The Four Activities of an Adminsitrative Team

I often see the the office treated as some unwanted necessity. They’re viewed as the phone-answers, the mail-openers, and the go-fers. People refer to laying off people in the office as “cutting overhead.” It’s thought of as a group of uninspired people who only feel that they’ve done their job if they get in your way.

Which is totally screwed up.

The office, or rather, the whole administrative team, can be a force of nature. They can serve the company, make everybody’s lives easier, and set the prevailing company culture. They can help you understand the impact of the latest big decision, and help you make the next big decision. They can show you what happened yesterday, and how to change your behavior today. They can teach you things you didn’t even know you needed to know.

The administrative team of a company–whether it’s the polished accountants of publicly-traded firm or the handyman’s wife down the road–should be working on the following four things:

  • Strategy is the primary occupation of a well-oiled financial team. Business is inextricably linked to money, and understanding money and its impact on future plans must be done to have any measure of success. Strategists see the big picture, understand possibilities, are creative and push the company forward.
  • Efficiency is the ability to make things happen consistently and quickly, without fuss or drama. It’s the know-how to navigate complex regulatory regimes, the ability to make payroll seem like no big thing, the ability to make honest complexity seem simple. Efficiency eliminates friction between departments, and removes the drudgery from the people who make the money for the company.
  • Control is the function that most people associate with the roll a bookkeeper or company accountant plays. This involves managing risk, preserving assets, and understanding security. Controllers set up budgets and manage expectations, and play a lead role in examining trends for undesired behavior.
  • Education is the least obvious, but has the highest impact of the four activities. Education includes both teaching people within the company about the finances, but more importantly teaching people the “why” behind process and the “how” behind strategy. Educators take the company vision and make it a roadmap, showing the company the steps between here and there.

These are not elusive goals. These are things that you can begin working on immediately. Strike up a conversation with your accountant on your future plans, and press them for their opinion. Ask your bookkeeper how she intends to streamline quarterly tax reporting. Talk to your IT consultant about security. Think about who you could peel off from their “everyday” work to begin training.

Times and seasons and business and systems must change. Build a core group that understands these four concepts, and strives to make them better, and you and your business will be able to change both more quickly and safely.

A crutch or a platform?

If you have a really dialed system in place, you don’t need excellent workers. McDonalds does it all the time: with unskilled workers from a huge variety of backgrounds, they can make the same Big Mac the same way every time. McDonalds realized early on that in order to scale in the fast food industry, it couldn’t wait for top-notch workers, for chefs with degrees and experience and opinions and “taste”. It had to take the employees that it could get–and so it built it’s Big Mac-generating system.

McDonalds built a crutch.

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Rialto Restaurant is a upscale restaurant on Harvard Square, in Boston. They serve thousands of people every year, but they’ll never serve billions. They rely on Jody Adams and her highly-trained staff to produce high-quality food. Jody, in turn, relies on her recipes. She has checklists for every dish, and every dish is made to perfection. Nobody is allowed to deviate from the checklist, although being trained chefs, not everything is specified. Further, the recipes don’t stay the same, but change and improve over time [1]. Jody gets consistently good food, but still needs amazing talent to make good in the first place. Her and her chefs can create offline, when building a new recipe or tweaking an old one, but then they stick to what they’ve created while under the gun. The whole team works better because of the system.

Rialto built a platform.

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What are you after? Do you need a crutch because you can’t find the people? Or do you need a platform to help the people you have?

 

 

[1] “The Idea”:Gawande, Atul The Checklist Manifesto, (New York: Picador, 2009)

Excel

I don’t normally post links here, but this one is too good to miss:

How Excel is Ruining the World

Gotta get your web app running!

Redundancy is good, resiliency is better

As businesses grow, inevitable specialization occurs, where a certain process is done only by one person who is really good at it. This has its benefits. Now the charismatic guy with no possibility of being consistent isn’t responsible for budgets, but can concentrate on selling. Now the gal with the cutting sarcasm and a knack for numbers can concentrate on the bookkeeping instead of having to deal with cranky customers.

However, specialization has its drawbacks as well. The primary one is that eventually, an increasingly specialized work force breaks the Mack Truck Rule:

If any one person gets run over by a Mack Truck, the business must still be able to function.

After a crisis, such as a sudden termination or a medical emergency, businesses are left in a pinch–the person they relied on for so many years is gone, and there is nobody who can do her work. Nobody really knows how George set up the website after they changed web hosts. Nobody is quite sure how Susan mixed the Candy Cane Espresso that the customers like so much. Nobody really knows how Nancy figured out the payroll every week. They just know it got done. So, with the pain fresh in their mind, managers vow to never let that happen again, and make sure that at least two people know the process. This is known as System Redundancy, or the duplication of critical components to make sure the system has less chance of failing.

However, redundancy doesn’t much help the second drawback to specialization: the fact that change becomes hard. This is due to the Theorem of Empathetic Change:

The better something is understood, the easier it is to change.

In fact, introducing redundancy can make change that much harder. Since there’s multiple people that have it under control, it seems that there is no need to worry, and certainly no need to spend additional money on a process that’s working well. Redundancy can take the pain out of a process, which saps all the drive out of anybody wanting to make that process better.

Besides, if changing the behavior of one person is hard, changing the behavior of two is more than twice as hard. Now, instead of convincing a single salesman that it’s time to start concentrating on aluminum mills, not just iron foundries, you have to convince him and the marketing director, who fills in for the salesman when he’s on vacation. And besides, since neither you nor anybody else in the company really knows what they do when they’re selling, it’s tough to say just how big a change it is you’re proposing.

Remember, just because two people understand something, it doesn’t mean that others in the company can. Better, then, to make sure the critical process that any one person does can easily be picked up by another person. And doing this is extraordinarily simple, but mind-numbingly boring: write the process down. Sometimes people refer to these as Process Manuals, some as Standard Operating Procedures. Others make them into Training Guides, still others make Checklists.

These written instructions give the business an important advantage:  Resilience. Now, come what may, you can do what another did yesterday by thumbing through the three-ring binder, or checking out the company wiki, or looking at the checklist doc on the server. Sure, it won’t be easy if you’ve never done it before, but at least it is possible.

Learning vs. Knowledge

I’ll give you three people who have knowledge for one who has the ability to learn.

Please listen to me, the worker

Two truths:

1) They know their job better than you

2) They already want to change something

Arrogance leads to you coming in with solutions. Sometimes your solutions might even be right, be beneficial, be good for the people you’re solution-izing.

But it’s likely, nay certain, that they already want to fix something, want to make something smoother, want to adjust some small piece of their job. Yes, they may not have the big view, they may be trapped by the blinders of the rigors of their work, but it’s nearly guaranteed that they want something changed.

Start the conversation with “Is there something about your job that could be better?” and see where it leads. Help them fix it. Even when it isn’t directly aligned with company strategy, even when its a tweak that is only going to help for this job or for this week, do it. Your hardest challenge isn’t to change the process or modify the software or re-jigger the report, it’s changing behavior. If they wanted it before you ever came, your work is mostly done.

And you get to be their hero.

Define only enough

Don’t try to define everything. Not only is it a fruitless task that will forever remain beyond your grasp, it is counter-productive. If you wanted robots, you would have bought robots, not decided to work with living breathing socializing human beings. Robots are cheaper, frankly. No, you have humans around you that can think and decide and create and build. Some humans like things defined and concrete, and others like them abstract and loose, but nobody wants to live in a box.

One way to help those around you is do loosely define the broad roles of various people. Not “Sally staples the check stubs to the invoices once they are paid” but rather “Sally is responsible for paying vendors.” If Timmy is quite good at striking deals, don’t tell him he has a quota of 36.2 sales per month, but rather educate him on what constitutes a good sale, put “Sales Representative” on his business card, and call it good.

It’s important to give the people around you a mental model where they can place the others they’re expected to work with. But don’t attempt to make it a jigsaw, with hard boundaries that never overlap and must be fit together exactly. People will play by any rules given to them. Just make sure the rules are loose enough that the creative juices aren’t bottled up.

The Arrogance of Ignorance

Why do you pretend like not knowing is okay? If you’re trying to do good work in a position that you’re unqualified for, shouldn’t you be asking questions of everybody who comes along? Why are you pretending to be blissful, when you’ve caused harm around you? If she’s explaining something to you that you need to know, where’s the harm in listening and trying to learn?

You’re going to make better decisions if you know more about your domain. You can’t think that you arenotimportantenough/aretooimportant/aretoobusy/justdon’tcare or you’ll inevitably make a decision that negatively affects the people around you through your ignorance. Your world is learning and growing and changing. You’d better too.

(Thanks to Michael Beatty for the title)

Design for the concrete, allow for the abstract

The best designed systems are made easy for the people who think in concrete, in the here-and-now to understand. Software system? Make things happen on-screen, not behind the scenes. Management system? Show people clearly the if-this-than-that rule.  Customer facing system? Instant response, instant gratification. Vendor-facing system? Immediate pay. Government system? Show voters that it makes a difference to vote. Over 70% of people are what the Myers-Briggs and Keirsey tests call “Sensory“, the people that are grounded in reality, the here and now. These are the ones that  use the mouse for everything they do on a computer, the ones that say “Show me the money, then we can dream for the future.” These are what I call Concrete Thinkers.

Business systems are a collection of individuals working towards a common goal. Both the constraints of this system and the rutted pathways are set by the owners, the managers, and the long-term employees. And you have a choice: Set it up to exclude the those who are Concrete Thinkers, and you may get a bunch of talented, creative abstract thinkers. But they aren’t the ones who see the fine detail, or take pleasure in getting it done. That Form 941 from the IRS? That’s details. Understanding the differences between three bad health-insurance plans? Details. Some of the most proficient artists I know are Concrete Thinkers, and I’m convinced that their talent has been amplified by them seeing and understanding the fine details.

But often the system is designed by somebody who thinks abstractly. The neck-beard that like his vim keyboard shortcuts, the manager that moves on to the next Strategic Direction before the first has had a chance to turn a profit. They think in the abstract, in the big picture. But they’re often frustrated by the people around them, wishing they could move past the variance in last month’s budget and start planning for next month. They see the raw intelligence in a Concrete Thinker, but are helpless to do anything with it for lack of understanding. Similarly, the Concrete thinkers wonder how the Abstract Thinker keeps her job: she comes in late, sits in brainstorming meetings, and rarely does any real work.

Where you have the latitude to design, you must design for the Concrete Thinkers, but allow for the Abstract Thinkers. If you’re building houses, enforce the rule that jobsite materials are organized for one day’s work at a time. But when Abstract Joe, the one who can’t organize the buttons on his shirt, wants to put in the gluelam from tomorrow’s stack to save time, listen to him. He might have a point. If you’re the manager of the Accounting Department, make sure the rules are clear about cutting checks for vendor discounts. But listen to Abstract Jane when she says that by dipping into the line of credit for one day, you can save 3,000 dollars.

And you do have the latitude to design, but you have to choose to.

New Year, More Change

There are two types of change:

  1. The type you create (and thus control)
  2. The type you don’t create (and can’t control)

Remember: Your new year will be filled with change. Pick the kind you prefer.