Monday, May 28, 2012

How not to build a company which I despise


A few of the common reasons why we left a company are 

  • The bureaucracy or politics sucks
  • We believe that we could do a better job than the manager/CEO
  • There is nothing we could do to change to the company to become “better”

When the times come for us to build our own company, I got a funny feeling we might end up unconsciously building the exact replica of the company which we despise. Why the funny feeling? We have a very vague idea about leadership and could put a wrong focus on management instead; most important, most of us know what is wrong, but not quite sure how to make it right.

What kind of company would I like to build?

  • No bureaucracy, procedures and policies barrier which hinder productivity or innovation
  • Attract great people to do great things together
  • Everyone have the freedom act on the best interest of the company
  • Everyone is free to pursue their own interest, as long as it’s within the interest of the company and co-workers
  • No one shall be told what to do using the top down approach

The above criteria are not quite refined yet, but it should suffice to get me started. Now that I have some idea of what I want to build, how do I do that? Since I have not much of a personal experience in building a company (more than 1 person), perhaps I should borrowed some wisdom from the books.

Good to Great is one of the 1st leadership/management book I read when I was still under employment, which helps me to clearly identify what’s wrong with my previous company, which strengthen my determination to left it soon after. What are some great wisdom from the books?

  • Level 5 Leader: a leader needs not to be glamorous, as it should be someone who is willful, humble and fearless; someone who would not let his ego take precedence over the well-being of the company.
  • Internal Talent: always promote from within, as these guy knows the internal workings well and is in a better position to identify the problems.
  • Focus on what not to do and stop doing
  • No merger & acquisitions (M&A)
  • It’s all about the people (not process), allow them to be the best that they could be
  • Get the right people on the bus, the wrong people off the bus and the right people on the right seat
  • Hire like 5, Work like 10, Pay like 8: if someone is as productive or create as much value as 10 people, shouldn’t we pay him ten times the average salary? Perhaps not, but perhaps 2-3 times above average sounds fair and justifiable.
  • Selective Reward & Retrenchment: the last thing you want to do is to give across the board raise to everyone, sending the message of there is no point in striving to be better than the guy next to you.
  • A Culture of Discipline: Build a culture around freedom and responsibility, where everyone is responsible for their own ROI. 
  • Confront the brutal facts. You must first admit what’s wrong with you, and then only you could make a change towards recovery. 

Freedom Inc
Recently I found another good read: Freedom, Inc: Free your employees and let them lead your business to higher productivity, profit and growth. I really like the idea of freedom, trusting your employee to do the right thing without being told to. I just manage to finish the 1st chapter with the following takes:

  • Rules and policies is counter-productive as it dictate how people should do things, thus made it impossible to find better ways
  • Small teams which work as equals, no hierarchy (liberated), everyone bring their knowledge and skill together.
  • How would you do that? Hear different ideas on how to deal with the situations, never drive the answer to others; only instill values and value judgements.
  • You can’t lead using the top down approach (telling others what to do), you need to build the credibility by helping others with their work.
  • Fairness: provide a safe and healthy environment, let people have a say on how the job should be done (rather than dictate how it should be done) or whether it should be done at all
  • Commitment: it is something chosen, not imposed; use credibility to counter commitment hopping. Once a commitment is made, you’d better keep it; if you plan to leave your current commitment, it’s you responsibility to plan the transition properly.
  • Waterline: “waterline decision” is one that could sink the boat. Corporate freedom is not a blank check, and the waterline helps ensure that freedom is used in a responsible manner.
  • FAVI examples:
    • Eliminate procedure and inventory control of changing to worn-out working gloves, as the productivity lost and procedure cost is higher than the cost of the gloves.
    • Eliminate time clock because “employees should work to make products, not hours”
  • “How” company spend their time telling workers how to do their job, follow by more clearance and procedures; and eventually becomes impossible to get any work done without breaking the rules or disobeying someone in the chain of command.
  • “Why” company: Why are you doing what you’re doing? To keep the customers happy. As long as you satisfy the commandment, we don’t worry how you do it.
  • Allowing freedom for any employee to do things which are good for the company without seeking prior permissions, as long as it’s not a waterline decision.
  • The goal of a CEO, is “to do as little as possible”

Hopefully, the wisdom above would serve as the beacon to stop us from crashing into the rocks: stop us from building a company which we despise in the 1st place.

1 comment:

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