1991 Middle Manager’s Manifesto

Tom Peters

“My sole objective today,” I recently told 500 middle managers in Boulder, Colo., “is to get you fired before you’re laid off.” I was, at most, half kidding.

Middle managers who do business in traditional ways are endangered. A recession adds immeasurably to the pressure on the species. But some will survive, even thrive. My “manifesto” for would-be survivors follows. (I define middle managers as staff bosses in a $50-million to $100-million division of a big firm, with perhaps a dozen people reporting to them; some of those subordinates supervise others.)

1. Starting today, refer to those whom you support (factories, distribution centers, sales branches) only as “client” or “customer.” These people put bread on your table in the same way that JAL enriches Boeing.

2. Change calling-card titles to “purchasing department customer account rep” or the like: symbolize your commitment to move away from “arms-length expert/watch dog” toward “provider of economical client services” with such little touches.

3. Become a “preferred supplier” to your internal clients. Urge them to compare your quality of service to all outsiders and insiders. Evaluate your unit in part on how many “preferred supplier awards” you lasso yearly.

4. Within the year, base one-third of staff members’ performance evaluations and incentive compensation on line-client feedback, with content, process, and format designed by the client. Then ask your boss to allow you (for employees who volunteer) to reduce base pay in return for a 1.5 to 1 “upside’, formula: That is, for each $1 of base-pay reduction (up to a third of total salary), the employee stands to gain $1.50 if customer satisfaction and productivity scores are tops, $1.25 if they are very good, and so on.

5. Become time-obsessed. Virtually all staff processes can be shortened by 50 percent to 99 percent. Directly tie performance evaluations to speed. Remember: “What gets measured gets done.” Make speed pay.

6. Devote half your time, starting now, to “horizontal activities.” Work with other staff functions (and clients) to reconfigure processes that cut across functional boundaries; add new value to every product and service by creating cross-functional improvement activities in support of line clients.

7. Mandate “sabbaticals” for each staff member, aimed at acquiring a major, new, salable skill every 18 months. A sabbatical might mean working full time for three months with a university professor on a project that can be transplanted directly into line clients’ operations; or taking a significant outside course; or half-time/full-time assignment to a client operation for six months to design and deliver a value-added project. Each member of your team should be perceived as “world-class” at some essential aspect of your service. Make outside awareness of your value an objective for everyone.

8. Within 18 months, set an objective of selling 20 percent of your services to outside customers at going market rates. If your services are state-of-the-art, then outsiders should beat a path to your door to pay for them. (Logic: Every corporate service is provided by independent vendors. So compete with them.)

9. Inform line customers that within the year you will begin billing them directly, at market rates, for your services. (Overhead cost-allocation formulas will be revised downward accordingly.) If they blanch at the figure on the invoice, then urge them to purchase the services elsewhere. In short, set an objective of running your affairs like a business: If your output is worth paying for, then it should be paid for. If it’s too expensive, or if quality or innovativeness are not up to snuff then do something proactively about it before your employer does something to you. (E.g., “downsizes” you!)

If the divisional or corporate parent balks at setting up such an internal market (they shouldn’t: see part 2 of this column, next week), proceed anyway. Send line clients quarterly fee statements which, assuming the costing is accurate, can provide the basis for assessing whether or not you are delivering good value—i.e., whether the client would pick up the tab if it were real. You and your client may decide that your staff group is doing a lot of unnecessary chores, or chores that the client might better do. Consider training your line client’s people to do much of “your” work (outside service vendors routinely do this); meanwhile, your professionals can focus on horizontal-process renovation (see No.5 and No.6 above) and high value-added projects in support of line activities (see No.7 above). Viewing tradeoffs like this through the lens of real costs at least simulates the market.

To summarize, the best way for middle managers to stay in business is to become a business. I see no alternative. True, if you push too hard and too fast, you may get the ax. But if you are bounced, I bet that you land on both feet, and that you’ll fare better than the hapless “don’t-rock-the-boat-bunch” who drop next anyway.

My proposal is extreme. But these are extreme times. Easy-does-it strategies by middle managers are likely to yield no more than early unemployment checks and a late start in a race that must be run.