2008 and beyond
Financial Pressures May Help
‘The Rule of 10’ and ‘Business Psychosis’
By Michael P. Marshall, PhD
Many business organizations suffer greatly from “The Rule of 10′ and ‘Business Psychosis’.
I have written several articles on these phenomenon and are also posted on my personal website of www.AskTheBusinessDoctor.com
To bring all readers up-to-date with what these are, I will quickly summarize.
‘The Rule of 10’ is a natural occurring business phenomenon where people have a tendency to hire others at skill levels below their own.
This happens both unconsciously and consciously as ego protection and protecting ones own job position, internally.
On a skill level rating of 1 to 10 with 10 being highest; 10’s hires 9’s and lower, 9’s hires 8’s and lower, 8’s hires 7’s and lower, 7’s higher 6’s and lower, and so on downward.
To combat this natural tendency, senior leadership must make mandatory continual training and education for all management and supervisory staff.
This will help reverse the natural spiral down and encourage a progessive spiral upward.
‘Business Psychosis’ is simply doing the same things over and over again that do not work but hoping someday for them to miraculously get better results.
This is a bad business rut.
To combat this ‘Business Psychosis’ it is helpful to have formal ‘Think Tanks’ and teams at all levels of a business organization, investigating and discovering creative, out of the box thinking and bold innovative ideas.
Along with this has to be a formal process for aggressive and progressive evaluation and developing plans and times lines to implement.
The same needs to be for quality improvement, elminating wastes of all types, and cost reductions.
To support this, an incentive and reward program of some type needs to accompany it.
During these times of economic instability and extreme business challenges, downzing and staff elimination is rampant.
Many skilled staff are being layed off.
The tasks, leadership and decison making is the responsibiity of whoever has survived this.
Many staff surviving may not have as high of skills as those that are no longer with the organization or company.
Keeping in mind ‘The Rule of 10’, there is more Business Chaos now.
More staff layoffs or terminations, adjustments and new hires may happen to realign everything to ‘The Rule of 10′; the skill level and social order.
This of course is a spiral down.
I have been actively monitoring numerous business, management and executive networks and blog sites.
I have been actively talking with business organizations, professional trade organizations, senior business consultants, colleges, technical schools, university business professors and teachers.
There appears to be some common things significantly contributing to business organizations’ decline.
1. ‘Business Psychosis’
2. ‘The Rule of 10’
3. Lack of Business Fundamentals
4. Lack of ‘Creativity’, ‘Out of The Box Thinking’ and ‘Bold Innovations’
5. Lack of finding, hiring and retaining staff with top level skills
6. Not willing to create incentive and reward programs to attract and retain staff with top skills even though base compensation may be lower than is marketable and desirable
7. Organizations not willing to invest in aggressive training & education of staff
8. Employees not motivated to put out the time and effort to obtain education and training other than fully paid by the employer and on regualr company time
9. In retail, sometimes an over abundance of similar retail stores/competition in the market area that dilutes the markets potential sales.
10. Large amount of US manufacuting sector moving out of the country and possibly unequal trade contributing to this.
Business organizations and employees are making broad comments on how the declining economic world markets are to blame.
Here is a paradox that is very thought provoking and interesting to discuss.
Unequal trade situations that can contribute to US manufacturing moving out of the US which in turn contributes to high enemployment and lower wages has negative effects worldwide.
US consumers ability to purchase products and services affects economics worldwide.
High unemployment and lower wages wages in the US that has negative effects on consumer spending has a negative effect on economies worldwide.
Just think about all those products and services coming into the US that consumers do not have money to purchase.
This subject can make a very interesting conversation and debate.
We also hear how poor business management or lack of it, is to blame.
We hear about executive corruption and executive unethical poor leadership is to blame.
We hear on the news how business organizations are looking to the US government for money and funding to stay in business.
These businesses often use the threat of laying off employees as the reason for obtaining the bailout funding.
We have also heard how the US government is asking for these businesses to develop a plan of what they will do different to improve and help grow and not just keep doing the same things over an over again that are not working.
These businesses seem stressed and challenged with the idea of having to improve, change, do what is necessary to grow the business, and provide a formal plan of this.
The US government appears to understand ‘Business Psychosis’ and ‘The Rule of 10’ and now encouraging businesses to wise up and do something about it before any government funding is to be given out.
I question if businesses and people are hurting enough to be motivated to improve and change.
I question if the US government is hurting enough to improve and change.
I also acknowledge the factor and issue of ‘fair trade’ versus ‘equal trade’
When I go into a store to buy anything and read the labels where the products were made; I do not think I need a PhD in economics to understand why unemployment rate is so high and a large number of people are out of work.
This is a large subject of its’ own and I will not go into this area especially since I am an advocate of international business but just not in the way it is currently.
Now that businesses and people are significantly hurting, will most be more motivated to improve and possibly do things differently?
Knowledge, wisdom, skills and insights will not rain down from the skies on everyone.
I do think there is a real need for business development support programs led by business professors from the academic sector, top talented business consultants and possibly leading edge business leaders that exemplify ‘creativity’, ‘out of the box thinking’, ‘bold innovation’ and utilizing all business development fundamentals.
Such programs can possibly be financially supported by the government to help businesses improve, help create and implement progressive plans that are affective.
Significantly improving the things in the above list of course to be part of this.
This approach may be far more effective than just handing out money to help businesses from laying off people but not making any significant improvements to grow the business.
The ideas in this article can certainly be expanded upon in far more details.
I understand how the ideas in this brief article can be controversial and lead to significant discussions.
I also understand that the ideas have tremendous merit.
If you have further questions or need some help, you can give me a call or email.
Michael P. Marshall, PhD
Senior Specialist and Advisor for Business Development, Marketing and Sales
Michael has more than 30 years of business experience focusing on business development utilizing extensive skills in marketing, sales, and communications; both national and international.
This experience comes from starting at field staff level positions and then progressing up to senior level Director and Vice President positions in several industries and markets including medical and healthcare.
His expertise is also utilized in special advisory and consulting situations, as well.
Prior to his extensive 30-year business career, he studied advanced engineering and then transitioned to psychology and social human behavior.
In these endeavors he learned what makes people do what they do, what influences others, how to motivate positive behavioral change; and the importance to a strong foundation and the individual components in a structure.
Michael’s education and trainings include a PhD in business concentrating in marketing and business development, an MBA, bachelor degrees in psychology and social human behavior, advanced post graduate certification in medical and healthcare marketing from UCLA, formally trained in ‘Creativity and Out of The Box Thinking’, federally certified in international business.
He has over 35 formal trainings and certifications covering the fundamentals of business development, marketing, sales, communications, management and leading a business to significant sales and profit growth.