Book Notes : Up the Organization

Up the Organization: How to Stop the Corporation from Stifling People and Strangling Profits by Robert Townsend
My rating: 4 of 5 stars

This book is from 1970 but there are things which most organisations don’t do today even though they are trying to build “Theory Y” type organisations.  The book is also novel as each chapter is presented in alphabetical order.

  • Advertising – fire your existing agency and find a new one and make it fun
  • Assistants-to and make-working – fire them, they just get in the way
  • Big wheels in little companies – great leaders of big companies can kill small ones
  • Boss, How to retire the – say your going to retire multiple times a long way out so that the organisation can prepare and structure itself.  When they retire make sure they don’t spend a lot of time at head quarters.
  • Budgets – should be decided by the people who have to deliver them.  Use terms such as better or worse than budget, not higher or lower which can be confusing.  Include a contingency in your external budget so that you have room to move.
  • Call yourself up – pretend to be your own customer but don’t call rank, listen to how things work for real customers.
  • Chairman of the executive committee – it means nothing, so use it – a complaint handled by the “executive committee” will be taken better than “customer retention”.  The executive committee and the chairman can play very useful role.
  • Compromise and king Solomon – When you give in give in all of the way and when you win try to win all the way so responsibility lies squarely on you.
  • Computers and their priests – Computer technicians are complicators not simplifiers.
  • Conference board: what others did, don’t – when big businesses agree then it is already old news so look for something better.
  • Conflict within the organisation – a good manager does not try to eliminate conflict but does try to prevent it wasting too much time.
  • Contacts – if you want to make a contact just approach them directly instead of going via someone else
  • Controllers and accounting – don’t change the accounting system as this change produces inconsistency.
  • Conviction vs. ego – “are you trying to do something worth while here?” or “are you trying to just build another monument to some diseased ego?”
  • Decisions – all decisions should be made as low in the organisation as possible.
  • Delegation of authority – when negotiating pick someone two layers lower than you who would be more impacted by the bad contract, set an acceptable bounds for this person, tell the company who you are negotiating with that what ever your chosen person negotiates is what you’ll agree to (so there is no going over their head).
  • Directors, board of: the backseat drivers – they have never done anything useful as they can’t know enough about the business.  Have a mix of outsiders and insiders on the board.  Keep lawyers, bankers, investment bankers off the board where possible.
  • Disobedience and its necessity – any manager who conducts a plan which he feels is defective is at fault – he must put forward his reasons, insist on the plan being changed and tender his resignation instead of causing the downfall.
  • Do it – sometimes its best not to tell people in advance as people will kill your idea, sometimes its best to just get on and do it.
  • Employment contracts and why not – they loose the people they are designed to hold and keep the people you want to get rid of.
  • Epaulets for the chief executive – a good chief executive will knock off the niceties, a bad one will accept all the kudos as ego massage.
  • Excellence: or what the hell are you doing here? – if its not excellent it won’t be fun
  • Excuses – eliminate peoples excuses for failure.  Go out and ask how you can help.
  • Expense accounts: Theory X disease – Be honest, even if everyone else is not.  Fire the people checking and start to build a Theory Y company.
  • Fairness, justice and other oddities – Judge base on performance alone.  Reward outstanding performers, don’t reward underachievers.
  • Family Baggage – Spouses who are pushy for their partner to get promoted or earn more.  Money, if sought directly, is almost never gained but as a byproduct of some worthwhile objective or result which is sought and achieved for its own sake.
  • Firing people – Some times it needs to be done for the good of the organisation
  • Geography, respect for – Absentee management if fatal.  The larger the distance the more difficult it is to support.
  • Gifts from suppliers – don’t accept anything
  • Going a little bit public – the value based on a small volume of stock traded is fictitious and is not worth the hassle.
  • Headhunters – provide a large amount of feedback on each candidate to help them find more suitable candidates for you.
  • Hubris, The sin of – This is the sin of acting cocky when things are going well.
  • Incentive compensation and profit sharing 
    • Employees must have sufficient salary to not need to worry about making ends meet.
    • Using Unsatisfactory = 0%, Satisfactory = x% and Outstanding = 2x% distribute the discretionary salary.
    • Bonus checks should be handed out by the line manager.
    • No one should be penalised for things outside of their control
    • Fat cat perks should not be deducted impacting bonus calculations
  • Indirection: Don’t neglect it – Give people flexibility to get things done their way
  • Institution, On not becoming an – For any form in the company the chief executive must be the first to use it personally.  Have someone who is responsible for highlighting pointless processes.
  • Investment bankers – Keep at least one spare lined up so you are not stuck.
  • Investors: Keeping them informed – A nominated investor is allowed to come in one day and ask any question of anyone who they wanted, including the chief.  The investor would return a report which was then corrected and sent to all the directors and investors.  This saved time and produced a good internal document as well.
  • Job descriptions – strait jackets – job should be able to continually change
  • Killing things, V.P in charge of – It is easy to start, hard to stop so its best to have someone who can stop things when they are no longer a good idea.
  • Labor unions – create a Theory Y organisation so they are not needed.  If you have one deal with them openly and honestly.
  • Lawyers can be liabilities – a good lawyer will give you his home phone, travel and work weekend when needed but an unsuitable one wont.
  • Leadership – True leadership must be for the benefit of the followers, not the enrichment of the leaders.
  • Management and “Top” management – Top management should be like owl – hooting when management heads in the wrong direction.
  • Management consultants – one person shows are effective the institutions are disasters.
  • Marketing – take a group of top employees and some from the ad agency and spent some time away talking with them and relaxing.  This will give time and space for important conversations.
  • Mars, Man from – Think about problems like someone from a different planet to give you a better view of what you should do.
  • Meetings – should be as few as possible with as few participants.  If a meeting is important enough to have one meeting it is likely to be important enough to have two so people get time to think.
  • Memorandum, The last – don’t have any
  • Mergers, conglobulations, and join failures 
    • Joint ventures are always bad.  At worst both parents neglect the stepchild.  At best one parent does all the work and gives up half the reward and feels cheated.
    • Acquisitions and mergers should be avoided.  If they do then continue to run your bussiness as if no change will happen (as it might not).  To set up a committee to come up with a proposal which will exclude the chief executive until the last minute to prevent distractions.
  • Message to chief executives – Your people aren’t lazy and incompetent.  They just look that way.  They’re beaten by all the overlapping and interlocking policies, rules and systems encrusting your company.
  • Mistakes – Admit your own mistakes openly and joyfully.
  • Mistresses – results in creativity in peoples expense account
  • Moonlighting – usually mean the salary isn’t enough to cover living expenses
  • Moving the head office – Get someone to arrange this for you and give them the task to make it standardised,  If it is on time, works reasonably well and cries die within 30 days it will have been a success.
  • Nepotism, The smell of – keep family out of the work place
  • No-No’s
    • Reserved parking spaces
    • Special stationary for the boss
    • Bells and buzzers
    • Company psychiatrists (unless they only report to patients)
    • Outside directorships and trusteeships for the chief executive.
    • Company plane, golf club, big office, three secretaries…
    • Conning people
    • Social relationships within the firm
    • Hiring unless people are already over worked
    • Trade associations (could lead to price fixing)
    • Conventions
    • Greed
  • Objectives – what is the organisation aiming to do, simply
  • Office hours – whenever you want
  • Organisation charts : rigor mortis – don’t you need to be nimble
  • People – Try to build a Theory Y organisation where there is freedom and responsibility.
  • Personnel (People vs.) – fire the department and just have the paperwork with payroll
  • Planning, Long-Range: A Happening – Planning is handled by the boss, not a “planner”
  • Policy manuals – Don’t bother.
  • P.R. Department, Abolition of – let the top ten people speak for the company if needed.  They are just honest, pretend your ablest competitor is listening, don’t forecast earnings.
  • President’s salary (Is he really worth $250,000?) – take a modest salary and with shares if the company grows it is win win.
  • Promises – keep them
  • Promotions, From within – As long as there is someone 50% then promote internally and they will grow the other 50% quicker than an external hire.
  • Public accounts and the audit committee – the audit committee should ask things such as “Has anyone pressed you to do anything you-re reluctant to do?” “Is there any subject or incident that for any reason you didn’t include or didn’t give proper weight to in the audit report that you’d like to discuss orally now?”
  • Purchasing department – fire them, trust people to get what they need
  • Putting on weight – a sure sign of frustration
  • Racism – stamping it out is a process and not an act, it takes effort over time
  • Reorganisaing – should be done rarely, be well planned and swift.
  • Retirement, Mandarotry – retire the chief executive every five or six years.
  • Salary review: Annual encounter group – between annual reviews you have to acknowledge that at all times people are either over or under paid and there is nothing which can be done about it right then.
  • Salesmen – 20% always produce 80%.  Have a commission structure which is fair.
  • Secrecy : A child’s garden of diseases – What I’m doing is so horrible I don’t dare tell you or I don’t trust you (any more).
  • Secretary, Freedom from a – have a good pool of staff services rather than a dedicated secretary as this produces much more value for all.
  • Small companies – don’t take on big company structure too early it is a burden
  • Staff services – great service different people can use to get things done
  • Stockholders – turn as management and employees into stockholders because this makes the customer important.
  • Stock options and democracy – Give everyone options
  • Tax advice – you are looking for someone passionate not some suit
  • Teams, Two-Man – Good and Bad – Sometimes a pair of people are the right for a single role as they will have different strengths.
  • Telephone operators – make them feel special
  • Thanks – a really neglected form of compensation
  • Time: Three Thoughts on it – companies should be fun, new people need time to learn and systems take time to bed in – people are quick with torpedoes, some meetings should be leisurely and some brief stand for the latter.
  • Titles are handy tools – these are physiological promotions and good sales for menial jobs
  • Too much vs too little – space should be on the tight side, people should be a bit over stretched, money should be tight.  Constraints breed creativity.
  • Training – only way to learn is on the job
  • Underpaid – resign with the reason underpaid, reapply for your old job with the salary you feel you are deserved – you will be the best applicant.  If you can’t be rehired because of regulations this is not a company you would want to work for.
  • Vacation policy: go when you please – no reasonable person will abuse this freedom, your worst job will be making sure people take the time off they need.
  • Wearing out your welcome – if the chief executive doesn’t retire gracefully after five or six years throw him out

Rate your boss

  1. Available – If I have a problem I can’t solve, he is there.  But he is forceful in making me do my level best to bring in solutions, not problems.
  2. Inclusive – Quick to let me in on information or people who might be useful to me or stimulating or of long-term professional interest.
  3. Humorous – Has a full measure of the Comic Spirit in his make-up.  Laughs even harder when joke’s on him.
  4. Fair – And concerned about me and how I’m doing.  Gives credit where credit is due, but holds me to my promises.
  5. Decisive – Determined to get at those little unimportant decisions which can tie up organisations for days.
  6. Humble – Admits his own mistakes openly – learns from them and expects his people to do the same.
  7. Objective – Knows the apparently important (like a visiting director) from  the truly important (a meeting of his own people) and goes where he is needed.
  8. Tough – Won’t let top management or important outsiders waste his time or people’s time.  Is more jealous of his people’s time than he is of his own.
  9. Effective – Teaches me to bring him m mistakes with what I’ve learned and done about them.  Teaches me not to interrupt him with possible good news on which no action is needed.
  10. Patient – Knows when to bite the bullet until I solve my own problem.

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