Often a manager will make statements in the heat of the moment, usually under pressure in an attempt to satisfy his boss or to get someone off his back. You’ll often hear such statements at board of directors’ meetings, when managers are thinking, "If I get through the next hour I won't have to worry about these guys for another three months!"

Everyone has heard the now infamous, "The check is in the mail." If someone who owed YOU money said that, would you believe it? Management tells lies, too -- both the ones we've all heard and new ones that are a tribute to the creativity of the American manager. Below are some of my favorites.

***************

The CEO says to the head of a company being acquired, "Don't worry! Things will be the same as they have always been. I want you to run the company as always. Think of this as a marriage." Just remember, on a honeymoon, somebody always gets screwed!

In front of a customer or the board of directors, the CEO says to his staff, "No problem! I'll make sure you have all the necessary resources." Unfortunately, when the audience leaves, so does the offer.

The CEO again: "Don't worry. I wouldn't think of making an acquisition without talking to the board first." 'Nuff said.

When the time comes to replace a top level person, the CEO sometimes comments to anyone within hearing distance, "I will hire the best person available regardless of sex, color, or creed." At this point, at least half the people within hearing distance are rolling their eyes.

A CEO is raising money. "I have investors beating down my door." "I always have someone ready to put up $2 million. I just have to let them know." Sure. If you believe that, you probably also believe that Michael Jackson's only had two operations on his face.

The management staff is being questioned by directors, and responds with, "You don't understand my area." or "You don't understand my market." In their minds, this solves the problem and ends the conversation. Ironically, the bad results the manager presented make it clear that it is they themselves who don't understand the situation.

A board member recommends that the management staffer call someone for help. The reply, "I tried several times to reach Joe." What he forgot to mention was that he called at lunch, or at the very end of the day (as if he really wanted to talk to Joe, right?). The same thing happens when Joe is an irate customer; he never seems to be available.

"I don't have an inventory problem," says the manufacturing manager, when the walls of the storeroom are bursting and the cash flow has dried up. After all, it's not his money at risk . . . And on the flip side, a director insists that "Inventory turns should be at least six," because other (possibly unrelated) companies such as the flower shop around the corner are doing six. He makes these demands without regard to the nature of the business or the current competition.

"The revenue is in the bag." I marvel at how a revenue forecast given the 30th day of a month can be missed on the 31st day of the month.

"Next month we will have linear shipments." What this means is that when it's the thirtieth day of the

month and only 20% of the product has been shipped, they will be shipping 5% of the target each and every hour through that night.

The sales manager, when sales are low, can be heard to say, "I will pack a suitcase and go on the road until I get bookings." This sounds dramatic and committed, doesn't it? However, weeks later, the situation has worsened and his suitcase is still collecting dust.

Be wary of the salesman who uses words like "good for business" or "margins."

Ever heard this one? The salesman says, "If we don't lower our prices we will go out of business!" More than once I've been told this, but even several months after we held absolutely firm on prices no salesman ever produced a report on the business lost as a result.

Or this one? The salesman says, "We got this job even though we were the highest bidder." Believe that, and you probably also believe "I'm the only one that was given the competitor's prices." And talking about naiveté, how about the salesman who says, "I get more insight because the customer is my friend." I cringe when I hear that because the salesman probably believes it himself. How often salesmen fall for the old

Maxwell Smart trick: "I will be out of the room, and if you can read upside down you can see your competitor's prices."

The marketing manager, on the other hand, might tell you, "Our pricing formula guarantees a twenty percent pretax profit." I've always wondered what happens to that elusive seventeen or eighteen percent, because more often than not, the actual profits are two or three percent. How often does anyone ever make twenty percent pretax?

The general manager is explaining something, and the subordinate says, "I understand." But so often, the employee really wasn't listening or really did not comprehend. The flip side of this is just as confusing. The manager says, "Okay," meaning by that "I hear and acknowledge." The employee hears, "Okay," meaning "I approve."

In a cash crunch, management says to the board, "We will shut down the dock and stop all material coming in." You can check the shipping dock days later and find that they never heard about this, and the material keeps coming in.

Haven't we all done this at one time or another? The general manager says, "If sales don't improve by (fill in the date), we will be making some cuts in personnel and expenses." I could grow a beard waiting for this to happen. Unfortunately, from this time on, all kinds of energy is wasted in misguided attempts to delay these actions, even as the situation is crumbling around them.

Sometimes you'll hear the engineering manager say, "Trust me. The project will be completed on time and within budget." However, left to themselves, it would never be done. You could even double the engineer's estimate of the time and cost for a project, and it would still come out late and over budget.

And this one from the quality engineer: "We don't have a quality problem. It's the customer system." Often, this is said before the quality engineer has gathered enough facts to realize that the product was DOA at the customer's site.

MIS has its own set of lies. "With this new (and undoubtedly very expensive) MIS system, I'll be able to close the month in four days and get rid of all kinds of people in accounting." Then, when the system is on line, the head just count grows and grows.

The MIS manager again: "Although it normally takes several months to make a system conversion, we are organized to do it by (fill in date)." Several months later, the system still isn't on line, and everyone is up in arms.

Be wary of the implied lies in answers from subordinates to questions from personnel above them in the organization. The same question might very well receive multiple answers, depending on who's asking. A worker on the line will give different answers to the president, their boss, the engineer from a different department responsible for the product, the quality engineer, and their fellow workers.

Asking a second question can help you fully appreciate the answer to the first question. This is especially important in dealing with people who do not volunteer information. For example, a general manager asks a manufacturing manager, "Will there be any problems meeting the revenue forecast for this month?" The answer is "No." Or even better, "I will guarantee it."

After guaranteeing that the firm will buy someone's company, the president says, "The board will go along with whatever I request." Months later, the poor seller is still waiting to be acquired while he sees his assets going down the drain.

When they are having quality control and yield problems, Presidents have been known to say to the board, "I will stop the line if necessary," when in reality, everything that is not tied down or breathing will be shipped for revenue.

The president tells you, "I can always get an accounts receivable loan." This is generally followed by, "I can go to the bank if I need money." Obviously he never figured out that banks only lend you money when you don't need it.

"I don't care if our salesmen make millions on a commission. I would welcome it. After all, the company benefits from it, too." says the president. And then, at the first hint of a "bluebird," the word processor is directed to change a number or two in the compensation plan . . .

The company is rapidly outgrowing the president, and he says, "I'll know when it's time to step aside." Right. And Magic Johnson knows when to retire. Power puffing up the ego clouds judgment. With that comfortable salary, the retirement program, and the thrill of control, why quit voluntarily?

The president tells you, "I can fund my growth from my profits." What he doesn't realize is that the more successful the company gets, the more cash it requires. And this same president will probably not welcome investors, because giving up any real ownership is giving up their control. It amazes me that people with years of business math haven't figured out that 5% of a $100 million dollar company is a LOT more than 100% of nothing.

Finally, here's the one that has deprived me of the most sleep over the years.

The program managers and engineering personnel are missing major milestones, and they'll tell you, "Don't worry!" I really hate that. I never did understand how a delay to meet the next major milestone can be longer than the total program planned.

Or worse yet, the cutesy version: "No need to worry!" Then, for sure, I worry. And I can't sleep at night.

The following are my favorite management words. If you understand each of these principles and how important each one is, these keys will open the door to successful management.

Many companies succeed! Many companies do not!

Most companies achieve at least some of their goals. Many do not.

Since success is relative, even successful companies often do not attain their full potential.

Why is this true? Most company management personnel understand the theory and mechanics of management. Managing isn’t all that complicated, and new theories and techniques are written about constantly. With all this education and preparation, why don’t all companies have the best possible success? Why do companies with successful periods have to suffer through down periods? Why do companies manage to survive for years but never burst through that next revenue plateau to become big and profitable?

I believe the answer is related to management’s mind-set. When managers don’t have the mind-set to run a business at peak performance, the company will suffer.

What is mind-set? Mind-set is a combination of perception, perspective, and prioritization in decision-making. It also helps to have patience and skillful planning to go with that mind-set.

Profit is high on everyone's list of important management words, but cash is, in my opinion, even more important than profit. Cash is perhaps the most important thing to keep track of in running a company. A company can survive without profit, but they cannot survive without cash. Profit is the muscle of a company, but cash is the blood.

To succeed, the small business person must understand cash management. Statistics show that most small companies fail because they run out of cash due to poor cash management, and I have seen many high-tech start-ups with great ideas fail for exactly that reason.

I also believe that many large-company managers would perform better if their management were cash-driven rather than budget-driven. For instance, if cash were king, there would be less chance of ending up with too many employees or too much inventory.

Setting priorities is one of the most important management issues, because wrong or misunderstood priorities are one of the most common and serious problems in poorly performing companies. This is also many managers weakest point: they do not know how to set and communicate their priorities well. When a manager's staff is not performing to expectations, more often than not it is because they have their own set of priorities that are not the same as the management's. The best boss I ever had used to sit and listen to my goals and priorities and look for mismatches.

Whenever I have been asked to work with a client's staff, I usually find that the boss's priorities aren't clear. Priorities should be written down whenever possible, and the manager must take the time to make sure they are understood. In fact, it is a good idea to have employees state what they understand the priorities to be and make sure the employees' priorities are consistent with management's priorities. We very commonly mix up the priorities as stated with what we would like them to be.

For example, I once asked a CEO who used to be a client of mine what his top priority was, and he replied that his absolute, number one priority was to hire a national sales manager. I then asked him why, if it really was his priority, there weren't candidates lined up outside his door waiting to be interviewed. Further research disclosed that he had not even talked to the search firm in two weeks. I think he enjoyed playing the acting head of sales.

In the final analysis, the manager who makes everything work is the manager who establishes priorities that fit everything together. Setting and reordering priorities is the most important responsibility of "the person in charge." Priorities should be monitored constantly to ensure that they are consistent with the company's evolving goals and objectives.

The importance of collecting receivables as a money source can get lost in a growing organization. Too often it is assumed that an accounts receivable credit line will automatically be available and 80% of the receivables' value can be borrowed. Many times only 50% of the value can be borrowed because of the mix of sales. Restrictions and limits related to heavy concentration of one or two customers, government and international customers, and overdue accounts reduce the borrowing potential.

It is better to emphasize that using collections as a money source can be more effective and cost far less in interest than if receivables are used as collateral for a loan. New companies often fail because they counted on an accounts receivable loan as a given. It is not a given that a bank will lend money against receivables, because many other factors related to the condition of the company come into play.

The worst example of poor priority setting and perception management I've seen in recent years was a case where it was alleged that bricks (literally!) were shipped in boxes instead of disk drives. Only a badly directed management signal to the troops, that revenue must be met at all costs, could have possibly caused such an irrational action!

Planning, priorities, perspective, and perception add up to focus, a key to successful management. Making a company work depends directly on the definition and implementation of priorities, and meaningful priorities depend on sound planning, accurate perceptions, and ensuring that all personnel involved have the proper perspective. Often, to deal effectively with employees (or customers, for that matter), you must realize that you have to deal with their perception of the situation, no matter what the facts are.

Building and implementing a good plan requires that the perceptions and perspective of the team are clear and well understood. The best-formed plans will go astray if everyone isn't aligned -- if they aren't seeing things the same way. In making plans and decisions, listen carefully and look for and respond to perceptions; do not rely on fact and logic only. Also, make sure everyone has the same perspective and will support the plan with enthusiasm. This is why it is so crucial for a company to have a mission statement: it’s the tool that gets everyone’s perception and perspective aligned.

Two experiences I had with the same client company illustrate the importance of focus. This client was forming a joint venture with a Japanese partner. The Japanese partner's priority was to seize the opportunity to break into a major segment of the U.S. computer industry.

In dealing with the Japanese early on, I was confused by how long it took for them to make a decision on a new venture or relationship. I eventually learned that they were spending all this time getting everyone aligned in the same thinking -- aligning perception and perspective. This was to ensure that everyone would support the new program with the same enthusiasm and priority.

In the joint venture, they were commissioned to build a new point-of-sale terminal, and the negotiations for the specifications seemed to go on forever. When their team finally agreed on the specifications, the tempo picked up significantly and we got the first prototypes, which were actually better than what we would normally consider production quality.

This was accomplished in four months, in time for major trade show. It would have taken our team twelve months longer, and many of our people would have fought it all the way because it wasn't their idea

While employed by the same American partner, a multi-billion dollar conglomerate, there was more than one occasion when I watched the company make an acquisition that failed miserably. Their only approach was to send the group merger acquisition team out to make a deal, and then to jam the new acquisition into an

operating division that was not part of the original decision-making process. There was no attempt to align priorities or work the perspective on the deal, and as a result, the situation was doomed for failure. It seemed at times that the first the division manager heard of the deal was after it had already been closed. It was doomed from the start.

Another example of how perspective can warp judgment: I may have lost yet another friend because I use my right to disagree. He founded and owns a small, successful company, and one day we had the following conversation.

"Dick, I am going to sell my company."
"No, you won't."
"Why do you say that?"
"Because the last seventeen guys who said that didn't sell, and since I am a consultant who relies on my experience and statistical probabilities, I would bet that you won't sell."
"Well, you're wrong. I don't need your advice anyway."

Why did I tell him that he probably wouldn't sell his company? There are several reasons.

1. Exploring a sale is often only an ego trip for the owner/founder, who needs to see that someone out there thinks they're valuable.
      
2. The company has become a way of life for them, not just a job or a business, and it is hard to give up.
      
3. The owner finds, as Mel Brooks once said in a movie, "It is good to be king." Since he answers to no one, why risk a change?
      
4. Even if he starts to get a little serious, the owner's price includes all the blood, sweat, and tears that went into building the company, and his price will be too high for an investor looking only at the economics.
      
5. At some point in the process, the owner usually realizes what is happening and begins to worry about what he will do after his company is sold. He asks, "Where will I go Monday morning if I have no company?"

My advice is that, if someone really has the desire to sell, they should first find another activity that will replace the intensity of running the business and give them the same satisfaction.

Quite often, patience is needed to make the other management keys work. This is especially true in a group of overachievers and in high-growth situations. The company's leadership has to exercise restraint to ensure that everyone is focused and not pulled apart by impatience.

Always strive to make those above you in an organization comfortable. Whenever I attend a management meeting, I always try to determine whether I feel comfortable with the management team's performance. Is management doing what it says it will? Do they seem focused on the plan? Are they finding and attacking problems correctly? One hour after a board meeting, I won't remember everything presented in the meeting, but I will remember whether I felt comfortable with what I heard or not. If I don't, I follow up, looking for more information about the problem, and I try to determine how I can help.

Also, it is unlikely that a board or any senior management will ever approve a business plan that shows a bottom line loss, but under the circumstances, it might be the best plan. What you look for then is that it is acknowledged, that there is some degree of comfort. The entire idea of delegating tasks is based on comfort, as most managers are reluctant to give up anything unless they feel entirely comfortable with leaving the tasks in the hands of those they delegate to.

Because of they need to feel comfortable, I believe that anyone above me in an organizational structure has the right to communicate with anyone in the organization. However, they are not to "chew anyone out," or give or imply priorities. They must come to me with any criticism or suggestions.

An example of how communications can be abused: At one time when I was president of a company, I walked through the accounting department and asked innocently, "Even though it is only Wednesday, is it possible that the Friday report you normally supply is done?" The answer was, "Well, gee. No." No sooner had I returned to my office than the accounting supervisor was on the phone complaining that all work in his department had been stopped and the entire department put to work on "my report."

The lack of good communication tends to be a "catch all" for explaining away poor performance, but in reality, good communication is necessary to prevent unwarranted surprises, the bane of all managers.

Management often gets in trouble when they don't understand the important difference between "need to know" and "need to say." Unfortunately, most people love gossip, and they love to be the first one to tell someone else of the latest news. The definition of a secret appears to be to tell only one person. Of course some people need to know and have to be kept informed of a situation, but it can become harmful when the word is spread to those who do not need to know. This is particularly true with strategic issues within the company.

"Success is setting a goal and attaining it; happiness is enjoying the goal." Setting goals is an operating necessity. However, those goals must be meaningful and realistic. The worst thing a boss did to me was to let me set goals that were far beyond reality. I did very well, being something of an overachiever, but the goals were too high and not meeting them as planned hurt the program. Also, just doing your best is not a good goal either. As Vince Lombardi said, "Losers do their best."

Management gets into trouble when it does not think a situation through -- plan it -- carefully. Ego also creates a tremendous reluctance to change decisions when things go wrong.

Probably the most important aspect of planning is timing. The importance of good timing to good management cannot be overemphasized. Often timing is so good that it borders on luck rather than vision, but other times companies fail because they peak too soon and have no staying power.

And finally, no matter how carefully you plan, luck will always be a factor. It is often said, but still true, "I would rather be lucky than handsome." Clearly it is better to throw several balls in the air with the hope of catching a significant quantity than to throw only two and have to catch them both to survive. Luck may be dumb, but it can be enhanced by having the energy and talent to always have several balls in the air. Even so, it will still seem like dumb luck when you catch the big one!

A growing management must continually change their perspective. This is particularly true when it comes to purchasing. When material reaches a certain percentage of the cost of sales, no longer can the president (or the person assigned to do the buying because the president trusts them) do the most effective job. When so much of your cost of goods sold goes to materials, it is the place where some of the most significant cost reductions can be made.

In this situation, materials need to be handled by experienced professional purchasing personnel. Not only will the decreased material costs increase profitability, but the efficiency gained from improved material handling throughout the process will also help. With their help, the company will increase timely deliveries, stop overbuying to gain false pricing advantages, and stop receiving material long before it is needed in production.