On a recent 710 WOR “Mind Your Business” broadcast, Yitzchok Saftlas (YS) spoke with guest Dr. Rich Roberts, the former pharmaceutical CEO of URL Pharma, on the subject of management fundamentals.
YS: What are the tips and tricks to be a great manager and to delegate effectively?
RR: When you’re an entrepreneurial, one-person company starting out, you’re doing everything yourself. Eventually, you’ll need to hire a few more people if you’re fortunate enough to grow, but you’re still going to have a finger in everything. But when you reach 50-100 employees and you’re still trying to have a finger in everything, your company will collapse. Not only will it collapse, but you’ll be communicating to employees that they don’t really matter because you’re going to step in and just do the work if they don’t. So, if you want to grow as a company, you’re going to need to be able to delegate. You need to be able to transition from when you did everything yourself to now getting other people to work in their areas of expertise. And then you have to hold them accountable for what they’re doing. As you back off from areas, you’re going to need to have written measures of how well that area is doing to best degree of detail possible.
It’s a classic business 101 case of the Mom-and-Pop company that started from nothing goes to a $50 million a year corporation, and then goes out of business because Mom and Pop tried to do everything. Part of that is understanding that you don’t know everything. I have a history of being able to understand most things, whether it be quantum mechanics, chemistry, pathophysiology, medications, and other things, but I never went to business school. So, I held no illusions over the fact that I don’t know finance. I certainly learned finance from different chief financial officers I’ve had over the years, but even with everything I know now, I don’t know it nearly as well as a financial expert does. When it comes to marketing, Mom and Pop might think it’s the same as just trying to go and sell or putting an advertisement in a publication.
But marketing goes way deeper than that. There’s all kinds of analyses and research that’s done on understanding your customer base, competition, products, etc. In every area, there’s a tremendous amount of knowledge that the Mom-and-Pop entrepreneur doesn’t have. As you grow and bring in people with higher levels of expertise, you need to be able to delegate to them and give them ownership over the process. Let them feel that they are responsible.
But you, as the person above them, are going to have written deliverables that they’re measured against, to make sure that they’re getting it done. And many times, it becomes difficult to measure. For example, in business development, you might say the person has to get five development deals a year. Well, how good are those deals? How advantageous are they? Maybe the lousy deals can end up losing money years down the road. It’s not so simple in many areas.
When you delegate, you have to give people ownership of their areas. Hold them responsible. Don’t let them put it on the people below them. You can add your ideas and ask questions, but you can’t go in, do the work, and take control.
YS: Perhaps you could explain the idea of “transference” and how it can be applied to the business world.
RR: “Transference” is a term in psychiatry (though it’s not solely a psychiatric issue) where early in a person’s childhood when their personality is developing, if they had to deal with difficult recurring situations, they will have developed techniques to cope. For example, if their parents are not so healthy, the child must develop certain techniques or approaches in order to cope with their parents’ deficiencies. And later in life, this person has a personality disorder, because this same technique they were doing as children, they now apply to other relationships around them. So, in psychiatric therapy, many times, the patient, as they become more comfortable with a psychiatrist, will start to transfer those attitudes, preconceived notions, and reactions they had for their parents to the psychiatrist. The patient starts to see the psychiatrist as the parent figure and react the same way. That’s transference.
In business, I noticed, as a 35-year-old CEO, certain employees (some were even high powered around 60 years-old) would react to criticism by getting into a tizzy like a little child being criticized by their parents. And what I realized is that this is the psychiatric mechanism of transference. Sometimes, the employee will see the people higher up on the management structure, especially the president or CEO, as a parental figure. So, if they do something wrong, you need to tell them, but you also need to see if people are reacting to you based on the facts of what you’re saying to them or if they are reacting with emotions that don’t really pertains to that specific situation. In those cases, you have to be careful. If the employee is a good one and you want to keep them, you need to be very careful. If you want to keep them, you need to be very careful and gentle with that person in what you say and how you present things.
Now, there are going to be other people that don’t have transference at all. They’re just all about the work, the facts, and getting things done. Then, you could talk more factually. There might also be cases where an employee is transferring their obnoxious, adolescent rebellious period on to you, as someone higher up on the management curve, and I don’t think this is age related. That person could be 30, 20, or even 60 years old. Then, it becomes insubordination which cannot be tolerated and that person will eventually have to be eliminated from the company. But you need to realize that, as a CEO, especially as a company gets bigger and you become less commonly accessible, people will see you as more of a mythical, powerful figure and transfer their feelings of authority onto you. So, with some people, you need to hammer into them when they do something wrong. Some people you need to be very gentle with.
YS: How do you maintain clear, direct communication when working on a large project with many people?
RR:There are various project management software programs, mass emails, and video conferencing tools you can use. But I think the real key is to first understand how important it is that everyone involved in a project is kept up to date. It might be that every week everyone on the project is going together on a conference call and whoever is leading the project is going to go through all the deliverables and issues. But the one thing I want you to know is that when significant decisions are being made, when milestones occur, new information comes in, when there’s any change in course, you need to make sure it’s communicated to everyone involved in the project. Don’t think, “Something new thing came in, and I can get it done this way on my own.” When everyone else find out about it two weeks later, and they’ve all been working now on something that’s no longer applicable, you’ve demoralized them. So, you want to have everybody contributing. You need to make sure that they not only have ownership to deliver what they need to deliver, but they also understand their part in the greater project and are up to date on it.
YS: How does a company institute a great corporate culture plan?
RR: There are different aspects to corporate culture. The first part is identity. If employees are working 8-10 hours a day in a company, they’re spending more of their life working there than they do anything else. They’re probably not sleeping for more than eight hours a day. They’re certainly not spending that kind of time with their spouse, their children, or on hobbies they like to do. The largest single expenditure of time that they’re spending is working for that company. So, you want to make sure that they feel a part of it, that they identify with it as their company.
Human resource professionals know all about how to do this, whether it’s having corporate picnics or having signs up around the lunchroom. But it’s very important that you know that most people have a natural inclination to want to identify with and feel a part of their company. So, it’s important that you communicate that to them that we’re all succeeding or failing together. The other thing I would say about corporate culture is that, as a president and CEO, you will set a standard by your behavior, both in front of people and behind closed doors. When I first joined a certain company, there were many gender discrimination lawsuits against that company. So, I didn’t come in there and start espousing or talking in platitudes about ethics, but when somebody would say an off-color joke, I wouldn’t respond. If they said something denigrating to women, I would act like I didn’t even hear it. They would curse, and I would respond by speaking about the facts and content of the sentence or the information. I wouldn’t curse back, and I wouldn’t respond to the cursing. As president or CEO, people are conscious of what they’re going to look like in your eyes, and when they see that you don’t joke or speak in this way, it will permeate throughout the organization. Similarly, if you say in public, “I love the employees” but behind closed doors, you’re just working on taking everything for yourself and giving nothing to them, that will permeate throughout the culture. Executives will see it, and they will set that example to the people underneath them.
I loved my employees. I didn’t do it because it was good business. I did it because I love them and respect them. But those attitudes are also good from a business perspective because they’ll permeate throughout the company. Employees will know that this is a company that looks out for them. The number one reason employees unionize is not for more money. It’s because they feel they’re not heard or respected by the management. Therefore, they feel like they need representation for protection. So, your behavior and your attitude will set a culture throughout the company.
YS: What is MBWA?
RR: MBWA stands for “management by wandering around.” As I said, when you’re a small company, you’re involved with everything. But when you get larger, there is so much data, people vying for resources, and issues coming into your office. And suddenly, you’re stuck in your office day after day. So, you need to make a firm commitment that, at some point each week, you’re going to leave your office and your cellphone, and you’re going to walk around the office area. Talk to people, walk around the manufacturing plant, walk around the warehouse. You might see some groups of employees sitting in the corner smoking, you also might see people working like crazy. You might see things moving efficiently, or you might see garbage piled up somewhere unattended to. You don’t get to see this stuff unless you walk around. You only hear what’s the vice presidents are filtering for you if you don’t go talk to employees at all levels.
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