When I was a very young manager at United Parcel Service, there were two books I kept close at hand. The first was a slim, brown policy manual. It was full of plain-speaking guidance on the values of UPS. The second was a thick three-ring binder called the standard practices manual. The industrial engineering function produced this straightforward guide that laid out step by step approaches to operations and general management practices and challenges. The procedures outlined in the manual were guided by a simple idea; the shortest path between any two points is a straight line. When coupled with the compelling mandate that failure was never an option, the manual held the solution to almost every problem. It served me well.

I am no longer very young, and I have come to appreciate that the world of enterprise is no longer linear. Straight lines have been replaced by an intricate web of networks where an action anywhere in the system affects other critical areas of the enterprise. The current economic crisis has many leaders and managers focusing on immediate needs. There is a feeling that we must solve looming financial problems, now! This often means looking for the shortest path to efficiencies. Achieving lean operations seems to be guiding much of the managerial activities among my clients. There will be an immediate improvement in metrics by this approach; numbers will look better. Please, be careful. Consider the impact on other areas of the business. Consider the impact on the business three to five years from now. That straight line might be the shortest distance, but it might take you quickly to a place you do not want to go.

Two areas to watch come to mind. Talent and brand. When I work at the operative level of organizations I find good people stretched to the point of near burnout trying to produce results with shrinking resources. This, in too many cases, has led these folks to hunker down and try to just get through the day. The passion for excellence is being replaced by a sometimes desperate need to merely survive. Hardly the environment that breeds the risk-taking needed for innovation. Leaders, if you really believe that talent is your most important asset, let them play on a field where they have a chance of winning.

Cost-cutting is also affecting brand equity. Well-intentioned people are working hard to cut the cost of products and services in response to a perception that we have to lower prices to compete. Any isolated cost improvement probably does little harm to the brand. If no one is watching the cumulative impact of all the small cuts, however, product and service quality could suffer in a way that does irreparable harm to the brand. The future effect on brand and the possible resulting loss of sales and revenue must be considered.

What's the answer to this conundrum? How to contain costs without overburdening talent and damaging the brand? I wish I knew. What I do know is that the solution is not linear. We won't find it in a standard practices manual. The world has changed. Leaders need to up their game and consider solutions that are as all-encompassing as the complexity of the current challenge. Sure, execute swiftly and efficiently, but only after a patient and thoughtful analysis of the plans. The good feeling of today's improvement of metrics could lead to a future distaste of failure three to five years out.

Mike Neiss posted this on October 17, 2008, in Strategies.
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