: graciousgnu | January 6, 2010 8:36 PM
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This is just silly. Some of the comments are also as laughable too. Steampunk, you in particular have a lot left to learn. With this sort of outlook, you're unlikely to innovate very much, or actually produce innovation that goes anyplace. Instead you'll get used. Cultural illiteracy like yours is why we need laws against the sort of stupidity you're advocating.

I bet you own an iPhone. I'd point out that Steve Jobs is no spring chicken.

Posted by: Nymous | January 6, 2010 8:33 PM
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To the author:
You do not sound like you've been to business school or had a formal education to justify your position, which explains why your own approach impresses you. There was a formula we learned early on about the more people you add, the more communication channels you open, and it was exponential or close to it as I recall. It is the job of managers to properly adapt and manage all of these channels - so clearly, if you cannot handle more people efficiently, you are an inefficient manager. I do agree that many times, adding more people does not add increased output linearly or even close...sometimes it decreases it. However, this is the fault of management for either poor hiring, poor training, or poor management processes.

Your solution works for you, and that's great - but if you're overworking your people, be prepared for them to run for the hills the second they can: it's what the team I was on did in a similar situation, and the company was crippled for 6+ months when we all left for non-80-hour-weeks and better pay (during the recession in 2000-2003 in telecom/IT).

To Steampunk: Sorry, no, 1-sided logic. Those 16-30 year olds are also more likely to be lazy, unmotivated, spending 25-75% of their time on Facebook and Twitter, and unable to adapt to a real working environment. The difference is, the 31+ folks in IT have been there long enough to realize that things change and they must adapt constantly. Yes, my logic is anecdotal and not absolute - which is the same case as yours, so the point is: you hire people that best meet the needs of the company, in terms of culture, skills, and attitude. :)

Posted by: shapeshifter77 | January 6, 2010 8:10 PM
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Typical mindset of the money-grubbing managerial POS.

Posted by: dlkimura | January 6, 2010 8:04 PM
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"But the really big cost is coordination cost..."


And that's YOUR salary and benefits. If a good/small team requires less coordination, then less upper level management "coordination" the better. Congratulations, you've just written an article calling for your own position to get the axe!

(hint: this is an example of REAL design-thinking, Mr. Martin...)

Posted by: autofan1 | January 6, 2010 7:02 PM
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Simple. Fewer workers. More work. And when we're done rewarding the Blessed Few by overwork, what is this society to do with the rest of us? Or is that something that American business cannot be bothered to confront?

Posted by: dane1 | January 6, 2010 5:17 PM
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How do you have .5 of a person?

Posted by: jaho | January 6, 2010 4:48 PM
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So let me understand this ... Managers should rarely hire new staff or bring additional people on board because they have to train and well, manage them.

Oddly, I understand this because managers now are so overloaded they can't manage, train or encourage staff; they are loaded up with transactional work and don't have the time. And aren't evaluated based on how well they do it.

I know there are still managers out there who evaluate themselves based on the size of their staff and not the efficiency of their operation, but come on.

Let's re-visit this in a couple of years and see what happens with this strategy.

Posted by: LAGirl1 | January 6, 2010 3:47 PM
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Hire young people. They ask for less money, are generally much more intuitive with today's technology, and can streamline old processes. These traits, of course, don't apply to all young people. They could even apply to certain older people. But if you happen upon a candidate with these traits, chances are, they are between 16 and 30 years old.

The majority of young people do not have large families to shelter and feed. They only have to worry about themselves. They don't need the paycheck of a married someone with two kids, and in this economic climate, they won't be asking for it either.

Put a random 40-something in a room with a random 20-something; ask them to name the uses of technology they encounter on a daily basis. The 20-something's list may contain the same technology as the 40-something's. The difference will be that the 20-something finds a seemingly infinite number of uses for one piece of technology, while the 40-something can only come up with two or three. This is because 20-something was raised on technology and 40-something only learned the technology when it was necessary to keep their job.

Old business has obviously flawed processes. Older people can't identify these process flaws because they've been working alongside them for so long and do not understand how technology could possibly help. A young person can not only find these flaws almost immediately, but can also think of ways to improve the process or even rid of a useless process entirely by creating a new one.

I'm not saying young people are smarter than old people. I am saying they are more efficient and worth being on your payroll.

Posted by: steampunk | January 6, 2010 3:22 PM
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What a massive load of self-justification.

After reading this article, everyone needs to get their hands on a copy of Chris Hedges' new book, EMPIRE OF ILLUSION, and read it cover to cover.

Pay special attention to the chapter titled "The Illusion of Happiness." Corporate America and its leadership -- people just like Mr. Martin -- are the problem, not the solution.

Posted by: kjohnson3 | January 6, 2010 3:20 PM
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I sort of agree, but this is not an acceptable answer for all but the smallest firms. When I first got out of school I was working for a Fortune 100 company and we had over 100,000 employees. Sure we had weekly meetings, but our manager was sharp and we stayed on track month after month. I had roughly 20 people on my team at the time. Well times got a bit nasty and they started making cuts while our output was expected to continue or increase. Any sick day wrecked havoc on the team and our internal systems were extremely stressed as work piled up day after day and then week after week. I got fed up and left. Once a company is so big and so many billions are being pushed mindless hacking at personnel is not going to work....it destroys morale and drives the best workers elsewhere.

Now I work for a very small company but there's enough wiggle room for someone to be out without blowing up the process. We've been accumulating work back up to a high level as companies have been coming back to profitable (not the actual economy, just the client companies) and we aren't planning on hiring more. We're just prioritizing and setting expectations properly so we don't have to hire people at the moment. Of course we don't believe the actual economy is going to be back to healthy until we see that the rest of the nation recognizes that our workers need to be able to buy the few products that we still build and others working 2-3 minimum wage jobs just to survive is not acceptable.


Posted by: theobserver4 | January 6, 2010 2:29 PM
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No one can argue with the reasoning of Dean Martin. It sounds as though he has exactly the right amount of employees to do the job at hand. Congratulations! The recession and subsequent loss of revenues may dictate how a company resizes and as work returns, clearly, output per employee may improve. My concern is that Dean Rotman might walk into a company that is doing well and announce that they should cut the number of employees. It's certainly happened before.
As I recall, Sunbeam was pretty much ruined by a man named Al "Chainsaw" Dunlap whose specialty was trimming employment. Of course, the quality of Sunbeam products suffered (what a surprise) and the bottom line gains were both short lived and illusory.
A company needs employees with the right skills sets and they need enough employees to meet obligations mentioned above such as vacation, illnesses, etc. If you meet those criteria you should end of with the Dean's 7.5 employees

Posted by: Raven49 | January 6, 2010 2:03 PM
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First step: Stop hiring consultants and fire the ones you have. Look internally for people with the same or similar skill sets or train people to do the job. The overwhelming majority of consultants are a waste of money.

Posted by: pjjacobs | January 6, 2010 12:46 PM
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While I think it's a leap to say the Rotman team had success simply because it's small. I get the point. I know a local business that runs a half man short to make sure everyone hustles and they do great work.

Several things are left unsaid though. A small team requires clear priorities and objectives and the rest of the business has to really buy into them and the consequences.

How hiring managers identify elite people is another thing. Often they hire someone who thinks like them but need someone with a different perspective and new ideas.

Few people start out as an elite expert. Most have to work at it and round out their skill sets. A small staff is a good way to allow people experience to do this but it rarely happens otherwise.

Your assuming the manager has the skillset to recognize elite work from good enough work. And if they don't they want to learn how to do it. Many managers are threatened when surrounded by an elite staff and not being the experts themselves.

I know that many industries have asked colleges to develop better courses to train elite workers. However, these new degrees are not mentioned in job adds or required by recruiters.

What advice would give managers learn how to develop and manage elite workers?

Posted by: talmans | January 6, 2010 12:41 PM
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Reading the article I got an impression that is different from what I'm reading in a lot of the comments here. I think the point the author is making is that a smaller team can get more done not because the individuals do more work than they used to, rather it is because the overhead of dealing with a large team has been removed. Each person is doing the same amount of work, but now that work is channeled toward producing a product, not toward coordinating efforts among team members.

Posted by: paul5301 | January 6, 2010 12:36 PM
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Maybe Martin is right. Businesses should hire fewer new MBAs, whose compensation exceeds their true contributions. Therefore, cut recruitment at University of Toronto and similar schools.

But, oh, there is a case to cut costs by hiring kids, forcing older employees to train them, and then fire the older employees. That will help cut pension and health costs. Let the despised "guvmint" and the Almighty take care of them. Root, hog. Or die.

A good thing Martin skirts any attention to the externalities of any single-minded focus on S/T bottom line. Another good thing he does not broach a contrarian hypthesis: that corporate profits might improve, or not fall at all, if cuts started with the CEO suite and moved downward.

Posted by: jkoch2 | January 6, 2010 12:14 PM
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"Do more with less". We the American worker have been hearing this for about 20 years now. That's not leadership, it's hogwash. You can cut and cut and eventually you get beyond the point where it's beneficial. There is only so much deadwood you can remove. I will concur with the vast majority of these posts. You wind up creating a negative environment in which your best and brightest tend to leave.

Something tells me this author is over-simplifying his particular situation and acting like it could apply anywhere. Maybe his current team was bloated to begin with before he got there. Maybe his competitor teams deal with different constraints that he doesn't. There could be hundreds of other facts we (and even the author) don't know about that apply to other managers' work situations.

C'mon, Wash Post, can you get some better writers than this? The line of thinking by today's business and organizational "leaders" seems to be: outsource almost all jobs overseas and everyone in America will be a manager. Not even close to realistic.

Posted by: pk_1 | January 6, 2010 12:10 PM
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I am unclear why some people consider "leadership" to consist of forcing workers to work harder for the same pay under threat of outsourcing. Organized crime is more honest on the concept.

Thirty years ago when I first joined the work force, there was a different labor philosophy - a company was considered to be a long term entity, there were enough in the work force to overlap on vacations, holidays, retirements or other reasons for employees leaving. Quality did not suffer.

Now, this writer considers "Leadership" to include reducing staff to the minimum while insisting the same amount of work be accomplished. It would not surprise me to find out this means 70 hour weeks for 40 hours pay.

What will happen if only 1 person leaves? The writer is silent.

What will happen when a NEW manager with a new philosophy is brought in? First question he'll ask: What do these 7.5 people do? Then the memos, meetings, evaluations, goal settings, mission statements, etc. will start up and there will be more chance of burnout before the whole thing is outsourced.

Posted by: shadowmagician | January 6, 2010 11:43 AM
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1) The ability to increase the value of a new hire is a skill.

2)Does he listen to his employees when they say they need help or does he just tell them to work smarter? That gets old fast.

Posted by: ccbuck | January 6, 2010 11:43 AM
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1) The ability to increase the value of a new hire is a skill.

2)Does he listen to his employees when they say they need help or does he just tell them to work smarted? That gets old fast.

Posted by: ccbuck | January 6, 2010 11:40 AM
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Very academic.

Management may not be aware of the "costs of control," but the line troops recognize it on an ongoing basis. Producing the ostensible product occupies very little of their time. Nonproductive aspects such as reporting on production, planning for production, reorganizing to simplify the management of it, going around the obstacles imposed by management, or trying to training management to stay out of the way, is the biggest part of any productive position.

The obvious truth of his main point, output is not proportional to manpower, cannot be disputed. In practice, it devolves into trying to get one more potato out of the field by beating the serfs until they bleed.

Posted by: IGiveup1 | January 6, 2010 11:34 AM
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Dynamo2000 said, "Would you rather have LeBron and Kobe with 3 other guys or Brandon Bass, Janero Pargo, Kris Humphries, you get the picture." Makes sense, but how many superstars are there to go around? In my experience the "superstar" mentality encourages managers to inappropriately privilege certain employees, ignoring or dismissing the contributions of those who have been deemed "ordinary" or worse (These are often women and people of color, though anybody can find themselves in this unhappy group for the most trivial of reasons.) Enron is a good example of how the crowned princes Jeffrey Skilling and Andrew Fastow turned out to be worse than worthless.

Of course there are employees who are not carrying their weight and they shouldn't be part of a team. But have you ever considered that maybe there are management practices that could also greatly increase or decrease the team's effectiveness? For instance, every time people are downsized, pay is cut, employees are mistreated, morale goes down, and the first thing that happens is that the best and brightest leave as soon as they can. So treating all employees well, even in little ways, motivates and retains the best ones. The inverse is also true: the atmosphere of fear and paranoia that to some extent poisons most workplaces, especially in this horrible job market, does a lot to hinder productivity as most employees, including the strong ones, squander effort protecting themselves. If you want to jack up productivity in a hurry, make the workplace atmosphere as positive as possible.

As B. F. Skinner's research showed (and which our punishment oriented culture prefers to ignore), you can only motivate people to *do* things with positive reinforcement. Fear, punishment, and negative stimuli serve only to get people to *stop* doing something. When a company downsizes and cuts pay and perks, and when even a subset of employees are maltreated, this operates as a powerful negative stimulus for the whole team.

Posted by: floomby | January 6, 2010 10:11 AM
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"...people will ask me how much we spend on marketing consultants, design outsourcers and public relations firms. The answer: Nothing. Then they ask how many people we have on staff. When I answer 7.5 people, they think I am lying."

Yeah, I'm sure this happens. In his mind. Why do so many of these "leadership" columns turn into self-promotion? They often make me angry at the self-congratulatory authors. And that's not good leadership.

Posted by: ClarkKent1 | January 6, 2010 10:08 AM
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The author's position implies that existing staff somehow are not already working to optimum output levels. Therefore, either the existing workers are 'lazy' or the hiring managers have an incompetent grasp of what it takes to get the job done. Likely these blinkered statements are about as accurate as the author's implied assumptions. Namely - not accurate at all.
Posted by: woodscw
-----------------------------------
Woodscw,

The author never implied existing workers are lazy and I would challenge to specifically point out anywhere in the piece where you think he did. The point the author made was that there are hidden costs when hiring any new hire regardless how talented that person is. He even spells out the cost for you as coordination costs. He concedes that over time the new hires value exceeds this hidden costs but then makes another statement that the cycle will start again. I don't necessarily agree with the author but I can understand the points he is trying to make. I believe you were off the mark on your assessment of the author's view.

Posted by: 6thsense79 | January 6, 2010 10:02 AM
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Fewer isn't always better, even with an elite group, how do you handle the work load? You should staff according to the volume of work.

My direct experience: With fewer people, there are problems with resolving issues, things that used to take days, or hours, now sit and fester for weeks and months, or do not get resolved at all.

How do you handle staff downtime like vacations, or illness? How do you cope with staff loss when some one gets burned out and quits? This is a very inflexible and risky strategy.

On outsourcing, I hope you enjoy the profits now, because your product is going to suffer, the quality isn't going to be there, we are moving towards a least common denominator of quality and service.

I for one do not enjoy chatting with some Indian call center rep who can't comprehend english, nor do I enjoy using their buggy uninspired software.

Posted by: Dr_b_ | January 6, 2010 9:37 AM
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Actually he is dead on. While it seems an easy reflex to say more work = more people needed, the truth is not quite so. While there is some self congratulations in the article, most companies I have worked at tend to be managed by the warm body rule. That is, I need someone to do these 5 things. I hire someone and find out they can only do 3 of them, so I hire someone else to do the other 2. The fact that person 1 can't do all 5 indicates that they can only do 1-3 adequately well, but by no means are they a superstar. Translation, mediocre people produce mediocre results. Think of a basketball team. Would you rather have LeBron and Kobe with 3 other guys or Brandon Bass, Janero Pargo, Kris Humphries, you get the picture. High quality people and fewer of them can be more productive than a mob of mediocre warm bodies. Now in the author's case, he does not have to deal with growing work volumes, so in a company that triples it's revenues year over year, you do have to add people, but the axiom still applies. Hire fewer high quality people who can figure out how to produce a higher volume of work at higher quality with less people to mess things up.

Posted by: dynamo2000 | January 6, 2010 9:36 AM
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Why is academia always so out of touch with reality? Sure this is great BS you can feed to college freshmen and hope they believe it, but experienced work professionals know better. Attitudes like this help explain why people are more dissatisfied with their jobs than ever.

Posted by: driddy | January 6, 2010 9:28 AM
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Kaizun, Just in Time, and Lean are all synonyms for elimination of slack capacity. 6-sigma is a methodology to reduce failures in that slackless environment; but the fact of the matter is that failures will happen, eventually, and usually will be catastrophic when they occur. The question for management to consider is, "Does the revenue generated by use of the lean environment outweight the cost of the failures?"

Posted by: mhoust | January 6, 2010 9:25 AM
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The author's position implies that existing staff somehow are not already working to optimum output levels. Therefore, either the existing workers are 'lazy' or the hiring managers have an incompetent grasp of what it takes to get the job done. Likely these blinkered statements are about as accurate as the author's implied assumptions. Namely - not accurate at all.

Posted by: woodscw | January 6, 2010 9:01 AM
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What I really love about this article is that it assumes the people making the decisions are competent and objective.

Posted by: hipshot | January 6, 2010 8:26 AM
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yet sooner or later management won't be happy and outsource the entire unit except for their manager to india to squeeze more profit for their shareholders...
and in time there is a decline in the sales of your product because the people that used to buy it, can't afford to...
and then the company will be sold off because it is no longer viable in this economy...
this is what will happen...
and because the goverment seeing it happen does nothing to maintain it's tax base raises the taxes on it's citizens...

Posted by: DwightCollins | January 6, 2010 7:40 AM
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"When we got busy, we hired more consultants to increase our capacity. But the net effect was always to reduce our effective capacity as we spent all of our time coordinating with the new hires, not serving our clients."

This has been known in information technology circle for over 30 years as "Brooks' Law", put forward by Fred Brooks in his classic work, "The Mythical Man-Month" (1975). Brooks summed it up as, "Adding staff to a late project makes it later" and specifically cited both the increased complexity in communications and bringing the new people up to speed as reasons why. ..bruce..

Posted by: bfwebster | January 6, 2010 7:40 AM
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End result: sweatshop.

Posted by: hipshot | January 6, 2010 7:11 AM
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This sounds like something a manager would write.

Posted by: hipshot | January 6, 2010 6:56 AM
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You talk about apples then give an oranges example. You discussed a problem where work load varied and then talked about overhead staff, an area where workload is relatively stable and predictable. This sounds a lot like all those folks who championed just in time delivery, which works fine until the door handle make goes out of business and then the entire auto production line has to shut down for two weeks until a new door handle make is found and can start supplying. Ask the auto industry about this during the crisis when parts suppliers were dropping like flies. I work in an agency that has gone from 800 to 550 people and within that a office that went from 23 to 9 people. You lose institutional memory, as there is no one in your office to tutor; you miss opportunities, since when they come up unexpectedly there is no one who can drop what they are doing to take advantage of it unless they don’t do something they were scheduled to do; and you leave your self open to having one person’s departure. Built in redundancy in staffing serves a purpose, like having two backups of IT data, it’s a question of managing it to be more production and to capitalize on opportunities. Small staffing is a way to make managers’ lives easier, not necessarily make the organization more productive.

Posted by: crete | January 6, 2010 6:47 AM
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