Learning the Hard Way

Well Dave, it doesn’t look as we’ll be getting to the West Coast tonight after all.” My boss Fred Wilson and I were walking towards the airport lounge. We had been sitting together on a plane when, halfway to our destination, the captain made an announcement telling us we had to make an unscheduled landing. Apparently a warning light had come on in the flight deck, alerting the crew to a potential problem.

“At least we’ll have lots of company in the lounge,” I said. I noticed the tables were already filling up with passengers now facing a delay in their cross-country journey. Fred was the manager of our insurance company’s downtown branch office. He was heading to the annual conference of the provincial Superintendents of Insurance, where our company was making a formal presentation. As the company’s senior fieldman, I was heading out on holiday. I had chosen this popular, early-morning flight unaware that it was packed with delegates heading to the Superintendents’ gathering.

A voice called out to us as we entered the lounge, and a distinguished-looking man rose smiling from a nearby table. I recognized the former president of our company; he had taken early retirement two years ago and now did consulting work for the insurance industry. He was sitting with the vice-president of another insurer and one of the big ABC brokers from the city. After introductions, our former president turned to Fred. “An airport supervisor just walked by and told us our landing wasn’t necessary. It seems the young flight engineer on our plane misread an instrument, got worried, and told the pilot to get our plane down fast. We’ll be on our way again soon.”

“I hope that flight engineer learns from this boo-boo,” the vice-president said with a chuckle, “because it’s certainly an expensive one!”

“Oh yes,” our former president agreed. “No doubt he’ll get an earful from his boss. But then, haven’t we all made mistakes in our careers? The important thing is to learn from them, so something positive comes out of the experience.” He gave us a quick smile.

“Now Fred and Dave here will remember this, but some years ago I managed to create a pretty big problem for our company. I allowed myself to be talked into launching a new management concept that was all the rage back then. I’m sure you all remember the rash of management fads that sprang up in the ’70s and ’80s?”

We all nodded. The ABC broker spoke up: “Who could forget all those quick-fix concepts? There seemed to be a different one every other year. There was always a new book written by some management guru telling us how critical this new concept was —-“

“I can remember a few of them,” the vice-president chipped in. “Management By Objectives, Total Quality Management, Zero Defects. They all sounded sensible enough. Most of them promised quick results for even the most moribund companies. That was pretty sweet music for companies in trouble.”

“Absolutely!” our former president said. “Fortunately, our company wasn’t in trouble. At the same time, we just seemed to be plodding along steadily, rather than driving ahead. We had grown substantially during the post-war years; sheer size tends to dilute the best efforts of senior management to impose firm control. We were a little like those giant supertankers on the ocean: once they get moving in one direction, they’re damn hard to turn.”

He shook his head and then continued.

“At the time, we had two or three very ambitious and aggressive vice-presidents. They wanted our company to be Number One in the country. They kept pushing me to make changes in our management style. So, typically, we formed a committee to come up with ideas for change. At that time, “Quality Circles” was all the rage. It was first created in Japan, where they called it ‘kaizen teams’.”

“I remember the Quality Circles idea,” the ABC broker said. “Wasn’t the general idea to encourage employees to generate ideas for improving the company performance?”

That brought a smile to our ex-president’s face. “That was the general idea behind Quality Circles all right. The concept involved a group of workers who all did similar jobs getting together regularly during business hours. These people set their own rules for the meeting. It was supposed to be voluntary. But of course most staff felt compelled to join in, rather than be seen as indifferent. The idea was that this group – this Quality Circle – tried to pinpoint problems that arose during their workdays and to suggest solutions. Then they were empowered to bring these solutions forward to management.”

Our ex-president paused for a moment and shook his head. “Now I’m sure the concept has been very successful and, for all I know, it’s still successful in the business world. But that wasn’t our experience. Perhaps we didn’t train our people well enough on how to conduct these sessions. Anyway, we found that too many Quality Circle groups reached for the easy solution to problems. Either that, or they suggested impractical and expensive remedies. A lot of them simply deteriorated into gripe sessions, with the poor supervisor trying to keep it focused on solving the problems and not just complaining about them -“

“And as I recall,” Fred interjected, “these same VPs that were all hot on the idea at first began to see the concept as a way for employees to tear down, amend, or dilute the processes we’d had in place for years!”

Our ex-president gave Fred a wry smile. “Quite true. So after a couple of years we quietly dropped the whole concept, somewhat sadder and wiser.”

My boss gave him a sympathetic smile. “Even if it didn’t meet expectations, sir, it was worth trying. I think a lot of those management fads grew like mushrooms in that period. They’re mining a rich vein because we all want to believe that we can change ourselves into something better – and we’d like this transformation to take place in a week or less. What is it they say about concepts like this – the plausible sold to the gullible?”

At the other side of the table, the vice-president gave a booming laugh. “Hey, I like that line! And since we’re confessing to past failures here, let me tell you of a similar management fad that our company tried for a few years.”

Seeing our questioning looks, he carried on. “Our president always prided himself on being open to new ideas. He became convinced that our company needed a more democratic management style – less top-down hierarchy, and more involvement by all staff in the decision-making process. So, with the help of our consultants, we brought in a so-called ‘Leader Program.’ Under this program, we eliminated all our usual titles. All our managers became Leaders. Our vice-presidents also were now Leaders. Even the president himself was dubbed a Leader.”

The vice-president ran his fingers through his hair and sighed. “There was only one small problem. Nobody was sure who was responsible for making final decisions any more. On some projects, we had two or three ‘Leaders.’ They seemed to spend half their time top-toeing around the issue of who was really in charge, instead of having clear lines of command and assigned responsibilities -“

“It must have been confusing for the rank-and-file staff who had grown up under the old management system and were comfortable with it,” I suggested.

“It was!” the vice-president replied, nodding his head. “For instance, how do you create a management chart under this ‘Leader’ system? Do you show a Leader at the centre of a circle with staff grouped around him or her? Surely there’s one teensy problem: who’s in charge of this whole operation?”

“How did the company’s executives and senior managers feel about losing their old titles and simply becoming Leaders?” Fred Wilson asked.

The vice-president pointed his finger at him and grinned. “That’s a very good question, Fred. In my experience, almost all of them hated it. Most of them saw it as a demotion. For appearance’s sake, they put up a brave front and tried to adjust to it. But they always resente d being stripped of the title they felt they had earned the hard way. Frankly, I agreed.”

“Is there any proof that companies going the Leader route have a better management performance than companies that stick with conventional titles?” our former president asked.

The vice-president shook his head. “I’ve never seen any studies that show this,” he said with a shrug. “Look at it this way: in the armed forces, there’s a reason why there are specific titles for specific roles. The people who are generals, or captains, or sergeants all have clear duties; everybody understands what these duties are. It’s how the armed forces maintain discipline, order and the effective execution of their plans. Once you start fuzzifying this concept, you’re asking for trouble.”

“Sounds like one of those experiments that sound great in theory, but simply don’t work in practice,” the ABC broker added.

“So your Leader program is history?” I asked.

“Indeed it is,” the vice-president answered. “And the lesson we learned is this: top-down management has its problems, but at least everyone knows who’s in charge.”

There was a brief silence around our table. Then the loudspeakers in the lounge suddenly issued a series of announcements. There was no mention of our interrupted flight, so we settled back in our chairs.

“Well, since we’re talking about learning from our mistakes,” I said. “Let me tell you about a rookie mistake I made when I first went on the road as a field representative. After my training, I assumed my job was to spread my company’s gospel on my brokers. It seemed to me my task was to keep them up-to-date and enthusiastic on all our new products; to remind them of our marketing strategy; and, if necessary, to prod them on good business practices. I’m embarrassed to admit it now, but at that time I almost felt I was like a missionary, bringing enlightenment and truth to the masses. In this case, the “masses” meant the independent brokers I serviced. Only after I’d been on the road for a year did it dawn on me that in my youthful exuberance, I had got my duties ass-backwards.”

I took a quick sip of my coffee and continued. “One of my brokers was an older man who became a sort of father-figure to me. He gently pointed out to me that I would learn a lot more and be a much more effective fieldman if I listened more. Of course he was absolutely right! I began to realize that when I really listened to what my brokers were telling me, my visits became more productive. I found out which of our insurance products were good. I also found out which of our products were off the mark, and why? What strategies were working for our competitors? How could my company learn from them? What policies and practices did my company have in place that brokers found irritating, or that gave them and their clients problems?”

“At least you listened when good advice came your way, Dave,” our former president said quietly. “Not everyone can manage that.”

I nodded in his direction. “Well, I finally cottoned on to what some of my brokers were telling me: a few of our products just hadn’t been well thought out. They were either cumbersome to underwrite or they simply didn’t offer benefits that matched those of our competitors, and so they didn’t sell. I guess I learned the wisdom of that old saying: ‘You have one mouth but you have two ears – and there’s a good reason why.'”

The loudspeakers in the airport lounge gave a melodic chime, telling us an announcement was coming. We heard our flight would be continuing in one hour, after re-fueling was complete.

Fred leaned forward into the table. “Well, we’ve got a little time before we re-board, so I might as well tell you all about one mistake I almost made 20 years ago. I’ve never forgotten it.”

He looked over at me. “Dave here will remember when I was the assistant manager of marketing and I was trying to keep our business volume pumped up. I thought some of our brokers weren’t too productive, so I began accompanying our fieldmen on their visits. When we paid a visit to one particular rural broker in the northern part of the province, I was appalled at his operation. Most of his staff was elderly, and he never appeared to supervise what they did. They ran the office the way they saw fit, and most of the records were paper ones, drop-filed. The broker answered his own phone; when clients came into his main street office, he would always come out to greet them personally and pass the time of day with them.”

Fred closed his eyes for a second in recollection. Then he carried on: “What really astounded me was the fact that he would drive 50 kilometers out into the countryside to renew the property coverage for a small farm. Or when there was a loss, he would often personally drive out to check and see that the settlement process was moving along smoothly. At the time, I thought it was one of the most old-fashioned and inefficient operations I’d ever seen – until I checked a little deeper. What I found was this: the broker had almost zero staff turnover, and they worshipped him because he didn’t micro-manage. He delegated. He trusted them to do their jobs then left them to it. And this old pro had an unshakable grip on the area he serviced. People knew him by his first name, and he knew them all personally. I discovered his business retention rate was phenomenal. During those informal chats in his office, he often heard about changes in their personal lives or their businesses that could affect their insurance coverage. This man almost never lost a piece of business, even when our company had to raise rates substantially, because he explained the situation to his customers in person.”

My boss smiled again around the table. “I learned then that you shouldn’t make snap judgments on serious business decisions – and that things aren’t always what they seem.”

We rose from our table and headed for the loading ramp. “Which brings us back to the young flight engineer on our plane,” I said. “I’d be willing to bet that today’s experience is one lesson he’s learned the hard way.”