Leadership

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In part 1 I talked about the leader of ITT, Harold Geneen. His book, Managing by Harold Geneen with Alvin Moscow had a big impact on me. Ironically, Geneen’s ITT bought the company led by another author and business leader who may have had an even bigger impact on my business philosophies and techniques. And when ITT bought the company, they ran this guy off.

The first version of this book was published in 1970, long before business was on my radar. But by the dawn of 1984 a revised version of the book was published. I can’t remember, but I probably bought it because the subtitle drew me in. It still does.

Further Up The Organization: How To Stop Management From Stifling People And Strangling Productivity by Robert Townsend was a monumental book for me. The first version – the 1970’s rendition – was Up The Organization.

By January 1984 I was a big time fan of Tom Peters, co-author of In Search Of Excellence. Tom Peters had talked openly about how brilliant Robert Townsend was. Townsend was part of the executive team of American Express before being recruited to run Avis, a then struggling car rental company that had never turned a profit. In the early 60’s, under Townsend’s leadership, the “We Try Harder” campaign was born and Avis joined the ranks of profitable companies. Townsend continued to lead the company until Geneen’s ITT acquired them in 1965, resulting in Townsend’s departure.

After that he went on to become a senior partner of Congressional Monitor. During that time he wrote the first version of the book, Up The Organization, which landed on the New York Time’s bestseller list for 28 weeks in 1970. Almost 15 years later, when the new version of the book was published, I was well into my own management career.

Sometime in the 1980’s I got into audio programs, especially programs that Tom Peters was producing. Among them, was a cassette program Tom did with Robert Townsend, based mostly on this book: Winning Management Strategies for the Real World. That was a few years after this book was published, but I remember being so happy to finally have a voice to the author of this book, Further Up The Organization.

I must have played that audio to and from work a thousand times. I enjoyed listening to these men talk business. Somewhere in a box I’ve still got the cassette. I’m sure of it. I just don’t know where. Of course, I don’t have a cassette deck, but I’d find a way to convert it to mp3. I went looking online and can’t believe nobody is selling it as a downloadable audio file.

Townsend was a refreshing voice for me. A street fighter kind of business guy. The first sentence of his introduction to the new edition says quite a lot.

Since I wrote Up The Organization in 1970, much has happened, but nothing essential in organizational human behavior has changed.”

But he goes on…

In many of the major American industries, the same kind of leaders have been rising up the golden escalators and presiding in turn over the decline of their companies, their industries, and, as a consequence, the position of the United States in the world’s productivity pecking order. In their companies, the workers still check their brains at the gate.

This book is an attempt to help people change that.”

For Townsend, it was about how people do work together and how they should work together…and how they would work together if they just had the chance. He called it participative management or Theory Y, because he said, “I don’t know any better terms.”

This book was an instant hit with me because Townsend was irreverent, snarky and funny. He didn’t come across like the Princeton grad he was. Instead, he came across like the local business guy who had figured out how people work best. He was intolerant of hubris and I loved him for it. If I had thought I wanted to experience working for the likes of Harold Geneen, well, the idea of working along side Robert Townsend was beyond anything I could comprehend. How cool would it be to work for a guy to wrote a memo to the readers of the book with this admonition…

Dip into it someplace. If you don’t get at least a hollow laugh and a sharpened need to kick that 200-foot sponge you work for, then throw the book away. It’s not for you. There are already too many organizational orthodoxies imposed on people, and I don’t want to help the walking dead institute another one.” 

Townsend believed in operating companies as if people mattered. It was more novel then than now perhaps. But I think it’s still more novel than people think. Townsend didn’t have in mind ping pong tables and free snacks. He had in mind people being alive in doing their work together.

I remember Townsend’s opposition to Assistants-To. I didn’t live in a world with Assistants-To. I knew about Assistant Managers and other lifeforms known as Assistants, but Assistants-To were new to me. Townsend wrote…

In my book, anybody who has an assistant-to should be fined a hundred dollars a day until he eliminates the position.”

The very few people I knew in bigger business, where Assistants-To existed, were not humored by Townsend’s position, but for me…it was a bit of a canary in the coal mine barometer. It was indicative of an organization that was experiencing bloat and inefficiency.

There are 246 chapters, but most are just a single page. Some are just a paragraph. They are alphabetical and range from topics like Advertising, Firing People, Putting On Weight, Titles Are Handy Tools and Wearing Out Your Welcome. The chapter on Thanks is just a single sentence:

A really neglected form of compensation.”

Don’t be fooled into thinking the book is shallow though. Re-read that sentence he wrote on Thanks. Do you really need to hear more on the topic? Brevity shouldn’t be misunderstood as low value any more than exhaustiveness should be misunderstood as high value. Townsend wrote a couple of pages on a chapter entitled, Too Much vs. Too Little, but his lead sentence exhibits what I loved about Robert Townsend and this book.

Too little is almost always better than too much.”

Townsend was blunt, opinionated and confident. He was unabashed. And like Geneen, he was gone before the Internet age got into full sway. In 1998 he suffered a massive heart attack and was gone at the age of 77.

In that chapter about Too Much vs. Too Little, Robert Townsend mentioned 3 areas: space, people and money. Here’s a single sentence he wrote of each one.

Space: Too much brings out the worst in empire builders.”

People: One person with only half a job can wander around and do real damage in his or her spare time.”

Money: A tight budget brings out the best creative instincts in man.”

The final chapter is one that resonated with me throughout my career and still does. It’s entitled, Workers Should Own Company Stock. In 1984 I had always worked in small business. At this time I was running a subsidiary of a larger company, but it was privately held, like all my employers had been up to that point. Closely held private companies are as prone to bad behavior as larger, publicly traded ones. At some level, they may be worse. Sales may slip, but the owner still buys a new Mercedes every year and the troops are affected. Employees are told, “No pay raises this year,” while the owner takes home record pay. It happens and I’ve seen it throughout my career.

Back in 1984 I had no knowledge of how things might work otherwise. I’d had owners make overtures of an equity position, but I always saw it as a ploy – and in retrospect, I know now that it was. In lieu of increased pay I’d be offered some trivial amount of ownership. I was smart enough to know that unless the company sold my “equity” position would be worthless. I never accepted such an offer.

Over time though, a new thing would capture my attention. Employee Stock Ownership Programs. ESOP’s became part of the IRS code in 1974, but it wasn’t until the early 90’s that I began to really cultivate an interest in them. I had long believed that employees as owners would be a game changer. For decades I had heard business owners lament about their employees. Many would tell me how frustrated they could be because some employees didn’t behave with enough pride. “They don’t care as much as I do,” an owner might say to me. And I’d invariably respond, “They don’t have a stake in the business like you. They don’t act like owners because they’re not owners.” Of course, I’d often be hit in the face with a retort, “But you do.” He’d be right. It was always my competitive edge. I behaved like I owned the joint and it’s why my career was made in being a hired gun, running another man’s business. I was a faithful steward and they trusted me. I’d earned it.

But still…I knew Robert Townsend had it right when he ended the book on this topic and wrote the following:

Get with it, Mac! If 70 percent of your people think of themselves as shareholders, it’s worth at least two percentage points on your company’s pre-tax profit margin.

With 2 percent you can beat anybody in the country. Or Japan.”

Robert Townsend was bent toward candor. It’s the quality I most admired about Harold Geneen. Every leader I’ve ever admired had it, or has it. And the belief that people – if given the best opportunity – will do good work. Together.

That’s why I spent 3 years of my life, while operating a company full-time, to buy the company and convert it into an ESOP. My conviction ran deep. And strong. Until I grew exhausted with the quest and in the face of insurmountable difficulty, I quit. I surrendered, but I never changed my mind. Organizations can exist and operate in ways to enhance and empower or they can exist to stifle and strangle as Townsend’s subtitle suggests. Sadly, far too many perform the latter. I’m still on a quest to help them operate at a high level. Thanks to lessons learned by Robert Townsend, I’m better armed to be more helpful and effective.

Mr. Townsend, I’m doing my best to get with it!

P.S. Next time I’ll tell you about a book that proved to me things could be done with employees being fully engaged.

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In 1984 I read a book about somebody I had never heard of. A business titan with a reputation for making senior leaders cry publicly as he questioned them about their numbers in an open forum. He’d made the cover of Time magazine back in 1967, but that preceded my business career so it escaped me. People still think of the hard-nosed CEO as an SOB. This man is often credited with being the father of the tough, SOB executive. I’m not so sure that’s accurate or fair, but I admit I have a favorable bias for him.

From 1959 to 1972 Harold Geneen was the President & CEO of International Telephone and Telegraph Corp. (ITT). Under his leadership the company grew from $765 million in revenue to a multinational conglomerate with $17 billion in revenues in 1970. Geneen was among the first corporate leaders to incorporate building a business into a larger conglomerate. ITT grew mostly through about 250 acquisitions and mergers spanning 80 countries.

I bought the book, Managing by Harold Geneen with Alvin Moscow, for no particular reason other than I was (and still am) a voracious reader. The cover was plain. The authors, unknown to me. But there I stood in line buying a copy. It was a new release. Maybe that’s why I bought it. I don’t remember.

Only 2 years earlier I had stood in this same bookstore buying a copy of the first book to really establish the business book genre into mainstream America, In Search Of Excellence. I’d never heard of those authors either. And like Geneen, these people were living in a different universe than the one I occupied. They were part of BIG BUSINESS. I was part of small business. Rinky dink business compared to the things these men were exposed to.

But it all fascinated me. I was a young father, married almost 7 years and I was ambitious. I was a learner, mostly captivated by what I did not yet know. And smart enough to know how vast that depth of ignorance ran. It’s likely why I was a voracious reader. I had a lot of catching up to do. Still do.

While In Search Of Excellence captivated me with stories of men and women doing amazing things – contrarians who were figuring out new ways to excel – when I dove into Mr. Geneen’s book it was different. It was one man’s journey and story of how he was doing things. It was about philosophy, beliefs, teaching and biography. I was young, impressionable and searching for wisdom in places far loftier than any place I knew I’d ever occupy.

Geneen’s book changed me.

He suffered from paralysis by analysis.”

You likely didn’t know that’s a Geneen quote. He was a very quotable guy. Maybe that’s was part of my attraction to him and his book, but it ran deeper than that for me. I had read Peter Drucker, but I confess Drucker wasn’t a writer who resonated with me. I knew he was smart, brilliant even. But I also was more captivated by the people in the trenches doing the work. Men like Geneen. And that made him different that Peters and Waterman who had written In Search Of Excellence. They were high brow consultants. Geneen was a business guy. Hard core.

Performance is your reality. Forget everything else.”

One quote in particular caught my attention like no other. It’s been the most used quote in my working career since because it’s so pointed and powerful. And clear.

Management must manage!”

Geneen’s intent with that quote is that managers must get the job done. People in every organization I’ve helped run since 1984 have heard me repeat that quote, giving Geneen attribution each time, thousands of times. For me, it wasn’t merely a good quote, but it was true. The burden I always felt as a manager was to perform. That likely stems from my early days as a straight commission salesperson selling hi-fi gear. If I didn’t sell something, I didn’t make any money. It’s the purest form of performance based pay I suspect.

Performance was my reality and it was easy for me to forget everything else. That’s how it is when your paycheck is fully determined by your performance. Of course, that doesn’t speak to the frustrations you experience because of the incompetence of others. I had plenty of that in my life, too. Frustration that something was out of stock. Frustration that co-workers fiddled with connections and a system wouldn’t work properly when you were trying to show it off to a shopper. Irritation that one part of the store wasn’t as clean as my area of the store, making it embarrassing to take a shopper to that area. Finger prints on glass was a constant source of frustration for me in those early teen years of selling because every sound room in a hi-fi shop had sliding glass doors. The presentation was part of the performance for me as a young hi-fi salesperson and I grew increasingly irritated when co-workers took no more pride than they might in a buddy’s dorm room at LSU. All those details ate me up some days.

Geneen seemed to be a guy who was equally eaten up with details. And I loved him for it. Mostly, I loved him for his candor. While In Search of Excellence had some terrific stories, it lacked the grit of the ugly conversations that necessarily have to be had if business is going to succeed.

The interviewer is annoying – poor Harold Channer – but it’s worthwhile to hear Mr. Geneen explain things on camera.

Management manages by making decisions and by seeing that those decisions are implemented.”

Managers in all too many American companies do not achieve the desired results because nobody makes them do it.”

If you keep working you’ll last longer and I just want to keep vertical. I’d hate to spend the rest of my life trying to outwit an 18-inch fish.”

I learned some critical things from this book by Harold Geneen. Among them, that leaders owe people more. Managers must support people by holding them accountable. While I knew peers who struggled to hold people accountable because the conversations were difficult, Geneen taught me that no matter how difficult they may be, managers owe their people that conversation.

Geneen’s book also taught me that the facts serve us, but we have to make sure we’re really getting facts. He lived in an era where getting the numbers was much tougher. The world was manual. Stacks of spreadsheets. Ledgers heaped upon ledgers. Decision making took much longer in his day. I grew up in the computer age where business could much more easily distill the facts. The numbers were far easier for me to get, than for Harold.

I knew instantly, upon reading this book, that Geneen was right about measuring performance. It rang true based on everything I knew and everything I believed.

When you have mastered numbers, you will in fact no longer be reading numbers, any more than you read words when reading books. You will be reading meanings.”

Performance stands out like a ton of diamonds. Non performance can always be explained away.”

By the time I was reading this book I had almost a dozen years of business experience behind me. Most of it had been involved in sales. Real world toe to toe, belly to belly sales. I had mostly learned how NOT to do things. I was now running a multi-million dollar enterprise and I had a clear vision of how I thought things should be run based mostly on how badly I had seen some of my earlier places of employment operate.

I knew what I wanted and some years prior I had learned somewhere to begin with the end in mind. So Geneen’s message just kept on resonating with me.

You read a book from beginning to end. You run a business the opposite way. You start with the end, and then you do everything you must to reach it.”

Geneen’s philosophy was extremely congruent with my own. I knew his style was probably more gruff than my own, but I didn’t care about that. I had friends who were busy trying to be something they weren’t. Or somebody they had never been before. I knew my limitations. I knew who I was and what I was. I never really tried to be somebody else. That doesn’t mean I was always happy with who I was, or what I was, but my convictions were strong. I was unwavering in my dedication to not be somebody different. If Geneen or other leaders I admired could yell and scream, I knew I couldn’t. I could get amped up and raise my voice, but I wasn’t some storm trooper manager who walked in a room and everybody instantly grew uneasy. I’ve longed believed managers must be congruent and true to whom they really are. And I think we all can be. For every hard-nosed manager who is succeeding I’ll show you a soft-spoken manager who is doing it stylistically very different, but also succeeding.

Winning changes everything. Losing does, too. But losing makes everybody pay. I never wanted to lose and I never wanted my organizations to lose. The price was too high. Geneen was such a no nonsense guy driven to win that I couldn’t help but like him. More than that, I found him highly valuable. I remember the first time I read the book I thought how nice it would be to work for a guy like that. I had never worked for anybody remotely like him. Sadly, I had worked for a few good managers, but most of the managers I worked for were poor. By the way, now years later my mind hasn’t changed. If anything, my current perspective of my earliest managers has only revealed to me how pathetic they were.

Geneen had high standards. If performance measurements weren’t met, he didn’t lower the expectations. I thought that was exactly right. I had grown up with hearing managers and business owners excuse poor performance. I grew up with managers who had no trouble lowering expectations. Sometimes I had managers who didn’t have an expectation. And because I was often working along side of people who were at best indifferent, at worse they were apathetic or rebellious…I could not understand why management made me work along side these losers. Geneen was staunch about what management owed people, namely to not make them be partnered with people who failed to perform. Boy did that hit a sweet spot in my belief system!

Do you want my one-word secret of happiness? It’s growth – mental, financial, you name it.”

Harold Geneen died in New York City on November 21, 1997. He was 87 years old. He had endured the Great Depression. Like most people who went through that experience, it helped shaped his world view and business philosophies. He was trained in accounting so the numbers were always important to him. Fact-based management was crucial during his regime at ITT.

This November he’ll have been dead for 18 years. This book was first published 31 years ago. Today, you can go to Amazon and buy a copy for a penny! A penny.

In Search Of Excellence changed the book selling world by giving us a new subset of books, BUSINESS BOOKS. Prior to the publication of that book you wouldn’t have seen aisles and shelves of business books. But this book, Managing by Harold Geneen with Alvin Moscow impacted my entire career by giving me a sense of my own abilities to become a better manager and leader. The fact that Geneen had achieved wild success using techniques and philosophies that I believed in gave me hope that in time I too could figure out how to be successful, albeit on a much smaller scale.

Ironically, earlier that same year – 1984 – another book had already had a profound impact on me. I’ll tell you about that book the next time. As you hear stories of these books that impacted by business philosophy you’ll see a theme emerge. The focus is on HIGHER HUMAN PERFORMANCE.

Here’s a Slideshare on 10 Management Lessons From Harold Geneen by Sompong Yusoontorn.