When Increasing Capacity Becomes a Priority

One Sunday morning, a homeless woman at a traffic intersection was approaching cars and begging for alms.  Some drivers give but most don’t.  But the woman persists anyway; she shows a sign saying she’s homeless and asks for money for food. 

I thought as I observed the homeless woman:  if the government could spend so much setting up facilities to quarantine patients infected with the CoVID-19 virus, couldn’t it also spend a little more to house the homeless who roam the streets?  At least the government could provide a place to sleep and some food and water to homeless people even for a brief time so they’d be able to find work or resolve whatever issue that brought them there in the first place? 

The frequent answer to such a suggestion is a lack of resources.  The government would say they don’t have the budget to provide such for homeless people. 

How then were they able to provide for CoVID-19 infected people?  That’s different, a government person may say.  It was a national emergency and the virus is dangerous and life-threatening. 

But isn’t being homeless and without food dangerous and life-threatening too? And at this point, the government would not pursue the argument.  With a wave of a hand, they’d just say there is no justification to provide the resources. 

Not only governments but also enterprises hesitate to provide resources even when the demand would be there.  Executives would cite limitations in budgets or capital.  They would prefer that the operations spearheading supply reach their points of maximum capacities before asking for any investment in additional capacities. 

And even if they are at that point of maximum utilisation, executives would require proof that operations are also at their highest efficiencies.  Executives by common practice, will want an organisation to exhaust all of its means before considering any investment in additional capacities. 

If executives can avoid investing in new capacities, they will.     

This is why factories run flat-out to supply products before companies realise they need to build new production lines.  This is why airlines wait until flights are overbooked or ticket counters turn away passengers before they add new planes to their fleets.  This is why some restaurants don’t expand their dining areas or hire new staff until they see patrons waiting for tables or walking away because they couldn’t get a waiter to serve them.    And this is why internet companies don’t install new equipment until they see slowdowns in downloading speed or backlogs of subscribers. 

It doesn’t occur to many enterprises that investments in additional resources should ideally happen before operating limits are reached. 

At the height of the CoVID-19 pandemic in New York City, USA, in late March of 2020, the US Navy dispatched the USNS hospital ship, Comfort, to assist the city’s medical services. 

New York was low on available beds and staff to treat a surge of CoVID-19 patients.  New York City welcomed the Comfort, with its 1,000 beds and trained medical staff.   

But instead of helping, the Comfort would only take non-CoVID-19 patients.  The US Navy thought that by taking in patients not infected by the virus, New York could free up space in their hospitals for the CoVID-19 patients.  The Comfort’s beds were also spaced closely side by side so in the first place, the ship could not enforce social distancing for CoVID-19 patients.

The Comfort ended up treating 20 patients at its first week as New York’s hospitals continued to struggle with crowded wards and weary staff.  After so many weeks of sitting idly by hardly utilised, the Comfort departed New York City. 

The story of the Comfort was a lesson for leaders, if not an eye-opener for executives.  One should not wait till an issue becomes extremely urgent before acting.  

But nobody did learn.  Nobody did realise.  Many executives of governments and enterprises have forgotten the story of the Comfort. It has been relegated as one more passing tale of the pandemic era.  Meanwhile, wave after wave of virus infections months after the story of the Comfort have led to overcrowded hospitals and more deaths due to patients unable to be admitted for treatment.   

We shouldn’t wait till the last minute before deciding we need more capacity.  It isn’t complicated to calculate how much more we need if we can see the rate of  growing demand and anticipate when our resources will no longer be enough. 

I gave money to the homeless woman that day but I saw more homeless people begging on the street corners the weeks afterward. 

We still haven’t learned. 

About Overtimers Anonymous

Owning versus Managing: What’s the Difference?

Do you own the business or do you manage the business?*

A senior member of the board of trustees of a high-rise building walked into its administration office and asked the accountant there to order parts for a diesel generator set.  The senior board member believed that the generator needed a minor repair and not only does he tell the accountant to buy parts, he also tells the building technicians to do the repair the coming weekend.  At no time does he talk to the building manager or the engineer both of whom were at the office. 

The building manager didn’t agree with the board member.  She made that clear in a previous board meeting where the senior member as well as the president and other board trustees were present.  The building manager felt that an outside contractor, with special expertise in generator sets, should diagnose and repair the building’s diesel generator.  It shouldn’t be entrusted to the building’s technicians who themselves said they were not qualified to do the job. 

The senior board member didn’t care for the building manager’s opinion and didn’t bother to talk to the engineer.  When asked why, the senior board member said the technicians agreed to do the job and the engineer didn’t seem to be interested. 

We can easily see that the board member was wrong for pushing ahead with a job that is the responsibility of the manager.  But this kind of thing happens a lot not just in buildings but in businesses.  Owners hire managers but take it upon themselves to micro-manage daily activities.  

Owners would insist on being part of every daily decision, from approving every petty cash disbursement to studying every project, big or small.  Managers end up paralysed; they won’t move until the owners tell them what to do. 

Thus, the question to enterprise owners: are you there to own the business or manage the business

Managing the business is about planning, organising, directing, and controlling the enterprise’s day-to-day activities and projects.  It’s about supervising people, procuring resources, budgeting & accounting, and compliance to rules & regulations.  Managers make sure goals are met and strategies executed. 

Owners set the standards and peg the objectives of the enterprise they have stakes in.  They monitor the performance of the enterprise in which management delivers and reports.  They listen to management’s recommendations on issues such as budgets, plans, projects, and strategies.  It is the owners who decide via their boards or executive committees whether plans push through or not and how much resources will be planned, procured, and given.   And of course, it is the owners who hire and fire the managers. 

Both managers and owners share the same common interest:  make the enterprise prosper.   Each just have different roles.  But because we are human in which we each have our own opinions, owners sometimes cross the line and interfere with management. 

There is nothing wrong when owners complain when they notice employees come in late for work or when they question why customers aren’t receiving their orders quickly.  There is nothing wrong when owners suggest ideas to managers whether it be for process improvement or for a new gadget. 

It becomes wrong when owners push managers on how to address a complaint or how to adopt whatever idea or suggestion is raised.  Managers are there to figure out how to do things.  Owners are there to see how managers perform. 

Managers represent the owners when they deal with clients, vendors, contractors, community, and government.  Managers therefore should make sure their decisions and policies are in line with the owners’ standards and objectives. 

Owners lead.  Managers execute.  Owners set the destinations; managers map the routes.  Owners approve the strategies; managers act on them. 

There should be no overlap.  No crossing over.  Owners should know their place as much as managers should too.  If owners want to manage, then they should assume the position but be ready for the consequences, one of which is organisational paralysis. 

*Thank you to Mr. Jovy Jader of Prosults for coining the question and inspiring this blog. 

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