Without Warning

The Ability to Hide

October 19th, 2010

Alvin Toffler, author of Future Shock and The Third Wave just released a paper titled, 40 for the next 40, A sampling of the drivers of change that will shape our world between now and 2050. As expected from a futuristic thinker, Toffler provides a plethora of ideas to think about and ruminate on.

There is one idea that Toffler points out that relates to the phenomenon I refer to as Silent Problems (problems that are being avoided, neglected, going unnoticed or are being intentionally silenced) in my book Without Warning. This idea is:

It will be impossible for organizations to hide improper actions:

Rapidly growing amounts of information, and the proliferation of professional/consumer grade tools for analysis and interpretation, mean previously empowered individuals will now be able to see what organizations are doing, and promote that information to others.

Consumer opinion of corporate responsibility practices will influence product/service selection and brand switching.

This obviously doesn’t imply that mankind, nor organizations won’t try to hide improper actions. After all, there will always be a Madoff, a Petters, an Enron and others out there preying on the innocent. For some, it is simply their human nature and their predisposition. And this is not to suggest that even with vast computing power; governments will become smarter, thereby becoming more effective in their vigilance in preventing such wrongdoings. It does suggest that a cat and mouse game where wrongdoers will find it necessary to weave an increasingly complex web of deception in an attempt to stay one step ahead of the Feds will continue into infinity. Which by itself; is a knowledge network of sorts.

In the end, the empowerment of data changes everything. Yet man must take such data and make decisions, and implement actions. Which makes me ponder, will data overwhelm our ability to make decisions and implement actions?

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Random Acts of Kindness

October 15th, 2010

Business and civic leaders are positioned to play roles that can have a huge impact with little effort. Such was the case I experienced and participated in this week. Tragically, two teenagers committed suicide in the neighborhood in which I live. It was a tragic loss for the community, the school and the parents. During times of great uncertainty, how should such situations be treated?

The school district brought in counselors, but from I’ve been told by numerous students, with little success. Instead, classmates of the two victims took over and owned the outcome. They migrated in masses to the park where the suicides occurred the previous day. I was there, hundreds of kids started arriving there at 3 in the afternoon, and were there well into the night. They were scattered between open spaces and a densely forested area where the incident occurred. There were tears and laughter occurring simultaneously. As I watched this dynamic unfold, I was inspired. These kids knew what they needed to do to heal their broken hearts and begin to deal with the unanswered questions of “why?” They participated in a celebration of life and the sorrows of death. This was their process for healing - not a .prescribed formula coming from above

As I stood there, I realized that many of these kids had not slept the previous night - they were texting and talking with their friends wrestling with this troubling issue. And, many had not eaten during the day. Another parent and I grabbed cases of water and handed them out to the walking wounded. I then came back to my house and grabbed bags of Halloween candy, chips, crackers, fruit - anything that was easy to disperse at a moments notice.

As I was handing these gifts out, many said thanks and a few asking, “Why are you so nice to us?” All I could say was, “I don’t believe I can do enough for you and what you’re going through.”

I know I made a huge difference with a simple gesture of food and water. Insignificant from my perspective. Significant from theirs.

So what random acts of kindness can you or have you participated in? What was the impact? How did it change a person(s) life?

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The 5% Factor

October 10th, 2010

Have you ever pondered what successful business leaders do to achieve success? I know there are hundreds of business books on the subject, thousands of supposed experts and millions of articles on the subject. However when you boil all of the distilled knowledge down, several common themes emerge. Some of these would include:

Ceating a environment where continuous improvement and innovation an occur.
Having the right people on the bus and in the right seat.
Build and environment where people can and want to do their best work.
Have clearly defined goals in place.

Each of these and others are noteworthy, however something struck me the other day when I was working with my clients. This is what I discovered.

The most effective business leaders are constantly thinking about how they could make their business/organization 5% more effective. It’s as if they’re wearing a pair of rose colored glasses with “5%” etched into the glass. Questions that might go through their mind could include:

How could we make this marketing campaign 5% more effective.
How could I become 5% more effective as a leader.
How could we improve workflow to reduce waste by 5%.
How could our sales staff convert business opportunities 5% more effectively.

If you look at a computer keypad, it’s serendipitous that 5 and % are kindred souls - placed together on a single key. And in most businesses, the 5% factor should be a key part of many conversations. Because a mere 5% improvement can and will make a huge difference for every organization.

What 5% factors are you or should you be contemplating today?

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Exagerate the POSITIVE and negative

October 3rd, 2010

The framework of politics seems to naturally bring out the best and worst in those running for office. In some respects, it’s entertainment. Kind of like, All Star Wrestling. A lot of huff and puff, but in the end, the good guy/girl usually wins. But there’s also a dismal and disturbing side of politics, this being the exageration of the truth. Or what I would like to say “Exagerate the positive.” And for the opposition, their campaign will focus on turning that grain of sand into a boulder of doubt and suspicion. Here is a case in point.

(Chicago Tribune) U.S. Senate candidate Alexi Giannoulias tells voters he was gone from his troubled family bank by late 2005, but that’s not what he told the Internal Revenue Service.

Giannoulias was able to take a $2.7 million tax deduction last year because he reported working hundreds of hours at Broadway Bank in 2006.

Giannoulias says there’s no contradiction, and in fact there is no suggestion the Democratic state treasurer took a tax break he didn’t deserve. Rather, the issue highlights the fine line Giannoulias walks on the campaign trail in explaining exactly what he did at Broadway and when he did it.

The bank was at the top of his résumé when he was a 30-year-old first-time statewide candidate in 2006 with few professional highlights. But in his tight Senate race against Republican Mark Kirk, his tenure as a senior loan officer at Broadway is a bull’s-eye for critics who hit him for the bank’s loans to mob figures as well as troubled lending that contributed to Broadway’s collapse earlier this year.

Saying he left in 2005 gives Giannoulias maximum distance from the bank’s questionable lending practices, the April takeover by federal regulators and other controversies such as a loan by the bank to convicted influence peddler Antoin “Tony” Rezko in early 2006.

But by reporting that he worked at least 500 hours at Broadway in 2006, Giannoulias was able to get a break that helped him avoid paying federal income tax for 2009.

Deception by “exagerating the positive” is something that creeps into politics, onto resumes, and infects businesses. In the early stages, it makes perfect sense. However, if the other side of the story surfaces, penalties will accrue. Trust is questioned/destroyed. Careers are derailed. And future opportunities for advancement, destroyed. The inclination to exagerate the positive is almost human nature. However beware, it’s often a trap.

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The Growing U.S. Economic Engine - Manufacturing

September 19th, 2010

Over the past 6-months, the U.S. economic landscape has been a rollercoaster. Depending on the day, the outlook is encouraging or quite dire. And its probably a matter of where one looks. And just maybe we’ve been spending too much time looking in the wrong places.

What may surprise most is the next wave in the U.S. industrial engine - manufacturing.

What most economists have been missing is a subtle, yet accelerating shift in the outsourcing - insourcing equation. Ten years ago, the outsourcing move to China was growing by leaps and bounds. The U.S. manufacturing base was weakened as companies downsized and at times, went out of business. But something has happened in recent years, I guess maybe one could attribute it to wisdom. Many companies are beginning to figure out that outsourcing to China was not the holy grail they had bought into. Especially for small to mid-sized companies. The stories from issues related to quality, contamination, slow turn-around times, increasing prices…

Today for many companies, the reasons to pull production back out of China are growing daily.In the Sep/Oct 2010 edition of Chief Executive, they did a feature article titled “the case for ONSHORING.” Here are a few of the key takeaways for that article.

China is no longer the cheap play it once was.
Long supply chains are proving themselves too extended and too slow, particularly when middlemen or contract manufacturing are involved.
Increasing evidence suggests that placing manufacturing offshore and in the hands of outsourcers threatens to disrupt the process of innovation.
With costs increasing in China and the operating environment toughening, the overall difference in the cost and risks of manufacturing there versus here has decreased.

Today the path to bringing production back into the hands of U.S. manufacturer is growing for good reason. It’s cost effective. Lead times are slashed. Innovation is enhanced. Intellectual property loss is diminished. Supply chain management is enhanced.

Yes, the early stages of a resurgence in the U.S. manufacturing is underway. However, one very important question remains. How much productive capacity remains following years of plant closures and consolidations. This is the question that remains unanswered.

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Ponzi Schemes - How Many More?

September 14th, 2010

There’s a saying, “Strong tides float most boats.” Well if you look at the robust years leading up to the financial bust in the fall of 2008, this appears to be the case. However as the economy turned down, the ponzi scheme marketplace appears to be especially difficult to keep afloat. Names like Madoff, Stanford, Petters, Kenneth Starr and a host of others verify this phenomenon. And today, almost 2-years since the financial fallout, another surfaces.

Authorities say a former Wethersfield, Conn., resident has pleaded guilty to federal charges he operated a $100 million Ponzi scheme that ripped off hundreds of investors.

Federal prosecutors and the FBI say Michael Goldberg stole more than $30 million in 12 years by promising investors huge returns quickly on money they gave him to buy diamonds for resale or to buy foreclosed assets from the JPMorgan Chase & Co. bank.

Prosecutors say he didn’t invest the money and paid old investors with funds from new investors. They say the result was “financial misery” for many of them.

Goldberg revealed his scheme to authorities. He’ll be sentenced Dec. 2 on three counts of wire fraud. The 39-year-old faces up to 60 years in prison.

Unfortunately, new ponzi schemes are being exposed monthly, and at times, weekly. The trail of broken dreams - endless. Yet in many respects, ponzi schemes reveal a vulnerability and gullability within a society. And its this gullability in risky dreams is sinking many boats. And my guess is, there are many more yet to meet their demise.

Yes, what many considered to be “safe money,” wasn’t very safe after all.

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The Good, The Bad & The Ugly - Part 2

September 7th, 2010

A couple of weeks ago I wrote about Mark Hurd’s sudden departure from HP, stating:

…months prior to being placed on the “crosshairs of failure,”more often than not, these individuals (like Mark Hurd) were being praised for their leadership acumen, their business insights and strong stewardship capabilities. They were the future, and being treated accordingly. However once the shoe fell, everything good was displaced. The list of accolades, forgotten. The awards, dismissed. The strong words of praise, erased. Everything feels and appears different.

Needless to say, such events are messy situations, with everyone focused on covering their perverbial A**. And in this whirlwind, emerges the The Good, The Bad & The Ugly as relates to forced outplacement of key executives.

Well over the weekend, Mark Hurd’s friend and perverbial cheerleader during the crisis, Oracle’s Larry Elison, came to Mark’s rescue by offering him a position as a President. And now, not surprisingly, HP is going after Hurd with a vengeance. “In his new positions, Hurd will be in a situation in which he cannot perform his duties for Oracle without necessarily using and disclosing HP’s trade secrets and confidential information to others,” HP said in a blog posting.

Hurd, the chosen one, is quickly losing favor and face. And while Mark Hurd may have embarrassed the HP Board upon his departure, I believe that this will be payback time for HP - rightfully so. And this will become the ugly part of Mark Hurd’s legacy. This is one cat fight that Mark Hurd entered willingly and will reveal his true personality as a business leader and as an individual. And my guess is - his name will be toast.

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Responding to a Silent Problem

August 27th, 2010

The Gulf of Mexico oil spill story has raged on for upwards of 4-months now. It’s been been a story with anger displayed, heartache captured, concerns emitted and consequences discussed. Yes, it has been a long and arduous 4-months. Yet despite the magnitude of this disaster, it can be broken into three parts, These being:

Exploring the great unknown. “What will be the consequences, if any?”
Shutting the beast down. “This thing is bigger than we’ve been told, can it be shut down? If yes, how soon.”
Gathering information to avoid a similar catastrope in the future. “Every disaster reveals consequences from the unknown. Until its been experienced, its difficult to understand all of the unintended consequences of certain actions and procedures.”

As part of the third stage of this story, the investigation is revealing that numerous silent problems were present. For instance, recent stories reveal that a single engineer may bear a huge responsibility in the blowout. However, this isn’t the story I’m fascinated with at the moment. I’m intrigued with how the environment is and has responded to this ecological disaster - most of it is a huge surprise - most scientists included. This story is titled, the great vanishing oil spill.

Yes, microbes may become the heroes of the Gulf of Mexico oil spill by gobbling up oil more rapidly than anyone expected.

This leads me to a parallel discovery. As I have worked with organizations and helped them work through their silent problems, I’m always surprised how organizations respond from the effects of silent problems. And once it is solved, the results can be equally surprising and unexpected. At times, organizations remain devastated for months on end. However more often than not, once the silent problem is identified and rectified, a rejuvenation phenomenon often takes place. Unexpectant individuals step up to the plate with previously unknown skills that can be leveraged. New processes and procedures that were unwelcomed, are suddenly adopted. However most important in this equation, people learn how to speak about the unspeakable, and take action. Quite similar to the little oil eating bacteria at the sight of a natural disaster.

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Exit - Stage Left

August 17th, 2010

Have you by chance wondered about the CEOs of the two P’s, and what really got in their way? I’m referring to Mark Hurd of HP, and Tony Hayward of BP. From what I’ve read and been able to discern, each of these had SPs (silent problems) to the max. And due to their SP affliction, HP’s and BP’s stock has suffered, and their careers derailed.

Each has exited Stage Left. Stage left for Tony Hayward means frequent trips to Siberia for the foreseeable future. The crisis in the Gulf will forever be associated with his name. For Mark Hurd, we’re unsure, although it was reported pocketed a quick $28 million, which should provide him plenty of options - including a quick retirement. However in the bigger picture, Mark Hurd symbolizes another epic chapter of HP. It’s too bad, because there’s a lot of blame to go around over at HP.

For any leader, Exit - Stage Left is rarely a pretty event. It’s filled with drama, and emotions and too much hurt. The need for true leaders is greater today than ever, unfortunately, there appears to be a shortage of them in the marketplace.

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The Good, The Bad, & The Ugly

August 11th, 2010

Each year, hundreds of business executives find themselves in the crosshairs of outplacement. Some are being replaced due to lack of financial performance. Others due to a lack of strategic direction, cultural fit, and from time to time, reasons related to ethical and moral concerns. Quite often, these events turn into a media fiasco. Just mention the name Mark Hurd (H-P) or Tony Hayward (BP), guess what happens. You’re likely to have a strong emotional reaction to them as an individual and as a leader.

Guess what? It wasn’t always that way. In fact, months prior to being placed on the “crosshairs of failure,”more often than not, these individuals were being praised for their leadership acumen, their business insights and strong stewardship capabilities. They were the future, and being treated accordingly. However once the shoe fell, everything good was displaced. The list of accolades, forgotten. The awards, dismissed. The strong words of praise, erased. Everything feels and appears different.

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