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Small business. Big game
Александр Александрович Высоцкий
«This book is not about how to come up with a brilliant business idea, but about how to organize the work of a company so that its employees function as a genuine team and are capable of implementing a worthwhile idea. Experience shows that the brilliance of an idea is undoubtedly a plus, but if you look around carefully, you will find that most flourishing companies are not actually based on any revolutionary idea. What is revolutionary about McDonald's fast food, Starbucks coffeehouses, or products sold by the majority of chain supermarkets? Every business has its own expertise, of course, but the most successful companies offer their clients fairly ordinary products. Why then, of hundreds of competing fast-food chains, have only a few achieved great success, and of hundreds of grocery stores, why have only a few grown into large chains? In most cases, the secret is not in some special know-how or secret formula; it is in how a company is run…»
Александр Высоцкий
Small business. Big game
Introduction
This book is not about how to come up with a brilliant business idea, but about how to organize the work of a company so that its employees function as a genuine team and are capable of implementing a worthwhile idea. Experience shows that the brilliance of an idea is undoubtedly a plus, but if you look around carefully, you will find that most flourishing companies are not actually based on any revolutionary idea. What is revolutionary about McDonald's fast food, Starbucks coffeehouses, or products sold by the majority of chain supermarkets? Every business has its own expertise, of course, but the most successful companies offer their clients fairly ordinary products. Why then, of hundreds of competing fast-food chains, have only a few achieved great success, and of hundreds of grocery stores, why have only a few grown into large chains? In most cases, the secret is not in some special know-how or secret formula; it is in how a company is run.
It’s been twenty years now since my friends and I opened our first company. We were extraordinarily enthusiastic about having our own business and felt like travelers setting out in search of adventure. We all were in our early twenties, recently graduated from a higher education military institution, and knowledgeable about computer technology. The computer industry was just beginning to take shape, and it seemed to us at the time that our knowledge and skills were all we needed to create a successful business. Of course, we were apprehensive about the obstacles we faced, but the prospects were alluring. We had no money to buy ourselves equipment to show to clients, to create a minimum inventory, or to fulfill the other requirements of an official Apple dealer in Ukraine. We therefore decided to begin by selling users and official dealers all sorts of auxiliary devices such as external hard drives, scanners, and software.
We decided to deliver to order: We simply took orders, accepted prepayment, and then supplied whatever was needed. There was no talk at all of any sort of serious planning; we simply grabbed any order on which it was possible to turn a profit. No matter what the client wanted – instructional programs for preschool children, a professional scanner for a publishing house, a portable printer or a batch of modem cables – we took on the order. We very quickly earned the reputation of being fellows who could get anything for Macintosh computers. We found a suitable supplier in the United States – a small computer firm that bought everything we needed from various manufacturers and shipped it to us. Then we would deliver these goods to our customers. Our own equipment, meanwhile, consisted of nothing but a single computer on its last legs (good only for printing documents), a fax machine, and an electric kettle. A company that procured equipment used by oil refineries gave us a room in its office.
After several months of working by the maxim “We get what you need,” we already had good connections with authorized dealers, and thanks to this, we were able to land our first big fish. Even before we were an authorized Apple dealer, we purchased a shipment of computers from a dealer – a shipment that the customer had for some reason refused to pay for – and we sold that lot to another official dealer. Payment for these computers went from Switzerland to Turkey for some reason, in exchange for Hilal chocolates. Our profit from this transaction consisted of two computers, which became our primary asset and served us for many years to come.
After a while, we became an authorized dealer, and this enabled us to obtain new clients, which at the time were mainly western companies and organizations that had opened offices in Kiev. They were importing a significant portion of their computer equipment from abroad. The computers were mostly old and arrived the worse for wear, and they needed servicing and repair, so we earned a lot by providing such maintenance. Laser printers back then were very expensive and frequently broke down, and spare parts for them were expensive, too. So I simply went to a worker I knew at one of the Kiev metalworking plants and ordered a bag of spare printer gear wheels from him for twenty dollars, which enabled us to repair laser printers at a staggering profit. Electronics specialists whom I knew would repair computer power sources, which saved us from waiting a month for deliveries of spare parts and enabled us to solve a client’s problem quickly and earn something in the process.
Within a year is we rented separate premises in the city center and opened our own office. We had no money for redecorating, to be sure, so my partners and I refurbished the place ourselves, and we were able to buy office furniture for a song from a failed business. There was no money for an alarm system or guards for the office, either, and for several months my partners and I took turns spending the night in the office, doing guard duty. Business proceeded, and after a while, we began to earn good money on deliveries of desktop publishing systems, video processing, and computer animation. We were incredibly excited by our success, our profits were growing, the company gradually began to expand, and our first employees were hired. In our very first year as an Apple authorized reseller, we were first in the country for quantities of equipment supplied. That moment was the peak of our enthusiasm for the future of the company. But even then the first signs of impending problems began to appear.
From the first day of the company’s operations, my partners put me in charge of management, but I had no idea what it meant to run a company. It seemed to me that it took just a few things: agreement among partners and employees, personal competence, and personal example. But when we hired our first employees, I found that it was also necessary to allocate areas of responsibility, plan the work, and demand high quality performance.
Until then, the company had been essentially a sort of club, where everyone chose his favorite area of activity and pursued self-fulfillment in that area. And that was great! After all, if a person chooses his own area of activity, he usually acts it with the utmost responsibility. Look at how hard a person can work tending his own garden or engaging in his favorite hobby. It does not even occur to him that he may have worked too much or been paid too little for this work. When a person freely chooses the work that he is going to do, he feels really good about it and does his best. If he is forced to do something that he finds useless and unnecessary and does it under duress, he will, at the very least, be unhappy with the work. His productivity will also be very low; there is a good reason why they say that the lowest labor productivity was in slave-owning societies and prisons. Wise parents know that if they force a child to wash the dishes, that child will come to hate washing dishes more and more with each passing day and will, at best, grow up and hire himself a maid, and is at worst – is will spend his whole life with mountains of dirty dishes piled up in the kitchen. To get him a child to wash dishes on his own initiative, it is necessary first and foremost to inculcate a desire on his part to do so, to make an interesting game of it, and then the dishes will be clean and the child content, as well.
Managers often forget that a company’s most valuable asset is the creativity of its employees and their earnest desire to work. It must be noted that is actually not so much that managers forget to motivate workers to be productive; they just don’t know how to do it. Areas of responsibility need to be clearly defined, after all, and not only the dream jobs must be allocated but unpopular work, as well. So it was that in my first computer company I came up against the need both to clearly allocate functions and, strange as it may be, to require positive results from employees and partners alike. At the same time, I had no precise idea whatever of what the subdivisions and the functions should be, and therefore, in attempting to bring order to this work, I encountered many problems. And when I tried to manage the work of my partners, I came up against the idea of universal equality, which thwarted my attempts to impose order on their work. To some extent, I felt like a ceremonial VIP – formally acknowledged as chief executive but effectively without the power to insist on achieving positive results, since we were all equal partners.
By this time, the company was already three years old, we began to contend with tough competitors, and customers were becoming more demanding. In order to keep up and to develop, we needed more than just knowledge of computer technology and the desire to work. As in any other area of activity, increased competition led to decreased profitability. The standard markup when selling Apple computers was 32 percent when we began our work but fell to one quarter of that over these years. Of course, demand also grew during this time, and gradually this technology went from something exotic to a popular tool for desktop publishing. But in order to develop in this market, we needed real organization and effectiveness. We had no precise division of labor, and no system for planning and monitoring the execution of plans, and therefore we were unable to take advantage of the opportunities presented by growing demand, but we were nevertheless well aware of all the problems that came from the growth of competition.
At that moment, I became fully aware of my inadequacy as a manager, so I stopped enjoying my work to the extent I had when I was working directly with computers. Attempts to take control and manage the company’s performance and productivity only led to quarrels with my partners, which in turn impeded the management of employees. Operating efficiency was too low, and we were not only losing control of the company’s position in the market but also losing clients, although usually our bids won out and led to profitable contracts, allowing us to keep our heads above water. But I understood that unless we changed our methods of managing the company, our days were numbered.
The only problem I saw then was the differences of opinion with my partners, whose own ambitions, it seemed to me, kept them from allowing me to be an effective CEO.
If a person is incompetent, he cannot grasp what is actually the source of his problems. He therefore focuses his attention on some contrived reason for a specific problem, which of course does not help to solve the problem. This is how an unskilled computer user behaves when, in attempting to deal with errors, he completely reformats the hard drive and reinstalls the operating system. He does this over and over, but if the real reason for the computer errors is an overheated processor or memory failures, this will not solve the problem. Thus I, too, thought at the time that the only way to deal with the company’s problem was to reformat existing relationships. In the end, I did indeed reformat them, but not with the desired result. There were three partners, and I, finding myself in the minority, had to leave the company.
This sort of approach is common in small business that if something does not work out, an employee can change jobs, or the owner can open a new company, but as a rule, in this new endeavor he will sooner or later encounter the same problem again. I know many people who own several small businesses that are as alike as two drops of water in terms of their problems. This failure to change is tantamount to repeating third grade over and over again simply because the homework is too difficult in fourth grade-many actions are taken, but the result is poor.
After leaving that first company, I came to two conclusions. The first was that authority must be in the hands of one person, and the second was that there should be no co-owners at all. The first was true, but not the second. The problem was not in the number of co-owners, but in how I had managed the company and dealt with my partners. Fortunately, I stopped making such mistakes after that, and I was therefore able to create two successful manufacturing companies and one consulting company. But I did not immediately recognize the reasons for my first setback, and I had to seriously look into how to manage a group of people and organize their work.
The story of my first business is not unique. Many small companies are created based on the enthusiasm of a few people, grow to a certain size, and then at some point cease their development. But as is well known, that which is not developing is dying either quickly or slowly. Very often the great ideas of a company’s founders begin to be put into practice quickly and yield good results, and the business grows to a certain size, but then the company gradually withers and dies.
A friend of mine manufactures first-rate leather book bindings, and they are really very nice – wonderful leather, beautiful tooling, resulting in a very high-quality and aesthetically pleasing product. In my travels all around the world, I have seen many books in leather bindings, but I have not seen products of this quality in any other country. This enterprise is situated in Kiev, and about two dozen employees work there, most of them directly engaged in production. The company’s founder is a very intelligent, decent, and educated person. Employees work in that company for years at a time, and there is practically no turnover. The company pays a good wage, and relationships among employees there are quite relaxed and pleasant. It can be said with certainty that his business is a very stable small company. There is only one but here: His company has not grown for the last ten years.
When I spoke with him and asked him about his development plans, I saw that he wanted his products to be used by people throughout the world but that he was being held back by fear of the problems involved in expansion. He thought that the main thing keeping his company from developing was the threat of a reduction in quality and the difficulties associated with advertising and sales in new regions. Essentially he, like me in my first company, did not even see the true reason for the problems involved in expansion; he did not know how to organize the work or how to manage people, and what’s more, he was afraid to do so. Yes, he had a perfectly respectable income for a company of that size as well do satisfied customers. But despite being bogged down in the routine of operations, he himself worked with big customers, he himself managed financial affairs, ran production, and handled personnel. Such an array of duties would be hard to hand over even to his son, let alone a hired manager. No one would want to take on that whole headache. Looking at this situation honestly, the employees of this company had no prospect of advancement if the company did not grow. Therefore, even when a very talented and ambitious person joined the company as an employee, sooner or later that person left. Some company founders tell, with a mixture of pride and regret, that many of their former employees have started their own businesses. This is truly something to be sorry about. If these men and women have been able to found their own companies and have achieved some results, they could have made real contributions to their previous employers. It is obvious that a group of capable people can move mountains, but instead of a single company with tremendous results, the outcome is often several small and usually unsuccessful businesses.
The smaller a company, the less earning power it has. But what is interesting is that managers and employees of small companies have more problems than those of large companies. This is easy enough to understand. In a small company, most people are jacks-of-all-trades, performing a wide variety of functions. Thus quite often in a small trading company, a single employee takes orders from customers, works with suppliers, arranges deliveries, resolves conflicts, and collects receivables. A department head in a small company performs even more functions. It is therefore difficult to hire people to work in small companies, as a person must be prepared from the outset to perform a multitude of functions. Managing such employees in small businesses is even more difficult because when a manager requires one thing, an employee can always say that he is busy doing some other very important thing. It is also difficult to raise the level of professionalism of such people because there are too many different areas of activity, and it is even hard to know what training to send them to – computer courses or a seminar on advertising. It is hard to make an employee more productive when he or she has been doing too many different things; there has been no clear job definition for such an employer, so it is difficult to decide how to make that person more productive and focused through in-service training in computer courses or a seminar on advertising. And the most vexing thing of all is that, with all these difficulties, a small company does not bring in a large income, and this means that it cannot properly take care of its employees or make a substantial profit for its owners.
Take a look at the employees of successful small companies and you will find that they work long and hard, frequently more than the employees of big corporations. At the same time, they are paid less, and they have fewer opportunities for professional advancement and a more focused area of activity. Look at this from the point of view of a capable employee who wants to achieve much in life. What are his prospects in a small business? If he is very good, he will very quickly hit the ceiling. Even if he becomes the top manager in a small company, his problems will still outnumber his triumphs. At the same time, in attempting to achieve great results in his work, he will inevitably take on more and more related areas and accumulate duties, but for most of the time he will not be doing what he dreamed of, but simply coping with chaos. You could say that a small business has one thing going for it: It may grow into a big one.
In order for a company to continue growing for a long time, it must leap many hurdles, including people-management problems. As a consultant, I interact with a large number of managers and employees, and in small business, I often meet people who are not even aware of the rules of the game that they are playing or the laws of people management. Frequently, people who are simply good specialists become managers; they do their work capably but have no idea how to organize the work of their subordinates. Most of them think that a manager’s responsibilities are giving orders, establishing incentives, and imposing penalties. Even so, they don’t even know how to handle giving orders professionally, have no idea how to issue them correctly, how to monitor performance, or how to get informative and useful feedback. I am certain that you have dealt with these types of sales department managers, people who only recently were good salespeople, are competent in working with clients, but know nothing about what to do with their subordinates. Their favorite line is “Do as I do.” They naively think that the main duty of a sales department manager is to follow his superior’s example and advice regarding sales.
I was once such a manager, naively supposing that, since our company sold computers, the main thing was sales, and that all our success depended on that. I was quite a good salesman, and all the other employees of the company observed with pleasure how I did it. Of course, applause is gratifying to a person’s self-esteem, but it is impossible to create a successful company based on a principle of “the star and the rest”; for great achievements, teamwork is necessary.
Being a star is no simple matter, and creating a truly successful company and achieving great results using such an approach will not work. Real success calls for not only professional skill in sales or knowledge of production methods; the key factor is the ability to implement operations management. This is not an incredibly difficult thing, and the principles of managing a group of people are as old as the world. But it is also true that these principles are very difficult to apply in a small company in which every person and every cent counts. In this book, you will find answers to the fundamental questions about company management and, most important, how to apply this in practice, even in a small company.
Chapter 1
Team Play
The first thing one must do is to understand what administration is. Most people are firmly convinced that administration is something unrelated to work itself, something extraneous. Administration is frequently perceived as a synonym for bureaucracy – a waste of ink and paper that only complicates work and adds nothing of value. It imposes the burden of submitting reports, participating in planning meetings, and filling out standardized report forms and documents that measure and guide the productivity and overall activity of the company. It seems to employees as well as to managers that all these reports have been imposed for the sole purpose of impeding work. And instead of simply selling or producing, people are forced to waste time filling out forms as part of reporting to management. It is not surprising that administration has such a bad reputation, and that administrators seem like bureaucrats of a sort, people who are not interested in the real business of the organization and merely shuffle papers.
Often, when a management consultant – essentially an administration specialist – comes to a company, employees do not greet him with ovations. And when a company manager tries to set up a planning system or implement regular reporting, employees perceive this as an infringement on their freedom and a questioning of their competence and productivity, so they respond to such measures with hostility. Yet everyone, for some reason, forgets the simple truth – that for a game to exist, there must be certain rules.
Try to imagine a football game with no preplanned game schedule, no score charts, no system for counting points, no rules for the coin toss, or other administrative tools. Of course the game itself does not consist of these schedules or score charts, but what would happen if all of these administrative tools in football were suddenly to disappear? The world would lose a great sport.
In any business, a technical and an administrative component can be distinguished. For example, in the work of a salesperson, the technical aspect is how he interacts with the customer, demonstrates the advantages of the product, overcomes objections, and closes the deal. But even if that salesperson is working on his own, he still needs to engage in some sort of administration – at a minimum, accurately recording his clients’ names on a notepad and adding up the amount of goods he has sold. This is obviously necessary, and if he does not keep a daily count of his sales volume, he will be unable to understand what technical actions are improving his results. He will not even be able to assess whether his work is going well or poorly. If he does not keep notes on his work with customers, then in only one month he will not be able to recall the details of his work with each of them, which sooner or later will have an impact on his sales. The work of the factory or of the purchasing department depends on the work of the salesperson, and if he does not have a plan to monitor current sales accurately and estimate future sales volume, the factory workers or buyers will not be able to plan their work, either. If a person works in a team, administration becomes an important component of a business activity, since it makes it possible to coordinate the actions of each employee with the other members of the team.
It may be an unusual idea, but only through capable administration is it possible to create an interesting and inspiring game! This sounds like a paradox, since in the minds of many, administration is something terribly boring, whereas the exciting activity of a game is entirely different- something full of emotion and enjoyment. Administration is associated with formalities, a game represents freedom and drive. So let’s take a look at this sharp distinction.
People really like playing games, and even if there is no chance of participating in a game oneself, just watching a game can bring pleasure. Nothing can compare with the interest and emotion aroused by an NFL or college championship game; cities come to a standstill during a final game, and discussions of how “our guys” played become the main topic of conversation. Sports – the Olympics, major-league baseball, professional football, college football – all enjoy lucrative media coverage and draw huge audiences in the United States, while soccer has made remarkable inroads thanks to its popularity in schools, opening America to the worldwide excitement that the game generates.
Or consider video gamers who battle virtual monsters. They move their heroes around, devise tactics, and are prepared to spend all their time on this. It is so entertaining that it is simply impossible to drag them away from the computer, and what is amusing is that victories in a computer game bring them nothing in the real world. Yet they are frequently prepared to sacrifice their real lives for the sake of the adrenaline rush that they get during a game. The game consumes all their attention, and they spend all their time on it, frequently at the expense of their health. You have surely said to yourself at some point, If only he would put as much energy into his work! And it is true: The enthusiast not only can achieve unbelievable results but he also takes pleasure in the game itself.
You don't really think, do you, that top athletes who set incredible records do so for the money or from a need to support their families? Of course, prizes are nice, and when prizes in a game liberate you from thinking of earning your daily bread and allow you to devote yourself fully to the game, that is wonderful. But people play games just because they enjoy playing, and they like to reach the mountaintop – to become champions in their field of activity. What can we do to turn work into a game and make it inspire as much emotion and passion as ordinary games do? First of all, to do this, we must understand how a game works.
First, participating in any game involves a personal choice. In order for a person to really and truly play a game, he must choose that area of activity himself, and he must have a desire to prove something, to achieve some goal. Try to make a man play football if he does not want to, or try to drag a person who hates team sports to the stadium. Remember those unfortunate ones whose parents sent them to law school even though they dreamed of pursuing art. In the best case, such people will waste several years at a higher-education institution before eventually taking up their favorite work. In the worst case, they will actually become lawyer’s against their will and will do that work with loathing for the rest of their lives, taking no pleasure from the work and, as a rule, achieving little of any importance.
It is difficult to create a masterpiece if you do not love the work that you do. This is probably why it is so difficult to manage soldiers who have ended up in the armed forces only because they couldn’t evade the draft. You see, these fellows, once in the armed forces, continue to actively struggle to avoid playing the armed forces “game”, and to actively demonstrate that they have nothing whatsoever to do with it. Their favorite game in the armed forces is to compete among themselves to see who can do the least work and to count the days until they are honorably discharged. For them, being in the armed forces is not a game; it is more like being in prison. Then look at professional soldiers, who have chosen to play in this very demanding game. They seem to be made of different stuff, and most of them truly like this activity. In spite of the difficulties and danger, they are proud of their work. The only difference is that some play the game of their own free will, while others have ended up on the playing field by force of circumstances.
Look at how much easier it is for many people to get carried away in a game involving killing virtual characters on a computer screen than by earnestly pitching in and helping their company become a market leader. Although it is illogical, many people nevertheless may sincerely believe that the success of a company is not their business, while the illusory win in a computer game is worth the investment of their time, energy, and passion. The same type of person may earnestly root for his favorite football or baseball team and be utterly indifferent to the success of the company he works for. The reason for this is simple: For many people, the company where they work is not the place in which they seek to achieve something of worth.
How do you think the average employee of a company will answer the question, “What do you consider to be the goal of our company?” My experience says that in small business, you will very often hear this response: “Profit”. This means that the employee considers increasing the owner’s wealth to be the meaning of the existence of the company in which he works. Naturally, in this case, there can be no talk of the attractiveness of the goal, of a desire to play the game to reach that goal, or of creativity. Why should he play the “let’s make the boss richer” game? Perhaps, of course, that employee receives some portion of the profit and is therefore interested in increasing it. But in that case, he is playing the “earn a bit more” game, and this is not team play. Managers are surprised that employees have little motivation to work productively when they are “playing the game” of work simply to enrich the owners and managers. But who wants to run around on the field after a ball for the sake of lining the boss’s pockets? If this is the case, it means the company’s goals do not inspire employees to share these goals, do not arouse passion, so essentially, these people are not players in the company’s game.
The most common reason for this is a company's lack of worthwhile goals that team members would find attractive, or a lack of understanding of such goals. If a person does not understand the goals of an activity, there will be no game. He may of his own choice aspire to achieve the company’s goals only if he is aware of them and, of course, if his manager capably promotes these goals. Simply imagine a person who has been told to dig a pit but has not been told why this is necessary. Only a robot will put its all into such an activity. But explain to the same person that this pit is needed in order to supply hot water to an orphanage, and you will see how his attitude toward the work changes, and how enthusiasm and energy appear.
Setting goals for a group has to do with administration, not the technology of a company’s activity. Thus in football, the technology is the methods that players use on the field, of which they must have perfect mastery, whereas setting the goal “let’s kick our opponent’s ass” is administration. Without such a goal, even the most sophisticated technological methods lose their meaning.
The next integral component of a game is rules that establish the boundaries of the game and describe the possible actions. Without rules, there can be no game, and if the rules fail, the game collapses. If there were no precise rules in football and every player acted as he saw fit, the game would turn into chaos. A company must also have quite specific rules, which precisely define the rights and obligations of team members. Of course, all rules create restrictions that are necessary for the game to continue. Quite often, when rules such as a fixed work schedule, a dress code, or reporting standards are introduced in a small business, it leads to employee resentment.
There are two reasons for this. The first is clear enough; the introduction of a new rule, reasonable and useful as it may be, is a change to a preexisting rule, albeit an unwritten one. If a dress code is instituted, this means a change to a previously existing tacit rule that allowed employees to dress for work however they liked.
At one of my companies, a new policy[1 - Policy – fundamental principles and guidelines in organizational management] was implemented that regulated the appearance of employees, the use of makeup by female employees, and the use of fragrance. Even after employees became familiar with this policy, considerable effort was required to achieve compliance with these requirements. These rules were reasonable and simple, and indeed no reasonable person would dispute that professional employee appearance inspires greater confidence in clients, whereas loud makeup or strong perfume undermine it. Nevertheless, managers had to apply considerable effort to get employees to comply with these rules. After repeated reprimands, the CEO was obliged for a time to implement a morning appearance check at the company’s entrance. Violators simply were not allowed into the office and were sent home to change. Only by means of this rather harsh measure we were able to get all employees to follow the rules. Setting and maintaining such rules is a key part of administration. If no reasonable rules are imposed on employee appearance, behavior, or interactions with customers, getting the company’s work done effectively is in jeopardy.
Therefore, when new rules are introduced that contradict previously established ones – even tacit ones – employees must be made aware of them, and it is necessary to reach a consensus about the changes. After all, in order for a game to take place, every team member must want to follow the rules. If the rules change, it is essential to clear this with the team members, or else they will either try to keep trying to play in the old way or they will even make a game of “let’s show the bosses that they are wrong.” In any case, no good game will come of it.
The second reason why introducing new rules causes employee dissent is more complicated, and it involves people's yearning for self-expression. Everyone yearns for self-expression. If someone senses an effort to restrict him in this, he perceives it as an attempt to undermine his individuality.
As a result, imposing rules may indeed seem to conflict with freedom of self-expression, but this is not the case. Everyone experiences the urge to become a member of a team, to collaborate with others. One of the greatest pleasures that a person experiences in life is cooperative activity and communication with others. If a person is cut off from communication with others for some reason, he or she suffers. This is why one of the most severe punishments inflicted on criminals is isolation from society, the extreme measure of which is solitary confinement. From childhood on, we are surrounded by friends and classmates; we become members of clubs and engage in group activities with like-minded people. This makes for a full life. Most people have the urge to belong to a group, and not only as observer’s, but also as participant’s who make a valuable contribution. This is also part of self-expression. If this role is missing from a person’s life, he most likely will feel.
So there is no contradiction between consciously accepting some restrictions as a member of a group and expressing one’s own individuality. These are two natural impulses, ones present in every person. If he does not obey the rules of a team game, he will be unable to achieve self-expression as a team member. Therefore, everyone tries to maintain some sort of balance between these aspects of life.
A problem arises only when some person does not want to be a member of a team, and then he perceives any rules of a game as a restriction of the manifestation of his individuality. Conscious acceptance of rules is the necessary cost of participation in such a game. A member of a football team wears the same uniform as all the other players, and he is assigned a number to make him readily recognizable. This is similar to a loss of individuality, but, in fact, it is simply a means of his self-expression as a member of the group. And participating in this game gives him genuine satisfaction. Therefore, following rules that are truly intended to make a person successful in a group activity facilitates his self-expression, rather than restricting it. A real problem arises only when a person does not understand how these vital restrictive aspects of rules contribute to the activity of his entire group.
Disagreement with the rules arises either when the rules really do not facilitate the success of the activity or when employees simply do not understand why they are necessary, important, or reasonable. In both of these situations, the administration is in error, since in people management it should be understood that no matter why a rule is imposed, it is important to know what people think about it.
In my archives I recently came across one of the policies written fifteen years ago. It was a policy about discounts for customers. To be honest, when I read this document, I felt ashamed. There was not a single word in it about why this policy was even needed, what problems it addressed, or how it facilitated the work of the company. It is not surprising that in those days I experienced many difficulties as chief executive. It took a lot of effort to overcome employee disagreement with my instructions. If I, as a company employee, had received such a document imposing a new rule from the chief executive, I myself would have had a lot of questions and disagreements about it.
An unskilled manager can easily kill the spirit of the game just by the way he presents his instructions; rules may be fundamentally reasonable, but if they do not lead employees to understand how these rules facilitate the achievement of goals, people will perceive them as an encroachment on their personal freedom.
Governments have been extremely inept at this; they create laws for reasons that are often utterly unclear for those who are supposed to obey them. As a result, in order to achieve compliance with these laws, it is necessary to create a complex control mechanism and employ an entire army of bureaucrats to ensure that the laws are enforced. Such laws are an example of incompetent administration. After all, no one will dispute the requirements of the criminal code, and its use is obvious to every honest citizen. But with respect to tax law, there is no such unity, because there are many who do not approve of the way their tax money is spent.
Fortunately, everything is much simpler in business, and there are usually no such obstacles to creating rules that are reasonable and that help employees both to achieve self-fulfillment and to accomplish team goals. You could say that proper administration enables a person to maintain a balance between his capacity for self-expression as an individual and his self-expression as a member of a group, thereby making life more harmonious. A common error in this area is giving employees the impression that they work at the company only in order to earn money for a satisfying life.
