Market-Based Management®

Can you make too much money?

Quoting the President on a recent speech: 

"I want to be clear, we're not trying to push financial reform because we begrudge success that's fairly earned.  I mean, I do think at a certain point you've made enough money."

I wonder...  How much is too much?  Is the amount different for different people or is there a standard?  Who gets to decide when enough is enough - you, or someone else - like a regulator?  If a regulator, what might be the unintended consequences if she guesses wrong?  What are the implications for a regulator getting it wrong for all of us vs. some of us getting it wrong for ourselves?

For most of us there is likely a point at which that next dollar that we could earn wouldn't be as valuable relative to the effort we'd have to expend to get it.  We have alternatives that become more attractive (reading more, spending more time with the family, taking a class at the community college, retiring, working for a non-profit).  I am certain, however, that this is a dynamic, subjective concept: the point shifts quickly as our situation, needs, desires, and alternatives change from moment to moment.  

Since we all face different situations and have different preferences, it would be surprising to me that one could objectively determine an amount that is "enough" for anyone.  Many of us struggle with answering that question for ourselves.  

What do you think?

What is Innovation?

What does innovation mean to you? What assumptions do you have about innovation?

Culture Assessment

Bob Sutton's Blog has a post about new employees' potential to see culture for what it is. The post talks about how new comers see the organization in a different way than people who have been there a long time.I wonder if we can find a way to be in a culture, but not completely immersed (or lose the ability to see it for what it is) so we can keep the fresh eyes we need to ask questions and grow. 

Reading this post reminded me of my first few weeks in my current role. I can remember feeling more socially awkward than usual and not understanding what social cues caused the little groups of people to disperse after talking around the coffee machine. It didn't seem to follow the ordinary social rules. The funny part is, these simple situations were sometimes difficult to express and question to others. It was such a part of the day-to-day that people had trouble noticing that it was different. 

So if we eventually become part of organizational culture, how can we step out of our day-to-day to honestly assess the culture of our team or department? How can people who have experience with an organization catch glimpses of an organization with "fresh eyes"? How can we harness the questions of newcomers to assess culture? 

Tension

Sometimes I encounter tension when I am trying to be deliberate about applying MBM. One example that I've been "noodling on" lately is when I felt tensions between two MBM Guiding Principles. 

Not too long ago, I found myself in a meeting where I felt my knowledge was contributing to value creation. The meeting went long, which caused me to be late to an appointment with a colleague. Ironically, I think I should have just left the meeting because I was so worried about being disrespectful to a co-worker by being late that I had trouble concentrating on the meeting at hand. Since then, I've taken steps to simply try to avoid this situation. For instance, (I think) I've gotten better at understanding what situations are likely to require more of my time than originally thought and not schedule anything close to it or better communicate with the parties involved. 

I think the good news is that when folks encounter a situation that presents tensions like I experienced, it's a chance to examine and learn MBM. This implies that managers need to be able to turn these situations into learning experiences.

So, what would you say to a co-worker or direct report that came to you with this situation? Do you think I had an accurate read of the situation? What should I do the next time I'm in this situation?  

Some More Random Links

Here's an example of a mental model many people use (from Strange Maps). 

I am waiting to see if the market shows people actually want this. 

LifeHacker reminds us to "Don't Mistake Activity for Achievement." 

Here's some aggregated charts about the psychology of recessions. 

Another Strange Maps link illustrates that many common concepts about population may be wrong. 

Why Management?

Recently, I have heard someone ask the question, "Why do we have managers?" and "Why management?" These questions weren't asked in a rhetorical way, but with curiosity. I think these questions lead to asking what is meant by "management." 

A colleague of mine suggested we read parts of The Essential Drucker as a first step to finding some good reading material to help people who are trying to think through why we have managers. I plan to read the first portion of this book, which is called "Management" in the next two weeks. Feel free to read along, as I'm hoping to work my way through the entire book during May. At some point in the first week of May, I'll write an update to throw some thoughts about management and managers. 

I interact with lots of inexperienced folks, and I think it's important for me to have well-thought out and genuine answers to these questions. What would you say to an intern who asked you questions about the definition of management? What reading material or video clips helped you think through why we have management and managers?  

Management versus Leadership

I found this clip that shows Carly Fiorina discussing the difference between leadership and management:

I don't really have a problem with trying to draw distinctions between management and leadership, but I don't know how useful it is. What do you think of the clip? Is the distinction between management and leadership useful? Do you agree that only leaders can drive change? If so, does she mean business leaders or people with the general quality of leadership? What do you think? How can we use these ideas to get better results? 

Friday Funnies

An amusing post on "A Test of Demand Theory" from Environmental Economics. 

I think this is an example of return per unit on constrained resource. 

The clothing market has responded to the ipad madness. 

Here's a neat tutorial on how to make quality bar graphs. 

I was smiled at this "Friendly Parking Letter." I could try to tie it to culture or something, but really I just like it.

And now, just a plug for a really cool website. It's called wonderhowto.com and just has totally random "how to" posts. 

While doing some research on Maslow for last week's posts, I stumbled upon this funny (and cheesy) video below about Theory X and Theory Y management. I don't know if it has value as a teaching tool, but it's at least good for a laugh. 

On Interruptions

Here is a video from Big Think (via Life Hacker) about interruptions. I couldn't get the embed to work, so I hope that you take a minute to link over to the video.

I don't disagree that interruptions are productivity killers, but it is a trade off. Interrupting managers are trading off productivity for something else (hopefully different and better productivity). His company's culture is at one extreme: almost zero interruptions and face-to-face interactions. I would love to ask him some questions:

• What does this imply about developing people?
• Do employees get the interactions and mentoring they need to increase their long term value creation potential? 
• Is this more likely to focus employees on short term results only? 
• What about the challenge process?
• Do you ever hire extroverts?

At the root of this is culture. What culture do you want your team or organization to have? What cultural attributes will make a team more productive? What do you think of this video? Do you think he's making a great case? What questions would you ask him?

Responsibility, Accountability and Authority

I've struggled with the practical application of decision rights. Allow me to use a clip to motivate my questions:

I appreciate that responsibility, accountability and authority are the elements of getting things done, but I'm not sure that a project driver needs to have all of them to appropriately align incentives. For instance, I have been a project lead where I have had little authority, but still had responsibility and accountability. I didn't have much authority because I lacked the perspective and track record to have high potential to make optimal decisions for the project. 

What do you think? How do accountability, responsibility and authority interplay to get the best results? In your experience, what are the trade offs between having all three with one person versus pulling the authority to a higher level?