A couple of notes:
On the personal side, check out a new website called The Stimulist. Went live last week. Subtitle is "The Optimist's Daily Brief" and the human spirit behind it is an up-and-coming rising star, journalist Carlos Watson. Watson has an original take on the news and what's happening. For us old folks, it is a way to stay in touch with the men and women who are going to be running everything soon. For Watson's age cohort of 28-45 year olds, it has the aspiration and the potential to be a touchstone and a voice for a refreshing sensibility that succeeds at walking that razor's edge, being optimistic without being naive and being realistic without being cynical. Oh, the personal part? My son, Max Linsky, is the Managing Editor.
This realism/optimism thing got a boost last Sunday when the New York Times published Adam Bryant's interview with Microsoft's CEO, Steven A. Ballmer. Here are two exchanges I don't want you to miss:
(1) Bryant: What is the most challenging part of your job?
Ballmer: Finding the right balance between optimism and realism.
(2) Bryant: How do you assess job candidates?
Ballmer: "......And I try to figure out sort of a combination of I.Q. and passion.
I like it that Ballmer sees optimism and realism as synergistic, and that he recognizes the important of passion, caring deeply about something and not being afraid to display the emotion that goes with the commitment.
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The controversy over the CIA pictures, and President Obama's flip-flop on whether to release them or to contest the ACLU lawsuit demanding their release, is a powerful example of what makes leadership difficult. Read Jeff Zeleny's piece last week in The Caucus, the New York Times' government and politics blog.
Leadership is difficult because it requires choosing among competing values, each of which has legitimate claims to be honored, each of which is treasured.
Such choices are painful. You have to re-order your loyalties. You have to put a stake in the ground. You have to disappoint those who were counting on you to put their value at the top of your list.
In the case of the detainee pictures, Obama originally decided to let the pictures be released, then changed his position. We don't want our politicians to change their positions. We call them flip-floppers, a pejorative. We would rather have them be consistent than be educated.
On the pictures, Obama weighed multiple competing values. Among the most obvious are:
(1) transparency, a value he has espoused frequently during his Presidency;
(2) moving on rather than seeking retribution for past sins;
(3) consistency;
(4) deference to technical expertise (in this case, the "technical expertise" is really just the best guess of his military advisers about the consequences of releasing the photos); and
(5) supporting the judgment of those who he has appointed to senior authority roles.
There is no analytically correct answer. News junkies like me could probably make cogent arguments for any position. What we want Obama to do depends on our own personal perspective, not only only those values but on Obama and politics.
As of today, Obama seems to have made a choice that disappointed almost everyone except the military. Combined with the rest of his national security policy he is being criticized from the left and the right. From the left there's Maureen Dowd's parody in the Wednesday New York Times picturing him as a Rumsfeld-Cheney puppet. From the right, Dick Cheney is criticizing his every move. In the center, he has challenged centrists who want to close Guantanamo, but not have any of the detainees on US soil.
As Peter Baker pointed out in his front page news analysis in today's Times, Obama's pragmatism, his unwillingness to follow a consistent ideological line, will disappoint partisans of both extremes and will ensure that the debate stays front and center.
But the reality that so many people are pushing back may also be evidence that he is doing something important, by carving out a governing path that does not fall into the usual categories.
Not all resistance is evidence of leadership. But there can be no leadership without people pushing back.
Monday, May 18, 2009
Friday, May 8, 2009
Reset, Italian Style - Essential and Expendable
First, a note about an opportunity for a New York City-based non-profit:
We have just moved the main office of our firm, Cambridge Leadership Associates (CLA), from Cambridge to New York City. As part of our commitment to the community and as a recognition of the challenging times facing nonprofit organizations right now, we are offering ADAPT New York, a year long pro-bono consulting engagement to a selected NYC area nonprofit organization.
CLA will work with the nonprofit to co-design a comprehensive leadership program that directly meets the challenges the organization is currently facing. If you know of anyone that might be interested, please pass this information along. Click here for the application. ADAPT New York is featured on the corporate social responsibility website, JustMeans. (The application deadline is June 12.)
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Having spent quite a quite a bit of time a couple of weeks ago with people at or near the top of private sector organizations in Milan and Rome, I can see how the economic crisis has spread to Italy, but also how there is enough distinctiveness in the Italian economy and society so that its manifestations are different than they are in the US.
First, there is no widespread banking crisis. The Italian banking system is heavily regulated and heavily locally-owned and operated. They are what New York Times columnist Paul Krugman called "boring banks" in a terrific piece he wrote last month.
Most Italian bankers are local businessmen and businesswomen, known in their community, and knowledgeable about the folks to whom they lend money. They are conservative and risk-averse. They are comfortable but not rich. They did not do credit default swaps.
I can remember the days of post-world War II boring banking in the US. Within a four block area in Coolidge Corner in Brookline, MA, there were four or five banks, all locally or regionally owned and run. The men (all men, as best as I can remember) who ran those banks were active in the community, involved in civic life. I watched those local banks then get gobbled up and disappear, sometime around the 1980s, replaced by huge national bank companies and equally impersonal ATM machines. Krugman thinks we need to get back to boring banks. Seems right to me. But there are a lot of folks in the banking industry who will fight for the deregulated world that made them fabulously rich until their house of cards crashed last year. But my guess is that a highly-regulated locally-driven banking system will be one of the consequences of the current turmoil. (And, further, but the subject of another post, the pattern of heavy regulation plus lots of local autonomy will be part of Reset going forward, not only in the banking industry, but in government-private sector relations generally and in individual organizations as well.)
This is not about nostalgia for the good old days. It is about the function of banks in the economy, providing capital for businesses to invest and grow and for families to buy and fix up their homes. Deregulation led to consolidation, fostering the morphing from savings and loan institutions to venture capitalists, creating incentives for the banks to feed the financial bubble. And despite James Surowiecki's characteristically insightful piece in this week's New Yorker about the need for capital to drive the economy, seems to me there will always be institutions and people with lots of money to fuel big growth, but that local banks serve a different and critical purpose for ordinary folks, as Italy illustrates.
Italy has also been somewhat insulated because the Italian economy was lagging behind most of its counterparts in the European Union. There was no consumption frenzy. Families were not inundated with debt. Houses are not under water. There was not too far to fall.
What makes Italy so appealing - and sometimes so frustrating, to both natives and expats - is that the country seems to have been determined to hold on to its definition of the good life as having more to do with family and food than money and materialism. Last time I looked, for example, Italy had the highest number of hours working per person and the lowest productivity rate in the European Union. Italian workers talk a lot, take long lunches, and generally enjoy themselves. As our contractor said to us, "We Italians like to start things, We are not so interested in finishing."
Italy is feeling the pinch in industries that rely on exports of consumption goods or imports of visitors. We have a friend who owns and rents a fabulous villa - take a look, it is really extraordinary - on the Amalfi coast whose bookings through agencies are down dramatically, although he has managed to keep his business thriving through his own contacts and repeat clients. And in my time in Italy, I talked with folks from industries like fashion and automotive parts who are seeing orders from Japan and the US plummeting. Fiat seems to be a notable exception, seeing this worldwide crisis as an opportunity not to hunker down, but to Reset and make big bets on the future, with investments in Chrysler and perhaps General Motors that, if they work and the economy recovers, will make Fiat a worldwide industry leader.
But Italy has considerable cultural constraints to moving forward in the current turmoil. Domenico Bodega, Professor of Organization Theory and Dean of the Faculty of Economics at Catholic University in Milan, was a respondent at one of the sessions I did for a group of 150 private sector corporate big-wigs in Milan. I spoke about Reset and the need for adaptive leadership in the current reality. Bodega responded that Italy is not well positioned to adapt because of deeply held norms which get in the way of an adaptive response: deference to authority, reliance on charismatic leadership, discomfort with uncertainty, a culture of alibi, and an aversion to efficiency in use of time.
Selfishly, of course, I do not want Italy to adapt too much or too quickly. I love it there in part because of those eccentricities, such as the values on food and family and relationships, which permit me to relax as soon as I land at the airport in Rome.
The challenge for Italy is the challenge that we all face in adaptation, in thriving under uncertainty: Do we have the courage, and the skill, to separate the essential from the expendable? Can we make good, tough choices about of all that we value, what to keep and what to leave behind?
Can Italy preserve what makes it so special and move away from those practices and norms which are holding it back, as it responds to the growth pressure from the European Union and from its own citizens, and its reliance on exports and tourism?
Can Italy make progress without risking what is essential in the its DNA? Can you? Can we?
We have just moved the main office of our firm, Cambridge Leadership Associates (CLA), from Cambridge to New York City. As part of our commitment to the community and as a recognition of the challenging times facing nonprofit organizations right now, we are offering ADAPT New York, a year long pro-bono consulting engagement to a selected NYC area nonprofit organization.
CLA will work with the nonprofit to co-design a comprehensive leadership program that directly meets the challenges the organization is currently facing. If you know of anyone that might be interested, please pass this information along. Click here for the application. ADAPT New York is featured on the corporate social responsibility website, JustMeans. (The application deadline is June 12.)
*********************************************************************************
Having spent quite a quite a bit of time a couple of weeks ago with people at or near the top of private sector organizations in Milan and Rome, I can see how the economic crisis has spread to Italy, but also how there is enough distinctiveness in the Italian economy and society so that its manifestations are different than they are in the US.
First, there is no widespread banking crisis. The Italian banking system is heavily regulated and heavily locally-owned and operated. They are what New York Times columnist Paul Krugman called "boring banks" in a terrific piece he wrote last month.
Most Italian bankers are local businessmen and businesswomen, known in their community, and knowledgeable about the folks to whom they lend money. They are conservative and risk-averse. They are comfortable but not rich. They did not do credit default swaps.
I can remember the days of post-world War II boring banking in the US. Within a four block area in Coolidge Corner in Brookline, MA, there were four or five banks, all locally or regionally owned and run. The men (all men, as best as I can remember) who ran those banks were active in the community, involved in civic life. I watched those local banks then get gobbled up and disappear, sometime around the 1980s, replaced by huge national bank companies and equally impersonal ATM machines. Krugman thinks we need to get back to boring banks. Seems right to me. But there are a lot of folks in the banking industry who will fight for the deregulated world that made them fabulously rich until their house of cards crashed last year. But my guess is that a highly-regulated locally-driven banking system will be one of the consequences of the current turmoil. (And, further, but the subject of another post, the pattern of heavy regulation plus lots of local autonomy will be part of Reset going forward, not only in the banking industry, but in government-private sector relations generally and in individual organizations as well.)
This is not about nostalgia for the good old days. It is about the function of banks in the economy, providing capital for businesses to invest and grow and for families to buy and fix up their homes. Deregulation led to consolidation, fostering the morphing from savings and loan institutions to venture capitalists, creating incentives for the banks to feed the financial bubble. And despite James Surowiecki's characteristically insightful piece in this week's New Yorker about the need for capital to drive the economy, seems to me there will always be institutions and people with lots of money to fuel big growth, but that local banks serve a different and critical purpose for ordinary folks, as Italy illustrates.
Italy has also been somewhat insulated because the Italian economy was lagging behind most of its counterparts in the European Union. There was no consumption frenzy. Families were not inundated with debt. Houses are not under water. There was not too far to fall.
What makes Italy so appealing - and sometimes so frustrating, to both natives and expats - is that the country seems to have been determined to hold on to its definition of the good life as having more to do with family and food than money and materialism. Last time I looked, for example, Italy had the highest number of hours working per person and the lowest productivity rate in the European Union. Italian workers talk a lot, take long lunches, and generally enjoy themselves. As our contractor said to us, "We Italians like to start things, We are not so interested in finishing."
Italy is feeling the pinch in industries that rely on exports of consumption goods or imports of visitors. We have a friend who owns and rents a fabulous villa - take a look, it is really extraordinary - on the Amalfi coast whose bookings through agencies are down dramatically, although he has managed to keep his business thriving through his own contacts and repeat clients. And in my time in Italy, I talked with folks from industries like fashion and automotive parts who are seeing orders from Japan and the US plummeting. Fiat seems to be a notable exception, seeing this worldwide crisis as an opportunity not to hunker down, but to Reset and make big bets on the future, with investments in Chrysler and perhaps General Motors that, if they work and the economy recovers, will make Fiat a worldwide industry leader.
But Italy has considerable cultural constraints to moving forward in the current turmoil. Domenico Bodega, Professor of Organization Theory and Dean of the Faculty of Economics at Catholic University in Milan, was a respondent at one of the sessions I did for a group of 150 private sector corporate big-wigs in Milan. I spoke about Reset and the need for adaptive leadership in the current reality. Bodega responded that Italy is not well positioned to adapt because of deeply held norms which get in the way of an adaptive response: deference to authority, reliance on charismatic leadership, discomfort with uncertainty, a culture of alibi, and an aversion to efficiency in use of time.
Selfishly, of course, I do not want Italy to adapt too much or too quickly. I love it there in part because of those eccentricities, such as the values on food and family and relationships, which permit me to relax as soon as I land at the airport in Rome.
The challenge for Italy is the challenge that we all face in adaptation, in thriving under uncertainty: Do we have the courage, and the skill, to separate the essential from the expendable? Can we make good, tough choices about of all that we value, what to keep and what to leave behind?
Can Italy preserve what makes it so special and move away from those practices and norms which are holding it back, as it responds to the growth pressure from the European Union and from its own citizens, and its reliance on exports and tourism?
Can Italy make progress without risking what is essential in the its DNA? Can you? Can we?
Sunday, May 3, 2009
Leadership: Self-righteousness and Self-doubt
I was surprised by how focused I was last week on Arlen Specter's decision to bolt the Republican Party and join the Democrats. Why should anyone care?
Part of my response was simply personal. I still cling to my identity as a liberal Republican, a choice I made fifty years ago. Specter is "nice Jewish boy" like me, who has used the Republican Party and been used and abused by it for most of his adult life. His abrupt departure makes the already thin ranks of socially-liberal, fiscally conservative Republicans even smaller. I feel lonely.
But this process has been going on for decades. Back in early 1972, when I was a three-term Massachusetts state legislator contemplating running for Congress, I received a surprising phone call from then-Congresswoman Margaret Heckler, asking me to come to her home in Wellesley for a cup of coffee. (Heckler later was US Secretary of Health and Human Services, after she was defeated for re-election in 1982 by Barney Frank.) She and I had known each other casually as fellow elected Massachusetts Republicans. Our only real engagement had come when she was on the Platform Committee for the Republican National Convention in 1968 and I had tried in several uncomfortable conversations to convince her that a Republican perspective on abortion would be to emphasize individual freedom of choice and that public policy decisions, if they are to be made, should be left to the states rather than the national government. (She didn't buy either argument.)
Over coffee that morning at her house, Heckler tried to persuade me not to run for Congress. She said, "You know me well enough, Marty, to know that I am not all that liberal in my views. But even so, I am almost a pariah in the Republican Party in Congress. My Fellow Republicans ignore me, dismiss me, and ostracize me. I feel very isolated. Are you sure you want to be a part of that environment?"
She was no more successful in persuading me not to run that I was in changing her position on abortion. I have often wondered what would have happened if I had won that race.
(I ran and lost. Some Republican stalwarts put a very conservative independent candidate into the race so that even though I held the incumbent to less than 50%, the third candidate siphoned off enough voters from me to end my electoral career. 1972 was a pretty ugly year for Republicans in Massachusetts. As fellow political junkies may recall, Massachusetts was the only state that George McGovern carried against Richard Nixon in the Presidential race and I was the only Republican candidate for Congress in the whole country who ran ahead of the national ticket and lost, and I ran 20 points ahead of the ticket!).
Despite holding onto to my Republican affiliation even as that part of my life fades deeply into obscurity, the Spector defection also raised less personal issues for me.
Specter's reasons for becoming a Democrat are pretty straightforward. His own polling showed that it would be almost impossible for him to beat former Republican Congressman Pat Toomey in the Pennsylvania Republican primary next year. By switching his allegiance, he may give the Democrats a filibuster-proof 60-vote count in the Senate, so he was probably able to extract a pretty good welcoming deal from Majority Leader Harry Reid and President Obama. Good for Specter.
But he must have made a calculation that his own political survival, keeping his Senate seat, was more important to him than fighting within the Republican Party for the values he has espoused all his political life. He was self-righteous and arrogant not to risk his own power on behalf of those values.
Survival is a wonderful instinct. Specter is a cancer survivor as well as a political survivor. But with five terms already under his belt in the US Senate, having just turned 79 years old, you would think he would be willing to go down in history fighting for what he believed in, rather than being remembered mostly for a politically expedient party switch.
Leadership is risky. Leadership involves taking risks on behalf of Purpose and not about individual aggrandizement. Leadership is about embodying enduring values, putting in jeopardy your own personal ambition.
I became a Republican in part (there are lots of reasons, but that's another blog post) because I could not identify with the smug liberals at college, who were so sure they were right about everything that they ridiculed other people's perspectives and were completely closed to learning. They were the least open, the least tolerant people I knew. I agreed with where they came down on many if not most of the issues, but I was racked with self-doubt where they had none, and I wanted to be with people who were continuing to search, rather than those who had already found the holy grail.
It is a paradox of leadership: you have to be completely committed to what you are doing in order to step out there and take the risks, but at the same time, with equal persistence, you have to hang on to self-doubt, always keeping open the possibility that there is a better idea out there. Otherwise, how can you ever learn and grow?
But, then again, I might be wrong about that.
Part of my response was simply personal. I still cling to my identity as a liberal Republican, a choice I made fifty years ago. Specter is "nice Jewish boy" like me, who has used the Republican Party and been used and abused by it for most of his adult life. His abrupt departure makes the already thin ranks of socially-liberal, fiscally conservative Republicans even smaller. I feel lonely.
But this process has been going on for decades. Back in early 1972, when I was a three-term Massachusetts state legislator contemplating running for Congress, I received a surprising phone call from then-Congresswoman Margaret Heckler, asking me to come to her home in Wellesley for a cup of coffee. (Heckler later was US Secretary of Health and Human Services, after she was defeated for re-election in 1982 by Barney Frank.) She and I had known each other casually as fellow elected Massachusetts Republicans. Our only real engagement had come when she was on the Platform Committee for the Republican National Convention in 1968 and I had tried in several uncomfortable conversations to convince her that a Republican perspective on abortion would be to emphasize individual freedom of choice and that public policy decisions, if they are to be made, should be left to the states rather than the national government. (She didn't buy either argument.)
Over coffee that morning at her house, Heckler tried to persuade me not to run for Congress. She said, "You know me well enough, Marty, to know that I am not all that liberal in my views. But even so, I am almost a pariah in the Republican Party in Congress. My Fellow Republicans ignore me, dismiss me, and ostracize me. I feel very isolated. Are you sure you want to be a part of that environment?"
She was no more successful in persuading me not to run that I was in changing her position on abortion. I have often wondered what would have happened if I had won that race.
(I ran and lost. Some Republican stalwarts put a very conservative independent candidate into the race so that even though I held the incumbent to less than 50%, the third candidate siphoned off enough voters from me to end my electoral career. 1972 was a pretty ugly year for Republicans in Massachusetts. As fellow political junkies may recall, Massachusetts was the only state that George McGovern carried against Richard Nixon in the Presidential race and I was the only Republican candidate for Congress in the whole country who ran ahead of the national ticket and lost, and I ran 20 points ahead of the ticket!).
Despite holding onto to my Republican affiliation even as that part of my life fades deeply into obscurity, the Spector defection also raised less personal issues for me.
Specter's reasons for becoming a Democrat are pretty straightforward. His own polling showed that it would be almost impossible for him to beat former Republican Congressman Pat Toomey in the Pennsylvania Republican primary next year. By switching his allegiance, he may give the Democrats a filibuster-proof 60-vote count in the Senate, so he was probably able to extract a pretty good welcoming deal from Majority Leader Harry Reid and President Obama. Good for Specter.
But he must have made a calculation that his own political survival, keeping his Senate seat, was more important to him than fighting within the Republican Party for the values he has espoused all his political life. He was self-righteous and arrogant not to risk his own power on behalf of those values.
Survival is a wonderful instinct. Specter is a cancer survivor as well as a political survivor. But with five terms already under his belt in the US Senate, having just turned 79 years old, you would think he would be willing to go down in history fighting for what he believed in, rather than being remembered mostly for a politically expedient party switch.
Leadership is risky. Leadership involves taking risks on behalf of Purpose and not about individual aggrandizement. Leadership is about embodying enduring values, putting in jeopardy your own personal ambition.
I became a Republican in part (there are lots of reasons, but that's another blog post) because I could not identify with the smug liberals at college, who were so sure they were right about everything that they ridiculed other people's perspectives and were completely closed to learning. They were the least open, the least tolerant people I knew. I agreed with where they came down on many if not most of the issues, but I was racked with self-doubt where they had none, and I wanted to be with people who were continuing to search, rather than those who had already found the holy grail.
It is a paradox of leadership: you have to be completely committed to what you are doing in order to step out there and take the risks, but at the same time, with equal persistence, you have to hang on to self-doubt, always keeping open the possibility that there is a better idea out there. Otherwise, how can you ever learn and grow?
But, then again, I might be wrong about that.
Tuesday, April 28, 2009
Immelt's GE: Reset's Poster Child
Jeffrey Immelt, the CEO of General Electric, is fast becoming the poster child for Reset in the US corporate community.
My friend Jon Hoch from Connecticut was the first to point this out to me. He sees Immelt's GE (and Ford Motor Company as well) as looking at the current turmoil and uncertainty as an opportunity for adaptation and Reset, rather than hunkering down and waiting out the storm.
If you are wondering what Reset looks like in practice, look at Immelt and GE.
In February, he refused an $11.7 million bonus to which he was contractually entitled.
Then, he cut the treasured annual GE dividend, a symbol of GE's consistent growth and stability, for the first time since 1938. The next day, as the stock dipped to its lowest point since 1993, Immelt personally invested in the company buying 50,000 shares.
He has shrunk GE Capital (GE's finance unit) by 30%, both to reduce volatility in the company and in recognition of the fact that the financial industry will be much more highly regulated than it has been in the past. He has made it clear that more cuts are coming.
In his letter to shareholders, dated early February and released with the GE Annual Report in March, he took full responsibility for the bad news, but also challenged his GE colleagues to be energized, not frightened by the challenges facing them. If they are frightened, he told them, they should leave. If, however, they are energized, the opportunity to transform GE should be "thrilling." He also confirmed that the company would be pumping $10 billion into technological research and development.
Then in his mid-April speech at the annual shareholders meeting, Immelt predicted that GE would Reset, but so would capitalism with government permanently playing a more robust role as industrial policy advocate, financier,and partner.
So, let's tease out the Reset principles here.
First, Immelt has recognized that the future is unknown and unknowable, except that it will be very different from the past.
Second, he has chosen between the expendable and the essential. Reset is a time to make hard decisions about what to preserve of all that is valued and created success(i.e. manufacturing), and what to leave behind in order to survive and thrive in the new world (i.e. GE Capital and the 50 years of never cutting the dividend). All this while taking responsibility for each decision and for the pain they are causing those involved.
Third, model the behavior you are asking of others, so that people see you, too, feeling pain and taking risks (ie invest your own money).
Fourth, be simultaneously brutally realistic and unflaggingly optimistic.
Fifth, run some experiments, make some big bets, invest in the future.
Sixth, practice interdependence by challenging and inspiring own own people to take responsibility for joining you on the journey and reinventing the future.
These are ideas that can be applied to any business, non-profit, or government agency. What is required is courage and skill.
Immelt is making big bets and taking big risks. If he is right more often than he is wrong, GE will be even stronger in the future than it has been in the past. If he is wrong more often......
My friend Jon Hoch from Connecticut was the first to point this out to me. He sees Immelt's GE (and Ford Motor Company as well) as looking at the current turmoil and uncertainty as an opportunity for adaptation and Reset, rather than hunkering down and waiting out the storm.
If you are wondering what Reset looks like in practice, look at Immelt and GE.
In February, he refused an $11.7 million bonus to which he was contractually entitled.
Then, he cut the treasured annual GE dividend, a symbol of GE's consistent growth and stability, for the first time since 1938. The next day, as the stock dipped to its lowest point since 1993, Immelt personally invested in the company buying 50,000 shares.
He has shrunk GE Capital (GE's finance unit) by 30%, both to reduce volatility in the company and in recognition of the fact that the financial industry will be much more highly regulated than it has been in the past. He has made it clear that more cuts are coming.
In his letter to shareholders, dated early February and released with the GE Annual Report in March, he took full responsibility for the bad news, but also challenged his GE colleagues to be energized, not frightened by the challenges facing them. If they are frightened, he told them, they should leave. If, however, they are energized, the opportunity to transform GE should be "thrilling." He also confirmed that the company would be pumping $10 billion into technological research and development.
Then in his mid-April speech at the annual shareholders meeting, Immelt predicted that GE would Reset, but so would capitalism with government permanently playing a more robust role as industrial policy advocate, financier,and partner.
So, let's tease out the Reset principles here.
First, Immelt has recognized that the future is unknown and unknowable, except that it will be very different from the past.
Second, he has chosen between the expendable and the essential. Reset is a time to make hard decisions about what to preserve of all that is valued and created success(i.e. manufacturing), and what to leave behind in order to survive and thrive in the new world (i.e. GE Capital and the 50 years of never cutting the dividend). All this while taking responsibility for each decision and for the pain they are causing those involved.
Third, model the behavior you are asking of others, so that people see you, too, feeling pain and taking risks (ie invest your own money).
Fourth, be simultaneously brutally realistic and unflaggingly optimistic.
Fifth, run some experiments, make some big bets, invest in the future.
Sixth, practice interdependence by challenging and inspiring own own people to take responsibility for joining you on the journey and reinventing the future.
These are ideas that can be applied to any business, non-profit, or government agency. What is required is courage and skill.
Immelt is making big bets and taking big risks. If he is right more often than he is wrong, GE will be even stronger in the future than it has been in the past. If he is wrong more often......
Saturday, April 25, 2009
Obama's Leadership and the CIA memos
My favorite definition of leadership: leadership is about disappointing your own people at a rate they can absorb.
By that measure, President Barack Obama is now facing the toughest leadership test of his 100-day old Presidency. He made an Obama-like decision, looking forward and not backward, to not investigate or prosecute those responsible for carrying out the "enhanced interrogation" methods on al Queda suspects in 2002 and 2003.
Curageously, he went to the CIA and faced those most worried about the backlash from the memos and his condemnation of the techniques they authorized.
As Obama surely expected, the release of the memos generated criticism on the right and a new wave of publicly expressed angst on the left from the usual sources, such as Senator Patrick Leahy and MoveOn. And then, inevitably, they were soon followed by a self-righteous column from NYT columnist Paul Krugman.
My assumption is that Obama assumed that predictable sources on the right and left would vent for a while and then it would all blow over, as happened with his selection of Reverend Rick Warren to particpate in the Inauguration.
But then he made a tactical error. Courting trouble, but presumablky to try to calm the waters hestirrede up on the left, Obama allowed for the possibility of prosecuting the authorizers of the now-banned behavior. (Presumably he would have to include those Members of Congress from both political parties on the Senate and House Intelligence Committees who, according to Congressman Peter Hoekstra of Michigan, had been briefed on the techniques and has approved the funding them.)
Obama is walking a razor's edge here. He has given those who seek a pound of flesh from the Bushies an avenue for doing so. He had been willing to take heat from both extremes for his release-the-memos-condemn-the-methods-but-no-retribution stance, to avoid what he believed was the worst scenario, a long, divisive, partisan, ideological, and diversionary series of investigations and prosecutions. Now, under pressure, he may have opened the door just enough to get that dreaded outcome as well.
As we learned from the ridiculous Clinton impeachment process, nothing can come from such show trials except taking the attention and energy of Congress and we the people away from the tough choices the country is having to face in order to get the economy moving again.
And as we learned from Gerald Ford's pardon of Richard Nixon (and have been reminded by Gerald Seib in his recent Wall Street Journal column), the political fallout from trying to avoid a long, drawn out show trial can be considerable.
This is not South Africa where a Truth and Reconciliation Commission was needed to try to heal the great decades-long scar of apartheid that had split the country in two.
Obama was right to balance government truth-telling with no looking backward, tactically wrong to throw a bone to his critics on the left. He may be risking his other priorities being sidelined if the Justice Department or the Congress start looking for scapegoats big time.
With his re-election still 3 1/2 years away and lots of other problems facing the country, there maybe enough time for Obama to get by this one.
But from a leadership perspective, it is not yet clear that he has figured out how to disappoint his own people at a rate they can absorb.
By that measure, President Barack Obama is now facing the toughest leadership test of his 100-day old Presidency. He made an Obama-like decision, looking forward and not backward, to not investigate or prosecute those responsible for carrying out the "enhanced interrogation" methods on al Queda suspects in 2002 and 2003.
Curageously, he went to the CIA and faced those most worried about the backlash from the memos and his condemnation of the techniques they authorized.
As Obama surely expected, the release of the memos generated criticism on the right and a new wave of publicly expressed angst on the left from the usual sources, such as Senator Patrick Leahy and MoveOn. And then, inevitably, they were soon followed by a self-righteous column from NYT columnist Paul Krugman.
My assumption is that Obama assumed that predictable sources on the right and left would vent for a while and then it would all blow over, as happened with his selection of Reverend Rick Warren to particpate in the Inauguration.
But then he made a tactical error. Courting trouble, but presumablky to try to calm the waters hestirrede up on the left, Obama allowed for the possibility of prosecuting the authorizers of the now-banned behavior. (Presumably he would have to include those Members of Congress from both political parties on the Senate and House Intelligence Committees who, according to Congressman Peter Hoekstra of Michigan, had been briefed on the techniques and has approved the funding them.)
Obama is walking a razor's edge here. He has given those who seek a pound of flesh from the Bushies an avenue for doing so. He had been willing to take heat from both extremes for his release-the-memos-condemn-the-methods-but-no-retribution stance, to avoid what he believed was the worst scenario, a long, divisive, partisan, ideological, and diversionary series of investigations and prosecutions. Now, under pressure, he may have opened the door just enough to get that dreaded outcome as well.
As we learned from the ridiculous Clinton impeachment process, nothing can come from such show trials except taking the attention and energy of Congress and we the people away from the tough choices the country is having to face in order to get the economy moving again.
And as we learned from Gerald Ford's pardon of Richard Nixon (and have been reminded by Gerald Seib in his recent Wall Street Journal column), the political fallout from trying to avoid a long, drawn out show trial can be considerable.
This is not South Africa where a Truth and Reconciliation Commission was needed to try to heal the great decades-long scar of apartheid that had split the country in two.
Obama was right to balance government truth-telling with no looking backward, tactically wrong to throw a bone to his critics on the left. He may be risking his other priorities being sidelined if the Justice Department or the Congress start looking for scapegoats big time.
With his re-election still 3 1/2 years away and lots of other problems facing the country, there maybe enough time for Obama to get by this one.
But from a leadership perspective, it is not yet clear that he has figured out how to disappoint his own people at a rate they can absorb.
Wednesday, April 22, 2009
Living Adaptive Leadership
Harder than I expected to stay focused on work while looking out over rolling farmland, gently ascending up to the town of Collevecchio here in the province of Lazio about an hour northeast of Rome.
But here I am, following the Red Sox and the Celtics, reading newspapers online, and trying to stay current and make connections, as if the world would stop if I did not know what was going on.
For example, in Tuesday's Boston Globe, Paula D. Broadwell wrote an op-ed piece extolling General David Petraeus as the embodiment of someone practicing adaptive leadership. The piece is worth reading. (Full disclosure: Broadwell, a major in the US Army, is now a pre-doctoral Research Fellow at the Center for Public Leadership (CPL) at the Harvard Kennedy School (HKS). My colleague Ron Heifetz and I teach leadership at HKS, and Ron was the founding director of CPL. But we do not know her.)
Broadwell accurately identifies some of the core assumptions of adaptive leadership. The first is that leadership is about skills that can be learned by anyone.
The issue of whether leadership can be learned, or more precisely, whether it can be taught, is the subject of this week's debate on the Washington Post's On Leadership blog. The question was stimulated by the provocative piece that Thomas Ricks, the Post's military correspondent, published on Sunday suggesting that the service academies be abolished.
Despite my making a living teaching and consulting on leadership, I am much more convinced that leadership can be learned than that it can be taught.
The resistance to that idea typically comes from two sometimes overlapping sources: (1) people who think they've "got it" and (2) people in positions of senior authority who fear loss of control and diminishing the deference of subordinates that they enjoy so much if there really were to be a culture of leadership throughout the organization, if leadership was the responsibility of everyone.
Broadwell's second core idea from adaptive leadership that Petraeus embodies is that the capacity of organizations to adapt to new realities depends on whether the culture expects leadership throughout the organization, not just at the top.
Petraeus and many others in the military have realized that in a rapidly-changing situation, where people on the ground are constantly having to adapt to new and unanticipated external and internal realities, the creativity, judgment, and experimentation that are elements of leadership must be the province of everyone in the organization.
Petraeus and the military are not alone. Last weekend I spent some time with Lee Baca, the innovative elected Sheriff of Los Angeles County. Baca, too, believes in leadership throughout the organization and has run experiments that have challenged and shocked his colleagues in the law enforcement community. For example, Baca has developed a program offering gang members education as an alternative to incarceration. And instead of being sued by advocates for fairer treatment of people in jail, he has partnered with them. Take a look at his website. Everyone of the 14,500 people who work in his Department signs on to a value statement that begins, "As a leader in the Los Angeles County Sheriff’s Department....". Not bad.
So, how is it in your organization, your family, your company, your non-profit, your community? where does the responsibility lie for leadership How prepared are your people with the skills necessary to adapt, to survive and thrive, in the face of accelerated pace of change and continuing uncertainty?
It will be interesting to see whether the challenge of coping with the current turmoil and foggy future will generate a similar commitment to adaptive and disseminated leadership in the private sector where, in my experience and observation, hierarchical responsibility for leadership usually still prevails.
This afternoon I go to Milan for meetings with senior corporate folks from Italian-based companies. I'll let you know how it goes.
But here I am, following the Red Sox and the Celtics, reading newspapers online, and trying to stay current and make connections, as if the world would stop if I did not know what was going on.
For example, in Tuesday's Boston Globe, Paula D. Broadwell wrote an op-ed piece extolling General David Petraeus as the embodiment of someone practicing adaptive leadership. The piece is worth reading. (Full disclosure: Broadwell, a major in the US Army, is now a pre-doctoral Research Fellow at the Center for Public Leadership (CPL) at the Harvard Kennedy School (HKS). My colleague Ron Heifetz and I teach leadership at HKS, and Ron was the founding director of CPL. But we do not know her.)
Broadwell accurately identifies some of the core assumptions of adaptive leadership. The first is that leadership is about skills that can be learned by anyone.
The issue of whether leadership can be learned, or more precisely, whether it can be taught, is the subject of this week's debate on the Washington Post's On Leadership blog. The question was stimulated by the provocative piece that Thomas Ricks, the Post's military correspondent, published on Sunday suggesting that the service academies be abolished.
Despite my making a living teaching and consulting on leadership, I am much more convinced that leadership can be learned than that it can be taught.
The resistance to that idea typically comes from two sometimes overlapping sources: (1) people who think they've "got it" and (2) people in positions of senior authority who fear loss of control and diminishing the deference of subordinates that they enjoy so much if there really were to be a culture of leadership throughout the organization, if leadership was the responsibility of everyone.
Broadwell's second core idea from adaptive leadership that Petraeus embodies is that the capacity of organizations to adapt to new realities depends on whether the culture expects leadership throughout the organization, not just at the top.
Petraeus and many others in the military have realized that in a rapidly-changing situation, where people on the ground are constantly having to adapt to new and unanticipated external and internal realities, the creativity, judgment, and experimentation that are elements of leadership must be the province of everyone in the organization.
Petraeus and the military are not alone. Last weekend I spent some time with Lee Baca, the innovative elected Sheriff of Los Angeles County. Baca, too, believes in leadership throughout the organization and has run experiments that have challenged and shocked his colleagues in the law enforcement community. For example, Baca has developed a program offering gang members education as an alternative to incarceration. And instead of being sued by advocates for fairer treatment of people in jail, he has partnered with them. Take a look at his website. Everyone of the 14,500 people who work in his Department signs on to a value statement that begins, "As a leader in the Los Angeles County Sheriff’s Department....". Not bad.
So, how is it in your organization, your family, your company, your non-profit, your community? where does the responsibility lie for leadership How prepared are your people with the skills necessary to adapt, to survive and thrive, in the face of accelerated pace of change and continuing uncertainty?
It will be interesting to see whether the challenge of coping with the current turmoil and foggy future will generate a similar commitment to adaptive and disseminated leadership in the private sector where, in my experience and observation, hierarchical responsibility for leadership usually still prevails.
This afternoon I go to Milan for meetings with senior corporate folks from Italian-based companies. I'll let you know how it goes.
Sunday, April 19, 2009
Reset Lives...and Relives
A short post today before going off to Italy for 11 days of work and relaxation.
Meeting there with several Italian companies and senior officials, through the good offices of our friends, clients and partners at Watson Wyatt. I am anxious to see if the Italian private sector is looking at the current reality differently than the US firms we have been doing business with in the past six months.
There was a fabulous piece in this week's New Yorker by James Surowiecki entitled Hanging Tough, which tells the whole Reset story, but from history, the 1930's, the last time that Reset was required.
The article tells the story of how two cereal companies, Post and Kellogg, responded to the Depression. Post hunkered down, cut expenses, and concentrated on survival. Kellogg Reset, making investments, innovating, and creating new products. The result was that Kellogg became the industry's top dog, and has remained there ever since.
Surowiecki acknowledges economist Frank Knight's useful distinction between risk and uncertainty, which is very applicable in today's world. Hunkering down is a risk calculation, assessing the odds, playing it safe, controlling what you can control. Reset is an uncertainty calculation, suggesting that when you do not know what lies ahead, you have an opportunity to make quantum leaps and quantum change, but you also risk sheer survival if none of the investments pay off. It is the difference, as Surowiecki suggests, between risking "missing the boat" and risking "sinking the boat." It is no wonder that so many firms and organizations are playing it safe.
But this is a blog about leadership, after all. And leadership is about taking smart risks smartly in service of the mission. And if you believe in the mission, have the courage to test that belief, and the skill to test is wisely there is an opportunity out there.
United States Secretary of Defense Robert Gates is doing just that.
Pressed to make severe budget cuts, he is using the moment to introduce fundamental strategic changes in defense spending and, by extension, defense policy itself. He is trying to move this country from an old and mostly successful idea about wars and how to fight them, to facing a new reality, when war will not be nation state against nation state, but international nation state coalitions against global non-state aggregations of destabilizers of one persuasion or another.
To their credit, the hunkering down Members of Congress and their allies in what President Dwight Eisenhower in his Farewell Address famously labeled the "military industrial complex" are not fooled, as the New York Times pointed out last week in Elizabeth Bumiller's coverage of Gates' budget-selling road trip.
That ferocious opposition Gates is facing is evidence that he is on to something big and important.
Sadly, in one respect, Gates is smart enough to know that he can only deliver so much bad news at any one time. Pacing the work is one of the core skills in leading adaptive change. You cannot go faster than the pace at which people can absorb the discomforting adaptations. As a consequence, as reported again by Bumiller in the Times, Gates will not take on gays in the military any time soon.
We at CLA are on to week two of our column in the Washington Post's On Leadership blog. Take a look. Send in a question.
And I am going to try an experiment in Italy, in the spirit of experimentation that needs to characterize our response to the current reality. I am going to try to blog at least every other day, short posts, and do so without sending out e-mail notification to my list. Hope you will stay connected and give me feedback.
Meeting there with several Italian companies and senior officials, through the good offices of our friends, clients and partners at Watson Wyatt. I am anxious to see if the Italian private sector is looking at the current reality differently than the US firms we have been doing business with in the past six months.
There was a fabulous piece in this week's New Yorker by James Surowiecki entitled Hanging Tough, which tells the whole Reset story, but from history, the 1930's, the last time that Reset was required.
The article tells the story of how two cereal companies, Post and Kellogg, responded to the Depression. Post hunkered down, cut expenses, and concentrated on survival. Kellogg Reset, making investments, innovating, and creating new products. The result was that Kellogg became the industry's top dog, and has remained there ever since.
Surowiecki acknowledges economist Frank Knight's useful distinction between risk and uncertainty, which is very applicable in today's world. Hunkering down is a risk calculation, assessing the odds, playing it safe, controlling what you can control. Reset is an uncertainty calculation, suggesting that when you do not know what lies ahead, you have an opportunity to make quantum leaps and quantum change, but you also risk sheer survival if none of the investments pay off. It is the difference, as Surowiecki suggests, between risking "missing the boat" and risking "sinking the boat." It is no wonder that so many firms and organizations are playing it safe.
But this is a blog about leadership, after all. And leadership is about taking smart risks smartly in service of the mission. And if you believe in the mission, have the courage to test that belief, and the skill to test is wisely there is an opportunity out there.
United States Secretary of Defense Robert Gates is doing just that.
Pressed to make severe budget cuts, he is using the moment to introduce fundamental strategic changes in defense spending and, by extension, defense policy itself. He is trying to move this country from an old and mostly successful idea about wars and how to fight them, to facing a new reality, when war will not be nation state against nation state, but international nation state coalitions against global non-state aggregations of destabilizers of one persuasion or another.
To their credit, the hunkering down Members of Congress and their allies in what President Dwight Eisenhower in his Farewell Address famously labeled the "military industrial complex" are not fooled, as the New York Times pointed out last week in Elizabeth Bumiller's coverage of Gates' budget-selling road trip.
That ferocious opposition Gates is facing is evidence that he is on to something big and important.
Sadly, in one respect, Gates is smart enough to know that he can only deliver so much bad news at any one time. Pacing the work is one of the core skills in leading adaptive change. You cannot go faster than the pace at which people can absorb the discomforting adaptations. As a consequence, as reported again by Bumiller in the Times, Gates will not take on gays in the military any time soon.
We at CLA are on to week two of our column in the Washington Post's On Leadership blog. Take a look. Send in a question.
And I am going to try an experiment in Italy, in the spirit of experimentation that needs to characterize our response to the current reality. I am going to try to blog at least every other day, short posts, and do so without sending out e-mail notification to my list. Hope you will stay connected and give me feedback.
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