The Higher They Go, The Stupider They Get
by Kristin Zhivago

"What?!!? He said that? You're kidding. You're not kidding? He actually said we have to do that? Starting tomorrow? Does he realize what he's asking? Oh, of course not. What an idiot! That means I'm going to have to drop everything I've been working on for three weeks and start running full speed in the other direction! I can't believe it."

This conversation, which takes place in millions of hallways across the world each business day, ends with everyone going back to their desks, carrying their cups of coffee, heads down, grumbling all the way.

Because of something a manager or manager's manager said, employees are going to be working on something that doesn't make sense, something that will mess up everything else they're working on, something that will probably inconvenience customers -- or, worse, make customers shake their heads in disgust and go find a company who has a clue about what they need and how they want to buy.

Working on things that don't make sense -- things that will hurt the company because they won't help the customer -- is, by far, one of the biggest problem in business today. It's an epidemic, and nobody talks about it.

Scott Adams, the creator of Dilbert, owes a lot of his popularity to the sad fact that the stupidity of Dilbert's boss rings true for a lot of workers. Every minute an employee spends working on something that doesn't make sense is a wasted minute. You could even call it a "negative" minute, because 1) the job that should be getting done isn't getting done and 2) the employee's respect for the boss, and his belief in the company's future, has slipped down another notch.

Working on things that don't make sense is the single biggest source of job dissatisfaction. Who wants to work on something that is obviously going to fail? Who wants to fight traffic, spend 8 to 15 hours in a windowless office, answer another 200 emails, and sit through at least 5 boring meetings every day, just to do something stupid?

Employees are the happiest when they're working on something that is going to succeed. Something that they think customers will like, something that competitors can't do or won't do, something that "fits" with the company's set of promises (which is, as I explain in my book, a company's true brand). Something that makes them proud to be associated with a company that is doing the right thing.

Are these top managers really stupid? Nope. The thousands of people I've worked with in top management were not stupid. They were intelligent and dedicated.

But these same intelligent, well-meaning people make stupid decisions. Why?

Because:

1) They aren't personally talking to customers.

2) Their employees don't tell them the whole truth.

3) They have to answer to their own "bosses" who are also illogical.

Let's take these one at a time.

1) They aren't personally talking to customers.

Lou Gerstner is one of the best examples of a customer-centric CEO. If you're in management, and you haven't read his book, Who Says Elephants Can't Dance? you're missing a great read -- and insight into what made him so successful. Before he came to IBM, he was an IBM customer, and a consultant to large companies. He knew the traps that CEOs can fall into. As a customer, he was fully aware of the stupid mistakes that managers make.

When he first started his job as the CEO of IBM, instead of calling a bunch of meetings with employees and analysts to discuss His Grand Strategy, he horrified college professors and reporters by saying that the last thing IBM needed at that point was another "vision." Worse, he spent the bulk of his first three months visiting customers. He continued to spend about 40% of his time talking to customers during his tenure at IBM. How many CEOs can say they do that?

And I'm not talking about spending time with big-ticket prospects, closing the deal. When the CEO is acting as the company's Top Salesperson, the customers he's talking to will be just as cagey and close-mouthed as they are with their regular salesperson. The CEO won't learn anything useful in that situation.

What I am saying is that the CEO has to randomly call customers on a regular basis - -not to sell them, but to interview them.

He needs to find out what drives them crazy. He needs to know, personally, what they really want. He needs to understand how they want to buy - the questions they need answered, how they need those questions answered, and in what order.

He needs to hear them tell him, in their own words, what they wish his company would do for them that it isn't doing now. What would they pay good money for? What makes sense to them?

If you're the CEO, all you have to do is pick up the phone and call. Start asking open-ended questions.

"How's business? What's driving you crazy right now? How do you feel about our product? Our service? What could we be doing better? Who else did you look at before you bought -- and what did you think of them? How did they sell to you? Was there anything about our sales process we could improve? What promise do you wish companies like ours would keep?"

These simple questions elicit the kinds of answers that can drive logical, market-conquering strategies.

If you don't interview customers personally on a regular basis, you will fall victim to Agenda-itis. Everyone has an agenda. Maybe they really do want to help the customer (there are more of these people, by the way, than most managers assume). Maybe they're trying to please or impress someone else -- a manager, a spouse, or even their mother-in-law. Maybe they're trying to do what only one customer wants (the main failing of sales-driven companies). And some, sadly, are just greedy and selfish, doing whatever pleases them.

When the CEO doesn't talk to at least several customers a month, she's going to do what makes sense to her based on what she hears from non-customers. Her main source of information will be her employees. That's a big mistake. Because…

2) Employees don't tell the whole truth.

Here's a simple example. Let's look at a guy named Bill. Bill is in charge of a project. He's done the best he can with something he was asked to do, but it's not as good as he wanted it to be.

When Bill's boss asks how it's going, Bill says, "Good. We'll be able to meet the deadline." What Bill doesn't say is that he isn't happy with how things are going, that some of the people who are supposed to be cooperating aren't cooperating.

Why isn't Bill telling his boss the whole truth? Here are just some of the possible reasons:

  1. He doesn't want someone else to get into trouble.

  2. He doesn't want to look like a whiner.

  3. He is fighting a political battle with someone and he believes he is going to win. He doesn't want to say anything about it until it's obvious that he has to escalate.

  4. He's afraid of being labeled a snitch, so he doesn't say anything about the people who are resisting.

  5. He figures if he can't get the right people on board, he'll find another way.

  6. It is taking longer than he thought to get certain information.

  7. It is taking longer than expected to do some aspect of the project, but he thinks he'll be able to finish it if he can just get some uninterrupted time. Riiiiight. In fact, his day is filled with meetings and interruptions, so he never gets around to focusing on the big stuff.

  8. He believes that someone is doing their part, when in fact their part either isn't being done or it is being done incorrectly. He will probably discover this when it's too late.

  9. As the job is nearing completion, something changed--something that will have a major effect on the job. Bill doesn't know about the change. Or, he knows about it but figures he can work around it. Or, worse, he knows about it and decides to ignore it because he can't figure out how to incorporate the change into what he is doing.

  10. Bill screwed up somehow and is desperately trying to figure out how to make it right (or cover it up). Meanwhile, he isn't about to say anything about it to his boss.

  11. The technology, employee, outside vendor, system, or process that Bill wanted to use for his project didn't work out. He is scrambling behind the scenes to find an alternative.

  12. He's an eternal optimist, and in spite of all the obvious signs to the contrary, he believes the project will "turn out OK."

We're up to reason #12 already and the list certainly isn't complete. Obviously, employees have many, many reasons to avoid telling their bosses the whole truth.

Bill doesn't tell his boss the whole truth, Bill's boss doesn't tell his boss the whole truth, and so on up the line until the story makes it to the CEO. The larger the company, the less truth is left in the story by the time it reaches the top. Plus, as everyone in the chain leaves out some of the truth, they add a little more fiction.

By the time the CEO hears the story, it bears little resemblance to reality.

The CEO then makes a carefully considered decision, based on this filtered and embellished information, and delivers a decree.

Bill gets the memo and thinks, "What an idiot!"

CEOs who depend entirely on their employees (or their kiss-up vendors) for the truth will always make stupid decisions. Smart CEOs make a point of looking elsewhere for the truth. They talk to customers on a regular basis, as we've already mentioned. This is the single most important thing a CEO can do. A customer will say, "Well, I called customer service to solve my problem, but I was put on hold for 25 minutes, and then the rep couldn't solve the problem. So last week, when it was time to upgrade, I bought your competitor's product. And frankly, I've told others how terrible your service is."

What did the customer service manager tell the CEO? "We're working on improving the phone system."

Many CEOs think they get the truth when they challenge these vague statements. "What do you mean, you're working on it? What's wrong? What are you doing?"

This leads to some answers, but the CEO will never hear this: "Well, the average hold time is 24.6 minutes, the system seems to cut off every 4th caller after they press '4,' and we don't have answers to 37% of the questions we're asked."

Instead, he'll hear: "We need to hire more reps to decrease the hold time, which is a little higher than I'd like. And we are testing the system because every so often it drops a call."

It's obvious that the CEO who gets this information is going to make stupid decisions, no matter how smart he might be. And he won't realize how much business he's losing because he's not getting the whole truth. Only his customers can paint that picture for him. Meanwhile, his competitors will be having a field day exploiting his vulnerabilities.

If he does interview customers and get the truth, he has to decide what to do. Another barrier that will keep him from making the right decision are the stupid "bosses" he has to answer to. Which brings us to Reason #3.

3) They have to answer to their own bosses, who are also illogical.

Every CEO has a boss. In fact, every CEO has several bosses.

At the very least, CEOs have to answer to the government. Regulations must be followed. Anyone who has tried to do his or her own taxes, or change something simple in their own town, knows that government regulations are neither simple nor logical. What makes sense to customers and to the companies that serve them may not have anything to do with what a CEO has to do to comply with government regulations, even if those regulations were created to protect consumers.

CEOs also answer to investors. In private companies, investors include family and friends, business associates, and venture capitalists. Each person has an agenda, which usually has little to do with what the customers want.

Maybe the venture capitalists want to get to an IPO as fast as possible. Maybe they want to "flip" the company -- grow it and sell it -- in the shortest amount of time. Maybe a relative or friend, who is advising the CEO, has been successful working in another company or industry, and wants to apply the lessons she learned in that previous situation to the current situation -- even if those lessons are inapplicable.

In public companies, the stockholders, analysts, and press put pressure on the CEO. The CEO makes promises that he is expected to keep. When the numbers come out, if they're different than what the analysts expect, the stock price will suffer. This has a direct effect on the CEO's own net worth, which puts more pressure on the CEO. All of these brush fires can consume a CEO's working day, and still have nothing to do with what customers really want.

CEOs who have to answer to illogical demands placed on them by their "bosses" often fail to communicate that they are being forced into it by a poor policy. They don't want their bosses to find out they said negative things about the policy to their employees. They also don't like to admit that someone else is pulling their chain.

But by protecting themselves, they are creating havoc and dissension in the ranks. Better to say, "Look, I don't like this either, but I honestly haven't come up with a better alternative. We have to work through this right now, as efficiently as we can."

This approach makes the employee feel he or she is part of the solution, rather than a victim of the problem. Employees who feel they are "in the know" are far more effective and motivated than those who feel they are treated like mushrooms (kept in the dark and fed BS all day). They also tend to sympathize with the CEO and even defend her because they understand what the real problem is. This is far different than the employee who says to a customer, "Yeah, I know that's stupid. But what can I do? This is a direct order right from the top."

CEOs don't have to be stupid. They can know what is really going on, just by making a few phone calls to customers every week. They can make decisions that make sense to customers. They can tell employees -- and their investors -- why they're making those decisions, and how those decisions will help customers. They can know when something has gone wrong, as soon as it starts going wrong, and take action before the situation gets out of hand.

Want to separate yourself from stupid CEOs? Call your customers.


Kristin Zhivago is a professional revenue coach, and President of Zhivago Marketing Partners, Inc. She serves as a revenue coach and marketing/sales system consultant for companies of all sizes.and has been publishing marketing and sales advice since 1985. Her articles have appeared in numerous trade and business journals including BtoB magazine, Sales Advertising Marketing magazine, Business 2.0, SoftwareCEO.com, CMO magazine, and dozens of industry trade publications. As the success of all marketing depends on the decisions made by company leaders, she began a newsletter for CEOs and business owners, called the Revenue Journal. The Revenue Journal is now a blog and can be found here - www.revenuejournal.com/ .Also visit www.zhivago.com for additional information.

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Copyright 2006 by Kristin Zhivago. All rights reserved.

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