Jim MacDonald

Management by Getting Your Hands Dirty

September 21, 2005

Case categories include: Leadership   Operations   

By Robert Sher
I like the notion of management by walking around.  It was all the rage about 15 years ago, but it is still useful.  When a CEO spends too much time in his plush office, he’s not as aware of what’s really going on in his company.

Jim MacDonald, CEO of RF MacDonald Co., was watching the monthly gross margin for his service team slump lower and lower.  It started after the firm promoted their long-term service manager and brought in a new manager.  Four months of slippage of this critical ratio – plus other evidence of a mis-hire – meant that Jim sent the new manager packing.  His next move was not to tackle the situation by walking around.

Getting Dirty Hands
Jim stepped in and became Service Manager and CEO.  He’d been service manager on his way to the top in the early 80’s when the business was much smaller.  He was rusty, but understood the job.  From 7 a.m. to 4 p.m., he was mostly service manager, and 4 p.m. to 8 p.m., he was mostly CEO.  The service team gave Jim immediate respect.  The biggest problem was that technicians weren’t billing for all the hours they put into each job. 

He patched the big holes right away (like lost job tickets), then developed an advance warning system for the gross margin line on the financial statements.  Every service tech began getting an automated report with each paycheck that detailed their billable hours ratio, and compared it to the budget as well as the whole department.  He trained the team on ways to keep their ratio up. 

Five months later, Jim was ready to pass the baton of Service Manager.  Billable hours ratios were now better than budget, and of course, so was gross margin.  Best of all, a new process and measurement was in place that would warn everyone immediately if there was ever slippage again.

It’s not glamorous
Stepping down to a lower level and actually doing the job is not glamorous nor best use of a top executive’s time over the long haul.  Your team and others may think you’re crazy.  You’ll be in for long work days.  And there’s never as much personal satisfaction doing a job you’re overqualified for, compared to doing a job that stretches your skills.

But it is incredibly powerful.  Why?  Because you have wonderfully broad vision (relative to someone stepping up into the position), and can see and create solutions that bridge departments, pull in special skills as needed, and utilize technologies that a lower level person may not know how to use.  As the CEO, you automatically command the respect of the team, and your willingness to get your hands dirty alongside them earns respect big-time.  I never cease to be amazed at how many “respect” points I get as CEO of my firm when a trucker shows up after the shipping department is closed.  I drive the forklift personally and load the pallet or two for the sake of a timely shipment.  Those who see me are amazed that I can and will load a truck.

Are you competent?
Jim is good with details, and was competent to step down to this position.  But not every CEO should be trusted with details.  Know your strengths.  Perhaps you’d be best to step down into a field sales position.  Or if you’re more of a quiet engineering wizard, perhaps you’re most suited for product development problem situations.  And if your organization is larger, it may be that others on your top team should be the ones to step down into some problem areas, rather than you.

The five months that Jim spent as service manager is on the long end.  I’ve stepped down for a little as two days.  My best result personally came from a one-week stint as customer service guy when I’d stepped in the midst of a mini-crisis.  My longest was about four months when I, like Jim, stepped in when I dismissed a manager.  It was hard slogging, confronting some really stubborn problems, but they were nailed one by one as I mentored someone on the team into becoming the supervisor, then the manager.
 
Keep walking around your business.  But when you walk into trouble and the opportunity is right, roll up your sleeves and get your hands dirty.  It works.

Takeaways
• Consider if you are the best person to step into a manager’s job and fix big ongoing problems.
• There can be many benefits of doing this, especially if you leave behind new systems that will keep it all running smoothly.
• Don’t make it a habit – a good CEO spends most of the time being a CEO.

Robert Sher is principal of CEO to CEO, specializing in assisting CEOs and business leaders as they navigate critical passages.  He is the author of The Feel of the Deal; How I Built a Business through Acquisitions.  He may be reached at Robert@ceotoceo.biz.

Company and Case Facts:

Company: R.F. MacDonald
Person: Jim MacDonald, CEO
Alliance Member since: 2000
Business Founded: 1956
Annual Sales Volume: $52 million (projected FY2005)
Growth Rate: 25% (2004 to 2005)
Head Count: 175
Product: Commercial and industrial boiler and pump sales and service
Typical Customer: Manufacturers, large hotels, industrial complexes, hospitals, biotech, food, processors
Written: September, 2005
Address: R. F. MacDonald Co., 25920 Eden Landing Road, Hayward, CA 94545-3816
E-mail: jim.macdonald@rfmacdonald.com
Phone: 510-784-0110