Q. What were some early lessons for you?

A. I come from a family of nine kids — six boys and three girls. Because it was a large family, we didn’t have a lot. One of the things that we did every Christmas was that my parents would say we had to earn our Christmas money. And so they were the venture capitalists.  They’d give us $5, and then we would go buy wholesale wrapping paper and take orders and resell them and turn that $5 into $25.   

It was a great thing, because you learned about customers, learned about keeping your word, getting the orders delivered on time. 

Q. What about your first kind of formal management role? 

A. We worked for my parents, and I did kind of supervisory things there, and then worked for the company that bought my parents’ business and actually ended up running that business.   

Q. What was the company?

A. My parents started a computer business back in the ’60s and grew that into a nice little regional business.  There’s a story behind that. Earlier, my mother worked for the phone company and worked at night, and she had a baby daughter, her seventh child — her name was Nancy. When she was four months old, her heart stopped. And I was 10 years old. I grabbed her and went to my brother, who was 12, and we got her to this clinic and they got her heart started again.  But she had a lot of brain damage from that, so she had to have somebody taking care of her and feeding her all of the time. [She died at 13 from cardiac arrest.]   My mother wanted to work, but she needed to be at home, and so she leased a key punch machine, put it in my sister’s bedroom and started to do data entry, and that’s where many of the principles that we operate on today were formed — how to compensate people, data controls and process control. 

All the kids in our family learned data-entry key punching in my sister’s bedroom, literally at my mom’s knee.  We grew up on a computer farm, as my parents called it, because it was back in the ’60s and it was one of those rare moments when, as key punch machines evolved into computers and our business grew, we were able to associate with these brilliant people from M.I.T. and Harvard . It was a wonderful education. 

Q. You mentioned that you ran your parents’ business after it was sold. How old were you, and how many employees did you have?

A. I was 27, and we had close to 1,000. 

Q. How did you handle that big leap into management?

A. You know, I just used a lot of the stuff we really kind of formulated back in my sister’s bedroom.  We eventually had a key punch machine in each of our bedrooms, so the trick question was, well, how do you pay the kids?  Because if you pay hourly, you’re going to have to have a lot of verification and that kind of thing.  So they came up with an incentive system that was essentially self-policing.  I believe that a really important management principle is that if you get the incentives aligned, people will motivate themselves far better than you’ll ever motivate them. But, again, you have to get the incentives right.   

Q. Just the financial incentives? 

A. It’s not only financial.  It’s being able to feel like they have a level of control over their destiny, that they are valued in what they do, that they’re being successful, that they’re contributing.  Those things are actually probably more important than the money.  But you’ve got to get the money right, too.   

Q. So how did it work in your house with the key punch machines?

A. I was terrible. I’ve never been a good typist. But all my brothers and one of my sisters were exceptional.  So my brothers resented me for getting paid the same as they did even though they did three times as much. Pretty soon my mom and dad both said: “Well, we have to make this more fair. We have to tie it more to what you do.” And because it’s a computer, it can provide all the evidence of the work — productivity and quality — that’s accomplished. 

What happened with that incentive program was that I learned very quickly that that was not for me. I was never going to make any money doing that job. And so this notion of self-nominating is crucial in management. If you can get a person to self-select, that’s a lot better than a supervisor having to come and say “You know, Lynn, you’re just not good.” 

Article source: http://www.nytimes.com/2011/10/30/business/lynn-blodgett-of-acs-on-entrepreneurship-in-a-big-company.html?partner=rss&emc=rss