Business Insight Zone

That’s the underlying question behind a post + comment exchange that I’ve been having with an online acquaintance who blogs anonymously. (I’ve never met this person face-to-face.) My pal has been going through the ringer, trying to do the right thing for the company, but getting no support from management. A sample:

I ended our session with a simple question: “What is it that is motivating you? Knowing all that we know?”

His response was horrifying but typical: He looked at me in such a defiant manner and said: ‘Where do I draw my motivation, I’ll tell you where I draw my motivation…it’s the fact that there are millions of people out there without a job that would love to be in our position…”

That is all he said.

I cannot tell you how much this response disappointed me and saddened me.

I invite you to read the whole thing — there’s as much in the comments as in the original post — and then to share your own ideas, here or (preferably) there.

Some questions for you to consider:

• What do you do when management abdicates responsibility?
• What do you do when you love your company but see it making huge mistakes?
• Is CYA enough of a reason to avert your attention from the hard choices that need to be made and the hard conversations that need to be held?
• What would you do, if you were in my friend’s position?

~

Photo by Danny Hope, used under a Creative Commons license.

It’s time for the business world at large to steal an idea from ESPN columnist Bill Simmons: the EVP of Common Sense.

Simmons has argued that pro sports franchises need such a person to review potential trades and draft choices. Ideally, it would be someone who knows the sport and commands total respect from the team owners and front-office personnel . . . but who is not beholden to the inbreeding or groupthink that often infects organizations.

This guy — let’s say he was the college roommate/teammate of Mr. Team Owner and is now a retired CEO from an unrelated industry — would take a look at big decisions, like which college player to draft in the first round, and apply common sense to them. He’d be in a position to say, “Okay, walk me through this one, because I don’t see why Player X is a great idea when it seems like everybody else thinks Player Y projects better as an NFL starter.”

In the corporate world, this person’s job would be to say something like, oh, I dunno, “Why wouldn’t we take IBM’s offer? Do we really think we can go it alone? Or force them to give us a better offer? What’s our leverage?”

Or, pursuant to what I said about Bob Sutton’s thoughts about the U.S. auto industry from last week, “Shouldn’t we simplify our product lines and make sure we’re making vehicles that more Americans want to drive?”

To put it another way, the EVP of Common Sense would be charged with asking naive questions about where the company and the industry is heading, and he or she would have a mandate from the board of directors to insist on straight answers to these questions from everyone, including — especially — the CEO.

Or would that make too much sense?

~

Related:

• Steve Tobak at BNET’s Corner Office blog: We’re Still Making Excuses for Weak Leadership

~

Image via the Library of Congress.

Four of the five panelists get their groove on.
The fifth may have been busy wielding the confetti cannon.

My first mistake was failing to post about every SXSW session I attended in real time. Next time I’ll live-blog sessions in progress, then clean them up later.

My second mistake was in ignoring the advice that my friend Kevin Lawver gave during the awesome panel — Rawking SXSW Year Round: Staying Inspired — which closed SXSW for me this year. His advice, and the point of the panel, was to capture that high-energy, high-possibility, let’s-make-something spirit of SXSW and preserve it as we resume our ordinary duties.

Besides dancing, the panel also included mood lighting, theatrical staging, ballistic candy, group therapy, and a high-powered confetti cannon.

When I come back to this post (soon!), I’ll explain more. I didn’t want to make the third mistake of letting it linger in my drafting folder even longer.

~

Photo by kellygifford, used under a CC-Share Alike license.

One of the reasons I love Twitter is that it gives me continual opportunities to learn from people who know waaaaaay more than I do about . . . okay, everything.

Case in point: my Twitter pal George Jenkins was talking about the “Red Flag Rules” that are about to go into effect in the United States, and when I asked “What’s that?” he was kind enough to point me to a couple of great sources. First, there’s this from the FTC:

New ‘Red Flag’ Requirements for Financial Institutions and Creditors Will Help Fight Identity Theft

Identity thieves use people’s personally identifying information to open new accounts and misuse existing accounts, creating havoc for consumers and businesses. Financial institutions and creditors soon will be required to implement a program to detect, prevent, and mitigate instances of identity theft.

The Federal Trade Commission (FTC), the federal bank regulatory agencies, and the National Credit Union Administration (NCUA) have issued regulations (the Red Flags Rules) requiring financial institutions and creditors to develop and implement written identity theft prevention programs, as part of the Fair and Accurate Credit Transactions (FACT) Act of 2003. . . .

Then there’s this, from George’s own blog, where he treats all kinds of issues related to identity theft:

The Red Flag Rules Deadline Fast Approaches

If you are a small business owner, this affects you. If you are a consumer, this compliance is important given the push to digitize patients’ medical records. If you are a consumer, it’s good to know about the Red Flag Rules, so you shop at retail businesses that properly protect the sensitive personal data they use. . . .

Be sure to follow the links of George’s post if you’re interested in learning more in this vein.

Thanks for educating me, George!

~

Photo by Federico, used under a CC-Share Alike license.

. . . are now available to subscribers of the San Antonio Business Journal at this link.

The short version, for non-subscribers or those in a hurry: not as bad as the U.S. economy in general, and not nearly as bad as it could be for Texas.

If I understand correctly, the story will be free for anyone to read next month — I’ll try to remember to tell you when that happens.

Many thanks to Donna Tuttle of the SABJ — whom I met at the San Antonio Social Media Breakfast in January — for giving me the opportunity to write the column.

~

Postcard image of Fort Worth’s Farmer’s and Merchant’s National Bank by Janice Waltzer, used under a Creative Commons license.

Climb that hill!

Is your mindset fixed, telling you that what’s so is so and unlikely to change?

Or is it attuned to growth, leading you to look for ways to do things differently, make things better, try again?

The growth-vs.-fixed dichotomy is at the heart of Prof. Carol Dweck’s book Mindset, which I reviewed here last year, and which I recommend to anyone. Many years of painstaking research by Dweck revealed that a growth mindset was the common denominator for many high performers across diverse fields of endeavor.

My guess is that the state of the economy has driven a lot of people into fixed-mindset-land. But I’m sure that we would all benefit from a society-wide conversion to the growth mindset.

• What are you doing to prevent the fixed mindset from taking hold?
• What can you do to promote a growth mindset for yourself, your team, your entire organization?

~

Photo by Rudi Riet, used under a CC-Share Alike license.

In Terry Pratchett’s huge-selling Discworld fantasy series, some of the menial jobs are held by golems — giant clay statues that are animated by magic. (The idea comes originally from medieval Jewish folklore.)

These creatures often toil day and night for centuries at jobs like pumping water underground or running a treadmill in a factory. A minor subplot that spreads through a few of the Discworld novels centers on the activism of some humans to liberate the golems from their slavelike toil.

The image of these stoic, tireless automatons came to mind when I read this post from Elliot Ross:

Real SMB IT, And Vampires?

It riffs, in turn, on an item of my own from a while back about killing off vampire projects.

Elliot’s post talks about the IT projects that never really die. The reasons are many:

• Somebody in the organization still feels a connection to it.
• Somewhere there’s a policy or a process built around the old way (the old rule, the old equipment).
• Somehow not all the pieces of the puzzle got rectified, cleaned up, cleared up — and so people live with the old project as a way of life.

In other words, somewhere a golem toils in silence at the bottom of a well, pumping water like he has for 105 years.

Pratchett’s world is a fable. The golems there are indestructible and toil without complaint because . . . well, because he’s making it up.

In our real world, that stuff costs money.

What to do?

• Find the golems.
• Get them out of their holes in the ground.
• Put them to work on the important things.

~

Image by Enrico, used under a Creative Commons license.

Two streams of thought converged for me this afternoon . . .

1. I’ve long enjoyed Heidi Moore’s work for the Wall Street Journal, and was pleased by the revised version of this piece:

The History of Mike Mayo Bank Downgrades

The first version of the piece, which I read this morning, included examples of Mayo’s bearish projections for U.S. banks, and of the sometimes vitriolic reactions to those projections by bankers, but it didn’t actually say whether Mayo was right in his projections. The revised version does exactly that — and provides more detail all the way around. (Kudos to Moore for responding to commenters who were calling for these details.)

2. After reading this post by Dave Livingston, which kindly quotes some of my own thoughts on Warren Buffett, I followed pointers from Dave to these two articles:

• Nicholas Kristof in the New York Times — Learning How to Think
  
• Sharon Begley in Newsweek — Why Pundits Get Things Wrong

Both of the articles talk about the research of psychology professor Philip Tetlock, who has spend decades studying the nature and quality of predictions made by pundits. It’s fascinating stuff — with big implications for the way we create and consume media, if we’re willing to consider those implications.

Tetlock figured out that the quality of predictions had little to do with having advanced degrees, pursuing one academic discipline instead of another (or none), having policy experience, or being of any particular political school of thought. He did find that the most famous pundits tended to be the most wrong.

So, who made the best predictions? Foxes, not hedgehogs.

I’ll let Begley explain the language (and encourage you to read her article in full):

That bestiary comes from the political philosopher Isaiah Berlin, who in 1953 argued that hedgehogs “know one big thing.” They apply that one thing . . . everywhere, express supreme confidence in their forecasts, dismiss opposing views and are drawn to top-down arguments deduced from that Big Idea. Foxes, in contrast, “know many things,” as Berlin put it. They consider competing views, make bottom-up inductive arguments from an array of facts and doubt the power of Big Ideas. . . .

In short, what experts think matters far less than how they think, or their cognitive style. At one extreme, hedgehogs seek certainty and closure, dismiss information that undercuts their preconceptions and embrace evidence that reinforces them, in what is called “belief defense and bolstering.” At the other extreme, foxes are cognitively flexible, modest and open to self-criticism.

Pardon me for a moment while I pat myself on the back for being a fox. (No one who knows me would ever accuse me of being a hedgehog under Berlin’s definition.)

Okay, so what do we do with this knowledge? Keeping in mind what I said last week about why I don’t write on politics, I suggest three things:

1. Stop listening to hedgehogs.
   
2. Undermine our own hedgehog tendencies.
3. Ask for the score.
   

The first step implies some possibly radical changes in our media consumption habits.

The second step may require some serious changes to our habits of thought, if we’re used to seeing the world in ideological terms. It occurs to me that there might be a connection within companies between being stuck in a way of thinking and being persistently wrong about — and thus unprepared for — the future.

The third step requires that we return to the data, over and over. Some of the commenters on Heidi Moore’s post this morning were ready to hang Mike Mayo from a yardarm for . . . for . . . well, apparently for having the gall to challenge the sanctimony of Big Banking. That’s hardly a good leg to stand on, if we’re trying to make sensible arguments.

Now, over to you:

• What are some of the worst sources of hedgehog thinking you encounter in business?
• What do you do to fight hedgehog tendencies?

~

Photo by Alexander Konovalenko; used under a CC-Share Alike license. No actual hedgehogs were harmed in the making of this blog post.

“Too much for the space available.”

Could be too much stuff for the physical space available, like in the kitchen above.

Could be too many meetings for the space available on your calendar.

Could be too many projects for the space available on your team’s work schedule.

Could be too many ideas for the “space” — time, energy, budget, cognitive capacity — available. (Let me raise my hand on that one.)

Here’s the problem: your inbox, your computer, your filing cabinets — they all have virtually unlimited space for stuffing in more. But your brain doesn’t.

Your calendar doesn’t.

Your budget doesn’t.

A Pareto-parsed view of your work doesn’t.

Antidotes:

• Don’t think more, think better.
• Don’t do more, do important.
• Don’t commit to more, commit to what moves the needle.

How do you administer these antidotes?

~

Image by Hassan Abdel-Rahman, used under a Creative Commons license.

Two of the most provocative posts I read this week share a common theme: corporate workers who have lost sight of the goal.

1. Back in November, business professor Bob Sutton wrote this long, pointed post about his experiences dealing with General Motors executives:

The Auto Industry Bailout: Thoughts About Why GM Executives Are Clueless And Their Destructive “No We Can’t” Mindset

I missed it at the time, but Sutton pointed to it this week as he discussed the departure from GM of longtime chief Rick Wagoner. The key point: that GM created a culture that guaranteed it would remain clueless and directionless in terms of what its customers thought and wanted.

~ ~ ~

2. Corporate recruiter Nick Corcodilos thinks that “[hiring] companies demand salary information because they don’t know how to run their business for profit”:

The real reason employers want your salary history: Hiring is a crapshoot

As he puts it, “Employers want your salary history because they need to start somewhere.” They don’t know how much a job is actually worth — what it brings to the bottom line of the business — and so they scrabble around for any old number that will put them in the ballpark . . . or let them claim they’re in the ballpark.

I don’t know about you, but I’ve known many cases where two people of the same title had radically different impacts on the performance of their organizations, but without even modest differences in their compensation, or even any way to build an argument for such differences.

What every company needs is to take examples like these, then use them to build tough processes that will prevent these kinds of cluelessness.

Now, how would you suggest they go about that?