~synthesis~

Y-shmy

I've been reading a lot lately about people who are trying to figure out ways to connect with and engage the Gen Y demographic (I've been reading even more about "consultants" that are "available" to "help" with this). Managers and business leaders (certainly HR people) are worried about recruiting, creating effective working conditions, making them happy, etc. There is a projected shortfall of millions of teachers with more than 40% expected to retire in five years (other industries have similar data); Harvard Business Publishing posted an article on low-cost approaches to motivating employees.

I wasn't around then, but was this type of thing discussed (albeit not blogged or twittered) when the baby boomer generation was about to hit the workforce? Were employers at the time worried about how that generation would be recruited, create outcomes and be happy? Were they worried at that time about potential staffing shortfalls in some industry? I think so.

In the end, what happened to all the Gen-Hippies? Did they fundamentally alter the work environment or recruiting or employee morale?? Not so much.

If you're employed (like I am), there is only ONE reason you go to work every day. This one reason is universal to everyone who is employed - whether its is at Microsoft or GM or McDonalds or the White House. And we all know for a certainty that if this one thing stops, we stop working - no ifs ands or buts.

We work because they pay us.

I don't care whether you are Gen Hippie, Gen X, Gen Y, or Gen Purple - if you don't have money and want to earn some, a job is required, and money is conveyed in exchange for work done. That's the bottom line.

If I were "consulting" employers on how to lure any candidate (irrespective of demographic) to come work for me, I would offer this employee perspective:

We go to work because we're paid. We enjoy work because we care. We thrive in the workplace because you care.

If you have the cash flow to make payroll, the first is easy. The second is self-selection combined with a belief that good work is being done. It is about the purpose of the organization and how it is conveyed - a barista at your local coffee shop has purpose, as does the assembly line worker at an auto manufacturer, as does a software engineer at a high-tech firm. It boils down to having a clear link between the mission of the company and the actions of each employee; it boils down to clarity about each job and its contribution. If a company is well run, one of the signs is employees that care about what they do.

Seth Godin said you have to watch the money to gauge a person's belief in the work they do - that's a great "indicator" of genuineness. When you're a leader, you have to go further.

The third sentence is about management's authentic commitment to greatness. You can smell that a mile away, and you can absolutely tell when it's being faked. You know when it's proxied through HR practices, and you know when the "all-hands" communications sent out by the leader are crafted by HR and PR.

Authentic commitment to greatness requires leaders to care - it requires leaders to be transparent and accountable, and it requires absolute integrity.

If you need HR and predatory consultants to "help" you understand people - perhaps it's because you've stopped being one yourself.

anti ex parte party

What branch of the federal government has the highest level of integrity? Which would you trust more than the others?

The Executive and Legislative are infected with special interests, and motivated not by what's right, but by what's popular and what sells. The Judicial seems to be the most transparent and the one where outcomes and implications are most easily observed and measured.

The Supreme Court is generally at the back of the decision tree - they don't create, they interpret and to some degree, enforce. But they have a system that prioritizes integrity and peer review in a way that the other two don't.

Is it because judges were deemed to be less trustworthy and therefore had to have walls put around them? Is it self-imposed? Judicial is the also only branch that has a competence/experience/academic barrier to entry - the others are a free for all - anyone can apply - all you need is citizenship, access to money, and a gullible electorate (this last you get for free).

Is there a way to inject trustworthiness into Congress and the White House? I suppose the founders felt that the election process was the best policing agency for this, but let's face it - that hasn't really worked.

Judges are required to explain and document their analysis and rulings (unlike the White House or Congress).  Judges can only communicate (directly or indirectly) with any person or group that has a connection to a case if it's "on the record." Any communication that violates this is called ex parte.

Why can't we apply the same standards across all three branches? What if every conversation related to a bill/measure/whatever was required to be on the record and fully-disclosed to the public as a matter of law? For national security issues, the conversations should be documented and available after an appropriate period. No matter what the discussion, or with whom, everything must be part of the public record.

If I had an interest in a particular law or ruling, I'd want to be able to see the "paper trail" of influence for every Congressman or Senator that voted for or against it, or helped craft it; and I'd want to see it in roughly real time (i.e. within a day of the conversation). I'd also like to eliminate the statute of limitations for violations, if an elected official is found to have done something inappropriate even after they've left office, they're still liable and subject to judgment

In 1994 the Republican party drew up a Contract with America that made a series of commitments that would be kept if they won a Republican majority in the House. I thought that was a brilliant tactic and wonder if they might not do it again?

If I were running their party and facing a possible worst-case scenario with Sarah Palin, I would want to reestablish my party with all demographics, and unshackle myself from any one interest group. The heartland, religious right, tea party, or whatever are all important constituents, but to win I need them and more. The American politic isn't as parochial as it once was; you are a victim of being fractionalized (the Palin effect) if you allow any one person or community to define the essence of the party.

Like the Contract, I'd also want to define a new game and force the others to come to me, and play by my rules (straight from Sun Tzu's Art of War).  My opening gambit: "we are now the anti-ex parte party; all of our candidates have signed this pledge and we call on our opponents to share our commitment of integrity and accountability to the American people." It would be a way to jettison the anti-Cheney/Bush sentiment, the religious right leaning that has turned off many voters, and the Palin effect. It would also put the President and many Democratic leaders in a difficult position, because either way (take the pledge or not), they lose. Can't beat those odds.

But the best thing is it would bring a measure of integrity and accountability to Congress and the White House.

the time is now

This week, I had the great pleasure of meeting Prof. Deborah Ball (math teacher and Dean of UMichigan's School of Education) as she spoke to a group of math teachers (I crashed the party). She was there to talk about teaching math, but really, her presentation was about two issues that I think we ignore at our own peril - a national education approach vs. state/district, and that teaching is a professional discipline and not a just a job.

With respect to federalizing - IMO it is utterly moronic to have more than one school district in America. According to the 2002 census there are:

• 13,506 school district governments
• 178 state-dependent school systems
• 1,330 local-dependent school systems
• 1,196 education service agencies (agencies providing support services to public school systems)

That's 16,210 separate entities that govern this country's public school system! There's just no way a rational person can say that's a good thing. It turns out, neither the Constitution or any of the 27 Amendments ever mentions the word "education" - that's a mistake.

My thanks to Larry for the African proverb below - it is brilliant, has many messages, not the least of which is "sure if you had had a brain you would have done this ages ago, but since you didn't then, it's time to grow some and get it done now." President Obama and Secretary Duncan need to grow some (the Republicans will likely endorse this before the Democrats), argue that eliminating 16,210 agencies is a good thing, and that we need a 28th Amendment to the Constitution to mandate that public education be nationally funded and administered.

As Deborah pointed out, every country that does education well, does it as one - we can learn from that. Moreover it is morally abhorrent for the government to discriminate against a child's right to a great education just because of their zip code. <-- Where are our student-rights advocates?

The second (and best) part of Deborah's speech was about teaching as a profession, with specific skills, discipline and capabilities. Lay teachers (i.e. parents, etc.) do create learning experiences for their child, but they have nowhere near a professional approach, worse, they often do the wrong thing if their goal is to grasp the child's current understanding and help them learn more. (If the goal is to make the "teacher" feel good, then they're successful.)

Read at least the first 2-3 presentations on Deborah's website, and you will see that she talks at length about how a professional teacher is distinguished from a lay-teacher. She also answers the question "what persistently impedes progress?" by identifying five contributors:

1. Persisting with extinct arguments about skills versus conceptual understanding
2. Lack of a central or common curriculum
3. Persisting with outdated and refuted ideas about "teacher quality," especially with respect to content knowledge
4. Persisting with pendulum shifts from teacher-proofing to teachers, but rarely focusing on teachING
5. Persisting with approaches to teacher education that emphasize things other than practice (e.g. reflection, believes, propositional knowledge, experience)

We've talked about #2 already, the other four are all aspects of respecting teachers as professionals, treating them as such, measuring their ability to teach separately from domain knowledge, and providing them with the tools and mentorship and support to become more skilled teachers. During her lecture, she gave us all a bunch of tests that show how different it is to be a professional teacher vs. a lay-teacher. It was fantastic.

But do teachers really want to be professionals? Do they really want that obligation and expectation? I think they do, I think the bulk of teachers go into it because they are called to it. BUT - as Deborah points out, that doesn't mean they're going to be good at it. It's also not the case that teaching is more art than science. There are specific tools and techniques that effective teachers use that lay-teachers or ineffective teachers don't. This needs to change.

But achieving professionalism isn't just about the teacher, it's a systemic commitment. It must start with the school leaders and administrators providing an environment where teachING is valued and developed; it goes to teachers colleges who must focus on developing these skills from the outset and for accreditation; it goes to the unions who must support these initiatives to measure and compensate their members in terms of their professional ability vs. tenure. It goes to teachers who have to sign up to evolve their technique in order to improve their performance.

Note that I didn't say teachers should be accountable for student outcomes. I think that's the job of schools vs. individual teachers. BUT - teachers do need to be accountable for developing their craft. They need to be paid based on their ability (vs. tenure) in this regard.

If we are able to go from 16,210 to 1 and treat teachers as professionals and measure their proficiency accordingly, change will happen. Not planting the tree 20 years ago shouldn't stop us from planting it today.

simplicity

Have you noticed that the more America cares about something, the more she screws it up?

From education to healthcare to crime to terrorism to disaster relief to taxation to foreign policy to whatever; anything that the politicians get their paws on is sure to take a turn for the worse. Moreover, the longer they hold on to it, the more harm they do. The media doesn't help with it's hype-obsessed approach, but that's a separate story.

Education has been at the forefront of political debate for as long as I can remember, but this year 7,200 American students will drop out on every school day. Look at America's foreign policy history of "anointing" leaders (just in the Middle East: Saddam Hussein, Hamid Karzai, the Taliban, etc.); or how Hurricane Katrina was handled; or how many people in this country die of preventable diseases; or the "war" on drugs; or crime-prevention efforts that result in more crimes and more criminals in jail year on year.

The list is endless, as is the complexity of each of these programs. It seems that everything this country cares about must be huge, intricate, nuanced, and over-manned. If it isn't we don't care enough. If we don't throw enough money at it, we're not really committed. Therein lies the rub, the fallacy, and our failure.

What can be done to create a more productive system? Whatever it is, it's for sure not as simple as I'm about to make it. Or is it? Is that our problem? We like complexity? It's much easier to hide (or hide things) in a tree/bush/shrub/etc.-ridden forest than in a less-cluttered place like an empty parking lot. Ask people in the government and they will affirm that it's an incredibly complex and nuanced thing - this is why the 2008 Federal Budget numbered 2,200 pages.

Warren Buffet once said that "business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective." Most corporations and governments are rife with business school graduates. Maybe not such a good thing... We should not take this idea that complexity is good, inevitable, and to be cherished as truth or acceptable.

What if three things were to change:

1. Spend well - most budgets are funded based on LOBA (lower of budget or actual), which is fine when you have a ton of money and no accountability. It favors those who spend, not those who do. What if this changed - budgets are now zero-based (start from scratch), and funded based on outcomes. There will be multi-year projects that need to maintain funding, but they should be assessed based on what got done in the current year and whether it's time to increase, reduce, or cut the investment. The goal should be (for the 1st year) a budget that is 10% the size of the current one - 220 pages.
2. Rewarding completion - why don't things stop in government? So many projects (largely due to #1) go on and on and on, just because departments measure success based on funding; and cutting things admits a need for less money. We should reward good completion - it could be as simple as a bonus (to the government employees, not the contractors) for finishing a project on time, on budget, and closing up that shop. Those people should be first in line for the next cool thing to happen, because they got it done the last time. I'm not sure what the real goal should be, but my gut says 80% of programs 20 years or older should be cut, and 20% of programs younger than 20 years should be cut - every year.
3. Being accountable for less - this is big. I've never seen any successful project get done when it had more than three objectives. In fact, the most successful ones have just one. When you try and do everything for everyone, you end up doing nothing for anyone. We must only fund programs that have a clear, singular, time-limited objective. It's true that some things are not time-limited - defense or social security come to mind - and that's fine, they should be the exceptions. The goal should be for every project to have a clear, specific and timely outcome. If it doesn't, it doesn't get funded.

I know I've focused solely on money, but look at how things get done in government, it boils down to he who has the $$ has the power. Let's temper that power a bit...

democracy

Leonard Cohen is one of my favorite artists - he is a brilliant poet and a great entertainer - I was (ironically) listening to Democracy as I was reading the news:

It's coming to America first,
the cradle of the best and of the worst.
It's here they got the range
and the machinery for change
and it's here they got the spiritual thirst.
It's here the family's broken
and it's here the lonely say
that the heart has got to open
in a fundamental way:
Democracy is coming to the U.S.A.

The NY Times reported that Dede Scozzafava (R) suspended her candidacy for an upstate New York Congress seat this weekend. Scozzafava's support of gay and abortion rights caused conservative interest groups to embark on an extensive radio and advertising campaign against her (despite he being a fellow Republican). Without missing a beat, the RNC switched its support to a more "mainstream" conservative candidate, but they never consulted the district in question, which of course is upset because the new candidate is a national choice and not a local one.

This is not about calling out the Republican party - this could just as easily have happened with the Democrats if a candidate wasn't "on board" with one of their core issues.

I'm not an alarmist, but the first thing I thought of after reading this article was these words: "Our job as Americans and as Republicans is to dislodge the traitors from every place where they've been sent to do their traitorous work." -- As spoken by Senator Joseph McCarthy in a 1952 speech at the Republican National Convention.

Those were complex times, when fear prevailed in the face of a very scary enemy and the government felt empowered to do whatever was necessary to win. Sound familiar? As today (with Newt Gingrich in the NY Times article), there were cautionary voices that spoke out, most notably:

Sir, I detest, I abhor their [communists'] philosophy, but I detest more than that their tactics, which are those of the fifth column, and are dishonest, but at the same time I never as a citizen want to see our country become urged, by either fear or resentment of this group, that we ever compromise with any of our democratic principles through that fear or resentment. I still think that democracy can do it.
–Ronald Reagan, testifying to HUAC as president of the Screen Actors Guild (1947)

It's easy to understand why the conservative Republican community is so bent on protecting itself. After years of dominance, the last months have been a struggle. When you face this kind of test, you think about what got you here (your last win) and try to recreate it or protect it. In the corporate world, it's strategic entrenchment - where a company tries to milk its cash cows to the last drop, forgetting how they began in the first place, and as a result allowing others to eat their lunch, their dinner, and future meals as well.

A set of principles galvanized a group of people to form the Republican party. If I were in their leadership today, I would remember that moving away from a successful approach is incredibly difficult, and requires serious conviction. But the alternative is someone else eating your lunch, dinner and all your future meals...

As Cohen said:

Sail on, sail on
O mighty Ship of State!
To the Shores of Need
Past the Reefs of Greed
Through the Squalls of Hate
Sail on, sail on, sail on, sail on.

antitrust

Does human nature dictate that we don't trust each other? It seems that way. While it is true that communities can form and have each others' backs, the vast majority of society seems bent on believing and expecting the worst of its people.

This is why we have police officers, FBI/CIA/DEA/NSA/TSA/XXX agents, a vast military machine, and even a division at the US Department of Justice that focuses solely on corporate antitrust. Schools have metal detectors, airports have ridiculous security procedures - it goes on. As a politician, you have to show that you are tough on crime, promoting your prosecutorial record (or in some states how many people you've put on death row). Have you ever heard a politician campaign on the fact that they have less people behind bars, and claiming it to be a good thing?

As an aside, it's interesting that American (I can't speak for other countries) enforcement officers are measured on their conviction rates vs. their prevention rates. Success is putting more people behind bars vs. preventing the crime from happening in the first place. Implication: the whole system is conditioned to look for wrong-doing (perhaps even creating wrong-doing to succeed) vs. preventing it.

Surely this can't be a productive way to live? This mentality permeates the corporate space as well; with few exceptions, almost every large (> 500 employees) company I've ever worked with or for has a layer of politics and mistrust between departments. In some cases it's the arrogance of not wanting to take a dependency on "them" to do something, so you create your own redundant process; in other cases, it's a belief (not inaccurate) that compensation/recognition is a zero-sum game that requires me/us to do better than him/them - for me/us to win, he/they have to lose. The team matters less than the individual.

Whatever it is, companies as much as societies believe the worse of themselves, and design and manage to that expectation of untrustworthy behavior. Look at HR models, regulatory compliance rules and trainings, corporate overhead, and you'll find that much of that is rooted in the expectation of betrayal.

But there are exceptions, my thanks to Axon for sharing this statement of Netflix' Freedom and Responsibility culture. It speaks volumes about their approach, but it's also interesting that it took 128 pages to tell the story. I wonder if one statement might have sufficed:

"We hired you because we believe in you, share your passion for doing great things, and feel your belief in us. All we ask is that you always keep our shared goal for greatness at the front of your mind and do the right thing."

Is it possible that if I trust you, you will feel empowered by that trust and allow the better angels of your nature to prevail? We do this in places like airports where we ask a stranger to watch our bags for a minute. Parents do this when entrusting their children to babysitters. Team sport athletes do this because they know they have to act as one and trust in each other in order to win. Netflix does this.

What will it take to do it more broadly? I think it boils down to one thing - the imposition of a shared accountability. This might not stop all untrustworthy behavior, but from what I've read of organizational behavior and crowd theories (like Wisdom of Crowds), it is possible to move the needle towards less oversight but better outcomes through self- and team-policing. Look at most smaller organizations, and especially those where each employee has some kind of equity stake in the company and you see this how well this can work. Is it possible that size does matter? That once you hit a certain size trust just begins to fade? I can't believe this (that's the Pollyanna in me, I know) - I think we can design organizations and even communities that are pro-trust.

It's a matter of will.

advocacy

I had a brilliant conversation last night with two public school teachers. We talked about so many things, but invariably it came down to our education system and what can be done about it.

As I write this, I'm watching the Bob Dylan 30th Anniversary tribute DVD, and Stevie Wonder is singing "Blowin' in the Wind" - interesting coincidence?

In Dylan's words:

There ain’t too much I can say about this song except that the answer is blowing in the wind. It ain’t in no book or movie or TV show or discussion group. Man, it’s in the wind—and it’s blowing in the wind. Too many of these hip people are telling me where the answer is but oh I won’t believe that. I still say it’s in the wind and just like a restless piece of paper it’s got to come down some ...But the only trouble is that no one picks up the answer when it comes down so not too many people get to see and know ...and then it flies away I still say that some of the biggest criminals are those that turn their heads away when they see wrong and know it’s wrong. I’m only 21 years old and I know that there’s been too many ...You people over 21, you’re older and smarter. --Bob Dylan, Sing Out! 1962

The song talks about oppression, being trodden upon, and injustice; most people connect that (as Stevie Wonder did) to civil rights, Vietnam, apartheid, Watergate, global starvation, etc., but as my two teachers affirmed, we forget the injustices that are befalling our students and teachers in schools across America. Who's singing about them?

One (recently moved to Washington State) said that she was forced to join the union - "they just stood over me and refused to leave until I signed the form." They wouldn't even let her take it home to read it. That kind of coercion can't be right? How is it that an organization founded in the spirit of advocacy for the downtrodden can be so oppressive?

Both (widely acknowledged by students and parents as great teachers) talked at length and with passion about how difficult it is to really do what's right in the classroom. They talked about how difficult it will be for them if they're accountable for individual student performance when they can't control the quality of the students they get, whether those students might just be resigned to life in a gang or joining the Army and dying in Iraq. In that scheme of things, how much does school really matter? How are they to be held accountable for that student's results? How are they to teach 10th grade English when the student's incoming reading proficiency is grade 3? Here's the worst one - if they do get singled out in any way (by the community, other outside agencies for some exceptional work), they're totally ostracized by their peer teachers!

No spirit of advocacy or camaraderie here at all. A clear sign of siege mentality. It's no wonder so many prefer the charter school model, and it's no wonder (though it is a crime) that unions violently oppose charters.

What would they change? First - we don't need the unions anymore - they're slowing us down; they're lowering our standing. Lawyers, doctors, other professionals don't have unions, the fact that we do makes us less - we are as important [I argue more important], and we should govern and represent ourselves appropriately. We also need to get rid of unions because tenure is killing our profession - it's the biggest impediment to change. [How often do you hear a teacher say that???]

Second - we need to rethink how principles are hired - it's really two jobs - the visionary (critical) and the operations manager (equally critical, but fundamentally different). It should be two people who work in partnership vs. one person who inevitably defaults to the operations side, causing us to lose out on any kind of evolved thinking, policy or practice. We lose out on an environment that is enriched and collaborative and passionate and challenging.

Third - we need to rationalize the structure - there is no clarity in the Constitution about where responsibility for Education lies; by default it goes to the States, but let's face it the Feds are pretty involved, and so are districts, etc. This is a mess. It's not about salaries (teachers don't teach for the money), it's about a coherent, equitable (every student in the country should have the same opportunity for an education), and consistent system that focuses first on honoring and doing the best we can for our children, and second but equally important, on helping prepare them for their futures. We need one system; we need a new Amendment.

Where are our true advocates? Who is really standing up for teachers like these two (and their peers around the world)?

To the presidents of the NEA, AFT, Secretary Arne Duncan and President Obama: mark these words by Dylan (now sung brilliantly by Tracy Chapman on the DVD):

Come senators, congressmen
Please heed the call
Dont stand in the doorway
Dont block up the hall
For he that gets hurt
Will be he who has stalled
Theres a battle outside
And it is ragin.
Itll soon shake your windows
And rattle your walls
For the times they are a-changin.

define winning

When a good leader embarks on a journey, he knows why they're going, where they're going, and when they'll finish. The goals and outcomes are clear. Achieving them is a matter of execution and circumstance, but beginning with a clear statement and vision of what success looks like is crucial.

Seth Godin wrote about the problem with transoms being that it's too easy to throw stuff out there in the hopes that something sticks. He argues that without credibility you will likely struggle to make yourself heard above the fray, that companies could make it easier for people to share ideas with them, and who knows what could come of that?

It underscores idea that good leaders know their destination when they embark. If you want your idea to be heard, or you want to be open to new ideas, create the circumstances to ensure that you will get what you want. Don't just hope that good things will come.

But in our world, the focus all too often is on the symptoms and processes and not the underlying cause or the eventual outcome. Your odds of blundering into a good outcome this way are infinitesimal. This is why so many people feel like their company or government seems to relentlessly churn over the same ground every bloody day. There is never real progress, just "metrics that show progress." It really does suck to be us, and worse, we don't seem to be able to get past the suckiness.

Take education - what is the goal? Is it happy teachers? Beautiful schools? Quality curricula? More budget? Competition with other countries? Improved assessments? What about healthcare? What outcome do we want to create? Is it happier doctors? Cheaper medicine? One payer? Happier insurance companies? Universal access? Better hospitals? More innovation?

In both cases, we rudderless because there's no clarity about the end goal. Shouldn't education be about ensuring that every child is best-prepared to excel in whatever future they choose? Shouldn't healthcare be about creating the healthiest society possible? Why don't we measure effective education by what students are capable of doing after they graduate? Why don't we measure effective healthcare by how infrequently people need to go to the doctor?

Without clear guidance, a team flounders. Without clear guidance, a nation can flounder as well. Take the "war" in Afghanistan. What is success? Is it the eradication of the Taliban? I despise what they stand for, but that feels awfully like extermination, or genocide. The Taliban are a socio-political faction in Afghanistan. Others might not agree with their principles, but that doesn't mean anyone has the right to erase its member from existence. I know many people who are passionately opposed to President Obama and the Democratic Party, or Gordon Brown and the Labor Party in the UK, or whatever, but I don't see those opponents building a military machine to exterminate them. We are civilized ...aren't we??

Is it the eradication of Al Qaeda? Terrorism is the use of violence to provoke social change - this is a criminal act, requiring a police force not a military. You don't stop violence with violence - you feed it. It is exactly the reaction they are looking for, and exactly what they can then use to recruit more poor and desperate people to their cause. Racism is a form of terrorism, but Martin Luther King Jr. taught us that "Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that."

If the goal in Afghanistan is to exterminate a political party, we should stop and ask ourselves what that says about us. If the goal is to eliminate terrorism, we should stop and ask ourselves how that work began in the United States of America with the (ongoing) elimination of terrorism against black (and other) people.

Frank Rich's OpEd in the NY Times compares (as many others have) Afghanistan to Vietnam - wondering if we will make this same mistake yet again? I see that the President is taking a step back to deliberate. It is true that Al Qaeda attacked America, but they are a band of criminals, not a sovereign nation.

I hope at a minimum the President's deliberation yields a clear statement of the meaning of "winning"; but I really hope he realizes that the only nation that has declared war thus far is America.

the expressional

Have you noticed that when candidates are seeking office they are over-the-top communicative? Driven to capture every foot-candle of the limelight, they expound about everything, including how "expoundive" they'll be when in office. Even veteran candidates (incumbents) promise transparency when elected, realizing that the electorate is dumb enough to ignore their prior acts.

Once elected though, things change. The idea that some things are better left in the hands of a few and not to be entrusted to the general public suddenly resonates. For example, (thanks to Dana) the FAA doesn't trust the public with information about how frequently flocks of birds fly into and damage airplane engines! As someone who does travel by air, I am very interested in understanding all the risks associated with travel, and then want to make my own informed decision.

Even the current Obama administration (thanks to Andrew Rotherham), despite assurances to the contrary is taking to keeping data to themselves when convenient, as in the case of the effect of school vouchers in DC.

In both cases, it was determined for whatever reason that the public did not "need to know" certain findings, results or whatever. I can see that being reasonable in certain national security situations, where the government wishes to protect a source, not publicize the ability to decipher secret conversations, or disseminating critical research. But I don't see why it applies to mainstream, everyday information.

Once in office or a position of leadership, people have a propensity for not trusting the judgment of "the people," believing the issues too complex, the analysis too esoteric, the information too nuanced to be entrusted to "them." We know only too well how often corporate executives "fail" to disclose seemingly important information, to their customers, employees, investors, or all three.

Why?

I think it's laziness (and maybe faux control). When too much information is available you give up the ability to manage and craft the message, to tell the truth vs. the most convenient story. You may also expose aspects of yourself, your image and your organization that you believe need to be kept well subterranean.

But during the hiding process (and let's face it, we've all done this), we never think about the consequences of being found out. We never realize how much worse it is to keep secrets, but also how much worse things become once you are outed vs. if you had simply come clean in the first place. When you scale this to the level of a large corporation or a powerful politician, the impact of being outed is huge.

The Communications Revolution makes this even more likely - individually people get outed all the time with something as simple as being tagged in a Facebook picture, and then the fit hits the shan doesn't it!

When corporations get outed, the ramifications are much, much greater (more fits and bigger shans), and the process is much more complex. Why? Because large organizations don't have as effective a sense and response machine as an individual. It takes time, process and politics for inputs to bubble up to decision-making layers, and then time, process and politics for them to bubble back down to the actors.

In politics, it's maybe a bit more efficient (their organizations (politics vs. government) tend to be much more horizontal), but all-too-often, the wrong people are driving the decision-making. PR and pollsters tend to have a much stronger voice than they should; they distill information into bite-sized chunks that don't have complexity and nuance (by definition). It's so easy to obfuscate complexity this way, and spin the situation to the point where strategy and integrity are compromised for expediency.

One example of this is President Bush's strident and dire warnings about how close to disaster the economy was so that he could get Congress to urgently vote to approve TARP, but then once they did approve, he realized that his warnings also had the effect of immediately arresting the people's desire to spend, which actually caused a more accelerated slow-down, made TARP less effective, and maybe caused a worse economic decline.

When running for office, you're always out there, and facing the barrage head-on. When you're in power, you're cloistered, and maybe rely more on others for that finger on the pulse. Doing that makes you more likely to agree with spin artists, and make you believe that the public really doesn't need to know everything. Town hall meetings could be a good way to do this, but in then end, they're also about creating spin, and getting a message out. Sharing, listening and responding doesn't really happen. When you're in business, the more senior you get, the more you rely on intermediaries to connect you to reality. But they have a stake in biasing your experience to accommodate their agendas, and that compromises your view of reality. Just like town halls, executive customer or employee visits are crafted - you don't get the real truth.

In the end, the more open and transparent you are, the more likely you are to have a truer grasp of reality, and make a real differences in the most sustainable and efficient way possible.

fed-up?

Hello everyone and sorry for the two-week gap in posts - you gotta love vacation-time!

All levels (from municipal to federal) face tough, tough financial challenges; each layer is dealing with its own challenges and scrambling to survive. Even if one level finds balance, it is still subject to the whims of those around it. In California for example, the state's recent budget agreement requires the municipalities to "contribute" money to the state's coffers, so a resident of a city can get hit twice - first with a state-wide program cut, and then because the city's revenue stream is impeded, a potential (and potentially related) municipal cut as well; all of this with no aggregated consideration of that individual or organization's situation.

For example, an education program cut by the state could reduce an inner-city school's funding, and when combined with a separate municipal cut, could result in the school canceling specific programs, or closing its doors altogether.

Additionally, both the state and city leaderships are also aggressively pursuing federal funds to mitigate their failures, creating a dependency on yet another branch of government. In good times when taxes are flowing, this type of thing doesn't happen often enough to cause any wide-spread grief. But now, when things are pervasively bad, the impact is profound. What becomes glaringly clear is the extent to which every level of government is intertwined, and really one big morass instead of a set of "small" ones.

Small Government?

A lot of people (me included) believe in the idea that small government is better, that the Feds should delegate legislation, decision-making and authority as far down the chain as possible on the assumption that local issues are best dealt with by local governments; thereby keeping the Federal government small. But this has spawned a system where each of the levels runs elections, legislates, is responsible for collecting its own revenue, and forming and staffing its own organization(s), defining separate priorities, perpetuating more bureaucracy, etc. But the delineation of responsibilities between the layers isn't clear, things like education or health care or law enforcement all have multi-layered and often competing or conflicting agendas.

With all this layering and duplication and potentially conflicting actions, surely the last thing that's accomplished is a smaller government?

Wherever you may go

Let's start with something as simple and seemingly innocuous as marriage, which is bizarrely deemed to be a local issue. The opening of the Declaration of Independence states that, We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the Pursuit of Happiness. With the Gettysburg Address, Lincoln posited the idea of a new nation, conceived in Liberty, and dedicated to the proposition that all men are created equal.; and whose closing demands that government of the people, by the people, for the people, shall not perish from the earth.

Whether gay, straight or otherwise, you are equal and have the right to be happy no matter what. Hmmm... How then does one state get to have one law about marriage, and the state right next door an altogether different law? What happened to the citizen in all of that? How is it consistent with the Declaration that a gay person is prevented from being equal and pursuing happiness in one state, but by literally crossing a street, they suddenly have rights?

And when it becomes an inter-state issue, courts and governments at all levels have to deal with the issues of marriage - because it's clear that in reality, no one level owns it.

Money changes everything

How about taxation and spending. Today every layer of government must find a way to raise funds from the citizenry. It is possible for you to be subjected to three or four taxes that are separately progressive and regressive, that create tremendous pain not only for you the tax payer, but also the collection system. The result is organizations at each level doing the same thing, not thinking about each other, and wasting money, due to the the inherent redundancy and inefficiency.

When it comes to spending priorities, one state might choose health care over education, because more of their voters are closer to retirement and in need of more care. Maybe this is reasonable, but in tough times, when they have to close schools because they can't get budgets balanced or borrow to cover shortfalls, what happens to the children of that state, and their future?

The disparity of student performance by state in the USA (as well as the disparity in curriculum goals, learning standards, etc.) is proof that American students are victims of district, state, and nation-wide discrimination. This can't be right, and it certainly doesn't save money when each city, district, or state makes their own decisions about closing schools, changing curricula, etc. In this the communications revolution era, it is stunningly naïve to think that education should be local vs. global.

In the end...

Why is "many governments" considered small government? Why not have one national government that assures every student the same educational opportunities; where everyone lives by the same laws; that we should all pay taxes, but that those taxes ought to be collected once, be progressive, and cover the needs of all the citizens, according to the laws of the land?

A valid argument against one big government is that there is nothing to temper its behavior - without a system of checks and balances, a government could turn authoritarian, no longer represent the will of the people, and potentially even harm them. No doubt this is a huge risk, and one that should be guarded against. But then I think about the Cheney/Bush presidency, and imagine if a second 911-like attack had occurred just after the 2008 Primaries, that Cheney might have declared a state of emergency and delayed or canceled the elections in the interest of national security... that doesn't seem implausible does it?

A second argument is that local issues can't be dealt with "federally" - exactly which issues fall into this category? And why can't a federal machine solve them?

I think a three (or more)-party political system reduces the Authoritarian risk. I think a purely federal government is a viable governing mechanism. It would be much more efficient, ensure that every citizen is equal, and not be subject to the sometimes idiotic whims of locally-elected "leaders."

focus and discipline

There are two aspects of American politics that I find painful - length and complexity. The former is the interminable process from Primary to General that ought to be shrunk dramatically. I proposed an approach to reducing the time and cost of elections a while back - I still think it's applicable. In the same post I also talked about a simpler and less cumbersome voting process; it and the vote counting part seem complex as hell.

In my last post about a third party, d.eris' blog and the post he pointed me to (whose numeric analysis of the recent election is very interesting), we're all talking about a 3rd party in American politics.

I wonder if the biggest obstacle for a 3rd party is the agony of the primary/general election and then the horrible voting process - who in their right mind would want to run there?

According to most pundits, the recent general election had a strong turnout, which equated to a mere 51% of the electorate actually voting! So President Obama's 52% popular vote equates to only 26% of the electorate vs. the 25% that Senator McCain received. Of those that voted and those that didn't, I imagine it broke down like this:

1. I'm a member of the D or R party and I always vote for our candidate
2. I love the R or D candidate and am voting for him
3. I hate the R or D candidate and will vote the other way so he doesn't win
4. Neither candidate is great, I'll vote for the one I perceive to be least bad
5. Neither candidate is great, but D or R stands for XXX and I will support him because of that issue
6. I'd really like to vote but it's a real pain and/or I'm tired of this process and can't wait 'til it's over and won't vote
7. My vote won't make a difference either way/don't really care, won't vote

In all of this, we know for sure that the 1-5 basically split their vote between the two parties, and if 6-7 had voted for a separate party, that 3rd party would have won a landslide victory with half again as many votes as either D or R. #3-7 might have gone elsewhere if there had been a compelling alternative and the act of voting was easier.

Compelling Alternative

What if a prospective candidate's platform were ethics-based (per the Jacksonian Party post) and they committed to only one term? In other words - vote for me, here are my ethics, and I won't run again, which means if I win, I don't need to raise money for reelection or campaign - my decisions will be based on my ethics platform, and I will not be influenced by lobbies.

I think a candidate like this has a good chance to create a stir and even win, if their platform is compelling to at least #s 3-5 & 7.

Voting Simplified

Now imagine if all citizens were able to vote from home (or from their mobile phones), and imagine that like Australia, people were required by law to vote. These two things will never happen per the comments to this post - incumbent politicians will NOT allow voting to be made easier or require all voters to vote. They like it as difficult as it is, and only want the voters that voted for them to vote.

If by some miracle voting became simpler and all voters were required to vote, then the election process would be cheap, cheap, cheap, and much easier. A significant percentage of a candidate's budget goes towards building massive local machines to get the vote out. Combine not having to spend that because voting is mandatory with social networks and the internet and the media to directly reach your audience, and you have a whole new ballgame.

Back to Reality

Let's face it - this aint going to happen in America. So what's possible? d.eris suggested we must first build confidence in, and a perception of viability for a 3rd party. I'm not sure that's needed - you're not trying to win people who vote. At a minimum, it feels like #4 & 7 would be inclined to vote for a separate candidate, and some of #5 might join the party as well. Additional momentum can be built based on a compelling voice, and the strategy I outlined above (a commitment to only run once) might achieve that, especially when combined with an ethics-based platform. The critical success factor though is being ULTRA-precise about the target audience (if it's just #4, 5 & 7, then focus ONLY on those people); do not fall into the R/D trap of trying to win everyone. Commit to and engage your audience ONLY - if you happen to get votes from others, that's their problem, not yours.

One thing that pervades the electorate is the feeling that politicians can't be trusted. If it is possible to be the trustworthy candidate, by admitting your motivation and your strategy, this might be a winner. Here are the promises I'd make (in no particular order):

• Will only serve ONE term
• Will not spend more than $X on this campaign - most of the outreach will be done electronically at very low cost, there will be no advertising
• Will NOT accept any donations once the campaign is over - no way to be bribed while in office
• Will make no more than three program (ex. change education in XXX way) commitments, because that's all you can do in one term
• Will clearly describe leadership style integrity, transparency, accountability
• Will never spin

Net

With a commitment to Ethics, a precisely targeted campaign, and a clearly articulated platform, it is possible for a 3rd party to coalesce, and achieve critical mass. It will only work with discipline and a strict, rigid adherence to the strategy.

risk shmisk

Accenture recently conducted a risk management survey of 260 CFOs from large companies in 21 nations that has (didn't think this was possible) increased my disappointment in corporations around the world. 85% of those surveyed said they are ineffective at considering risk, return and capital issues when making decisions. The same number said there is a lack of alignment between their company's strategy and appetite for risk, and 93% said it was really hard (whine, whimper) to align strategy to effective risk management.

C-Sense

How can you be a C-level officer, leading your corporation and yet be unable to effectively factor risk into decision-making? In good times, risk failures were compensated for by strong earnings, but now that either or both revenue and margins are shrinking, it's more difficult to hide or write off errors in judgment.

Theoretically, an executive achieves C-level status by being smarter than the average bear, having more foresight, vision and leadership skills than his or her peers, and the ability to skate to where the puck will be, and not where it is. If true, they should have recognized the following:

1. Good times creates bad habits
2. We're in the midst of a communication revolution
3. Tough times require focused investment

#1 - In good times, mistakes are forgiven/ignored because things are going so well that bad judgment is overlooked. But most critically, organizations forsake discipline in favor of expediency. Then when things change, the bad habits of the organization, which were compensated for with excess spending and often excess hiring, now surface unhidden, result in severe changes or layoffs, and are harder to fix because they're well, habits.

#2 - The stress caused by #1 creates internal and external disaffection/disloyalty, which makes people much more inclined to blog/Twitter/whatever their views and experiences. Malfeasance becomes very rapidly visible to the public, giving the company little or no time to sense, develop a strategy, and respond. In can we talk?, I wrote about transparency and immediacy being the offshoots of the communication revolution. This is either a huge risk or opportunity for most companies - the C-level "risk" executive leadership must account for this. Most don't.

#3 - If you have the means, the best time to invest is when times are tough. Whether that's acquisitions, new investments, or increased staffing, you are sure to get good (if not great) value for money, and be much more primed for growth when the market does turn. Choosing the best place to invest requires clarity of purpose - if the company's strategy is not clear, it's ability to evaluate and mitigate risk not solid, and it's leadership not focused, the resulting investments will likely accelerate poor performance and lead the company down.

C-Accountability

Chief X Officers (whether X = Executive, Financial, Marketing, Operations, etc.) get paid really well, this is because the expectations are commensurately high, and performance is expected and required. In addition to being a great sales tool for their services, the Accenture survey above is a confession by these C-levels that they don't know how to cope with change, or how to lead in these changing times.

At this level, they must own their actions, take responsibility for both their failures and those of everyone who works for them (the whole company). Shouldn't the 85% who said they didn't know what they were doing resign, so those who do can lead?

C-Response

From my can we talk? post: The industrial revolution created mechanical speed, the information revolution changed space (specifically, the distance between points in space), and the communication revolution changed time (sense and response time).

Thriving in this world requires discipline. If all C-executives in a company can't clearly (so that a 12-year-old can understand it) and consistently state:

1. Why they are in business
2. What makes their company special or unique
3. How they succeed
4. Where the company is heading

Then how likely is it that their employees are being guided properly? How likely is it that any management discipline exists, that the company's behavior and performance are predictable?

Ensuring this is step one for the CEO. Step two is to establish a discipline of two-way information flow so that all levels of the company know; and step three is to ensure that decisions get made, and are executed predictably and with accountability. Seems like management 101?

Think of Apple during Steve Jobs' current tenure. They don't always build the best product, not all of their products succeed, not all their customers are loyal and happy. But in the main, their business runs brilliantly; most customers are rabidly loyal; every employee has (from the outside anyway) a clear, consistent view of the all that is Apple; and you'd be hard-pressed to find an organization that had a better grasp of where the puck will be than Apple - both economically and product-wise.

If you took the 221 (of 260) companies representing the 85% of executives who admitted their inability to manage risk and created a fund that shorted their stocks, I wonder how it might do in the next 12-24 months vs. say Apple?

adventures in babysitting

I was listening to The Watchmen on This American Life last weekend - it affirmed my conviction about the sad, sad state of American regulatory oversight. The show is about financial services regulators and attempts to find out "who's to blame for this mess." It determines that one regulator was most "in charge" of many of the companies that failed most miserably.

It reminds me of a post a few months ago questioning whether our government has any regulatory insight at all, and then one that pushes our government to own it's own decisions. Listening to "The Watchmen" brought all this back, identified a potential scapegoat, and I think pointed to the real culprit.

A Fateful Year

In 1989 the Federal Home Loan Bank Board (FHLBB) was abolished by President George H. Bush and replaced with the Federal Housing Finance Board (FHFB) and the Office of Thrift Supervision (OTS). The FHFB regulates the 12 Federal Home Loan Banks, and the OTS regulates the Thrifts (providers of home loans).

Among others, here are some recognizable names that are managed by the OTS: AIG, Countrywide, GE, Ameriprise, American Express, Washington Mutual, IndyMac, and ING. I'm sure you've read about these fine institutions often in the last few months.

Around that same time, Alan Greenspan successfully pressured Congress into not legislating derivatives; and finally 1989 is also the year the Glass-Steagall Act was repealed by Congress.

Missed Intentions

But these were only the beginning. When the FHLBB was abolished, rather than start from scratch, the Administration did the worst thing possible. They ignored why things happened, just assumed it wouldn't happen again, and did the bare minimum. They appointed a new leader and changed FHLBB's name OTS - they did NOTHING else.

The real culprits (as is often the case) are not the front organization (OTS), but rather our elected representatives, who naively assumed that once the crisis was over, going back to business as usual would magically fix everything.

I haven't seen any Senate hearings on their own failings??? Gluttons for punishment that they are, the citizenry keeps reelecting these same culprits over and over again :-(.

What about the regulators?

Here's something I didn't realize: they are funded by those they regulate. Implication - the more companies they regulate, the more money they get. This is horrible!

Worse, when the new leader for OTS came on board, his mission was to expand his pie, and to do that he went on what amounts to a recruiting spree. He was aided tremendously by the fact that financial services companies can choose their regulator if they "qualify." For example - AIG, having learned about OTS' value proposition ("we're really flexible and generous with our oversight"), purchased a small Thrift (worth a mere one tenth of one percent of AIG), and was then able to elect to be regulated by OTS! Worse still, it was in OTS' best interests to keep a hold of as many of the old Savings & Loans as possible, which meant the most lenient regulator was regulating the worst offenders!

Is it any wonder that all of this combined with the creativity and ingenuity of traders, and the "you're only as good as your last deal" performance/compensation mentality, that things turned out the way they did?

So...

Should there be an organization that monitors the monitors? I don't think so - adding management layers never works well. What can we do instead??

First, it's pretty clear that regulators must be independently funded (via tax dollars), and that they must never solicit business (no lobbying or recruiting members). The hard one though is performance expectations (if you are what you measure, then how do we measure them?). Regulators are most effective when they're harmoniously (working well with their "flock") invisible, with their ideal result being a smoothly running machine.

What about real babysitters? A wage is negotiated, and the sitter is paid at the end of the job, provided the house is intact, and the kids are unwounded and asleep. If the sitter is good, then s/he gets more gigs, and because they're now in demand, their fees go up as well.

So... I propose an accelerated pay scale based on continued good results. Say they get 90% of current salaries as base. For every year their community is issue-free, their salaries go up 10% (1st year = 99%). If it remains issue-free in Y2, it's another 10% to 109%, and so on - by year five they're at 145% of base. We  bump it up by another 5% after five years so that the Y6 increment is 15% - then by Y10 they're up to 291% of base <-- not bad! But if an issue arises, they're back to 90% and have to start over. This might seem generous, but wouldn't you want great people in these jobs? You also want to make the pain of failure relevant. Moreover, think of the cost to taxpayers of the failure we've just experienced. The motivation then is to keep getting paid really well and increasingly better, provided the house remains intact, and the kids are safely sleeping.

Will this have the desired effect? I welcome your ideas...

fallacious panacea

The world of education is complex, nuanced, fraught with incumbency, and a worst-case scenario for its stakeholders because unlike say astrophysics, everyone feels justified in claiming domain expertise because they went to school or have kids who are now in school.

So when new ideas are proffered, it's very easy to jump on the bandwagon with conviction; be dismissive with conviction; or find effective ways to impede change with conviction. Sadly the last has the most "authority" and most resonant effect - the first two are just words.

I came across three readables this morning. First - Andrew Rotherham's pointer to the Moskowitz-Weingarten debate on Harlem charter schools vs. the AFT. Second, David Warlick's post on a response to this May 2007 article in the New York Times on the failure of 1:1 school laptop initiatives. Third - Mike Hourahine's post on how IT leaders can be an inhibitor to technology usage in education.

The debate was interesting, at issue is how a top-down union negotiating approach can lead to slow-downs at the school or class level, and provide a shield for teachers to be less accountable and have room to "just say no" to change. The union prefers the status quo, but did offer the olive branch of creating a special contract for charter schools, which I think might be really interesting, and a potential camel's nose under the tent opportunity.

The NY Times article damns 1:1 laptop initiatives in schools because they're seen to be ineffective (no differentiated learning outcomes), too expensive (initial and ongoing costs), and result only in bandwidth availability problems (excessive porn surfing). Jeff Utecht's response to this is a great read and enumerates some of the things that also occurred to me as I read the NY Times article.

Mike Hourahine (presently the CIO for Appleby College in Oakville, Ontario) advocates that trust and freedom don't result in widespread anarchy and prolific porn surfing in schools, and that CIOs should instead be much more open to change, know what their schools really need, and what teachers and students are really doing, vs. being the perpetual naysayer.

When something new is proposed for education, everyone has an opinion, most have a visceral reaction, and everyone feels compelled express themselves. But to Jeff's point, few if any take a strategic view, and in my view, apply discipline to the questions of what, why and how:

• What is our overarching mission? Achieve quantum improvement in learning outcomes for all students.
• Why will this help us get there sooner? It can allow broader access, and deeper and richer understanding and application of the concepts.
• How will we ensure success? By integrating this within learning, adapting the pedagogy, curriculum and assessments to account for this change, ensuring adequate teacher professional development and preparation time to make the change worthwhile, and adjusting our benchmarks accordingly.

The what/why/how is not specific to laptops, it is about any change (it could be new text books, a new cafeteria menu, new crossing guard uniforms, whatever). But if the system and its people are bent on preserving the status quo (which is why "why" is so critical), then no matter how great the potential is, any success is purely accidental.

Out of the gate, 1:1 laptops were burdened with high expectations and very little preparation. Given this, the best case outcome was simple mechanization (from slate to blackboard to whiteboard to PowerPoint), no change to learning, just a slight improvement in process. There was no alteration of curriculum, teaching or assessments to account for the laptops, it was just thrown into the schools.

Technology has the potential to cost-effectively allow more people access to compelling content in a form that is best suited to their learning style. I think those who push it away are doing it for the wrong reasons, just as those that advocate it without a plan are doing it for the wrong reasons.

But the big failure was even more critical - the addition of computers came with no specific expectation of improved performance for the school, teachers or students. We all know that we are what we measure, if you don't expect improvement and raise the bar, you will not see better results. If instead they said - "we are investing $X in equipment and process change, which is Y% of our school budget, and we expect Z% improvement in learning outcomes." Even if Z was a small number, people would have rallied around it and tried to achieve or exceed expectations.

We must involve students (the customer), learn how they interact with their world today, understand how they learn, what they like, and incorporate that in the teaching process. We should recognize that no tool is a panacea, that open-minded, passionate and creative teachers will trump any technology, and that no technology will overcome a closed, uncaring, and tired teacher. Finally, we should be prepared to adapt to new tools as students evolve, 'cause they will, and we should be prepared.

basest instincts

Might as well panic is Seth Godin's latest. I like it. Essentially, panic is the only sure impetus to creating real outcomes, or as he put it "panic is an acceptable substitute for forethought."

It is a management and leadership travesty how easily we overlook bad planning and lack of anticipation. We routinely forgive offenders that have the ability to freak out well, explode into frenetic activity, and come up with a plan overnight that should either have taken substantially more deliberate thinking, or been avoided altogether because people were keeping their eye on the ball and reacted ahead of catastrophe.

There is no shortage of examples - you only have to look at 90% of what the US Congress does to know this. Their "sudden" realization that the economy was in the dumper, and then the gun-held-to-everyone's-head reaction (TARP), is but one example. The FEMA non-response to Hurricane Katrina (something they knew was coming), and the panic and uncertainty last year with Gustav despite knowing how badly things went with Katrina is embarrassing. Even something as irrelevant Congress' random hearings on drugs in baseball should simply not be allowed to happen. Talk about panic gone bad.

In most cases, these knee-jerk reactions results in some action, certainly the perception of activity, but rarely well-thought-out, strategic approaches to complex problems that result in long-lasting solutions that make sense. The only thing you can be assured of is that a limelight-grabbing exercise will happen.

Panic-driven management is of course not limited to the public sector, it happens every day in the commercial world. Speaking from personal experience, I know of more than one "long-term corporate strategy" that panic-stricken leaders at my employer(s) authored overnight or over a weekend in response to a competitive act or even a worrying report from an industry analyst. In some cases, the ideas are good, but not "fully-baked," and end up "evolving" in the weeks that follow. The result is a more expensive strategy, as certain actions need to be undone or written-off and the ship's course needs to be tweaked so that it is aiming correctly.

In most cases though, the ideas suck, but because "we need something to present to the big boss in three hours," we put lipstick on the pig and go with it. The hope is that he is just as panicked, won't notice, and we get to live another day. In this case, the recovery cost is much higher because somehow in the post-meeting-survival euphoria, we forget how stupid the idea was, now believe our own spin, actually get the minions to go implement, blithely ignore their incredulous looks, and of course, declare victory.

Two characteristics are consistently present when you think of well-run organizations. First their strategies force others to react (i.e. they make or shape markets); and second even when things are done unto them, their effective responses make it seem as if they'd already anticipated that contingency, and had a plan that was ready to go.

Why aren't more companies like this? Why aren't more governments like this?

Simple - they're not paid to be and there is no "executive" motivation to be. Why pave the way when someone else can do the difficult, market-making work and you can follow along and ride their wake? Why bother building all those contingency plans or even do some game-theory analysis to figure out what might happen three-to-five years out when you will almost certainly be in a different job then and won't even care about this?

Cynical? Yes - but I bet if you look at the organization where you work, you will find some hints of this type of behavior. More than that, you will find that those who argue for better planning or analysis are laughed at and told to sit in the back of the room and let the action-oriented MBAs take over.

Here are three suggestions for how to avoid this (besides the obvious, which is to change human perception and expectation :-)):

Be smaller - you must sense, respond and adapt. Being smaller allows you to be most in tune with your environment and able to respond quickly.

Be more transparent - the more you expose and communicate as a leader, the more insightful, engaged and motivated your organization will be. Ivory towers are never a good thing. The out-behave manifesto must expand to include executive accessibility and transparency, so that the employees can rescue their bosses.

Create a community of committed supporters - this one is tougher. Companies like Apple, Ben & Jerry's and others have managed to do this really well - it's about creating fellow travelers that will ally with you and be as committed to your well-being as you are. I think it starts with being absolute and visible about your integrity; those that share your ideals will be there for you.

All three acts require concerted leadership and a willingness to stay with it. They don't require re-shaping human nature, or altering the what-have-you-done-for-me-lately market mentality. They are all possible, they are all practical, and they all exhibit what I believe is an organizational sense of what's right.

This is one way for us to transcend our basest instincts.

owning your decisions

achilles3 recently referenced a fascinating William Black interview by Bill Moyers. Black paints a scary picture of how close the relationships are between American regulators and the companies they regulate. It's often downright incestuous and painfully clear how much our regulators personally benefit when their "flock" succeeds.

Then thanks to Dana at Investorialist, I read this article about Ethisphere's list of the World's Most Ethical Companies of 2009. Turns out that many of the winners are actually members or sponsors of Ethisphere!  Hmmm.....

In both cases, the supposedly "pure" representatives of the people have personal goals that preempt their constituents' interests. I'm sure you can name other examples - another that popped into my mind is the linkage between personal oil interests among government leaders and our military incursions into the Middle East, but let's leave that for another day:).

Why are we not outraged about this? Why is there no gigantic public outcry about Black's accusations? Why are people not calling for the tarring and feathering of political leaders?? There's more widespread public angst about judging conspiracies in Olympic Figure Skating or Gymnastics than about elected and appointed officials enabling the abuse of $billions of public money! How is it that Bill Clinton's choice of where to "put" his penis while in the Oval Office caused global furor and even talk of impeachment, but his appointing Treasury/Fed/SEC Secretaries that caused millions of citizens' retirement funds to shrivel up (a whole new kind of shrinkage) received very little attention and almost no condemnation.

Is there a way to prevent these acts of impropriety? Can we create a situation where this is either not possible or at least managed? When faced with conundrums like this, my natural inclination is to consult Sun Tzu. Channeling him, I'm thinking "convert their strength to your advantage." Ah... Aikido...

Hmmm... what's "strength" to a politician? How have people successfully "convinced" them today? It boils down to one word, and despite Bill's ...best efforts, it's not "Monica" but maybe a very similar word?

Money (and people). But where should this intervention focus? With a problem this complex and  massive, the biggest contributor is the Rating Agencies. Organizations are campaigning to remove their liability shield, but I don't see the point. Fitch, Moody's or S&P don't have lawsuit-worthy money.

Every employee needs to be accountable for the rating decisions that these agencies make, so even if one person (or team) is bribed to fix a rating, there's a very good chance the rest of the org will catch it and prevent it, because of how they all get paid. Their compensation should be a guaranteed base salary (that's say 75% of current), plus a bonus pool containing an additional 50% of current. Bonuses should be paid based on the relative performance of instruments they've rated vs. other similarly-rated instruments.

In other words, if Moody's rates both a bond and a Mortgage-Backed Security "AAB," then they should each have a similar risk profile. There should be an allowable range of variance, but if they exceed that - say the MBS ends up creating returns that are consistent with a CCC-rated instrument, then their entire bonus pool is shrunk based on the losses they created.

There should be one pool for the entire payroll (from top to bottom - they're all in it together), and everyone's bonus should be affected, not just the person/department that rated that particular instrument. This encourages team behavior, and hopefully enables auto-corrections between groups in the agency to reduce risk.

This type of results-based compensation should also be applied to other organizations (including the banks) like the SEC, FAA, and others - it would result in a far more accountable workforce.

giving reality

Despite the tough times, interest in and focus on philanthropy remains strong. While the Gates, Fords, and Buffetts of the world are doing "big" things, the popularization of philanthropy started with Live Aid's "Feed the World," followed by USA for Africa's "We are the World," and now Bono's RED. Of course there are many, many others as well.

These programs are all wonderful because of the democratization/aggregation opportunity. Everyone gives what they can, and it gets added to others' little bits to create, big bits. They also call the world's attention to situations and issues we must all at least be aware of, and if that awareness leads to positive change, so much the better.

Why do people give? What's in it for them? Here are three possible answers:

1. We genuinely wish to make a difference and help change the status quo
2. It's a tax write-off
3. It's a way to relieve the guilt of being relatively better off than others

I suppose it's a combination of all three, but more #3 and less #1. If the priority was #1, then we'd be living in a very different (and changed) world. Instead, despite the $billions donated to many worthwhile causes, not that much has changed. No doubt changes do occur, but they rarely survive once the money's gone. There are counter-examples, but in the main, most giving that is targeted at persistent and endemic problems (vs. circumstantial events like earthquakes, tsunamis, hurricanes, even 9-11) results in minimal sustained (where the status quo is permanently altered) change.

These are incredibly hard problems and money alone has never solved them. If you live in the United States (still the wealthiest country in the world), you don't have to drive very far to see homeless people and shelters; despite spending a massive amount of money, New Orleans is still not back to it's pre-Katrina state.

What's the problem? To be sustainable, the recipient must continue to make the same decisions they did after the money stops. This is easy when you're in your armchair reading a blog on your laptop, but put yourself in the shoes of a sole breadwinner who now has to decide between feeding the family and sending the kids to school, because the non-profit that funded the tuition is now focused on another part of the world, thinking that their work is done here. Not so easy.

The trade-off also applies to us (the givers) - we make the choice of sending money instead of participating. We all inevitably take the easy road, which is why change never happens - the hard problems are not solved because we participate. Until we do, there will be suffering.

So why do we keep doing the same things over and over again expecting different results? While the journey is far more important than the destination, surely those of us that do give would want to see something good, real and permanent result? This is why I think it's more #3 than #1 - we really don't care what the result is, we just care that we took action, fruitful or otherwise (guilt management).

But if we do decide to care and get serious, this is what I would do.

fiscal prozac

Stimulus packages are near top-of-mind for almost every person on the planet who has access to CNN. I have also fallen victim to this and written about it on a number of occasions. Two posts (one, and two) prompted a lot of discussion (my gratitude to Bob S. for sharing his economist’s perspective).

Here’s what I’ve learned so far.

We need to see 10 trillion dollars (yes, $10T!) of flow through the American machine annually (GNP) to have a solid economy with “full” employment. At its worst, our GNP had fallen to $7T. The goal of the stimulus packages at the highest level is merely to throw money at the problem. It turns out that it matters less where the money goes, as long as there’s more money flowing. As long as cash flows into the system, expansion happens.

What about the bank bailouts? When you borrow money, leverage is created – you’re spending more than you have, and the banks are too. They convert their deposits (counting on most loans to be paid back on time) into debt, at a greater than 1:1 ratio. In other words, they can lend more money than they have, because they’ve done the due diligence (theoretically!), to know that they are issuing loans to credit-worthy people.

Why not just lend like mad and use the leverage to bridge the $3T gap? Because there's not enough motivation to borrow. In tough times, we all naturally become more conservative, spend less, even start saving in case of an even rainier day ahead.

That’s where the stimulus packages come in. They create immediate cash flow, hopefully directed at driving demand and consumption of goods and services so that people start spending, cause movement in the economy which spurs borrowing, etc.

This is the theory. And hopefully the very bright minds “in charge” get it done, and done right. Money it seems is the ultimate anti-depressant.

But this isn't all peaches and cream.

First, and this is more of a nit. It just rubs me the wrong way that so much money is going to fund what is clearly political pork barrel pandering. There should be more integrity in the system and a sense of social accountability that is sadly missing among those that got elected.

Second, and this is my big one. Have you seen anything that leads you to believe that banks will be better lenders this time around?

We’ve seen bad judgment, which of course provokes Congress to write laws preventing that specific behavior. AIG gives out bonuses to many of those that caused their problems in the first place; GMAC advertises multi-year interest-free loans to anyone as long as they have a pulse; I still get 5-10 credit card, and 3-4 mortgage re-financing solicitations a week.

I’m sure there are examples where banks have cleaned up their acts, but the leadership that caused bad lending remains mostly in place; regulatory oversight hasn't changed enough. International or multinational regulations haven't changed either. Here's a site that reports on regulatory changes - no mention of real or substantive change.

In the main, it looks like the feds are on the right track to improving the economy, except for preventing it from happening again, or even something as simple as disciplinary actions against those that caused this in the first place.

Oversight anyone?

the out-behave manifesto

The concepts of integrity, transparency and accountability (ITA) are sprinkled throughout this blog. But they are just words, and can be used freely by anyone with no commitment to real action or outcomes.

I proffered the idea of out-behaving yesterday as way for companies to demonstrate their ethical chops with changed outcomes. How might it happen? Let's start with some truths:

1. You are what you measure. Measure the right things and you can provoke the right behavior.
2. The only reason you go to work is because you get paid. That is the one thing that if they stop doing, you stop going.
3. Stuff flows downhill. In any organization, whatever the leaders are measured on is what their people are measured on.

In the beginning of green, companies that chose to act did so knowing that while it was the right thing, costs would initially be higher than returns. They felt in their hearts and stomachs that green was a societal imperative, and that others would come around. They engaged the world on this basis, sacrificing the perception of being less-profitable for the reality of being more right. So too must the out-behave community act.

This could get really complicated, so let's start with one simple premise. Participants must demonstrate their "ITA-ness" by tying behavior to compensation, by believing that sustained success for any commercial venture is based on the sustained success of its customers, and paying their people accordingly. This is not to say that everyone gets the same pay, just that performance is measured as a blend of organizational and individual success, but biased to organizational success. Everyone must be committed to the higher purpose of sustained customer success.

Employment contracts (including for union-supported workforces) should be written this way. Everyone (management and workers alike) should be paid based on the ITA of sustained customer success. Sustainability can be achieved (as suggested here) by creating a compensation schemes that look at impact over time. This leads to longer employee tenure, and more critically the powerful idea that the customer needs to be better over time for the company to be better.

Tying compensation to corporate performance means that in good times, everyone benefits. In tough times, everyone feels the pinch. But the company is also helped because its people costs move with the times. Unlike companies today, where no matter how bad sales are, salaries don't change, and the company spirals more quickly as a result of ever-declining sales not being matched by some decline in costs. This model makes the ITA company that much more resilient.

The out-behave model might lead to lower salaries in hard times, but it's less likely to lead to the same amount of layoffs. If the market acts properly (this is a stretch), then prices would fall as well, so while you might be taking home less, you should still be able to afford to live (albeit more frugally), and know that your job is more than less secure. There are no guarantees. Instead you have greater risks (your salary is no longer predictable) but also greater rewards (you do well when we do well). Some employees won't like this and will vote with their feet.

While implementing ITA in a company should be top-down, the directory of ITA companies will be a grassroots artifact. It will grow organically, perhaps starting with Craig's List, blogs, twitters, Facebook, and general media buzz, and then coalesce into a structure that makes sense based on how people wish to consume it. It should be given the time to develop and proliferate naturally.

In the end, this first implementation of ITA is not radical as much as it is customer-success-centered. Can it be done today? Yes - look at any small business in the world. Large companies just need to think and act small to be successful.

the new green

Following on inspired minds that want to grow, and some feedback I received, here's a corporate viewpoint.

Maybe it's the optimist in me, but especially now when trust in corporations is so low, companies must not only assert a vision that is inspiring, but also make it a public mission to live up to, and be held to a standard of performance.

The green movement started this way. A few saw the light and began to behave in a new way. Green funds were created, VCs for green start-ups were formed, etc. When it began, most were skeptical. Cynics said that green was more expensive - organizations that were green would be less profitable; they/it would never succeed, it was just a fad.

Despite this and no major legislation (outside of emission controls), green continues to be a strong and powerful force. Our government is now investing in green; new companies are touting their commitment to green every day, hiring green "czars," moving into green(er) buildings; green-specific industries have sprung up; even students now more than ever use green and social responsibility as criteria by which to judge potential employers.

Green is a largely self-policed or socially-policed phenomenon based on the idea of good and environmentally-sensitive behavior. Can it be repeated?

Companies that step forward and demonstrate their integrity, transparency and accountability could be the ones where customers choose to shop, whose shares investors choose to buy, in whom people choose to believe.

Integrity, transparency and accountability (ITA) are not where a company will out-innovate or out-perform their competitors, but rather where a company out-behaves. This could also be where a company creates market advantage, where they can capitalize on the perception of mistrust and outshine the rest to be recognized as having a management ethos and discipline that can be trusted, that won't be rapacious, that will be open and honest and accountable. This could also be a really effective marketing strategy, one that results in (like Whole Foods) market and price advantage.

There will need to be a way to judge performance, and ensure actively good behavior. Could it, like green, be a more socially-driven vs. regulation-driven mechanism? I hope so.

My gut says companies that out-behave are more sustainable than those that don't. They are potentially better long-term investments because they are less likely to get caught out, but will be able to capitalize on the those that do, capturing market share, talent, etc. when the ill-behaved are outed (AIG, GM, Madoff, etc.). Imagine if there was an ITA-compliant directory of companies from which you could choose your insurance, banking, investment provider, or where you could buy your car, etc. Would you go there if you just found out that you'd been "Madoff'ed"?

They, like the tortoise, will get there in the end, perhaps with less flash than the hare, but with a stronger and more sustainable business.

It's different spin on inspiration and vision, one that could be table stakes for tomorrow's companies because society (and not necessarily regulation or law) wants and expects good behavior.

oversight or insight?

I once heard that governing is about doing as little as possible, making only the most subtle changes, allowing the machine to operate as naturally as possible. The premise being that something as large, interconnected and complex as a whole country (or planet) has more moving parts than any human can grasp, and big, hasty changes invariably lead to unintended consequences.

The American tax code is a great example. Every new law has a number of amendments attached to it because the legislators didn't think the original through, and then needed to react to loopholes they inadvertently created. The end result is an incoherent system, with no clear strategy or intent, and a massive and wasteful administrative process.

The last few months have caused many to demand greater regulatory oversight, be that antitrust, prisoner treatment, stem cell research, banking, automobile manufacturing, health care, or education. There's just one thing we know for sure that applies in all these cases. The government is the wrong place to manage it. They are not equipped with the insight, expertise, or management experience; they are utterly susceptible to external influence (lobbyists, lust for power, etc.); and finally as lawyers, they are incapable of simplicity and succinctness, the absence of which is of course the petri dish in which all loopholes and bad behavior are cultivated.

So if it's not about legislating oversight, what other options are available to the government? What do they have at their disposal? Well, other than a bunch of soldiers and tanks, it boils down to money - either giving it to someone or taking it away (taxes).

Making smart choices about where to spend these incredibly vast sums of money is not easy. We don't have to look farther than the first batch of TARP "grants" to know that the best laid plans of mice and men... I know we've been having an amazing discussion in the comments section of this post, but I still think as a matter of policy, the government should use money to motivate behavior that shapes results that matter, outcomes that are sustainable, and impact that is largely self-policing.

What can they to do motivate the right outcomes? I think we spend more time wondering about the how than the what, and in the case of the Feds, I don't think they should ever focus on the how - they simply don't have the time to know enough. Instead, let them focus on the whats.

With education, which what do you want? (!) Is it as simple as more and better graduates?

In banking, which what do you want? How about decision-making that demonstrates accountability of results 3-5 years hence (i.e. commissions/bonuses paid based on results in the future).

In taxation - a simple way of equitably collecting what's needed with no room to move - maybe a flat tax?

In transportation - people safely getting from A to B. The government should only pay for that outcome. Why is it concerned with the how?

This is an incredible over-simplification, I know. Being purely outcome-driven, and allowing the free market system to decide everything might not be perfect. But deciding (legislating) everything and being purely process driven isn't right either.

So I prefer the idea that the government should do as little as possible legislatively and as much as possible economically to motivate (and incent) outcomes, leaving the "how" to the marketplace.

Imagine for example if the TSA had not been formed, but instead the FAA had created an X-Prize
that built a system that ensured that people and baggage boarding an airplane did so with maximum safety and minimum intrusion.

I bet we would never have to take off our shoes, or wait in ridiculous lines as poorly-trained people attempted to look authoritative.

Socialism America-style

I just read an article in the latest McKinsey Quarterly called A better way to fix banks. The title intrigued me, as did the subtitle: "Here’s a plan that could solve the toxic-asset pricing problem voluntarily—without requiring Uncle Sam to nationalize the whole industry—and make (pretty much) everyone a winner."

Sigh...

I thought McKinsey was better than this. The only people they care about are the large organizations - either the banks or the government. I should know better - they are, after all their customers, and by that definition, maybe it's true that their everyone was a winner.

What about the people??? What about the homeowners that are facing their share of the $1.5 trillion in toxic assets? What do we do about them, their homes, their families, and their livelihoods?

America has become a corporate welfare state - believing that preserving corporations is the only way to prevent economic doom. I assume the reason for this is the idea of helping individuals smacks of socialism (though the opposite is true) or welfare, and this country is "too proud" to allow that. While both sides of the political aisle claim to be anti-socialist, it hasn't stopped both from supporting corporate bailouts.

Socialism is state ownership of the organizations that produce and distribute goods and services. "quack"

Back to the toxic assets, I have to believe that not all of the $1.5 trillion is toxic. Some of those former homeowners could detox their debt if renegotiated. I wrote about the 70-40 Company a while back, where the Feds would buy debt that was close to default from the bank at 70% of its original value, and refinance the home to the homeowner with a 40-year fixed rate, principle + interest mortgage. In this way, the debt to the bank is no longer toxic - it is essentially insured at 70% of the original value.

The homeowner is happy because they get to stay in their house, now with a predictable, fixed-rate mortgage, and while their home has a lower value, at least they have one, and are in a position to keep it. The banks should be happy because their losses are capped, and the government is happy because they were actually helpful.

But this isn't all peaches and cream. Lest we forget, I wrote about the guiltiest culprits in the lending crisis. The rating firms (Fitch, Moody's and Standard & Poor's among others) rated all the derivative instruments that were composed of these toxic assets as being of high quality and reliability! What's been done about that? Have the Feds or the Treasury Department or the SEC even mentioned them?

A characteristic of a socialist state is the ability to mask its most egregious miscreants. If it walks like a duck and quacks like a duck...

Fool me once, shame on me...

Imagine you are the parent of a 12 year old child (Rob), who last week asked you for $500 to buy a Wii with WiiFit. And since you had begun to notice that Rob was a tad more inactive than usual, and wanted to encourage some physical activity, you agreed and off Rob went to get Wii'd up.

Two months later you walk by Rob's room and notice that the Wii's just sitting there and looks trashed - game player is broken and the WiiFit mat doesn't look like it's ever going to work again. You're a bit upset, and when all you get from Rob is "I don't know," you resist the urge to get angry and think to yourself, "OK, I've learned my lesson and will never give in to him again."

But Rob's not done - "I don't know" is followed by a request for a $3,000 custom Cervelo bike to ride to school, since "um... like my grades are like going to submarine if I like don't get one."

What's your reaction? (Or better said, do you freak out, and take $500 out of the kid's Christmas budget to pay for recently-trashed Wii, or just ground the kid for a month?)

I'm pretty sure I'd do both, plus I'd make the kid like walk to school in the rain, but that's just me.

Turns out Rob was actually Siamese twins who have now visibly separated, and "Rob" became "Rick and Bob."

And instead of $500 to buy a Wii & WiiFit, it was $17.4 billion, and instead of $3,000, they're now asking for $22 billion more, and like the trashed Wii, the $17.4b has resulted in ...like nothing.

WTF?

One has to give Rick and Bob credit for having the stones to come back to mom/dad (the Capitol) with this bold an admission of abject failure - we used up $17.4 billion in a matter of weeks and nothing's changed. And on top of that the rocks to ask for another $22 billion to stave off immediate death, and then the boulders to also state that despite the whole $39.4 billion bailout, they will still have to terminate 50,000 people!

Wasn't the reason for bailing out the auto companies in the first place to avoid massive layoffs? I may be wrong on this, but I'm thinking 50,000 is a pretty massive number of people?

I've written twice about what we should do instead of bailing out the car companies, and what they could do when presented the opportunity to declare bankruptcy. But we, it seems are hell-bent on just throwing money at the problem.

Sadly, the real blame doesn't rest with Rick and Bob - the idiot twins. That honor belongs in the hands of one Nancy Pelosi. Who is quoted as saying she was hopeful the plans would help lead to the "transformation of our domestic automobile industry into a viable, technologically advanced, and globally competitive manufacturing force."

I'm guessing not even Rob's parents would have been so stupid as to give him the $3,000 bike, what's more they would have punished Rob for having trashed the $500 Wii that he bought! Instead, Nancy seriously believes that giving Rick and Bob another $22 billion is going to result in a completely revitalized automobile industry? Can you say "track record?"

Maybe Nancy needs to lower her Crystal Meth intake or go to Walter Reed to have them reattach the cerebrum that she accidentally threw into the recycle bin during National Be a Moron Week.

I certainly hope she's not a parent.

Do you feel stimulated?

There is an $825 billion economic stimulus package before Congress. Add the $700 billion that was passed just a few months ago, and we're north of $1.5 trillion!

How does this plus wars on two fronts get paid for? Where is all the money really going? How does a citizen evaluate these expenditures and determine whether they are wise, and whether they will result in turning the prosperity tide?

As I understand it, the purpose of a stimulus to the economy is to increase the flow of money in the system (and not expand the wallets of the CEOs that got us here). That is, people buying and selling and earning and spending. That flow creates a virtuous circle that moves the economy towards robustness. Economic confidence is one measure of this. There are many others - employment, the money supply, inflation rates, etc.

So - how have we done lately?

Almost exactly a year ago, President Bush implemented a tax rebate to "give the economy a shot in the arm". Several months after the "stimulus", we're in a state that most closely resembles the Great Depression. Looks like President Bush missed - he shot the economy in the groin instead...

Then there's the first $350 billion - how many of you have benefited from this? Have any of you noticed an improvement of any kind since the money was distributed?

And what does the new administration wish to do? Go right back and hit our poor economy the groin yet one more time!

Looking at the bill the House just passed, there's basically zero dollars that go directly to people that would spend it in ways that would help money flow. Take a look at it. The only "cash" that goes to people that would actually spend is tax rebates, and we (and our groins) know how effective they are.

I wrote twice (here and here) about how to help the economy by actually giving money to people who can spend it. But it does require more work, than just giving huge sums of money to very few people. Both of these suggestions require a more structured federal involvement, but interestingly, don't require a whole lot of corporate oversight or regulatory action.

I think doing these two things have a better shot of working and cost vastly less than $1.5 trillion. Your comments are welcome.

Blame Game

Bob Herbert wrote an interesting op-ed in the NY Times recently. He argues against demonizing the teachers' and auto workers' unions for all the problems facing these two industries.

He notes that Randi Weingarten (president of the American Federation of Teachers - AFT) and Ron Gettelfinger (president of the United Auto Workers - UAW) have both represented their unions/members as respectively willing to, and having made significant concessions to help out given these economic times.

The UAW has lowered starting wages for new employees. How does that lower the costs for the Big Three? They aren't hiring anyway - so what difference does this make?

Similarly, the AFT has agreed to change the way tenure is awarded (but not change the tenure of current teachers). They have gone further to allow changes to merit pay and teacher assignments, which is a positive step.

Andy Rotherham of Eduwonk also saw this article and commented that in his experience teachers are not perceived to be the cause of the failings in our education system. Similarly, I don't think auto workers are perceived as the cause of their industry's failings.

So why are they being vilified? Simple - the mission of both unions is to maximize the salaries and benefits of their employees with the most favorable working conditions to the employees. To their credit, the AFT does state in their mission statement the goal to "strengthen the institutions in which [they] work". The UAW does similarly talk about improving product quality.

But in addition to poor management and inappropriate measurements of performance and success (I've written about this often - 1, 2, 3, 4, 5), there is no doubt that during negotiations between labor and management, neither side is worried about the success of their industry. They're respectively worried about getting the most for their members, and and spending the least amount of money on their employees.

In a successful negotiation, the primary goal is to sustainably produce the best results for our end customers. If both sides were genuinely committed to this goal, they would realize:

1. If we don't produce the best product, we won't stay in business for very long,
2. If the business isn't profitable, it won't be around even if we do make a great product, and
3. If our employees aren't treated well, paid well, and cared for as partners in our success, we won't be able to produce our product at all.

Success is not about extracting everything you can from management (as the UAW seems to believe), nor is it about stomping down the unions as Michelle Rhee seems to believe.

Winning is important, but at what price? This isn't about blaming one side over the other, it's about taking accountability for the end result, and understanding that every player in the game must succeed for the outcome to be sustainable.

Willingly Misinformed

It snowed a whole lot here yesterday, which combined with this time of year and this article about the mortgage crisis in the New York Times put me in a reflective mood. Most interesting and telling - as recently as September 18 of this year, President Bush was unaware of the extent to which economic conditions had deteriorated, and had no idea how we got here!

Is this a freak occurrence or a pattern? Example situations (by no means comprehensive):

1. The events leading up to 9-11
2. The lack of preparation for Katrina
3. The performance of FEMA after Katrina
4. The lead-up to the Iraqi invasion
5. The military strategy for entering and exiting Iraq
6. The resulting oil crisis
7. Ethical failures in the White House, the Department of Justice (Gonzales), the Department of Defense (Veterans Hospitals, Boeing/Airbus tankers, etc.), to name just a few.
8. The financial crises
9. The reactions to the financial crises

But it's not just keeping an eye on the ball, it's also about situational hitting. What's your judgment of how this country has reacted to any of these issues? Here's my sense of the modus operandi:

1. Look only at the symptoms that jump out at you (WMD, one shoe bomb, liquids on planes, etc.)
2. Be blissfully naive about everything else, and use PR spin to get everyone to rally behind the one thing
3. Never forget to use fear, wield power (military might, financial might, etc.), think narrowly (to avoid the appearance of lying), and be thoughtlessly bold
4. Define the one thing as a matter of national security (or something like it), and force everyone to focus only on that
5. Once you've sold a plan of action, secured funding, abused enough rights and freedoms, and stroked all the egos, assume the problem will fix itself anyway, and we'll use PR to make us look good, like we worked feverishly and unwaveringly to do the right thing
6. If/when the narrow-minded strategy fails, we'll just use the next crisis to divert people's attention
7. Go back to #1

Then it occurred to me - how is this different from the way most American companies operate? Think of the Detroit Big Three. Think of the financial services sector. Think of the energy sector. Think of telecommunications, or entertainment, or education, or high tech, or whatever else.

Is this how America works? Surely not!

Maybe this is what happens when organizations (or societies, or whole countries) rise too quickly, get too accustomed to the idea that failure doesn't really happen, that winning today is critical, and that at the end of the day, PR and a good perception machine is all you need to make your case before an increasingly naive and ignorant public that blindly grasps at every straw.

Erasmus was right - "In the kingdom of the blind, the one-eyed man is king."  We, it seems have forsaken wisdom for instant gratification, experience for expediency, and chosen misinformation over integrity.

If America is the Hare of the world, who is the Tortoise? That's a tough one. Why? "Hare-mentality" prevails across most of the larger, "successful" countries in the world. Most societies (Eastern and Western) are thus infected.

There are smaller (much smaller) countries out there that seem to have found their center, are able to consistently make good decisions, and have a more nurturing society that cares for its citizenry first, and doesn't seem bent on beating anyone, or imposing themselves on any other country. But then again, they're not actually in competition with the Hare are they?

These  nations seem pretty centered on their place in the global economy, and aren't aspiring to unseat any other society or nation. They are very self-aware and self-critical when things don't go well; they recognize situations, accept blame and work together to resolve and move on. They compete for things and not against organizations or people.

Hmmm... is that the real lesson? If you deal with integrity, take accountability, and are transparent in your actions and their results, then sustained success is possible?

A thoughtful (if that's possible) reaction from the Hares of the world might be that deliberateness stifles creativity, quantum change, and significant outcomes. A fair point.

Is it possible to have the best of both worlds? Do we have any leaders that are that good?

Measure well

Seth Godin wrote today about how to live to fight another day. While our default is to question our customer's decision-making when the deal doesn't go our way, he argues that losing with grace gives you more chances to be invited back to the table. I agree.

So why is this not typical behavior? Simple - we are what we measure. Very few salespeople or sales organizations are measured on sustained performance (where "sustained" spans more than a quarter or a fiscal year). Therefore the sales team and each salesperson is goaled specifically on winning every deal, closing every opportunity, etc. Lifetime value means less than deal value.

I worked at IBM Canada in the early 90s. At a sales training class, the instructor argued that success is most dependent on the relationship you have with the customer. The measure of a great relationship is when your customer calls to tell you that he tried his best, but had to buy the competitor's product. However, he hopes that this doesn't tarnish your relationship in anyway! Wow!

This is one very clear reason for why IBM has been so consistently successful - they care so much about their customers, that their customers care just as much about them.

A purely commission-based sales force loses when they leave any money on the table. This is why they behave this way. You are what you measure.

So how does an organization measure sustained success? 

What if we made commissions the smallest part of the compensation package? What if the accelerators were based on the customers' success, our sustained performance over time, and customer satisfaction?

A very simplistic formula might look like this:

Compensation = [total revenue X 2% (sample base commission rate)] X [1 + customer's year-on-year revenue growth percentage] X [average attainment over the last three years from this account] X [three-year average customer satisfaction index]

Say the deal was worth $1mm, the customers' business had grown by 105%, the sales team had achieved 97%, 103% & 105% of quota the last three years, and their sat index was 90, 98 & 97%.

Then the sales person would receive: [$1mm x 2%] x [1 + 105%] X [ave (97, 103, 104)%] X [ave(90, 98, 97)%] = $20,000 X 205% X 104% X 95% = $40,508.

$20,000 turned into just over $40,000 based on the customer's success, sustained sales performance, and customer satisfaction.

Now imagine how the customer's view of the salesperson might change if they knew that commissions were based in large part on the customer's overall business success? Imagine how the salesperson's point of view would change?? The sales company benefits because their customers' loyalty will grow, which will result in lower costs of sales, higher margins, and more predictable revenues over time.

You are what you measure.

Sometimes you just gotta say...

I may not be an educator, but I did stay at a Holiday Inn Express last night. Well, OK - so maybe I didn't, but that's not going to stop me:).

Rodd Lucier (awesome blog name The Clever Sheep) wrote last Thursday about a conference he attended on the use of tools (ostensibly ICT tools) to ensure learning is relevant to the students of this century. A great thing. While there, he overheard some interesting conversationlets:

"Our IT department won't let us!"
"My superintendent doesn't get it."
"We don't have enough money."
"Our computers are too old."
"The school networks are out of date."
"We still ban cell phones in school!"
"I've never even heard of RSS."
"The kids know more than we do."
"I don't have the time!"

Phooey! 

Every one of these statements is an excuse. How many of these same educators would accept these excuses from their students???

David Warlick was generous enough to offer his suggestions on how to overcome each of these objections. I think David went over and above on this. His ideas are great, but I believe giving their words this much credence may not be the best approach. From the season 7 opener of West Wing:

"If you don't like what they ask, don't accept the premise of the question."

Or in this case, don't accept the premise of the response. While I think David's responses are apt, I'm pretty convinced that he'd be tilting at windmills if he went to the authors of these excuses and offered to help. They would find other excuses. "That'll never work at my school," "my situation is different," "you just don't understand the people I have to deal with," or whatever. 

Here's what I might have said:

When I was growing up, one of the defining movies about taking control of your life, finding your power, and of course, getting the girl was Risky Business. It was ground breaking on many fronts, and there was this one quote that struck a chord:

'Every now and then say, "What the fuck." "What the fuck" gives you freedom. Freedom brings opportunity. Opportunity makes your future.'

These words should be tattooed on the foreheads of all the educators who made all those excuses that Rodd overheard so they can read them in the mirror every morning.

OK - so that might not set the right example for their students, but the principle is sound. Every great teacher I've ever met shares among others, the following traits: integrity, a passion for their students' success, a commitment to doing great things.

Saying the magical phrase above "gives you freedom, freedom brings opportunity. Opportunity makes your future."

Every one of the excuses above can be overcome with enough ...chutzpah to do what's needed to get to better learning outcomes. I went to a fantastic event celebrating Innovative Teachers a few weeks ago where I met many, many educators from around the world who exhibited this kind of strength and guts and ingenuity, and are getting results despite these and many other obstacles. 

In conversations with them, not one knew all the answers up-front, none had all the approvals or funding or resources to get it done once they found some answers or approaches. They undertook a process something like this:

1. Understand the real problem
2. Figure out what you know and what you have at hand
   
3. Do the gap analysis to know what you still need
4. Get help (from students, staff, faculty, the community, wherever)
5. Be creative and ingenious if funding is required
   
6. Give it a go
   
7. Evaluate and tweak
8. Return to Step 6 until it's good
   

Sometimes, you just gotta say... it "gives you freedom, freedom brings opportunity. Opportunity makes your future."

The next Secretary of Education...

...should be someone unique. S/he must be a proven, successful educator combined with a successful manager of an education system.

I was reading Scott McLeod's recent blog entry on Alfie Kohn's essay in the Nation. It's excellent as usual and I totally agree with Scott.

There is a lot of media fervor around Michelle Rhee, Joel Klein and Arne Duncan. They are among the front-runners for SOE, and appear to be opinionated, narrow-thinking, bureaucrats who in classic MBA fashion, are looking to inject even more mechanization into a machine that (due to NCLB, etc.) is already losing its soul at an alarming rate.

I have worked with MBAs. They are trained to be dispassionately metric-driven. Their focus is on achieving the specified result. Success is often only measured by reaching or exceeding the stated metric. It can result in leaving little room to assess whether their project contributes to or hinders the bigger picture, or whether it results in a sustainable outcome.

After a quick scan of their three leadership styles, it looks like Rhee, Klein & Duncan are all about immediate and noticeable impact ("ready, fire, aim"). And if they're anything like the DOJ was under Golzales (or Gonzaless?), I wonder how their attitudes will infect the rest of the organization?

The result (using the quote that opens Kohn's essay) might be an even more exacerbated version of this:

If we taught babies to talk as most skills are taught in school, they would memorize lists of sounds in a predetermined order and practice them alone in a closet.   --Linda Darling-Hammond

Expeditiousness and the relentless pursuit of the result are all that matter.

The mantra for Rhee, Klein & Duncan looks to be improve standardized test results at the lowest cost. <-- This doesn't bode well for our children.

Though I suppose if I were their babysitter and couldn't find the kids, I'd know to check the closet.

I hope the next Secretary of Education:

• is inspired,
  
• is not just an MBA,
• can get things done at scale, 
• can sublimate their own ego for the greater good,
• is more focused on practical, sustainable, macro-outcomes, and
  
• can do all this while maintaining a sense of heart and love for our children and their destiny.

And let's also hope that they can, as Pete Reilly so eloquently put it, understand that "Your life is a reflection of you."

My vote is for Linda Darling-Hammond; if you agree, sign the petition supporting her selection.

Edu-leadership

What is the right amount of money for a community to spend per student? How does one judge this? A number of studies [one, two, three, four] I looked at today that show contradictory information. Some say that the more you spend, the better the scores are, others say there is no correlation at all.

What's the right answer?

I wonder if we're asking the right question. Is it about the amount or is it about the composition of the investment and the mandate of those managing it? My gut says it's about the latter. My gut also says it's really about how we measure success and where accountability lies.

Today the decision-making rests in the hands of school districts, state and local politicians, heads of schools, and maybe parent-teacher organizations. The federal government also has a hand in this of course.

Three questions:

1. Who defines success?
   
2. Who judges whether success was achieved?
3. Who faces consequences of failure or gets credit for success?

Hmm... I'm not sure the answer to any of these questions is clear is it? Here are three more questions:

1. Who is the customer?
2. Who is the provider?
3. What mechanism is there for the customer to assert their market rights?

Perhaps the answers to these are more clear? Or are they? Is the customer the student, the taxpayer, or the federal government (who funds much of this on our behalf)? Is the provider the head of school, the school, the district, the teachers' union? Is there actually a clear flow of funds through which to assert market rights? Not clear, not clear, and no.

Going back to the first set of questions, you could say that all of society defines success, but this isn't practical, so it falls on legislators, but they'll come up with unfortunate programs like No Child Left Behind. Who judges success? Unclear. Who feels the consequences? Well that's interesting, as in the corporate world, it all flows downhill, so the lowest people on the ladder (teachers) feel the brunt of the pain; of course the students also feel it.

What to do? As with everything else, it's easier to find fault than fix things. From my experience in the corporate world, it almost always boils down to having one leader who has vision, strength, experience, but no ego. If this person is found, they will have the capacity to do what's hard (take a stand with conviction), and push for outcomes based on the best advice available. 

I believe we must know what the goal is and you are what you measure.

I wonder if we have it in us?