Thursday, February 14, 2008

You've just got to be kidding me...

I was reading about the Congressional hearings on steroids in baseball, and the thought occurred to me, "How could this possibly be construed as something for Congress to be focused on? Don't they have any real work to do?"

If they've got time to fart around, snooping into grown people's lives... then they've simply got too much time! We could shorten up the time Congress is in session and save the country some money.

Lemme see here; a grown man, adult for many years, decides to stuff some substance into his body such that it will allow him to perform better on the job. It could be caffeine for a night watchman, it could be Gatorade for a professional marathoner... or it could be steroids for a baseball or football player.

Now, if the league as a private entity says they don't want their player to be on the juice - so be it. They have every right to run their business the way they want.

But for our main legislative body to get involved... that's just silly.

I really don't care about the so-called "ethical" issues... that's for the team owners and the fans to decide. In a free market, there would be a separate league that promoted itself as "REAL BASEBAL" or some such.

Whoops, there's another thing I don't get... why does Baseball get an exemption from our monopoly laws? Why can't I start another league if I think I can do it better?

The obvious answer is money, of course. The owners of the league DON'T want me to be able to start my own league... that would mean competition - and competition is bad for short-term profits.

The worst, in my mind, is the utter hypocricay of the whole thing. Players aren't told they can't do steroids... they're told they can't get caught using them. That's just wrong. And so every now-and-then, they throw one player to the wolves as a token, hoping the wolves won't get greedy and grab the whole thing.

Instead, let's just go back to kids playing in fields or lots and having fun. That's what it's all about, isn't it?

Tuesday, February 12, 2008

The Lesson of the Phoenix

The Lesson of the Phoenix

Without creation there is entropy - but creation without limit is chaos. Sustainable success needs thoughtful creation and equally thoughtful destruction.

Have you ever wondered why the IRS Tax Code is more than 54,000 pages, with a staggering 2.4 million pages of associated regulations? No one, including the IRS can even pretend to understand such a Gordian knot. Yet each year our tax code grows and grows. Why? The answer is simple; the system is rotten at the core. It cannot be fixed – must be utterly dismantled – and a new system needs to be erected in its place.

This is the lesson of the Phoenix; destruction is a necessary part of renewal and rebirth. This is the lesson of the vintner; for a grape vine to produce, it must periodically be pruned of old, dead wood in order to make room for new vigorous growth. But how does this apply to systems?

A “System” is the combination of inputs and processes that produce a specific outcome. We agree on an outcome, we design a process and dedicate certain inputs to achieve that outcome.

Good systems create consistency and stability. McDonald’s success is the result, not of wonderfully imaginative chefs and creative menus, but on standardization of systems and inputs resulting in unparalleled consistency. A Big Mac tastes the same in Paris, London, Tijuana or Peoria. These systems work, because McDonald’s understands that systems exist to create the outcome; quick, tasty hamburgers purchased by happy customers at a consistent and acceptable profit to the franchisee’s. Systems are means to an end; not an end unto themselves. Systems are supposed to serve the outcome.

Perhaps it’s pesticides in the coffee, but it seems government employees go through a transformation whereby they start think that the system is the outcome. As long as all the forms are filled out right, Hannibal Lector could get a grant for “Culinary Performance Art” from a government bureaucracy.

Who hasn’t been tempted to violence when filling out insurance forms, government forms or hospital forms? Each and every one of those forms was created as part of a system. Forms are to systems what cow pies are to cows; necessary, but not the point. But aren’t forms, much less systems, supposed to increase efficiency and reduce waste? How could something so promising go so wrong?

The reason is simple, though subtle. In life, you can never do just one thing. Eating is essential for health, but too much eating is unhealthy. Running is healthy, but too much running can ruin your knees.

Balance is the key. Yin/Yang, ebb/flow and in business the key is to find a balance between building and tearing down.

Unfortunately, building systems is easier than tearing them down. It works like this; to improve efficiency, we standardize resources and processes. Then a problem surfaces that wasn’t covered by the original system, so we create an amendment to cover it. Another oddity pops up so we have to create an amendment for it as well. And on, and on. Pretty soon, your sleek and elegant system is so bloated and covered with amendments it looks like a giant toad stuck in a poison ivy patch.

The systems become bloated, obsolete and inefficient. They end up hindering progress and creating more work than they save; the exact opposite of what they were supposed to do.

In our bodies, cells regenerate at a stately and choreographed pace. Old ones die, new ones take their place; order is maintained. When something goes haywire and the cells start multiplying faster than old ones can die, we have cancer. Cancer essentially consumes the body from the inside out. This is the same problem that unfettered systems run amok create.

What’s a smart entrepreneur to do? The first step toward making a good decision is to stop making bad decisions. All systems are guilty until proven innocent. Make sure all systems are serving the outcome: Profit.

I used to have a rule for all my clients; for every report or form you want to add, you must kill two others. They would argue and complain, but as long as we stuck to this rule, paperwork improved and people could actually get some work done, instead of wasting their time filling out forms. I explained that reports do not make you money. They (might) provide information that helps make profitable decisions, but in and of themselves, reports and paperwork are meaningless and almost always a waste of time and trees.

The next thing to remember is that you, the entrepreneur, need to constantly think about three things. What the company should start to do, what the company should continue to do, and what the company should stop doing.

Each is critical to the success of the organization. Almost no one pays any attention to what they should stop doing, and this is why once great companies fall apart. They get ponderous, slow and unwieldy. Eventually they succumb to a start-up competitor that doesn’t suffer from systems overload.

Manage your company like a Phoenix. Create a system for construction and a system for destruction. Allow each part to grow, mature, decline and finally die – and then help it to be reborn new and vigorous once again. This will keep your company lithe and adaptable. Adaptability, not size, is what allows a company to thrive in the long run.

Erik Olson is co-author of the business bestseller Create The Business Breakthrough You Want and author of the soon-to-be-released book, The Profit Center, Why Your Business Doesn’t Work and How To Fix It. He is a recovering Yankee and lives in Charleston with his wife and children. You may visit him on the Web at www.theprofitcenterinc.com.