Leadership

The shiny new penny syndrome

During tough times, many organizations attempt to get things moving again by replacing what isn't working. Here's why it doesn't work.

Generally, most organizations' approaches to management can be divided into two camps: the ones who consistently and strategically invest in their existing resources and the others who are more likely to abandon the existing ones when they come across a new, more attractive, model.

Unfortunately, those in the first group are in the minority. To those in the latter group, the "new" promises to provide answers and fix existing problems. These organizations will readily discard the "old" in an attempt to get the operation moving ahead quickly. Regardless of what is being replaced - tools, systems or personnel -  in most cases, it's exactly the wrong decision.

How did this evolve?

Thanks largely to the impact of advertising, it's almost human nature to believe that newer means better. But when you're in charge of an organization's direction, it's important that you have a more balanced - a more enlightened - approach.  Unfortunately many leaders just aren't emotionally mature enough to balance the pros and cons appropriately. To them, as a rule, "the new is always better than the existing."

When it comes to key tools and systems, it can take a great deal of energy for a company to pull off a successful changeover. This is challenging even when the company has a full headcount, and each of those affected has the requisite time and clarity to get the job done properly. But if too many of the key players are already working at a pace at or near the breaking point; the chances of a successful execution are much slimmer. The organization loses momentum and important work can be stalled. Important stuff gets done poorly. Deadlines are missed, tempers flare.  Sometimes people are fired by frustrated managers above them.

When it comes to replacing those managers, the impact can be equally poor. The new guy will fix it! Or, She'll know how to get us back on track!

For a while everyone will be enamored with her or him.  (S)he's the new shiny penny - much better than the old, tarnished one.  But history shows that executive changes alone rarely make much difference over the long run - once the new person has run through their bag of new tricks, things aren't usually a great deal better overall. That's because just changing the lead sled dog doesn't address one of the key rules of management. And that key rule is investing in your people.

Strategically, making a long-term investment in people requires 4 key elements:

1. An HR Policy - I am amazed at how few organizations have an easily enunciated HR Policy that is aligned with the company's strategic plans.  Without one, new hires have less of a chance of succeeding.  And, often the wrong people are hired. 2. Compensation plans - Successful companies have strategic goals regarding their comp plans.  Others simply pay what the market demands.  This very tactical approach often leaves them behind the 8-ball when it comes to attracting and retaining the best candidates. 3.  Action programs - The best organizations really do know who is doing a good job and who is in the bottom 10%. They have programs to build on greatness and, also, to help those who are failing. Most don't.  These companies usually focus time and attention on the hero of the moment while others, who could be helped to success fall behind and are wasted. 4. ROI mentality - investments in people can, and should be, tracked.  No less than any system or capital expense, people can improve the company's financial, as well as its psychic success.   Most HR bosses unfortunately operate like old fashioned "personnel managers."  Many have little understanding, or interest in, such things as financial profit models. Peter Drucker once noted: No institution can possibly survive if it needs geniuses or supermen to manage it. It must be organized in such a way as to be able to get along under a leadership composed of average human beings. Department heads, HR bosses and corporate leaders all need to increase their investments in the next generation of leaders.  Otherwise they will be stuck in a cycle of failure interrupted temporarily with an occasional win caused by the shiny new penny recently hired.  Ultimately, such organizations and individuals leading them will witness their own value erode and diminish until ultimately they are all circling the drain, unable to compete successfully.

john

Leadership Coach

About

John M. McKee is the founder and CEO of BusinessSuccessCoach.net, an international consulting and coaching practice with subscribers in 43 countries. One of the founding senior executives of DIRECTV, his hands-on experience includes leading billion d...

11 comments
dirkkrantz
dirkkrantz

Ford company has sometimes had to replace parts of Henry's once so successful organization. Luckily they did (sometimes almost to late). What I try to tell you is that you can be too conservative.

ccrashh
ccrashh

Wow...several articles recently have been so appropos for our situation. Being in the gov't, where cost is not as much an issue (hey, it's only taxpayer money...that's unlimited, right?), we see the "shiny penny" syndrome all the time. We also see managers entranced by the shiny demos vendors give them - and the pretty PDF brochures.

TheProfessorDan
TheProfessorDan

I like most people love new things. This Christmas, I am buying my kids a new XBox 360 and I can't wait for Christmas morning for my sons to open the present. I will probably get as much joy as my kids will opening the box, pulling out the unit and setting it up. I think that is where the problems that this article eludes starts. An organization has a problem and as most IT people will attest to, there is not more exciting than fixing a problem. So the idea is presented with replacing the current system with a new one and the excitement is there. And even though the new system may fix the issue, thought and planning needs to override the excitement and analysis needs to be done to determine whether the problem will be solved by a different direction.

mazych
mazych

I am in the position of being "the old penny" right now and am waiting patiently for the shine to wear off the new penny. I am thankful I am working butthe shiny penny does not make coming to work any easier or help with motivation - just the opposite! Michigan

JamesRL
JamesRL

I'd been laid off from a previous employer, and looking for a job. At the same time my employer had a group that was tough to manage, and a temporary supervisor who was eager to get back to their "real job". I was brought in to make big changes. It almost ended in disaster. The last thing a 20 year employee wants to hear is big changes from a brand new manager. After 6 months I had to reassess the strategy, ignore my bosses demands, and start making small incremental improvements, some of which had to come from the team themselves. James

GL44
GL44

I have worked with government agencies for years and I don't know of an agency that does not have financial problems when trying to accomplice various objectives. There are times when money is more easily available then other times and many times when it is not available at all. This is the same with private industry. Is there waste and corruption in government agencies? Sure, just as there is in private industry. For example; Enron, the current Wall Street melt down, etc., etc., etc. As for liking new pennies, that happens as much in private industry as the government or non profit world. A bad decision is a bad decision. Working for private industry does not magically turn it into a good decision. Nor is there any serious evidence to demonstrate that any particular management or ownership model is automatically the best.

jdclyde
jdclyde

I have had one for two years now, and it has been replaced twice because of the RROD flaw of them overheating and burning up. The first time was after only having it for three weeks. Make sure you get it from a store that will exchange it, rather than making you sent it back to MicroSoft for repair. It is over a month turnaround if you have to send it in.

ccrashh
ccrashh

When did I ever say that the private industry was better? And when did I talk about management models? All I said was I see the "shiny penny" syndrome in the government. Quite often, in fact. Whisper "ITIL" to a boardroom of managers and watch them start to salivate. But I never compared them to the private sector.

GL44
GL44

If I misunderstood you, my aplogies.

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