Operational Problems and How to Solve Them
by GORDON C. STUBBS Partner, Los Angeles Office
Presented before a Conference on Operations and Administration for Member
Firms of the New York Stock Exchange, Los Angeles—February 1965
AT THE OUTSET let me say I have no intention of attempting a compre-hensive coverage of the topic assigned to me. I am confident that you understand thirty minutes does not permit sufficient time to accomplish
this task. I shall consider my paper successful if I touch upon a few key problems that affect each of you and that may stimulate your subsequent discussions at this meeting.
Originally, I had planned to have something to say in regard to revenues but recent events have changed my intentions. I am sure you are familiar with Keith Funston's recent letter of December 29 on the subject of Tentative Recommendations of the Cost and Revenue Committee.
I feel confident these tentative recommendations will be the basis for some of your discussions later during this meeting. For this reason I shall, for all practical purposes, pass up any remarks on ways and means of increasing revenues.
CONTROL OF PERSONNEL COSTS
Most of my remarks will be directed to control of expenses and more specifically to the control of personnel cost since this is the largest single cost in the brokerage industry. To date, no clear-cut evidence has been produced to indicate that costs have been reduced through the extensive use of electronic data processing equipment. Since personnel
costs are relatively fixed, most of our efforts should be directed toward increasing efficiency in the use of personnel.
The most effective means of obtaining optimum efficiency of personnel
is through proper supervision. Consider the nature of the industry:
Its units have hundreds of routine transactions, extreme fluctuations
in the work load, and clerical staffs relatively inflexible numerically, and have never been known for high wages in the area of clerical help. Certainly, these conditions are not conducive to maintaining
the highest morale among office personnel and effective supervision is obviously essential.
Supervisors must supervise. Too often a person who is considered to be a supervisor is, in reality, only a clerk. A supervisor cannot