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Fear of Risk Can Hinder Managerial Effectiveness

Eric Frederick |

One of the hardest things for a manager to do is manage risk — the kind that comes with adding a new service or customer or promising to cut labor expenses if new equipment is purchased.
Managing risk properly is an essential part of what makes a manager above average or excellent. The fear of risk often holds a manager back or prevents him or her from adequately preparing for the future.
I once applied for the laundry director’s position at a brand-new hospital central laundry. Before I could get an interview, a local candidate who worked at another facility in the same city filled the position. It made perfect sense to me that they would offer the job to a local candidate rather than relocate someone from several states away.
Less than two weeks later, the job opened up again when the prospective manager got cold feet. The laundry was having service problems, so the new manager was going to be under the gun to quickly correct them. The risk was apparently more than the local applicant was willing to handle.
There’s an inherent risk in building a new laundry. Most managers who participate in such design and planning fail to survive the first year of operation.
Management has high expectations for the new facility, which often requires additional management skills in order to meet its projected performance. Old equipment and poor workflow often help managers hide their flaws. To properly manage the risk of opening a new laundry, managers must be honest with themselves and work on developing and improving their management skills.
Managers also need to manage the expectations associated with the new laundry. It often takes a number of months for new equipment to function properly and for new employees to reach normal productivity levels. Those who succeed in opening a new laundry have done so through proper planning.
In 1979, I listened to a laundry consultant from Denver talk about a central laundry his firm was putting together for that city. A key feature was an off-site retail cart-exchange system. I thought the consultant was crazy. During the question-and-answer portion of his presentation, I attempted to show him the flaws in his plan. I left that meeting 100% certain that such a system could never be made to work.
In June 1980, Methodist Hospitals of Memphis hired me to create a retail cart-exchange system for their brand-new central laundry. While interviewing, my boss had asked if I thought such a system was possible. Looking him straight in the eye, I told him I was sure I could make it work, because I had an excellent grasp of all the problems that needed to be eliminated.
The risk of trying something I had never done before and had believed to be impossible six months earlier was apparent. But the rewards and the challenge were too much to resist. We developed an effective retail cart-exchange system and the computer system necessary to support it. It didn’t happen overnight; it took extra work and probably caused more than a few gray hairs.
Where nothing is ventured, nothing is gained. There’s no safety in trying to maintain the status quo. Drought conditions, utility costs and rising linen costs have had major impacts on most Southeast laundry operations over the past year. The high cost of gas will further drive up the cost of everything we buy. All of these factors create a certain amount of risk for our laundries and our owners.
What are you doing as a manager to address these issues? How do you plan to reduce your energy consumption and limit the effect of rising prices on your operation? We managers must be actively engaged in managing the risks that are all around us.
 

About the author

Eric Frederick

Carilion Laundry Service

Director of Laundry Services

Eric Frederick is director of laundry services for Carilion Laundry Service, Roanoke, Va., and past president of the National Association of Institutional Linen Management (NAILM), now called the Association for Linen Management (ALM). He’s a two-time association manager of the year. You can reach him by e-mail at efrederick@carilion.com.

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