Specialty Medical Chemical

The Harvard Business School’s case study of SMC brought to light some extremely common issues relative to business management.  While the management team appeared to have things under control from a high level view, there were many underlying problems that needed to be addressed. 

The first and perhaps most troubling management issue was the competition between department heads.  It appears that rather than working as a team, managers were territorial and competed to protect their territories rather than working as a team to build toward a common goal.  While there is no “I” in “team”, there are two in “idiot”.  Sorry bad joke.  It should go without saying that a team cannot survive internal competition.  Only by working together can a team win.

Another major problem was the lack of management talent present in the company.  There are two possible solutions to this dilemma.  If you believe that talent is malleable, then training becomes a very important tool.  If you believe that people either have it or they don’t, it’s time to start looking for new leaders.  I tend to subscribe to the idea that most things can be learned, and you need only find people with the right type of attitude.  This may still make it necessary to look for new leaders, as attitudes are tough to change.  A big problem with SMC in this study was that people were so entrenched into their jobs as they existed, and so bent on maintaining the status quo that the idea of change was very uncomfortable for them.  While last week’s blog pointed out that comfortable people provide better service, there is a point when people can become too comfortable.  At this point sometimes a shakeup is necessary to see who floats to the top, and who sinks.  As was pointed out in the study, some shake up was necessary to get things moving in the desired direction.  I’m not suggesting whole sale firings, but perhaps job changes, or cross training would have been helpful. 

The thing I found most amusing about SMC was the ineffectual evaluation system they were using.  Even though it was obvious to the new CEO several of the managers weren’t doing an excellent job, their evaluations portrayed them as excellent managers as did their salaries.  It just renews a frustration I’ve had for years.  Evaluations are a waste of time for everyone involved unless they are tied to something extremely specific.  No one likes doing them.  No one likes receiving them.  They accomplish little and waste ton of time.  Why do we do them?  Well that’s easy.  We do them because we’ve always done them.  How’s that for circular reasoning?  The SMC case study proves why a huge percentage of evaluation systems are a waste of effort.  Looking back at the evaluations was of little use to the new CEO in finding out what type of team he had.  Everyone was excellent and at the top of their pay scale, yet the company’s growth was declining.   How can that be?  I’ve not worked through the details yet, but I’ve been thinking that a consistent mentoring program would replace annual / semi-annual evaluation systems very well.  Rather than patting someone on the back or coaching them up once or twice a year, there would be a continual coaching mechanism where feedback was given consistently.  However, that is another topic for another day.  All in all, the CEO came into a company that needed a lot of adjustments.  But he was going about it the right way, and that’s what was important.

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