~synthesis~

divided

Something rather predictable happened in America yesterday. North Carolina became the 28^th State which overwhelmingly voted to amend their constitution to protect the "sanctity" of marriage as a union between one man and one woman.

As a recent citizen of this much-vaunted nation, this and related events make me question two things I was required to learn to gain citizenship:

(1) Did the Boston Tea Party really occur? Was this country really formed in response to "a long train of abuses and usurpations" against the ideal 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."? Or is that all a sham?

(2) Are the fifty (50) United States of America really so, or is this just a geographically convenient artifact?

Today, 56% of American States are anti-gay marriage, anti-abortion, and anti-any-other-religion-but-ours. They ironically campaign for this using the very Declaration quoted in #1 above. They are strong in their conviction, persuasive with their campaigning, and (very) successful in their actions.

If an alien were tapping into American news over the last months, they would be convinced that this continent is on the brink of civil war pitting the Middle/South (MS) against the North East/West (NEW). They would be further convinced that the passion, state of weaponization, and ferocity of MS would prevail against the tepid passion and insipid NEW.

I think they'd be mostly right. MS wins referenda because they stir passion in an organized way, they instill fear by correlating any issue to the personal insecurities of their constituents. NEW on the other hand appeals to people's sense of what's right; they may agree, but are not provoked enough to rock the vote. Once again proving that when it comes to politics, the threat (actual, perceived, or fabricated) of imminent, personal danger far outweighs any intellectual discourse.

Notwithstanding their brains, NEW's density and lack of savvy are impressive -- if I were running the NEW campaign advocating that any two consenting adults should be allowed to marry, I would also argue that any two consenting married adults should be allowed to divorce. I would be sure to give the latter as much "air" as the former, secure in the knowledge that that would cause/require MS to oppose it. While incredibly obvious, I'm certain NEW will never do it.

Gay rights is but one rift in metaphoric Grand Canyon that separates Americans; it began with the Civil Rights movement and the US military presence in Vietnam (or perhaps with the abolition of slavery?), and fed by vitriol, violence, and politics, blossomed into our current state of "irreconcilable differences." The pundits claim that the upcoming presidential election is about the economy/debt, jobs, national security (energy self-sufficiency), and health care. They're wrong. These are surface issues, filled with gray; and both sides (politicians and voters) are mostly in agreement. The real issues, the most evocative, are personal and decidedly black/white.

Democrats and Republicans alike claim "what unites us is far greater than what divides us" and in the next breath, go on to paint "them" as against the core, fundamental, and personal issues that "we" share.

You can't have it both ways. Aaron Sorkin said this best with President Andrew Shepherd's speech in The American President:

America isn't easy. America is advanced citizenship.You've gotta want it bad, 'cause it's gonna put up a fight. It's gonna say, "You want free speech? Let's see you acknowledge a man whose words make your blood boil, who's standing center stage and advocating at the top of his lungs that which you would spend a lifetime opposing at the top of yours." You want to claim this land as the land of the free? Then the symbol of your country cannot just be a flag. The symbol also has to be one of its citizens exercising his right to burn that flag in protest. Now show me that, defend that, celebrate that in your classrooms.

Then you can stand up and sing about the land of the free.

America (and democracy) can't exist when her citizenry is made to be personally severed from its neighbors. If we continue down this path of intolerance, metaphoric severance will become literal; either peacefully - "You (44%) go your way, and we (56%)'ll go ours.", or violently - "You're too evil to live, you need to be ended."

Maybe it's time to renew my Canadian passport...

spintegrity

As a kid, I routinely proclaimed my innocence when “stuff’ happened . It is possible that sometimes “I didn't do it” wasn’t exactly accurate; it's also possible that had I come clean right away (or even before the “stuff” was discovered), I would have spent much less time being well-grounded...

When I was in that “innocent” moment, I always felt it was possible that the broken fish tank (or whatever) might not actually be discovered, or that I could find a way to not make it my fault.

As in childhood, “stuff” also happens in business; but the consequences are worse than a wet carpet (the fish were saved, though I got zero credit for that). Sadly, the “adult” leaders are often as righteous as I was, and as convinced that they can somehow get away with it.

A teacher I admire recently posted a link on Facebook to a blog by Gary Rubinstein entitled: Why I did TFA, and why you shouldn’t. As a former TFAer, my friend was understandably upset about this. I too am an admirer of TFA (Teach for America), and this article was an eye-opener, it exposed perspectives I hadn’t considered.

Money quote: "Rather than be honest about both their successes and their failures, they deny any failures, and charge forward with an agenda that has not worked and will never work. Their ‘proof’ consists of a few high-performing charters. These charters are unwilling to release the data that proves that they succeed by booting the ‘worst’ kids — the ones that bring down their test scores."

A few months ago, the Susan G. Komen Foundation was accused of politicizing their grant-making (which they denied despite information to the contrary); they were further accused of singling out Planned Parenthood, which the head of Komen, Nancy Brinker also denied. When asked if their reputation was at stake, Brinker responded: “...all I can tell you is that the responses we’re getting are very, very favorable." They reversed their decision 24 hours later, apologized for causing any distress, while reiterating their righteousness.

Like TFA (23 years), Komen has been around a long time (30 years), both are very effective, and widely regarded as resounding successes. They had to overcome huge obstacles; persevere through difficult times; and finally gain traction and slowly win people over. Now, rather than begging to get an invite to the dance, they are the main attraction.

To get to success, it is often necessary to transcend negativity; it is always necessary to believe in yourself, your vision, and your strategy, even (or especially) when everyone else doubts you. This thick skin is critical to progress in the early days, and if you are fortunate enough to "win," it is sadly also very effective at helping you forget who and what you were when you started, and think only of how great you are now.

Humans are designed to forget, minimize, or even romanticize tough times -- I can't imagine a mother wishing to give birth to second child if this weren't true; it is certainly how adults forget the angst and difficulty and complexity of puberty and teenagehood, when they vowed never to be the jerks their parents were.

In life, as we learn and grow, we hopefully never lose sight of the principles and morals that we were taught as children -- these neural pathways were formed when young, and ideally persist and guide us throughout our lives. But in business (and politics), there is no such memory, especially when it comes to leadership. Principles or morals are routinely forsaken in the name of expediency. What's worse, it is the very leaders who were closest to those principles that are most likely to ignore them.

But how is the ideal that caused shivers down your spine, brought a tear to your eye, and drove you to do just one more thing before going to sleep so easily replaced??

I think it happens when you hire two- and three-lettered people - JDs, PRs, MBAs. The "2-3s" are designed to manage situations by respectively telling you scary stories about what will go wrong if you admit things; telling you lies about how great you are, and assuring you about how easy it is to fool the public; and by "helping" you measure success with generally-irrelevant metrics. The 2-3s also help you forget the big picture -- the very reasons your organization exists in the first place.

The result? You've been spun.

Spin is a powerful thing - it is intended to "shape" truth into convenience: "the fish needed a new home anyway, and let's face it the floor also needed a wash." The problem happens when you start believing your own spin. Back to TFA: Education is a difficult, difficult challenge -- we spend $100s of billions on it and are still failing. Rather than admit that some of their efforts have also failed, and help others learn from their mistakes, they're forsaking their original dream -- we can make education better -- for their new mandate -- TFA must succeed at all costs. This is true for Komen, for many large corporations, and certainly in politics.

As Gary put it, “TFA spawned leaders suffer a type of arrogance and overconfidence where they completely ignore any evidence that their beliefs are flawed.  The leaders TFA has spawned are, to say this in the kindest way possible, ‘lacking wisdom.’ ”

When you start believing that your 2-3s can help you hide or spin failures and acts of stupidity, you’re in trouble. When you start believing that these things didn’t really happen, you’re an idiot. And when you start thinking you can now do no wrong, you’re sunk, for you are now without integrity.

The standard to which we hold ourselves is our greatest asset. When we are honest about our successes and failures, we show our humanity. When we are open to external scrutiny, we are worthy of other people’s trust.

impossible??

You are what you measure. What gets measured gets done. These and other phrases are taught in most business schools around the world -- if you want someone to do something, pay them based on getting it done.

In sales, it's commissions -- if you don’t sell, you don’t eat; outside sales, many use MBOs (management by objectives). The process is slightly different, but the effect is roughly the same. The key is designing the measurement to ensure the desired outcome.

When students are measured based on test scores, the skill created is not understanding the curriculum, but rather knowing how to pass tests (an unhelpful skill in the working world). More insidiously, if schools are paid based on standardized test scores, an easy was to improve is to expel the poor performers. Sure the numbers look good, but is that really the right outcome? Are we measuring the right thing?

You need money to live, you work to earn money; like students who learn test-passing but not curriculum, adults learn how to game their system, how to interpret and translate their MBOs into the greatest income at the lowest effort.

Health care is rife with “gaming,” and like any other player in this game, (some) doctors are no exception. I was listening to Marketplace recently, and their fascinating show on billing codes -- every patient-related activity has a code assigned to it, and doctors must map their work to these codes to then bill the insurance companies and get paid.

To “clamp down” on rising costs, the insurance companies are reducing the $/code - so if lancing a boil used to pay $100, it now only pays $90. The result? Increased payouts, and more sophisticated gaming. Not exactly the desired outcome.

According to the show, 2.2 people are employed to do billing for each doctor in America. They even have their own conference -- CodingCon, where they “equip medical coders, billers and related healthcare professionals with best practices and tools needed in correcting codes from the start, avoiding claim denials, maximizing productivity and increasing practice’s bottom-line.”

Or, “learn how to not only overcome the $10 cut on boil lancing, but also add $100s more to your bottom line.”

The Marketplace doctor’s codistas have increased his revenue by 70% ("hundreds of thousands of dollars per year”). A codista at a hospital discovered that instead of claiming knee surgery and rehabilitation under one code, they could discharge the patient from surgery and then readmit them to the physiotherapy clinic downstairs, thus billing against two codes, and making much more.

How big is this? An additional $360B (yes, BILLION) per year is spent on the whole coding process - a concept that was introduced to standardize care and lower costs... We reap what we sow.

Net -- the best way for a doctor, clinic, or hospital to dramatically grow revenues is not by providing better care, adding more doctors, or serving more patients; it is by hiring more coders, and sending them to CodingCon.

We are what we measure, and what we measure gets done.

What if instead of student test scores and attendance, schools were paid according to how well their graduates did after they left that school? (Click for more info.) Now principals, teachers, staff, unions, etc. have a common purpose: the more prepared their students are for the future, the more money they earn. You’d better believe they will work together to ensure that their students are prepared for elementary (if a pre-school), middle, high school; or college/university, and the workplace. Attendance and tests are a piece of the picture, but the key measure is student preparedness.

The (state of federal) secretary of education’s only concern is tracking how students do after they graduate (something they, and the census system already does). By eliminating tons of redundancy and complexity, we should be able to educate all public school students at half the cost of today, saving $2-300B/year.

What if instead of procedures, doctors were paid based on how healthy their patients were? (Click for more info.) The job of health care is not to perform procedures, it is to assure a healthy community. This measurement would save $2-300B/year in coding procedures and such.

It is possible to create centralized (federal) funding with autonomy at the point of execution. The key is to ensure that the recipient of funds does NOT control how their performance is assessed or reported. Create the right measures...

For both education and health care, we can accomplish this with existing measurement systems and existing funding mechanisms. Not only would we achieve better graduates and a healthier population, we would do it for as much as half a $trillion less.

These are but two examples - consider the 39-year long war on drugs (metrics: arrests and interdictions). The result is $billions spent jailing street corner dealers (3 years in jail @$33k/yr for a $200 transaction) and intercepting tons of easily and inexpensively replaced drugs, with NO corresponding drop in consumption (constant for the last decade). If instead the last 39 years had been spent helping addicts, the war might already be over.

To quote a man of immense wisdom: “Impossible is just a big word thrown around by small men who find it easier to live in the world they've been given than to explore the power they have to change it. Impossible is not a fact. It's an opinion. Impossible is not a declaration. It's a dare. Impossible is potential. Impossible is temporary. Impossible is nothing."

motility

Tyler Cowen co-authors Marginal Revolution with Alex Tabarrok - it is a fantastic blog; I read it every day. In a recent interview, Tyler said that one of America’s biggest problems is a lack of economic mobility. People are stuck in their economic stratum because they don’t have access to better schools, particularly in their K-12 (primary & secondary) years. Sure excellent people will succeed no matter their background or school, but the vast majority are immobile because the only education available to them is not good enough to help them rise.

They’ve also written that the US government’s approach to stimulating the economy (spend $trillions) is ineffective. I agree, and think it’s for the same reason - immobility.

Effectively executing the latter, might also give us the answer to the former:

When an economy falters, we must increase the flow of money -- get people and businesses to spend, this creates monetary mobility. That movement of money causes goods to flow, inventories to be replenished, and people to be hired. It’s not just about increasing the money supply, the added money must actually do work -- if it is put in the bank or invested, the effect is diluted or eliminated. So, who is most likely to very quickly spend every penny they get? What also is the most efficient approach - where there is little or NO leakage of funds to bureaucracy or other interests?

First who: In a shrinking economy, businesses will lower operating costs (layoffs, other efficiencies), grow profits through savings, and ONLY spend if they see sustained proof that customers are buying. They will not (and should not) create capacity when there is no demand. The result is profitability growing much faster than employment. Companies are NOT spending. They will only act when people buy. So not business.

People? If you already earn enough to meet your needs, any incremental income may not all get spent - you might save, pay down debt, or invest it instead. The richer you are, the less likely it is that a new dollar is spent. This money is least mobile. Poor people on the other hand, can’t afford to save money; they will spend whatever they have to subsist, if they get a bit more, it means they can afford to buy more necessities, not save more. There is also no overhead to their spending; they don't commission research, or conduct needs analyses, or consult McKinsey, they just buy food or clothing or whatever.

A thousand dollar bonus to someone earning $20K or less represents at least a 5% increase in income. If this person were the sole breadwinner of a family of four, they would still be $1,350 below the 2011 poverty line, and every cent would be spent. At that income, savings is not an option. There are 82.6 million people in the USA who earn $20K or less; giving each of them a $1K bonus would require a stimulus of $82.6 Billion.

When the lowest wage earners are spending money, their inertia creates a ripple effect that accelerates money flow, drives capacity creation and reinvestment, and thankfully (!) also enables the not-so-poor to buy new cars and drink mojitos in the Hamptons.

Then, how: Fighting the urge to form a task force, hold 735 meetings over three years, and create a 3,000-page manual, filled with absurd crap, let's just issue a $1,000 check to everyone who whose total W2 income (box #1) was less then or equal to $20,000.

In a commitment to failure, Presidents Bush and Obama chose and continue to choose a trickle-down approach with their stimuli, believing that giving $$$ to bigger companies will cause them to invest to create more infrastructure (manufacturing and service capacity), and in turn employ more of the middle/lower class.

Why? Perhaps because America doesn't like the idea of giving people a handout (though we have food stamps, welfare, jails, etc.). It is more palatable to give a business money because that feels less like charity.

But I don't think of this as charity as much as low-overhead-high-efficiency investment.This same view applies to education - the goal is simple, but instead of acting, we analyze; instead of inspiring students, we measure them; instead of empowering teachers, we oppress them.

This is not an argument against business, or the rich, or for charity; it is instead a plea for us to learn from nature, which teachers that the nimblest, most efficient, and most directly-aimed things prevail, ...and perpetuate.

quintessence

Steve Jobs resignation as CEO of Apple has provoked questions - will Apple maintain their trajectory of success? What is their unique advantage?

Check out these three articles:

1. Ultrabook: Intel's $300 million plan to beat Apple at its own game
2. The New Apple Advantage
3. 10 Reasons Why iPhone 5 Doesn't Stand a Chance Against Motorola Droid Bionic

The first is Peter Bright’s quest ‘to find a 13" MacBook Air that isn't made by Apple.’ Sobering insight into a normal person's experience of buying a laptop from Dell, HP, or Lenovo.

Next John Gruber thinks Steve Jobs and Tim Cook are responsible for Apple’s success: “We’ll give Jobs the credit for the adjectives beautiful, elegant, innovative, and fun. We’ll give Cook the credit for the adjectives affordable, reliable, available, and profitable. Jobs designs them, Cook makes them and sells them.” Gruber feels that it is possible for Dell, HP, etc. to copy Steve, but they’ll never match the economies of scale that Cook achieved.

Finally, Elias Samuel delivers a detailed and apparently thorough assessment of the shortcomings of a phone that no-one has seen vs. a phone that few will use. It includes the Korean version of their teaser ad, here’s the English version. If you want to nerd out some more - here’s a comparison of three random Android phones - does a typical consumer really think this way?

From these articles, I concluded that Apple made it easier for us to buy; consolidated their product line and parts requirements to lower operating costs; and conceded the phone-nerd audience vs. normal consumers.

But this isn't really Apple's magic...

Have you seen Jobs' 2005 Stanford Commencement speech? He said one of the best things that happened to him was getting fired from Apple in 1985. It gave him the freedom to create NeXT (which Apple eventually bought), and Pixar, the most successful and creative animated film studio ever.

Steve Jobs is brilliant and a visionary, but there are many of those; what makes Jobs unique is his time at Pixar.

Two “behind the camera” roles in film-making are Producer and Director. Simplistically, the producer’s job is money, logistics, and marketing; the director’s is the story, the artists, and the ultimate experience.

I think John Lasseter (director, Chief Creative Officer, Pixar) is/was a HUGE influence on Jobs’ thinking about the essence of product development.

Great directors must:

• Interpret an intricate, complex and wide-ranging story and turn it into something that can be conveyed in ~90 minutes;
• Marshal talented, creative, and ego-filled actors to work together for one cause;
• Create a complete sensory (emotional, visual, auditory) experience;
• Make all the difficult editing choices that turn hours and hours of footage into a tight story that will not only entertain at the theater, but also in DVD.

The story is preeminent. Difficult tradeoffs will be made, forsaking interesting story lines, scenes, and special effects. The audience will be treated to a unique and powerful and memorable experience because these tough choices and decisions were made. The audience's job is also made easier because *they* don't have to do this hard work - they just have to enjoy its fruits.

Steve Jobs returned to Apple in 1997 as CEO, but he was really the Director.

He took over a company that lacked focus and was bleeding money. Jobs eliminated most of the product portfolio (Newton, Cyberdog, OpenDoc, etc.), keeping only what he believed was part of the "story," and he aligned every employee to a singular vision.

He defined the experience customers would enjoy. I can imagine him saying, “Forget computing or productivity or any of that crap! Apple will entertain. We are not a company that builds multi-purpose devices that offer flexibility and choice at a low price. Apple's job, our job is to elevate spirits, to amaze, to create pleasure in use and pride in ownership."

This is Apple’s magic - this obsessive and uncompromising desire to create pride, to elevate.

Will it survive Steve Jobs’ departure as CEO? Is there another Director in the wings who will have as strong a spine and be as unwavering?

I hope so.

Stay hungry, stay foolish, Apple.

child abuse

Have you ever seen a therapist or a counselor? Does your employer have workplace policies that protect you from isms (ageism, sexism, racism, etc.) or undue physical hardship (excessive hours, moving heavy objects, etc.)? Are you able to take a day (or a few days) off if some thing personal comes up? Are there advocacy groups to support you if you feel in some way wronged by your employer, or if your life is in some kind of stress or distress?

Despite all this "help," many of us will come home after a tough day at the office and feel horrible, exhausted, drained, and just ...done. How often have you heard (or said) the words, “I need a drink”??

Adults have advantages: we are mature, we have freedoms, we can speak for ourselves, we have advocates and advocacy groups, there are laws that protect us, and perpetrators of “bad” behavior are prosecuted or sued everyday. Lawyers who specialize in these issues are prolific, and work on a pure contingency basis - caring for adults is a thriving business.

While it’s disappointing that all this is needed, at least we have access to support, friendly ears, and recourse.

What about our children?

They have access to a fraction of the resources or recourses that we do; they even have fewer legal rights! Worse, they’re going through one of the most difficult things in the world - transitioning from child to adult - puberty, growing pains, emotional transformation and upheaval, sexual awakening, first loves, responsibility...

Add to this, middle and high school are pivotal to their one (really only) ticket to happiness, good health, and independence in life. Without a great education, their destinies are ...uncertain at best.

Stress, complication, emotional overload, difficulty, rule changes, a persistent feeling of powerlessness. This is what confronts children in our society.

Talk about pressure.

Who is their advocate?

• Parents? Nope - most parents delegate their children's upbringing to school as soon as they're in full-time school. More often than not, they side with the “system,” telling the child it was much tougher when they were growing up.
• Teachers? Nope - they are similarly victimized by a system that mandates ridiculous measures of performance, absurd outcomes, embarrassing working conditions for relatively little pay, and lately, a ton of social vilification.
• Government? Nope - kids don’t vote.
• The legal system? Nope - it’s almost impossible to sue the government or a school. They are happy to sue teachers (who are the vogue target these days), but nothing else gets any traction, and teachers are broke anyway.
• The media? Nope - they love to hype stories of bullying, suicides, other abuse, but they don’t do anything about it or cause others to change.
• Who?

No one.

Humans are designed to forget the worst experiences we have - otherwise no woman would give birth to a second child. Teenagehood is not a happy time, but once past it, our memories become very selective. As proof, think of how many times you said, “I’ll NEVER be like them [parents/adults] when I grow up.” And then...

Adults (even parents) may not remember or even understand what it is like to be a teen/student; BUT they are CONVINCED they know what’s right for kids, what they need, and how best to help them become adults.

So here’s what we (adults) have decided is the optimal approach to “educating” children:

1. At the beginning of each year, they are notified of the school rules [you *must* click this link (note: this is for middle school)!], which presume every child is a cheating, lazy, misanthropic vandal. Animals are held in higher regard and given more love and understanding. [If you treat impressionable kids like criminals, how do you expect them to behave? Is it any wonder bullying, delinquency, etc. are on the rise?]
2. Each student in a grade is assumed to come in with same knowledge, context, motivation and home life, and expected to learn the same thing at the same time and in the same way. There is no room for individuality; there is no tolerance for “deviants.” [If they had their way, I think Education America would prefer every student to enter the factory as powdered potatoes and exit as identical, extruded McDonald’s fries/graduates.]
3. They must wake up at 6:30AM and be sitting in class by 7:30AM. Most walk through metal detectors, into buildings that more closely resemble factories or prisons; all are assessed for attendance and dress code. [Do you need a jolt of caffeine so you can face the morning? Do you feed your 6-year old a shot of Red Bull before school? "Of course not - that would be horrible and cruel! How dare you!" And yet you expect them to learn things at 7:30AM.]
4. Sit with 29 others in a room designed for fewer, where they are required to be attentive (silent), docile, take copious notes, and speak only when spoken to. [Schools, like prisons are designed to control and monitor the population, not to enable learning.]
5. Change rooms every 50 minutes, "enjoying" a steady stream of lectures covering new and altogether unrelated topics, and of course, be assigned copious quantities of homework. [Are you able to learn so many new and disconnected things everyday, with just a break for lunch (crappy food) and then pass the tests??]
6. “Learning” is measured by completion of homework assignments and of course lots and lots of tests. In all cases, students are judged individually - teachers are required to be vigilant in preventing plagiarism, cheating, and other bad acts. [When’s the last time you took a test that judged your whole year as a success or failure?]
7. The children are required to carry 15-20lb packs containing expensive and outdated textbooks to and from school. [Workforce rules protect most adults from carrying this much weight every day. But not so for our children and their growing bodies.]
8. Adults in "higher" institutions have deemed that grades alone wont get a student into their university - they need a gazillion extra curricular activities, to be a volunteer, have interned somewhere, and written an essay begging to be considered for admission. And if the gods smile and they are accepted, they have the privilege of graduating just slightly more educated, saddled with at least $75k in debt because of the exorbitant tuition.

So this is the best way to prepare our children for adulthood during their already difficult growing years. Who knew?

But wait, there’s more! Shrinking federal, state, and local budgets have resulted in teacher layoffs, equipment reductions (no more labs), increased class sizes, school closures, elimination of most “non-core” classes (arts, phys-ed, clubs, etc.), the killing of recess (yes, recess!), and even guidance counselor layoffs in middle schools.

Rest assured though, our Defense budget remains largely untouched. Whew!

Adult feelings, wants, needs, and satisfaction are routinely surveyed by our bosses, who at least try to be responsive. When is the last time a school district asked its students how they like to learn, or what environment is most conducive to learning? And if they did deign to ask, did they actually listen, much less change??

Abuse is defined as "any action that intentionally harms or injures another person."

It is time that America admitted that her 50 million public school students are victims of wide-spread, systemic child abuse.

Do you recognize these words?

But when a long train of abuses and usurpations, pursuing invariably the same object evinces a design to reduce them under absolute despotism, it is their right, it is their duty, to throw off such government, and to provide new guards for their future security.

I bet the younger amongst us will. When, I wonder will they heed them and declare their independence from us despots??

As for me, all this typing has really stressed me out, and I’m feeling a tad overwhelmed. I'm going to visit my therapist, get a massage, have a martini or three, and then take a few days off...

social reality

I’ve received a lot of email over my last post :) - my thanks to all of you! Most questioned the alignment between advocating killing Social Security and community-related posts like this or this.

So...

I believe that the role of society is to care for those that can’t. When pre-humans began to coalesce into communities, they discovered that it was possible to specialize - hunters, child raisers, security-providers, shelter creators, etc. As these specialists became more efficient, wealth was created; in this case, it was the wealth of time and reflection and communication and innovation.

Over time, they used fire for cooking and protection, they used farming to grow and improve their diets; they used knowledge of the human body and medicine to reduce infant mortality and increase life spans; and the community was able to “support” caring for the ill and aged, learning, art, and other “civilized” pursuits.

This is the essence and power of society and community, ...and civilization.

Then why nuke Social Security?

Western society has “evolved” to the point where necessities (healthcare, education, infrastructure, security, etc.) cost too much, and our organizations (governments, corporations, etc.) are so big, inefficient, and pendulous that real change/improvement is impossible.

For more than a generation, Western nations have had to borrow massive amounts of money just to maintain status quo. Despite deep programmatic cuts, operating costs today are still much higher than revenues. Bureaucratic inertia + embarrassingly juvenile (apologies to the world’s youth) and avaricious elected officials have prompted credit agencies to put most governments on “watch,” and recently, downgrade America and Italy, among others. This plus the prospect even bigger dufuses being elected in 2012 assures a future of worse government, greater ineptitude, and growing (more expensive) debt.

What to do? Short of a total national reboot, we must prioritize at the program level, and make some tough calls.

What programs must remain, and which can be eliminated? I say education and healthcare for all are more important than Social Security. With an effective education (early childhood through post secondary), and the comfort of basic healthcare, we give people the building blocks to not just survive, but thrive. Eliminating a safety net like Social Security creates an impetus for people to care for themselves and their families, or else.

Unfortunately, the Republicans/Democrats/Tea Partiers are proposing small, inconsequential but politically palatable cuts to everything; if they do recommend the elimination of programs, they are small and budgetarily inconsequential. Our situation is far too serious and dire to tolerate this kind of futzing around.

To protect the essence of our society and the viability of our community, we need someone with serious cojones to step up, take the bold step of throwing partisanship, politics, and silly amendments aside, and lead.

flaunting the third rail

The third rail in many railway systems (tubes, subways, metros, etc.) is electrically charged, and fatal if touched; unless you’re contemplating suicide, stay away from it.

In American politics the third rail is Social Security (SS). The people most affected are the fastest growing segment of the population (older people); they have very strong lobbies (AARP); a lot of sympathy (we’re all planning to get old + Congress’ average age is 57); and they turn out in droves and vote in both primaries and general elections.

After reading Monique Morrissey’s testimony before Congress and talking to a few people I thought SS was a sustainable program, needing only minor rate increases, and that Governor Rick Perry’s Ponzi claim was specious. But...

SS beneficiaries receive significantly more than they + their matching employers invest; to make this sustainable, the system counts on a reasonable return on invested capital, a certain mortality rate, and more people contributing than consuming (i.e. disproportionately younger, income-earning population).

This is similar in design to a Ponzi Scheme, so it is reasonable for Gov. Perry to make his claim. Plus here’s Alex Tabarrok at Marginal Revolution quoting three Noble Laureates who agree with Perry, and argue that people are having fewer babies and living longer (= more older people, fewer SS contributors), and economic growth has slowed (a lot); all of which affirms that Social Security as-is is no longer sustainable and in a literal sense, fraudulent, especially to younger contributors.

The "fix" strategy is to pare things back a little - increase the contribution percentage, implement a means test, delay eligibility, and significantly reduce the amount of benefit paid. Does this make the return worth it for seniors? Can they live on this reduced benefit? Are Republicans right that it should be self-managed? Can the public do better on its own? I say, "Yes."

The President is fumbling the ball all over the place, has a largely vision-free and uninspired record thus far, and could very well lose the 2012 election. This is no time to be timid or take half measures. He could overcome his legislative impotence and take a bold step to redefine entitlement - he could propose that we face reality and sunset Social Security.

The first question in all of our minds - how will this affect me? Well, if you're:

1. Over 50: Three changes - increase in contribution percentage (+2%), a means test for recipients, and an increase in the retirement age (+1 year). You keep paying in, and you will receive what was promised until you die.
2. Over 35: You stop paying into the plan, and you get the current value of your historical contributions back in a locked, tax-deferred US Treasury Bond that you can access upon retirement. All your very important future contributions into this nest egg are tax deferred.
3. Under 35: Sorry, and thank you - your contributions will go towards your parents’ and grandparents’ retirements. You are encouraged to contribute towards your own retirement with tax-deferred deductions of up to 15% of your annual salary. You have the option of buying the same US T-Bonds, or a number of other tax-deferred instruments.
   
4. Federal employee: The same (#1-3) formula will apply to federal employees for their pensions - we will increase salaries slightly to compensate for this, but per the scheme above, times are tough, and we can't afford this benefit anymore.
5. Elected official: Historically, the President, Vice President, Congress, etc. received pensions to discourage, well... bribery. We will continue to offer this pension to elected officials as long as it is their ONLY source of income.
   

This is a long sunset - it will take about 40 years for those who are now 50 to die, at which point Social Security dies with them.

Advantages:

1. Take the government out of the pension business.
2. Screw everyone a little bit - spread the pain.
3. Create a palatable, self-managed savings scheme for American workers.
4. Offer tax-deferred T-bonds as a secure retirement investment, that are also a way for the Feds to raise money, put more of America’s debt in the hands of Americans, who have the greatest vested interest in ensuring its repayment.

This is a dramatic step to be sure, but real leaders face issues head on; they don’t patch things up and leave them for future generations to deal with. Will this be the only step in the “face and deal” process? Nope - MMO (Medicare/Medicaid/Obamacare) also needs to be rationalized, consolidated, and made available as a basic service to all Americans in a way that encourages well-being and good health vs. the current system which funds visits and procedures and tests, but that’s for another post :).

If President Obama has a hope of not just winning, but winning a decisive mandate, he must LEAD. He should not marry this to taxes for jet plane owners or any other silly ploy. He should set the precedent for proposing simple, clean legislation that deals with our most important problems one at a time.

Start with entitlements, show that you're bold enough to go where others have feared to tread, and that you have our nation's best interests at heart, with no fear of the political consequences.

feckless

Tony Karon argued yesterday that Israel's 'Diplomatic Tsunami' has arrived, I think he’s right, and it got me thinking about America’s foreign policy.

From Wikipedia, “a country's foreign policy... consists of self-interest strategies chosen by the state to safeguard its national interests and to achieve its goals within international relations milieu.”

For almost a century, America has been the world’s cop, the world’s strongest economy, and even the world’s authority on morality. From protecting Korea and Taiwan in Asia, to helping Japan and Germany with their post-war economic recoveries, to leading the world in communications and high tech and entertainment, to being Israel’s doting uncle, America has been a (really “the”) dominant force in shaping the world’s behavior.

America, the President of the United States, and the American Congress were regarded, respected, and feared as the pinnacle of freedom, integrity, power, and achievement.

When “powerful” is your norm, you assume infallibility and righteousness are forever yours. The most brazen example of this is the Bush Doctrine (aka National Security Strategy of the United States) wherein the American government empowered itself to preemptively strike any entity or sovereign state that it deemed threatening.

American foreign policy is/was not so much a diplomatic process as thuggery; using either the threat of, or the actual act of military or economic retribution to impose its wishes.

Wielding brute force will go to your head; when you have this kind of power, why bother with subtlety? Why waste time on nuance and wit when you own the most powerful one-two punch (US Military, US Dollar) in history? Sure it's dominant now, but time isn’t kind to those that drink too much of their own Kool-Aid; Davids are able to find slingshots, Goliaths are vanquished.

Ten years ago today, America was the victim of a horrible and criminal act, and it reacted with force and anger, some of which was directed against its own citizens, making us a lot less free than we’ve ever been. America is a more intrusive place to live today than it was on September 10, 2001.

That same act also robbed America of its integrity, as evidenced by three words - Guantanamo, Rendition, and Torture.

The American military is without equal in “traditional” warfare; the last time they were asked to fight one of those was 21 years and 40 days ago, and they were victorious. Since then, the “enemy” has been replaced with individuals and small groups of criminals who are inhuman, without honor, and lack any national affiliation. This is a law enforcement problem, not a military one.

Using the military to counter terrorism is like using a gun to kill a mosquito. You make a fool of the weapon, create a ton of random damage, and help the foe look agile and effective. Case in point - Afghanistan, ironically the same place where Americans helped the “locals” defeat the Soviet Union. American power does exist in reality, but in the eyes of the rest of the world, it is no longer mighty, nor is it feared. The thug mind assumed that every problem could be solved with the same weapon, and that delusion made a mockery of both the thug and the weapon.

Can we at least rest on achievement?

Going back to Karon’s article, taking its cue from Uncle Sam, Israel assumed that a powerful military and self-righteousness are all that’s required to maintain the status quo; but they didn’t count on the agility and effectiveness of the mosquito, which took the form of individuals and their desire for personal freedom and justice.

They did count on Uncle S to stand with them and “prevail” on the Turks, Egyptians, and even the Palestinians to respect and honor the integrity of Israel; and of course America did stand with its favorite nephew, but regrettably, with little effect. Nations (and worse, individuals) that once cowered are no longer bowed. They listened politely, but then followed their own beliefs rather than US "advice."

Why? Because today even America’s ability to get it done is suspect - the military will leave its last two theaters of operation without victory; the economy is weak and depleted; the government prefers ideology over strategy.

What was once a majestic and imposing and relentless is tired and fading. The “assets” that America has held dear for so long, it’s military and the all-mighty dollar remain, and remain strong, but only according to the definitions of the last millennium.

While the world moved on, America chose laurels and rest.

The line it is drawn
The curse it is cast
The slow one now
Will later be fast
As the present now
Will later be past
The order is rapidly fadin’
And the first one now will later be last
For the times they are a-changin’
Bob Dylan - The Times They Are A-Changin’

These are harsh words on this sad day; but this is also a day of reflection, when we contemplate not just what was lost, but how we've changed, and what we've become. Reflection must encompass the whole image in the mirror, not just the convenient illusion. Humility always prevails over hubris.

the hole in the middle

The professional baseball season is 162 games long, and the players have a saying: "Every team's going to win 54 games, every team's going to lose 54, it's what you do with the other 54 games that counts."

This is also true in politics. The fervent Right (1/3 of voters) will always vote Republican, and are lost to Democrats, who have the Lefty third in their camp. The theoretically “balanced” media is just as polarized, and only attracts audiences who are in violent agreement with them; few if any “minds” are changed.

Both sides realize they need the Center to win the Presidency, and despite redistricting efforts, many Congressional districts and states are also decided by Centrists.

Normally, politicians lean toward the Center once elected, but the 2010 elections have resulted in a level of dogmatic obstinacy that has rendered the White House impotent, Congress a disgrace, and America a laughingstock.

Was this a one-time occurrence? Will the political landscape come back to its senses with a natural regression to the mean? Or has the American voter become so polarized that the middle 1/3 is no longer meaningful?

As a Centrist, I hope not - I don’t want to see a cluster f&*k like the one that we’ve experienced so far in 2010/11.

I don’t speak fo all Centrists, but I believe most would agree that ensuring the sustained wellbeing of every citizen is the #1 priority of Government.

Today is Labor Day, but more than 25 million Americans are un- or underemployed (i.e. not earning enough to survive); the two greatest sources (public sector and small business) of jobs are retrenching; and larger corporations are doing pretty well.

The White House and Congress are oblivious; they think making government smaller, eliminating jobs, and pandering to the Tea Party (lower taxes, less debt) are the path to prosperity.

This at a time when more families are unable to feed themselves every day, individual debt is untenable (student loans are at an all time high), and those who might have a dollar or two of disposable income are saving it, preventing the very commerce needed to put people back to work.

To earn my vote, I’d like to see candidates focused on:

1. Investing to create jobs.Individuals and small businesses need improved access to debt, and assurance that their jobs are not about to go away. People create the demand that will drive the need for supply, production, and jobs. The obsession with shrinking government (the country’s largest employer), reducing debt, and cutting and cutting, has created a ripple effect in the commercial sector (shrinkage), and with individuals who are increasingly scared to spend.
   
   Government prioritized supporting corporations over the last couple of decades and it worked. Large businesses are more profitable than ever, and they are more cash-rich than ever. But they are not investing because they see no need to. There is no pressure on corporations to expand capacity because consumer demand is weak.
   
   Government must now prioritize the individual, to help them become consumers once again, and give corporations a reason to invest their savings back into the economy.
   
   Lowering individual taxes are not the answer - this has never worked. We must improve cash flow by refinancing existing consumer debt, changing the way student loans are awarded and priced (if we can deduct mortgage interest, why not student debt?), and providing individuals with some assurance that at least their children’s education and health will be taken care of (see below).
   
   These acts will immediately put money in consumers’ hands, and give them the motivation to buy stuff.
    
2. Creating a safety net that includes universal education and healthcare. Public education was a response to the demand for Industrial Revolution workers, and to protect young children from slave-like labor. It was decried at the time as a socialist act, but justified because an educated and employed workforce would accelerate Capitalistic economic growth, and prevent child abuse, which was thankfully agreed to be a good thing. Today we accept public education.
   
   Universal healthcare is no different. The ONLY constituent that suffers is the health insurer (and the politicians funded by them). By ensuring that everyone is covered, we grow the healthcare industry even more rapidly (it is one of the few that even today is adding jobs), and we recognize (as we did with child labor) that this is part of society’s obligation to help ensure the sustained well-being of every citizen.
   
   But we accomplish one more thing - we enable the bold, daring, capitalistic mindset of the “exceptional American” (sorry) by freeing them to invest and spend and grow the economy, safe from the worry that their families won’t be able to go to the doctor when needed.
   
   The value of this peace of mind can not be underestimated when it comes to a national, positive, growth-oriented outlook.
   
   
3. Banning government intervention in individuals’ lives (provided they aren’t harming others).
   
   I want my government to stop wasting time worrying about abortion (it is the law of the land), gay marriage, teaching creationism, and the myriad other “social” issues that are important to individuals, but which as a Centrist, I don’t want to make political.
   
   It is bizarre to me that Congress (a bastion of piety, morality and right-mindedness) should even be allowed to opine on these issues, must less legislate them. They simply have no standing.
   
   I think we can trust the American people to live within their moral fabric and rely on domestic law enforcement to protect them from those who would do them harm.

Once the economy stabilizes, we must absolutely focus on cleaning up Government - this will require a clarity of vision and cojones. Attributes both President Obama and the Republican candidates are sorely lacking.

It is ironic that the non-extremist nature of Centrism precludes the impetus to advocate for rational government.

demoPrats

Nope - it’s not a typo - a prat is an incompetent fool; and looking at the Party of Donkeys, I see a whole lot of those in their midst.

The DemoPrats have accomplished little to nothing since 2006, during which they’ve had control of the House (‘06-10), Senate (‘08-) and White House (‘08-); their leadership is inept and toothless, and they lack the ability to lead.

The Republicans are dogmatic bullies under the dual (and bizarre) thumbs of the Tea Party and Grover Norquist. But they are masterful at focusing their message in a way that is instantly resonant. Their platform in my words:

1. Taxes are evil - We must curb government excess and put Americans to work.
2. Life is sacrosanct - We must protect innocent unborn children from those who would kill them.
3. Peace through might - We must ensure America’s freedom and safety with a powerful military and border security that deters all our enemies.

To any Democrats that might read this post - can you in as succinct a way articulate your Party’s position?

...

Yeah - it’s a problem isn’t it? In the absence of a compelling message, you allow the Rs to define you as Anti-Jobs, Anti-Life, and Anti-Freedom.

...DemoPrats

From the President down to the petulant Reid/Pelosi dullards, no-one has been able to effectively challenge the Republicans. This is after all the party favored by most of the media, almost all of Hollywood, and some of the brightest minds in the country, and yet, they are bumfuzzled.

1. Taxes create jobs. Capitalism is greed - if your net revenue/employee is positive, you will hire more people because you will make more money. If your taxes go up, you’re still greedy and you’ll hire even more people to make back the tax money - remember employees are a tax deduction. There’s a ton of data to back this up.
2. Life doesn’t end at birth. Every life must be protected; a healthy birth is the beginning - we must ensure a healthy life for every child - that includes an excellent education and guaranteed healthcare. Healthy, well-educated children are net contributors to our economy - they do honest work, and pay their taxes. In fact, they give back more than we spend on them. The Bible says we must protect life, and we couldn’t agree more - the healthier our nation, the wealthier we are, the more jobs we create, and the less debt we incur.
3. America first. We have a lot of problems to fix here at home, and a lot of enemies wishing to attack us in our own backyard. Let us bring our troops back from abroad, and defend our own cities and towns. We don't need to be the world's cop anymore.

This is just an off-the-cuff (one hour of thinking) response written by an immigrant marketing guy.

The Dems could easily de-Prat themselves if they were to utilize the full capacity of the talent on their side; they just need to focus on connecting to their audience, and not on trying to be smart, something in which all DemoPrats revel.

Effective communication is not when the speaker does a good job, but when the audience hears what they need, in the way they need it.

To be clear, this is only a way to engage the voters politically, and win an election. It does not change the DemoPrats' ineptitude in government.

I think there is a possible fix. President Obama needs to replace Vice President Biden with someone who will run the entire Domestic portfolio. He must be able to wrangle Congress, and know how to streamline our government and catalyze job creation. He must be confrontational, decisive and impolite, but most of all, he needs to totally resonate with "regular people."

I think that person is Ross Perot.

remember who you are

Henry Ford once said, “Whether you believe you can do a thing or not, you are right.”

Ford's planned auto-innovations will enable cars to run apps, read your Twitter feed to you, let you update your Facebook status, and surf the web, all while driving! Ford executive Sue Cischke: “Telling younger people not to use a cellphone is almost like saying, ‘Don’t breathe.’”

We know that texting while driving is more dangerous than being drunk or stoned, and yet Ford, in their quest to be "with it" have chosen to pander to kitsch ["Cischke" <--> "kitsch"?] and actually enable distracted driving to win younger buyers - now there's a strategy - let’s proactively help young drivers "stop breathing...” - not sure this is the path to repeat business.

In talking to high-tech C-level executives, I know they are desperate for strategies to help "connect with the consumer." This despite the fact that most of their revenue comes from corporate clients, whose values and priorities are decidedly not-consumer. Corporations (and older people) are interested in function, economic value, predictability and vendor stability; young consumers are interested in form, social value, creativity, and “new.”

So why are large corporations like Ford and others desperate to be hip when their real (paying) customers value the opposite?

In the old days, for costly items like trucks or computers, it was easier to get corporations to buy - they had more money to spend, there were fewer of them (easier to sell/market to a smaller segment), and they could write off the costs of these purchases, making them even cheaper. Whereas the consumer had less money, was much harder to reach, and didn't have the tax advantage. The barriers to entry were lower at the office.

Today corporate customers are extending the lifecycle of hard goods like cars and PCs; they’re reluctant to deplete their cash reserves; and they’re negotiating when they do buy. None of these problems exist in the home, and more specifically, in the minds of new buyers. The barriers to entry are now lower at home and with younger people.

Their example is Apple, who has seen non-corporate, young-consumer sales also drive adult and business purchase behavior. But their “cool” comes from an uncompromising commitment to the product and its design. This priority is why people buy, and why they can command a premium price in tough times. It is also what justifies the "adult" decision.

Executives at Ford (and many high tech companies) are glomming onto social media in the belief that being Twitter/Facebook-enabled associates them with youth and “cool,” and winningyoung and hip customers, leads to “adult” sales as well. This is just badly-executed imitation.

It feels like Ford (and other) executives no longer believe they can “do a thing,” and desperate to remain relevant, are vainly grasping at social networking straws in the hopes that that becomes their new killer feature. 

They should know better. Marketing and random features don't compensate for bad decisions and weak products.

The first step is simple - be clear about your “why” - once you know why you exist - what your fundamental purpose is, then the what and the how become much clearer. There is no doubt about Apple's "why." I fear that companies like Ford have gotten so pendulous that their “why” is lost somewhere in the folds of their quadruple chin.

Instead of enabling distracted driving, get on a treadmill, and work off the fat (high priced consultants, MBAs, etc.) that has caused you to misplace who you really are.

inhumanity

What do the June riots in Vancouver have in common with this week's events in London? This Independent article posted by a good friend made me see things in a whole new light.

Each riot was sparked by an event - the Canucks losing the Stanley Cup, and a black man killed by the police in a way that raised the community's suspicions. The rioters in both cases are young (teens and early 20s) people. The police are not designed for, and ill-equipped to quell riots and prevent innocent people and local buildings/stores from being harmed.

[ASIDE: Domestic police forces ought not be militias, armed to the teeth, and bent on suppressing the citizenry; this assume-the-worst-of-our-people attitude is a self-fulfilling prophecy.]

There's one other thing the countries have in common: while both invest heavily in, and are reputed to have excellent public education systems, their schools are becoming increasingly mechanistic and factory-like. Success is measured by test scores; effectiveness is based on numeric data; and students are viewed as numbers (vs. humans), and assumed to be cheaters and prone to bad behavior, read: mistrusted.

In good times, economic success can overcome these failings, but with increased unemployment and more people falling below the poverty line, no-one is present to model a "peaceful national character and an accepted moral outlook" or the idea of civility for young people. Parents are too busy making ends meet, and there are few "good" influences in the media, or in our increasingly aloof neighborhoods.

Their most formative experiences happen whilst in school, and if the "texture" of that experience is "you'll be held back if you don't do well on the tests"; "we know you're a truant or are cheating and we will catch you"; and being treated as a data point and not a person, how do we expect them to grow into anything but disenfranchised young adults, who when presented with an opportunity to rebel against "the man" will gleefully take it?? This BBC interview of two young British rioters is a classic example of the result.

Why doesn't this happen as much in America (which has an even more mistrustful public education system)? I think it's because the local police forces are more violent and better armed.

[ASIDE: Domestic militia can discourage violence, but at what cost? Prime Minister Cameron just said, "There are pockets of our society that are not only broken, but frankly sick...It is a complete lack of responsibility in parts of our society, people allowed to feel that the world owes them something." His remarks are political peacocking, and by weaponizing his police forces, he creates an even greater rift with the citizenry. Being 'tough on crime' is a failed strategy, as evidenced in America, which boasts the highest percentage of incarcerations on the planet, but no corresponding reduction in crime.]

It is regrettable that politicians can't focus on root causes. In all three (and many other) countries, our children are victims of an increasingly dehumanized education system. The powers that manage (districts, departments/ministries of education, etc.) and influence (Gates, etc. Foundations) public schools are filled with too few real educators, and too many MBAs, whose training in micro-thinking leads to disastrous macro-outcomes.

"Take care of the little things, and the big things will take care of themselves" is a practice in most MBA programs (in their parlance: what gets measured gets done, just focus on optimizing your piece of the business), and is one of the worst things to happen to schools (and corporations) over the last generation. "Penny-wise and pound-foolish," or "missing the forest for the trees" are much more apt, but frequently ignored.

When you manage teachers based on their students' test scores, you demand that the teacher ignore the person in front of them, and focus ONLY on their preparation to answer a set of questions on a piece of paper. Learning is not a requirement; correct responses are.

More and more parents choose a school for their children based on test scores, in the mistaken belief that that's a "good education."

Is it at all surprising that young adults aggressively rebel when given the opportunity? Is it at all surprising that they have a diminished sense of civility and respect? Which adults treated them with civility and respect? What behaviors did their "models" exhibit towards them when they were most impressionable?

Learning is an inherently human act - the more you separate the person from their education, the less educated and "human" our younger generations will be.

The people to blame for the riots in Vancouver and London are not the kids (they are merely accountable), but rather the adults (parents and educators and policy makers) who created the education system in which they were dehumanized.

how can you be so obtuse?

Sound familiar? It will if you've seen The Shawshank Redemption, and recall when Andy Dufresne (protagonist) finds proof of his innocence, but Warden Norton (antagonist/scumbag) dismisses it. Andy "knows" he is innocent; the warden "knows" that all criminals are guilty. We are on Andy's side, and appalled that the warden doesn't even consider the possibility of innocence. In the end, the warden is vanquished and Dufresne is free, but both remain obstinately true to their beliefs.

I was reminded of this when reading The Science of Why We Don't Believe Science - a brilliant analysis on the strength of our belief systems, and why persuasion is so difficult. Psychologists use the term cognitive dissonance to explain it - when we are faced with conflicting ideas, we "reposition" things to reduce the discomfort. Like when justifying an expensive purchase - "Sure this is an expensive car, but that's because it's well-engineered, safer, and will last so much longer than that cheap clunker you just bought - you get what you pay for."

Unprovoked, most of us are somewhat open-minded, but when pushed, we forsake reasonable for defensive and obstinate, and that leads to bad decision-making.

As American politics kicks into gear for the 2012 elections, apparently *every* politician feels pushed and under siege, and none are capable of making good decisions. The abject disinterest in governing has never been more present than during the recent debt ceiling and FAA debacles. The good of the nation is/was forsaken for the good of the Party or the individual politician.

Why? Because politics is a zero-sum game - there is only one winner. It used to be that candidates would campaign on the merits of their vision, their ideas, talk about who they were as a person, and "may the best (wo)man win." But as politics has "evolved," they've discovered that it is much easier to make your opponent(s) lose than it is to show why you should win. Rather than being the best candidate, it's about being the one with the best opposition research and counter-marketing.

Bizarrely, this new breed of politician's cognitive dissonance causes them to actually believe that integrity and good is about partisan one-upmanship and not about service and governing.

How can they be so obtuse?

On Friday Standard & Poor's lowered America's credit rating from AAA to AA+; their analysis wasn't based on numbers (i.e. is America actually a trusted investment), but rather on the politics - can Congress and the White House stop the posturing and juvenile finger-pointing, and focus on running the country?

Is this a reasonable basis for judging credit-worthiness? Will a loan officer at a bank decide to lend money to a couple based on the numbers, or on whether they keep bickering all the time? I'm sure the bickering should be a factor, but am not convinced it is the ONLY factor.

How can they be so obtuse?

Having said this, the reaction so far from both the White House and Congress is partisan drivel. The ONLY thing politicians are capable of is showing how the other side is to blame for everything that's bad, and how they are righteous and good (there is no pressure to talk about compromise, leadership or governing). If immaturity and petulance were the only factors, America should receive a rating below that of Greece, Ireland, Portugal and Spain - maybe closer to that of Syria or North Korea.

A strength of democracy is that the fringes are attenuated by the center; and that effective partisanship impedes government overreach. A weakness of democracy is that it is possible for enough of the electorate to be swayed in the moment, that the most fringe voices are rewarded, and the more honorable and insightful are ignored.

Today the American public is as polarized as her politicians, no-one is considering the ramifications of the downgrade or our economic state, instead we are each bent on making sure everyone knows how screwed up the other side is, and how we'd be better off if they didn't exist. This is our cognitive dissonance, founded on our deepened commitment to the votes we've cast.

How can we be so obtuse? 

"Hope is a good thing, maybe the best of things; and no good thing ever dies." These are the last words spoken by Andy Dufresne in The Shawshank Redemption.

Does good come out of bad? I hope so. Has American been harmed enough by our politicians' failings to demand and expect more from ourselves than angry sound bytes? Not yet, but perhaps soon.

I was listening to a show on NPR asking, "What is life?" I agreed with the NASA definition - life exists when there is procreation and evolution. I was talking to a friend later about the unasked question, "What is humanity?" I think humanity exists when there is empathy and aspiration.

Survival requires community - we must have more empathy for our brothers and sisters, because the community prevails when the least among us survives and thrives. Success requires ability and desire - we must make our children more capable than we are, and we must imbue in them a desire and urgency to be greater than their parents.

Out of all that has happened recently, my hope is that we overcome our cognitive dissonance, and resurrect our humanity.

crossing lines

Over the last couple of days, a question has been bothering me - when do the ends justify the means?

I was driving home Sunday evening, and NPR was a-buzz about President Obama's impending announcement that American forces had found and killed Osama bin Laden. I watched the speech, heard the President proudly state that Mr. bin Laden had been "brought to justice," and saw the wild demonstrations in front of the White House and across the country. Americans had literally taken to the streets, were singing the national anthem, and chanting "USA, USA, USA." The coverage looked just like the demonstrations we've seen on TV of crazed Muslims the Middle East decrying America.

And I keep thinking of this rather crude joke:

A average-looking man walks into a hotel bar, sits beside a very pretty woman, and strikes up a conversation. A couple of drinks later, he asks her: "If I gave you a million dollars in cash, would you have sex with me?" She agonizes over this for several minutes and then says, "OK - let's do it." "Then how about fifty bucks for a blow job?" She slaps him, "What kind of woman do you think I am!?" she demands self-righteously. "We've already established that, now we're just negotiating."

If you draw a line in the sand and then cross it, how different are you from someone else who draws a line in a different place but also crosses it?

How different is America from Al Qaeda? Al Qaeda tortures people, attacks countries, and acts out of anger, all without accountability.

The intelligence that helped locate Mr. bin Laden came from a prisoner interrogation at Guantanamo Bay. Many are using this to justify the existence of Guantanamo, and the methods America used/uses (extraordinary rendition, enhanced interrogation, etc.). Evidence gathered in this way is not accepted in an American court of law.

American forces invaded a sovereign state without the permission of its government to conduct the raid that killed Mr. bin Laden, and yet the US Government is now accusing Pakistan of playing a "double game." Invading a country is a criminal act, how will America be held accountable for that?

The Fifth and Sixth Amendments of the American Constitution respectively give us the right to due process, and to face our accusers in a court of law. Granted these don't apply in the case of a War, but why didn't America take the extra step of capturing Mr. bin Laden alive and trying him in open court? (Had I been President, I would have wanted him captured alive, returned to his native country of Saudi Arabia, and demanded that he be tried in public court in that country, by its citizens.)

Al Qaeda is a terrorist organization that does evil things in the name of religion. Its members are criminals and must be brought to justice. They interpret a book of laws (the Quran) in a way that makes it convenient to commit acts of terror and violence. The Quran does not preach violence and anger - hundreds of millions of peaceable Muslims are proof of that. But it, like the Bible have been selectively interpreted by bad people to justify evil acts.

There is a quote that is falsely attributed to Martin Luther King Jr. but is still worth reading: ‎I mourn the loss of thousands of precious lives, but I will not rejoice in the death of one, not even an enemy. Returning hate for hate multiplies hate, adding deeper darkness to a night already devoid of stars. Darkness cannot drive out darkness: only light can do that. Hate cannot drive out hate: only love can do that.

America is a nation founded by people of integrity - its principles and laws were conceived and crafted by brilliant men who understood the power of freedom, the path to prosperity, and the fallibility of man. The Declaration of Independence and Constitution were written to guide this country towards a future different from the oppressive Britons of that time; one that would form a republic governed by the people, and guided by the right to life, liberty and the pursuit of happiness.

It is an incredible country, which despite its size has been pivotal in shaping the path of this entire planet for decades.

I can't help but wonder if by crossing our own line in the sand, we have turned what was a brilliant beacon of hope into a fifty dollar hooker.

this above all

Seth Godin's post today on tiny media is spot-on. It reminded me of a social media panel I sat on a couple of years ago with the two people who respectively ran John McCain and Hilary Clinton's e-campaigns in the 2007/8 primaries and general election.

Despite having polarized political views, they were totally aligned on web2.0. Paraphrasing: "Everyone needs to jump on social media and web2.0 - if you're not in, you'll be left behind. This is the cheapest and easiest way for you to get the word out - if you post a video on YouTube that doesn't work, it's OK - you didn't lose anything by trying."

My argument: "Marketing is marketing, YouTube, Twitter, newspapers, TV, radio, etc. - are just channels. If your marketing fundamentals aren't strong, you will fail. The advantage of social media is that the channels have fewer gatekeepers. The disadvantage of social media is that the channels have fewer gatekeepers. The impact of social media is that anyone has a voice, and at any point in time, any voice can rise above the fray."

Seth's point - these "tiny media" voices, unlike mainstream press or traditional advertising, are not susceptible to conventional corporate PR machines and can't be bought. While corporations might be used to buying advertising and even editorial, it is impossible to manipulate "any" voice because you have to manipulate every voice. In his words:

If you're hoping that this now important form of media is going to sit there and promote your average stuff for average people made in bulk but pretty cheap product merely because you're used to paying media companies to run ads... I think you're wasting a lot of time and money.

This goes deeper than that. You'll need to take that money and change the product and the service instead.

I agree but I don't think Seth took it far enough. More than product and service, you also have to evaluate your philosophy for the intent to deceive will out. I wrote this last fall in response to a NY Times post about Apple's voice in media:

The reason Apple dominates is that they have no interest in PR per se vs. a fundamental desire to create and achieve incredible and inspiring consumer experiences. Their integrity and authenticity in this is obvious and undisputed. While there are product hiccups (recent iPhone 4 antenna issue), they weather these by staying true to their mission vs. via a well-crafted PR strategy.

Microsoft, Google, etc. on the other hand invest in efforts whose sole or overarching purpose is to drive PR and coverage; ironically making the message the medium. I don’t believe this is authentically who they are, but it is how they act.

Their (MSFT/GOOG, etc.) target audiences and the press can smell this, and obligatorily cover them vs. wanting to be a part of their world because of their products' compelling, profound, and far-reaching implications.

Your organization's purpose is to become a trusted adviser to your customers – a powerful mission to be sure. I wonder sometimes if proactive PR helps or hinders? If your greatest and most visible business successes are measured mostly on PR metrics, you run the risk of pursuing the wrong things, and diminishing your genuine and authentic commitment to the premise that technology can help achieve profound, pervasive, and sustainable improvement.

It’s the difference between doing things that happen to be coverage worthy vs. doing things because they are coverage-worthy…

Tiny media's advantage vs. conventional PR and media: their ONLY currency is integrity and authenticity; the "conventionals" can be bought. Since the former is by definition "any" voice, you can't find it, or buy it, or manipulate it - you don't know which one(s) will surface and be heard. We are increasingly more likely to seek out and believe tiny media because we're tired of the bias and lack of discipline and integrity of conventional media (witness Fox and MSNBC) - this is why I read Yelp reviews.

For "old-school" organizations that count on their secrets remaining intact, and on owning and controlling their image, beware. If your fundamentals aren't sound, and your beliefs and practices can't stand up to external scrutiny, you will be found out. But you won't realize it until it's too late - unbeknownst to you, your own marketing and PR people and agencies are now spending more time spinning you than spinning the market.

kill skills

It's easy to get caught in a rut - the greater the risk or threat of change, the taller the walls become, the harder it is to accept new things, and worst of all, the less aware you are of your self-imposed exile.

When change occurs in a team, or they are asked to rethink their business given new market conditions, rutted people will produce a PowerPoint presentation that references new market research, extensive analysis of Twitter feeds, and select customer quotes that proving that strategy X is exactly what's needed to achieve success.

X is of course the current mission restated with a new team name, new logo, renamed programs, and one or two tweaks that come with incremental budget requests - PowerPoint lipstick on the status quo pig. They will also revamp their "scorecard" with additional rows to reflect the tweaks, and of course the team leader will require a business manager to manage the growing "burden" of command.

Does this sound familiar? Have you looked back after a couple of years of genuinely hard work to see what was really accomplished? There will have been a TON of "busy" results that can be documented in scorecards and spreadsheets (thanks to the now entrenched business manager), but how have you helped the business?

In consulting with organizations, the first question I ask is, "What is your why?" Once we are clear on why you exist, figuring out how you will get there and what you will do are easy. This is a difficult discussion because even CEOs are in a rut of busy work that is assumed to be of value, but rarely mapped back to the why. I wrote a few weeks ago about an organization I knew with ~90,000 employees, and my belief that they could achieve the same results with 30,000 people. One reason is this organization has misplaced its why; there are many brilliant people who are accomplishing amazing things that have little or no contribution to the business and have nothing to do with their why. In fact, I bet fewer than 30,000 could accurately state their why.

The reason clients resist the why discussion is because it leads to evaluating every investment (the whats) vis-à-vis its contribution to why. Many of the investments were created for good reason, but do those reasons exist today? If the what is still meaningful, then its contribution to why must be clear; if it isn't, then why are we still doing it?

Whenever something new comes along (especially in large organizations), if there is an openness to try it, it will never come at the expense of something old. "Without incremental resources or funds, fugedaboutit!"

What just happened? The organization chose NOT to make a difficult decision. "This new what is great, it can and will help us achieve our why. Which of our current what(s) should we kill to do this?" The text in red creates tension, angst, the killing of sacred cows, and a lot of hand wringing and unhappiness, and that is always difficult.

The reason organizations fall into ruts, the greatest impediment to good business is an inability and unwillingness to confront every (existing and new) what with why? Rationalizing ruts is easy; making difficult trade-offs is not. The more you rationalize, the more ingrained your siege mentality; this mistrust makes you think you can't be dependent on "them," thus justifying redundant what's in your portfolio. This balloons rapidly - contributing to the 60,000 excess employees in the example above.

Leadership is not just about the salary, stock options and the big office. If you can't make tough decisions, you are not a leader; the skill to kill investments that don't contribute enough to the why is a fundamental criterion of leadership.

leap of faith

Education's goal is to prepare students to succeed in life. What skills will help kids be healthy, independent and even happy?

Most schools choose English, Mathematics, Science, Social Studies, and "World" Languages as core skills. Missing is anything that helps students bridge concepts across subjects, or become independent thinkers and learners. Also missing is anything that looks at the whole student, their hopes and emotions (as they go through puberty), how they will live and work within our society, and how they become ...a person.

Research shows that employers are looking for broad, creative thinkers who can work in varied settings and in teams to solve complex, multi-disciplinary problems. In other words, people who know how to learn and have the confidence and wherewithal to get things done in ambiguous and unpredictable settings.

There are schools whose mission is to graduate students like this. Two that I know are Seattle Girls' School and High Tech High. They are amazing.

Both schools incorporate an integrated curriculum in which students actually become entrepreneurs, engineers, doctors, activists, writers and artists. They also focus on the person before them, treating them not like a widget in a factory but a human being with feelings, fears, interests and lives outside school.

Tangentially, the US Department of Education is investing $4 Billion to fix the 1,000 poorest-performing schools in America. The primary approach is a complete reboot, including a complete staff overhaul. Cynics predict a 1% success rate, or 10 good schools, and $3.96 billion wasted. I think they'll do better, and I'm willing to bet that the successful schools will have principals who are focused on the whole student, who aren't pitting teachers against each other, and who recognize that an integrated and experiential curriculum is not only what the kids need, but how best to engage them in the magic of learning.

Leaders like this are what made Seattle Girls' and High Tech High successful, and what's needed not just in the worst of our schools, but all of our schools. These aren't easy people to find, so we need better resources to help the less-brilliant leaders.

I recently suggested an approach that leads to integrated learning by inverting the classroom, turning lectures into homework, and what was homework into teacher-facilitated classwork. This ought to be a part of the academic solution, but it doesn't address a problem most poor schools face - that the students have a tough, tough life (poverty, violence, drugs, etc.) outside school; and with that occupying their minds, can hardly be expected to care about math or grammar.

Of course a school can't fix problems at home, but is it possible for them to help children cope with these issues, and in doing that enable them focus on school? Yes. Are there examples of this in action? Also yes.

John Gilmour founded four LEAP Science and Maths Schools, in townships (where the black people were forced to live during Apartheid and continue to live now) in Cape Town and Johannesburg. I had the opportunity to visit one school last year and was amazed. Each class spends one hour/day in Life Orientation, where an Occupational Therapist helps students listen, feel, understand and express what is inside them, and learn how to interact with each other.

The result is a remarkable awakening of children who might otherwise have lived lives of crime, poverty and disaffection, but instead are successful, empowered contributors to society. Gilmour has made this work with students who are immersed in the worst circumstances, and created graduates whose brightness and brilliance easily matches that of any American private school student.

Are inverted classrooms and Life Orientation a panacea? No. Are they worth exploring? Absolutely. What holds us back? They're different and not invented by the "establishment."

There is a fear of trying anything new or "radical" even though America is only graduating 70% of its students, of which most are unprepared for college (1/3 drop out after their first year, and 1/2 never graduate). Shouldn't some of the $4 Billion from the Dept of Ed go towards proving these approaches in American schools?

The traditional approaches are failing; radical is our only choice.

tech in ed - epic failure

Education today is designed to meet the needs of 19th century Industrial Revolution employer - “We need millions of assembly line workers, who are all similarly-skilled, and able to work for a simple wage.”

But children today want more, they have broader needs and expectations from their school - not the least of which is to be treated as individuals and to be engaged based on their unique aspirations and abilities. This is not possible if the least interactive and differentiated part of learning in today’s schools is the lecture, and the most interactive part is the homework. We are not only wasting the most valuable asset in the room - the teacher - but also flaunting the idea that you can create creative, critical thinkers in a one-way, generic teaching system. Real learning is a curated experience; humans - teachers - must be involved, but in an interactive and personalized way.

Technology’s role is NOT to mechanize, but to humanize. The most humane technology interventions in history are characterized by a simple truth - the target audience naturally consumed them. The telephone, television and browser are examples of this.

Sadly, a generation of school leaders, administrators, teachers and parents are now conditioned to view technology in the blandest way; from the slate to the blackboard to the whiteboard to PowerPoint to the SmartBoard, the ONLY improvement is mechanization. Teaching and learning NEVER changed. To-date the use of technology in learning has been a waste.

Successful teaching can’t be an act of oppression, it can’t be “pushed,” it needs to be “pulled” - the student must want. Talk to any teacher and they will say that student engagement is fundamental to success. Combine the best teacher with the smartest but disengaged student, and learning will NOT occur. But if the students are engaged, and if the teacher can meet them where they each are and work with them, any student can be successful.

This is our challenge, but in a system this complex (USA: 50 million students, 3 million teachers, 15,000 school districts, $600B/year), it must be done correctly.

The answer is not rocket-science. In fact, it's right in front of our noses. Look at children at play - watch them engage and interact in mediums of their own choosing - they have already know how they see, learn, play, and enjoy. My favorite example is Pokemon. Excerpt from student teaching?:

Most Pokemon aficionados that I know mastered the game in about six months. Mastery implies a full understanding of the Pokemon vocabulary, ecosystem, evolutionary paths, strengths and weaknesses of each character and appropriate strategies with which to select the right Pokemon and win battles, etc.

Moreover, each child also learns to interact with their peers, learn tricks and techniques from each other, and of course battling to achieve supremacy in the game.

Finally, for particularly tough battles, students need to also do research online to uncover cheats that they can use to achieve status.

How often do you see average students achieve this level of skill this quickly in Algebra, Grammar or even simple Fractions, forget Organic Chemistry, Biology, or a foreign language? Animated cartoons, simple re-playable simulations, pervasive, easy-to-use, child-friendly, long-battery-life devices are the basis for Pokemon's success.

This can be translated into mainstream learning. Technology can inspire children to want to learn.

We can't ignore the role of the teacher - they are essential to connecting with students based on their specific interests, abilities, and learning needs; and to being the human connection that all Brain Science tells us is crucial to effective learning.

Technology should liberate teachers from the burden of generic lectures and enable them do what they're best at, what they came to do in the first place - engage students. But we have to do this practically, knowing that they have 30 students and 50 minutes per class.

What if we took the current education standards in a given school system and created short (< 10 mins), animated lectures of each concept(s) with a simple assignment to test comprehension? The teacher could assign these lectures to students as homework, have them "play" their homework and complete their assignments, and automatically receive "reports" on how each student did, and what they understood before class started. In class, the teacher would group the students based on their comprehension, and work directly to inspire, and bridge their learning gaps.

Of course there is much more to this approach; but in the end, it helps accomplish three things:

1. Recognizing and accommodating the way children naturally think, learn and play.
2. Empowering the teacher to directly engage students and help them learn.
3. Eliminating the child abuse of forcing young children to shoulder 20lb (10kg) backpacks filled with dated textbooks.

It can be done at a substantially lower cost - American public schools spend more than $5 billion/year on text books - this approach would cost much less, if for no other reason than most kids already have the devices (smartphones, MP3 and game players), and that all learning content should be open-source.

He who learns but does not think, is lost! He who thinks but does not learn is in great danger. ~Confucius. Bold school districts and teachers unions need to step up and lead our children into safety.

cojones

Anyone who has run a business will say you can create bottom-line impact (grow profits) by cutting costs, but that this is a short-term fix; if you can't grow your top line (sales), the business is at risk. And if you keep cutting and cutting, your top line will eventually shrink as innovation, product quality and customer service decline.

When looking at where to cut and where to invest, you focus on how the business will look 3-5 years out and make your choices strategically. Which engines have been around a while and have fat in them? Which will create future value? Which ones were important, but have now outlived their usefulness?

Good leaders will make the tough calls, making big cuts in some programs, investing significantly in others, and killing some outright.

Bad leaders implement death by a thousand cuts, trimming each department by 5 or 10%. They will have done no real thinking, conducted no real analysis, and certainly made no real decisions. They are afraid to to be bold.

The same holds true in government - President Obama and Speaker Boehner have on opportunity to achieve strategic and sustainable impact through their budgets, but unless things change in the coming weeks, they will shirk it in favor of being safe. A plague on both their houses!

In 2010 the Feds took in $2.162 trillion, and spent $3.456T, creating a deficit of $1.294T. The best Obama/Boehner have come up with is a paltry 1.7% ($60B) reduction in spending. Worse, most of the proposed cuts do nothing to prepare the country for tomorrow, enable growth, reduce unemployment, or create a more self-sustaining economy. For shame!

Four programs account for 60% of the 2010 Budget - Social Security: $695B + Defense: $664B + Medicare $453B + Medicaid: $290B = $2,102 Billion. All-up (Fed + State) spending on Education is ~$600B for 2010.

If I were in their shoes, I would:

1. Grow the Top Line (increase income): simplify the tax code, eliminate ALL deductions:
   -- Business tax: flat 3.5% on gross receipts
   -- Personal flat tax: 0% below $50K, 15% between $50-100K; 25% from $100-200K; 40% above $200K.
   This includes all Federal deductions (tax, Social Security, Medicare, etc.). States that tax must adopt a similar model. For 2007 (most recent year with comparable personal and business data), this would have increased net Federal income from $2.3 trillion to $2.7 trillion.
2. Rethink Defense: in 2009, America spent $664B - more than then next 22 countries COMBINED! We need to move away from being the planet's cop, and simply protecting the United States with the following cuts:
   -- 2011: budget capped at $500B total by phasing out ALL American military forces abroad
   -- 2012: $400B capped with cuts including reductions in nuclear arms.
   -- 2013: $300B cap
   -- 2014+: Cap = 10% of total Federal income (which per #1 above = $270B in 2007, or roughly 2.5 China's budget.
3. Redefine Social Security: Introduce legislation to add a means test + change the eligibility age to 68 in 5 years, and 70 in 7 years. Yes, this a bait and switch for many taxpayers, but one ameliorated by #4 below.
4. Eliminate Medicare/Medicaid, replace it with Universal Health Care ensuring health, medicine, dental and vision care for all Americans. As with the rest of the developed world, the costs will be shared at about 65% federal and 35% businesses. Insurance companies will suffer (yes!); some employers (particularly small businesses) will also take a hit (though their taxes (#1 above) will actually go down); most large companies will actually save money because this insurance will cost less than what they're paying now. Employees will have more disposable income, greater job flexibility, and of course be healthier.
5. Cut Education: Add a 28th Amendment to the Constitution, federalizing education, consolidating the nation to 50 school districts (one per state), and 3 years later consolidating further to one district. This would save $225 billion in district payroll alone. Enact a one-time $100B capital improvement program + $25B for a complete national curriculum with teaching resources.
6. Change Culture: do you know what LOBA is? It stands for "Lower of Budget or Actual" - this is how government budgets are set, and effectively how people are measured - your budget next year is the lower of what you did spend or were supposed to spend. The motivation is to spend everything you are given whether you need to or not. Per my post on simplicity, we should measure government employees on their ability to spend well, reward outcomes vs. process, and prioritize fewer, simpler objectives. By changing the culture, we can create a system motivated to spend less and do more vs. the opposite. This eliminates the need for the thousand cuts.

Difficult times require drastic changes. If the Republicans are to be believed, America is headed for bankruptcy, and will become the next Greece. These six changes would create a culture of lean efficiency, shrink or cut programs that are outmoded, and invest where it makes sense to enable future growth.

We need leaders who can guide this nation through the tough times ahead, and prepare the United States for sustained prosperity in the future. Legislators who waste time trying to save $50-100 million on trivial initiatives are afraid and useless. We have serious problems, and we need serious people to solve them.

President Obama, Speaker Boehner - let's see what you've got.

in the best interests

Are you familiar with the Butterfly Effect? It states that a small change in one part of a system can dramatically affect outcomes in another part of the system, or more poetically, a butterfly flapping its wings in Brazil can set off a tornado in Texas.

A look into the roots of recent uprisings in Tunisia and Egypt reveals that some of their inspiration came from far-away sources like American Gene Sharp, and the Optor in Serbia. They were bolstered by a history of civilian uprisings against authority - from Kent State in May, 1970, where students reacted violently to President Nixon's announcement that the US had invaded Cambodia, to the African National Congress and people like Steve Biko rising up against Apartheid in South Africa, the list goes on.

Lives have been sacrificed and countries have been shaped through civil disobedience, but sadly, humanity is not yet civilized enough to claim that this phase of our "development" is over. Recent events in Bahrain eerily echo what happened at Kent State 40 years ago. We are at least consistent...

Our hackles are raised when our sense of what's right is shaken; we feel righteous indignation when what we know to be fair and just is violated; indignation turns to anger when the perpetrators are those entrusted with authority and expected to represent the will of the people (their victims).

What about those on the "other" side of these actions?? I think/hope most are acting in what they believe to be the best interests of the people, that they are doing what they know in their hearts and minds to be the correct response given the situation and available information.

Look at President Bush's decision to invade Iraq in search of weapons of mass destruction, and how we see that the information he believed to be true and verified was a lie. Look at the actions of the British Empire, who for centuries believed that they were "civilizing" the Colonies. It's easy to fault their actions in hindsight, but in that moment, in their moment, I can't honestly say what I would have done, given what was known to be "true" at the time.

In their minds, they were doing what they felt to be "right." If any of you are or were children, were you ever "subjugated" by your parents for doing or wanting to do something you thought was OK? Did you swear that you'd never do that if you had kids, then when you became parents, you put the screws to your kids in much the same way??

Context matters. Our judgment about the best interests of those in our charge is at best complex, and infrequently based on pure, unbiased reason.

Parenting is different from politics - in politics transparency matters, due process matters, and the voice of the people matters. In the politics of a democracy, these are sacrosanct, aren't they?

Texas Governor Rick Perry believes that abstinence is the only way to teach sex education, and he has invested more than any other state on promoting virginity before marriage. Texas has one of the worst-performing public school systems in America, the 3rd highest teen pregnancy rate, and more sexually-active high school students (52.9% June/08) than the national average (47.8%), when recently questioned about his decision cut education budgets, close schools, lay off teachers, etc., but maintain abstinence funding, he responded: “I’m just going to tell you from my own personal life. Abstinence works.”

Wisconsin Governor Scott Walker has decided to arbitrarily rewrite the rules governing public service employment in his State. His legislature will vote to ratify this despite strong opposition from the people of Wisconsin. His rationale - we can't afford to do what we were doing, we must live within our means, and this is the only answer - I/we know what's right.

Zine El Abidine Ben Ali and Hosni Mubarak have always acted in what they believed to be the best interests of Tunisia and Egypt respectively. King Hamad ibn Isa Al Khalifa has always acted in what he believes to be the best interests of Bahrain. Each of these leaders' assumptions have been challenged over the last weeks.

We in the West have looked on these events with some feeling of superiority, sanguine in the belief that at least we live in nations with government[s] of the people, by the people, for the people.

I wonder - are there butterflies in Tunisia or Egypt or Bahrain?

clarity

"You've got mail" was in the vernacular 15 years ago, there was even a movie that used this now quaint Aol phrase. Such was Aol's strength and place in the market that they were able to strike the largest business deal to-date in buying Time Warner in 2000 for $182 billion. Aol's core business was (and still is) dial-up Internet access. They peaked in 2003 with 26.7 million subscribers; today that number is 3.85 million, with earnings of $1.02 billion (and $1.28 billion from advertising) in their last fiscal year. Both were 26% lower than the prior year, despite averaging 112 million visitors/month. Revenues have fallen by 25% for the last three quarters of this fiscal.

With desperation come bad decisions. Aol recently bought TechCrunch for $25m and then Huffington Post for $315 million in the belief that content is the light at the end of their tunnel.

On the same day I learned of the Huffington purchase, I read this fascinating survey whose title says it all: "Executives Say They're Pulled in Too Many Directions and That Their Company's Capabilities Don't Support Their Strategy." My gut response to these executives is: "then you're clearly not worthy, do us a favor and quit."

64% of these "executives" complained that they have too many conflicting priorities; 52% don't feel their strategy will lead to success; and a whopping 66% admit their organization does not have the capability to be successful.

To run an organization, you must have a clear vision; be relentless (dare I say - single-minded) in pursuing it; and you must have the capacity to ensure success. If you can't do these things, you are not a leader - you're at best a mid-level bureaucrat who needs a manual to figure out where the toilet is (and perhaps what to do while there).

In my last post I talked about how team trumps the individual, how success requires a cohesive team focused on the end goal and not individual glory. Executives bent on personal accomplishment to "rise" above their peers create random strategies and priorities aimed only at making them look good.

In the end, these organizations are doomed to fail, they favor spurious action over well-thought-out plans, they jump on random bandwagons, and they don't create a community with a common purpose, where people are valued and team success is rewarded.

What does this have to do with Aol? First:

1. Dial-up - what market segments use dial-up today? I’m guessing it's people who have decided they're too old to change, can't afford to change, or have no interest in change because it's not worth it to them.
2. Advertising - the fact that Aol's ad revenue is falling at exactly the same pace as their subscriber revenue means that most of their traffic comes from their subscribers, and they're doing nothing to hold on to, or expand either.
3. TechCrunch/Huffington Post - including DMG from the link in #1 above (a must read), you might not need all the fingers on one hand to count the number of TechCrunch (nerds) and Huffington (liberals) readers who prefer and use dial-up.
4. I'm willing to bet that Arianna Huffington only sold the Post because she's been promised the CEO-ship of Aol in the next 12-18 months.

Second – one of the most interesting demographics for advertisers is older people; now that baby boomers are retiring by the thousands every day, there’s a lot of $$ available to companies that have access to these very lucrative audiences. Aol's 112 million visitors/month are probably closer to this segment than any other, but have minimal overlap with either the nerds or the liberals.

If Aol has a core competency, it is in provisioning dial-up access and advertising to their subscriber base. Why not buy a cheap broadband ISP that they can use to convert (and maybe even grow) their subscriber base, and focus on delivering (vs. acquiring) content that is meaningful to the customers they already serve?

Tim Armstrong, their CEO was President of Google Americas (US & Canadian ad sales) prior to Aol; there is no doubt that he knows the Internet ad business and how to run a sales organization. He will leave Aol soon, having added M&A to his portfolio.

But sales (and M&A) by its very nature is not a team sport - for you to win, others must lose. Is Tim forging a path for Aol's success or his own?

team trumps

Jack Welch's Straight From The Gut is the management bible for many business leaders. Welch talks in the book about his 20-70-10 rule: no matter the company, 20% of employees are stars, 70% are adequate, and 10% need to be fired.

GE and others rightly put a lot of energy into hiring - the selection process is long, painstaking, and rigorous - in the hopes of recruiting the best. A good HR person will tell you that a successful team needs many different skills and experiences and personalities, and that the team's achievement is rarely based on any one person, but on the group's ability to achieve. Sadly, they fall short in advising you about how to hire this great team; instead they push only for superstars.

If you're only hiring one kind of "best," how do you then sustain success if you can only reward 20% of these ultra-ambitious "best" appropriately?

Many have adopted Welch's model; one company I know assumes that two out of ten are stars, and one is a dud. They have about 90,000 employees, which means 9,000 need to go; and with a fully burdened cost of $250k/year/employee, the 10%ers theoretically cost them $2.25 billion last year.

But this is a successful company, run by smart and capable people - I cannot believe that these 9,000 are truly that much of a drag. When "team success" is disincented in favor of individual success, we have a failure in leadership, not in employee quality. If the manager did a good job of recruiting and hiring, every member should be valued, not just the top 20%, and if there really is a 10%er, that is a critique of the manager more than the employee.

This might surprise you, but Welch, like most senior executives has a rather large ego (yes - it's true!). They achieved what they achieved because they are good at what they do and competitive as hell. The 20-70-10 model appeals to them and their egos. But once you grow beyond a sole-proprietorship, the team becomes more important than any one contributor - you could be the best chef in the world, but if the buyer bought crappy ingredients, or the servers are slacking off, or the cleaners aren't cleaning, your success is at risk irrespective of your talent.

This why Michael Jordan didn't win his championships until he had a great team around him, and why despite his enormous talent, LeBron James couldn't win a championship in Cleveland.

Short term success is possible in a climate where teammates must compete with each other, but pretty soon all these "great" and "ambitious" people realize that it's not worth it to claw at each other and they slack off. They re-prioritize their lives (remember "work-life balance"??), become less obsessed with work, and focus on their own lives. Now the gym memberships, vacations, long lunches, etc. become more important than shipping a product.

While the employees are getting healthier, the company is getting fatter; when teams perform poorly, output per unit declines, and more people are needed to achieve less.

With the right management approach, it is possible that that 90,000 person company could achieve the same revenues with 30,000 people. 60,000 X $250K = $15 billion incremental profit -- hmmm...

Measure and reward everyone based on how the team does; in most start-ups this happens naturally - their salaries are a small piece of the pie compared to the value of their stock options. The focus is on making the stock price rise, not on looking better than their peer. In large companies where the stock price is not rising as quickly, salary and bonus matter more - unless you reward people based on the team's performance, your message is "for you to succeed, your peer must fail." That's just wrong.

Prioritizing team success over individual success creates sustained and more efficient achievement.

Is this a management failure? A manager's job is to execute the wishes of their leadership. The leader's job is to orchestrate sustained success for their organization. Once you get to a certain size, managers are forced to be insipid sycophants.

The real 10%ers are leaders who can't transcend their own egos to prioritize the team over the individual.

awakening

The recent uprising in Tunisia was sparked (sorry) by the act of one person, it (very) rapidly expanded into a national uprising that resulted in the ousting of a long time President whose resounding electoral victories (he won his fifth election in 2009 with his lowest mandate - 89%) were always suspicious. Despite his close call in 2009, it was not until January 13 of this year that he announced that he would not seek reelection in 2014, and then realizing this was not enough, fled the country the next day. I'm willing to bet that in the 29 days following Bouazizi's immolation, former President Ben Ali had NO idea that that one seemingly inconsequential event would so quickly evaporate his once-powerful stranglehold on Tunisia.

That one man's desperate act would have gone unnoticed without the amazing communication capabilities, which even the poorest among us now enjoy, is a powerful testament to the world we now live in.

President Hosni Mubarak is reeling from roughly the same kick in the groin, and wondering, "what the hell just happened?" Emboldened by these acts, the oppressed from Morocco to Pakistan are rising against their leaders; leaders who until very recently lived under a wonderful shelter of power, wealth, and comfort without accountability. These regimes (even the faux-democracies) have wielded power over their citizens (many of whom live in poverty) for generations without repercussions. How will things change?

I think there are three lessons to be learned - first, politics or leadership is a delicate balance between the application of power and serving the citizens. Second, the right (and ability) for people to assemble may not be pervasive, but it is unstoppable. Third, be careful what you wish for, lest it come true.

Politics - citizens expect that leaders will be somewhat heavy-handed; they also expect public safety, employment, the opportunity to feed, clothe and shelter their families, and in most places, education and health care. We are all willing to suffer, but there is a breaking point. The Middle East reached it recently; we saw it in Sudan with their referendum; it affected the dissolution of the Soviet Union; and caused America to declare her independence from Britain.

Are Western states immune? Nope - the Wars on Terror + the Patriot Act combined with severe domestic belt-tightening have created unrest across America and Western Europe. The difference in the West is that politicians give away more than they should to win, where in the East, they suppress the populace more than they should to remain in power. But either way, in the end, the people suffer.

I think sustainable leadership requires adherence to three absolutes - Integrity, Transparency, and Accountability. There can be no compromise. Once you cross this delicate line, you are either perceived as insipid (President Jimmy Carter) and lose respect, or as despotic (almost every other example of government gone bad) and subject to revolt. Most governments will use misdirection (Wars, etc.) to keep their citizens in line and resistance at bay, until they get found out.

Assembly - the Communication Revolution is upon us and there is no turning back. Anyone has the capacity to create and share and associate, though its implications are not fully grasped by all. Even the American government was caught off guard by the speed with which things progressed in Tunisia and then spread to other countries. Birds of a feather are able to find like-minded people, convene and create movements in ways that were not possible even five years ago. Once tightly-held secrets (Wikileaks) are also fair game. Governments simply can't keep up.

Wishes - the Egyptians want Mubarak ousted - he is why they live in poverty, suffer high unemployment, and a high cost of living, etc. They want free and fair elections to choose their next government, believing that once Mubarak is gone, Egypt will once again flourish and all will be better. I feel sorry for the eventual winner of the elections - the world markets are in crisis, oil and grain (and hence most food) will be more expensive due weather, this turmoil and the economy; and let's face it - the situation in Egypt (or anywhere else) is not caused solely by its leader - most of the contributing factors that caused these problems still remain, and are very difficult to fix. The next leader may not fare any better.

The world is holding its breath to see what happens in the Middle East - from economics to diplomacy to war, changes of this magnitude to the status quo will have gigantic repercussions. Bouazizi may have ended up doing a huge favor to the Ben Alis and Mubaraks of the world - they will leave (with $$ tucked away in offshore accounts), their successors will inherit the messes they presided over, and the citizens will need to start over.

But there is something to celebrate - rising against despotism is a good thing. Self-determination is a good thing. I hope the citizens of these countries will look inwardly to realize that they are now responsible for their destinies, that they can no longer blame "the man," and that they alone have the ability to create viable economies, and ensure the health, safety and well-being of their families.

anger

Does it feel like the world is angrier today than ever before? Perhaps it's just that communication is so easy, that every action (more often every bad action) in the world is made more visible. But I think it's more than that.

A 22-year-old man shot a Congresswoman in Arizona. There are violent clashes in the Sudan during a referendum that will decide whether the country should be split in half. A few days ago, Salman Taseer, the Governor of Punjab, Pakistan was assassinated; his death was celebrated by a segment of the country that decried his moderate views. The assassin was showered with rose petals and garlands during his appearance before the court. What provokes all this anger?

Extremism exists in every community - that's reality. The "edges" have historically not been as visible to the middle, but the media in their relentless quest for shock-journalism are changing that. Once they become visible, it's much easier for the edges to collect fellow extremists, and wannabe extremists with the tools the Internet makes available.

What were scattered, random, disconnected micro-freaks are finally able to coalesce into much larger, more coherent, better funded, and very real threats to the mainstream. Of course the media will now shower ever more attention on these now macro-freaks, and in doing so, legitimize them (can you say, "Joe the Plumber"???). This is when things get scary.

Being legitimized means that you are accepted as part of the zeitgeist - you are now acculturated, and scarily you are a "respected" force. Look at Moktada al-Sadr who recently returned to Iraq from exile - originally a cleric in a small town, he became political by weaponizing his community, and inciting them to resist. He became a force when CNN and the US Army began to pay attention to him, and this enabled him to recruit more micro-freaks to the point where he went macro.

The scariest part is when a mainstream player decides that to become even more "main," they must incite the fervent and freakish edges to their cause, thus expanding their base with people more driven to act (donate, vote, rock the vote, etc.). Frenzy is currency is politics - the ability to drive your constituents into a frenzy is considered a good thing (for any party); it is defined as:A state of violent mental agitation or wild excitement; temporary madness or delirium; a mania; a craze. Is it hard to picture violent acts resulting from this? If you can drive your constituents into a frenzy against your opponent, your chances of winning have gone up significantly. Honor and being honorable are seen as weakness.

Going back to the Arizona case, the same NY Times article talks about how Sarah Palin's Facebook page contained a map where every "enemy of Palindom" was identified with cross hairs. It's interesting that she just chose to take this down now, in the wake of the Arizona shooting (the Congresswoman is one of the "targets" she identified). Is that an admission of guilt?

I wrote a post after the US Midterm elections last November questioning whether Democracy is simply the lesser evil, and that there must be a better form of government that is at once both pluralistic and of integrity.

No doubt there are horrific examples of wanton violence in non-democratic states around the world, and when they occur, the "voting" countries all rise up to condemn them. And yet more and more we see horrible acts of violence in the name of winning elections in democratic countries, yet no-one rises up to question that.

Campaigning and then governing based on anger is no different than despotism and fascism when it comes to the price exacted on humanity and integrity. In fact, the advantage with despots and fascists is at least you know what's coming and can, to an extent, steel yourself. With democracy acts of anger are random and spurious, and always catch you by surprise and unprepared.

Until politicians (and voters) can agree that winning with integrity is preferred to winning at all costs, acts of anger will occur even more frequently - this isn't the last time a 9 year old girl will be killed by politics.

the america moment

President Obama recently called the US education crisis our Sputnik moment; this because there are significant challenges:

1. Education budgets around the country facing even more dramatic cuts.
2. The incoming Republican Congress intending even deeper budget cuts.
3. PISA scores (OECD global student achievement testing) place America near the middle of the world, sandwiched between Iceland and Liechtenstein, well below the leaders.
4. The belief that to be successful, America must follow "the leaders."

Dennis Pierce talks about this in today's eSchool News, and ends his editorial with: If we don’t spend more on our schools, our children’s future will suffer.

Here's the data (knowing that things have changed a bit since 2008): Education America spent $10,259 per student that year (=$593 billion total), this total has shrunk some in the last couple of years but I guarantee most what I point out in the link are still true:

1. Student populations are declining year over year.
2. The proportion of the overall payroll going to teachers is declining year over year.
3. There are still almost 15,000 school districts in this country, each requiring its own infrastructure, budget, and politicians.
4. Education leaders are stuck in a rut and think the only path to success is more spending.

Dennis Pierce and President Obama couldn't be more wrong. Increasing the budget for education will NOT fix things. It is true that we must improve the situation in our schools, but more money is NOT the answer.

America is afraid of everything right now - Homeland Security has declared a war on Americans (TSA, etc.); the Pentagon has declared a war on disaffected people labeled as terrorists, but who live in poverty in some of the worst places on Earth; the Republicans are afraid of China taking over the American economy; and the Democrats are afraid of Finland, Poland, and Estonia because their students are smarter.

But America is forgetting some fundamental truths. (Perhaps I see this more clearly because I was born in the Third World looking from the outside into countries like the US.)

1. America didn't become America by following in other countries' footsteps. It became America because it charted its own path and believed that success will come to those who work the hardest and choose to break molds, vs. to those who copy and conform.
2. Corruption is human nature - the more money you throw at a problem, the less likely you are to find a solution, and the more assured you are of creating an even bigger mess. The data clearly shows that the more we spend, the fewer we graduate, and worse, the weaker the graduates.
3. ONLY in the minds of bureaucrats has education EVER been about test scores or single subject proficiency.

Rather than being America's Sputnik moment, this should be the world's America Moment. The rest of the planet needs to look at what the US is doing and despair. Leadership requires others to look to you, not vice versa. That's the challenge I expect a President, Congress, and Edu-cognizanti to proclaim! Where is your gumption people???

America went from being an average country to a superpower in less than a generation. A defining moment in this transition happened in 1940, when President Franklin Roosevelt went to Congress asking that America go from the 12th largest Air Force to the LARGEST Air Force, that she build the most advanced planes ever, and that her production capacity should increase at least five-fold.

The essential America Moment happend when despite his using these numbers metaphorically, the country took him literally. America not only achieved what everyone said was impossible, but doubled it (100,000 planes/year vs. the 50,000 in FDR's speech)! She created a industrial force that innovated in design, engineering, and production at levels never before seen; and in ways that put the fear of Uncle Sam in every other country's heart.

The President (and the rest of the Edu-Cognizanti) should find their inner FDR and demand that: "American students deserve an education system the likes of which has never before been seen. One where each student is able to find and develop their greatest selves; where every teacher is passionate, committed and excellent; and where all schools are filled with joy and achievement.

The graduates of Education America 2.0 will be equipped to not just survive, but adapt and thrive no matter what future unfolds. They will be the engine that drives America into the 22nd century as the country that is not only the best place to live, but the only one that all others look to achieve similar greatness."

America is neither Finland nor Korea - the people, their aspirations, their very natures are different. We need an education system that is of the people, by the people, for the people - uniquely and bespokenly American. It is possible to create a clear and simple plan that Republicans, Democrats, the Unions, parents and most school leaders) will wholeheartedly support - we just haven't tried.

Stand up people - our time has come.

goog-up

If money is the ONLY reason someone is working for you, do you really want them in any kind of role, much less a “mission-critical” one? Aren't they then really a vendor/ consultant vs. an FTE?

When you start a company, everyone is connected to the vision, shares the passion, and is there with you to create something great. When you're small enough and young enough, this common thread amongst all employees is intrinsic, and management is almost not necessary. As you grow, you must create the conditions that naturally attract those that must work with you, and repel those that shouldn't; your values and integrity must be intrinsic and permeate the whole company. This is the best of management.

I recently wrote about how I thought Google might implement a growth strategy that would be more in keeping with its original premise and the ethos of its founders. Over the last five years, they've grown more than seven (7) times in revenue, and their employee base has grown almost five (5) times to 23,000+.

Impressive! There is no arguing their success in advertising, email services, video provisioning and of course search, and there is no arguing their competence in these.

Sadly, success has a price (especially for American companies that wish to play in Europe, and eventually other regions); but it can be avoided. They have to be open to growing by becoming smaller, recognizing that spinning off little "Googlets" can enable both the organization and its people to progress and achieve; and they have to be committed to great management.

When Brin and Page (Google founders) wanted to hire a CEO, they needed someone who spoke their language, that had chewed the same dirt that they had; otherwise they wouldn't be able to relate to, or trust him. They found Eric Schmidt, a fellow-nerd. Of course there are other critical functions (HR, PR, facilities, etc.), but they were viewed by the nerd collective as "non-core," nothing more than corporate overhead, and there was less focus on hiring in these areas.

In some high-tech companies, HR/Operations, etc. are roles where executives are relegated (penalty box), or where "core" people are assigned because there are no other (real) senior openings. Since these roles are "different" and aren't valued (or understood), there is a tendency to not only not pay for, but mistrust really capable outsiders; so if at all, these roles are filled with inadequate leaders. You can't be cavalier about any management role.

Now we read that Google is struggling to retain their employees (ConnectCV, NY Times), and the risks of not caring about "non-core" things like effective management surface. I'm singling Google out, but this is true of most (all?) high-tech companies. When asked about their recent brain drain, Schmidt's response was "the company’s attrition rate for people it wished would stay has been constant for seven years."

My interpretation: "We think of our people as numbers and don't regard or value them as individuals with unique abilities, gifts and interests. Our numbers are consistent; we don't suck any more than we used to, and we don't see a need to change." What do you think that response says to the 23,000 people that stayed behind and still work for Google?

This answer was not crafted by anyone that cares about the people of Google, it was written by a PR person whose job is to spin a story and control the message. It speaks volumes that Schmidt was quoted saying this. Alas - most high-tech leaders blindly parrot PR/HR talking points.

If it were me: "Of course it hurts when people like Lars or Matthew leave - they are amazing and talented, and this is our loss. But I am excited about people like XXX and YYY who are doing fantastic things; and we just recruited ZZZ and QQQ who are brilliant and passionate, and already making a difference. Our strength is that no one person is Google; together all of us are Google. I wish Lars, Matthew and everyone else who has worked at Google the very best in their futures; we are proud of the fact that Google 'graduates' are sought after by other companies; it's a compliment to the great people who work at Google now, and we are honored that they chose to spend time here and make a difference with us."

A statement like this must be a genuine reflection of management's philosophy and approach. When senior executives companies so obviously feign knowledge of their own products and customers, or worse knowledge of their employees or interest in their well-being, it's time to short the company.

Google recently gave all 23,000 employees a 10% raise; from the NY Times article: "The motivation was, in part, the “war for talent,” Mr. Schmidt said. People who have other job offers have been persuaded to stay with seven-figure bonuses. Google says 80 percent of people who get a counteroffer stay put."

The interpretation is either "Doh! We suddenly realized you're underpaid!", or "When we learn that you're not happy, the only thing we can think to do is buy your loyalty." Neither is a message I want to share with current/future employees or investors. What kind of people does this say Google is recruiting? Those bent on creating profound impact, or those just looking to make a buck?

Goog-ups (high-tech screw-ups) happen when you grow to a certain size (when leaders no longer personally know all the employees), but because you're still "small" (~250 employees), you feel that it's "frivolous" to burn valuable FTEs on mere people management. Here is my corollary to the Mythical Man-Month - a well-run and well-managed company is much more sustainable and likely to succeed than one that is lean but un- or badly-managed.

Goog-ups only value "core" skills. Everything else isn't just overhead, it's commodity. Or in the old IBM parlance, plug-compatible - anyone can fill those roles, and they're utterly replaceable. A mature player sees and appreciates the whole chess or Go board, and plays the whole board, not just that one pawn or stone.

According to a Feb ‘09 survey, the top three reasons employees stay are: good relationship with co-workers; job security; and desirable commute. The top three reasons for leaving are inadequate compensation; inadequate professional development opportunity; and insufficient recognition. High tech compensation is already excellent, but rather than focusing on why people stay, and optimizing for that, most obsess only with why people leave. Addressing the latter is about sucking less. Addressing the former is about being the place people would work for free. Which would you prefer? Which is more sustainable?

A well-run company has the maturity to look at the whole board, and plays not just to win today, but to keep winning always.

endurance

Is "good" an absolute or does it change over time? We are creatures of habit and tradition; in general what was true yesterday is true today and will be true tomorrow. This especially applies to the things we value, and while most "goods" do and should endure, there are some that don't, and some that shouldn't.

Often these "goods" are benchmarks or measures that say things should be done tomorrow the way they were done yesterday. But is "good" good enough this time? For example:

1. We expect medical interns to work extended hours because the doctors that came before did. This despite studies in the New England Journal of Medicine, and other publications that prove that this does not improve learning or develop skills, and worse, actually harms patients!
2. We want our kids to do as much or more homework than we did, despite studies that show that it does not lead to meaningful learning. We believe in measuring student performance in the same way we did a generation ago, despite the data that shows that the ability to do well in a test has no correlation to success in the world or to personal achievement or happiness.
3. We base current business models on the past despite the fact that the (business) world has changed fundamentally, what worked yesterday is absolutely not guaranteed to work today, and that the world tomorrow will be different yet again.

We fear tomorrow but know and understand yesterday, so by measuring tomorrow based on yesterday, we are admitting that tomorrow matters less than yesterday. This is not leadership; it is instead a classic example of traditional MBA thinking - administer micro events based on historical trends, and assume the bigger picture will take care of itself.

Leaders who think this way should neither lead nor think.

What happens when a business model comes along that is fundamentally different from what came before? Google's model was brilliant - they turned the end user into the product and the advertiser into the customer. Microsoft turned the application developer into value-added "pull" for their products, and used these external "solution developers" as the sales machine that just dragged Microsoft along. The "establishment" scoffed at these two companies, as they did at Southwest Airlines, PayPal, Skype, Napster, ...and even the once radical notion of using ball-point pens in schools. Forsooth!

But the establishment (teeming with MBAs) does a bit more than just scoff at these upstarts; they actively subvert them by portraying them as untenable, wrong, evil, unproven, charlatans, etc.; they lobby against them through governments, press, and public. This is how incumbents attempt to hold on - by suppressing competitors vs. improving themselves. Just read this article to see that even the market-watchers (supposed innovators) get into the game of decrying those who are challenging the status quo.

A couple of weeks ago, Steve Wozniak said that Google's Android will become the most pervasive smartphone operating system. EVERYONE (media, competitors, Apple-haters) jumped on this assuming he meant that Apple's iOS will lose, and the iPhone is doomed. They compared this to Apple's "loss" to Microsoft in the personal computer marketplace (Windows still enjoys a ~90% market share vs. Mac/OSX and others).

Really? What is the basis for measuring "win" and "loss"?? Narrow minds define winners based on market share - and it's true, from that point of view, Android is more likely to win, because it's free to the manufacturers and they're not limiting the design criteria all that much. But is that really winning? Is Mac/OSX a loser in the PC market because it has less share than Windows? What computer are you using right now? What do you wish you had?

Outside of sports there are very few places where "winning" is clear-cut. In war - the "winning" side does get to write history the way they want, but let's face it, no-one would call America's invasion of Iraq a "victory" despite the fact that they technically won. Take Windows and PCs - it's fair to say that Microsoft "won" and continues to win the PC war but at what cost? Their success put them in the cross-hairs of a number of governments who feared their market share and pervasiveness as threats to competition. This cost Microsoft $billions, and even worse, altered the very nature of the company and its approach to doing business. This is not a "win," but this is the fate of share "winners." Hmmm...

Now let's look at the "loser." Apple seems to have done ...adequately despite their "poor" market share. Looking at their stock price, market cap, share of PR voice, future prospects, etc., I don't know about you, but they seem quite viable for a loser. How do their competitors look?

Perhaps NOT having a dominant market share was the best thing for them? It allowed them to diversify their efforts beyond the PCs, into music players, music services, and other consumer devices. Not being committed to one category or product-type let them be open to cannibalizing their own products, be innovative, creative and driven. When your market share is very high, your tendency is to preserve it vs. usurp it - you only have to look at the music industry to see how well this plays out.

I'm not saying they had a master plan and things turned out exactly as intended, but I am saying that Apple approaches the world differently than its peers, and stays true to its intention despite market pressure/ perception/ etc. This is a mark of leadership and vision. I don't believe for a second that they want to be the most sold phone in the market - I think they want to be the best phone, the best experience, and the most fun. Rather than volume, their obsession is impact or effect.

Are there absolute performance characteristics that will always be "good"? How about:

1. Are you competing on price or value?
2. Do your customers choose you in the face of cheaper alternatives?
3. Are your products more important than your ethos/values ...your "why"?

Arbitrarily deciding that X is good just because it worked a generation ago or even yesterday is naive and doomed. Absolute measures of "good" should be about who you are, and why you are. These are the enduring "goods."

googlets

How do you measure success? How does your employer? Three measures a commercial company might use are revenue, share price and market capitalization. The three are connected, but the first guides the other two.

Initially, revenue or the promise of revenue sets the company's value; if they achieve success and cash flow, the name of the game is growth. Once established, year-on-year improvement becomes that much harder, and share price growth comes with ever increasing market scrutiny.

Few companies achieve a position of market dominance - but those that do face an even steeper slope. The toughest part is the transition from underdog to leader - people will now root for the other guy, governments will keep a closer eye on you, and all the while, you've got to keep up that year-over-year performance (despite a growing denominator) and remain compelling to the markets.

When the company is starting out, there is pressure on the employees to build the product, close the first sale, make payroll, pay off debts, etc. It's a productive pressure, everyone is in it together, and while the risk of failure is ever-present, you knew it would be like this when you joined.

When the company first achieves consistent growth, the pressure changes, it's a much better place to work. Progress is visible and customers are enchanted; sure everyone is working hard, but it doesn't feel like it - there is an energy of vindication, of growth, and of optimism - you've made it over that hump, and things are looking good.

Then seemingly out of the blue, success changes from a happy surprise to an expected duty; people want to see you fail; what was passion is now work; what was energetic is now draining; what was once a team is now a group of competitors fighting over an HR-imposed compensation scheme - some call this maturity, others just say it sucks. At all levels, the company is, well, less happy.

I've read a number of articles (1,2,3) about Google recently, and it feels to me like they're now just about out of the happy phase; their behavior is that of a mature company.

In phase 2, you want to win on your merits; confident about your product, you simply want an even playing field and the opportunity to participate. You know how good you are, and damn it, they just need to see it so that they can catch the fever as well!

In phase 3, growth is harder, more doors are open to you, but winning is tougher, the competition is fiercer, and expectations are much higher; so you grasp at other kinds of straws. You ship products before they're ready, make poor decisions, and use other (not merit-based) means to win.

Google is doing all of these things.

But why?

They are incredibly successful in their core business; they have dominant market share, their margins are unheard of, their reputation is solid, and they still have perhaps the most talented workforce ever assembled.

But their mission has shifted - they've gone from wanting to get better every day to wanting to grow bigger every day. Their success is no longer in their control (you own your improvement, you don't own customer preference), nor is it particularly inspiring.

Why have they allowed themselves to get this way? Is it greed? Ego? The fear of being a one-trick pony?

I think it's all three. Besides recent product mishaps (Wave), complaining publicly when they're at risk of losing deals, the abysmal policy choices (Net Neutrality with Verizon), and even the opening of a think tank (isn't this function the very essence of Google?), I think one of the most telling reasons for their current state is their recently-published code of conduct.

I admit, I started reading it and got bored. This is not the sign of an energetic, passionate company, it smacks of lawyers and HR departments, a company gone "corporate."

ASIDE: The best and most easily remembered set of principles I've ever read (IBM):

Respect for the individual, customer service, excellence.

"Don't be evil" (Google's motto) is an admonishment. When I first heard it, I wondered: "Why? Are you afraid you actually are evil and need to keep reminding yourself not to be?" Why not "Be Great"??

I admire and respect Google, I think they have helped shape a completely new landscape for people and business everywhere. I say this not to kowtow to them, but to recognize that brilliance in some areas does not equal brilliance in all areas. I think Google will continue to be successful, but I believe their leadership is preventing them from achieving quantum success.

Could they have avoided their recent pitfalls? Yes. They should (given their incredibly talented workforce) have realized that growth and winning do not equal success.

Burdening one success with the creation of others is not always the best strategy.

Instead of trying to accumulate all sorts of new products and businesses under one roof, they might have been better off spinning things like Gmail, or Google Apps, or Blogger or YouTube off into little independent Googlets, each free to evolve, grow, and achieve without being beholden to, or held back by the mother ship.

Of course they can "help" each other, and cross-pollinate, but that doesn't require them to be in the same organization. It can be easier for a new entrant to ride the giant's coattails, but that comes with rules and constraints, some of which can prevent sustainability or confine the addressable market. Google's quest to amass size is failing them.

There is strength in being one great thing; there is wisdom in seeking to build other great things; and there is wit in being the one to eventually replace your one great thing.

Google has an amazing talent pool, a powerful market presence, and a big wallet. The Googlets can take advantage of all three from the outside; they can create value and impact, and even help revitalize the workforce.

Size does matter. A business has a right size; it takes a real leader to understand that and to stay true to it. The stock market has never been a good judge of greatness and achievement; it knows so little about you or your business - why allow them to prescribe your path to happiness?

collar blues

Arbitrage is defined as "attempting to profit by exploiting price differences of identical or similar financial instruments, on different markets or in different forms."

A simple example is the buying of a currency in one market and selling it in another for a slightly higher price; success is knowing the prices in various markets and having buyers and sellers therein. Arbitrage thrived when communication was limited and it was difficult to know what each market was doing. As time and space have shrunk, arbitrage has had to evolve.

As one form of arbitrage was threatened, others grew. It began with the ability to safely and economically ship goods across oceans, combined with countries with predictable governments, cheaper workers, and easy access to ports - thus was formed outsourcing 1.0 - manufacturing. Improved telecommunications then lead to outsourcing 2.0 - services, which prevailed in countries with forward-thinking governments and cheaper, better-educated workers.

We all know that countries with lower costs of living were able to provide help desks, call centers, etc. to countries with higher costs, and both sides won. Western companies lowered expenses, reduced payrolls, and returned more to their shareholders, and "Eastern" companies created markets, employed people, raised local standards of living and returned more to their shareholders.

But... The East is able to provide these services to the West because they have a large, well-educated (better-educated, really) workforce who is used to getting paid much less than their Western counterparts. As communication opened up the possibility of outsourcing, it also opened the East to the salaries and lifestyles of the West, and as their "tide" of awareness and achievement lifted, so did their "boat" of expectations.

Thus people costs in the East are rising, margins are falling, and with the recent recession, the people costs in the West are falling and margins are rising. I'm not saying that the arbitrage opportunity is lost; I'm just saying the margins are shrinking, and growth in BPO (Business Process Outsourcing) is slowing.

I was having lunch with Pierre de Vries a few days ago, and among other things, our conversation went to a question that has been bugging me of late - whether a more educated society is more advantaged [more on this in future posts], and whether "white-collar" jobs add more value than "blue-collar" jobs.

Before we get to that, I'm sure you've noticed a trend over the last couple of generations. It used to be that goods manufactured in the East were of inferior quality, and their only buyers were those with no other choice. That changed very quickly - today goods made in Japan or Korea are considered to be of better quality and reliability vs. what you get in the West. The same thing happened with BPO - initially, you hated it when the call was answered by someone with an Indian accent because you weren't getting the same experience as with a Western call center; but now, their ability and capability have improved to the point where it's not as big an issue, and eventually, the outsourced call center will be preferred to the Western one.

As we have gotten used to the idea of some business processes provisioned "over there," the East is looking for new sources of growth - about 5-7 years ago, medical services began to be outsourced; today outsourced legal services are the new vogue; this in addition to successful outsourcing of software engineering, accounting/tax preparation, and design services to name but three. Outsourcing 3.0 is pure white-collar, and the acceptance of these services by the West is less and less an issue, which opens the door to even more white-collar provisioning.

A commodity is created "when a product becomes indistinguishable from others like it and consumers buy on price alone." From clothing to appliances to cars to help desks to accountants to radiologists to lawyers to ophthalmologists to... you?

When something becomes a commodity, the cost per unit drops, and the price per unit drops - that good or service is valued less, and those that do it are therefore valued less.

Doctors, lawyers, accountants.. What is more precious today? Having someone do your taxes, or knowing a really good, trusted contractor who will help make sure your house stays standing and in good repair? What is more valuable? The car or a great, trusted mechanic?

A successful economy requires sustained value creation combined with growth in unit value. If the worth of the thing being created is declining, the economy declines. A successful economy also requires that most of its constituents (citizens) be sources of value and not merely consumers of social services. For generations we've been led to believe that a doctor was "better" than a plumber. Our parents may even have discouraged us from pursuing these "lesser" vocations in favor of the "desk" job.

Can you have a purely white-collar economy? No. Consumers consume things - those things need to be created and provisioned. Let's go a bit further - you only have to start with lawyers to see that many white-collar jobs are actually self-fulfilling prophecies. As they become commodities, their value will diminish, and (hopefully), their role in society will diminish (speaking specifically of lawyers and tax accountants :-)).

There's a theory that white-collar jobs have more "leverage" than blue-collar jobs - that they earn more, create move value, etc. Doesn't that also mean that disproportionately more white-collar jobs implies greater unemployment?

Might we see less and less white collar jobs in the West and more and more blue-collar jobs over the coming generation? Is it likely that we will want to outsource white-collar jobs???

The extreme conclusion (of course this won't happen) would be that America (for example) becomes the agriculture and manufacturing capital of the world, and India and China become the white-collar services capitals. Each consumes the other's products, and needs the other to survive, but power resides in control of scarcity, which will depend on what is more commoditizable. Now this can't happen because it's not practical for someone in Beijing to wait for a plumber from Buffalo. But you get the picture.

I believe our value mechanism needs to shift to the point where we recognize what so many already know - white or blue, economic success resides in the scarcity of what you do, and not whether you need to clean your fingernails at the end of the day.