Management and Teachers: Accountability Requires Authority

In Chicago, the city and the teachers’ union are approaching an agreement. Interestingly, neither side said that the strike was over wages. (According to NPR, the average teacher makes just over $76,000 a year, and will receive a raise of about 16% during the next 4 years.)

The most important disagreement in the strike is about measuring teacher effectiveness. Chicago is seeking to implement metrics that will be used in deciding tenure, promotions and compensation. Teachers whose students learn more would be better paid. Rahm Emanuel, the Mayor of Chicago, says it is all about accountability. I’m no fan of unions and of the teachers’ unions in particular, but if I look at the schools as a business, I have a problem with their definition of accountability.

No sane business owner will argue against accountability. We live with it all day, every day. We bear the consequences of our decisions, both good and bad. We expect our employees to accept responsibility for the jobs they are given, and have prescribed actions (progressive discipline, termination) for those who don’t. What could be wrong with accountability for teachers?

I met a teacher recently who had taken a job in a Catholic school. His previous experience had been in a big city public school system. The Catholic school was in the same area of town as the public school where he taught previously.

Within a week or so, he began experiencing disruption in his classroom. Students weren’t paying attention; listening to music and talking with each other. During his free periods he walked around the school observing other classes, and noticed that none of the other teachers had the same problem. Their classes were quiet and well-behaved.

He felt inadequate. He assumed that the lack of engagement was his fault, because he wasn’t as good a teacher as the others. The problems grew worse. He finally swallowed his pride, and raised the question in the teachers’ lounge. “How do you all keep order so well?”

The others looked at him incredulously. “We have students misbehave, but if they don’t straighten out, we send them to the principal’s office.”

“I know that I can refer them for disciplinary action, but what good does it do?” he replied. “They just serve some minor punishment and come back.”

“No they don’t. If they don’t straighten out, they are dropped from the school.”

He was thunderstruck. “We can do that?”

“Of course. Our school provides an excellent education. To accomplish that, we have to be able to teach. If we can’t teach, we can’t fulfill our promise to the parents who pay us. Students who prevent us from accomplishing what we promise can’t be tolerated.”

The difference was so simple, yet so profound. In order to be held accountable for the result, the school demanded authority for how it was delivered. It is a basic tenet of any contract.

My son attended a magnet high school. Like many such, its 400 students were encapsulated with 2500 others in an urban  school. Every single member of his graduating class was accepted to college. The acceptance rate for the rest was in the very low double digits. The magnet school had academic and behavior standards for admission and retention. If you didn’t maintain them, you were transferred to the other student body. 

In Chicago, a number of public schools have remained open for the sole purpose of serving meals to the 350,000 students who are dependent on the Board of Education for decent meals. It is part of the role we have mandated for our schools nationally. No one will say that a student should have to watch others eat because he or she can’t afford to buy lunch.

We’ve allowed the social role of schools to overshadow their educational purpose. In business, we expect a different level of accountability from a factory worker compared to a manager. The worker needs to show up and do as he is directed. The manager is expected to get results, and needs the authority to do so.

Providing a safe haven from the streets and basic nourishment is a school’s factory job. Ensuring that a student learns the necessary skills for productive citizenship requires some authority.

I am wholly in favor of teacher accountability; but I can’t imagine telling a manager that his performance review depended solely on his department productivity without giving him the authority to make it happen. I know that he can’t do it with employees who don’t have to show up, or don’t have to work.

I also know that no amount of salary will attract the best managers to a job where they are destined to fail. Educational reform depends on teachers who are held accountable, but there is a lot more involved than just a grading system.

Posted in Management | Tagged , , | 1 Comment

One Response to Management and Teachers: Accountability Requires Authority

  1. Heather says:

    The grievance is whether 40% or less of theteacher’s performance review is based on student performance. If your job is to teach, then it seems to me ridiculous to think there is a method of evaluation that doesn’t include student performance! You make good points here, but there must be some accountability to educate your students. In your private school example, I assume these teachers must still educate their students and performance is a measure of their success. Just because the students behave, it doesn’t mean the teachers are effective.

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Politically Speaking: Do Small Business Owners Have a Voice?

The political parties have completed their prime-time convention pageantry, and are buckling down for the 60 day dash to the election. Both profess to be focused on the”little guy,” the middle class backbone of America. One party says that you succeed on your own. The other says that you succeed because you live in a system that makes success possible.

My friend Jim Blasingame’s Small Business Advocate newsletter conducts a poll every week. Not surprisingly his readers, owners of small businesses, tend to lean strongly to the Republican side of politics. Are the Republicans really the political party of business?

Those who watched the Republican convention were treated to a parade of small business owners, and of politicians who extolled their small business roots. Does anyone really think they can finance a Presidential campaign on the contributions of small business owners? Of course not. As soon as the lights were turned off in Tampa they rushed to ask the lobbyists of giant corporations for contributions. Small business doesn’t have the excess cash to throw around.

At home, we are watching “The Killing” on Netflix. The reformer politician is running behind. He needs money, and his legion of followers can’t come up with enough. The campaign manager suggests a visit to the local tech billionaire, to which the reformer exclaims ” I won’t take money from someone whose patron saint is Ayn Rand.”

Of course he goes, and gets a big check. At least the show was fair to Ayn’s memory. He accepts the check with the excuse that he is only doing it for the good of the people. The entrepreneur responds that he is doing it for his own reasons, and could care less why the reformer is accepting it. If Ms. Rand’s consciousness exists somewhere (she would not appreciate being portrayed in a happy afterlife), I hope she was pleased.

As the election approaches, our peer board meetings and many of my coaching sessions veer off into a discussion of politics. The ridiculous refund reporting requirements of the Affordable Healthcare Act seem to have gotten owners stirred up. On the heels of that came the notices from our accountants regarding the new taxes effective in January. (Somehow the press seems to miss that when the President says he hasn’t raised any money on the backs of the middle class.)

The conversations usually end the same way. One of us says “That’s all fine to talk about, but we need to focus on running our businesses.” Is that correct? Are small business owners really just ineffective pawns in a broken system?

In the 1970’s the drug epidemic in New York City was out of control. I remember reading a magazine story about a woman whose sister visited from Connecticut. They took their two young daughters to the park, where the NYC mom spent every moment tracking the kids’ moves. No going behind the bush, some addict might be there. No picking things up, it might be a diseased hypodermic needle.

The suburban sister asked why they even came to the park, since it was so dangerous and stressful. The mom answered: “Because if we stop coming, they win.”

The story isn’t just about maternal courage. The fact is they did eventually clean up the parks, at least in many areas. By refusing to give up, eventually they won.

A technology entrepreneur (not a billionaire yet) said to me the other day “Why should I bother to vote for President? In Texas, it is a waste of time. We live in the reddest of red states, and there is zero chance that anything I do can change that.”

I reminded him that Texas was once the bluest of blue states. As described in Malcolm Gladwell’s Tipping Point, things changed little by little until suddenly they changed all at once.

Small business owners aren’t powerless. We may not be able to pour millions into political war chests. We can talk to our employees, but most will still vote as they see fit. What we can do is not give up. Don’t stop talking. Don’t stop pointing to things you see that are unfair or corrupt.

Entrepreneurs own businesses because they refused to accept the way things were. A feeling of helplessness is absolutely the worst thing that can happen to small business in America. The odds of engendering change are long, but every day that you unlock the doors of your business you have already beaten the odds.

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Employ People; Don’t Adopt Them

I cringe when a business owner tells me “Our company is just like a family.” I have a family, and thankfully my business is nothing like them.

Family members have the right to unconditional love. They can make mistakes (and in the case of children, the same mistake multiple times) and expect to be forgiven every time. What they receive from you is based on need, not ability.

If that is how you treat your employees, I’m guessing that your business is in big trouble.

Employees are hired. They have a contract, whether it is written or not. It requires a certain level of job performance, in return for which they receive wages and benefits. If they can’t or won’t hold up their end of the bargain, you have no obligation to stick to yours.

More importantly, allowing one employee to fail without suffering the consequences is unfair to all the others. If you do it regularly, you won’t have any good employees left to carry the load.

When you interview a new employee, I’m sure you say things like “We want people on our team that we can depend on.” Or “You will be joining a group of folks who work hard and do a great job.” Do you believe it when you say it? I hope so, or else we know where to place the blame for performance problems.

Many business owners fall into a deadly routine of accepting mediocrity. First, they hire based on whether they can get one person less expensively than another. I can’t count the number of times I’ve heard “I liked the other applicant better, and he had more experience, but he wanted a hundred dollars a week more.”

A hundred dollars? Really? You can’t see anything in that position that, done efficiently, correctly and with enthusiasm, couldn’t add $5,000 a year to your bottom line? Why does the job exist at all, in that case?

Then there are a thousand excuses (not reasons) for hanging on to a mediocre performer. He or she does the job well enough. His mistakes are regular, but usually minor. She has a great personality, and everyone likes her. He is the designated driver for the Friday after-work parties. She coordinates all the birthday cards and cakes.

Those might be reasons to stick with your family, but they aren’t justification for spending precious payroll dollars.

Perhaps he was ill, and never quite got back up to speed. Or she had issues in her family, and has been distracted. Employees have lives. They fall in love, break up, get back together, get married and get divorced. They have children, parents, siblings and pets. They buy houses, make  investments both good and bad, and get sick. Those aren’t reasons to be paid not to do their jobs.

 Of course we all care for our employees, and we want to treat them well. In practice, you routinely accept that they have no intention of giving you the same consideration. Do you think I sound callous? Try this little exercise. Call your employees together and make this speech.

 “As some of you know, I have had a number of personal problems over the last few months. Things aren’t so good at home, and my portfolio has taken a shellacking. I’ve also been to see the doctor, and he says that I have a chronic condition that, while not life-threatening, will require some extensive treatment.”

“Because of these issues I haven’t been able to give my full attention to the business, and our performance has suffered because of it. I am fully confident that we will recover, but in the meantime we won’t be able to issue paychecks until further notice.”

 Yeah. You know how much sympathy you’d get. Perhaps a mumbled “I’m sorry” as your longest-tenured employee cleaned out his desk.

 Entrepreneurs have less slack, less margin for error and less flexibility than their employees. Expecting a reasonable day’s work for a reasonable day’s pay is fair, equitable and sustainable. Paying for work you don’t receive is unfair to you, your customers and your other employees.

Posted in Management | Tagged , , , | 2 Comments

2 Responses to Employ People; Don’t Adopt Them

  1. Claire Gard says:

    Great read and so true

  2. shandi says:

    I agree. Great read

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It’s Your Money: Fighting Profit Guilt

A few weeks ago one of my peer boards was discussing the hiring of a new salesperson. One owner asked the others “What is the most important trait you look for in a new salesman?” Another member immediately burst out: “Someone who doesn’t feel guilty about my profits!

It’s something we don’t think about, but it is a critical foundation of your company culture. We enshrine it as Right Number Three in our Rights and Obligations of a Business Owner: “You have the right to all the profits.”

All ownership rights come with attached obligations. In this case, it’s the obligation to use profits to pay your employees and your bills before you pay yourself. Unfortunately, many employees as well as many entrepreneurs feel that profits should be limited to a comfortable living wage for the owner, and everything in excess of that is profiteering.

Profiteering is variously defined as making money by unethical means, and making a lot of money by charging high prices for goods that are in short supply. There is no definition of “excess” profits other than certain arbitrary measures from governments seeking to levy additional taxes.

Many small business owners suffer from profit guilt. They subconsciously limit the amount of money they make to a number they feel is “fair.” They find ways to keep profits within a range that is comfortable by foregoing price increases, offering discounts to customers who aren’t asking for them, and voluntarily increasing expenses.

If you keep your financial results secret from your employees because you are afraid that they will think you are making too much money, you are suffering from profit guilt. If you don’t want employees or customers to visit your home because they might think you are “rich,” you are suffering from profit guilt.

Profit guilt is most common in entrepreneurs who started out as technicians. That means those who did the work of the business, whether carpentry or engineering, and then took the leap to do that work for themselves. Technician owners frequently are indoctrinated with a mental balance scale that measures their personal work output against the amount of income they receive.

The primary reason to start your own business is to disconnect the link between personal work and personal income. Getting paid for what you do is the definition of a job. If your business is just a job, it is one with too little security and lousy returns. Profits are your compensation for investment and risk.

Try this exercise. Begin by writing down the actual cash amount you invested to start your company. Add to that the difference in any income between what you paid yourself and what you could have earned as an employee at another company, for as long as that condition existed. Now add the value of the hours you’ve worked beyond what you’d normally expect from your employees. The resulting number is probably huge, and it represents your investment; the total contribution that you made personally to get the business to where it is today.

Professionals who acquire small businesses, such as Private Equity Groups, roll-ups and larger corporations, target a Return on Investment ratio of between 25% and 35% annually. That’s a fairly consistent number across industries. It has been determined in the open market to be what is necessary to offset the risk of investing in a small company.

A small business should therefore generate a salary for the owner that fairly compensates his or her work, plus from a 25% to a 35% annual ROI on that owner’s total contributions to the company. That is a baseline. Regardless of what your accountants or the IRS say, only the amounts over that are really profit.

If you are making more than that, I congratulate you. Your are among the very few small business owners who have built something that creates wealth beyond a return on your personal investment. Unless you are doing it using unfair or unethical means, you deserve every penny.

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Computer Technology: Curse You, Bill Gates!

Every business is held in thrall to its computer technology. In most white-collar environments a computer crash comes with the added expense of employees sitting dumbly at their stations, unable to function.

When a function of our business becomes a core competency, we do our best to make it fail safe. Why hasn’t it happened with computers? The best we can do is try to maintain old computer technology when the latest version seems to be worse (think Microsoft Vista).

We’ve come to accept critical vendors who require us to spend more on features we don’t need or want in order to remain in business. “Upgrades” come at the additional price of threatening the performance of the functions we need. The vast majority of office (or Office) users want word processing, spreadsheets and file organization. Yet we are required to buy software that can do so much more than we want or care about.

What were your favorite new features of the last 5 word processing upgrades you purchased? Other than having to learn where they moved the function menus, I can’t think of any. I still type on a QWERTY keyboard designed with no particular logic in mind during the 1800’s. I have a few more colors available for text, but most of them are unreadable, at least to the human eye. It’s the same if I highlight in anything but yellow.

I can still bold, underline or italicize fonts. That’s the exact same variety I was offered in Lotus Word Pro when I was starting out on my IBM 286. Most other programs then were 80%, 90% or even 97% IBM compatible, but only IBM could run 100% on IBM. Of course, that never really meant 100%. Nothing having to do with computer technology has ever been 100% compatible.

The software features that get piled on require faster computers, so we have to buy new desktops and laptops. The old ones worked fine, but they couldn’t keep up with the unnecessary and unrequested changes in their software. It’s like the local mob boss telling you that your restaurant has to carry his brother’s lousy brand of ice cream. It’s overpriced. It doesn’t sell. The company requires minimum sized orders, and you have to buy an extra freezer from the Don’s equipment company to store it. Of course, if you don’t do it you are out of business.

If you hire an IT expert for your business, he or she is paid a premium for understanding the latest computer technology. Unfortunately, that knowledge starts becoming obsolete on the day of hire. The IT person can either a) attend a lot of classes that cost you a fortune until he is recruited away from you, or b) hold back your technology development by stalling at the level of development that was already in place when he walked in the door.

We always say that IT conversions take twice as long and cost twice as much as you planned. Sometimes we hedge our bets by saying they take three times as long and three times as much. So we plan for triple the time and triple the cost, and they still take three times as long and cost three times as much.

We have been trained to believe that something costing thousands of dollars, and requiring thousands more to maintain, should fail regularly and be thrown out after a few years. This is during the same time that a 100,000 mile automobile went from being a rarity to the minimum life span acceptable. Except, of course, for the computer stuff it’s packed with.That will have to be fixed or replaced multiple times during those 100,000 miles. It can’t be upgraded, so I guess we will just start throwing away our cars because their IT no longer functions. That’s not outrageous, it’s a behavior we are trained for already.

Of course, computers do allow one person to broadcast his rant about computer technology to thousands of others. I guess there is some redeeming value.

Posted in Thoughts and Opinions | Tagged , , , , , , , , , , , | 3 Comments

3 Responses to Computer Technology: Curse You, Bill Gates!

  1. Chris White says:

    Your rant shows the importance of the move to “the cloud” which, if it delivers on its promises, will make the laptop or desktop about as important as a telephone…simply a means of establishing a link to your software programs, your files, etc.

    Once everyone is in “the cloud” all we have to worry about is just exactly who is this new “big brother” that we have invited into our businesses, our homes and our innermost thoughts?

  2. Computers, Internet & Technology = Enabling faster decision making and faster errors in today’s need it now marketplace.

  3. Zbig Skiba says:

    I took Fortran when I was in college. I would submit my card deck to the people who ran the mainframe computer, and if I was lucky would get the results in 4 hours. Generally, the results indicated that I had missed a period and I had to do it all over again. So I think that we’ve made some progress since those days in the ’70’s.

    That said, I agree that more effort should be spent on stability and ease of use and less on adding gee whiz features. I currently have a color printer that gives me an error message that is meaningless and refuses to be fixed. So it’s a piece of junk — it shouldn’t be that way.

    Cars have had 100 years to get better. My first car was a 1971 Toyota Corolla that had burned through its engine valves at 28,000 miles and had rusted through the fenders before it was 2 years old — when I disposed of it by totaling it and luckily not myself. So now we pay 5 times more for a superior product that lasts 5 times longer. Computer prices have actually gone down, and the product is far superior to what it used to be. That said, more work to be done.

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