Since the contributions of business executives with great operations skills are too often underappreciated I decided to do a blog post on a notable example. I intend for this post to be a natural follow up to my recent blog post on sales, marketing and distribution. While there are a significant number of executives who excel at business operations, I decided to pick someone who is less boring than may typically be the case. To achieve this objective I decided to write about Jim Barksdale because his use of colorful southern sayings makes his personality not only more interesting than normal but also unforgettable. Operations may not be the most exciting topic in the world, but it sure as heck is important if you want to be successful. What you want to avoid in the end is being described at your funeral as being “all hat, no cattle.”
1. “You cannot manage that which you cannot measure.” People who are highly skilled at operating a business are a rare and highly valuable asset. Rather obviously perhaps, operating a business is a very different set of skills than founding a business. Some founders are great operators while others are not. When people describe a great operator they will sometimes say that she or he “makes the trains run on time” which is a very good thing since if they don’t run on time very bad things can happen to a business. Operating a business when a business gets to significant scale vastly increases the need for highly developed operational skills. As an example, Craig McCaw said once regarding Jim Barksdale’s skill as an operator: ”He took a great mergers-and-acquisitions company [McCaw Cellular] and made it into a great operating company.” Jim Barksdale is famous for doing many things as an operator, including putting in place the measurement systems which drove much of the success of Federal Express. Fred Smith said once that information about the packages can be more valuable than the package itself. Great operators also know how to set priorities and one way to do that is to determine what is measurable. Jim Barksdale believes: “If you can’t measure the objective then don’t put it on the list. We got too many things to fix that you can measure to waste time with things you can’t.” Jim Barksdale has also said: “The management of time is just as important as the management of money.” When you have great measurement tools you can react quicker and capitalize on that information faster and more effectively. Michael Cusumano writes that Jim Barksdale “manages by facts” and demands hard analysis- not just “touchy feely impressions.” It can be hard to weigh the facts if you got the scales weighed down with your own opinions, but great operators have a knack for doing that well. As a final point, great operators love what they do. I know one fantastically successful operator whose hands literally shake when he is not running a large organization. This leader lives to lead teams. Not everyone is like this – some people are far happier and better off as an individual contributor.
2. “Now I’m the President around here. So if I say a chicken can pull a tractor trailer, your job is to hitch ’em up.” “If we have data, let’s look at data. If all we have are opinions, let’s go with mine.” Great leaders are great listeners. What changes their mind on something is facts combined with logic. Opinions are not facts and someone like Jim Barksdale knows the difference.
3. “The main thing is to keep the main thing, the main thing.” Every business has a profit engine that lies at its core. And that engine is invariably simple if you strip away everything extraneous. Two former Barksdale colleagues write about this “main thing” principle:
“We loved that expression when we first heard it from Jim Barksdale, then the COO of FedEx. That single sentence captures the greatest challenge that executives and managers face today: keeping their people and their organizations centered on what matters most. Every organization needs a Main Thing—a single, powerful expression of what it hopes to accomplish. Without it, it’s not possible to align the four elements that produce organizational efficiency and effectiveness: strategy, people, customers, and processes.”
Relentless focus on “the main thing” is a universal attribute of great operators. As an example of implementing this idea in a nonprofit context, Jim Barksdale has said: “… whatever they say to us about what’s going on here or there, our question is always, ‘But are the children learning to read?’ And we want to just stay focused on that.”
4. “Three rules: if you see a snake, shoot it; don’t play with dead snakes; everything looks like a snake at first.” A Wharton MBA student who heard Jim Barksdale speak elaborates on what he heard Barksdale say: “The first rule: If you see a snake, don’t have conference calls about it, don’t leave voice mails about it, don’t have meetings about it, just kill the snake.” If you perceive a mortal threat to the firm, waste no time, and attack it before it destroys you. The second rule: Don’t play with a dead snake; keep going even if you’ve attacked the wrong threat or solved the wrong problem. The third rule: All opportunities start out looking like a snake. If a threatening snake turns out not to be a problem, turn from attacking it to using it.
During a speech at Harvard, Jim Barksdale explained it this way: “getting rid of a snake is sometimes a greater problem than the snake itself. People within a company…. write memos about the snake. And after the snake is officially dead, …sometimes people in an organization continue to insist that the snake is still around. They’re the people who ‘lost the argument’ and were overruled.”
5. “The infantry is always ahead of headquarters.” People in the field who are near the line of fire know things that people in headquarters don’t know. Great systems transport that data quickly from the edge to the center of the system that is a company. Great leaders spend lots of time in the field talking with people like call center operators and store managers who understand the customer pain points. When problems arise, great leaders leave their chair at HQ and get out with the infantry to find a solution. John Stanton is another former McCaw Cellular leader who was famous for getting out of his chair and into an airplane to get to the field when a problem came up.
5. “In a fight between a bear and an alligator, it is the terrain which determines who wins.” There are some domains in which any business is weaker and some in which they are stronger. Knowing the difference is critically important. As an example, Clayton Christiansen’s “disruptive innovation” thesis is all about finding favorable terrain in which to fight an incumbent. Strategists have written about this principle for centuries:
“Sun Tzu devotes a chapter to terrain and the appropriate, associated tactics and strategies. “We may distinguish six kinds of terrain: accessible ground, entangling ground, temporizing ground, narrow passes, precipitous heights, positions at a great distance from the enemy.” Von Clausewitz offers: “There are certain constant factors in any engagement that will affect it to some extent…[one of] these factors [is] the locality or terrain…which can be resolved into a combination of the geographical surroundings and nature of the ground.” Notice the use of the expression “constant factors.” That is the notion of those things that cannot be controlled in a competitive environment; hence, they must be taken as a given by all competitors. Von Clausewitz also devotes a chapter to terrain, which he argues “bears a close and ever-present relation to warfare.”
There are a few related sayings which Jim Barksdale may have used:
“Life is simpler when you plow around the stumps.”
“You will encounter horse droppings as you go through life. You can walk around them or jump in the middle of them. The choice is yours.”
“If someone tries to hand you fresh horse droppings, whether you grab them is a choice.”
6. “Nothing happens until somebody sells something.” “If a company doesn’t have profits over the long haul, then it’s gonna be a short haul.” & “Quit spitting on the handle and get to hoeing.” In the real world of business, hoeing in no small part means selling. I’m not going to repeat the points made in my very recent post on sales and distribution here, but make no mistake, selling successfully is not only important but hard.
7. “We’re going to jump with every chute we build.” Making sure you “eat your own dog food'” is important. Using your own products is essential because it is a source of feedback but also because it creates the right incentives. Charlie Munger on this:
“Munger cites former Columbia University philosophy professor Charles Frankel who believed that “truly responsible, reliable systems must be designed so that people who make the decisions bear the consequences.”…Frankel “said that systems are responsible in proportion to the degree in which the people making the decisions are living with the results of those decisions…So a system like the Romans had where, if you build a bridge, you stood under the arch when the scaffolding was removed—or if you’re in the parachute corps, you pack your own parachute—those systems tend to work very well.” Conversely, “a CEO who’s there for five years while the company looks good, after which he’s gone on a pension, is not operating in a responsibility system like that of the Roman engineers.”
“Standard economic theory makes an allowance for the agency problem, but not the compounding of moral hazard in the presence of informational opacity, particularly in what concerns high-impact events in fat tailed domains. But the ancients did; so did many aspects of moral philosophy. We propose a global and morally mandatory heuristic that anyone involved in an action which can possibly generate harm for others, even probabilistically, should be required to be exposed to some damage, regardless of context. While perhaps not sufficient, the heuristic is certainly necessary hence mandatory. It is supposed to counter risk hiding and transfer in the tails. We link the rule to various philosophical approaches to ethics and moral luck.”
9. “Great opportunities are the ones that solve great problems. And a great opportunity for wealth is solving the last link in the chain, that holds the whole system back from working.” If you can find a business that is the last link in the chain, sometimes you can unleash a huge torrent of value that is primed to benefit customers. Lost of the underlying work has been done – the last link solution just unleashes the gusher of value. “Your job is to run as fast as you can towards the cliff. My job is to move the cliff.” One of the jobs of a leader is to make sure that the team is always challenged and moving toward creating additional value. In other words, says Barksdale: “Management spends too much time fixing problems instead of pursuing opportunities.”
10. “They’ve got a bigger bulldog to feed.” If your competitors have a higher cost of doing business, that can be a huge advantage. Great operators invest only in what adds value. When some young company founder invests in an expensive chair, that money is dilutive of his equity. That may be the most expensive chair ever sold if the company gets a great exit. In the South, people say things about unnecessary spending like: “He squeezes a quarter so tight the eagle screams.” “He’s tighter than a bull’s ass at fly time.
11. “Never mistake a clear view for a short distance.” JimBarksdale has said that this quote is an old “cowboy saying.” The saying originally referred to the fact that a ride to somewhere on a clear day may be further than you think. Just because something seems obvious does not mean it will happen quickly. People tend to overestimate change in the short term and underestimate it in the long term.
12. “Nobody that I know can predict the next two pings of the pinball.” People who think they can predict the future are as common as ears of corn in a farmer’s field. Yes, they are right some times because: “Even a blind squirrel finds a nut once and a while.” and “Even a broken watch is right – twice a day.” But to focus on those inevitable forecasts driven by luck is a big mistake. It is best to remember that we have zero data about the future, but lots of data about the present. Great operators focus on the present and don’t fool themselves as often about their ability to fully forecast the future.