Saturday, June 5, 2010

Manage by Fact

Dennis Brown loved Indians for their spontaneous grasp of situations and ease of working with numbers. The decision to move their business involving business intelligence to India, in preference to Singapore or manila therefore required no debate. Given the generous advantage Indians had in communicating in English, managing a team of 200 odd researchers, he assumed, should be a piece of cake. In addition, the Tropical Sun, Golf at Deccan gymkhana and the salubrious weather in the evenings at Pune provided a refreshing departure from the headquarters at Boston, MA. Cheerfully, Dennis assumed charge as the Director for India Operations of their newly acquired establishment engaged in consumer research.

At the end of the first month of his stint in India, he invited the senior management team for a business review. The purpose of the review was twofold: to ‘take stock’ of how the month went and to arrive at a realistic projections about the business ahead.

Dennis was blissfully unaware of what he had let himself into. The Sales director presented his sales funnel making some projections about the order book that bore no resemblance to the estimates made in the three previous months. With revenue projections slipping inexplicably, confidence was not very high. On time delivery of research reports was yet another matter of deep concern; the research head was unable to make any firm commitments to Sales since he was unhappy with the quality of staff hired by the HR head. Quick to respond, the HR head bemoaned the fact that the Research team never used up even 60% of their workforce effectively; when employees were not fully engaged at work, they brought down the overall enthusiasm for work. Watching the proceedings in silence, the CFO felt it was his duty to inform the group that only 40% of the projected cash flow was realizable. He attributed the reasons to poor collections, free offers, undisclosed credit notes and undisclosed risk for which adequate risk cover had not been provided yet.

Dennis cleared his throat, a signal for everyone else to shut up and listen.

“For a company that provides high quality research to its clients, it is an irony that the quality of our own information on the state of business is fraught with so much speculation. We cannot have a business meeting if the credibility of the data presented is so low. This must stop. Here is what I propose.

    • In god we trust. Rest must have data.
    • Before anyone presents any data on the business relating to their performance, they should be doubly sure of the facts they present.
    • I have no time or patience for people using the meeting time to do reconciliation work because it shakes my confidence.
    • When I do not trust numbers, I lose my confidence in the people responsible for those numbers. Since I would like to have a team I can trust 100% I am instituting a discipline of ‘Manage By Fact’.
    • I want each one of you to present your performance trend in One page like I have shown across. I will work with each of you in developing this page.

We will meet again as a team next week to get familiar with the contents presented by the other. Thereafter, we will let the reports speak for themselves. It does not matter to me if you have not made your numbers; if we have to start fabricating numbers to look good in meetings, we won’t be in the business for very long anyway. I hope to see you next week”



  1. I liked this too, but how true. Lets face it, this is how it works even today, where the CEo is continously misled by the Functional heads and a certain weak CEO just to protect his position either keeps mum or worse inclines towards the so called loyal generals of the organisation leading to perhaps temporary relief but certainly heading towards a organisation disaster sooner then later..I have seen it and seeing it..!

  2. Sir ...what has been told in this article may be true.. but i have a point to ask...

    Does the boss wants to hear the TRUTH...or does he wants to hear WHAT HE/SHE WANTS TO HEAR ????

    Any way if a plan doesn't go as scheduled... we do have contingencies ...

    Isn't being optimistic good ?? !!!! ...

    I am sorry to say ..all i have attended are low level Sales meeting & BIG NUMBERS make all HAPPY .

  3. Nat & Krishnan,
    for Asian communities the worship the authority figures, telling the truth will be quite a challenge. I guess this is the challenge that the professionals of today will have to learn to deal with . cheers