Consideration of People Potentials Never Comes After Consideration of Product and Process

The following debate is an argument related to Myth 4 of Chapter 1, Seven Myths of Mediocre Leadership, in Spitzer's book: The Spirit of Leadership. The seven myths are:

Myth 1: Resources are fixed.
Myth 2: The narrow view of maximizing shareholder wealth -- to maximize stockholder wealth in the short term -- is a reasonable one.
Myth 3: Three traditional financial statements -- income statement, balance sheet, and cash flow statement -- give a comprehensive report on organizational performance.
Myth 4: Consideration of people should come after consideration of product and process.
Myth 5: Leadership requires tough-mindedness -- matters of the heart make one "soft" and should be avoided.
Myth 6: Principle-based ethics will make us less competitive; the best we can do is look at harm and benefits.
Myth 7: Tangibles -- money, equipment, and inventory -- are more real than intangibles (ideas, ideals, trust, spirit, concern and vision)


Everyone knows how to use wheat flour to bake, but a croissant is tasted much better than a piece of bread, and so a breakfast with croissants also cost more than the one that involves only plain bread. Eventually, to sell croissants will bring more profits than to sell breads, and we also can't forget to be grateful to the person who invented it. That story is a good example to remind us that without the invention of a product, there would be no process of making it, and there would be no business to be established in order to sell the product. Thus, what comes first increating a business? The product. But who makes the product of course would even comes before the invention of the product. Moreover, for example, a pharmaceutical company whose focus is to manufacture medicine would definitely emphasize more on the development of new medicines rather than just selling the current products. How do they accomplish this goal without paying attention to the employment of a group of talented pharmacists or chemists to help them? So, to get to the main point is equivalent to saying that the consideration of people should be the main concern issued at least at the same time with, if not before, the concerns for designing a product and for constructing processes.

Before proceeding into further arguments for the above main theme, it is necessary to classify the manpower which means the consideration of people potentials into two primary categories that are used in the structure of a business. They are employees and customers. In addition, employees do not mean only employees but also corporation leaders, stakeholders and others who involve in making and selling the products, and customers are the ones who involve in the purchasing of the products. For this purpose, the first category which is employee will be mentioned first to help the analysis of why manpower should be considered the priority.

As I already stated in the above first paragraph by giving two examples to show why people are important for the foundation of a company, the next example will not focus on how to form a business, but on how to operate a business. Once, a group of people already decide what product that they want to engage their business in, and how to get that product, the next step for them is to worry about how to conduct and make the performance tasks of making the product the best ways they can to bring them profits. A good example for this strategy would be the case of a pharmaceutical manufacturer who wants to create more medicines that can cure new diseases to sell. In this case, the management team would concentrate on hiring talented pharmacists and chemists, and this is not an easy task because among a thousand people, the real talented can be counted on the finger tips. Not just people who invent the products that are important to increase profits, other regular employees who involve in the daily operation of producing, selling, accounting, etc. are also very important to the survival of a business. In the book First Break All the Rules: What the World's Greatest Managers Do Differently, written by Marcus Buckingham and Curt Coffman, the two authors concentrate their main issues mostly on the manpower more than other matters such as product, process, money, equipment, etc. In this 7-chapters book, the five chapters are reserved for teaching how to obtain the best relationship between the managers and their employees as to how to select, to train and to treat employees as the most crucial matter for a business to succeed and develop. The following paragraphs extracted from this book presents their valuable ideas about employee power:


Companies and managers know they need help. What they are asking for is a simple and accurate measuring stick that can tell them how well one company or one manager is doing as compared with others, in terms of finding and keeping talented people. Without this measuring stick, many companies and many managers know they may find themselves high and dry... And now there is a powerful new faction on the scene, demanding this simple measuring stick: institutional investors. (Chapter 1, 22).

The institutional investors, instead, find out that traditionally, managers focused on hard results, like return of assets and economic value, and that most of them didn't concern themselves with "soft" issues like "culture": Why this new found interest? They have started to realize whether software designer or delivery truck drive, accountant or hotel housekeeper, the most valuable aspects of jobs are now "the most essentially human tasks: sensing, judging, creating, and building relationships"... Today more than ever before, if a company is bleeding people, it is bleeding value. Investors are frequently stunned by this discovery. (Buckingham, 23)


Thus, the focus is on the power of employees and how managers should manipulate this power. The following paragraph is an important conclusion of their perspectives:


As we described in chapter 1, many companies have realized that the strength of their culture is part of their competitive weaponry. If they can treat their people better than their competitors, the will be able to attract more talent, focus that talent, develop that talent, and ultimately dominate. In their view, culture - how managers treat their people - has become tremendously important. Too important, it appears, to be left to chance. (Buckingham, 118)


In the next category which is customers, we all know how important customers are to the survival of a business. Speaking about customers is also speaking about profits because more customers means the increment in profits, and thus customer is related to other tangible considerations such as maximizing shareholder wealth, financial statements, etc. which are the main subjects of Myths 2,3,5,6 and 7. Thus myth 4 is not only important for itself but also affects the meanings of other myths. If myth 4 is not practiced correctly, other myths will be useless in considering them as ways to improve the spirit of leadership. Back to the customer problem, product, of course is the object of customers because all they are interested in is to buy the products. However, what products are sold and how they are sold is a relation to the interaction between the sellers, the employees and customers. If employees are not trained well to be courteous, helpful and cheerful, the store or the company will loose customers. Recently, in my own experience, the market place, especially the stores are the most popular places for cashiers, salespersons, employees to mistreat customers. Once they are tired or have some personal problems, they pour their problems on customers by some very impolite and nasty actions. Of course, the ill-treats will cause customers to forsake and detest the places and not to come back for their future purchases. So, loosing customers can mean a reduction in profits and further disaster as bankuptcy. Therefore, consideration of how to attract more customers is one of the most important priority in the operation of a business. The following paragraphs that are extracted from Chaper 7 - Ignoring Custoerm - of the book, Why Companies Fail, written by Mark Ingebretsen will show us how a business evaluate its customers and put the importance of customer a second rank behind the first priority which is employee:


southwest Airlines is one company that is legendary for its innovative customer service. Not so well known is the fact that the company does not input its customers on top of the organization chart. Ironically, it caters to customers not via costly perks but through the lack of them. While other airlines were offering in-flight meals Southwest gave customers "a beverage and a bag of peanuts. The result? As fierce price competition forced other airlines to cut back on service, customers reacted harshly to the ever-diminishing value of their tickets. Southwest Airlines, meanwhile, was able to continue as before. It focused on two things that customers value most from an airline, other than safety: price and timeless. What Southwest added to this mix was notably courteous service, which in the end costs nothing but is often what customers remember most about a flight.


How the airline makes a specialty of customer service is somewhat ingenious: First, its employees are taught that "intangibles are more important than tangibles." For exmple, a simple friendly hello can mean more than a well-prepared meal. To operate under edict, the airline puts its employees ahead of customers, the very opposite of what most companies say in their mission statements. Presumably happy employees will be motivated employees. And on their own, they'll envision and innovate often cost-free ways to keep customers happy. (Ingebretsen, 125)



Furthermore, some fixed tangible assets that are on the financial balance sheet is of course as not important as other variable tangible assets, and most of these variable figures belong to revenues and expenses which show the operations that are related to employees and customers which are in the manpower category.

In summary, if the management of a business considers profits, production, and other tangible assets are more important than employee values, then what regularly happen in the daily operation of their business? Probably, frustration, complaints, and disciplined procedures such as verbal warning, written reprimands would be given out frequently to employees, and how people would think about those managers who always nag their employees and treat them worse than the value of an equipment or money? But those behaviors are not crucial if the actions of managers are to enforce or to maintain rules, and to control damages that fly beyond an accurate calculation in their financial statement. The real problem comes when these managers use some strict company's rules or policies in order to abuse their employees for some selfish personal purposes. Some managers hire new employees with just a purpose to use them as a start to advance their own potentials, or to show off their managment ablity by taking the disadvantages that new employees are not yet competent enough or expert enough at their new assignment and duty. In today's modern business, there are managers who are mistreating their employees and still be considered the best managers who know how to use manpower, and manage their financial situation effectively.

Usually, when some conditions are considered a myth, they are the conductions actions that are not correct. Thus, in our text book, when myth 4 says that "Consideration of people should come after consideration of product and process", it is not always true and needs to be re-evaluated. Explaining in myth 4, Spitzer writes "The people system cannot be shunted off as an afterthought to product and process." And "As leaders think about new product lines, they must also think about stakeholder satisfaction, about ways of promoting co-participation, of creating a fun atmosphere, of helping people to be openly communicative, of decreasing blame and game-playing. The same four steps for building the heart of a leader are designed to help build stakeholder satisfaction. When these steps are combined with opportunistic visioning and rational communication, growth and quality of both products and processes will follow." Thus, we see that myth 4 considers that the role of manpower is indeed more important than product and process. As I already pointed out in the above paragraph that not only myth 4 is important in training a good spirit of a leader, but also it is the one that has close relationships to other myths. Thus, failing to learn myth 4 will lead to failing in the practice of other myths.



Bibliography



Buckingham, Marcus and Curt Coffman. First Break All the Rules: What the World's Greatest Managers Do Differently. New York: Simon and Schuster. 1999.

Ingebretsen, Mark. Why Companies Fail: The Big 10 Reasons Business Crumble, And How to Keep Yours Strong and Solid. New York: Crown Business, 2003.

Spitzer, Robert J. The Spirit of Leadership - Optimizing Creativity and Change in Organizations. Utah: Executive Excellence Publishing, 2000.