“Why should I fight this battle? What’s in it for me?

At lunch this week, one of my closest friends, and a very well educated and capable guy, who is in “upper” middle management for a $2b public company, related a story about how the politics within his company precludes him from taking a stand–facts in hand, to one of his colleague’s bosses who is two rungs above him on the hierarchical ladder. I’ll paraphrase the problem he’s confronting, which I’m sure many of you have come across in your own experiences.

“Bill, one of our general managers is an idiot (I believe my friend on that observation not because he’s a friend, but because I’ve known people like the guy he’s referring to) and he is making decisions on an ongoing basis that, while insulating his own P&L from additional overtime costs by shutting down his plant during the day–is knowingly and intentionally transferring his O/T savings into higher costs for another department by forcing them to buy product for the company’s energy customers from other producers at a premium charge due to the fact they are being purchased at peak demand rates. We are talking about his department saving a few thousand dollars, and the company’s energy customers taking a beating in the hundreds of thousands of dollars from fuel costs that are passed through to the customer. I’ve spoken to him about this several times, but he refuses to do what’s right (shut his plant down at night for maintenance when energy demand is low) and I’ve shown him how much he’s costing customers…but he says that’s not his problem. This GM, my friend continued, has been in place for a long time, and his boss, and his boss’ boss must agree that ‘he’s the right man for the job,’ as they don’t seem to be in a rush to replace him. And although I have the numbers in hand that prove his decisions are wrong, my department is currently lacking a boss. So, if I go to the general manager’s boss to make my case it is clear that I will be punching at windmills at two and three levels above me. So what’s in it for me? His bosses must know by now he’s not the smartest general manager in the group…but they obviously like him and therefore, absent a current boss who will fight this fight for me, and at a level commensurate with the GM’s boss, why should I risk alienating two vice presidents that I have to deal with on other matters, and on a regular basis?”

I told my friend that in his situation: two kids, a wife, a house with mortgage and a dog, there’s not much he can do that might not impact him negatively from a political perspective. Oh sure, he’s not going to get fired, but the two vice presidents could easily say “the wrong things” about my friend to their vp friends and others in the company, and cost my buddy future promotions and make his contacts with others in company more tenuous as well. So, my guidance was to document the situation with factual data…times of phone calls he made to the GM, a summary of the conversation, direct quotes, and the amount of savings to the GM’s P&L as well as an historical check of the exact cost of the additional energy that had to be purchased at peak demand and high cost to deal with the decision the GM made to save his own OT costs. He could then pass the information on to his future boss and if the situation arises again, my friend’s boss could then fight the fight at the appropriate level.

What is obvious to me, and others at Maverick, and most certainly to many of you, is that the problem has evolved because my friend’s company is silo based; that is, each group works mostly independent of the others, and with silo based organizations, managers generally are rewarded for their group’s performance, and there is generally no danger of acting this way unless a silo based decision impacts the C level or executive management. From our 20 years of experience in the consulting business, the majority of companies we’ve worked with are silo based organizations, and the majority of CEO’s (but not other C level executives) do not see their organizations from that perspective. Why don’t the other executives tell their respective CEO’s about the silo problem? That’s another Post coming to you soon.