Tag Archives: Digression

A Snow Decision is No Decision When the Decision Comes Too Late

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Leadership Lessons from Snow Days in Georgia

(My apologies as I get a little local here, but this stuff really ticks me off.)

It snowed in Georgia yesterday; this is news. Some towns, like Athens, received as much as six inches of snow. Gwinnett County, Georgia (north of Atlanta) got a little more than an inch. To anyone living in Chicago, Detroit, Philadelphia or Buffalo this wouldn’t be considered anything more than a dusting. To Georgia, this is a major event. This is big news.

As my kids played in an inch-and-a-half of the white stuff yesterday, they continued to ask if school was going to be canceled on Monday. This was 6:30 PM Sunday – and over an hour had passed since the last flake fell in our yard – of course the schools would be open. The roads were clear and the great melting had already begun. Certainly there would be school on Monday.

When we sat down to dinner at 7:30 the kids scanned the local television channels; searching for signs that the Gwinnett County Public Schools would be shuttered in the face of this massive storm.

After dinner, they were surfing the Web for any indication that they could stay up late tonight and sleep in tomorrow. No such luck: the Gwinnet County Schools had announced that they were going to brave the elements and open their doors in the morning. By 9:00 PM the situation remained unchanged. School was on and they were bound for bed. Sure, forecasters expected temperatures to drop below freezing overnight, but school was a go, and these kids were going.

Great Leaders are known for being Great Decision Makers

I hate to break it to you, but the people running our public schools (the district administrators) are generally not great leaders. More often than not they are former educators with so many college degrees that their email signatures take four lines. That’s the problem with administrators: most of them have spent their entire lives in the education system and not a minute in the real world. They’ve never had to live by a P&L or make real personnel decisions. They spend our tax dollars like Monopoly money, and they do all of this with no real accountability.




If they were truly great leaders, they wouldn’t be educators. As noble as the teaching profession is meant to be, our education system is filled with people too afraid to face the business world; too afraid to chase dreams; too afraid to take even minimal risk. A teaching degree is the safest college degree one can achieve. A degree in education is one of the few degree programs (like medicine and law) with a guaranteed title waiting for you on the other end. “In four years, I’ll be a teacher.” “In six years, I’ll be a lawyer.” “In eight years, I’ll be a doctor.”

Deciding to become an educator, like deciding to become a doctor or a lawyer, is safe. Unlike doctors and lawyers, teachers never really put much on the line after college. They move into a union job with no real chance of ever being fired; regardless of their level of incompetence. And, if they’re really incompetent, they can aspire for management.

Those who can, do. Those who can’t, teach. Those who can’t teach, become administrators.

Great Leaders consider all the Stakeholders

Okay, back to the Great Georgia Blizzard of 2009 as the local news stations are just dying to call it. When we went to bed last night, there was no chance school was to be canceled. We made our plans for today based on this knowledge and drifted off to sleep.

5:30 AM comes fast sometimes, and this morning was no different. Rushing around the house as usual, I woke my oldest son and told him to start getting ready. (His bus arrives just after six.)

After showering and shaving (though not in that order), I turned on the TV for background noise as I got dressed. While the local anchors were marveling over the white stuff as if it was an alien sighting, I heard something that shocked me.

“We repeat: Fulton County, DeKalb County and Gwinnett County Schools are closed today…” they exclaimed.

While I knew my kids would be thrilled, I wondered how this would affect families with two working parents. The businesses in and around Gwinnett County, you see, are open today. Had the bureaucrats of the Gwinnett County School District made this decision while it was still snowing more than twelve hours ago, parents could have made plans to take care of their homebound children. Now many of them will be stuck with tough a decision: do they miss work, or do they leave their kids home alone?

Great Leadership is about Looking Ahead

While we can debate all day about whether or not school should have been canceled in the wake of a storm that “dumped” a miniscule amount of snow, the real issue lies in the fact that J. Alvin Wilbanks, the Gwinnett County Schools superintendent, and his team waited to announce the school closings until well after every student and parent in the district had gone to bed. We single out Wilbanks, a lifelong educator and student who does not have any school-age children, because he is in charge. He actually holds the title of CEO for the Gwinnett County Public Schools, so like all CEOs; the buck should stop with him.

The argument from the school bureaucrats is that the roads became icy overnight; forcing the school closures in the name of safety. Noble reason, indeed; and one with which we probably agree, if not for the timing.

For us, this begs the question: In all the years Wilbanks was in school, teaching school, and administering schools, did he never learn that temperatures generally drop overnight? Was it a shock to Wilbanks’ staff to learn that water freezes when the thermometer drops below 32 degrees Fahrenheit? Did no one consider that the melting snow at 6:30 PM Sunday would turn to ice by 5:30 AM Monday? Didn’t anyone bother to check the Weather Channel?

The drop from 34 degrees last evening to 25 this morning was no surprise; it was accurately predicted. Had Wilbanks or his team bothered to look ahead and consider all of the data, the working parents of Gwinnett County would have had plenty of time to make proper arrangements for their children.

As unsafe as it might have been to run the buses this morning, it is equally unsafe to have hundreds of kids home alone today. Let’s hope for everyone’s sake that unlike the Great Georgia Blizzard of 2009, nothing newsworthy happens to the children fending for themselves in big empty houses.

The Nerds are Taking Over – What The Terminator can Teach Us About Leadership

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Skynet is Here, and the Nerds are at the Controls

(Terminator fans can probably skip the next two paragraphs, as they’re just an explanation of the havoc we can expect in our not-too-distant future.)

Skynet, for the uninformed, is a computer-based defense system, created by nerds working for the U.S. military in the 1990s. Long story short, Skynet was put in control of all of the U.S. military’s weapons and given the task of protecting Americans from all threats. Skynet was such a powerful computer program that it “learned” at an exponential rate until it became self-aware.

Skynet, which was basically created to remove the possibility of human error in the event of an enemy attack, eventually turned on the very humans it was designed to protect (it deemed them a threat when they tried to shut it down), and it decided to terminate all humans to protect its own existence.

Can You Even Spell IT?

Welcome to 2009, where instead of Cyberdyne Systems’ Skynet program, we have our various corporate IT departments protecting us from ourselves. (IT, by the way, is short for Information Technology. An oxymoron really, since no one involved with technology is ever very forthcoming with any information.)

At my company this week, our self-aware IT department blocked our regional employees from accessing our own consumer-facing websites because they were “uncategorized.” Never mind that it is the IT department’s job to categorize these sites, or that these websites have been live and accessible for ten years.

This team also blocked employees in our corporate office from accessing our advertising agency’s demo site (where we login to view details of the current marketing programs and make changes to artwork, etc.). The violation here, you ask? Not sure, though the following menacing message appeared on everyone’s screen who attempted to access the website:

“This site is blocked by Corporate Policy.

Reason for restriction: Administrative Custom List Settings”

Aha! The three big threats to our internal network security are clearly computer worms, malicious viruses and “Administrative Custom List Settings.”

While I find this just a little bit humorous today, I was not laughing during the seven hours Thursday while I jumped through hoop after hoop to get the website lifted from the banned domains’ list.




Better Safe than Sorry

Of course, the nerd-driven event this week that clearly proved to be a sign that Skynet is upon us and is exponentially becoming self-aware, happened when one of our vendors (finally) disclosed that they had been “scrubbing” our customer email lists and destroying those that were equated with “domains that have suspicious registration and DNS configuration settings.” While I have no idea what that means in English, suffice it to say that this vendor, without direction from us, had been purging our records of valid customer email addresses because they didn’t like the way the email addresses smelled.

This vendor has potentially cost us hundreds of thousands of dollars all in the name of “data integrity.” The CEO of this company had the nerve to claim that it is better to be safe, than to be sorry.

Really? That’s what you’re going with here? No one asked you to protect us; and as it turns out, you were protecting us from nothing.

When we examined the recent email addresses they had purged (they kept a record of what they deleted in the past week), we found no malicious threats, no spammers and no breach to our data integrity. What we did discover were valid email addresses for real customers who were scheduled to be removed permanently from our database (like the hundreds or thousands before them).

The Tail Wagging the Dog

Prior to the anointment of the IT staff as Lord and Protector in the business world, we had the Admin Nazis. Those large women with cafeteria lady arms or the small, pale men who could stifle the joy of any young salesman’s first big sale with a simple and curt “paperwork’s not right; order’s rejected.”

I’m starting to miss the good old days where anyone in an administrative function believed the world revolved around them. When I was starting out in business, it was woe unto anyone on the operations side who tried to circumvent or curtail the self-important authority of an Admin Nazi. They could be very vindictive and selective in their enforcement of proper paperwork, you see.  

Back then we complained that the tail was wagging the dog; and we just lived with it because we could. As bad as the Admin Nazis were, they just made our lives suck; they didn’t actually control them.

If You’re Not Selling, then You’re Support

The only cure for the productivity-killing Admin Nazi was great leadership. Great leaders have a way of weighing inter-departmental priorities against the goal, and finding a solution that, although it doesn’t always please everyone, makes the most sense over both the short and long terms. They put administrators in their place by asking them to administrate and support the efforts of those who drive the real value for the company: those who touch our customers.

While great leadership was able to overcome the threat of the Admin Nazi in the past, it turns out that great leaders are often the ones who are allowing IT to build their version of Skynet at your company in the present. Because support for this over-protectionism comes from the top, trying to wrestle control from a nerd with network administrative rights is going to be a whole lot harder than getting Marge to accept a customer contract without the Ts crossed.

By the way, this is not the tail wagging the dog; this is the flea wagging the dog’s owner.

Your CEO is oblivious to what the real threats are or what they mean to your business, so she is forced to listen to the CIO’s version of reality. Chief Information Officers, it seems, are mostly frustrated former nerds with larger offices and tons of control.

Their power initially grew from a lack of knowledge and fear; although they gain more muscle every time some knucklehead in a cubicle downloads malware while registering for a free iPhone. Forget that the CIO’s team should have proactively ensured there were adequate protections against malicious computer code in the first place; it only takes a few hours of network outage for the CEO to give up a little more of her power to the CIO. It’s better to be safe than sorry, they’ll say.

I’ll Be Back

Cybernetic organisms aside, it’s time that leaders start asking tough questions of their CIOs and other IT department heads before we allow the nerds to give the computers all the control.

A simple “Why” can work wonders.

Every time anyone in IT appears to be protecting us from ourselves, the leader needs to ask “why?” And when IT answers the question, the leader needs to ask “and why is that important?”

Two questions is more accountability than most IT mangers can handle. They’ll either capitulate or their human-like skin will melt away, revealing their android inner self.

In case the IT manager insists on continuing with their course of action after the leader has asked the two “Why” questions, we recommend they follow up with something like “I’m not sure that’s in our best interest, can you put that request in-writing and give it to my administrative assistant Marge?”

(Marge, you see, misses her old role as an Admin Nazi.)

 

Leadership Lessons from the Stimulus and Obama

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The Stimulus, Obama and Leadership

Eight Hundred Billion Dollars. $800,000,000,000.00. That’s a lot of money. When combined with the $700,000,000,000.00 squandered by or scheduled to be squandered by the Troubled Asset Relief Project (TARP), we’re talking about one and a half trillion dollars. In round numbers, $1.5 trillion looks like this: $1,500,000,000,000.00.

Hard to fathom, really. To give this amount some perspective, imagine this: $1.5 trillion is larger than the gross domestic product (GDP) of Spain. If the stimulus plus the TARP were a country, they’d be the 8th largest according to International Monetary Fund’s 2007 ranking.

So why is it so easy to spend?

While the TARP has clearly not performed as intended – to free up credit markets and salvage well-run financial institutions – at least it was directed with a specific and bipartisan purpose. Virtually everyone agreed it was the right thing to do at the time. (Today, not so much.)

It’s Not a Stimulus Package, it’s Welfare

Let’s stop kidding ourselves, okay? The package the Senate passed this weekend, even though it had more than $100 billion stripped from it, is more welfare than stimulus. It’s more government spending than economic stimulus. It’s more “more of the same” than it is “change you can believe in.”

Obama Needs to Lead

We elected Barack Obama as our 44th President so that he could lead this country through one of the economically toughest times in our history. Tough times call for tough decisions, tough love and tough leadership. Obama has so far failed on all three counts.

Tough Decisions include making the right call based on what is best for America. No one doubts that Obama’s own economic advisors – using their own economic models – show greater job creation and a shorter recession if the stimulus contained more tax cuts and less welfare. So why is Obama afraid to make the tough decisions and do what’s right? Why is the stimulus package just a conglomeration of left-wing leftovers and partisan welfare projects?

Tough Love means making those who made bad decisions live with the consequences of those decisions – even when it means they’re going to suffer. Too many Americans bet on the come that their homes would continue to skyrocket in value. They were wrong and now they’re suffering.




Too bad, we say. Obama should show strong leadership and apply the principles of tough love: you need to get yourself out of any situation you agreed to put yourself into. Sorry, but that’s what’s best for the rest of us.

Tough Leadership means standing up for what’s best for America – that’s his job – and this is going to be the hardest part. Pushing through the “Nancy Pelosi Welfare Reform Act of 2009” is not showing tough leadership and it’s not change – it’s politics as usual.

Step Up, Mr. President

President Obama, that’s not why we elected you. You are not supposed to be the Pro-Socialism Puppet as Rush Limbaugh portrays you. You are supposed to stand for something more. So why are you trying so hard to push through a spending package that will do nothing to save the economy and do everything to grow the government? Are you indebted to those who got you elected? Are you just another Chicago politician?

Leadership means leading. Leading, President Obama, is about shedding the partisanship and the obligations, and doing what you know is right. Leading sometimes means losing your friends; though I can tell you that any “friend” you lose while leading, wasn’t that good of a friend to being with.

 

Google is Just Like Everyone Else…

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Leadership Lessons from Google – When a Giant Makes a Giant Mistake

Google announced last week that they would close three offices and lay off 100 full-time recruiters. Even though these are the first Google-hired employees ever to lose their jobs in a workforce reduction, it’s not news… not in this economy. In fact, 100 employees is nothing, right?

Wrong. How big could it have been for Google if they would have announced they were not going to lay anyone off, ever? Instead of layoffs, they were going to find new jobs for these 100 people at Google?

100 employees is nothing, right?

With a ninety-billion dollar market capitalization and over 20,000 worldwide positions, Google could have easily absorbed these 100 humans in other areas of the company. They could have used the non-event of not laying off 100 employees as a chance to score a coup with the American media. They would have been the darling of the new administration: An American company; devoted to full employment despite the economic downturn.


We’re not naïve. We’re not suggesting Google not lose the 100 jobs, just not the 100 humans. Through attrition and everyday hiring, Google will surely add these positions in the next two weeks. With some on-the-job training and evening classes, these 100 recruiters could easily be ready to tackle many other jobs at the search giant. It would take a little work, but everything worthwhile does.

Google Could Have Been Someone; They Could Have Been a Contender…

Google could have been different. Google could have been the only giant American company to never, ever lay off a full-time employee. In the process, they would enjoy a more loyal workforce and great press. The positive feelings created by this move in this economy would have been worth 100 times more than Google would pay those 100 employees this year. They really could have played this to the hilt.

To be fair, Google has technically cut jobs before. In 2008 they laid off over 300 employees at their Double-Click subsidiary. This is somehow different; these were Google employees, hired as Google employees.

As my buddy Niall puts it, “in reality, Google is just like everyone else.”

Niall’s right; and it’s sad when you think about it. Google had a chance to make a statement, and instead chose to take the easy way out. Google is just like everyone else.

This begs the question: When will Google fall? If they’re not different, then they must be susceptible to the same market forces as every other business. Inevitably, they will be overtaken in their own field, and then they will be acquired. Then, the layoffs will really flow.

 

Circuit City, Where Service Was Never State of the Art

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Circuit City – We Told You So…

In what was probably the easiest call in the last ten years, we told you Circuit City was going to go all the way (read our November 12, 2008 post if you don’t believe us). Back then we said you shouldn’t “be fooled by their reorganization plans; Circuit City is down for the count and not getting up. Lousy leadership is lousy leadership, and court protections will change nothing.

“While Chapter 11 might provide a short-term reprieve and allow them to stock their stores for Black Friday 2008, they’ll not be around for Black Friday 2009. (Heck, they probably won’t make it to Good Friday.)”

We were right, and we just want to gloat.

Circuit City, unable to work out a sale of the company, said Friday it will close its 567 U.S. stores and cut 34,000 jobs. Nice going, guys. Please don’t blame this on the economy. You were the nation’s second-biggest consumer electronics retailer and you failed to build a sustainable business. There’s no excuse.




What’s amazing about the retail bankruptcies during this recession: KB Toys, Mervyns, Linens ‘N Things and now Circuit City; is that none of them are surprising to us. If you ever stepped foot in one of these stores and compared them to their biggest competitor (Toys R Us; Macy’s; Bed Bath and Beyond; and Best Buy, respectively) you’d know who was the best and who was not. You’d understand that it would not take much to cripple these also-rans.

Whether it was another big box selling the same goods or Wal-Mart, Circuit City never stood a chance. They could not be expected to survive even a slight downturn if their leadership was unwilling to have the singular goal of building a sustainable business. Their selection was inferior, their prices appeared non-competitive, and their salespeople were clearly on commission. It was never “fun” to shop at Circuit City, and the leadership should have recognized this.

That was their job. Of course, the employees could have told them… if they bothered to ask.

Online at 30,000 Feet? Welcome to the World Wide Mile High Club

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Delta-a-GoGo: Wi-Fi in the Sky – Good, Bad, Right, Wrong? It’s Here

When I first read about Delta’s plans to add wi-fi networking on some flights I was appalled. Under no circumstances did I want this one last bastion of freedom from emails to escape my personal dead zone. I truly enjoyed my twice-weekly vacation from the Internet, and I’ve always used this time wisely. Generally, I read, listen to music, read and listen to music, or work on various documents offline (and listen to music).

Today, at 9:14 AM I boarded a Tampa-bound flight in Atlanta and heard the terrifying announcement that Delta was launching a new service on this flight, GoGo (or is it Gogo?): a wireless Internet service for flyers. No way was I falling for this invasion of privacy. I’m too strong; too focused.

My Transition to the Dark Side: A Timeline

9:42:08 AM EST – The lead Delta Flight Attendant announces that Delta is proud to offer wireless Internet access on today’s flight. I find myself offended by the very thought and I decide that there is no price low enough to temp me to interrupt my Internet-free time with a Mile High Web Surf. I decide to stand firm: No Sky-High Wi-Fi for me.

9:42:25 AM EST – The lead Delta Flight Attendant further explains that there is a forty percent discount available for anyone wanting to try the GoGo (or is it go-go?) Wi-Fi today. While I despise the idea of working online at 30,000 feet, I hate the idea of missing a discount even more. (To learn why I hate missing discounts, read Predictably Irrational by Dan Ariely – the third to the last book I read on a plane before this latest attempt to ensure I occupy 100% of my time on the Internet.)

9:42:26 AM EST – 40% off? I’m sold; let’s give this whole Web 2.0 a run for its money.


9:51 AM EST – After an excruciatingly long nine minutes since hearing of the forty percent discount offer, the plane is finally above 10,000 feet and we are free to use our approved electronic devices. A list of approved electronic devices can be found in the Delta Sky magazine located in the seat pocket in front of me. I release my laptop from its case in record time.

9:51:12 AM EST – I wonder why it takes so long to boot up my laptop. Could it be the altitude?

9:54 AM EST – After a brief enrollment in GoGo (or is it gogo?) that included offering up my Amex number, I am off and surfing.

9:55 AM EST – First, I attack Outlook and feverishly drive through the thirty or so emails that have accumulated in the forty-nine minutes since I last shut down.

9:56 AM EST – Hey, there’s the receipt from GoGo (or is it GOGO?) in my inbox.

10:03 AM EST – I click through on a balance reminder email from American Express and spend the next couple of minutes verifying my charges for the last week. Did I really spend $238.62 at CostCo on Saturday? How many four-gallon cans of pork ‘n beans can one family eat?

10:09 AM EST – I’m on Digg.com reading, Digging, and re-Shouting a Digg “Shout” for a blog post from a great sales writer, Skip Anderson. (The post is titled Selling Yourself for Success and it deserves your attention.) I wonder to myself if Skip has a clue that someone is reading his post five and a half miles above Florida.

10:14 AM EST – I’ve run through my original inbox messages and now find myself replying to the replies of those messages. I am in Internet Heaven: I have discovered approximately one hundred fifty-two minutes each week during which I previously had no Internet access.

10:17 AM EST – An instant message pops in from a coworker using Yahoo! Messenger. Weird – it feels like they’re invading my personal space; like they’re standing in my bedroom or something. After a brief hesitation, I answer uncomfortably. I feel a little ashamed that I’m online at 30,000 feet, so I don’t bother to tell them.

10:26 AM EST – I’m reading Google News. It seems the Golden Globes were televised last night. Hmm, I wasn’t aware. Not sure I missed much, to be honest.

10:31 AM EST – The markets have been open for more than an hour, so I check my stock positions at CNBC.com. Even though my portfolio has not recovered in the forty-two minutes since we departed the gate, this Internet-in-the-air is starting to feel really, really good.

10:34 AM EST – Back to email. My inbox seems to fill quickest when I’m out of the office.

10:41 AM EST – I’m looking at my blog, AskTheManager.com, and admiring the cool post I wrote on New Year’s Eve. (I’ve had two drinks, and I think I’m feeling a little too good about my writing.)

10:43 AM EST – Back to email. Don’t these crazy @$#&?!s know I’m on an airplane?

10:49:03 AM EST – Are you kidding me? We’re landing already? Just thirty seconds more and then I’ll shut down, okay?

10:49:22 AM EST – Oh, you’re serious? I have to shut down now? The flight attendant is explaining some crazy rule about 10,000 feet or something.

10:50:12 AM EST – After learning about the possible Federal penalties that can be assessed on someone who disobeys the instructions of a member of the flight crew (flight attendants are members of the flight crew?); I decide it’s best to shut down the laptop and the accompanying wi-fi Internet access.

I’m In – Count Me Among the Mile High Club of Web Access

Sold. Charge me whatever you want, GoGo (or is it gOgO?), and I’ll pay it. I want my Internet access 24/7, and I was only fooling myself when I assumed I was happiest on a plane, insulated from the online world.

 

Leadership Lessons from a Dead Socialist

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Leading in the New Millennium: Pay for (Lack of) Performance

“It is difficult to get a man to understand something when his salary depends upon his not understanding it.” – Upton Sinclair

Although Sinclair’s words were uttered in 1935, they ring especially true when applied to the leadership void we face today. While Sinclair, a socialist, didn’t speak these words to decry the inattentive state of management during the Great Depression, his words speak volumes when applied to the CEOs, boards of directors, and other executives of the failed and failing businesses of this Great Recession.

We’re still a few months away from the first of many Lehman Perp Walks, though it’s important to note we believe that Sinclair’s quote can be equally applied to the senior leadership of Lehman as it could to the senior team at Enron.  

Enron and Lehman: Two Peas in a Pod

Let’s compare Ken Lay and Dick Fuld – two monosyllabic managers with their eyes on their own bank accounts and little regard for their employees or their shareholders.

Enron’s Lay claimed he had no responsibility for and little understanding of the risky and illegal ventures of his management team that bankrupted the giant company.

“It is difficult to get a man to understand something when his salary depends upon his not understanding it.”

Assuming Lay was telling the truth when he feigned ignorance regarding the schemes that brought down Enron, it’s easy to assume that he did not want to understand – he was making too much money in his ignorance.

Lehman’s Fuld claims his company and he were, in effect, victims of the housing and credit crisis. Dick Fuld made over a half a billion dollars during his 14 years as CEO of Lehman – that hardly qualifies him for victim status. Moreover, Fuld made his hundreds of millions all while allowing his company to dive into riskier investments requiring insane amounts of leverage.




When Fuld is finally brought to answer under oath for the enormous bankruptcy he orchestrated (his congressional testimony in October was a joke), he will no doubt claim he didn’t fully understand the credit default swaps and other risky investments his team was helping create.

“It is difficult to get a man to understand something when his salary depends upon his not understanding it.”

So What Must We Change?

Clearly shame and public humiliation aren’t enough to sway America’s CEOs to always act responsibly and in the best interest of the company’s shareholders. Case is point: Merrill Lynch CEO John Thain recently requested he be awarded a bonus of $10 million for 2008. Without going into Merrill’s ‘08 financials (or lack thereof), let’s just say that Thain proved, if nothing else, he has incredible nerve. (Boards of failed companies, generally, don’t even face shame or public humiliation – they just move on like carpetbaggers.)

Given the speed at which many companies are collapsing, it seems that even the alleged pay for performance packages that reward a CEO for some short term positive movement of a company’s share price are ineffective. Fuld had the gall to argue in front of congress that he delivered terrific shareholder value during the first 13 of his 14 years as CEO. Big deal, Dick, tell that to the September 2008 shareholders and employees.

Leaders as Stewards

CEOs, like US Presidents, serve at the pleasure of their constituents. Presidents serve at the pleasure of the American citizens; CEOs, allegedly, serve at the pleasure of the shareholders (the owners of the company). No matter how many years of prosperity a CEO has delivered (via shareholder value), a sudden bankruptcy that destroys a 158-year old company proves that the CEO was no steward; that personal gain (including stroking his own ego) was his primary (and possibly his only) goal.

If our business leaders fail to act as stewards, then our boards must act. If our boards fail to act, shareholders have little recourse beyond civil remedies that generally fail to change behaviors. Civil penalties for underperforming and/or incestuous boards are insufficient to stem the tide of bad leadership we’ve faced over the past decade.

Perp Walks for Boards

It’s time we criminalized the lazy, incestuous boards who fail to protect the shareholder. It’s time that more than a few directors received several years behind bars for every billion in shareholder value they failed to protect.

If you think what we’re requesting is akin to advocating the death penalty for jaywalking, you’re way off base. We asked someone who sits on three Fortune 500 boards (who spoke to us on the condition of anonymity) what made them feel they were qualified to sit on so many boards while leading another large company as CEO. Their response: “Listen, I get about $100,000 from each company for four meetings a year. I think I can handle it.”

Four meetings a year – unfortunately, that’s how far too many board members view their duties. What’s worse is that your “performance” (i.e. networking) on one board leads to appointments to other boards. Rock the boat, and you’re not asked to join the other boards.

“It is difficult to get a man to understand something when his salary depends upon his not understanding it.”

Amazing how a socialist like Sinclair can teach us so much about capitalism.

Coming Soon to a Theater Near You: Freakonomics, The Movie

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Freakonomics: The Movie

During my extended time off between Thanksgiving and Christmas, I sat down with accomplished entrepreneur and filmmaker Chad Troutwine to discuss the most ambitious documentary ever to pique the interest of the editors of AskTheManager.com.

For those of you unfamiliar with Chad’s work, he is a founder (along with Markus Moberg) of Veritas Prep, one the finest and most prestigious GMAT preparation and graduate school admissions consulting companies in the world. In addition to his business interests, Chad has served as a producer or executive producer for many wonderful films.

His latest project involves taking one of the most interesting and controversial business books ever written and turning it into a feature length documentary. Freakonomics, for the few of you who’ve not yet read it, is likely one of the five best business books ever written. Although not a leadership development or management training book, Freakonomics is both a fun read and an eye-opener into real world economics. More social commentary than Economics 101, Freakonomics, by Steven D. Levitt and Stephen J. Dubner, is one of those rare books that provides something for everyone, especially for those outside the field of economics.

While the editors are not seeking to turn AskTheManager.com into a blog about Freakonomics – the book’s authors Levitt and Dubner already maintain a terrific one at NYTimes.com that (like the book) is both an economics lesson and a quirky look at humanity – we are very interested in the upcoming documentary and we do highly recommend the book.


To satisfy some of my own curiosity around the Freakonomics documentary, I cornered producer Chad Troutwine – keeping him from his Holiday shopping – and peppered him with ten tough questions:

TheManager (TM): What made you think that Freakonomics would make a good film?

Chad Troutwine (CT): The real answer is that I thought it deserved to be a film, more than I was convinced it would be a good one. I’m pretty evangelical when it comes to this subject. I want as many people as possible to learn about Freakonomics. Film is a remarkable medium to reach a mass audience. It gives people who don’t really read much the chance to enjoy the material, but it also offers the three million readers a way to enjoy Freakonomics in a brand new way. Besides, I really wanted to meet some of the amazing characters that Levitt and Dubner found for the book.

TM: Have there been any other projects that made you feel this way?

CT: Yes, but none as strongly as Freakonomics. I’d still like to adapt Liar’s Poker, the brilliant Michael Lewis autobiography about 1980s Wall Street excess. It seems particularly timely today. Brush With the Law would make a spectacular film. It’s the joint memoir of a Harvard Law School student who became addicted to gambling and a Stanford Law School student who occasionally smoked crack during his third year. It’s Fight Club and Trainspotting meet The Paper Chase, but it’s a true story. 

TM: Freakonomics is such a great read with many desirable topics, how did you select the main topics for the film?

CT: I let the prospective directors pitch me. First, I had to get them to agree to join the project. I described my cinematic vision with as much clarity as possible, and shared my passion for the material with them. I suggested several possible topics – including ideas that emerged after the book was published. Morgan Spurlock was great. He said something like, “As long as it doesn’t have anything to do with food or terrorism, I’m in, man.” Because Morgan was willing to commit to the project so early, it gave me instant credibility when I approached Academy Award winner Alex Gibney and the other accomplished filmmakers.   

TM: What influence, if any, did the directors play in selecting the topics?

CT: The directors chose their own topics, but I retained a veto position. I required each director to submit a treatment. If I approved, that was the topic. I rejected a couple of ideas, actually.

TM: What influence, if any, did the authors play in selecting the topics?

CT: That’s a good question. Co-authors Dubner and Levitt have shown interest throughout, particularly Dubner. They trusted me to oversee that part of the process, so our contract gives me sole responsibility. One director team pitched a story idea that required a lot of participation from Levitt. He graciously agreed, and I think it will turn out to be one of the most engaging segments.

TM: Was there a topic covered in the book that you felt was too taboo for film or too hard to deliver to a traditional audience?

CT: No. Abortion, racism, cheating, classicism, crime, terrorism, and myths about child safety were all fair game. The main premise was enough of a hindrance: taking economic analysis and making it entertaining. Fortunately, Levitt and Dubner already conquered that challenge in grand style. We’re simply emulating the model that they created. One subject was off-limits. Because Sudhir Venkatesh was writing his own book, “Gang Leader for a Day,” we were contractually obligated to avoid using material in the chapter “Why Do Drug Dealers Still Live with Their Moms?”

TM: What is the most important thing you hope audiences take away from this film?

CT: Running regression analyses and mining rich data sets are extraordinarily valuable endeavors for brilliant people like Professor Levitt because the results offer so much utility for everyday life. He can interpret the data and impart findings – often directly contradicting widely held beliefs – that can help us all be wiser parents, more informed voters, savvier business people, and better decision-makers. If we succeed, our film will inspire audiences to see the merit in challenging conventional wisdom. I’m not sure I can turn economists and sociologists into rock stars, but I hope that “thinking freakonomically” becomes synonymous with sound judgment and high intelligence. That’s pretty sexy to me.

TM: What has been the most rewarding thing for you (personally) about working on this project?

CT: We’re not done yet, but I feel a real sense of satisfaction that I was able to orchestrate what is already being hailed as the greatest collection of documentary filmmakers ever assembled. Moreover, this is, ostensibly, my first film as a lead producer. If Freakonomics can permeate the popular culture and inspire people to think more like Levitt and Dubner, and then act accordingly, that would be the ultimate.   

TM: If you were a tree, what kind of tree would you be?

CT: I would be a deciduous tree in autumn. Is there any other answer?

TM: No, not really… As a producer, where do you get both your motivation and your inspiration?

CT: I’ve never fully understood where I get my motivation or my inspiration.  Maybe that question is best left to others to interpret based on what I create and how much I accomplish.

…

Troutwine is eyeing a late summer 2009 final cut for the film, with a theatrical release possibly later in the year. For those of you (like us) who cannot wait, here is a list of the named directors, the working titles of each segment and current status for their respective segment:

  • Morgan Spurlock: “Would a Roshanda by Any Other Name Smell as Sweet?” (post-production)
  • Rachel Grady & Heidi Ewing: “Applying Freakonomics to the Young and Nimble Mind” (filming)
  • Alex Gibney: “Who Cheats and How Do We Catch Them?” (pre-production, filming begins January 2009)
  • Eugene Jarecki: “Abortion and Crime” (pre-production, filming begins in January 2009)
  • Fifth Segment: TBD  

We think we know who the will direct the fifth segment (and we’re thrilled if it turns out to be correct), but we were sworn to secrecy and despite our overall lack of journalistic integrity; we do plan to keep this secret. Sorry…

…

Between now and the film’s release, may we recommend you enjoy the books Chad Troutwine mentioned in his interview. We’ve read all three and highly recommend them:

·         Freakonomics

·         Liar’s Poker

·         Brush With the Law

Additionally, if you’re looking to get a daily fix of Freakonomics, we recommend you drop in on Dubner’s and Levitt’s blog.