Unfreezing Important Resources: Middle Management

 This book by Leppert and Wasserman has many practical suggestions for “thawing” the middle tiers of a large organization. They report enormous, quick bottom-line results through their methods. They describe traps that “freeze” middle management because they dare not deviate from norms, or suggest radical ideas….or even share what they know about the markets or operations. This is unfortunate. I have experienced some of this but I don’t think it’s as prevalent for very long in many businesses. Certainly in crises when fight/flight/freeze modes kick in, this may happen. But normal operations and improvement efforts often include middle tiers. They have to. Businesses invest too much in treating middle management as merely go-betweens. 

If what the authors say is true for organizations in normal times, then we have too many unaware corporate leaders. They have either forgotten their own experience in the middle tiers or unwisely jumped to the top from their MBA programs without first learning the mechanisms, methods and management flow of their operations. Or they’re so arrogant others are afraid to tell them what’s happening. “Undercover Boss” was a frustrating show because those CEOs should have been more aware of the goings-on in their companies: most came from outside the organization, never “growing up” through the ranks nor taking the time to get outside of the meeting rooms and onto the “shop” floors interacting with the people who make things happen. These I believe are rare occurrences. And they are less likely to happen in non-Fortune 500 corporations. The authors assert their experience with many of the largest organizations. 

There are times when you need consultants to show you what you and your organization don’t know. Other times consultants package what your organization already knows and feed it to the top levels as brilliant new ideas. The latter is what the authors have done. Middle management will gladly tell senior leadership what needs to happen if senior leadership remembers to ask open-ended questions, i.e. not presuming the answer, and empathetically listen to the answers. The authors have such suggestions at the end of each chapter. If you need this, this is a good reference.

If the organization is led by a toxic leader—narcissistic, self-important, self-interested, willing to sacrifice the organization in the long-term for short-term glory—this book will not help. The authors can’t turn this type of organization around either. Don’t frustrate yourself suggesting a leadership team adopt and adapt this book’s methods to turn things around. Only a coup d’etat will change the trajectory of the organization. Marshall Goldsmith once advised a CEO to listen to his staff more. “Why?” was the reply from the CEO. “I got here by not listening to any of them.”

In smaller organizations, where senior leaders or business owners have worked in middle management, they can easily be reminded of what their experience had been like—the good and the bad. Most likely, the leaders will then engage with middle management to glean what they know and what their recommendations are. And many will give really good strategic advice as well.

But if you need a tune-up or some ideas on how to better engage with middle management, this book might help. There aren’t a lot of new ideas in it but you may have forgotten some and need to pull them out of the “toolbox.”

I’m appreciative of the publisher for providing an advanced copy.

Possessions Not Critical to Our Identity

In a book to be published next year, the author postulates that our possessions define us and are key to our identity. Morewedge points out the trends of ownership in houses, clothes, books, music, art, vehicles, etc. where many things have become products/experiences-as-a-service. He describes how we value our possessions more than we may value “the same thing” sitting on the shelf because it’s now “mine.” Rightly pointing out that the cost of ownership is greater for goods that we infrequently use, e.g. vehicles are not utilized 98% of the time. While the author suggests ownership is part of our identity and it changes us—in our valuation of those things, how we feel about ourselves—he limits his perspective on why we own only to the psychology or the economics of possession. He failed to consider a broader expanse of decision elements, options and comparisons, and especially other aspects of our life that create our identities.

Besides the economics of owning vs renting, including whether tax credits to one class or another are available, home ownership may be more valuable to: pet owners; parents who want their kids to complete their schooling in the same district or school system; security of knowing the rate of occupancy is fairly fixed for decades. These are the intangible decision elements that aren’t covered by identity or self-esteem.

In one example, he suggests that throwing out three shirts is not three times as painful as throwing out one—similar to the diminishing returns of having more pleasurable items/experiences, plateauing at some hypothetical maximum of pleasure. The curve may not plateau with more loss, remaining in the “pain” side of the axis; the curve may be parabolic in that the more we discard the happier we are because we’ve created more capacity and opportunity for more new products/services/experiences. Instead of only replacing one five-year-old shirt and getting one more trendy shirt, within some budget, I can replace more of my out-of-fashion wardrobe and upscale my personal brand. (See Part 3.)

His comparisons, for example, of the declining sales of physical music products (albums, CDs, tapes) over the past decades while streaming has eclipsed those sales is too narrow. People have recognized that we pay for services one way or the other. Remember the 21st century adage: if the product is free, you’re paying for it in another way—such as being inundated with ads. Streaming may cost less than owning thousands of music “records,” as the author once did, but it comes with ads perhaps, less cost of storage and so on. Even if our access to particular songs or artists go away, streaming may be less like owning records and more like listening to the radio, in which we had no control over “access” or variety. At least with streaming we pay for the privilege of an expansive library of global music, whether we choose to sample them or not; they are mostly there. Likewise, we pay to stream shows, movies and sports because on-demand has value compared to broadcasting schedules or limited stacks of VHS tapes, DVDs, etc.

While the comparisons may be incomplete in his book, the author does not look at second-home ownership vs short-term rentals, like Vrbo, given a growing population. Has the number of second-, third- or fourth-homes decreased, or just the percentage of people owning more than one home? How does this relate to the past decade’s K-shaped recovery—where the top tier net worth people are getting richer while the middle- and bottom-tiers are getting poorer?

Vehicles sales may have decreased because of a reconsideration of ownership and/or because cars are more durable and being kept longer and thus, the turnover rate has decreased. Additionally, as urban areas continue to grow, vehicle storage becomes more costly. Perhaps a fairer comparison, which the author ignores, is the rate of ownership of vehicles in exurban and rural areas, where rideshare is less prevalent. Vehicle ownership overall is less with the under-50 urban demographic, but is that true in rural areas?

Morewedge then tries to project what possessions will change—but into a service?—in Part 3: smartphones; our personal brand with its breadth/depth of social networking; valuing experiences more than possessions and becoming more nomadic. Smartphones have changed us; we spend more money and time on them…because their utility is far greater than other communication and pocket research devices. There’s just no comparison. The only reason Steve Jobs agreed to the iPhone project wasn’t because he loved cell phones (he hated them) but because it was described as a computer in the pocket. And its interface was better than BlackBerry’s and Nokia’s—two companies that dominated the cell phone markets and barely exist today. Personal branding socially may be important but personal branding in the sense of credibility, competency, trustworthiness and capacity are important for earning what you need to do the rest. The author seems to take this for granted and has forgotten that employment in the traditional sense has declined and more are involved in the gig economy: freelance, fractional, contractual work. And that’s work that needs to be “re-sold, re-marketed, rebranded” for every “encounter.” Your personal brand in hyperdrive.

And most people don’t have the luxury of flexible schedules for maximizing experiences over possessions. We have jobs, families, volunteer work, friends to see (even if it’s only 15 in a given month), aging parents, etc. These roles and responsibilities have the most influence on our identities.

Morewedge focused on the psychology of possessions but that’s like saying clothes only provide color to our flesh. Clothes have much more function than adornment. Likewise, our possessions do much more for us than make us feel good or bad about ourselves and others. Our circumstances (and our family background and early learnings in our nuclear family) shape how we view ownership, its utility and its perils (obsolescence, risk of loss, cost of maintenance). A comparison book may be considered here: “The Psychology of Money” by Morgan Housel. Housel considers far more aspects of possession, ambition, investment and the roots of how we adopted and developed our core beliefs about money and things. This book’s perspective is too narrow.