September 6, 2011

Commodity Management

(Day After Labor Day, 2011)

Has it ever happened to you that you were handled badly by customer service for the product or service you bought, and switched providers? How about had a bad experience with a brand of shoes, or fast food?

It happens all the time. Businesses have to pay for a bad delivery or production with lost customers, from production or implementation of software, to massage therapy, to retail store experiences.

Yet the wish in the last few decades has been to treat production and delivery as commodity skills. To pretend like it does not matter who delivers or makes what you sell, and pay them less and less.

What we have seen in the last two decades is bloated middle managements, with better and better pay, positional glamor and power. The Question that arises, is there any sense (other than the arbitrary wish to see things that way) to treat the deliverers as commodity skilled while the middle management as the ones with some real, suave, situational skills critical for business?

On closer investigation, the scenario is shockingly opposite to what one might expect. Today, in the corporate world, every step in middle management is driven by process and rules. If you resign your job, there is a manager handbook telling the manager how to handle you - on what basis to ascertain and document whether you are worth keeping or a good riddance. If worth keeping, what to offer you to stay on as a first step. What to offer next, how far to go, then what to say if you are just intent on leaving, how to scare you that leaving the current company is such a risky decision for you, given you are so perfectly matched to your current company, like no other! Similarly, performance appraisals, pay hikes, et al, are all mapped out. Any communication of e.g. bonus payouts is standardized for everyone, though it might be signed in your manager or vice president's name! There might as well be a robot in that place and it would make no difference!! No matter who's in that place, it's the same Program that runs, yet it goes by the name of leadership - something that is supposed to be DEFINED by choice making and subjective assessment. And gets paid leadership dough, with the result there isn't enough to hire good quality, well paid direct workers in sufficient numbers. Even those that are hired are constantly bombarded that they don't really make a difference, and their best bet is to play along and support politics of their supervisors and 'superiors', for their individual contribution and skills are commodity. Yet this is but a big bamboozle.

The reality of the matter is that it is the middle management that is a commodity skill in today's world, although the pretense that drives compensation structuring has been the opposite. Factually, other than a few strategic positions at the top, the rest of human Capital is really at the bottom, in the delivery and production roles. These, combined with the right strategy and direction chosen at the top, make or break a business organization. Companies that realize this, and work their hiring and compensation policies and organization structures accordingly, will win the battle for efficiency, motivated delivery force, and finally, customers satisfied with the quality and pricing of the products and services that serve them well.
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