Archive for October, 2009

The Dean’s Disease: How the Darker Side of Power Manifests Itself in the Office of Dean

The Dean’s disease in my opinion is not just a problem in the academic world with deans.  This can and does happen in the workplace all the time.  Managers get stuck in this warped sense of power and they use this power to get what they want and some of the time they don’t even know they are doing this.  They are able to influence the people under them because the people under them are in constant fear.  This is just how dean’s influence the faculty under them by controlling the resources of the faculty.  Managers, higher-ups, and deans all use two main things to keep their control.  They use “Coercive power and Reward power.”  The Coercive power that they use is basically the fear they instill in the people under them by either threatening to fire them or showing them how “dumb” they are or just by belittling them.  The Reward power is the simple power of being in control of what the employee’s or faculty under them takes home, i.e. their salary.

All this described in the previous paragraph creates a sort of protected cocoon that deans live in.  They do not have a clue what is going on because they have isolated themselves because of their power and the separation it has caused.  They create what the article called “doppelgangers” because people are afraid to do what they want or think is right to do because of fear.  This doesn’t allow the dean to ever get the truth as to what is actually happening in their college.  This eventually creates an inner-circle and in this circle the truth is always sugar coated for the dean.  This explains the dean’s seemingly always “positive” attitude towards the college they are working for.  People around the dean get stuck in this circle and without any outside accomplishments on their own.  This creates a circle of “yes-sayers” because they lack the personal experience.  This only creates positive feedback and it is a viscous circle.  Not only does this cause a very unhealthy circle around the dean it starts to make the deans “head grow.”  They start to think that they are the ones that have accomplished all of this good all on their own.   This does not help growth or new ideas to be presented.  The only way a new idea can enter the “circle” is if the dean comes up with an idea but this keeps them in the past.

The dean starts to get a very warped sense of reality.  They start to believe that they do not have to follow the same set of rules that the others have to.  This is the case where their power has overcome and consumed them.  This eventually creates a sense of insecurity in the dean and consequently the dean starts to surround themselves with incompetent people that are non-threatening.  This will directly affect the college or institution that they are working at because they do not have the proper people in the places that they should be in.

All this is very negative but with the negative there can always be some positive.  There is ways of preventing this from happening in ones own workplace.  The first place of prevention is always the hiring process.  When in the position to hire it is the job of that person to seek out the signs of this power hungry person and don’t hire them.  In my opinion in all cases of employees not performing it can always be prevented in the hiring process.  In the case of the dean or a manager look out for the ones that use “I” when talking about their past accomplishments.  When they say I a lot they are showing that they do not work well in a team environment and or they like to take all the credit for what was accomplished.  The article also talked about some safeguards that can help prevent this from happening to a dean and if it does start to happen some ways of counteracting this.  Their was a great point brought up in the article about years of experience.  It basically stated that just because a person has many years of experience does not mean that the experience is useful.  If all the person did for all those years was the same thing it does them no good and there is no difference between one year and twenty in this case.

In conclusion, the “Dean’s Disease” can plague us all in our workplace.  The idea is to try to seek it out before the person gets consumed by it and eventually hurts the company by it.  Always keep a close eye out for the power hungry people in one’s organization and if at all possible get rid of it.

Gary Loveman and Harrah’s Entertainment

This post is directly linked to the Diamonds in the data mines post.  The articles contain the same information about what Gary Loveman did with the company and how he transitioned the company from a normal gaming company into one that was thinking outside of the normal casino box.  His competitors were mainly concentrating on bringing customers in and not so much about retaining them.  They do this by creating a theme park idea and attracting the customers to “themes.”  Loveman did a completely different approach.  His approach was centered on the high-value customer.  This was the middle aged working person who would typically come to the casino and spend their paycheck in hopes of becoming a high card member.

Right off the bat Gary got rid of many “tenured” people in high positions that he saw weren’t doing the company any good as far as expansion.  He replaced them with people that didn’t have anything to do with the casino industry.  This was a huge step towards his success.  Other gaming companies always hired inside their own community and this doesn’t allow for out-of-the-box thinking.  He highered graduates and people who challenged the norm.  He did all this and while doing all of this he gained credibility in his company by letting people take care of themselves.  He didn’t micromanage people and he made them accountable for themselves and for their jobs.  He did his job of providing direction and almost a cheerleader towards their goals.  He made himself available to everyone in the company and was very visible in the company.  This instilled a sense of equality in the workplace.

One of the main things he did for Harrah’s is that he brought science back into business.  No one would incorporate a new idea without first testing it.  There was always a control group and with this there always are results that the company as a whole can use.  The company linked this to their computer system that tracts customers and the evidence is clear and right in front of the people as to what avenue to take.  Instead of each individual casino having it’s own operation he combined them all and made them all function together.  This allows for a much better control over the big picture as a whole.  He made it very clear to the employees that the shareholders owned their job and that they did not own the job.  The always had to be accountable to the job and ultimately the shareholders.

One of the biggest things that contributed to Gary’s success was his support.  Satre, who hired him, always was right at his side and never overpowered him.  He stood by every one of his decisions.  The employees recognized this and this also gave him a great deal of respect.  As the new CEO of Harrah’s he is still challenging himself and the company and will succeed as long as he continues to do so.

Diamonds in the Data Mine

This in contrast to the Good to Great Article praises data mining, and it is doing so rightfully.  The title put it perfectly in that Harrah’s did actually find their “Diamonds” in the data mining process.  This goes to further prove that not one model will work for all business practices.

Harrah’s used a very ingenious way of gathering data on its customers profile; it did this through its customer reward card program.  One might say that there was nothing new to using customer award cards in the casino industry, which they are 100% correct.  It is how they used these cards is what made Harrah’s a success.

They used customer feedback, even though the customers had no clue, in order to shape rewards that were tailored to their high-value customers.  You might ask, “What is the high-value customer?”  The high-value customers weren’t necessarily the high-rollers; it was and is the people with both the time and a little money in their pocket, i.e. the normal people.  Harrah’s took a close look at these customers and made these customers happy which in turn created a high customer loyalty.  This loyalty is viewed, to the casino, as a long term customer as opposed to a short term customer.  They also rewarded the employees at the front line for doing an exceptional job.  They realized that the people dealing with the customers were directly affecting the company as a whole and whether or not that specific customer will come back or not.

Harrah’s used their card program to track its customers and when the customers were there they made them feel like royalty.  The data base told them everything about their main customers.  They utilized this and they catered to their specific needs and this made the customers feel like a high-roller and they keep coming back.  They very wisely used “database marketing and decision-science-based analytical tools.”  This allowed the company to make its marketing decisions based on evidence as opposed to just intuition.  This ties directly to my evidence based management post in that companies should base their marketing decisions on evidence in order to succeed.  The card program created incentives for the customers for spending more money with Harrah’s casinos.  This is nothing new but one thing that they did that was new was that they created a visual difference between customer benefits.  The higher level card members had their own separate lines to wait in that were usually never a wait so all the members in a line visually see this and want to spend more money to get that benefit.

Harrah’s not only was very good at retaining their existing customers and creating incentives to make them want to spend more money, but they checked on old customers.  The customers that haven’t been there in a while they would call them or send something to them to get them to start coming back.  All these ideas stemmed from their data mining system that they had in place.

Getting Ready!!

Just wanted to stop by and say hi to all my readers and fans and let them know what is going on.  We are getting ready for the big open comp in Vegas!! I cannot wait for this race becasue it is going to be a 200 lap race.  This is a very good thing for us because our car throughout the season has always come on strong and the end of the races and typically the other drivers tend to fall off.  Not only is it going to be a fun race but we are also going to be running on full Hoosier slicks.  This will be another first for me and the team and I are looking forward to the challenge.  Hope you can make it to the race! 🙂

Evidence-Based Management

This is a great article that really sets the facts straight.  The main idea is that there is plenty of evidence out there about how to manage your company; the problem lies in finding this and applying it to your specific purpose.  In the article they claim that doctors don’t use the evidence and research available to them to their advantage.  There is plenty of medical research and medical journals about so much stuff that there is no way doctors can get to them all.  The doctors realize this and take it to the extreme and don’t even bother to read any.  They are simply using the knowledge they learned through school and what they have personally learned to diagnose and work on patients.  The thing that doctors need to do is learn to sift through the crap and use the true knowledge to their advantage.

This applies even more to businesses and managers. There is a plethora of knowledge on how to manage a business and how it is suppose to be done.  The thing managers need to do is realize that just because something worked on one specific company does not mean that it will work for their specific company.  This is in contrast to doctors because doctors are all dealing with the same thing, the human.  In the medical world though this knowledge needs to be tested and doctors need to not assume that just because one cure fixed one individual does not mean that it will fix the next person; even though in most cases there is a higher chance of doctors being able to a apply the same cure to fix many things.  Sadly this is far from true in the business world.

For instance, some managers believe very much so that if you give your employees a stake in the company, stock options, that they will work harder.  Most of the time this is not the case.  Employees with stock options typically do not make a connection with their direct work having any affect on their specific stock options.

Another great example that they used to show that not all ideas are universal in making all businesses function properly.  There is some industries where the first company that was formed in that particular industry is the main leader in that industry and that specific company has such a great advantage over others that it is almost impossible to gain any of the market share by being the second or third company in that industry.  On the contrary there are many industries in which the second, third, or even farther down the line, that company is succeeding higher than the original company.  You might ask why this is.  It is very simple in that the following companies either say a weakness in the first company and either fixed it or simply took those companies ideas and made a company that functioned better.

There are many reasons why some companies succeed and why others do not; the idea that the article is trying to get across is that managers and companies need to take in all the information they can.  They not only need to be able to take in all this information but they need to be able to sift through it and apply the practices that will work for that specific company.

In-depth: Iraq

There isn’t much to say about this article except for the fact that “evidence” needs to be better tested or looked at before it is called evidence.  When talking about politics, in my opinion there is never any hard evidence that we, as outsiders, can truly use as fact.  The fact is that we never get to see the entire picture; hence we do not ever know the whole story behind some of the decisions that are made.  That is why we elect the officials that we put in office to make these decisions for us.  Also hindsight is always 20-20 and that is how the media and all critics always base their criticism on.  After reading this article the only conclusion that I can come to is that the only thing that should be done in making decisions is that the SYSTEM to which decisions needs to be changed.  This will never solve all the problems but it will help in the process to making the proper decisions.

To view article visit:

http://www.business.unr.edu/faculty/simmonsb/badm720/notes720.html and click on Extra Reading:  Senate Select Committee on Intelligence

Good to Great, or Just Good?

The Good to Great book may have some very good points about what makes a company a good company but some of the claims aren’t based on great evidence.  In the book Collins used stock returns and his idea of outperforming companies in like industries in order to decide who was the elite firms that “made the leap” to greatness.  He found eleven firms who had achieved this.

There is many problems with how he came to his conclusions.  For one, Collins even realized this fact, these two traits that were used to show greatness doesn’t necessarily relate to other companies and might not necessarily work for other companies.  Another major problem with how he came to his conclusions is that he used data mining.  Data mining is a very skewed way to do statistics.  It is also only good for that particular sample that is being looked at, it doesn’t tell us anything prior about the data or anything relevant to the future.  For instance if a person used data mining to see where to invest their money in the stock market it would be like gambling their money.  According to Hand using data mining is basing everything on chance.

Collins also left out another important factor that must accompany data mining; that is once the results are obtained they need to be tested.  They need to be tested to see if it just a random thing that is only a characteristic of that particular sample.  The article doesn’t discredit Collins efforts completely though.  It says that his findings may be true but it argues that there is no evidence to support them.  In order to check the validity of Collins results some tests were ran to check his findings.  The tests looked at the stock return for periods longer than the sample.  They looked at the years prior, after, and all together.  The findings from these tests show that Collins “GTG” companies weren’t even close to the top in this category.  The bottom line is that Collins needed to test his results and this would have supported his claims better.

To view article visit:

http://www.business.unr.edu/faculty/simmonsb/badm720/notes720.html and click on Good to Great, or Just Good?

Compensation and Performance Evaluation at Arrow Electronics

Steve Kaufman has basically the right idea to find the weaknesses and either getting rid of them or working on them, he is just going about it all wrong.  The performance review will never be an accurate way to define performance, especially if it has positive or negative rewards linked to it like raises.

Steve is angry that his new Performance Evaluation system is failing miserably.  Managers basically didn’t take the reviews seriously.  He wanted to get a truly objective opinion from this to help the company.  The managers took the performance evaluation as a negative.  He goes on to say how everyone can be doing their job perfectly.  He contradicts his original thinking in that he wanted to base new pay off of evaluations as opposed to use them to help the people and tell them their weaknesses.  He doesn’t know why the reviews aren’t getting accurate data.  Could it be that everyone is lying because of fear of losing job and they want a raise?  That typically is the problem with performance reviews and they never fulfill the job that they were intended for.

An interesting side note observation about the company’s early stages.  Did the three graduates help the company grow as the article points out or was it just because the electronic industry was just starting to boom?  This is an interesting question to answer but would require a further evaluation of the company and market.

Steve has the proper idea in that you need a strategy but more importantly that this strategy needs to be executed well.  He has a strong belief that this people are his best assets and the company’s best assets. If one of his salespersons leaves he or she leaves with the companies they represent.  This is a good and a bad thing. This is good that they have built such strong relationships and loyalty but bad because it is loyalty directed at the wrong thing.  The company’s loyalty needs to be with the company and not with the salesperson.  The commission structure that they give the sales people has created this relationship.  The sales people aren’t loyal to the company and they are typically W-2 hoppers, and the company needs to realize this and weed them out.  These W-2 hoppers are only a short term fix and the company needs to think more long term.  The management team and how the company is structure keeping the different teams close minded and they do not share ideas with each-other.  Steve says all the managers need to learn how to weed out these hoppers and that they all need to learn from the mistakes as opposed to talking to them about it and making everything a team decision he takes it into his own hands.

The college plan was a great plan but once again it wasn’t implemented properly.  It created heavy problems between the new recruits and the old staff.  He once again put himself in a predicament where he had to make a short term decision and lost basically all of these graduates.  I would have probably let them go also to help in the short term but he needs to think more in the long term and if he would have kept him he would have a better team now.

Strategies of Effective New Product Team Leaders

In order to find great team leaders is a hard task, but definitely one that needs to be done in every organization.  In corporations there is always a need for teams and with teams comes the need for leaders.  The leader is not the person making the decisions, or at least shouldn’t be the one making the major decisions; they are the ones who pave the way for the proper decisions to be made.

For instance, when departments do not share information and are closed to other departments is slows new product development.  It forces departments to think in the micro and not in the macro which is in the company’s best interest.  A good leader can break this barrier between departments and encourage teamwork and collaboration between departments.  The leader doesn’t necessarily come up or design the new product; they just create the proper system and environment to allow for this to happen.  A good functioning team equally all commits to the inputs and share the reward and hardships of the differing outputs; this is that since of team.

In teams there is also a high importance for teams to gain each other’s trust and the trust of the leader.  The leader will allow their team to work together by taking action to give them the opportunities for teamwork.  They set up team meetings and encourage a team working environment.  A good leader knows that, “Nobody knows everything. Any you can’t do it all by yourself.”

A leader needs to realize that all they are is a facilitator.  If they realize this then they can use it to their advantage.  A leader should allow and encourage the team to work through things with the team and the leader should put trust in the team and back them with their decisions.  This will lead to more productive teams and teams that are willing to take on projects and to take some risks.  These risks will eventually lead to the teams succeeding in the project that they are assigned.  On leader, in the article, realized that he needed to isolate his team from the bureaucratic B.S. so that it doesn’t distract his team from reaching their goals.    All in all leaders need to be focused on the team and focused on helping the team as opposed to ordering the team around and forcing his or her ideas on the team.  They should alter their behavior and learn to create an environment for the team in order to succeed.

To view article visit:

http://www.business.unr.edu/faculty/simmonsb/badm720/notes720.html
and click on Article on Teams

Sins of Commission: Be Careful What You Pay For, You May Get It

Jeffrey made some very great points about being very careful in what kind of system a company is using.  This entire article is all about the systems that are driving the employees, mainly one with incentive programs.  His first story about the dealership pushing away the customer and ultimately losing him was purely a consequence of commission pay.  This is a big issue with commission is that employee behavior will eventually push potential customers away.  The article gives many examples of how incentive programs are inherently flawed and I agree but the big underlying problem is typically in the system.  Systematic problems plague many companies and they try to fix these problems by incorporating incentive programs.  If companies would think outside of the box they might just find the proper solution for their company.
One thing I do like about incentives is that companies use incentives to show and drive the employee to do what the company desires most.  It tells the employee what the company wants out of them and it allow for them to work hard for that goal.  Some instances incentives will just not work, however.  For instance a place where incentive probably won’t work is with teachers, as the article points out.  It’s a joke to try to pay teachers for something that cannot be properly measured.  I think the best way to get the teachers to teach well is a huge systematic problem.  The best way to get good teachers, in my opinion, is to make the profession a higher ranked profession.  This can be done by, for one, paying more for the job and also by making getting a teaching degree a little more difficult than it is.  This will attract the people to be teachers that are choosing not to be because they, in their mind, can achieve a higher degree and ultimately make more money.  I think the system is weeding out the people that would make great teachers.

Incentives may be a quick fix as the article points out, but sooner or later the right system might just be found for that company.  After each change in the programs it takes some amount of time for the employees to find the cracks in the system and even more time for them to exploit these cracks, if they choose to.  Zimmer’s nailed it on the head when he talks about incentives.  He says that they need to be used as a reward for good work.  In my opinion the way to do this is by adjusting the base pay right on the bottom line of what the employee needs.  This will create no pressure to make more money but it will be a reward to the employee to receive them.  Ultimately each company is different and many companies thrive on incentives but the idea is to find what works for your company and constantly examining it to make it a better system.

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