Tagged: leadership

Directed as by madness

I saw a ship of martial build
(Her standards set, her brave apparel on)
Directed as by madness mere
Against a stolid iceberg steer,
Nor budge it, though the infatuate ship went down.

Herman Melville, The Berg (A Dream)

The Titanic has been a major topic of discussion at my house for a couple months. I’m not sure where the interest in all things shipwreck-and-iceberg related came from–these obsessions are often a mystery to me–but the boys have devoured every book on the Titanic from the Minneapolis Library’s children’s section, and a fair number from the adult section. They know all the facts and figures about the ship’s size, means of propulsion, and passenger accommodations (as I’ve noted before, kids are really smart about the things they care about), and they ask a lot of really tough questions about why it sank and how the sinking was handled.

Their interest in the Titanic is probably similar to the interest that some kids have in fairy tale monsters and horror stories: they’ve found something that they fear, and by learning as much about it as they can they master that fear, or at least build contingencies around it. We’ve had similar discussions about Pompeii, tornadoes, and plane crashes, and I always try to respect their concerns and their solutions, and work out plans with them about what to do if we should suddenly encounter, say, a volcanic eruption somewhere in South Minneapolis.

One of their favorite books has been Eyewitness: Titanic. Like all the Eyewitness books, it’s packed with pictures and facts. And at the end of the book, it covers some “lessons learned” from the inquiries following the disaster. Many of these lessons were implemented, and passenger lines were considerably safer afterward.

It’s interesting that in transportation generally, humans are good at learning from their mistakes; one of our Cub Scout leaders drives the historic trolley at Lake Harriet, and he has explained to us that “every page of the motorman’s manual is written in blood.” And it’s equally interesting, and tragic, that we don’t apply our “lessons learned” in other spheres of human endeavor. So in the service of trying to apply the motorman’s and ship captain’s ethic to the current malaise, here are a few things that people learned after the Titanic sank that might make sense for our economic future.

Enough lifeboats for everyone

The tragedy of the Titanic was that there weren’t enough lifeboats for everyone on board. It carried 20 boats, with a maximum capacity of 1,178 people, but there were at least 2,223 passengers and crew. There were enough lifebelts for everyone, but since most of the victims died of hypothermia rather than drowning those were cruelly useless.

We have a similar lack of lifeboats in the American economy. As companies have shed employees like so much ballast, they’re being cast into choppy waters without benefit of health care, limited unemployment benefits, and little assistance to keep their homes. Indeed, many states are in the process of setting their lifeboats ablaze, cutting spending on social services as their revenues drop, precisely at the time when those services are most desperately needed.

The Titanic was in full compliance with British shipping regulations, though it could have carried more lifeboats. The White Star Line didn’t carry more lifeboats because they feared that the decks would be too cluttered with more boats, and the new and larger lifeboats were too expense. We’re similarly fearful of clutter and expense when we talk about improving our social safety net in the United States; but clutter and expense seem like minor inconveniences when the ship starts to sink.

Keep in radio contact

Another tragedy of the Titanic occurred in the radio operator’s room. Throughout the day of April 12, the Titanic’s wireless received numerous reports of heavy ice fields and large icebergs from other ships in the area. But the operators were too busy sending out vanity messages for the first-class passengers (radio from ships was a great novelty) to pass the warnings along. Indeed, when the last call about ice came in around 23:00, the Titanic’s operator snapped, “Shut up, shut up, I am busy” and took no more warnings.

When the tragedy occurred, and the Titanic began sending out its distress signals, the nearest ships were too far to respond. Some had even shut down their radios for the night. A massive failure of communication is at least in part to blame for the Titanic’s sinking.

The “Shut up, shut up, I am busy” response sounds a little like CNBC and the rest of the financial news industry in the years leading up to the financial meltdown. Though there were signs of trouble in the sub-prime and derivatives markets, and reasonable people were asking questions about unreasonable practices, exuberance was the tone of the day. The financial programs continued to send vanity messages from the first-class passengers long after the economy began to sink, drowning out the warnings and criticism that would have been very useful indeed to hear.

Water-tight compartments and firewalls go only so far

The Titanic was “unsinkable,” in large part because of its innovative design. It had sixteen “water-tight compartments” that could contain flooding to a section of the ship while protecting the rest of the ship, making it far more likely to survive without sinking. Unfortunately, the bulkheads proved not to be entirely water-tight, and five were breached by the collision and subsequent flooding; when the five compromised bulkheads filled with water, the Titanic snapped in half.

We’ve seen a similar failure in our economy, where financial institutions that should be protected from each other–mortgages, insurance, investment–have proved to be dangerously interwoven. AIG “insured” incredibly foolish investments in incredibly foolish mortgage instruments, compromising what we’ve always been taught to believe is a safe and boring part of the economy. And when enough of the bulkheads failed across the financial industry, the economy snapped in half, sinking industries in now way directly related to the ones that caused the crisis.

Truly “water tight” engineering would have been inconvenient on the Titanic, forcing people to go up and down between decks to travel from stem to stern. And regulatory firewalls between, say, insurance and speculation, would have been likewise inconvenient and put a brake on the “innovation” in the financial markets. Sometimes brakes are good to have.

The Greeks had a word for it …

And that word, of course, was “hubris.” If you really believe that you’re unsinkable, indestructible, you’ll be very unlikely to heed warnings and build contingency plans. Of course the Titanic didn’t need more than 20 lifeboats; of course we don’t need to weigh down our economy with the taxes necessary to build a social safety net; the ship will sail on, the economy will grow, and everything will always be good and getting better.

The opposite of hubris is humility. It’s a recognition that “The best laid schemes o’ mice an’ men gang aft agley” and that we can’t always predict the nature and the hour of their collapse. Contingency planning, frugality, and caution are useful tendencies to cultivate, but it’s too late to cultivate them after the disaster strikes. We can only hope that they’ll be written down and codified in preparation for the next disaster, so even if we can’t avoid the icebergs we can at least save all the passengers and crew.

Unemployment Diary: Leading from the Middle

Long ago, Baden-Powell suggested that, on a hike, the patrol leader should “lead” from the middle. Here he will be in contact with all his Scouts. Here he will know exactly what is going on ahead and in the rear. Here he can have the new Scout close to him, giving him a chance to know the boy, giving the new Scout a chance to know his patrol leader.

Boy Scouts of America, The Official Patrol Leader Handbook

March 16, 2009

The recent uproar over retention bonuses and executive compensation at AIG and other financial firms implicated in the economic catastrophe has given us an opportunity to talk about how people are paid for their work; if all we do is sharpen our pitchforks and light our torches while descending on the enclaves of power, though, we’ll have wasted this conversation. Though outrage is certainly cathartic, and justified, it’s not sufficient to make serious change.

We have in the United States the steepest slope in pay scales in the industrial world. The AFL-CIO has an interesting tool that lets you see the compensation of publicly-traded corporations’ CEOs in stark terms: we can see, for example, that AIG’s last president, Martin Sullivan, made about as much in 2008 as 8 Nobel laureates, 34 U.S. presidents, 472 average workers, or 1,024 minimum-wage workers. My former CEO certainly isn’t in the same stratospheric range as Mr. Sullivan was, but he does make enough to cover my former salary 31 times over.

There’s a similar pattern elsewhere in the developed countries, though there are often caps placed on executive pay. We have a sharply hierarchical distribution of wages, implying that the work of the person at the top is worth many times the work of the person at the bottom, and that the corporation depends on the CEO’s specialized talents for its survival. It’s an unexamined assumption that we would do well to consider.

Stever Robbins gives a succinct job description for the CEO position: the CEO sets strategy and vision, establishes the corporation’s culture, fosters teamwork, and sets priorities through fiscal allocation. These are obviously important jobs, but are they 472 (or 31 or 703) times more valuable than the work done by the people who implement the vision? Should the CEO really be the highest paid person in the corporation?

Recently, a few executives have opted for the “$1 a year” compensation package; I find this insulting. It’s an obvious stunt: the paycheck is a tiny part of the executive’s total compensation, and it’s unlikely that I’d bump into a $1/year CEO at Saver’s, or share coupon tips with him in the checkout lane at Rainbow. There’s far more public relations than true leadership in this sort of trick.

I’d like to see a CEO with real vision and leadership try something that my old Boy Scout Patrol Leader Handbook suggested: lead from the middle.

When I was a Boy Scout, I did my stint as a Patrol Leader. It was my job to set the strategy, culture, teamwork, and priorities of a group of four to ten Scouts, though our resources amounted to a few tents, an axe and saw, a box of cookware, and a cooler of food. A successful patrol leader doesn’t rush out ahead of the patrol and blaze new trails; he delegates that to the Scout with a knack for pathfinding. And he doesn’t set up a nice Springbar tent on top of a hill while the rest of the patrol struggles with moldy green canvas; he uses the same tent as the rest of the team, and if he’s smart he puts it right in the middle so he’s available to advise and lead whenever his input is required. In the middle, he knows what’s going on, and he can lead his patrol on a successful outing.

How interesting it would be to see a corporate leader model a Scout. Gone would be the corner office upstairs with a cherry desk suite; instead, the patrol leader CEO would have a cubicle (maybe with high walls, even a door) on the same floor as his employees. He could hear the buzz of the office, participate in the water cooler chatter, and know first hand if his vision is working instead of having the news filtered through his minions. He could set an example of teamwork by using the same spartan conference rooms as the regular workers when he needs to call a meeting; if he truly requires an updated conference table with leather chairs, then he can share the improved amenities with the accounting or web development team when they have their meetings. When he delegates work, he can actually see it done, and when employees have questions, they can ask him directly rather than through one of those seldom-monitored suggestion boxes.

And for pay, rather than making a mockery of the “common touch” on a dollar a year, he could accept compensation that’s the average wage of the team that he’s leading. By taking a salary somewhere between the lowliest help desk drone and the most esoteric of financial wizards, his fortunes would be truly tied to the corporation’s. If he wants a pay increase, or better benefits, then he would have to extend the same to everyone; and if he decides that pay and benefit cuts are the path to economic prosperity, then his own salary is trimmed in proportion to everyone else’s. A leader need not be a king.

Of course, CEOs are clever people–you don’t climb the slippery pole unless you’ve got no compunctions about stepping on some hands and heads and hearts to get to the top–so our current crop of corner office holders would find many ways to subvert this subversive idea. They could simply outsource all of the low wage workers, or create a special management corporation made up of just the top echelon of employees; they could opt for an office-less office, encourage everyone to telecommute, and work from their mansion or penthouse to avoid the hoi polloi; they could devise some alternative forms of compensation (there are so many ways to spell “bonus”) to keep themselves in the regal manner to which they’ve become accustomed. Leading from the middle would require a completely different kind of person–an actual leader, who recognizes that his skills in vision and team building don’t set him apart and above, but actually require him to be within and among–than what we install into power today.

Which is a shame, because leadership is what we’re lacking most, and most desperately need.

Unemployment Diary: I am Lazarus

I am Lazarus, come from the dead,
Come back to tell you all, I shall tell you all

The Love Song of J. Alfred Prufrock, T.S. Eliot

March 12, 2009

What the culture of looming layoffs does to those who lose their jobs is obvious enough: abrupt financial turmoil, devastating loss of self-esteem, the feeling of having been cast out of society for no good reason. But what about those who are left behind after the tide rushes out?

I’ve survived quite a few down-sizings, right-sizings, smart-sizings, and other such euphemistic rounds of firings. They’re almost always conducted with a good amount of secrecy and uncomfortable silence, though there are always enough hints that they’re coming: the all-company meeting called abruptly with no published agenda, the closed-door meetings among managers, the not-so-cryptic hints from the corner office of “a change in direction” or “these difficult economic times” that call for “new thinking” and “unprecedented actions.” There’s more than a whiff of theater to it all: despite what management may think, workers aren’t so easily fooled, and are quite good at reading the corporate tea leaves.

We respond to these uncomfortable lulls between bloodlettings in a variety of ways. When I was going through a major merger, where overlapping functions and departments were being evaluated for their efficacy in the “new enterprise,” I was subjected to far more meetings than anyone should have to attend. The purpose of these meetings, always called by people who were most concerned about their place in the organization, was never to move a project along or get a problem solved. These meetings, which always resulted in more meetings, with ever-growing lists of attendees until, like a collapsing star, they were subsumed into black holes by their own density, were all about demonstrating the moderator’s importance to the company. The worst offenders sounded like that old BASIC program “Eliza,” the virtual therapist: they would say, in response to a technical answer to the real problem at hand, “I hear you saying …”; they would insist on recapping the sense of the meeting in detail no old Quaker scribe ever dreamed of providing, in e-mails strategically copied to the most important managers (but always excluding anyone who could challenge the content); and they inevitably called for a series of follow-up sessions so the topic could be further regurgitated. The strategy was clearly to present a vision of busyness: someone with a full calendar is clearly someone who is important to the organization, and important people must be retained.

These days, though, that kind of strategy is no guarantee of a job. It still happens–there are always people who need to be certain you’ve heard their voice so you know they’ve contributed something, being sure to get their cards punched–but it hasn’t proved to be a successful methodology. Today, the axe falls on the dead limb as swiftly as on the green, following its own inexorable logic of cost and benefit. It’s a more random universe than we’ve seen in a long time, and our cleverest magical thinking is no defense.

Before the axe landed on me, I saw a lot of gallows humor as the main coping mechanism. It was clear that cuts were coming–there had been cuts before, and all the right kinds of noises were flowing from the corner offices to expect more–and, what’s more, it wasn’t hard to predict when they would come. A glance at the fiscal calendar was a better predictor than all the cat entrails you could burn. The only thing that we couldn’t predict was who would feel the bit, or how many; we hoped our office would be spared, but knew that it wouldn’t. So we traded comments on the most unfortunate bits of news that Digg and del.icio.us could turn up, railed against the stupidity of the Wall Street wizards who got us in these straits, and joked about the growth opportunities in part-time service-sector jobs.

Under the joking, though, is an existential anxiety. We hope that we won’t be the one to go, but (at least in a functional work environment) we hope our co-workers will dodge the axe as well. We’d like to think we’d step up to the chopping block with aplomb, but hope that our sang froid won’t be tested. Every afternoon came with a certain relief, but with a knot at the pit of the stomach.

One of my former co-workers came by this afternoon to deliver the Girl Scout cookies I ordered back in Janunary; she had bought a Cub Scout wreath from me, so I had to take the Do-Si-Dos and Tagalongs. She told me that the morning after the cuts, in the all-company meeting I didn’t attend, they had been warned that more cuts were likely in the next quarter unless the economy changes significantly. Given the way we’ve chosen to respond to the recession, it’s doubtful that it will, at least for the better. And what does that do for morale and productivity in the office?

Obviously, it’s devastating. The certainty of cuts against the uncertainty of one’s own future is an impossible situation; the ambitious will spend their spare time checking Monster.com, and the fearful will spend their energies on occult prognostication. Excess energies will hardly go toward advancing the work that one should be doing. No better method of quashing productivity could possibly be devised.

Is there a way out of this conumdrum? Perhaps.

First, as one who speaks from the other side of the veil, I’d admonish not courage, but rather a cheerful resignation. Just as we cannot know the hour of our death, we can’t know the hour of our unemployment. And much like death, but really so much less traumatically, it’s the initial blow that hurts the most; once you’ve crossed over into the light, it isn’t so bad. A little dull, occasionally scary, but not so bad.

But most importantly, and seriously, I’d implore our corporate leaders to think seriously about how they handle these situations. The way they handle things now has all the earmarks of an untalented high school jazz band trying to improvise: they hesitate, fearful of making a misstep or showing their hand, then rush headlong into a wild flurry of notes before stopping short, absolutely clueless as to how to proceed. Perhaps there’s more method than madness in how layoffs are done, but from down here it isn’t clear.

If layoffs are absolutely necessary–if you really can’t see beyond short-sighted, penny-wise-but-pound-foolish tactics–then you at least owe it to your employees to treat them like adults. We know that layoffs are coming, and that these things require a certain amount of planning to pull off. Let us in on the plans, and on the outcome; rather than dropping the guillotine in the afternoon and expecting the beheaded to pack themselves out in half an hour, give them the same two-weeks notice they’d give you if they were switching jobs. Respect them enough not to scribble graffiti on the white board or infect the network with exotic worms; if they’re rational creatures (which they must be or you wouldn’t have hired them in the first place), they won’t be in a rush to burn bridges that might carry them over this gaping gorge.

Secrecy breeds fear and dissension; abrupt firings encourage fear and disrupt real work. We won’t soon dig ourselves out of this hole if we don’t treat each other with the decency we all deserve.

Blog Widget by LinkWithin