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It was an unusual time for me to be at Costco, Sunday morning, and as feared, it was jammed, the checkout lines long and carts overflowing. But this store, with packers assisting cashiers, is usually efficient at speeding people through and I reached for my eBook reader to make the most of the wait.
Out of the corner of my eye, I spotted somebody approaching me with a Costco badge and tablet. He offered to pre-scan my items and then when I presented my card to the cashier I could immediately pay, without even unloading and reloading the cart.
“You guys are amazing,” I said with a smile of assent. “I have my moments,” he replied. “But yes, Costco is amazing.”
The book I happened to be reading was about business models, 50 Ideas that Changed the World of Work, by consultants Jeremy Kourdi and Jonathan Besser. They begin 114 years ago with Frederick Winslow Taylor’s ground-breaking book, the Principles of Scientific Management, and its four basic principles that have guided managers since:
- Replace approximation, guesswork and intuition with a fact-based approach based on a scientific study of the work to be completed.
- Carefully invest in selecting, training, developing and promoting employees, rather than allowing them to learn, train and improve themselves passively.
- Ensure that each individual employee receives detailed, coordinated instruction and supervision of their work.
- Plan and divide work fairly and in the most operationally effective way, particularly between managers and workers, and work together to complete the necessary tasks.
That’s benign, indeed appealing, but Mr. Taylor, with his time-management studies of how much a human could fit on a shovel and how many loads handled in a given time, treated workers not as resourceful but as resources to be used – and used up. A fact-based approach shows Costco’s decision to pay its employees more than competitors and build engagement and pride has paid off, along with limiting the number of items it offers and selling memberships.
But the Costco Model is not in the book and many companies fight – perhaps based on fact, perhaps on instinct – to keep employee wages as low as possible.
The book – and our arsenal of business models – of course include many humanistic approaches. The book looks at the growth mindset, psychological safety, the Myers-Briggs personality indicator, situational leadership (which flows from the individual’s needs) and Maslow’s hierarchy of needs.
When I helped Ole Ingstrup, former Commissioner of the Correctional Service of Canada, with his 1998 book on public service management, co-written with Paul Crookall, he suggested that since Mr. Taylor’s days we have alternated between periods of analytical-scientific management and periods driven by humanistic thinking. Today, those two approaches seem intertwined in the managerial frenzy.
As such, and with Costco’s enlightened approach on my mind, I was drawn to The Balanced Scorecard, devised in the 1990s by Robert Kaplan and David Norton, as one of the models we need to pay more attention to. “Central to Kaplan and Norton’s approach is the belief that managers in businesses need to look beyond financial performance to remain competitive,” Messrs. Kourdi and Besser write. “They also believed that people prioritize and respond to those areas of their work that are being measured. They felt that companies that focus solely on financial issues were taking a restrictive, narrow view of their performance and ignored other areas that ultimately contributed to profitability but could not be measured in terms of revenue.”
Their solution is a four-element scorecard for the organization:
- Financial perspective: This includes traditional financial indicators such as sales and revenue, cost management and profitability and should also measure your progress toward your strategic goals.
- Customer perspective: How a company is perceived by current and potential customers. The company should set specific goals such as customer satisfaction, customer retention, new customer acquisition and profit per customer.
- Internal perspective: Those issues in which the company must excel and how to make them more effective, such as improved core competencies, adding critical technologies, streamlining processes and improving employee morale.
- Innovation and learning perspective: To continue to improve, the company must set goals related to employee development, retention and training.
You can hear echoes of Mr. Taylor and Costco in those four points. While the Balanced Scorecard gained a modest foothold initially – and most modern organizations reflect its ideas to some extent in their discussions – it is a solid model to resurrect.
The book also gave me a better sense of The Johari Window and its importance, something, like me, you may not be familiar with. Perhaps ironically given lack of attention, it is intended to recognize personal blind spots and increase self-awareness; it was developed in 1955 by psychologists Joseph Luft and Harrington Ingham, the title drawn from their first names. It also has four elements based on what we know about ourself and what we don’t know about ourself and what others know and don’t know about us:
- Open: Your attitudes, behaviour, emotions, feelings, skills and views are known by you as well as others.
- Blind: Those behaviours and feelings are known to others but you are oblivious to them.
- Hidden: They are known to you but not others.
- Unknown: The behaviours, feelings and emotions aren’t known to you or others.
The four areas will be of different size and your intention should be to reflect on the 56 adjectives the system provides (such as able, friendly, intelligent and kind) to reduce your blind spots, learning more about yourself and indeed increase the open area for more effective relationships.
Four other models that struck me worth more of our attention: The Eisenhower urgency-important matrix; psychologist Meredith Belbin’s nine team roles; black and gray swans; and appreciative inquiry.
“Much of what we do in organizations today can be directly linked to models that were created decades ago,” Messrs. Kourdi and Besser say. Reflecting on their models (and others you are familiar with) and refocusing where needed can make you a better manager.
Cannonballs
- Our first models stay with and have lasting influence, for better or worse. For me: Maslow’s Hierarchy of Needs often reasserts itself and the wisdom revealed in Harvard marketing professor Theodore Levitt’s classic Marketing Myopia essay reignites.
- I will often urge managers or business students to ponder their feelings on two fronts: Do they support Theory X or Theory Y in MIT Sloan School of Management professor Douglas McGregor’s formulation on the qualities of employees; and are they instinctively more drawn to the notion of hierarchy or McGill professor Henry Mintzberg’s portrayal in recent years of managers in the centre of a circle rather than the top of a pyramid.
- When asked for a good general book for somebody starting in management, my picks usually are The Guru Guide: The Best Ideas of the Top Management Thinkers by Joseph Boyett and Jimmie Boyett and 101 Biggest Mistakes Managers Make and How to Avoid Them by Mary Albright and Clay Carr. But 50 Ideas that Changed the World of Work, the business model book discussed above, is not a bad bet for such situations either.
Harvey Schachter is a Kingston-based writer specializing in management issues. He, along with Sheelagh Whittaker, former CEO of both EDS Canada and Cancom, are the authors of When Harvey Didn’t Meet Sheelagh: Emails on Leadership.