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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

One from my side:

"When you spend too much time doing "organizational processes" rather than selling and servicing customers.

"When you spend more than 10 days in training in class in a year"

"When instead of one guy selling and servicing a customer, 16 people do bits of everything and mess it all up"

"When you have a Cheif Strategy Officer, a Cheif Operating Officer, a Cheif Sales Officer, a Cheif Marketing Officer in addition to a Cheif Executive Officer!"

What's the statute of limitations on covering up bozosity? I hope 5 years is enough...

(1) Turning your worst customers into employees.
(2) Any Friday morning company ritual involving liquor.
(3) "Experimental" employees.
(4) Making employees stay in for lunch.
(5) No American cars in the parking lot.
(6) CEO recruiting for his "Business Professionals Course" or other pyramid scheme.
(7) "Business is like the game of Go"
(8) To the outsider, managing partners resemble Politburo. To insiders, managing partners resemble a keg party.
(9) Tech people who want windowless offices and no contact with non-techies.
(9b) Tech people who resent other tech people who want windows on their offices and want to chat up hotties at the water cooler.
(9c) Tech people who go on and frigging on about how they survived the Communist system and are greatful to have a comfortable chair in the closet they have chosen for an office.
(10) All employees known by cartoon names. [This one is fun, if you work with a bunch of bozos, you must try this with a co-worker. Goal is to name all toons in the office, make a website for them, and not be discovered or fired.]

Advertising on Google adwords $1.00 per click when your website is ranked one.

- Bar Raising consists of workgroup outsiders who are given the power to veto a new hire without understanding the job, the person vetoed, the hiring manager's requirements, or the job description.

- New functions like "marketing" and "quality" are hired into the organization and then all their efforts are vetoed by "bar raising."

- After the new function ("marketing" or "quality") managers leave in abject frustation the bozos rationalize against any new attempts to bring in new functions with "We tried that once. It did not work."

Excellent post! Also, excellent keynote at PMA this weekend! You're truely one of the big brains out there. Give me a month or two and I'll have a proposal of my own for you... ;)

Nontechnical employees start attending CAD classes in order to eat a free lunch.

Guy, could you clarify the final sentence of the post? viz.

"If you can't fix it, then make it an “exployee”--thereby, establishing performance excellence as a corporate standard."

Another addition to list of "how to avoid...":

Under-equip. Certain to raise a hew and cry from my fellow engineers, however, if every engineer has the newest, fastest and bestest equipment, that's the environment for which they will develop. If our equipment is a generation or so behind, we are more likely to be developing (software in my case) for the level of equipment our customers own. The result is fewer perceived performance and compatibility problems, and happier customers.

(Let the roasting begin! ;^)

The company starts having more than one retreat a year.

In every retreat, the long term strategy keeps shifting.

1) The mission statement sounds vaguely like every other company's mission statement.

2) And nobody knows what it means.

3) A $100k budget is allocated to market the new company blog because nobody reads it.

4) Your manager is jealous of you because you're smarter.

5) (How could you miss this out?) The IT department is forcing everyone to switch from Mac to Windows!

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

I think you mean that they hire a big-name performer but "sells in the iTunes Music store" doesn't say that. Pretty much any internet-savvy shmuck can get his music in the iTunes music store - I've been thinking of putting an album up there myself. iTunes is a "long tail" thing. "sells at Tower Records" might get the point across better.

ack! I'm having severe flashbacks to my days in the dot.com era. All of those things happened at multiple times real-time. Positions (including mine) changed from the time of hire to the time new hires actually arrived for their first day of work.

One sure sign of bozo-invasion: a lot more emphasis on making a profit (even a penny's worth) or finding a buyer than worrying about the product.

I presume German cars are costlier than Japanese cars

I have a few from Bozo Hell :)

1. VPs become somehow incapable of walking through a doorway not framed with mahogany.
2. To reward a division, management actually throws a cake and ice cream party for employees. Cracks abound referencing a certain relevant Marie Antoinette quote.
3. Org charts undergo redefinition quarterly -- nobody's job function actually changes.
4. Ability to "coordinate projects" and meeting attendence is valued higher than engineering discipline and measureable results. Whole teams begin to form of these coordinators, pushing out all the engineering talent...

I didn't understand #5, 'Your parking lot's “biorhythm” looks like this', maybe because I'm from the UK... someone care to enlighten me?

1) The company spends a quarter of a million dollars on a consulting firm to create "passionate" employees, instead of talking to the employees

2) Bizarre rituals like an Xmas Bonus March. (no, really. Line up like you were paying homage to de massa)

3) A suggestion program that never even acknowledges your suggestion, but is astounded that you can fill out PDF forms online, then uses the form you created to streamline the process and cut waste without thanking you.

4) You can get a new server easier than you can get business cards, because only AVPs or higher can have business cards

5) The head of IS tries to ban wireless networks because he couldn't make a wireless keyboard work corrrectly

6) The head of the company only talks to employees for party decorating help...for the party at his house that none of the employees will ever see.

7) It takes them two tries to divest of a poorly performing division, because they weren't able to complete the sale in time.

8) They have a benefits package that is only a couple of hundred dollars cheaper than self-insuring, with worse coverage, while talking to the employees about how "we're a family".

9) Benefits are so tightly regulated so as to be unusable, i.e. no online classes are covered, not even if they're from Harvard or MIT. This way they get to say they have a benefit without anyone actually being able to use it. Oh, yes, and classify job related training, like an MCSE or an ACSA as a departmental expense, and only allow tuition reimbursement to apply to formal college classes.

10) Make sure that the senior management is the only contact the CEO has with the company, unless it's the accounting department.

The company spits out more stuff than you can imagine, pens, bags, notepads, messenger bags, etc.

Another key indicator:

Your HR "department" has more than one person in it.

You know you're approaching Bozo Explosion when the majority of the leadership team all used to work for the same Fortune500 company and keep saying "when I worked at XYZ, this is what WE did..."

PullllEASE!

Hey Jonathan I like your www.myfoodcount.com website.

12. Customer service entails waiting on hold for at least 45 minutes during "peak" hours (when seem to be anytime between a 24 h period).

Jon Cantin
Founder of myfoodcount.com
Free, Anonymous and Easy to use health monitoring

Title Inflation: Every couple quarters, Directors become VPs, VPs become Senior VPs, Senior VPs become Executive VPs. Eventually, 20% of the company is a VP.

Forms: Lot's of forms need to get filled out - especially about what you are working on. Really bad when they must be printed delivered & not emailed

Driver: New CEO must have a driver and a new, expensive GERMAN car

Stock Price: People say they don't care about the stock price - first sign that they care A LOT about the stock price. Also a leading indicator that the stock price is falling

to expand on the blog meme:

Departments and managers are encouraged to blog using the new corporate blogging facility and all the blogs end up looking like plain old web pages of useless and duplicated departmental info, rarely updated and never commented.

And some more....

1. A different brand of coffee, paper towels, and/or toilet paper shows up in the executive wing.

2. Comm meetings spend a lot of time talking about smashing the competition, and not how to make your own company better.

3. Charge-backs for things like floorspace in a building get drilled down to the department level.

4. Interviewees are told how "this dept rocks" and "that other dept sucks".

5. Your CFO now spends more time on CNBC than in the office. Your CEO spends more time out of the timezone than in the office.

I have to take issue with the German vs Japanese car--my BMW's seat construction is the only thing that keeps my lumbar vertebrae from ripping out of my back and flinging themselves against the ceiling. And I put 500-1K miles on the car in any given week.

During a declared "budget crunch", the sales manager purchases an entire new suite of coordinated office furniture, then hires non-selling staffers to support the sales team.

Yea Guy,

I agree with one of the commentors up there, are you talking about companies like GOOGLE?

This really does give me the idea that GOOGLE is possibly sliding down to BOZODOM.

Please tell me, do you think GOOGLE is really part of this BOZOSITY?

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