| We have set up this temporary test website to elicit your advice, and we thank those who have already contributed their valuable feedback. We will continuously update this site following your input. Consider an obscure fact: Not long ago, in our city, the employee-owned conglomerate-cum-pension-fund SRC Holdings bought a loss- making engineering plant from Komatsu Ltd. The Japanese, who are pros at running lean “kaizen” operations, had run out of options to keep the plant open and were ready to liquidate it. However, instead of bringing in a new management team and/or infusing additional funds, the SRC simply introduced their open-book management method to the factory employees. Within about six months the remaining workers turned the plant around themselves. They even started to hire. Before the year was out, the SRC pre-sold the plant to its employees at a premium price… If you are a buyout professional, you must have just thought: “Nice!...” -The SRC bought low and sold high (fast!) Still, it could have been even nicer. It pays to engage every mind First, let us briefly review some of the management method behind the SRC’s approach. To produce operational improvements, most companies rely on the brains of a few (and expensive) managers. As such, they largely ignore the mathematical fact that none of us is as smart as all of us. They also forget that it is non-supervisory employees who actually encounter most of the problems, see most of the opportunities and thus can create most of the new value. Yes, some managers use kaizen-like continuous improvement methods to tap into employees’ talents. However, those methods are hardly perfect: just like at the Japanese-owned Komatsu plant, the upside potential that kaizen methods leave behind is enormous. This massive waste of value-producing potential happens regardless of the company’s size, industry or international location. Even paragons of "managerial sophistication" like General Electric are not immune to it. Please note that in the case of the SRC, the ex-Komatsu plant’s value rose not due to anything that the SRC managers made their employees to do, but due to what the SRC system made the employees do. It was their system that ignited the employees own desire to increase the plant’s profitability; the SRC owners simply let them do so. In managerial parlance the system better aligned the interests of the owners with those of every worker, thus partially addressing the vast blind spot of management practice that few realize even exists (see more on it here). The speed of real trust Our own fallibility management system provides an even better approach for addressing the same Principal- Agent problem. Through an unobtrusive verify-and-trust mechanism it creates a degree of intra- organizational trust that is unmatched by any other method, including the SRC's (see the examples here). The resulting “speed of trust” inevitably boosts the pace of execution and the agility of the whole enterprise, allowing companies to out-maneuver their competition. By inducing and organizing employees’ desire to learn, our system doesn't just harness all of the workers' abilities, it rapidly expands them. They want to improve everything, and find their best mentors and work methods on their own. Along with being superior to the typical top-down training and initiatives - you can’t beat “free,” or make the horse drink, can you? – the system gives a steeper curve to profit-raising innovation. And innovation, like interest, is compoundable. Importantly for the PE industry, our system also creates the kind of cohesive organization that guarantees the emergence of a competitive bid for the company from its employees, with or without other buyers in sight. On every level, our system beats even the SRC's open-book method, not to mention typical manager- centered approaches. The question Most PE firms are so invested in their manager-centered methods that it appears they never seriously consider better systems for harnessing the value-creating potential of their employees. Hence, our question to you: How can we tell them that they leave half of their potential returns behind? Alternatively, which buyout firms are open-minded enough to recognize this opportunity when they see it? How would you tell them? And, while you're thinking, here is a short interview with SRC Holdings president Jack Stack for you: The system, indeed, is the solution You may want to know that the SRC Holdings Corp. has a consulting subsidiary that will sell you all the advice you need to learn their open-book method. Here is the link to their site. Please, use their services as much as you desire. Just keep in mind that our cybernetic (as in automatic, plug-and-play) management system is not only more effective - it requires no training. With our one-page checklist, virtually anyone can make it work in any industry, anywhere in the world. And, with its unmatched speed of execution, the system better caters to the needs of GP's (and especially LPs, who always want their distributions yesterday). There is a grander opportunity here, too: if the PE industry adopted the SRC acquisition approach multiplied by our “management steroids,” it would not just double its returns. For such a profitable “liberation” of the working stiffs, it is the Henry Kravises and David Rubensteins - now reviled by many of their own employees - who would be hailed as Gandhis with the Midas touch. Quick Summary Obviously, there is more to our simple system than what we can share on this page. A complete explanation of how and why it works would take several volumes encompassing behavioral economics, network theory, criminology and even fractal geometry. However, just as Google spews results without its users knowing its algorithm, our system will work without you knowing why. There are no costs involved either, and we get paid only from the resulting profits. With the proof always being in the empirical pudding, for now a PE partner only needs to know that our unique system will:
There are other valuable benefits that flow from the use of our system. Obviously, like the rotary phone users of yesteryear who couldn’t fathom the iPhone, some may think that this is too good to be true. We say -- try our system and speak from knowledge. After all, it won’t cost you a thing. Actually, all we really want is your opinion on how to tell some open-minded GPs that our system can greatly improve their returns while making their work easier. Since you have read this far, you most likely have developed an opinion about not just the things we say, but how we say them. Please, share this opinion with us, anonymously if you wish. We appreciate every critique. For more information about our group, please refer to www.FallibiltyManagement.com or send us your inquiry at info@peHeaven.com |
| PEHeaven.com Twice the return @ half the trouble |
This is peHeaven.com's temporary
test site - our attempt to elicit some
preliminary feedback.
| General information: PEHeaven.com is owned by the Fallibility Management Group, a research, system-licensing and co-investing group based in Lexington, KY, USA. |
By the way, how does “peHeaven”
sound to you? Since our systems
can double the returns of any non-
real estate PE firm while easing
the work of its GPs, we have no
qualms about using the name like
this. However, some GPs might be
offended: how dare we to tell them
that they could be making twice as
much while working half as hard!
You can leave your feedback
below, you can do it anonymously -
none of the fields are required.
sound to you? Since our systems
can double the returns of any non-
real estate PE firm while easing
the work of its GPs, we have no
qualms about using the name like
this. However, some GPs might be
offended: how dare we to tell them
that they could be making twice as
much while working half as hard!
You can leave your feedback
below, you can do it anonymously -
none of the fields are required.
Temporary Test Site
CONTACT:
info@peHeaven.com
Tel.:859.575.27.00
Fallibility Management Group
P.O.B. 22704
Lexington, KY, 40503-2704
info@peHeaven.com
Tel.:859.575.27.00
Fallibility Management Group
P.O.B. 22704
Lexington, KY, 40503-2704
| David Rubenstein being ambushed by SEIU protesters at Wharton PE conference. |
Please note that we are an
organizational R&D firm, not a
management consulting outfit. We
help install our systems, design any
desired additions and take care of
them for as long as necessary.
However, beyond an odd seminar, we
do not engage in consulting gigs.
Being self-adaptive, our systems take
care of a consultant’s work on their
own.
organizational R&D firm, not a
management consulting outfit. We
help install our systems, design any
desired additions and take care of
them for as long as necessary.
However, beyond an odd seminar, we
do not engage in consulting gigs.
Being self-adaptive, our systems take
care of a consultant’s work on their
own.
