Tips for doing this well.
Time to Act
December 2021, Vol. 10 No. 12
charlie goodrich

Effective management requires listening, communicating, and observing people firsthand.

Virtual interactions, while certainly more convenient, can have a negative impact on results if done to the exclusion of everything else.
Today's newsletter explains, in addition to offering specific suggestions for taking full advantage of your physical presence.

Wishing you and yours all the best for a safe and happy holiday season.
Charlie Goodrich
Founder and Principal
Goodrich & Associates
In this issue…
Why Your Physical Presence Matters
Heard on the Street
About Us
Why Your Physical Presence Matters
Much has been said about the current business fad of mindfulness: being mentally present at the moment. This article, though, is about being physically present, something many of us are doing less of due to the pandemic. I understand; it’s tempting to forego the office commute and let Zoom do the rest.

But… your physical presence is important. Doing everything virtually can have a negative impact on results.

Being physically present allows you to listen, communicate, and observe people and things firsthand — without any filtering by your organization… an organization that is, after all, designed to filter. Also, physical presence allows you to visually inspect. Remember the old business adage, “what is expected is what is inspected.” If the inspection stops, expectations change.

For example, with a bankruptcy client of mine, ownership was surprised by what was eventually discovered. They were rarely onsite and Board meetings were mostly remote. The first time I walked into this client’s offices, everything was a mess. The copier was broken, piles of paper were stacked everywhere, and things were just plain dirty. That’s the power of physical presence — or, in this case, a lack thereof.

Some tips on being physically present…

Use visual cues to informally gather information before you learn from formal processes. 

When I was in the food service distribution business, my company used an antiquated computer system that often crashed. If the system took too much time to recover, delivery trucks would leave later than planned in the early morning. The telltale sign when I arrived each day? A line of trucks queued up waiting to depart.

Similarly, when I was in the corrugated box business, my trips to the plant were full of tip offs. I could physically see if inventories were high or low, what type of products were being made, and so forth. All of this provided expectations that I then tracked against the computerized reporting systems. Discrepancies between the two were a sign that something might be amiss. 

Be unexpected. 

Walking around has the benefit of surprise; nothing is staged in expectation of your arrival. This becomes more important as you move higher up within the organization. For example, when I was in the corrugated box business, my walks through the plant didn’t matter to plant personnel. But when the regional general manager showed up — a planned event — everything was always shipshape. 

Unexpected visits are harder to do the more physically distant you are from the operation. When I was in the rent a car business and living in Boston, I would make unplanned trips to our East Coast locations. Yes, I did call the general manager to let him know I was in town, and typically, I had been scheduled to arrive sometime in the next four weeks, so it wasn't a complete surprise. But this allowed me to visit before preparations were made.

Be routine. 

Unexpected visits aside, the benefit of having a routine is that if someone wants to say something to you, they know where and when they can find you. When I ran a VOIP company that was trying to sell itself, I would begin every morning by walking through the building. I would start in the back and talk to the Chef (tech companies are supposed to have chefs, or so I am told), then the operations guy, the electrician, through the engineering department, and finally customer service.

Not only did I see what was happening or not, people were free to talk to me about whatever was on their minds. When a business is being sold, there is usually a lot on employees' minds! 

In this situation, the owner to whom the employees were very loyal was barred by a Federal Judge from showing up at the premises or otherwise interfering with the sale. The owner was constantly stirring the pot, however, and by walking around, the employees heard directly from me what was happening and what was not. The pot did start to boil from time to time, but never over the sides!

Engage with people. 

They won't always talk at first; it takes time for them to learn you are approachable. So probe when you talk. You’ll gain a better understanding of what’s happening, see if they have the resources needed to get the job done, and be able to assess how clear they are regarding the organization's vision, objectives, and strategies. 

Develop rapport and relationships. 

When I walked through the corrugated plant, my conversations with various supervisors built rapport over time. Later on, when I evaluated potential capital projects, I had the relationships in place to talk to relevant personnel and gain their insights.

Visit everyone you can. 

This refers to both time of day and location. If there is a night shift or early shift, make sure you wander around at those times too. Visit different locations as well.

For example, when I was CFO of the S. S. Pierce Company, a food service distributor, I would often come back to the office after dinner. Why? Besides having a lot of work to do, the evening is when the night shift works loading trucks for delivery early the next morning. It was a critical operation that affected a lot of costs and represented over a third of the hourly work force. 

Inspect what is important. 

If the operation has certain critical success factors, look at them. At S. S. Pierce, for example, one of these was fast inventory turnover (stale inventory is always a problem). So, when I walked through a warehouse, I always looked for dust, faded packing, etc. And I made it a point to visit the warehouse sections where traditional slow movers were stored.

Always be positive. 

If you don't like what you see, tell people what you would like to see instead. (More about this concept, here.)

Final Thoughts

Naturally, there are some limits to physical presence, the biggest of which is your time, so plan wisely. Also, if you are part of a larger company, wandering through someone else's turf uninvited is not always a good idea. Finally, the larger the enterprise and the higher up you are in that enterprise, the less effective this tool becomes. You can't be everywhere and when you do show up, it is planned and structured by necessity.

Limitations aside, physical presence should be a key, go-to tool in your management kit. It is a great source of unstructured and unfiltered information and an effective way to communicate. All needed to both manage and lead.
Please share with your colleagues:
Heard on the Street
There is talk again in Congress about the need for an “industrial policy” — subsidizing favored industries to counter China’s rise. 

Timothy Taylor, Managing Editor of the Journal of Economic Perspectives, based at Macalester College in St. Paul, Minnesota, concisely explains why that is a bad idea, why “industrial policy” didn’t work for the Soviet Union or Japan, and why it won’t work for China or the United States.

Read more, here
About Us
Goodrich & Associates is a management consulting firm. We specialize in restructuring and insolvency problems. Our Founder and Principal, Charlie Goodrich, holds an MBA in Finance from the University of Chicago and a Bachelor's Degree in Economics from the University of Virginia, and has over 30 years' experience in this area.

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