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February 26, 2006

How to Prevent a Bozo Explosion

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It's depressing to watch a mean, lean, fighting machine of a company deteriorate into mediocracy. In Silicon Valley we call this process the “bozo explosion.” This downward slide seems inevitable after a company achieves success--often during the years immediately following an IPO. The purpose of this article is to prevent, or at least postpone, this process in your company.

The first step is to determine whether a bozo explosion is happening. Here are the top ten signs of bozosity to help you decide.

1. The two most popular words in your company are “partner” and “strategic.” In addition, “partner” has become a verb, and “strategic” is used to describe decisions and activities that don't make sense.

2. Management has two-day offsites at places like the Ritz Carlton to foster communication and to craft a company mission statement.

3. The aforementioned company mission statement contains more than twenty words--two of which are “partner” and “strategic.”

4. Your CEO's admin has an admin.

5. Your parking lot's “biorhythm” looks like this:

  • 8:00 am - 10:00 am--Japanese cars exceed German cars
  • 10:00 am - 5:00 pm--German cars exceed Japanese cars
  • 5:00 pm - 10:00 pm--Japanese cars exceed German cars

6. Your HR department requires an MBA degree for any position; it also requires five to ten years work experience in an industry that is only four years old.

7. Time is now considered more important than money so you have a company cafeteria, health club, and pet grooming service. Moreover, the first thing that employees show visitors is the company cafeteria, health club, and pet grooming service.

8. Someone whose music sells in the iTunes music store performs at the company Christmas party.

9. An employee is paid to do nothing but write a blog.

10. The success of a competitor upsets you more than the loss of a customer.

(If you've seen other signs of the slide to bozosity, leave them as a comment, and I'll append to this list.)

Addendumbs (sic) to the list from readers:

11. You have a layer of middle management who worked at big-name companies (usually consumer goods) who like to call meetings and designate “project leads.” (I experienced this first hand.) Zoli Erdo

12. Your hire a big name consulting firm who brings in MBAs with one year of experience to re-think your corporate strategies.

13. The front-desk staff gets better looking and less competent. Jeff Barson

14. Your CEO or CFO spends more time on CNBC than in the office. Laurie Sefton

-------------------------------------------------------------------------------

Did you gulp? Don't sweat it: you're not alone. In fact, you'd be alone if you weren't going through the slide. Here's what you can do about the situation:

  • Insist that managers hire better than themselves. For example, an engineering manager should hire a programmer who is a better programmer than she is, not worse. By the way, this principle starts at the level of the board of directors when hiring the CEO.
  • Eradicate arrogance. Arrogance manifests itself in two principal areas: first, when your employees describe the competition using terms like “clueless,” “bozo” (ironically), or just plain “stupid.” Second, when your employees start believing in “manifest destiny”--that is, that your company deserves, and will achieve, total market domination. Your competition probably isn't stupid, and trees don't grow to the sky.
  • Understaff. Hire fewer people than you're “sure” you need to accommodate that hockey-stick growth you're “sure” you're going to achieve. When you're in a rush to fill openings to respond to growth, you make mistakes. Unfortunately, many companies adopt the attitude of “Hire any intelligent body, or we'll lose business--we'll sort everything out later.”
  • Undergrow. This is the flip side of under-staffing. I am suggesting intentionally forgoing sales. Staying small and fine is a perfectly acceptable management policy. At the very least, calculate the entire impact on head count of getting that additional sale, new line of business, or acquisition.
  • Look beyond the resume. The goal of hiring is building a team of great employees. One proxy for a great employee is a relevant educational or work background. However, the perceived “right” educational background and work experience are not sufficient conditions for excellence. Hiring a bozo with the “right” resume can drag down other employees and increase the probability of hiring more bozos. Not hiring a great person because she lacks the “right” resume is not as harmful but is a mistake too.
  • Diversify. Some companies look like the corporate version of the Stepford Wives: people are too similar. For example, everyone has a PhD. Everyone grew up in a white, upper-middleclass family. Everyone went to an Ivy League school. It's a bunch of Me and Mini-Mes. When this happens, it means that form is overruling function, and the way people succeed is by representing the right form, not excelling at the right function. That's back asswards.
  • Merge and purge. You owe it to your employees to take corrective action, and, if necessary, terminate people as soon as issues come to light. You may be thinking, “Let's wait and see; maybe he'll improve; our numbers are still great, etc.,” but this is unfair to everyone involved. If there's a problem, fix it. If you can't fix it, then make it an “exployee”--thereby, establishing performance excellence as a corporate standard.

Written at: America West, flight #567, seat 4B, Phoenix to Orlando

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Comments

Another sign of alert is if more than 10% of all employees has positions with "Vice President" or VP in the title.

More ideas...

* There are so many VPs in the company that a lot of time is wasted pushing paperwork back and forth.

* Top management adopts an "I know" mentality where fresh approaches to old ideas are quickly dismissed and debates are avoided. Big egos get in the way of further headway.

* Millions are allocated each year to send employees for team building and other skills training that change little in overall employee's attitudes and skills. Management regards training as a part of their to-do checklist instead of focusing on desired outcomes and following up on lessons learned.

* Management focuses on making a better mousetrap instead of seeking to develop solutions the market really wants.

The CEO has never actually seen the cafeteria... or the health center... or the floor of one of his factories.

10:00am to 5:00pm? Dude! It's more like 10:00am to noon, then 2:00pm to 3:00pm. Tops.

The Xmas party on a yacht with all employees onboard.

1. You outsourced your mission statement.
2. A large color printout of the mission statement is posted on *every* door.

Re the car comment:

Cheap (Japanese) cars that arrive early and leave late and expensive (German) cars that don't come in til 10 and leave on the dot at 5 mean that the brass ain't working as hard as the rank and file.

When the brass stops working, the rank and file eventually stops too.

The "friends and family" plan replaces the brains of the operation, in order to bring "new vision" to take the operation to the next level; failure!

It wasn't the "vision” that made the company successful in the first place, it was the execution, and most everyone that made it happen goes out execution style.

When your company begins to rely on consultants to "define a strategy" or "develop a new business model" you've reached Bozoville. A couple groups at MSFT when I was there had as many McKinsey consultants as regular employees.

May I recommend "bozofication" as an evolution of the term Bozo Explosion?

Sure sign of Bozo Hell:

-The CEO can't demo the product, or worse, doesn't even know how to log in.

Your CEO's chair is more expensive than his/her first car.

...your Chairman of the Board owns the second-rate hotels near corporate HQ and requires employees to stay there during corporate visits.

It's not "back asswards" it's "ass backwards".

You know you have a bozo explosion when the company cafeteria starts sounding like a "buzzard" expo...

An individual can be indexed as a buzzard if he exhibits the following charecteristics:

1 Excessively uses buzz-words in any conversation

2 Claims to have implemented large scale deployments of technologies released just a few weeks/months ago - you might have come across many AJAX buzzards already and also some RoR buzzards

3 There is a high likelyhood that these people are architects - read Joel Spolsky's take on Architect Astronauts in the technical domain but in the non-technical domain they are almost always management related folk.

More signs:

- your company has more middle management than "troops in the trenches"

- your company insists on hiring directors and VPs to head up divisions that won't exist for another 9-12 months

How does "suddenly having pins with corporate logo distributed to all employees" sound? Not that I *mind* getting one...

Thanks for the article - Having worked in IT for a number of years its still surprising how much crap is still spoken about IT.

It's all about the tech right?

No it's all about people, and organisation and a lot of other things.

A lot of startups fail because they outgrow their capacity to provide, and others because they solely focus on techie elements.

Quite simply - there is not enough organisation to support the IT operations that are required on a daily, weekly or monthly basis.

Companies that succeed are as focused on operations as they are on innovation.

After all if your start-up grows to the point that it becomes a major operation - who does the donkey-work?

Not your programmers - that's for sure - you pay them too much to have them messing around with tape backups on a daily schedule.

So organisations that succeed understand that the business of the daily running of IT is different from running the technical and marketing aspects of "IT".

You might make your business out of IT - but unless you run your company properly it won't be around for long.

But a lot of startups are started by young techies - they understand the technology - but not business (with a small "b").

Hence the "bozo explosion" - it's much easier to recruit "people like you" than "people who understand business" but who you don't understand.

So even if they share your interests and even if they *can* whip up a quick and dirty version of your latest web2.0 ruby-on-rails site that is an instant hit - without infrastructure it will fail.

Build for the future - it's as heterogenous with people as it it with computers.

yeah and here's one to add to the list:

BOZO SIGN:

The minute that the IT people start to talk about any department in the company as "stupid" like accounts, hr, pr, warehouse, etc etc.

Just because the other staff might not understand computers as well as you does *not* make them stupid.

Not only that - but without their contribution - you would be out of a job.

Think about it - the next time that you fix the CEO's secretary's monitor because she forgot to plug it in.

How's something like this:

"There is someone on your management team (or board) just because he went to [school] or has a degree from [school]" (i. e. Westpoint)

or

"There is someone on your management team (or board) just because he did, organized, lead, etc. [completely unrelated activity] at [Fortune 500 company or major competition]."

Good post. :)

>>>when your employees describe the competition using terms like “clueless,” “bozo” (ironically), or just plain “stupid.”


A a more severe case of "bozo"ism is when employees start descirbing the customer using these same terms.

Kiss of death - more time and energy is spent defining and adding specialized features, as defined by the marketing department, than is spent fixing bugs.

1)Your CEO starts to spend more time on the golf club than at the office

2)Your CEO has a blog that only links to A listers

3)One of your employees is Scoble (I just learn he has more publi power than anyone at Microsoft, is that true?!) and your last product launch has been a still clueless version of Mozila Firefox
4)Your company´s motto becomes "the plan is that there is no plan" (last place where I work. Now they are much smaller than before)

(feel free to edit them, My english is not the best!)
I guess you won`t publish number 3. Your blog is too politically correct ;)


Regards
http://niquel757.blogspot.com

"9. An employee is paid to do nothing but write a blog."


Oooh, snarky ;)

@Anonymous from the U.K.

In the U.S., the Japanese/German car analogy means the rank-and-file staff making a minimal salary drive inexpensive, Japanese vehicles, though maybe we should add Korean to that list with Hyundai and Kia growing in popularity.

The highly-paid execs show up in their pricier BMWs and Mercedes and generally depart work right at 5 p.m.

I've worked at a couple of places where this took place each day.

Thanks Guy. I learnt a new term.
Few more I could relate to:

1. A new manager or top management person restructures and reorganizes team when there is need for new people, downsizes them.
2. You often get to hear that new skillsets are required from other companies and current employee skillsets are redundant.
3. Employees are asked to become entrepreneurs and are asked to search websites and do cold calls.
4. Company adds one more term to strategy and partners - "Long term" while there are no new projects coming along and exisiting customers are moving away to competitors.
5. The COO, VPs and CEO sit in their cabins and question the implementation details of every project.
6. When every new project outside the company's core area is marketed as expertise in vertical and becomes a line of business overnight.
7. When CEO issues a press statement for a very small business win and claims his long term vision are delivering results.

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