Understanding How Others See Your World
Middle managers and senior leaders often make the mistake of thinking that everybody in our companies see the world the same way we do and prioritize events as we would prioritize them. I want to relate a brief teaching moment I shared with one of my employees in this past week that illustrates my point.
We had a large spare parts order that was scheduled to ship yesterday. As I was making my usual morning rounds on the shop floor, I passed by the shipping docks and noticed that the order was packaged and on a pallet, ready to go. I happened to be back out checking on some testing we are doing on a RV sized piece of subsea equipment for one of our major customers and noticed as of 4 pm, that pallet of parts still had not shipped. I grabbed the warehouse manager (we will call him John), brought him over and asked why it had not shipped.
John didn't seem to worried and said, "Oh, we just didn't get to it today. We'll get it out by Tuesday of next week."
I gently asked, "Wasn't it scheduled to ship today so it would arrive at the client's dock on Tuesday?"
John said, "Yeah, but we'll call them on Monday and let them know it will be late."
I looked a John with more than a little disappointment on my face and asked, "John...let me ask you something - today is payday, right?"
"Yeah, Boss. It is."
"John, do you know where the money comes from to make sure your paycheck is good?
"From the company."
"Sort of - but you should think of us as a middleman - our funding depends on money coming in from customers and John, we offer our clients trade credit - that client will have 30 days to pay after those parts show up. Not shipping these parts today means that 1) we broke a promise to the client and 2) the cash we get paid will be delayed another week longer than planned. I know that doesn't sound like much but we have two more pay cycles in that time and all of our vendors either have been paid or will be paid before we get paid. That's how this works - that part shipment is the cash for your paycheck in September. We plan our cash to make sure we have it when we need it, not shipping this means that our planning is now wrong and we have to re-forecast on Monday. We make a profit but we have to manage the timing of the cash coming and going to make sure we can meet our obligations. Now do you understand why hitting shipping dates is so important?"
"Yeah. You are saying that we should think of these shipments as our paychecks and if our paycheck dates are important, shipping dates are as well."
"Bazinga, John. Bazinga - but it's not just shipping dates, we have a complex continuum that started months ago with Sales closing deals when they forecast they would. Every function in this company has schedules that they have to meet in order for the business to function as we plan it. When we don't finish the process and close it out by shipping, all those efforts to hit those dates by every other employee of this company are diminished. It's not just your paycheck, it is the paycheck of every person in the company."
"But you said we are profitable? Don't we have money?"
"We do, John. But let me help you understand profits. Profits are illusory and ephemeral. They are only a measure of a business by taking a snapshot at a point in time. Companies can be profitable at the close of month, a quarter or a fiscal year and be in a deep hole by the end of the next reporting period. Businesses are never static. Lots of people think that we close the books at the end of the year and just skim off all that money and start over from zero - we don't. Fiscal years are only important to accountants, shareholders, investors and the tax man. For me, there is no difference between December and January because we are still rolling on, moving to the next milestone. That's why I pay more attention to cash flow, budgeted costs vs actual and meeting schedule dates. I know that if we do that, we will be profitable and if we don't, we are in for rough sledding. Profits are a measure of what we did, those others are a measure of what we are doing."
"I'll get this shipped first thing Monday and try to call the client now to let him know. I understand now why you push us so hard to meet dates."
"Thanks, John."
ROV Supervisor/ Trenching Supervisor
9 年agree with you Michael, I would like share one ocassion with you, a bit similar one. There was a failure on ROV system on a drilling ship, Spare card was required immediately, when I got a call, went straight to office at mid night hours. The security didnt allow me to open the stores as it require workshop manager permission, we made several calls to the workshop manager and he didnt respond. So security refuse to open the stores, which means I cannot connect the card on the next day early morning flight. I took the responsibility and ask politely the security that open it at my risk, if company find it wrong then they can fire me. Security on my risk open the stores a car was called and the card was connected to early morning flight and system was operational. Next day morning the drama started in the office, where the workshop manager was adamant to fire the security. security got the workshop manager to my office, Workshop manager explain to me that security has voilated the rules and I am firing him. I politely told the Workshop manager, if anyone need to be fired is me, I was the one who want to save money for our company and for our client. Our company may save few hundred dollars, but the rig company will save few thousand as their rig was idle and waiting on ROV. The workshop manager understood the case and Security is still working with the company from last six years. A leader need to take responsibility and need to put itself before the team when the time for confrontation comes up. Have seen so many leaders in the company, when the time for confrontation comes, their lips are sealed.