Saturday, July 13, 2013

The 24/7 Manager

We touched on the topic of management losing touch with reality in our earlier blog post The 24/7 Worker. Now is a good time to expand on that theme. See the Leslie Scism article on the front page of the The Wall Street Journal, weekend July 6-7, 2013, about 88-year-old Hank Greenberg, the former CEO of AIG.

Decorated war veteran and successful businessman, Mr. Greenberg deserves a lot of praise. He is described this way: "... a commanding presence ... dominated the insurance industry ... one of the most powerful executives ... often-brusque, hard-charging boss known for boundless energy ... impatience with managers, analysts and others who didn't live up to his standards. ... tough boss ... 'I wouldn't ask anybody to do anything I wouldn't do.'"

Making that statement of course raises the question what Mr. Greenberg would and would not do.

The article later continues "At AIG, Mr. Greenberg was legendary for placing phone calls to his managers at odd hours ... He always has been in 'in the business 24/7,' said Howard Smith, a former AIG chief financial officer ..."

It seems clear that one of the things Mr. Greenberg will do is wake his subordinates up at night. Also, he is in the business 24/7 and that is what he demands of his employees. Except that he asks something of them that he does not ask of himself: work the hours of the CEO without the pay of the CEO.

Mr. Greenberg seems to be rich, certainly, but here we think of him as a manager. There are many who consider him the very model of a modern major manager. A lot of managers want to be like him and lead like him.

The trouble is that he is also a jerk. Still fearfully climbing the ladder of success at the age of 88, presumably still waking up his employees at all hours when he feels like it, and still punishing those who do not live up to his standards. It is worth wondering what future his kind of thinking will lead to.

To some extent, we already know. Mr. Greenberg and those like him have been running U.S. companies for decades. All those commanding, dominating, hard-charging managers led us straight into the Great Recession, with bailouts for their rich companies like AIG. The poor lost their jobs, their houses, and their retirement funds, but they will still be taxed to pay for the bailouts.

The following frankly is a somewhat extreme view of management based on our reading and on our personal experiences. Blogging sometimes forces us to simplify far too much in order to get a point across in the space available. Please keep in mind while reading this that we do not believe managers are evil. They are necessary and important, but right now they are agents of the rich and as such, they have too much control over the lives of the rest of us.

The trouble is that U.S. managers buy into the notion that extreme wealth is economic heaven and extreme poverty is economic hell. Between the two are ladders with managers in the higher places and workers in the lower places. Everyone is supposed to try to climb into economic heaven. The competition is to pull down the people above you and keep kicking those lower than you in the face so that they cannot pull you down. The ladders form a hierarchy of economic fear from top to bottom. Managers believe in the use of fear as a weapon against others and try to defend themselves from its use against them.

There is little that managers will not do to maintain their positions. They tend toward sociopathy; see for example Profile of the Sociopath. Glib, charming, manipulative, secretive, ambitious, willing to lie and mislead, willing to take control, willing to suppress their consciences, and unwilling to take blame. This describes a lot of managers we have known. Case in point: managers will frequently tell workers that they need them even if they know that layoffs are planned. That is, they have to lie for the benefit of the company, attempting to keep workers pinned in place until the company is ready to get rid of them.

If you cannot lie convincingly, you should not try to be a manager in the world today. Likewise if you are unwilling to conform your ethics to the company ethics. Likewise if it bothers you to kick people into economic hell. Ask yourself what kind of people are able to do these things. Friedrich Hayek has a chapter in his book Road to Serfdom titled "Why the Worst Get on Top." We were tempted to title this post "Why the Worst Get to be Managers."

If nothing else, lying in the service of your organization loosens your hold on reality.

Beyond that, keep in mind that getting rid of workers is what companies always want to do. They do not exist to employ people, after all. Their interest is in ever-increasing earnings and ever-decreasing costs, and that is what they ask their managers to achieve. Best for them is maximum earnings with zero costs, meaning zero workers. No wages at all, consigning ever-increasing numbers of former workers to economic hell. Increasing the population of hell is not their goal, we will give them that, but it is a consequence of their kind of "progress."

Suppose that we could take away basic economic fear. Suppose that no one could be consigned to economic hell any more. That is our vision at

We need competition, yes, but we do not need competition that breaks up families and puts people on the streets because of the mistakes of the rich and the pathological and antisocial behavior of the managers they hire.

We do need competition to keep people from becoming lazy. People need goals to accomplish. Therefore does not believe that we should try to make everyone equally wealthy. That is, we do not want to get rid of economic heaven. We want to get rid of economic hell.

People should be encouraged to climb the economic ladder, but they should not be whipped by fear to do so. The lowest level of economic life should be acceptable but not desirable. That way, the importance of staying on the ladder will not be so great. Managers would not be able to threaten workers with economic hell. We think that over time, manager behavior would start to change, with more leadership and fewer threats. That would be good for both managers and workers, with fewer traumatized workers and more humane managers. That is, we want to change the economic hierarchy from one of fear into one of hope.

Read our many other posts for more details how we would go about it. The basic change would be the creation of internal markets and currencies to protect the jobs and wealth of the poor from the economic shenanigans of the rich and their managers. The rich and their managers would be consigned to the external market. On the other hand, becoming extremely rich could only occur in the external markets, because the internal markets must be balanced by government regulations in order to protect them. Therefore the extremely ambitious could still attempt to satisfy their ambitions by going into the external market. The difference is that the internal markets would be the safety nets for the economic ladder. They would catch anyone who fell off. The consequences of failure would no longer include the risk falling into economic hell.

The way capitalism should be.

Socialism for the socialists and capitalism for the capitalists.

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