The Private Sector Can Be Dumb Also

Planners, don’t get thrown off by the private sectors’ examples. You can learn something from these!

The Management Doctor

A number of years ago, our company was rapidly expanding in response to the needs of its largest client, a telecommunications giant that served many states in the Rocky Mountain region. Large, multi-million dollar deals had been signed, and, with the money pouring in, we were sparing no effort or expense to meet the client’s every whim, need, and desire. We were falling all over ourselves to comply with every demand, even though we were not fully prepared to handle the volume and pace of the business that was being sent our way. As often happens in the private sector, our sales team was promising the moon, and the customer service and warehousing teams were jumping through fiery hoops trying to live up to the promises that were being made. It was soon apparent that our existing warehouse would not be large enough to handle the demand, and so in keeping with our “do whatever it takes” attitude, we opened a new warehouse facility that would be dedicated solely to the needs of our main client. This new warehouse is where the “Dumb Management Story” comes into play.

Our company policy for creating a new warehouse facility was not streamlined and could not be easily adapted to meet the pressure-filled, time-sensitive situation that had developed. Floor plans and layouts were designed at the national and regional headquarters – both several states away. Dusty old “here’s-how-we’ve-always-done-it” manuals were called upon to establish appropriate staffing levels, operating hours, and even the numbers of forklifts and wire cutting machines that the new facility would be equipped with.  Between the time when the special client-specific new warehouse was first conceived, and the time that it was actually opened, the demand on our company had grown considerably – as had the levels and types of inventory we had been required to stock. The result was that the new facility was already undersized and obsolete on the day that it opened. Also, as is usual with high-dollar, high-profile business situations, there were politics at play – if the new warehousing operation failed, then nobody wanted to be associated with it. Naturally, everyone wanted his or her name attached to the building in the event of its success.

It did not take long for the weaknesses in the new project to become apparent. The staff was incredibly undermanned, under-trained, and inexperienced. There was a terrific lack of shelf (and other types) of storage space.  Huge shipments of material, still shrink-wrapped on the pallets it arrived on, would sit for days in the receiving area as there was simply not enough manpower to handle it in a timely fashion. These and other problems contributed to a comedy of errors that quickly led to incorrectly selected and packed orders, missing orders, and late shipments – all expressly forbidden with our very demanding client.

Harried and frustrated managers higher up the “chain of command” repeatedly asked us what the problems were. We responded by consistently listing the same issues. We even offered our solutions for the problems: Temporarily or permanently bring in experienced staff members from around the region. Get us a bigger, better-designed facility, where the available space, layout, and shelving arrangements were better suited to the products being handled. Get us the equipment that we needed. Make sure we were staffed appropriately for the workload. Consider three-shift (24-hour) staffing. The response we received was always the same – “none of what you are asking for is justified! Work smarter not harder! Get the job done! Stop whining!”

Eventually, our supervisor was removed from her position. Her six months of long twelve-and-fourteen-hour days were rewarded with a symbolic slap across the face: “You obviously can’t get the job done, so we’re going to replace you.”  And replace her they did.  The “Dumb Management” did not stop there, however.  Within the next two months, the company, in its infinite wisdom, did everything the supervisor had asked for. They brought in seasoned warehousing professionals from other branches of the company. They hired additional staff. They brought in needed forklifts, pallet jacks, and other equipment. They authorized overtime until the situation was stabilized. Within six months, they had rented a larger building, and moved the operation into it, thus helping to alleviate most of the storage and spacing issues. Everything we – and our supervisor had repeatedly begged for had been provided – AFTER she was made the scapegoat for the initial shortcomings of the operation and sacked.

To this day, I marvel at the “Dumb Management” mistakes that were made which created a nightmarish working environment, contributed to considerable turnover, and ultimately helped us lose our exclusive contracts and become “just another supplier on the list” for the big telecommunications client. The parallels to other private-industry debacles and to similar public/governmental scenarios can easily be seen, and the many lessons are straightforward and simple:

  1. Set realistic standards for performance. Don’t expect your staff to be able to meet unattainable goals; you will be disappointed;
  2. The “way things worked in the past” may not be the way to resolve things now or in the future;
  3. Listen carefully, confirm your understanding of the issues, and respond quickly and appropriately;
  4. Don’t be afraid to try unorthodox approaches to solve unforeseen or unusual problems; don’t be afraid to throw out “the manual;”
  5. Support your people, trust them, and respect their judgment, they are typically closer to the problem than you are;
  6. If you feel that you can’t trust the judgment of your people, ask yourself if you truly DON’T trust them, or if your lack of trust is fueled by your resentment that they are correct, and that you, as the manager, may be wrong, or that you are otherwise feeling threatened in some manner.

Respectfully Anonymous in Denver