Friday, February 13, 2009

The tale of the Three Envelopes

Recently the Vice President of an overseas division in a Fortune 500 company, let’s call him W, was being let go. During the transition period he had the chance to go to lunch with his replacement. We’ll refer to his replacement as Q. After they had ordered W offered Q some advice. The conversation went something like this.

W opened up saying, “There will come a time where you will be in the position I am in now. Don’t despair. There are some delaying tactics you can use. I was taught them by the guy in the position before me and I feel it is the honorable thing to do to pass the knowledge on to you.”

Q, the Incoming V.P., was sympathetic to the recently laid off W’s plight and in an effort to be polite replied, “Sure, anything you can tell me about managing the division will be extremely helpful. After all, you ran the unit successfully for quite a while.”

“Well, OK,” replied W, “Here goes. Sooner or later something unfortunate will happen. Senior Management is never satisfied, especially nowadays. You know how it is. You’ll be called to Head Office to explain why the unit isn’t doing as well as it should. I’m going to hand you three sealed envelopes. When your first crisis hits open the envelope labeled Number One and do what it says. Following the instructions found inside will buy you anywhere between six to eight months breathing space depending on how effectively you follow them. When your second crisis hits, open envelope Number Two and do the same with envelope Number Three. Open it when your third crisis occurs. All in all, you should be good for anywhere between eighteen months to three years, depending on how well you can follow instructions. All this time will allow you to look for a transfer and help ensure you land on your feet.”

“Can I look at them now?” asked Q.

“Nope, only when the time comes,” was W’s response as he handed over the envelopes. “And now, let’s enjoy our lunch.”

Time passed. Q was installed and things were rolling along when the news got bad. Sales were down, expenses were up and he was called to explain the circumstances. He remembered the lunch and reached inside his desk drawer to pull out envelope Number One. With much trepidation he opened and read the single strip of paper inside. There, in one terse, typewritten sentence were the instructions. They read, “Blame everything that’s happened so far on me, your predecessor.”

During the meeting that followed Q followed this strategy, waxing eloquently about the problems W had left behind. He explained to Senior Management that the last five months had been dedicated to turning the situation around, improving morale in the unit and generally fixing the mess he had inherited from W. After all, W had been let go, and this didn’t happen unless Senior Management perceived that things weren’t going the way they should. He pleaded his case for a whole stressful hour using extremely convincing PowerPoint slides all pointing to W’s inefficiencies. The strategy worked and he left the tense meeting with a six-month amnesty whereupon he would have to return and show that things were turning around.

Six months passed and things were still not working out, but Q was much less worried. After all, the previous envelope had worked like a charm. When he finally got the call to speak to Senior Management he nonchalantly reached into his desk drawer and ripped open envelope Number Two. He read the instructions. These were a little lengthier than the previous ones.

They read, “Initiate a massive reorganization/restructuring within the division. Lay off some people, bring some cronies in from other areas and put them reporting directly to you. Change reporting lines across all the top level and have a new organizational chart drawn with a lot of matrix reporting and dotted line relationships. Shuffle product lines and different business units around into different geographies. Change some job descriptions and consolidate some functions. Move people into different offices for no apparent reason, preferably in multiple buildings. Invent lots of new acronyms. Keep everyone guessing."

"Bring this new organizational chart to the meeting with Senior Management along with a white paper and an executive summary explaining the reason for the changes, which is to implement a new strategy and inculcate a new culture. Above all, give the impression of action and make so many moves it will take at least six months for everyone to figure out what it is you and they are doing. Remember to repeat the mantra “Focus on the customer” all the time and explain that these changes will allow you to do this within your division."

It took a little work but Q followed the directions to the letter. Senior Management was impressed and told him he had a whole year to implement his changes and produce results. Q was ecstatic. The year passed quickly and everyone, including Q was so confused with the changes that a stagnating paralysis set in. The unit did worse than before, but Q wasn’t worried. He still had the third envelope.

When the inevitable call came from Senior Management Q was cocky. He told them that all would be explained and that he would be at Head Office within the week to present exactly how he was going to get record results. He told them not to worry, that his division would be the star player within a short while and that he needed a couple of days to pull the deck together for their meeting. Q hung up from the call and opened the desk drawer. He pulled out envelope Number Three and eagerly opened it to see what words of wisdom W had left him to get out of this one. The single typewritten sentence, only three words, all bolded and in capitals struck terror in his heart. With much dismay he read W’s sage advice. It read,