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Management Lessons

Management lessons can be found in many places, not just business schools. The Divine Comedy of Dante Alighieri begins with Dante's trek through Hell, where he meets a whole range of characters. One of the most interesting is Guido da Montefeltro, trapped inside a column of flame in the circle of the evil counsellors. Guido was a warlord and politician. He had been asked by Pope Boniface to advise on subduing the rebellious city of Penestrina. “Your advice can be as evil as you wish,” Boniface tells him, “I grant you absolution in advance for anything you do.” “In that case, it's very simple.” says Guido. “Promise them a truce, then break the promise.”

Guido dies, comfortable in the thought that the Pope has given him a free pass to Heaven. But instead a demon comes for him. “Sorry,” says the demon, “but preemptive absolution just doesn't work. It is  a logical contradiction. You can't be absolved until you have repented, and you can't repent until you have committed the deed.” The demon drags him off to Hell, with a cheerful cry of “Perhaps you never knew, I practise logic too!” The world is full of Guidos today. His mistake was to become trapped inside his own logical frame. The Pope had absolved him, so he was safe. He forgot that there was  a higher power than the Pope, namely logic.

Some years ago, Dell began outsourcing manufacturing to a Taiwanese electronics manufacturer, ASUSTek. The outsourcing started with simple circuit boards, then the motherboard, then the assembly of the computer, then the management of the supply chain and finally the design of the entire computer. Using IRR [internal rate of return] and ROA [return on assets] analyses, this sequence supposedly “made sense” because Dell's revenues were unaffected and its profits improved significantly. The end result? ASUSTeK became Dell's formidable competitor, while Dell itself, apart from its brand, was hardly more than a shell, without any real expertise to run or grow its business.

The Value Of Advertising

It tells you the exact opposite of what the advertiser actually thinks.

  1. If the advertisement says "This is not your father's Oldsmobile," the advertiser is desperately concerned that this Oldsmobile, like all other Oldsmobiles, appeals primarily to old farts like your father.

  2. If Coke and Pepsi spend billions of dollars to convince you that there are significant differences between these two products, both companies realize that Pepsi and Coke are virtually identical.

  3. If the advertisement strongly suggests that Nike shoes enable athletes to perform amazing feats, Nike wants you to disregard the fact that shoe brand is unrelated to athletic ability.

  4. If Budweiser runs an elaborate advertising campaign stressing the critical importance of a beer's "born-on" date, Budweiser knows this factor has virtually nothing to do with how good a beer tastes.

Types (Definitions)

Direct Marketing:
You see a gorgeous girl at a party. You go up to her and say, "I'm fantastic in bed."

Advertising:
You're at a party with a bunch of friends and see a gorgeous girl. One of your friends goes up to her and pointing at you says, "He's fantastic in bed."

Telemarketing:
You see a gorgeous girl at a party. You go up to her and get her telephone number. The next day you call and say, "Hi, I'm fantastic in bed."

Public Relations:
You're at a party and see a gorgeous girl. You get up and straighten your tie, you walk up to her and pour her a drink. You open the door for her, pick up her bag after she drops it, offer her a ride, and then say, "By the way, I'm fantastic in bed."

Brand Recognition:
You're at a party and see a gorgeous girl. She walks up to you and says, "I hear you're fantastic in bed."

Commenting on it the author, Professor Clayton Christensen, wrote “There's no stupidity in the story.” But there is huge stupidity. You can't argue that simply following a rule like “maximize return on assets” absolves you from any charge of stupidity even when the predictable consequences of doing so are dire, any more than you can rely on a preemptive absolution (even from such an eminent authority as a Pope) when there is an obvious logical flaw in the procedure.

The world is full of people who have become very skilled at navigating within their own local logical frameworks, but have in fact become trapped in a fantasy world. In Dante's day you could go to a university school of theology and debate how many angels could dance on the head of a pin. Today, there are plenty of business schools where we could go to have a really sophisticated, intricate discussion of the best way to measure return on assets, without ever asking the question of when improving return on assets might be the last thing we want to do.

Think also of Facebook, and its recent experiments on emotionally manipulating its users. I am sure that the experiment was statistically very cleverly designed, and technically very cleverly executed. And I am sure that some very clever lawyers spent some time ensuring that the experiment was within the terms of the consent that the users gave when they signed up -  “Scientists and other critics claim Facebook is guilty of an ethical breach. But Facebook claims users consent to such experiments when they join, even though most people don't read the lengthy terms of service”.

But what about the larger logic? What about a principle that says “treat users with respect. Don't do things that creep them out?” Whether the issue is ethical or commercial, let's remember that rules, procedures and metrics are only guides to help us respect the larger principle. Mostly they point us in the right direction, but occasionally they don't. And those occasional cases are the ones that really matter.

A story may be an interesting and funny way of describing management lessons.

1) A man is getting into the shower just as his wife is finishing up her shower, when the doorbell rings. The wife quickly wraps herself in a towel and runs downstairs. When she opens the door, there stands Bob, the next-door neighbor. Before she says a word, Bob says, 'I'll give you $800 to drop that towel.' After thinking for a moment, the woman drops her towel and stands naked in front of Bob, after a few seconds, Bob hands her $800 and leaves. The woman wraps back up in the towel and goes back upstairs. When she gets to the bathroom, her husband asks, 'Who was that?' 'It was Bob the next door neighbor,' she replies. 'Great,' the husband says, 'did he say anything about the $800 he owes me?'

Management Lesson: If you share critical information pertaining to credit and risk with your shareholders in time, you may be in a position to prevent avoidable exposure.

2) A priest offered a Nun a lift. She got in and crossed her legs, forcing her gown to reveal a leg. The priest nearly had an accident. After controlling the car, he stealthily slid his hand up her leg. The nun said, 'Father, remember Psalm 129?' The priest removed his hand. But, changing gears, he let his hand slide up her leg again. The nun once again said, 'Father, remember Psalm 129?' The priest apologized 'Sorry sister but the flesh is weak.' Arriving at the convent, the nun sighed heavily and went on her way. On his arrival at the church, the priest rushed to look up Psalm 129. It said, 'Go forth and seek, further up, you will find glory.

Management Lesson: If you are not well informed in your job, you might miss a great opportunity.

3) A sales rep, an administration clerk, and the manager are walking to lunch when they find an antique oil lamp. They rub it and a Genie comes out. The Genie says, 'I'll give each of you just one wish.' 'Me first! Me first!' says the admin clerk. 'I want to be in the Bahamas , driving a speedboat, without a care in the world.' Puff! She's gone. 'Me next! Me next!' says the sales rep. 'I want to be in Hawaii , relaxing on the beach with my personal masseuse, an endless supply of Pina Coladas and the love of my life.' Puff! He's gone. 'OK, you're up,' the Genie says to the manager. The manager says, 'I want those two back in the office after lunch.

Management Lesson: Always let your boss have the first say.

4) An eagle was sitting on a tree resting, doing nothing. A small rabbit saw the eagle and asked him, 'Can I also sit like you and do nothing?' The eagle answered: 'Sure, why not.' So, the rabbit sat on the ground below the eagle and rested. All of a sudden, a fox appeared, jumped on the rabbit and ate it.

Management Lesson: To be sitting and doing nothing, you must be sitting very, very high up.

5) A turkey was chatting with a bull. 'I would love to be able to get to the top of that tree' sighed the turkey, 'but I haven't got the energy.' 'Well, why don't you nibble on some of my droppings?' replied the bull. They're packed with nutrients.' The turkey pecked at a lump of dung, and found it actually gave him enough strength to reach the lowest branch of the tree. The next day, after eating some more dung, he reached the second branch. Finally after a fourth night, the turkey was proudly perched at the top of the tree. He was promptly spotted by a farmer, who shot him out of the tree.

Management Lesson: Bull Shit might get you to the top, but it won't keep you there..

6) A little bird was flying south for the winter. It was so cold the bird froze and fell to the ground into a large field. While he was lying there, a cow came by and dropped some dung on him. As the frozen bird lay there in the pile of cow dung, he began to realize how warm he was. The dung was actually thawing him out! He lay there all warm and happy, and soon began to sing for joy. A passing cat heard the bird singing and came to investigate. Following the sound, the cat discovered the bird under the pile of cow dung, and promptly dug him out and ate him.

Management Lesson: (1) Not everyone who shits on you is your enemy. (2) Not everyone who gets you out of shit is your friend. (3) And when you're in deep shit, it's best to keep your mouth shut!

7) When the body was first made, all the parts wanted to be Boss. The brain said, "I should be Boss because I control the whole body's responses and functions." The feet said, "We should be Boss as we carry the brain about and get him to where he wants to go." The hands said, "We should be the Boss because we do all the work and earn all the money." And so it went on and on with the heart, the lungs and the eyes until finally the asshole spoke up. All the parts laughed at the idea of the asshole being the Boss. So the asshole went on strike, blocked itself up and refused to work. Within a short time the eyes became crossed, the hands clenched, the feet twitched, the heart and lungs began to panic and the brain fevered. Eventually they all decided that the asshole should be the Boss, so the motion was passed. All the other parts did all the work while the Boss just sat and passed out the shit!

Management Lesson: You don't need brains to be a Boss – any asshole will do.

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