Kinko’s. Was it Damaged?

Claudia H. Deutsch of the NY Times reported on Clayton, Dubilier & Rice’s management of Kinko’s on May 5th 2007 with an article titled “Paper Jam At FedEx Kinko’s”. One quote referring to the culture change: “Some say Clayton, Dubilier massacred Kinko’s, and that FedEx can never repair the damage.”

On March 8, 2008 the New York Times reported again on the issue, “…the unit has underperformed since FedEx bought the business for $2.4 billion.”

In my experience as CEO, a culture change was necessary in every turnaround I have managed. The turnarounds were largely penal colonies staffed with brow beaten and frightened officers and managers. The uncoordinated top-down, silo management process was used. Analysis made it clear that mistakes mounted and financial deterioration occurred a matter of months following the start of a punishing culture.

Improving the cultures was accomplished via cross-functional communication meetings with candid discussions at all organization levels. Once an improved culture was accomplished and a self-confident team was developed, profits followed shortly thereafter – usually in just a few months.

One lesson I learned seeing the consequences of the angry, confrontational style used by Emerson Electric Co.’s CEO was not to bully and yell at employees. As CEO I want strong, assertive but civil officers and managers to build a solid performing company. A CEO can whisper and get results.

Emerson Electric conducted anonymous employee opinion surveys annually on each of its divisions. Ironically, if a division president was confrontational with employees and maintained a punishing culture, Chuck Knight would remove him.

As Peter Drucker and Jim Collins advise, use metrics to make people accountable for tangible results. Fire the non-performers. Only deal in brutal facts in an open culture in which everything can be discussed. A tyrant style can sometimes get immediate profit improvement, but it usually results in the company becoming uncoordinated followed by unexpected mistakes and short-term profit decline. It can make the sale of the company problematic if potential buyers realize the management is weak.

 

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Reason I wrote my book “Learn to Whisper”

Click on this link for a more complete description of “Learn to Whisper”

The reason I wrote “Learn to Whisper”:

My conclusion after operating as a Turnaround Chief Executive Officer for more than twenty-five years is that the majority of this country’s top management is far from first-rate. In fact top management, particularly at the chief executive officer level, is at best average with a large number that can be rated mediocre. This lack of management competence has seen this country’s market leaders lose sizeable market share to foreign manufacturers able to export better quality and lower cost products to the USA. It has seen manufacturing and service operations unnecessarily moved to foreign countries. All of which has negatively affected the economy, severely damaged former blue-chip corporations and seen quality jobs lost.

It is quite common to discover that companies struggling with this inability to compete with foreign companies have been simply mismanaged. The once successful business deteriorated because of an incompetent chief executive officer and weak senior management

Why doesn’t this nation have first-rate management? Inadequate training. Chief executive officers and vice presidents learn “on the job”. A number get promoted based on personality, political connections and drive – not merit. They are not carefully screened for the potential to become successful at managing. For some all that is needed is a well-written resume, the right interviewing style and the inability of a new employer to accurately assess skills, performance and potential.

Compare this to the process doctors go through. From medical school to internship to residency to a senior role after years of education, experience and continuous training their progress and capabilities are constantly monitored even after they become senior in the profession. Generals and Admirals go through a similar protocol. They must prove themselves in low-level assignments before they are judged qualified for senior positions. Unqualified applicants in both professions are culled out. What can be done to improve management competence? Education, on-the-job training and job performance monitoring. My book will educate people on the subject of managing. Its 101 management lessons are separated into the 17 subjects managers need to know.