Though I saw it all around
Never thought I could be affected
Thought that we'd be the last to go
It is so strange the way things turn

Sunday, February 13, 2011

Parables for business execs

Back when I worked for business consultant, I worked with people who mostly had MBAs and PhDs in business. I worked with people who were hired by other companies to help them straighten out their businesses, or help them achieve some goals. I worked there for many years and had hundred of interesting conversations.

One of those conversations went like this (yes, this was a real conversation over bagels). This consultant held two PhDs in business.

Consultant, "If the top of the pyramid (this was before the age of the "flattened business hierarchy) is stable and sound, the whole pyramid flows from that and functions fantastically."

Me, "That's a faulty premise if I ever heard one."

Consultant, "Well, you as an artist should know you can draw a pyramid starting with any point. If you start with the top, the rest of the pyramid will work."

Me, "True, I can draw it from any corner. I wouldn't build it in the real world that way. Starting with the top, you're going to get awfully tired lifting it up to build the base after a while."

This is the basic argument about why we should pay executives massive salaries and bonuses. Because, you know, we need to attract and keep the highest quality people.

You may also notice that there's a concurrent movement to cut the wages of most of the people who work at the base level of the old pyramids. You can also see it with the move to break unions (here in Ohio and Wisconsin). Because you can just hire other people. It also proceeds from the myth of the blue color worker, the high work ethic they have. And how they'll work just as hard for any amount of pay.

Because business and government has forgotten what "bright sizing" means.

Also, four months after this conversation, we had a scandal involving our mail room personnel who had been skimming money on deliveries via a kick-back operation. It's estimated the activity had gone on for several years. Also same multiple PhD never could understand how I could get materials (binders, overnights, copies, etc) in less than one day, when it took them at least three days. Probably because I knew all my suppliers by their first name and talked to them about their lives.

So as our governor increases his appointed executives' salaries and cuts their staffs' pay, attempts to break the unions, and drives the government into a hole, just keep that story in mind. Some supposedly very bright people are attempting to build the pyramid from the top down.


Eric said...

I propose a practical experiment: take two pyramids; knock the top off of one and remove half the base of the other, and see which one stands longer.

Whether one wants to take this as a metaphor or literally, I'll leave to the reader.

Steve Buchheit said...

Eric, exactly. Works well in theory, but not so much in reality. Although know I have an image of using Jenga as a teaching tool in MBA programs.