A disgusted reader recently sent me this link regarding yet another textbook example of corpo scam artistry: “Bwin.party proposes new bonus plan for top execs as share price languishes“. Since the board of directors at a borg is usually a hand picked crew of yes-men by the “senior leadership team“, the article headline should probably read: “Bwin.party executives propose new bonus plan for themselves as share price languishes.“
When pay for performance under the current set of “KPI“s (Key Performance Indicators) stops the money from flowing into the pockets of the head shed aristocracy, the answer is always the same no-brainer. Simply get your board-of-derelicts to lower the bar and champion a new set of bogus KPIs to the powerless and fragmented shareholdership. Ka-ching!
With the old bonus benchmarks now akin to launching manned space flights to Alpha Centauri, Bwin.party is proposing a new scheme that more accurately reflects the company’s lowered expectations. Under this plan, CEO Norbert Teufelberger would pick up a maximum bonus of 550% of his annual base salary of £500k, while chief financial officer Martin Weigold would receive 435% of his £446k annual pay packet. - Steven Stradbrooke
When borgs perform brazen acts of inequity like Bwin.party (“party” is literally true for the execs), the rationalizations they spew to the public are mostly hilarious repetitions recycled from the past:
- Bwin.party says the paydays are necessary because the US market is beginning to open up, and the hordes of US gaming companies looking to move online lack senior management with online know-how.
- The potential for US companies to poach senior execs from experienced European companies represents “the single biggest threat to Bwin.party’s ability to retain its senior management.”
- Bwin.party also suggests its top execs deserve danger pay due to “aggressive enforcement of national laws against senior executives within the industry.”
Danger pay? Bwaaahahhah and WTF! That excuse certainly wasn’t dug up from the past. Ya gotta give the clever board-of-derelicts bonus points for such creative genius: “If ya break the law and damage the company, don’t worry. We’ve got ya covered.” Why not go one step further and give Bwin.party’s employees hazard pay for having to work under such a cast of potentially criminal bozeltines?
To determine if executive compensation has any correlation to company performance, BD00 performed 30 seconds worth of intensive research and plotted the results of his arduous effort for your viewing pleasure:
So, whadya think? Is executive compensation tied to performance over the long haul? Regardless of how you answer the question, ya gotta love capitalism because after all is said, it’s the worst “ism” except for all the other “isms“.
Update: Thanks to input from “fatjacques“, the quotes below can be attributed to Jon Seddon
A few days ago, I clipped a bunch of text from an article I read on computer-provided public services and put the words into a visio scratchpad page.
However, I forgot to copy & paste the link to the article. Thus, I can’t give proper attribution to whomever wrote the words and ideas that I’m about to reuse in this post. I’m bummed, but I’m gonna proceed forward anyway.
Consider the computer client/server model below. In the simplest case, a client issues a request to fulfill a need to the server. The server subsequently provides a single response back to the client that fulfills the need. The client walks away happy as a clam. Nothing to it, right?
Next, let’s assume that the client needs to issue “k” requests and receive k responses in order for her need to be fulfilled:
From the bottom of the above multi-transaction graphic, you can infer that the service provider can be “implemented” as a person or a software program running on a computer (or a hybrid combo of both).
With the current obsession in government about “reducing costs” (instead of focusing on the real goal of providing services more effectively), more and more public service people are being replaced by computers and the buggy, inflexible software that runs on those cold-hearted, mechanistic beasts.
Since computers obey rules to the letter and, thus, can’t absorb variety in real-time, service costs are rising instead of declining. That’s because each person requiring a public service likely has some individual-specific needs. And since the likelihood of a pre-programmed rule set covering the infinitely subtle variety of needs from the citizenry is zero, employing a computer-based service system guarantees that the number of transactions required to consummate a service will be much larger than the number of transactions provided via a thinking, reacting service person. What may normally take a single transaction with a flexible, thinking, service person representative could take 20+ interactions with a rigid, dumbass computer.
But it’s even worse than that. In addition to requiring many more transactions, a rule-based computer service interface may totally fail to complete the service at all. Frustrated clients may simply give up and walk away without having received any value at all. Miserably poor service at a high cost. Bummer.
Good services are local, not industrial, delivered by people, not computers, who give people what they need. – Jon Seddon
According to “No Managers Required: How Zappos Ditched The Old Corporate Structure For Something New”, by the end of 2014, Zappos.com will have dismantled their corpo pyramid. Under the stewardship of maverick CEO Tony Hsieh, the 1500 employee company will be transitioned into a “holacracy” of 400, self-governing circles.
Talk about having huge cajones. Just think of the disruptive risk to business performance of making such a daring structural/operational change to a billion dollar enterprise.
Although I look forward to watching how the transformation plays out, I’m a bit skeptical that Mr. Hsieh can pull it off. After visiting the site of the “consultant” that will be advising the company during the transition (holacracy.org) and browsing through the ungodly long, complicated, formal Holacracy Constitution, the first thought that came to mind was “D’oh!“.
Goalodicy – the pursuit of idiotic goals
The last book I read was Scott Adams’ “How to Fail at Almost Everything and Still Win Big: Kind of the Story of My Life“. The current book I’m reading is Oliver Burkeman‘s “The Antidote: Happiness for People Who Can’t Stand Positive Thinking“. Coincidentally, and unbeknownst to me before I began reading the books, both authors trash the dogma that setting specific goals is a worthwhile idea. Burkeman has this (and much, much more) to say on goal pursuit:
A business goal would be set, announced, and generally greeted with enthusiasm. But then evidence would begin to emerge that it had been an unwise one – and goalodicy would kick in as a response. The negative evidence would be reinterpreted as a reason to invest more effort and resources in pursuit of the goal. And so things would, not surprisingly, go even more wrong…. There is a good case to be made that many of us, and many of the organisations for which we work, would do better to spend less time on goal-setting, and, more generally, to focus with less intensity on planning for how we would like the future to turn out. – Oliver Burkeman
Scott Adams is even more critical of the “best practice” of goal-setting than Burkeman:
Throughout my career I’ve had my antennae up, looking for examples of people who use systems as opposed to goals. In most cases, as far as I can tell, the people who use systems do better. The systems-driven people have found a way to look at the familiar in new and more useful ways. To put it bluntly, goals are for losers. That’s literally true most of the time. For example, if your goal is to lose ten pounds, you will spend every moment until you reach the goal—if you reach it at all—feeling as if you were short of your goal. In other words, goal-oriented people exist in a state of nearly continuous failure that they hope will be temporary. That feeling wears on you. In time, it becomes heavy and uncomfortable… Goal-oriented people exist in a state of continuous pre-success failure at best, and permanent failure at worst if things never work out. – Scott Adams
If you’re a laser-focused, SMART goal-oriented person, you might want to revisit some of the foundational bricks in your worldview in light of what Burkeman and Adams have to say. But then again, neither Burkeman nor Adams are absolutists. They don’t emphatically advise against all goal-setting. They simply suggest considering alternative, less psychically destructive methods of attempting to better our lives (devise/use a system; envision a qualitatively desirable future and move toward it).
You might say every system has a goal, however vague. And that would be true to some extent. And you could say that everyone who pursues a goal has some sort of system to get there, whether it is expressed or not. You could word-glue goals and systems together if you chose. All I’m suggesting is that thinking of goals and systems as very different concepts has power. – Scott Adams
There is plenty of very real research testifying to the fact that the practice (of goal-setting) can be useful. Interpreted sufficiently broadly, setting goals and carrying out plans to achieve them is how many of us spend most of our waking hours. – Oliver Burkeman
Somewhere on the road from small startup sensation to huge institutional borgdom, the oft-repeated process of “manage-ification by growth” fires up and kicks into high gear. It’s inevitable, or is it?
In the context of complex decisions with uncertain outcomes and no obvious right answer, the managerial mind inevitably longs for some handrails to grasp amid the smoke and flames. Strategic planning offers that consolation— or illusion— of a sure path to the future – Stewart, Matthew
In “The Management Myth“, Matthew Stewart researches how the business of “Business Strategy” got started and how it evolved over the decades. He (dis)credits Igor Ansoff with starting the phantom fad founded on “nonfalsifiable tautologies, generic reminders, and pompous maxims“. Mr. Stewart also credits mainstream strategy guru Michael Porter with growing the beast in the nineties into the mega-business it is today.
Perhaps the most interesting outcome from the rise of the business of strategy was the stratification of “management” into two classes, top management and middle management:
Top management takes responsibility for deciding on the mix of businesses a corporation ought to pursue and for judging the performance of business unit managers. Middle management is said to be responsible for the execution of activities within specific lines of business. This division within management has created a new and problematic social reality. In earlier times, there was one management and there was one labor, and telling the two apart was a fairly simple matter of looking at the clothes they wore. The rise of middle management has resulted in the emergence of a large group of individuals who technically count as managers and sartorially look the part but nonetheless live very far down the elevator shaft from the people who actually have power – Stewart, Matthew
I always wondered how the delineation between “top” and “middle” management came about. Now I know why.
All self-credentialed management gurus base their sage “advice” on some sort of underlying pseudo-science. To keep the gravy train a rollin’, they gotta keep up with the science du jour; and today’s fresh produce seems to be the highly acclaimed field of neuroscience. But beware….
Studying neurobiology to understand humans is like studying ink to understand literature – Nassim Taleb
So, what preceded neuroscience as the rack du jour for the guru aristocracy to hang their collection baskets on? BD00 is delighted you asked! He’ll not only give you the answer to that question, he’ll gift you the entire history of the march of the gurus:
As you might guess, the research effort that went into the development of this guru-march graphic required many staff hours distributed over dozens of sprints from a highly effective, self-organized, horizontally-scaled, agile team facilitated by a Scrum Alliance certified Scrum Master.
Without a doubt, the most impactful (and depressing) management book I’ve read over the past few decades is Matthew Stewart’s “The Management Myth“. In his unforgettable masterpiece, Mr. Stewart interweaves his personal rise-and-fall story as a highly paid management consultant with the story of the development of management “science” during the 20th century. Both tracts are highly engaging, thought-provoking, and as I said, depressing reads.
At the end of this post, I’m gonna present a passage from Matt’s book that compares the Winslow and Mayo approaches to “scientific” management. But before I do, I feel the need to provide some context on the slots occupied by Winslow and Mayo in the annals of management “science“.
The Taylor Way
Frederick Winslow Taylor is considered by most to be the father of “scientific” management. In his management model, there are two classes of people, the thinkers (managers) and the doers (workers). Thinkers are elites and workers are dumbasses. By increasing piece/hour pay, Taylor’s model can be used to mechanistically increase efficiency, although it doesn’t come for free. Executed “scientifically“, the increase in labor cost is dwarfed by the increase in profits.
The Mayo Way
Elton Mayo, although not nearly as famous as Doug MacGregor (the eloquent theory X and X guy who I liked very much before reading this obscene book), is considered to be one of the top “scientists“, and perhaps creator of, the human relations branch of management (pseudo)science. In Mayo’s management model, there are also two classes of people, the thinkers (managers) and the feelers (workers). Thinkers are also elites, but workers are bundles of emotions. By manipulating emotions, Mayo’s model can be used to “humanely” increase efficiency. But unlike the reviled, inhumane, Taylor model, the efficiency gains from Mayo’s “nice” model are totally free. A double win! Productivity gains in an ethical manner with no additionally incurred financial cost to the dudes in the head shed. Management is happy and the workery is a happy, self-realized community. W00t!
OK, now with the context in place, here’s the passage I promised:
Mayo’s drive for control makes Taylor look like a placard-waving champion of the workingman. The father of scientific management may have referred to his workers as “drays” and “oxen,” but with his incentive-based piece-rate systems he nonetheless took for granted that these beasts of burden had the capacity to make economic decisions for themselves on the basis of their material self-interest. In Mayo’s world, however, the workers of the world lack this basic rational capacity to act in their own self-interest. – Stewart, Matthew (2009-08-10). The Management Myth: Why the Experts Keep Getting it Wrong (p. 135). W. W. Norton & Company. Kindle Edition.
When I first read that passage, it sent an uncomfortable shiver down my spine. Was it as good for you as it was for me?
Shoving all the preceding BD00 drama aside, I’d rather be happy (and duped?) making $XXXX than be miserable making the same amount. I just wish that badass Matt didn’t throw his turd in my damn punchbowl!
In case you’ve been wondering why I’ve been relentlessly railing lately against the guild of agile coaches on Twitter, this post exposes my main motivational force. From what I’ve seen, the coaching community rarely, if ever, thinks or speaks or writes about where the fruits of their so-called 400% efficiency improvements end up. They either auto-assume that the tropical delights are doled out fairly, or the topic is taboo; undiscussable (RIP Chris Argyris).