Anarchy in our Companies

“It has been a very difficult Q1. We have only a week to go, and we will probably close at about 40% below target, simply have to step up in the other 3 quarters” said the Sales Head, without looking up from his laptop screen. â€œBut,” protested the CFO, “even 10 days ago, you were sure of making the numbers, and asked us to keep the sales forecast at the same level….this gives us very little elbow room to arrange for bridge money.” The CEO chairing the meeting sat there with a poker face.

“We are holding full 6 weeks’ finished goods. We are already on 3 weeks’ extended credit with our suppliers, and are obliged to buy the next set from these same suppliers. We won’t make any more for ‘just-in-case’ situations, against ‘iffy’ forecasts. We will step up when you are sure.” The VP-Production was anguished when the CEO firmly pushed for enhanced production.

Both the Sales Head and the Production Head are saying the same thing: “We will do what we must do, when pushed. Right now, we are helpless. But, we will step up and deliver. Don’t worry.” We will ask for techies to be recruited at the very last minute, and desperately grab the first one who comes along.  A blip in one quarter will be made up in the other three. If you need products to be shipped out, we will pull an “all-nighter” and do it. If cash runs low, we can get emergency loans, and pay more for them.

“Whatever it takes” is a situation all functions in a company seem to relish. In India, we call all this “scrambling around and coming out alive” as part of our genetically-endowed quality called ‘Jugaad’.

This common organizational technique suggests that we recall a lament in Nietzsche's Der Fall Wagner (The Case of Wagner): “What is the sign of every literary decadence? That life no longer dwells in the whole. The word becomes sovereign and leaps out of the sentence, the sentence reaches out and obscures the meaning of the page, the page gains life at the expense of the whole—the whole is no longer a whole. This, however, is the simile of every style of decadence: every time there is an anarchy of atoms.”

Play that again. An Anarchy of Atoms. When individual functions such as Finance, HR, Sales, Marketing or Manufacturing can get away doing things their way or at their own pace or fall short, organizational anarchy gets unleashed. The resultant ripple effect means that someone else must stretch a muscle or fill in for this non-performance.

To the CEO, should it matter less when Sales are in pain, rather than if Finance is hurting?

If “pain is weakness leaving the body” as the US Marines say, as CEO or someone reporting to CEO, you must address these potential causes of pain:

1. The feeling and irrefutable concept of inter-connectedness across functions can’t go missing. When you are a member of the Senior Management Team in your company, you cease to represent your function. As J C Penney says:” The best teamwork comes from men who are working independently toward one goal in unison.”
2. As a departmental Head, say what you will do and do what you say. Not doing either hurts others in the company.
3. Empathising with one function (eg., Sales) and then pressurizing another (say, Finance) to step in to manage the chaos will create stress points leading to things and people tripping up.
4. When even one small part of the company is playing ‘catching up’, it tires everybody.
5. Irrespective of the department’s confidence on achieving goals, the leadership must use its superior intelligence to moderate performance expectations.

Anarchy as a word has Greek origins ( an – without; archon – master/ruler). No Masters or Rulers. Plato avers that anarchism is “mob rule” where the ends justify the means, leading to licentiousness, and ‘each one to himself’ style of living. Companies can’t afford that.