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YOU PAID ME A PITTANCE AND I STAYED YOU PAID ME A FORTUNE AND I LEFT WHY BECAUSE YOU GREW FROM A SMALL COMPANY INTO A BIG CORPORATION AND LOST YOUR WAY A real life account of the evolution of a 7 billion dollar company BY YIN DOLMAH

YIN DOLMAH Contents CHAPTER ONE THE EXIT INTERVIEW 2 CHAPTER TWO GROW SMALL 13 CHAPTER THREE ACCOUNTABILITY 17 CHAPTER FOUR CONSULTANTS 20 CHAPTER FIVE LISTEN 23 CHAPTER SIX METRICS 29 CHAPTER SEVEN CONTINUOUS IMPROVEMENT 33 CHAPTER SEVEN COMMUNICATION 36 CHAPTER SEVEN LESSON OF THE PHARAOHS 41 CHAPTER EIGHT WHY LARGE CORPORATIONS FAIL 46 CHAPTER NINE THE DEAD STAR 52 1

YIN DOLMAH CHAPTER ONE THE EXIT INTERVIEW It was a warm Thursday evening when my friend David called me as I was driving home from my usual twelve hour shift from work David was my colleague at CodWin We both started working for the secretive privately held and profitable company around the same time almost twenty years ago I joined the vastly expanding CodWin in Portland Oregon while David started in Seattle four months after I started The birth of CodWin was a hostile and hard fought battle CodWin was borne out of a revolution in 1985 A revolution of regular everyday people rising up to take their destiny into their own hands The inception of CodWin was very similar to that of the tea party revolution which gave birth to the United States of America There were several similarities to the tea party rebellion of 1773 which ultimately gave birth to a new nation The men and women who founded CodWin proved once again the heroism that abounds throughout the length and breadth of America These 20th century Tea Party men and women from Seattle comprised eight men and two women who shared a common ideal based on the belief that everyday people with little education skill or talent were capable of producing incredible value for the communities of which they were a part They held the conviction that by offering great retail service utilizing lowest prices in the market for the products they sell as the main business strategy they themselves would be rewarded through bulk and large purchases by the grateful members of their cities and towns wherever they found themselves 2

YIN DOLMAH The business strategy of CodWin which was based solely on selling large quantities of merchandise at very low prices and by natural extension very low margins was designed solely on a model which required its employees to operate at higher than normal levels of productivity in order to keep costs low and compensate for the lower than normal retail margins of its merchandise The group which engineered the revolution that gave birth to CodWin was led by a maverick A man nicknamed the commodore after Cornelius Vanderbilt How Billings Longsworth came by the nickname the commodore has become folklore within CodWin with little chance of the true facts coming out at this point This is especially so since the man himself refuses to discuss the true origins of the name Billings led the group of 10 through a daring takeover of an organization which had lost its way by many accounts The rebellion happened at a time when the organization was in dire straits with no clear sense of purpose It had become a rudderless ship drifting aimlessly at sea The controllers of CodWin were very powerful individuals A very rich family with limitless financial resources The family which owned CodWin prior to the revolution seemed to treat the organization as a disposable colony reminiscent of king George s approach to the thirteen colonies of the free world Afterall king George had many colonies and even though the American colony was the crown jewel it was not the end all be all for him He had a lot more pressing matters on his plate than worrying about a vassal state across the pond 3

YIN DOLMAH The situation at CodWin was the second coming or act II if you prefer to call it that way between king George and the tea party troublemakers Billings and his compatriots just like their forebearers centuries before them risked everything except the threat of physical violence in order to save the company from utter collapse They risked their careers and livelihoods If this bloodless coup d tat failed to succeed it would spell doom for all members of the junta How Billings and his team pulled it off and gained control of CodWin is one of the great American stories of the 20th century Billings was a man well loved by all who knew him The man who had just led an unlikely takeover of CodWin was as genuinely humble and approachable as the word genuine could ever portray Once the takeover of CodWin was complete Billings had to rebuild a broken organization from the ground up Tough decisions had to be made to give the organization a chance at life CodWin was in a state of coma The organization was in such dire straits the kind that called for martial law There was a lot of clean up required to get CodWin out of the mess There was a general expectation of a bloodbath as Billings cleaned house Expectation of bloodbath Yes Actual blood bath No On the contrary Billings did the unimaginable 4

YIN DOLMAH just as George Washington did 200 years prior with the young nation he had just liberated from the grips of colonial rule What could have become Billings personal property on so many levels was turned over to the people of CodWin The same question asked of Benjamin Franklin at the conclusion of the constitutional convention of 1787 was being asked at the corporate level 200 years later When asked Well Doctor what have we got a Republic or a Monarchy A republic if you can keep it was the reply from Benjamin Franklin A classic answer that will endure through the ages Good old Benjamin Franklin aptly added if you can keep it for he understood the allure of power The great Benjamin was discerning enough to understand how difficult a task it was to place power at the lowest levels of any organization a nation for that matter He knew it was the right thing to do if the new nation was going to endure and survive through the ages The right things are seldom easy no wonder the great empires of the past preferred to maintain the status quo of power consolidation at the very top Billings faced a similar question after the takeover of CodWin was complete What do we have here Billings A traditional corporate entity like everything else out there An organization where decisions are made at the C suites and trickle down to the commoners What do we have here Billings The members of CodWin enquired 5

YIN DOLMAH An EEO Empowered Employee Organization if you can keep it was the answer Billings gave to the teeming members of his organization And with that Billings went on to do something that had not been seen in the corporate halls of America up until this point Instead of amassing and consolidating power to himself he instead empowered the members of the organization by turning critical decision making over to the lowest levels CodWin prospered greatly as a result of the empowerment Billings pushed to the lowest levels Guess who got to enjoy the full rewards of the success of CodWin You guessed right Billings took the enormous wealth generated at CodWin and redistributed it to every member of the organization His approach ensured that any organization which tried to come up and compete against CodWin stood no chance The employees at CodWin naturally churned out much higher levels of productivity than any of the employees of its retail competitors Billings had created the greatest symphony in American corporate history He was the conductor of a corporate behemoth that operated like a symphony The coordination and beauty of operations Billings forged at CodWin were nothing short of legendary Billings built a symphony in which each player greatly enjoyed playing their individual instruments The synergy created as each player enthusiastically pumped out their own sound was incredible Lower level decision making empowerment together with the tangible creation of wealth for multitudes who otherwise stood no chance in corporate America and you wonder why he was beloved across the spectrum of CodWin 6

YIN DOLMAH The Symphony of CodWin continued as long as Billings ran affairs Many expected the great show of CodWin to continue perpetually Afterall Billings was youthful strong and full of energy However Billings had other ideas With absolutely no desire of becoming a demigod not wanting to turn himself into the be all and end all of CodWin Billings again in a fashion reminiscent of the Great first president of the land walked away from CodWin in 2005 while still in his prime He walked away in order to give others the opportunity to take their turn in continuing to build what he started He understood the importance of a succession plan and building others to take over while the architect was still around to help guide the organization into a successful future So Billings walked away at a time when all his people wanted him to stay He hang it up while fully availing himself as an elder statesman to guide the subsequent leaders of CodWin David and I began working for CodWin very shortly before Billings retired from the company After Billings left CodWin many things began to change The company evolved into a very different entity from what Billings built David and I at a point in our careers worked together in one of CodWin s stores in Sacramento in Northern California We became friends mainly due to our similar experience of relocating nearly a thousand miles from our original locations in search of future opportunities within the company as it continued to expand 7

YIN DOLMAH With time David and I continued to relocate as the company continued its growth I relocated a total of eight times while David relocated five times I ended up in Southern California in the city of Lancaster while David ended up in Mesa Arizona I managed CodWin s retail location in Lancaster California while David managed a similar operation in Mesa Arizona David and I had great mutual respect for each other We admired each other s zeal hard work and never give up attitude We continued to stay in touch even though we no longer worked in the same location We developed a routine of calling each other after 6 pm as both knew we most likely would be in our cars driving home from work That was our time to discuss our experiences and our thoughts regarding the direction of the company Billings left behind When David called me on this particular Thursday I erroneously thought we were going to have one of our usual conversations regarding the state of CodWin I was wrong David started our phone conversation with the words This is it I cannot do it anymore I am going to notify the District Manager I am handing over my keys in two weeks Are you really telling me you are quitting CodWin I asked David in disbelief My bewilderment stemmed from the seeming abruptness of his decision and not because I thought he was walking away from a good company Why so suddenly I asked David Do you already have another job lined up What are your plans I continued to probe my friend 8

YIN DOLMAH I have a few offers I am considering David replied He continued at this point it is less about the money than the principle Yin CodWin has sunk so low that I refuse to be part of it even if my salary was doubled The company has totally lost its way and everything it stood for under Billings to the extent that I cannot under any circumstances be part of what CodWin represents any longer So what do you plan on telling CodWin when you conduct your exit interview I asked David I asked David about the exit interview because CodWin recently instituted an exit interview for employees who decided to separate their employment from the company In the era when Billings ran the company attrition within its ranks was near zero and an exit interview was unheard of at CodWin CodWin prided itself then as a small company which took care of its employees and customers After the departure of Billings the subsequent leaders deemed the company as having grown so big to the point it was no longer considered a small company and with that new outlook attrition sky rocketed CodWin which was once a stable home for many employees suddenly began to see a mass exodus of talent like never before The company began to care less about its employees and instead focused its attention more on preventing and warding off legal troubles Deliberations at the highest levels of management were no longer centered on doing right by employees and by natural extension the customers those employees served Instead the leaders of CodWin only concerned themselves with how 9

YIN DOLMAH to be in compliance with the law to avoid lawsuits and legal wrangling Compliance with the letter of the law replaced all other matters of importance at CodWin That was not the way Billings did things when he built the company after the takeover Billings acted in the spirit of what was best for the people he led Compliance based on the letter of the law was always a secondary consideration when Billings made decisions regarding the company After David separated his employment with CodWin he called me to let me know how his exit interview unfolded I was all ears earnestly What did you tell them I asked him David replied you will not believe what I told them at the exit interview I find it hard to believe myself that I told them that I did not plan it It just flowed out of my heart and I told them what I truly believed David continued I looked everyone seated in the room straight in the eye and I told them this Are you really serious when you ask me for an exit interview Are you truly sincere within your hearts when you tell me you want to hear me out prior to my separation of employment from you For twenty years I worked and toiled for this company and most of those years I worked for nothing more than a pittance I stayed all those years you know why Because I believed in what this company stood for then What did CodWin stand for then It was a company which took care of its customers and listened to its employees All of a sudden you stopped listening to your employees because 10

YIN DOLMAH you deemed the company to have grown too big to be a listening company Then you started paying me a lot more money than most of my colleagues at the competition You thought by paying me more you no longer needed to maintain the values that brought the company this far I have a word for you You were wrong For a pittance I stayed For a fortune I am leaving I am leaving because you lost your way as you grew big If you truly want an exit interview I humbly suggest you start by listening to the employees who remain with you lest you lose all of them as well Good luck David concluded Good for you I exclaimed I was greatly impressed by David and what he told me regarding his exit interview After talking to David I started pondering CodWin s evolution as a company How did a company which started out so well with no blemish suddenly become such a bloated and confused entity Is that the price every company must pay in order to grow big and expand If that is so then it is a hefty price to pay A price that I could not get myself to accept was worth the benefit The desire of every company is to grow It is inevitable that a company grows in size if it desires to take advantage of economies of scale as well as leverage the many advantages that come with growth 11

YIN DOLMAH However if the price to pay in order to grow big is to become a fear based entity which jettisons its core identity and no longer listens to its employees or make common sense decisions then is the price for growing and expanding worth it Is there a way for a company to grow and expand without losing its identity and core values Can a company operate on a global scale and yet maintain its soul as a true small business entity What does it take to achieve that if it is possible I could not get these thoughts out of my mind throughout the day I kept pondering this perplexing matter 12

YIN DOLMAH CHAPTER TWO GROW SMALL Later in the week as I was flipping through channels on TV looking for something worthwhile to watch I came across a documentary on John Rockefeller The documentary highlighted John D s struggles with the legal system of America due to the monopoly his company Standard Oil held on the oil business Rockefeller s company had an absolute stranglehold on the oil business Standard Oil maintained pure dominance making sure any company which attempted to compete with it was utterly crushed and destroyed without mercy As I watched the documentary I noticed one thing Pure dominance did not bring Rockefeller the peace of mind I would have expected to see when a company has attained such success By taking out the competition Rockefeller s company simply replaced his competition with a more powerful and potent competition which was the government of the United States of America and its regulatory agencies On May 15 1911 the supreme court of the United States of America caused Rockefeller to split his company into thirty four independent entities The split of Standard Oil into smaller units created more value for Rockefeller and made him richer than prior to the split How come How is it that the elimination of pure dominance caused more value and wealth for Rockefeller than he ever attained when his organization ran as a single unit with no real competition Simple Standard oil was no longer under the microscope with the emergence of the thirty four independent companies 13

YIN DOLMAH The government and its agencies had to keep an eye on all the companies which were now at play in the oil business instead of investing all resources available to keeping only one company in check What Rockefeller did with Standard Oil is a perfect blue print that needs to be emulated by any company which desires to grow without exposing itself to the full force of governmental agencies unwarranted lawsuits from unscrupulous attorneys and the general harassment which comes with being the dominant company in the market Rockefeller grew small through the splitting up of Standard Oil Growing small enables a company to expand without sticking its neck out to those who might seek to cause it harm The principles of growing small are 1 Expand under different independent names 2 Promote the concept of local ownership 3 Utilize word of mouth and social media advertising We live in an era now where customers tend to gravitate towards small and locally owned businesses Long gone are the days when brand names meant everything In times past businesses depended on carefully crafted and nurtured brand names to help them expand into new markets By developing the brand into a household name companies relied on name recognition of the brand as the biggest source of advertising to draw customers in new locations Customers are a lot more informed and discerning in today s business environment and are most likely to form an opinion regarding a company based on the perception and views of close friends family and network instead of the inorganic and shallow advertising shown on television or billboards Access to information by the customers of today s businesses is no longer encumbered by proximity to a television set or newspaper We live in the age where information is as accessible as the air we breathe This makes 14

YIN DOLMAH today s customer extremely sophisticated and presents them with a vast array of tools to ensure they get the best possible value out of every purchase they make Value in this case is not merely a function of price Lowest cost will always factor very strongly in the perception of value in the mind of the customer however more and more customers are increasingly factoring their personal values when considering businesses where they will spend their money Many customers in today s business environment are looking to spend their money with businesses which project the image of local ownership instead of those that exist as just another branch of a huge conglomerate One way for a company to easily project the image of local ownership is to take on a unique name that is local to the community in which the business is located Instead of using the same name in New York as it uses in Seattle adopt unique names for every location Names that do not point back to the parent company but instead celebrate the towns and cities where the business is located Same great service delivery and standards but using names that do not create the appearance of a behemoth of a business operation Doing so will keep the business off the radar of agencies organizations and individuals who make a living out of going after the big guys while at the same time greatly promoting the concept of local ownership Once the outlook of local ownership is established the business will do well to promote itself through word of mouth and social media channels These two mediums are the preferred channels of locally owned small businesses because they provide the best return on advertising investment as well as promote the image of a true small business Getting a local influencer to promote the business on social media pays a lot more dividends than 15

YIN DOLMAH resorting to the ineffective and very expensive television advertising Gigantic billboards and television advertising do not create the image of a locally owned small business 16

YIN DOLMAH CHAPTER THREE ACCOUNTABILITY Accountability is not just a word but a tangible trait observed in leadership when a company runs as a small business The word Accountability is rarely used in everyday operations and yet it naturally permeates every facet of the company s way of doing business As a company grows big the word Accountability begins to take prominence in everyday communication while the actions which promote Accountability are thrown out the window by the very leaders who tout the word on a daily basis I saw this happen six months ago at CodWin when the newly appointed district manager of southern California Joel visited my location He approached a display of batteries and got upset because the display was too full According to Joel the order writer in charge of maintaining the battery display was over ordering on batteries Batteries were considered a high theft item and so the battery display was supposed to be maintained with little inventory in order to mitigate the potential losses due to theft The district manager wanted me to hold the order writer accountable for over ordering on batteries for the display I told the district manager I was happy to follow his directive and hold the order writer accountable but I needed him to help me answer two questions I know for sure my order writer was going to ask me when I sat down to hold her accountable Question number one was what is the minimum order quantity for the batteries You ask that the battery display 17

YIN DOLMAH have no more than three batteries per type and yet when the order writer places an order for one unit the warehouse ships her eighteen batteries because that is the minimum order quantity set for ordering A minimum order quantity which is unchangeable at store level Who has addressed that issue with the warehouse to ensure over ordering does not take place Do you expect me to hold my order writer accountable for having ten batteries on the display when the warehouse ships her eighteen for every one she orders Or do you expect the battery display to be left empty Question number two is backstock You sent an email last week asking that every item ordered from the warehouse needs to go straight to the display with no backstock If the order writer receives eighteen batteries for every one that is ordered and the shelf stocker is expected to place all items on the shelf with no backstock can you explain to me how the battery display is expected to stay within the guidelines you are stipulating Please help me answer these questions so that I can confidently hold my battery order writer accountable for over ordering on batteries When I concluded the district manager looked at me in a confused state and said oh I did not know the warehouse did that I will check with the warehouse to see what can be done but in the interim still hold your order writer accountable because we are now in the era of accountability What a joke I thought to myself after the district manager walked out of the building How about holding you accountable for not knowing something as basic as the minimum order quantity shipped from the warehouse 18

YIN DOLMAH How do you expect me to discipline my employee for not meeting expectations when you yourself have no clue what the operation entails This clearly does not happen in small business operations I did not see such travesty occur within CodWin when the company was deemed small This nonsense began when the new leaders transformed the company into a big corporation When a company runs as a small business competent individuals with true understanding of operations are placed in operational roles to ensure smooth execution When the same company is transformed into a big corporation individuals with no iota of operational knowledge are thrust into operational roles causing them to err greatly in decision making and yet these individuals are expected to be obeyed with great submission as if they were deities from the celestial realms Why is it so Why do big corporations suddenly develop the appetite to bring in clueless folks to run its operations and in the process ruin everything good the company had when it operated as a small business The answer can CONSULTANTS be summed 19 up in one word

YIN DOLMAH CHAPTER FOUR CONSULTANTS When a small business begins to enjoy great success and in the process decides to expand and transform itself into a big corporation a three headed beast arises whose sole purpose is to ensure the demise of the company The three heads of the beast are 1 Governmental and regulatory agencies 2 Fierce Competition 3 Legal troubles from within and without The three headed beast which lay dormant and asleep when the company operated as a small business is suddenly aroused from deep sleep and comes full force at the business to ensure its demise New scrutiny from governmental agencies and regulatory bodies together with the associated fines and penalties for the same practices which the company followed for many years without prior trouble suddenly send shockwaves and great fear down the spine of the leadership of the now large corporation Heightened competitive pressures from the competition that was hitherto non existent create a new reality for the newly minted large corporation Lawsuits merited or unmerited from employees customers competition and government suddenly engulf and ambush the company in a manner never before seen in its history The new reality leads many companies to make the single decision which inevitably leads to irreparable damage and destruction to the company s well being and existence 20

YIN DOLMAH That decision is to invite consultants to guide the company s leadership away from the myriad problems the company finds itself after growing big What the company leadership does not understand is that the consultants belong in the same family as the three headed beast They are two sides of the same coin What the threeheaded monster does from the outside the consultants complete on the inside They present the same value which is to bring destruction to its bearer from within and without These consultants come into the company having no understanding of the intangibles which make the company function properly The consultants bring nothing more than theories and assumptions while utilizing conversations with a few company representatives over wine and great food as the sole source of what they term deep and insightful knowledge of the company These consultants then proceed to make recommendations ranging from personnel choices to operational and human resource decisions Recommendations which company leadership swallows hook line and sinker believing it will solve the problems of the three headed monster By implementing the recommendations of the consultants the company leadership ends up destroying the very fiber which holds the company together The company crumbles from within due to confusion created by the lack of congruence presented by the new direction of the company through the implementation of recommendations by the consultants and what the company is supposed to represent The consultants make recommendations on the best fit for various roles within the organization without truly knowing the individuals they are recommending for those roles Those individuals then go on to exacerbate the 21

YIN DOLMAH company s problems by making the most basic operational errors which eventually bring the company down to its knees CodWin experienced such a situation when a senior executive appointed to his role based on recommendations of consultants committed the fundamental blunder of raising the prices of turkeys during Thanksgiving CodWin the company which was built on the business model of lowest price suddenly found itself the highest priced in the market of the most essential holiday item right before the holiday Needless to say the holiday was a disaster for the company as most customers turned CodWin into the turkey and looked elsewhere for their holiday shopping 22

YIN DOLMAH CHAPTER FIVE LISTEN Small businesses are naturally built to function as listening organizations They understand there is not a lot of room for error if the business wants to survive Hence they are set up in a manner that aids the flow of information between customers employees and management ownership To the small business listening is not a luxury provided to employees and customers It is an integral part of business strategy As small businesses begin to grow and evolve into large corporations listening becomes a luxury many cannot simply afford What was once a seamless part of the business suddenly becomes another jargon and clich used at the corporate office with no tangible manifestation at the lowest levels of the organization I witnessed this at CodWin when Marcie a senior vice president of the company an individual who was being groomed as one of three potential successors of the CEO of CodWin paid a visit to my location The store I managed was notorious for high shrink due to pilferage long before I took over as manager I was determined to reduce the shrink in that location since I had prior experience working in locations with similar problems as existed in the Lancaster location I studied the Lancaster situation for two years and then came up with a proposal which based on my analysis was cost effective and in alignment with company protocol I could not unilaterally implement the proposed solution I developed because a few aspects of the solution required approval from senior leadership 23

YIN DOLMAH I saw the visit of senior vice president Marcie as an excellent opportunity to share with an individual with the authority to give approval to my proposal I was excited to share what I had with Marcie When Marcie came to visit she shared her wonderful knowledge on everything that pertained to my location even though she had only stepped foot there twice in sixteen years After listening to Marcie tell me everything about my location I asked her before she left if she could spare five minutes so could share with her some findings I gathered regarding the historically high shrink in Lancaster and what I thought would be a cost effective way to greatly reduce the shrink problem Marcie flatly refused to grant me five minutes Not because she did not have five minutes to spare but because she was not interested in hearing what I had to say The same Marcie after flying back to the corporate office in Boise Idaho had the nerves to send a beautifully crafted email not only to me but the rest of the managers she visited in southern California in which she asked for feedback from us The same Marcie who refused to grant five minutes to a manager to articulate problems on the ground in his location was now asking for feedback and views from the same managers via email from the comfort of her cozy office one thousand miles away In Marcie s mind she was a great and excellent listening executive Marcie s case was representative of how CodWin was beginning to listen to its employees as it evolved from a small company into a large corporation 24

YIN DOLMAH An inevitable chasm began to form between the senior leadership of CodWin at the top and the employees toiling in the trenches daily to make magic happen for the company As the chasm between the leadership of the company and the rank and file continued to widen the leadership decided to implement a listening program to accurately understand the sentiments of its teeming members What happened to personally and physically talking man to man man to woman woman to man woman to woman Obviously in the minds of company leadership the organization was too big of a corporation to realistically expect the busy elites to find time to personally talk to those in the trenches So a third party organization was contracted by the busy elites to hear out the employees and then relay the sentiments of the employees back to those who wanted to hear them The elite had come to understand the seriousness of the dwindling trust between the rank and file and those spewing daily directives from the corporate halls and that was one of the reasons the third party organization was contracted to hear out the employees The goal was to use the information provided by the employees to make improvements and begin to rebuild the lost trust Company leadership argued anonymity was an important element of the process Anonymity would allow the employees the freedom and safety to accurately express to the third party organization their true sentiments Good thinking Leadership reached out to the employees with a beautifully crafted email and explained what they had in mind The 25

YIN DOLMAH employees were happy to hear their leaders were putting in place measures to improve listening within the organization Numbers mattered in this exercise In order to get an accurate reflection of employee sentiments a threshold number of employees had to participate in expressing their views to the third party organization Every member of CodWin was encouraged to participate in providing the information needed The information sought was the unadulterated views of the employees regarding the CodWin and its leadership When the day came for employees to anonymously express their sentiments they found out to their dismay the very first question required of them was self identification You could not anonymously express your true sentiments without first self identifying What is this Many of the employees asked themselves We thought this was supposed to be anonymous We were supposed to feel safe and free expressing our unmitigated views Now this Question number 1 please identify yourself You may not proceed anonymously unless you first let us know who you are Many employees declined to participate in the process They did not feel safe I do not blame them If you truly want to build trust start by showing good faith Instead of owning up to the gross error of judgment in the implementation of the listening exercise senior management tried to argue the employees were overreacting and irrational Company leadership argued the self identification information which was a mandatory requirement before the employees could participate in the listening exercise was not going to be used in tracing the respondents 26

YIN DOLMAH The employees did not believe the garbage Many employees refused to participate Once senior management noticed a very low response rate from the employees they turned their darts at the middle managers and accused them of not doing a good enough job of explaining to their employees that their fears were unfounded and without basis Senior management in their own eyes did nothing wrong in the way the entire listening exercise was organized It was someone else s fault the exercise was a failure The middle managers needed more training on how to better whip their employees in line the senior managers of CodWin continued to believe from the comfort of their offices in Boise The more I thought about CodWin and how low the company had descended over the years I could not help but think of The Titanic and the lessons which can be gleaned from it The lesson regarding the tragedy of The Titanic is not that it sunk into the ocean The real tragedy of the ship called unsinkable was that good counsel kept getting ignored by its handlers The failure to listen and heed simple but wise advice from those who meant well is the reason why today if you want to see The Titanic you will have to deep sea dive to the bottom of the ocean instead of seeing its majesty in a meticulously designed museum 27

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YIN DOLMAH CHAPTER SIX METRICS What gets measured gets improved This quote is attributed to Peter Drucker the great management consultant Metrics provide the means to measure objectives and make necessary adjustments to ensure the objectives are heading in the right direction Small businesses start out with the most basic and yet important objectives Take care of employees Take care of customers Provide the best service and products Small businesses do not measure these three objectives by relying on an algorithm or some software designed by a computer programmer sitting somewhere in Silicon Valley Instead measurement of these objectives is done in real time on a daily basis through interactions between management and employees employees and customers and feedback from customers regarding the services and products of the business The business makes adjustments based on the real time interactions to ensure employees are happy customers are satisfied and the product or service offered by the business is the best As a small business evolves into a large corporation these tangible interactions get thrown out the window in favor of algorithms computer software numbers and useless layers of metrics which have no meaning to the real people who do the work of the business Decision making regarding the most basic functions of the business is taken out of the control of employees and placed in the hands of a computer program which runs the metrics and makes decisions for employees to follow religiously Decisions as mundane as the placement of ketchup and 29

YIN DOLMAH mayonnaise can no longer be made by employees The computer program makes that decision and then the executive at the corporate office rams that computergenerated decision down the throats of the employees to implement without fail Small businesses understand that numbers are not always congruent with reality Numbers do not lie but they are excellent at equivocating Over reliance on the equivocation of numbers will bring any company down to its knees no matter how formidable that business is Small businesses concentrate their efforts on doing the right thing They know that by doing the right thing the numbers will always work out in the end even if not at the present moment Small businesses do not let the numbers dictate to the business The people customers and employees dictate to the business The numbers are just a small aspect of the overall picture They should never become the end all be all of the business based on which every decision is made Small businesses understand this Large corporations do not As small businesses evolve into large corporations numbers take over as the basis of every decision making Confused executives rush into error by making brash decisions to fix the numbers and end up causing irreparable damage to the very fabric which holds the company together They sacrifice the long term well being of the company on the altar of short term well being of the numbers The metrics tend to be so worthless they do not have the simple ability of measuring the depths from which a person is able to pull a potentially disastrous situation instead they are solely focused on measures of heights attained as the basis of determining success These flawed metrics are the reason one person who has done everything right under the sun to avert a complete 30

YIN DOLMAH collapse of her area of responsibility and in the process produces 2 increase is overlooked in favor of someone who did a lot of things wrong under his jurisdiction but yet due to favorable external factors experienced a 5 increase The woman with a 2 increase in reality turned what would have been a 10 decline into an increase thereby producing a 12 positive swing whereas the man with a 5 increase should have in reality experienced a 10 increase if he had done things right which means he produced 5 of what he should have brought to the table yet he gets rewarded due to a measurement system that should have waved the earth good bye the same time the dinosaurs made their exit The more I thought about metrics the more I saw CodWin falling into its entanglement as the company evolved and became a large corporation Product placement was taken away from local management and placed in the hands of a computer program called MicroStrategy while productivity was determined solely by a computer system known as operating ratio As the fixation on numbers reached maddening levels within the company I began to witness many employees cut corners in order to deliver the numbers expected at the corporate office Happy executives smiled at the sight of the numbers while the company continued to crumble from beneath due to the wrong approach business employees were embarking on in order to deliver the numbers Every organization like the earth itself will go through cycles of abundance and scarcity Do the right thing and the period of scarcity will not scar you Do the right thing and the period of abundance will not overwhelm you 31

YIN DOLMAH Metrics that make no sense in a lean season are artificial Anything artificial will not endure 32

YIN DOLMAH CHAPTER SEVEN CONTINUOUS IMPROVEMENT Consider a farmer who utilizes the best breed of cattle to plough his farm every season This farmer is extremely meticulous in feeding his cattle and providing them the best care to ensure they are the best conditioned cattle in town Every season this farmer is first to finish ploughing his farms due to the topnotch condition of his cattle None of the farmers in town can compete with this farmer The farmer not only provides his cattle the best possible care and conditioning he also experiments with different breeds of cattle His experiments yield cattle with super abilities Abilities which make them able to plough even faster than the cattle he possessed five years ago This farmer is untouchable because he continues to find ways to improve the performance of his cattle This dominance continues for twenty years Then one fine day while ploughing his fields with his super cattle the farmer looks over his shoulders and sees his neighbor ploughing with a mechanized tractor What is that the farmer wonders That is not how you till the soil he mutters to himself This gimmick whatever it is will not last I will continue to concentrate on improving my cattle I will stay ahead of my competitors as long as I concentrate on keeping my cattle in great shape Let my competitors engage in gimmicks and facades These things do not last As long as I concentrate on doing things the right way I will be fine 33

YIN DOLMAH Forget these crazy people who fall for everything new The farmer continues to believe the mechanized equipment have no place until one day he looks around and finds out he has been left behind and overtaken by all his competitors because they adopted the new technology and moved away completely from cattle The cattle he spent enormous amount of energy and resources trying to improve could not keep up and help him win in the end His desire for continuous improvement of cattle ultimately became his undoing because he lost sight of the fact that no matter how much he improved his cattle they were never going to be able to compete with the new reality which was the advent of mechanized equipment Henry Ford provides us a great example with his work on the automobile Henry Ford did not look into improving horses and carts which was prevalent in his day Instead he had the fortitude to move in a totally different direction while trying to improve the very service the horse and cart provided By staying the course and putting together what he believed would stand the test of time in the evolving transportation industry Ford was able to achieve a feat that transformed the world and changed the way people travel Not all industries lend themselves very well for quantum shifts in the way business is conducted Unfortunately too many businesses miss the boat by overly concentrating on continuous improvement of processes which no longer serve the interest of the business Such businesses do everything right according to their business model and yet in the end fail miserably 34

YIN DOLMAH Lack of good vision on the part of a company s leadership creates the over fixation on continuous improvement which ultimately destroys a good thing Lack of vision blinds company leadership from knowing when continuous improvement is no longer beneficial but rather counterproductive to the organization s long term success Instead of continuing to look for a way to improve the breed of horse retire the horse and get an automobile Realize you are not winning the automobile race with your horse no matter how you improve the horse As I looked at CodWin s woes as a company I saw the parallels with the farmer s story CodWin believed its future lay solely on continuous improvement with no consideration to new methods of delivering value to its customers The leadership of the company hang their hopes on the notion that if they could improve productivity by getting salaried employees to work longer hours and more days of the week instead of working smarter the company will stay ahead of its competitors 35

YIN DOLMAH CHAPTER SEVEN COMMUNICATION The purpose of communication is to transfer as accurately as possible intent of the one transmitting the communication to the receiver of the intent in a way which is as lucid as possible with little room for ambiguity Small businesses master the art of communication through face to face interactions between managers employees and customers Every communication tends to bundle up two things in transmitting the intent of the sender 1 The letter of the communication and 2 The spirit of the communication Just as water is intrinsically made up of Hydrogen and Oxygen and it is unthinkable to have water without the presence of one of the two elements so will it be near impossible to achieve alignment between communication and the actions taken by those to whom the communication is directed if there is no congruence between the letter and spirit of that communication The sole purpose of communication is to transmit the spirit of intent to those to whom the communication is directed There is yet to be discovered a flawless tool to perfectly transmit the spirit of intent when communicating and so we rely on a highly flawed instrument called language which is made up of the letter to transmit the spirit of our intent In other words the sole purpose of the letter is to transmit and help illuminate the intent which is the spirit 36

YIN DOLMAH The letter should never ever take precedence over the spirit Where there seems to be conflict between the letter and the spirit the spirit should always win Failure to give precedence to the spirit will breed inevitable chaos in a business When a company starts out as a small business there is hardly any reference to the letter when corrective action is required Emphasis lays only in the spirit And rightly so Small business leaders operate like the force of gravity They control every facet of the business and yet their presence are hardly felt Just like the force of gravity they are ever present yet seem to hide in plain sight Employees get to go about their business in peace without looking over their shoulders for when someone might show up with a list of wrongs List of wrongs I prefer to call the list of thou shall not As the company evolves from a small company into a large corporation something happens An awful terrible tragedy occurs The spirit of communication which is the intent gets thrown over the balcony and the letter which is supposed to serve the intent instead becomes the reigning champion of communication That which was meant to serve the spirit somehow usurps power from the spirit and becomes the supreme end all and be all controller of affairs 37

YIN DOLMAH The letter is turned into a golden idol a deity that is worshipped with great reverence Everyone in the company answers to nothing but the letter The letter is used to force compliance of the company s mission Fear replaces freedom the day the small business becomes a large corporation Fear of litigation fear of fines from regulatory bodies fear of bad publicity and the list goes on Common sense decisions are thrown out in favor of senseless practices as long as those practices are effective in assuaging fear Fear begets fear As the company operates more and more based on fear so does its employees Employees become fixated with compliance based on the letter of any official communication which comes their way The employees are fully aware that by being compliant based on the letter alone they are safe from being held accountable or whatever the term is the managers love to use or suffering any potential adverse actions Why go the extra mile to serve the spirit You asked for a pound of flesh I gave you your pound of flesh You made no mention of anything else other than a pound of flesh The letter of your communication did not stipulate that blood be contained in the pound of flesh The employees are right 38

YIN DOLMAH They cannot be held accountable under those circumstances The fear of losing their employment makes these employees unwilling to even attempt to interpret any communication based on what they understand the spirit of that communication to be Instead they jettison the freedom of interpretation based on the spirit and instead embrace the fear of being held accountable if they fail to get it right and so these employees act solely based on what the letter of the communication stipulates The company stands no chance when employees begin to act solely based on the letter with little or no regard for the spirit The employees learn very quickly This was the case with Codwin The leadership at the corporate office began to spend more time crafting long directives in the attempt to ensure they do not miss out on the precision of the letter for the employees of CodWin were beginning to worship the one and only deity known as the letter and not the spirit A cat and mouse game had evolved between compliance based on the letter and the spirit So the letter from leadership had to be flawless in transmitting intent with no room for loopholes Good luck Valuable time which could and should be employed towards improving the dwindling fortunes of CodWin was instead invested in crafting bedtime stories by the managers 39

YIN DOLMAH 40

YIN DOLMAH CHAPTER SEVEN LESSON OF THE PHARAOHS Many thousands of years ago the pharaohs of Egypt wore head gears which symbolized the authority of a crown worn by kings At the height of their civilization there was no ruler on earth more powerful than the pharaohs of Egypt The pharaohs used symbolism in all facets of their lives and this included the royal regalia with which they adorned themselves on a daily basis When you look closely at the head gear the pharaohs wore you will notice a cobra was at the center Why would the most powerful ruler on earth at the time choose a cobra instead of any other animal as the central piece of his crown We all know the lion is universally recognized as the king of the jungle in cultures the world over Why then would the 41

YIN DOLMAH pharaoh adorned in his royal regalia choose not to put a lion as the centerpiece but rather a cobra Why the prominent use of an animal that is vilified just as universally as the lion is glorified What was the message if any the pharaohs were trying to communicate to the rest of us that we have so miserably failed to comprehend for thousands of years Most kings wear a crown as the symbol of their power and authority Every crown has a crown jewel in it The crown jewel is that rare gem that crowns a crown In other words a crown is worthless without the crown jewel which is usually placed at the center of the crown and gives the crown its value and worth The pharaoh covers his head with the scarf to mimic the lion s mane The mane represents the crown of kingship The pharaoh communicated his kingship utilizing the visualization of the lion s mane for the lion is king of the jungle The pharaoh then goes on to tell us that if the lion which is represented by the mane looking scarf is the crown the crown jewel which gives the crown its worth is the cobra Why would the pharaoh of Egypt accord that level of prominence to the cobra Why would the grand pharaoh of Egypt the architect of one of the seven wonders of the world elevate a cobra above the great king of the jungle which we all know to be the lion People in authority such as kings have one thing which differentiates them from all other people That thing is called Control Control is usually referred to as Power even though the two words are totally different and do not mean the same thing 42

YIN DOLMAH In order to stay consistent with the generally accepted meaning of the word Power we will use Power instead of Control to explain the lesson of the pharaohs Power gives you influence Influence is the ability to get what you want a lot easier and with much less friction than anyone else That being said if power is influence and influence is the ability to get what you want with the least friction why would the pharaoh elevate the cobra over the lion Let us start with the lion king of the jungle When the lion is hungry and wants to eat lunch what happens The lion chases the deer throughout the jungle The lion makes a public spectacle of the hunt As the lion chases the deer every animal in the jungle gets to see the majesty and strength of the lion The hunt is a great opportunity for the lion to show everyone who the true king of the jungle is The scavengers the hyenas and vultures also get to watch the public display of the lion s power and majesty When the hunt is over and the lion settles down to eat its prey the scavengers show up for lunch as well for they were privy to the hunt which just took place The vultures swirl about in the air while the hyenas let out their dreadful loud and high pitched hee hee hee sounds that are so distasteful to the lion but ever present at the lion s party distracting the lion from eating in peace How come these uninvited scavenger guests always show up to the lion s party Before you assign blame to the scavengers for their disgusting and inconsiderate behavior towards their king you may want to start by blaming the king for being messy Blame the lion for lacking the ability to handle important matters in private thereby inviting the wrong crowd to his feast 43

YIN DOLMAH Now back to the cobra The cobra also lives in the same jungle with the king known as the lion The cobra gets to eat the same lunch the lion was unable to enjoy in peace There is no food in the jungle the lion eats that is not available to the cobra The cobra has access to all things in the jungle just as the socalled king The difference is the cobra eats in peace outside the watchful eyes of the scavengers Something the king of the jungle never gets to do Why is that How come the scavengers vultures and hyenas leave the cobra alone and yet disrespect their king so much as to perpetually give his royal majesty no peace to eat a simple meal The answer is simple The cobra is not messy in his affairs like the lion The cobra does not make a public spectacle of his hunt The cobra is a lot smarter than that Let the lion have the power and majesty the cobra prefers to operate with wisdom The cobra depends on lethal precision in order to capture the same prey the lion runs throughout the entire jungle to capture The cobra relies on stealth and swiftness as his tools of operation The cobra gets the job done outside the watchful eyes of the scavengers the hyenas and vultures do not get the opportunity to crash the cobra s lunch the way they do to their king not because they do not desire to do so The party crashers do not show up to the cobra s lunch due to one and 44

YIN DOLMAH only one reason they have no clue when the cobra eats his lunch The cobra eats in peace the same prey his royal majesty is unable to enjoy in peace One more thing about the cobra which is lost to many observers is the fact that a single cobra has the ability to obliterate an entire pride of lions One cobra can single handedly decimate a lion and its entire lineage The lions know this They rule the jungle but they seek from the cobra what everyone else seeks from the lion The cobra is not interested in the accolades and the titles The cobra is all about getting it done and doing it with efficiency and precision Where the lion is about pageantry the cobra is about substance The lion knows it is called king of the jungle only because the cobra allows it Therefore smart and intelligent lions make it a point not to agitate the cobras in their jungle The lions must give the cobras their due and not tread on them It is in the lion s best interest to do so Their rule and very lives depend on keeping the cobras happy If the cobras are content the lions get to rule in peace and everyone is happy in the jungle 45

YIN DOLMAH CHAPTER EIGHT WHY LARGE CORPORATIONS FAIL Why do large companies fail Why do smaller companies with less experience less money very little talent end up overpowering much larger companies Time and time again in America and around the world we see this happen in business It is a phenomenon that has endured as long as businesses have existed Do large corporations decide suddenly to cede dominance in their industry to small businesses It is doubtful that any company makes it part of their corporate strategy to give up market share to an upstart The question is what precipitates the bad decisions which ultimately does the big companies in 46

YIN DOLMAH The answer lies in one word Scavengers Scavengers are the reason big companies begin to make bad decisions and eventually fail Big companies are like the proverbial lion in the jungle Just as the entire jungle gets to see the lion s hunt so it is in the business world everyone including the competition government regulatory agencies and even some good for nothing attorneys who like to sue at the drop of a pin are aware of the big companies and how much money and profits they are pulling into the coffers every quarter Just as the hyenas and vultures show up when the lion is about to eat lunch so do the entities mentioned above show up uninvited to lunch at the big corporations How do they show up They show up in the form of class action lawsuits They show up in the form of fines and penalties from government agencies for labor and code violations They show up in the form of anti trust lawsuits They show up in the form of attorneys bringing all kinds of lawsuits for claims associated with accidents and countless other matters Merited or otherwise Many big companies end up settling a lot of these frivolous lawsuits obviously not because they think they are in violation of any laws but because they believe it is more advantageous to pay off the litigants and avoid the bad publicity associated with the law suit as well as the expenses that come with litigation 47

YIN DOLMAH These big corporations spend so much energy and effort trying to ward off the scavengers to such an extent that deep fear sets in regarding every aspect of their operations They begin to think in terms of how to avoid exposing themselves to the scavengers instead of concentrating on making sound business decisions The sound business decisions that got them to the top of their industry are no longer the focus of deliberations Instead how not to get fined or sued becomes the preoccupation of these big companies At CodWin I saw this fear in full display in its stores located in southern California CodWin built a store in the strawberry capital of California which is Ventura With a store located in Ventura anyone would have expected the best strawberries to be displayed on the shelves That was not the case The company on the contrary was regularly found to have moldy strawberries on its shelves not because the employees in the produce department were inept The reason moldy strawberries kept making their way to the shelves was because the strawberries purchased in Ventura by the company were first shipped to Mesa Arizona where the CodWin s warehouse was located The strawberries were then shipped back to Ventura from Mesa about a week later to be displayed in the store By the time the strawberries got back to Ventura from Mesa to be displayed in the store most of the strawberries were already moldy Executive leadership at CodWin tried to rationalize this clearly unreasonable routine 48

YIN DOLMAH Control The reason the company insisted on this practice was because they needed to control the sourcing and distribution of the strawberries in case there was a recall of product Due to the fear associated with the bad publicity and hefty fines which could result if a recall was not handled properly the company kept putting itself in a situation to sell bad strawberries to customers CodWin had no such fear when it operated as a small company As a small business Codwin permitted its stores to buy the best strawberries from local farms in Ventura and ship them directly to the stores nearby ensuring the very best quality was placed on the shelves Quality which the competition could not match The evolution of CodWin into a large corporation brought along with it fear Fear which caused the company to give up good quality strawberries in exchange for moldy product Business operations based on fear are the reason why small businesses such and startup companies end up taking out the big companies The never ending and yet perplexing cycle continues unabated because the small companies do not lose sleep over the scavengers Just like the cobra the small companies eat lunch in peace The small companies make sound business decisions based on taking care of their employees and customers without much regard for fines penalties lawsuits or regulatory bottlenecks 49

YIN DOLMAH While the small companies are improving processes based on sound business decisions the big companies are busy making fear based decisions based on trepidation of the scavengers The repeated fear based bad decisions eventually catch up to the big companies and they collapse on their own proverbial swords while the small companies thrive The question is what happens after the big companies flounder The inevitable takes place when the big companies are no more The small companies take over the show and in turn become the proverbial lion in the jungle which must watch out for the scavengers How does the new lion prevent the same fate as its predecessors How does the new big company concentrate on what is best for business operations succeed in warding off the scavengers and preoccupy itself with making sound business decisions like it always has without losing focus and paying undue attention to the prevention or mitigation of fines and judgments What did Rockefeller do after the Supreme court ruled against him and ordered the dissolution of standard oil on May 15 1911 Rockefeller did the greatest thing in the history of business HE GREW SMALL Growing small is how he maneuvered and came out ahead Billings He split his company into 34 independent companies 50

YIN DOLMAH He still maintained shares in the new independent companies and became richer in the split than when the company run as one unit Classic example of growing small Why businesses have failed to adopt this strategy beats my imagination Growing small is how a big company avoids the travails of his royal majesty the lion Quickly split up and reorganize so there is no appearance of pure dominance I believe there are different ways of achieving the split up strategy effectively but it must take place if any big company desires peace in operating a profitable business without having to preoccupy itself with the pesky scavengers Stay a cobra and never transform into a lion 51

YIN DOLMAH CHAPTER NINE THE DEAD STAR The more I thought about CodWin s decline the more I thought of the analogy of a dead star whose light was still shining through space The night sky is lit up with light from stars which stopped burning millions of years ago Just like dead stars whose light is still visible so it is with many large corporations Such corporations no longer provide value and yet exist by relying on the reputation of the value they used to create many years before The light from dead stars live on borrowed time It is just a matter of time before the light goes dark The light is unsustainable Success or failure of a business happens long before the tangible attributes people see and point to and refer to as success or failure show up If lit up and bright stars represent success the dead star is living on old success That star failed a long time ago the failure has just not manifested yet One inevitable day the failure of that star will show and that is when many will point to it as a failure 52

YIN DOLMAH Wrong The star failed the day it stopped burning and emitting light It just took many years for that failure to show In the same dimension when you see a woman or man with great wealth acquired through proper planning and smart dealings many people tend to point at the material accoutrements as representative of the success of the man or woman Again wrong The material wealth is just a physical manifestation of success that took place the day the individual decided in his or her heart to apply himself or herself diligently and wisely in their business affairs 53