FM Frequency: Business 101

By Jeff Crane, P.E., LEED® AP
Published in the June 2004 issue of Today’s Facility Manager

At the risk of being considered completely insane, I have a confession to make: I enjoy reading business management books. I picked up a three-to-four-book-per-year “habit” several years ago when I began managing people. This was shortly after I had my first encounter with a crying employee. I had heard stories about situations like this, but had never actually seen a professional adult fall apart). After this shocking event, I needed my own therapy session with our trusted human resources director.

It was then that my engineering instincts told me to find an instruction manual or some kind of plan regarding this responsibility…and fast. I guess I knew that business was a delicate balance of art and science, but talk about a rookie orientation!

I had managed multi-discipline construction projects, major design applications, and even multi-level relationships with customers. However, formal training as an engineer and a salesman couldn’t prepare me for the challenges that came with coaching the performance of direct reports and contractors.

Since that disheartening event, I have found that reading about the evolution of successful companies, CEOs, and management strategies is inspiring and can be a valuable supplement to the day-to-day experience of being a manager. In my opinion, the most interesting of these publications include formal studies on the evolution of company culture and the search for common elements in those that consistently outperform their competitors. Many of these organizations also enjoy above average financial success and have reputations as excellent places to work. More than likely, we can all agree these are positive attributes.

This published research—reinforced by my own personal experience working for small, medium, and large companies over about 15 years—reveals that an unfortunate but practically inevitable byproduct of success and growth is the weakening of the very culture that constituted a foundation for success.

It might seem obvious, but when companies are newly “born” with a single entrepreneur (or with a team of people) and a shared vision and a high degree of shared risk, survival instinct tends to galvanize individuals to a cause greater than themselves. In the early stages, leaders of well-run organizations are very careful about adding people to the payroll and then monitoring their performance and cultural fit. With survival (and often personal fortunes) at stake, anyone negatively impacting the performance of these high potential startups is quickly replaced.

As organizations successfully move beyond the initial “sink or swim” period (most companies never see their third anniversary), leadership circles and support staff must grow to support the mission and continue to grow the business. It’s during this maturation period and after early success that companies seem to face the enormous challenge of maintaining the founders’ culture. It’s also during this period of growth that many companies choose to go public (as founders plan to exit or increase capital reserves to continue growth) or are acquired by a larger organization eager to expand its own businesses or to eliminate an annoying upstart competitor.

So if it’s increasingly challenging to maintain a core set of values and a sense of company culture when adding so many distinct individuals, imagine how difficult it must be for multi-national companies with billions in revenue and thousands of employees in countries around the world to maintain a rich heritage that might have started before the current CEO’s grandparents were born. Many of you would probably argue that it’s impossible and cite the decline of so many industry giants over the past 25 years as evidence.

Unfortunately, in one lifetime (and particularly in the space of this column), we could never digest or summarize countless management studies, theories, and books taught in business schools around the country or available at your public library or neighborhood bookstore. But as a continuing student of life in Corporate America, I offer you what I have adopted as four critical ingredients for any business.

  1. People. I confess that it’s a dull cliche to hear, “It’s all about people.” However, I think this statement is absolutely true. One intelligent employee, highly motivated to learn and contribute, can make an enormous impact and is worth his or her weight in gold. Similarly, one leader or employee with a rotten attitude can destroy morale and damage the performance of an entire team—even if that person’s IQ makes Einstein look like a dim bulb.
  2. Customers. We either love our “customers” (even if they’re internal to the organization) or someone else will—it’s that simple. And even if we do care for our customers, we can be replaced. (Am I motivating or what?) The point is, no matter what our business card says, we’re all sales people and we’re paid “a fee” or a salary for our services.
  3. Process. The way we go about serving our customers and our internal functions is critical to our success. We can have the best people in the world who care deeply for customers, but if our processes are outdated, inefficient, or can be done better by Company XYZ, we’re not going to survive, let alone thrive in a competitive marketplace.
  4. Value. We have to be continually aware of our cost/benefit ratio and its perception within the organization. If we agree that this ratio is the definition of value, we must be diligent about cost controls and service levels. If another team (internally or an outsourcer) can perform at our service level for lower costs (or can outperform us for the same money) we will likely lose. And remember, perception is reality. Even if another team only offers the illusion of a better value proposition, they may win the battle, but they’ll never the war. All illusions tend to fade after time. If a magician does the same trick too many times, someone will figure it out.

I’ll wrap up with my favorite business analogy—professional football. Applying the four ingredients above to your favorite “modern day gladiator-corporation”:

  1. People: Hire great players and coaches while releasing those who don’t meet the team’s high expectations.
  2. Customers: Satisfy fans by winning games and being responsible members of the surrounding community.
  3. Process: Optimize strategies for offense, defense, special teams, practices, game planning, play calling, strength conditioning, nutrition, and game film studies.
  4. Value: Carefully develop consistently winning teams each year while respecting the “salary cap” and keeping players and coaches out of trouble and off the evening news.

Crane is a mechanical engineer and regional property manager with Childress Klein Properties, a leading real estate developer and property management services provider in the Southeast.