It takes a lot of time and effort, but people are very flattered and get to feel they are participating in decision making -- and they are.
* * *
INC.: Face it, if you let people make important decisions, there's a big risk, isn't there?
HATSOPOULOS: Not as much as you might think. You see, letting people make mistakes is an essential part of development. If you prevent people from making mistakes by overseeing them, then you don't grow. So, you have to take a risk. On the other hand, you can't let the person make a goof that would destroy the company.
* * *
INC.: How do you find just the right balance?
HATSOPOULOS: You have to assess the risk on a case-by-case basis. If following my manager's course of action would not subject the company to potentially catastrophic results, I would let him take the chance of making a mistake. What I require is for him to identify the difficult problems he faces, and to tell me the solution he's proposing and the rationale for it.
* * *
INC.: So your job, really, is to ask lots of questions -- both before and after decisions are made.
HATSOPOULOS: Exactly.
* * *
INC.: That's fine if you're around and if you have the time. But what about those mistakes you must hear about -- things you weren't prepared for?
HATSOPOULOS: The type of management I'm describing can work only if there's a tremendous flow of information throughout the company.
* * *
INC.: Does that mean that you're tougher on people who surprise you with stupid mistakes?
HATSOPOULOS: Yes, because the whole idea of creating responsibility and minimizing your risk is to get many people's advice, to get a lot of people knowing. If people do their homework -- explain their ideas, listen to mine, rethink their approach -- it's rare that they make mistakes.
* * *
INC.: And the penalties for making a mistake?
HATSOPOULOS: Oh, if they've done their homework, there is no penalty. If they make stupid mistakes, I bear down on them quite a bit because that's what I want to avoid -- letting things fall through the cracks.
* * *
INC.: You've been doing this for a long time. Has it worked?
HATSOPOULOS: What has happened is that people progressed very quickly to the point where I could trust their judgment. And they have applied this management technique to their own people, so that the whole thing grew that way. You can develop a way of growing the company, making people responsible, and building on it.
* * *
INC.: And you can go off for a few days or a week and feel that the company is in good hands?
HATSOPOULOS: Precisely.
* * *
INC.: I suppose most CEOs would object at this point. They'd say, "Fine, but I can't do this until my company is a lot bigger.'
HATSOPOULOS: I got quite involved with these broad issues when the company was very tiny. It was back in the late 1960s, when the company had sales of about $3 million and fewer than 100 employees.
* * *
INC.: What effect have all your activities had on the way you look at your job? You founded the company in 1956, and it sounds like you haven't had a boring day since.
HATSOPOULOS: If my job were to stay the same, I would get bored. I have been at it for more than 30 years, and I still find my job to be tremendously enjoyable. I have a lot of curiosity, I want to deal with new things and new problems. I think a person needs to have some kind of diversity. You cannot think about the company all the time because you would become stale.
* * *
INC.: People can get away from it all by playing golf, too.
HATSOPOULOS: That's right. People find diversion in sports or some other activities, going to a party and chitchatting, playing golf or cards. This is a way people get their minds off their problems.
All I'm suggesting is that you can be selective in picking something that has some creative element. Everything has a creative element to it. You play a hand of bridge, and you concentrate on that problem, how to handle that particular hand. But it's a very short-lived achievement. True, it does serve the purpose of taking your mind off the problem of meeting your payroll. And that's necessary. If you don't do that, I think you are going to bog down.
* * *
INC.: But you're talking about something larger. You're saying that there are ways to spend time that can benefit the business much more.
HATSOPOULOS: Yes, I'm saying that you can be a lot more selective. You can get yourself involved in something that has a longer-term objective than simply winning a game of golf. It can be very satisfying and it can eventually open your horizons in a way that would help your business.
But my initial motivation isn't, how would this activity benefit the company? It's more like, this is a fun problem. I am basically a problem-solver. If you give me a problem right now that intrigues me, I may spend a whole weekend worrying about it, even though it has nothing to do with the business or anything I'm doing.
