First Person : Tales of Management Courage and Tenacity

Edited with an Introduction by Thomas Teal

Harvard Business Review Book Series

4 The Hard Work of Being a Soft Manager-William H. Peace

4 Nothing Prepared Me to Manage AIDS -Gary E. Banas
4 What Asbestos Taught Me about Managing Risk- Bill Sells
4 Empowerment or Else- Robert Frey
4 How I Learned to Let My Workers Lead - Ralph Stayer
4 The Center-Cut Solution-Timothy W. Firnstahl
4 Managing without Managers- Ricardo Semler
4 Why My Former Employees Still Work for Me-Ricardo Semler
4 Tales from a Nonconformist Company-Hal Rosenbluth
4 The Turnaround Value of Values-John Thorbeck
4 The Reluctant Entrepreneur-Ken Veit
4 Development, Democracy, and the Village Telephone-
Sam Pitroda
4 The Purpose at the Heart of Management-Kye Anderson
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4 First Person is a book of stories about what it takes to achieve the
exceptional A+ management performance that most of us are willing to
accept as a passing grade. These are stories about the hazards and
frustrations of management and about those occasional exhilarating
moments of breakthrough.

4 All of them deal with the routinely impossible problems that managers
confront every day in the ongoing effort to create better products,
happier customers, bigger profits, greater rewards, and a healthier,
more fulfilling work environment.

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4 But all of the stories deal as well deal primarily, in fact with the human
or superhuman dimensions of good management just mentioned. For
among the preposterous demands we make, we actually care more
about character than technical finesse. More than anything else,
management is a problem in human relations. As the list of
requirements in the previous paragraph glides upward from acquirable
skills to primal virtues, each item on the list grows less and less
dispensable.
4 So this is a book of stories about how difficult management really is. All
13 articles first appeared in the Harvard Business Review between
1989 and 1994most of them in a department called "First Person." I
had the good fortune to edit all of them and to get to know the 12
remarkable people and exceptionally thoughtful managers who wrote
them.

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Not all these stories are success stories in the usual sense. Not all of
them end happily. But they all include struggle and error leading to
insight, and all of them say something vital about the nature of good
management even when good management is not enough.

The articles are grouped into three sections dealing with three kinds of
management challenges. The first part, "The Hard Work of Being a Soft
Manager," is about the often unwelcome responsibilities that go along
with treating subordinates fairly and humanely. Doing the right thing
may seem like a straightforward matter of morality, conscience,
organizational policy, and the law. These three stories offer another
perspective. Doing the right thing can mean stifling the instinct for self-
preservation. It can mean engaging in a struggle that you know you
cannot win .

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4 It can mean confronting loss, pain, even death, armed only with the
cold comfort that you are doing, if not the best there is, at least the
best you can. These are sobering articles. Two of them lack the
upbeat, optimistic outcome we've come to expect in articles about the
human side of business. Their great virtue is only that they're true,
that they teach useful lessons, and that one of these lessons is that
managers who face impossible situations are not alone.
4 Gary Banās's article won an award the year it was published from the
New England Corporate Consortium for AIDS Education. After the
awards presentation a young woman came up and thanked us for
publishing it. ''I thought I was the only person who'd been through
this," she said. "I thought I had failed everyone, myself included. You
have no idea what it meant to me to have someone point out that
there never was any way to win."

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4 In the third article, Bill Sells tells a story of managing at Manville at a
time when the company was failing and many of its employees dying
from two deadly afflictions: asbestos-related disease and two or three
generations of managers who had neglected to grasp or at least to act
on the deeper meaning of responsibility.

4 To the extent that Sells' story is a human tragedy, it belongs with the
stories by William H. Peace and Banas. To the extent that it combines
its life-and-death drama with a struggle for organizational change, it
makes a good bridge to the second section, "Empowerment or Else,"
which deals with the arduous task of moving organizations in
unfamiliar directions, sometimes to places they don't want to go. The
section begins with Bob Frey's remarkably candid story reprinted in
the Washington Post and elsewhere of how he coaxed, cajoled, and
flatly coerced his labor force into sharing profits, decision making,
and responsibility. Two more studies in change management follow .

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4 Ralph Stayer used profit-sharing and smart psychology to make his
workers care enough and worry enough to seize the power that he
offered them and that he simultaneously withheld. His story is direct
but full of subtlety, a pragmatic look at how difficult it can be for a
manager to recognize and overcome his own ambivalence toward
change.

4 Tim Firnstahl, on the other hand, had empowered his employees

years before (and written about it in two Harvard Business Review
articles). In 1990, chased by an economic crisis that was killing
restaurants left and right (and inspired by the example of Mikhail
Gorbachev), he made an all-or-nothing bet that would either save his
business or do it in. He eliminated his entire corporate staff and
transferred virtually all management power to his local restaurant
operators.

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4 This middle section of the book ends with two articles by Ricardo
Semler, the Brazilian industrialist who practices common sense as if it
were one of the martial arts and pursues organizational logic with an
inventiveness that can leave the reader breathless.

4 "Managing without Managers" is a testament to sanity, self-discipline,

and the value of radical delegation (all of which Semler himself calls
treating adults like adults).

4 "Why My Former Employees Still Work for Me" is a study in chaos

management. Semler appears to have built a system so shapeless and
ad hoc that it would give an anarchist sleepless nights. What he's
actually done is to identify the areas in which management must
maintain control, then delegate or eliminate everything else. His
company doesn't even know how many employees it has, which
Semler regards as useless information, but the company has been
making money and maintaining performance during some of the
worst economic times in Brazilian history.
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4 Ricardo Semler's experiments in organizational structure amount
very nearly to a life's work, which is the focus of the book's third
section, "The Purpose at the Heart of Management." Four of these
five articles are brief autobiographies, focused on business but
including a good deal of personal history.
4 The one partial exception, Ken Veit's "Reluctant Entrepreneur," is an
autobiography in the making. We see only one part of an ongoing
career, but the part we see deserves a niche in business mythology.
Veit's story is a disaster epican entrepreneurial Andrea Doria
rammed not by one ship in the night but by half a dozen. It's also the
story of a business survivor, a man who spends a year in the small-
business version of an open boat in stormy seas but who never stops
calculating, planning, learning lessons, and actually finding hope and
opportunities.
4 Each of the articles in this section of the book tells a story about the
invention or the reinvention of an enterprise.
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4 Hal Rosenbluth took a family company that had been invented twice
already the first time by his great grandfather in the 1890s and by
seeing opportunity where others saw only a threat, revolutionized the
business once again.
4 John Thorbeck rebuilt several companies, in part by giving close
attention to their history and trying to recapture their former values
and competencies without turning back the clock. His particular
interests are the marriage of values and realities and the conflicts
among business constituencies that can rise up and tear companies
apart
4 . Sam Pitroda, who grew up poor in one of the poorest states of India,
conceived and set in motion the implementation of a massively
ambitious strategy for introducing telecommunications to India's
600,000 villages, using equipment ingeniously designed for Third
World use and manufactured in India itself. Finally, Kye Anderson
traces her business and the relentless passion behind it to the sudden
death of her father when she was 13.

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4 All the stories in this book shed light on the qualities of really first-
rate managers optimism, energy persistence, decency the inability to
accept defeat, the inability to stop trying.
4 Kye Anderson's story adds a new dimension (which Sam Pitroda also
hints at): the sense of purpose, almost a sense of destiny that drives
many managers especially entrepreneurial ones to innovate, build,
proselytize, and take all opposition by storm.
4 The modest suggestion is that the 12 people who wrote these articles
are outstanding examples of what managers should be, even though
they don't all enjoy unbridled success in the conventional meaning of
the word and even though they don't all possess every attribute of
managerial greatness. Clearly all have passed muster with their
subordinates, who are probably as zealous and over punctilious as
any, and that matters. Clearly all have learned valuable lessons about
managing and are able to pass those lessons on, which also matters.
Clearly too, they are people who understand the difficulty of
management and stand in constant critical judgment of themselves,
which may matter most of all.
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¾ Management is a process as much as an outcome. The measure of
business success is whether or not the company makes money and
survives its crises, but the success of individual managers is a question
of how they manage day by day. Doing that job well not only
contributes to success, it is a kind of success, whether or not the
company succeeds.
¾ All in all, stories like these are almost certainly a better guide to the
essence of what makes a good manager than any definition or list of
skills and traits that anyone is likely to come up with.
¾ The second suggestion is that what distinguishes a really great manager
is more than intelligence, intuition, leadership, luck, or a deep
understanding of human behavior. I mentioned earlier that most of us
demand something in a manager that is larger than life. In really great
managers, we get it. The words "courage" and "tenacity" in the subtitle
of this collection sum up a quality that separates the sheep from the
goats in a crisis; it is in many ways the quality of heroism.
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4 Heroism certainly isn't a word we're comfortable using in the same
breath with the word self-interest, and there's no escaping the fact
that managers do what they do at least partially to serve themselves,
even to make money, even to make a lot of money. Still and all,
creating value where none existed; saving and creating jobs; doing
what's right, productive, and beneficial; standing alone, often
without support, often against formidable opposition; doing the
hard intellectual work of conceiving a vision and the hard moral
work of staying true to it aren't these the kinds of acts we associate
with heroism? Even if there are rewards? Even if the eventual
rewards are great? For that matter, quite a few of our traditional
storybook heroes and our modern media heroes as well reap lavish
benefits.
4 Management can be as complex and selfish as any other human
activity, but it can also be as idealistic and as noble. Management at
its finest has a heroic dimension, because it deals with eternal
human challenges and offers no excuse for failure and no escape
from responsibility .

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4 All the managers in these stories are competent in the sense that they
are dauntless. They do what has to be done. Nothing stops them; not
much even slows them down. And in the course of doing what has to
be done, the managers in this book and thousands of others like them
put on displays of uncommon behavior determination, integrity,
daring, even gallantry.

4 I doubt anyone can read the first selection in this book, William
Peace's short story of managerial conscience, without a sense that
Peace's mentor, and Peace himself, graze the shell of something
authentically noble and courageous, however industrial and self-
interested, however quotidian the scale. All the stories that follow
underscore the message. Management is terrifically difficult. It takes
exceptional people to do it well. But even doing it well enough is a
much more arduous and honorable task than we ordinarily suppose.

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