A warrior, by definition, is “a person who shows or has shown great vigor and courage.” A great career in the cubes requires vigor and, in working with management, great courage. I’ve even been brash enough to say that management is the enemy. That needs the vigor and courage a warrior has to work with management.
But, what, exactly, is it about management that drives this need of knowledge workers to have the vigor and courage of a warrior? A perfect lesson is the death of Washington Mutual this morning. If ever knowledge workers needed to understand their management team, this was the example to use.
Of course, your manager gives you your reviews, pay raises and promotions. That’s important, but what I want to address here is the role management plays in the company. You, as a knowledge worker, need to understand your management performance in these areas – because you will be the one laid off if your management fails.
The higher you go in the management ranks, the more important strategy becomes. When management sets strategy, knowledge workers complete it. In the case for Washington Mutual, for example, set a strategy to seek higher margin loans to increase profits. When carrying out the strategy, more products were developed to make more money for loans. They bought a company that focused on subprime loans because the margins were higher. They sold their boring, low margin, servicing on conventional mortgages to Wells Fargo.
By deciding a strategy, actions happen. As a Cubicle Warrior, it is not enough to protect your career by carrying out the strategy. You must also find out if the strategy makes sense. If the strategy doesn’t make sense to you, bells should be going off in your head about your job security. When I qualified for a mortgage amount from WaMu that I wouldn’t ever want to pay, I knew they jumped the shark.
When carrying out a strategy, how do you know it is working? By what you track. By what you measure. By your reports. Washington Mutual claimed to know how to manage the risk of higher margin loans, but it is obvious they did not. Sure, you can model portfolios, game the statistics to see likelihood, and make charts. But does it make sense? If people can’t afford mortgages using standards from ten years ago, why can they afford them now? If your model portfolio seems perfect, what about the assumptions behind the model?
I recommend having numbers – tracking – associated with your accomplishments. As a Cubicle Warrior, you need to understand how management is tracking their strategy, discover if the tracking makes sense and if the strategy is succeeding. Usually the strategy needs tweaking based on the reporting. But the old rules apply: garbage in for tracking is garbage out for understanding if the strategy is working.
With feedback from tracking, management decides the next steps to take to fulfill the strategy. Should we double down on higher margin loans? Should we sell the boring, low margin conventional servicing mortgages to raise our margins? Should we create new products? The actions taken by Washington Mutual continuously focused on the margins – and not on what was happening in the market. Foreclosure rates jumped. The sales continued. Late payments significantly increased. The sales continued.
This disconnect between the direction management is taking to the reality of the marketplace is important for the Cubicle Warrior to know. This is why having external sources about your company is critical to understanding your management performance. For publicly traded companies, this is easier because of disclosures and market analysis done by outsiders. For privately owned companies, this is more difficult and will require some intuitive, common sense analysis by you to find out if the direction is matching your reality of what is in the marketplace.
When management sets the strategy, tracking, and direction, there is a final success factor: accountability to results. Washington Mutual never had an “accountability” culture. Problems ignored or blamed somewhere else. Problems solved by “heroes” doing stuff that wasn’t in their job descriptions just to serve the customer. Despite poor performance, the management team that got them into this mess two years ago is still there today except for of the CEO. And he was fired, with a golden parachute, not long ago.
As a Cubicle Warrior, you need to understand the culture of accountability in your organization. If there is accountability, people do their work. They fix their own problems. You can see results. Without this accountability, it is difficult to have your own accomplishments shine with the right light and the company will be at risk when their good fortune turns.
While one can say no one saw the financial mess coming, that isn’t true. JPMorgan Chase had the higher margin strategy for all these famous credit swaps but had the right tracking in place. Changed direction in 2006. And held management accountable to make sure the changes got done. Because of excellent management, they bought over $300 billion in assets, $100 billion in deposits, and 2000 branches for a mere $1.9 billion dollars. While we’re talking billions, do the division and you will see the pennies on the dollar in the purchase.
As Cubicle Warriors, it is necessary to understand – and rate – your management team in these categories. JPMorgan Chase has knowledge workers who have their jobs because they have excellent management. WaMu’s knowledge workers have poor management and soon looking for jobs.
We pay the price for management’s mistakes. That’s why we need to understand how management is performing.