So You Think You Can Manage…
by
Hans Hofmann-Reinecke,
PhD
Copyright © 2011 Dr. Hans Hofmann-Reinecke
Published by Reinhard Stompe at Smashwords
Smashwords Edition, License Notes
This e-book is licensed for your personal enjoyment only. This e-book may not be re-sold or given away to other people. If you would like to share this book with another person, please purchase an additional copy for each recipient. If you’re reading this book and not purchase it, or it was not purchased for your use only, then please return it to Smashwords.com and purchase your own copy. Thank you for respecting the hard work of this author.
Preface
Introduction
Chapter 1 What the %&#**! Is Management?
Chapter 2 Distinctions and Intelligence
Chapter 3 What the %&#**! is a Project?
Chapter 4 Six Elements instead of Alchemy
Chapter 5 Objectives
Chapter 6 Collective Intelligence
Chapter 7 A Project’s Genesis
Chapter 8 The Art of Planning
Chapter 9 Risk Management
Chapter 10 Controlling
Chapter 11 Leadership
Chapter 12 Who wants to be Successful?
Preface
As a student of Biochemistry and Chemical Engineering I dreamt of a career in academic research; or at least of an engineering career in the respective industry. It would not turn out like that. After being hired straight from university by a pharmaceutical company it took no more than six month and I found myself in a management position. Today I am still a manager, in a different company but in the same trade; as Head of Division of a several hundred million Euro laboratory reagent business of one of Germany’s most renowned pharmaceutical/chemical corporations.
When the author of this book told me about his intentions to publish his views on management, I was pleased to offer my contribution in form of an introduction. But first, please allow me a quick flashback.
23 years ago, when I started work on my Ph.D. thesis, I asked the professor to agree with me on a concrete objective, the achievement of which would then grant the aspired academic title. The professor was bewildered by my request, but eventually he agreed. When after just under two years I had attained the stipulated goal and informed my mentor that I considered my mission completed, he was not only bewildered, he was upset. He missed the scientific ardor which was supposed to keep me working after I had reached my goal.
After this venture into academic research I entered the world of corporate pharmaceutical management full of optimism. But imagine my frustration when I found myself in meetings with high-ranking decision makers who tried to advance matters without having set clear objectives; who again and again ended up entangling themselves in technical and scientific discussions.
I had learnt very quickly that managers are guided in first place by their affection to the things that they grew up with: their technical expert knowledge. That’s where they feel at home and safe. From this vantage point everybody contributes to the discussion and tries to influence decisions. In other words, it became obvious to me that few decision makers had a clear concept of what was expected from a manager and of how to proceed in order to achieve it.
During those days I met the author who worked as a management consultant in our company. Through him I learnt that my experiences regarding professionalism in management in the pharmaceutical/chemical sector would have been no different in other lines of business. It was an across-the-board problem.
This is in effect surprising, because management can be quite simple as long as we stick to a few rules of the game. Such an approach to management, based on logic and pragmatism, was implemented in our company by the author. His advice for managers is now available as a book. He offers directives which are as logic as they are obvious but which are nevertheless new to most managers. The book should be standard reading for everybody who “simply wants to manage”.
Dr. Andreas J.G. Rauh, Senior Vice President Lab
Essentials Merck Millipore, Darmstadt/Germany
Introduction
No more than 20 generations ago, our worldview was a mix of superstition, taboo and dogma. People would believe that a heap of rags, left in the corner of a room for long enough, would spontaneously develop into a bunch of mice or rats. It was the time when Tomas de Torquemada was chief of the Spanish inquisition, with its colorful auto-da-fés and with redheaded young women being persecuted as witches. Alchemists and doctors of that era tried to transform everything that they could get their hands on, into gold, or if this malfunctioned, into an elixir for eternal youth. There is no evidence for their success on that either. Instead, they had to look on helplessly, as the bubonic plague took its toll on human life.
Science in that era was a quarrel between different schools of thought, with conflicting dogmas, trying in vain to understand the true nature of things. Having failed in this endeavor, the respective pundits could at least take comfort in seeing their academic foes being burnt at the stake.
It was from those dark ages that Western Civilization eventually emerged like Phoenix from the ashes. From now on, rational thinking replaced bigoted indoctrination; the light of awareness and logical insight irradiated the corners of the somber labyrinth of superstitions; clarity of mind triumphed over dogmatic blindness.
This enlightenment kicked off such powerful scientific and technological advancement, that progress during the past 400 years seems to dwarf the preceding four thousand or four million. Today we are governed by logic and enlightened intelligence.
Or are we? There are still some corners, even today, in the early 21st century, where the light of awareness and logical insight has not penetrated. There are still domains, where different schools of thought, with conflicting dogmas, try in vain to understand the true nature of things and each year their pundits besiege us with appeals to forget whatever we learnt so far – because “now cometh the truth”.
You guessed it precisely; I’m talking about the world of management.
So in case you have been in touch with this trade, as a perpetrator or as a victim, you may be relieved to learn that management does not have to be black magic. Our companies can do without witch hunts or auto-da-fés, without superstition and taboos. The same clarity of mind and unbiased intelligence, which made so many other disciplines flourish, can be applied to the realm of management as well.
This book will demonstrate to you that Management is neither a secret craft nor alchemy. Management is not rocket science either. It’s not even science. It is simpler than you believe and most of its seeming complexity is in reality a result of mental laziness, of lack of logical discipline.
You now have the chance to unmask all those little mix-ups and charades of yours, which have kept you from genuinely enjoying your job. You are only a few pages away from feeling 100% secure and professional in your position as a manager.
Enjoy!
Chapter 1
What the %&#**! Is Management?
1.1 Oh no! Not another Book on Management…
If you ever stood in front of Napoleon’s sarcophagus at Les Invalides in Paris you must have been convinced that you would never see an equally pompous burial place again. Wrong! Just take the 30 minute stroll to the Institut Pasteur in the 15th district and you will find another crypt that will take your breath away – and deservedly so. The celebrity who was laid to rest here is worthy of every single bit of that splendor.
Up to the middle of the 19th century doctors and nurses paid little attention to cleanliness. Operations were carried out with dirty instruments while surgeons wore gowns that were almost as filthy as their hands. Any operation was Russian roulette for the patient with a 50% chance of dying from sepsis. It was Louis Pasteur who (among many other things) discovered the correlation between those deadly infections and germs. By doing so he ushered in the custom of sterilizing everything before it would come in contact with a wound. This practice increased a patient’s chances for survival after operation considerably; in particular it reduced the devastatingly high incidence of childbed fewer. It was a giant leap forward in medicine and a blessing for mankind.
We may trust that a lot of literature has been published on each detail of sterile handling in the meantime. E.g. there will be books about the best chemicals to use in order to clean one’s hands; what would be the best water temperature for washing; for how many minutes; etc. Now suppose that somebody studies those books meticulously but without understanding the underlying problem of germs and infections, without seeing the full picture. Then, in practice, after following all the good rules for washing and rinsing, he might sneeze, covering his mouth and nose with his hands. He is now no longer sterile and all the books on washing and rinsing were futile. Nevertheless, he might believe that everything is ok - he had followed the procedures by the letter. Without being able to embed those procedures in their logical context, however, they are of little use.
There are more than plentiful books on the market about the many different methods and tools available in the world of management. There is abundant literature on the Matrix Organization, on Strategic Planning, on Time Management, on People Management, on Risk Analysis, on Project Planning, on Controlling, etc. Nevertheless we see top managers making strategic decisions which are totally wrong, despite many pages of Risk Analysis and Scenario Assessment prepared by their staff. We see projects fail pathetically despite employment of the latest version of MS Project and despite those Team Coordination and Motivation tools.
How can it be that today’s management is still such an amateurish affair - in spite of all those books and trainings and tools?
Like in medicine and like in many other fields it is easier to explain, to understand and to accept the details than to convey the full picture to which the details belong. But the details will not help us succeed unless we comprehend the whole story.
This book will provide you with the imperative insights into intelligent management. You will recognize the skeleton that gives the body of management its structure. The tools and methods mentioned above are the muscles that fit snugly into this framework.
1.2 The World from 15,000 Feet
Among the things that have fascinated me all my life are flying and physics. I like the relentless logic that governs both of them. If you control this logic, then new worlds open up for you – in the sky and in science. But without it you end up ridiculed, as inventor of another perpetual motion machine, or as a mess of broken bone and flesh in a heap of crushed aluminum. Neither in the air nor in physics can you steal your way out of a nasty situation by smart talking, by looking cute or by invoking friends in high places. You cannot fool nature.
I love science, but I did not love all aspects of life as a scientist. So, in my early forties I ventured into the world of management. From one day to the other I left the universe of quantum mechanics and I ended up as head of a company that developed and manufactured electronic devices for medical diagnostics. The aorta of our cash flow was a business with blood glucose meters. We sold them in large numbers to a big pharmaceutical corporation, who sold them to diabetic patients worldwide. At that time we were the global market leader.
My highest priority in the new job was to make sure, that nobody would find out that I was actually not a manager. When during a meeting, terms like “strategy execution” or “stakeholder integration” were dropped, I looked into my papers and nodded thoughtfully. When the engineers talked about “critical paths” and “moving targets” I tried to look impressed.
Nevertheless, despite my naiveté in matters of management, I had quickly found out something crucial: our customer was furious. Our key patron was seriously upset, because it took us too long to develop new products. If we were not able to cut our development times in half, then we would be out of business. So my task was to “dramatically accelerate our development projects, without compromising costs or quality” – as the angry Director put it.
How should I accelerate our projects? Should people walk faster down the hallway, should they talk faster in meetings, should they type faster on their keyboards, should their screwdrivers turn at a higher RPM? Would this dramatically accelerate things? I was not sure. I was however sure, that my fresh career as a manager would come to an early and ignoble end, if I did not come up with a solution.
Not too long ago, pilots of small aircraft relied on a chart and on their eyes to find an airfield for landing. Once they had come close to their destination, they would scan the terrain for any evidence of aviation: hangars, towers painted in red and white, aircraft parked on the ground, or a landing strip. This search could be quite demanding, when going somewhere for the first time. I remember situations when I was eternally circling the surroundings of a little town, searching for the runway, and fearing to run out of fuel.
During those times I made an interesting discovery: if you don’t find it, you either are looking in the wrong direction; or you are looking in the right direction, but you don’t recognize it.
Was I looking in the wrong direction as I was searching for a solution for our projects? Or was the key in front of my eyes, only I did not see it? In a moment of desperation, I took a look at our projects “from 15,000 feet” and I saw something.
An important step during the development of a new device was the delivery of prototypes to our customer. Those gadgets had to be identical in shape and function to the serial product. The customer would test their ease of handling and eventually, once satisfied, would give approval for mass production. This rite of passage had been successfully exercised several times in the history of cooperation between client and supplier - but it had a high price.
The brain of the final product would be one single, highly integrated, custom tailored electronic chip, while the prototypes’ brains had to be assembled from myriads of separate, commercially available elements. This was a tedious and time consuming procedure. It became obvious that the construction of prototypes was the main reason for our long development times.
Was this the only way to do our job? Our customer’s chief pharmacist explained to me the various tests they carried out with the prototypes. I asked him, if he could live with a device, identical to the final product in all respects, but with a cord attached to it, connecting to an external computer. “No problem” was the answer.
That was great news for us. Now we could move the entire “brain” of the device into a PC, leaving only elementary parts, like display and buttons, in the little box. The PC would be programmed in a comfortable language, to simulate the functions of our machine. This cut our development time in half, which in turn saved our business.
But how was it possible that despite all these Project Management Tools, despite the multi colored charts on the lab walls with critical paths and milestones, one had missed this point during all those years? Is there a failsafe method to avoid the most costly mistakes in management? The answer is yes, and you will find it in this book.
This book is also about managing projects. We will soon see, however, that there is no big difference between managing a company and managing a project. The basic mantra is always: Set the right objective and make sure that you achieve it… by yourself, with your team, with your department or with your staff of 10,000.
Most existing management tools help you structure your thoughts. But you structure those thoughts, which you would have had anyway. Those tools don’t change your thinking. The method offered in this book takes you to 15,000 feet; it forces you to think off the beaten track so you discover the most costly mistakes before you commit them. In the beginning your brain will resist to walking these new trails, but after the first experiences of success you will probably say to yourself: “I’d be a fool not to do so”.
Most likely you will disagree with one or the other statement made in this book at first sight. Do yourself a favor and wait before you say “false”. You don’t have to say “true” either. Just say “maybe” until you have tried it out.
The method described in this book has been implemented in companies, divisions and departments all over the world. The success exceeded the expectations of most managers, who adopted it. And it exceeded my own expectations as well.
1.3 A First Distinction
Some time ago I had a talk with the owner of a 500 employee company which manufactured wooden components for the interior of luxury vehicles. At that time they had difficulties meeting deadlines set by their demanding customers like Audi or BMW. I had offered my assistance in the management of their projects, promising that this would solve the problem.
It was my first talk with the owner and he asked me: Do you understand anything about wood, how to bend and to bond it? Have you ever done a panel for a Mercedes? Can you tell us how to always deliver the same product while the quality of our raw material keeps changing? I replied to him I trusted that he and his engineers understand wood and how to work it. I, on the other hand, understand about management. If they had difficulties meeting deadlines, then they had a management problem, not a problem of raw materials.
The owner of this company was convinced, that knowing all the technical data, dominating all technical processes, there should be no problems. He was not consciously aware of the fact that there was a need for management skills and management procedures in his company. Of course – he had intuitively acquired considerable management expertise during the years he built and ran his company. But he was not aware that management was a skill, an art, a trade in its own right. And although he frequently used the term, he had never made the clear distinction what management really was. He had never become aware that…
Management is the art of setting the right objectives and making sure that they will be achieved.
What is the practical benefit of this distinction? How does it affect everyday life and work in a company?
Intelligent distinctions reduce complexity and less complex things are easier to handle. The insight that we have a management issue at hand, instead of a technical issue helps us to look for the solution in the right place.
1.4 The Autodidactic Manager
Since the first days of our lives we used to set ourselves objectives and we made sure we achieved them. The favorite teddy bear falls from our cot and we want it back. So we scream until we get it back. Are we not all born managers?
Yes, it is more likely to find a successful, autodidactic manager, than a successful self-taught brain surgeon. We feel that an untrained surgeon would be a deadly threat to his patients. This does not mean, however, that lack of training in the management field would not have killed many a company, many a project.
There is this myth that management cannot be learnt, or need not be learnt, because it is a matter of personality. As a consequence of this widespread misunderstanding, today, in the early 21st century, management is still mostly a mixture of gut feeling, dressed with the latest boardroom buzzwords and some social intelligence.
Gut feelings may be the ideal compass when we select our partner, choose a place to live or buy a car. But gut feelings cannot handle the complexity of a new manufacturing plant or of a multi million development project. And besides, different people have different guts. How can a Board ever find consensus if its members rely on the chemistry of their guts? This book teaches your head in matters management; let time and experience train your guts.
A good manager needs talent, formation and experience, like a good musician or a golfer.
1.5 The Peter Principle Revisited: The Sham Principle
In 1969 Dr Lawrence J. Peter and Raymond Hull published a book titled The Peter Principle. They describe the absurdity of hierarchical organizations where promotions are based on efficiency and competence of an employee: A person who does a good job on a certain level for a certain period of time will be promoted to the next higher rank. Sooner or later he will no longer be efficient and competent in his/her new position. Therefore he does not deserve any further promotion and will thus stay in a position that overtaxes him. He has reached his level of incompetence. Consequently, at the end of the day, all positions in the organization will be occupied by incompetent people.
Why then does such an organization not fail and perish dramatically? Because there is always a number of employees which are headed for, but have not yet reached their level of incompetence. They keep the company running and they try to limit the damage that might be caused by their superiors who have already moved to their level of incompetence.
This was the situation in 1969 when Peter and Hull’s book was published. How is it today? - It’s even worse!
The statement that in the old days, good performance gave rise to promotion is not precise. The fact is rather that in order for us to be promoted certain people in high places must get the impression that we are performing well. It is not enough to be useful to the company, it is also necessary to make it known.
In order to progress we dedicate part of our energy to substantial work and the rest to PR in our own interest.
How shall we divide our personal resources? Would 50/50 be OK? Or would it be even smarter to go 10/90? Could we make it up the ranks by PR alone, by making our superiors believe that we are over performers while in fact we don’t do anything useful to the company?
The answer depends on three criteria: can our performance be easily, objectively measured? Can our boss be fooled easily? How, after all, did our boss himself end up in his position?
The first criterion depends very much on the nature of our assignment. If we spend our days at the assembly line then any poor performance would become obvious within a short time. It would be difficult, albeit not impossible, to succeed by PR alone in such an environment. If, however, the output of our work has only a long term effect or maybe no effect at all, then we are well set up to succeed as a sham.
How easily can our boss be fooled? That depends to a large extent on where our boss’s attention is directed to. Let’s assume that he too dedicates more than 50% of his energy to his personal PR. In this case his attention is directed mainly to his own bosses. His employees will receive little attention and he will not notice – maybe will not want to notice – that he is being fooled by his staff.
He might even be sympathetic to our personal PR efforts; after all that’s the way how he achieved his own position! Consequently some kind of strategic alliance will evolve among “shams”…
Now imagine we would observe a company like a biologist studies a colony of ants; we would identify the “shams” and the other creatures crawling around, called “the suckers”. The suckers keep the company alive while the shams make sure that they are perfectly dressed, have the latest blackberries, appear at international congresses and get their travel expenses correctly reimbursed.
A sham’s advancement may be accelerated by moving between companies. Let’s assume that he was unmasked by his colleagues or bosses as an impostor and that he is encouraged to look for another job. He will then negotiate his separation from the old company relentlessly and will receive, on top of a generous compensation, an even more generous letter of recommendation. The latter will open him the doors to the best headhunters on the block who will sell him as expensive as possible to the next corporation where he will end up one step higher on the corporate ladder.
According to the Peter Principle positions are occupied by people who at least had the necessary competence for their previous assignment. The Sham Principle promotes individuals to positions all over the place having no qualification beyond big talk, cojones and a good lawyer.
Who are the most famous shams in recent corporate history? Well dear reader, I don’t have to give any names, you know them anyway. Some have spent fortunes from their company’s coffers for spectacular M & As which never provided any return on investment to the corporation but a tremendous return on ego to the sham. They can be found in the financial, automotive, pharmaceutical, energy business; actually in any larger organization where you find people.
Would a biologist also find shams in a real ant colony? If he looks carefully he will find workers, soldiers, queens, etc but he would find no shams. Why? Because nature cannot be fooled!
1.6 Must a Business Leader have Tech Knowledge?
In Chapter 1.2 I made a point that a business leader with all the technical knowledge but without a systematic approach to management will never achieve his/her full potential. How is it the other way around? Does he/she need technical / technological expertise in addition to management skills? Here is a dramatic case study:
The engineer came home late from the office and his wife asked him: “How was your day”, “Nothing special” he replied “except that we are going to kill seven astronauts tomorrow.”
The engineer worked with Morton Thiokol, the supplier of the booster rockets for the US Space Shuttle. The decision makers of his company and of NASA had just agreed to go ahead with preparations to launch the Shuttle Challenger the next morning. They decided to do so, despite the engineer’s fierce opposition. He had warned, that the subzero temperatures expected for the night would pose an unacceptable risk to the mission. The freezing cold would cause the gaskets, which are supposed to seal the rocket’s different segments together, to become brittle and break. As a consequence, flames could pierce through the joints between the rocket’s segments and set the adjacent liquid fuel tank on fire.
We all know that this engineer was only too right. The next morning, January 28th, 1986, Challenger exploded shortly after liftoff, killing all aboard. Many factors had misguided the responsible top managers to their fateful decision. Their reasoning was guided by political and by PR-concerns. “What will the public think if we again delay?”; “Will Government cut funds if the Shuttle is never on schedule?”; “Let’s go ahead and launch; the entire nation wants to see that charming teacher in space!”
The matter of a brittle gasket was dwarfed by those imperative PR considerations. Since the decision makers did not really comprehend the technical situation, they had to rely on their judgment of the engineer’s personality and temperament. Was he possibly over cautious? How do we weigh his concerns against the general importance of the mission?
The accident was later investigated in detail, not only in order to find the technical cause, but also to understand, what had led to the tragic management decision. The chairman of the commission wrapped it all up in this final statement:
For a successful technology reality must take precedence over public relations because nature cannot be fooled.
Richard P Feynman (Physicist and Nobel Laureate)
In order to weigh public relations against reality, a manager must know reality, must understand its intrinsic laws, its technology.
A company whose success depends on the mastery of demanding technology needs leaders who are at home in that field. The list of the most successful business leaders is studded with passionate technologists. Microsoft or Intel or Audi would not have thrived without technological leviathans like Bill Gates, Andy Grove or Ferdinand Piëch at their helm.
Even if the trade is not rocket science, a business leader, who has never been exposed to the mundane nuts and bolts of his industry, will be at a loss. He will be too dependent on his staff when making strategic decisions and he will therefore be vulnerable to manipulation.
1.7 Management and Globalization
When I started consulting around 1990 my clients would invite me on a tour of the plant, so I would get a first impression. Since I catered primarily to the health care sector the tour would start in laboratories, where people in white coats were experimenting with rats or rabbits. Then it would lead through manufacturing halls with bottles moving along conveyor belts, robots dispensing liquids, chambers at high temperatures, where everything was sterilized, printing and labeling stations, packaging robots, warehouses to store the finished products and trucks with company logos waiting outside to pick up the merchandise.
Today such a tour, in most cases, would lead from one floor with offices and cubicles to another, identical floor. Where have all the rats and rabbits, the conveyor belts and the trucks gone? Well, what used to be done in the labs is now outsourced to a start up company with six people in the Czech Republic, the pharmaceutical ingredients are made in India and delivered to a contract manufacturer in China, who makes the pills and juices. The boxes are made in Poland, labels come from Hungary and storage is taken care of by an international logistics firm.
So, what is left to be done by our “Company”? They have to coordinate and follow up on the myriad of different activities carried out on their behalf all over the world. How? By exchange of e-mails; it turned out to be the most comfortable communication tool across the 24 different time zones of this planet. I can write a mail while the recipient is still asleep or already asleep. For a phone call both partners would have to be fairly awake at the same time.