Business and Politics: Avoiding Your Organization's Fiscal Cliffs

One of my areas of expertise is tracking how business and politics intersect in the ways they operate - and, most importantly, what we can learn from both. Over the years, I've written strategy papers on the subject as well as having advised senior members of United Kingdom political parties on how business strategy can be applied to create political party success.

With all that's been going on in US politics recently, I've decided to begin posting on the subject - only in this case, focusing on what business can learn from how politics operates, at its best and at its worst.

There are important strategic, operational and profit-related lessons to be learned and applied to your business, so, no matter where you live or what your political affiliation might be, put it aside and just look at the process.

I'll look forward to your thoughts and comments.
On January 1st, 2013, a few minutes after 11 pm, the United States House of Representatives voted to accept the Senate's bill (approved some 21 hours earlier) averting the so-called "Fiscal Cliff."

As markets around the world opened for their first trading day of the new year, they upheld the conventional wisdom that a global economic catastrophe was averted. Markets and futures were immediately up and could well stay that way. At least until the already known next 'cliff' occurs in two to three months.

So, good for Congress. They did their job. They saved the world. For the moment.

They should also be ashamed of themselves.

The reason why they deserve real scorn is because it was this exact same Congress that agreed to the "cliff" in the first place. That was in December, 2010.

Twenty-five months ago.

Why did they create the cliff? The logic was that it would motivate the elected officials to work together to solve the debt and deficit problems the US is facing.

From then until now - while those twenty-five months passed with the cliff always looming - they weren't willing to do what needed to be done for their own country as well as those world markets and economies. Right up until the last minute - and only then because it was the last minute.

Okay, so that's the politics of it. What does this have to do with you?

Like it or not...admit it or not...but you have your version of a cliff playing out in your organization on a regular basis.

It's those things that you and your employees at every level see and know and recognize out on the horizon that you'll take care of later. Some day. Soon. You're sure of it.

Only those 'things' - both little and big - grow to outrageous proportions the closer they get to whatever time limit within which you're working.

Maybe it's when your customer needs an order filled. Or you've got a new product or service launch that needs that one more thing to make sure everything goes smoothly. Or there's an expert you know you're going to need to hire to make sure that the strategy you're currently working has a chance in hell of actually succeeding.

It's anything that escalates from knowledge to emergency - simply because you or someone in your organization let it get that far.

And it gets worse.

You may well have someone you trust who has made a success of their career swooping in at the last moment to save the day.

That's all well and good when the emergency is a true emergency - not a manufactured one. If it's the latter, then whoever is playing 'hero' is anything but. In fact that person - man or woman - is the equivalent of an organizational sociopath...allowing that particular cliff to loom and get ever closer for their own purposes, frankly, not caring how it might impact others.

Including you and your business.

Because if the 'thing' escalates far enough for long enough - at least to suit your local sociopath - even with a save, you'll lose your reputation as a trusted provider. There go the orders, customers and jobs. And there goes your business.

So, as this year begins, spend some time on your own and with your leadership team to:
  1. Take a look back over the past six to eighteen months
  2. Identify those situations that escalated into crises
  3. Determine how those crises occurred (real or manufactured)
  4. Define how long in advance the problems were known
  5. Determine in each case how long it took to get from knowledge to action
  6. Specify the outcomes in each case - including but not limited to impact on operating costs, revenues, profits, customer relations, market share, reputation, etc.
  7. Identify the specific functional areas and their respective managers/team members involved in each crisis
  8. Determine whether there is a trend of occurrences by any of the people or functions involved.
As well, if you have a Lean initiative going, take the time to review the teams' measures to identify any trends from the data that show highly risky levels of variation in your processes.

Once you have the information in hand - as uncomfortable as it might be - you'll know what to do. Do it. While you still have the time.

Because the biggest difference between business and politics is that the politicians who took the US to the edge of the fiscal cliff have at least two years before there is a remote possibility of being held responsible and accountable.

For business...for your business...you don't have that luxury. 

Figure out your cliffs now - and then manage your organization so that you're designed never to get close to them again.

Innovation and Productivity: How's Your Infrastructure?

When you think about infrastructure, you tend to think roads and bridges. That's because the talking heads who talk politics always put infrastructure in that context.

As far as that goes, it's correct.

But, if you look at all the components of infrastructure - and then apply them to your organization - what you quickly see is that those "roads and bridges" are representative of how you and your organization are getting where you're trying to go.

What are you building? And how?

What are your policies and procedures? Are you consistently looking for opportunities to become more effective and efficient? Measurably?

Do you listen to your employees? Do you give them a chance to contribute and feedback information about the obstacles they face...without you becoming defensive?

How well trained are your employees? By whom? Are you ensuring your employees have all the knowledge and skill they need to demonstrate the ability you're looking for from them?

Do you have systems for innovation and expanded participation? Do you regularly work to collect new ideas from your employees, customers and suppliers that lead to new products, services and ways of doing business?

What you'll find is that the less you pay attention to those questions, the more organizational traffic jams you create and the slower your organization is able to perform and deliver. (Think the LA Freeway system in the heart of rush hour and you'll get my drift.)

Take some time to observe the infrastructure you've got. Then build the roads and bridges you need in your organizational infrastructure to create the success you always envisioned.

You'll definitely get where you want to go...because you'll have built what it takes to get there.

You Didn't Build That...Or Did You?

Just so you know, it's a trick question.

That's because the answer always is: Yes. You did.

How do I know? That's an easy one to answer: If it's yours - from start-up to SMB to multi-national - if you're at its head at this moment...whether first line supervisor or CEO...you built it.

Did you do it alone? No. Could you have? No. Will anyone ever build anything in business alone? No.

Because it doesn't work that way. Excuse the Kumbayah vernacular, but it really does take a village - no matter what kind of enterprise you've built or are trying to build.

The question, therefore, isn't about whether or not you built it. The questions you should be asking are:
  • Is it what I want?
  • How did it get this way?
  • How much history is driving our present?
  • How much is that helping or hurting us?
  • What do we need to change?
  • How've we been doing in making those changes?
  • What do we need to do differently in successfully executing the changes we need?
  • What kind of data do we have to tell us that any of the answers to the questions we just went through are actually true?
  • What kind of measures do we need to ensure we know what we're talking about now and for our future?
And those questions are just the beginning. 

Take it as said: You built it. What you want to know - and act upon - is: What do I want to do with it?

That's when you'll create the success you seek.

(If you thought I was going to go play with the politicians on this one - not this time. Frankly, when it comes to this, they don't know what they're talking about anyway.)

Corporate Etiquette and Public Maulings, Part Two

A number of months ago, I wrote a piece describing how one of my clients, the most senior executive in a family owned firm, decimated his son publicly for his “bad” ideas.  At that time, I promised a Part Two.

The problem was, I needed some things to happen in the organization about which I was writing to happen first.  They have and now - while the organization will remain anonymous - the story gets to be told.
It’s about me and their CEO and how we both got publicly mauled - at different times and for different reasons - and how that systemically happens, is (hopefully unknowingly) supported, and what the consequences and losses are.

Then, it’s about you, your organization and the culture you may be unknowingly and inadvertently supporting.
A bit of background
I was a volunteer in a charitable organization.  I had been asked to sit on a senior level committee to look at both internal and global issues for how the organization operates.  The committee was made up of volunteers from around the world - but with a definite bias toward the home country.  My input was on the global side.
A meeting was scheduled to get the committee members together in the same room with senior staff.  It was supposed to be an opportunity to get quick updates on the work previously done, discuss next steps - including expansion building on those activities - and, most importantly, to do some visioning-to-execution work as we looked at the future of the organization and its services to the global society.
Sounds good, doesn’t it?  Unfortunately, somewhere along the line, the staff lost the plot.
From disconnects to downfall
The meeting did not go well - neither from my perspective nor from that of the local volunteer participants.  The problem was that the staff had a wholly different agenda than that of the people who were there to provide input.
The agenda they built - knowingly or not - was not designed to get our guidance and further commitment.  Whatever they thought (or said) they were doing, what they actually did was to justify themselves and their actions since the last meeting.
Evidently they thought that was necessary.  (It wasn’t.)
As a result, however, we were treated to one of the most intense dog-and-pony shows I’ve ever experienced (four hours!) and were as good as kept from providing any information or thoughts - let alone recommendations.  And when, finally, we were given a topic to discuss, the time was cut, the topic was too large and the information provided was clearly not of any great interest to the staff members anyway.
It gets worse
Then the CEO arrived.  This was for a special session to do with a governance issue which had arisen and a mistake he had made in handling it which needed correction.  Only some of us were allowed to stay.
Of note was that we all knew the issue and the mistake.  Frankly, I didn’t consider either of particularly great importance and, what’s more, because it was being dealt with proactively, it wouldn’t have any negative impact on the organization anyway.
It was, ultimately, just something to be addressed.  Nothing more.
Unfortunately, because of the sense of disempowerment and disengagement that had been previously created, what happened next was predictable - but horrible.
The CEO began this portion of the meeting by apologizing for the mistake he had made.  He went on to explain what his thinking had been and how, as a result, his mistake occurred.
He then told us about the emails, letters and phone calls he had been receiving since the mistaken decision was made that questioned (and attacked) everything from his capabilities to lead the organization to his sexual preferences.  The attacks had been bitter and ongoing.
He ended by apologizing again and assuring us that what he had learned about the process and the organization would ensure that he would not make that mistake again.
The meeting then opened up for discussion.
It was a bloodbath.  I’ve never seen anything like it - nor do I ever want to again.
The vast majority of these very smart, talented, capable and accomplished people sitting in that room turned on the CEO with a level of vitriol I would never have imagined.  And, while they didn’t attack his sexual preferences, I expect that they reiterated everything else that had been previously presented to him.
Those of us who were looking for rational discussion couldn’t get a word in so we stopped trying early on.  As for the rest, eventually they wound down and an acceptable solution was agreed.  Not everyone was happy, but at least the most vocal advocates on both sides of the argument were appeased.
As for me, I couldn’t wait to get out of the room. 
No good deed goes unpunished
Fast forward a couple of weeks and now it’s me on the phone with one of the senior staff members.  Also on the phone was one of the employees in her department.
The agenda of the call was, in part about that meeting and, in part about other issues which I wanted to bring to her attention.  In both cases, the purpose of the call was to give her information to assist her part of the charity in better serving its constituencies.
This time I was the one mauled.  In the presence of her subordinate.
To her way of thinking, the fact that I would take issue with anything that they did - anything at all - was not only unacceptable, it was a mark of a clear lack of intellect.  She was demeaning, belittling, patronizing and condescending.  She was rude and not only her comments but her language were uncalled for.
Two weeks later, I quit the committee.  I could, you see, because I was a volunteer.  They were the losers in the deal - most particularly because of my prior commitment to this organization’s good works and all of my outreach activities on their behalf.  They’ve lost that now.
The CEO is still there and, I hope, not experiencing anything like the kind of treatment he experienced before.  If he is, my recommendation is to find another job.  Unless he’s the one who created that culture.
Which gets us to you.
A culture of maulings
What kind of culture do you have - and promote - within your enterprise?
There’s a lot of talk about creating a culture of competition - where employees are actively working to do more and better than their colleagues.  Most particularly, employees are pitted against each other - rather than against the external competition.
Or, if you follow the GE way, each year those employees who rate lowest in their annual performance appraisals become part of the 5-10% employee churn rate.  After all, why would we want to keep our ‘worst’ performers?
Or, more deeply embedded, do you have managers or executives who are consistently disrespectful of their employees?  Who malign and abuse them verbally - whether through direct confrontation or the always popular inappropriate use of humor?  (The latter comes with the always famous, “Can’t they take a joke?  I was only kidding!”)
Respect invariably rates either one or two in employee surveys when they’re asked what’s most important to them in their jobs.  It’s not money.  It’s how they’re treated.
That’s on you - because what you allow, you tacitly support - even if it’s something you would never actually want.
Maulings - whether public or private - are a corporate culture issue.  That makes them a behavioral issue.  And that makes them part of the training and reward systems of your organization.
Now for the good news
The good news is, the behaviors not only makes the issue manageable, but it’s easy to identify and address.  Here’s the three step process:
  1. Take a step back and think about what you see and hear in meetings.  Is it collegial?  Positive?  Participatory?  Do people give their opinions - openly and honestly?  If there is “cut and thrust” is it personal or toward a greater good?  This is a good indication of what it looks, sounds and feels like in each executive’s and manager’s individual areas.
  2. Next, have a discussion with your HR Director to find out what the trends are in employee complaints, sick days and stress leaves.  You’ll very likely find a direct correlation between those managers who are treating their people with the value they deserve and those who are not.  And, if yours is a volunteer-based organization, look at the dropout rate.  As you saw from my example, this is how those losses occur.
  3. And, finally, be very, very clear about what you want and what you will accept.  For those managers and executives whose behavior is undermining employee participation and positive performance, stop rewarding them.  Ensure that they know - and are trained, if necessary - the behaviors that are accepted and acceptable in your organization.
Most important, always remember that your organization is a direct reflection of you.  Whatever your subordinates believe is okay with you is what they will do.  The moment they know that that behavior doesn’t have your support, they’ll change - or they’ll find an organization that does support those behaviors in which they can remain comfortable.
In either case, the win is all on your side.  Yours and your organization.  In profits, innovation, global opportunities and realized potential.
And, if you need any further motivation just think to yourself:  How would I feel if the one being mauled was me?

Corporate Politics - In the End, They Really Don't Work

It's been a big time for politics lately - on all sides of the world.

We've had the US midterms, of course, but don't forget about Brazil's elections, the UK Spending Review, the call by Germany for changes to the EU's treaties and, throughout, the G20 is dealing with the so-called currency wars.

We can safely say that, politically, it's not boring.

I have a love/hate relationship with politics - electoral or corporate.  They exist - and because of that they fascinate me and make up a lot of what I have to look at when working with organizations and executives.  That's because in the form in which they exist, they do damage - which ends up wasting incredible amounts of time, money and morale.  Societally and organizationally.

But, as everyone seems to accept (except me, I think), they're just a part of life.  You can't do anything about them.

What led me to write this, though, was a commentary by Christopher Hayes, the Washington Editor of The Nation magazine.  The interview took place on the Rachel Maddow Show - so if any of you are wondering, yes, this was a look at the liberal perspective of what the functional results of the US midterms will be.

The comments that Mr. Hayes made that so caught my attention were at the end of that interview.  He was talking about the diminished number of "Blue Dog" (i.e, conservative) Democrats who were left in the House of Representatives and the lack of power that they will wield now that they are in the minority.

There were two particular items of interest - both of which apply to managers, executives and the decision to play politics.  Because, ultimately, it was all about what you have to lose when you play politics to the exclusion of the larger agenda.

The first was when he was describing the misconception that the Blue Dogs had that their parsing of the issues and their issue-specific voting record was going to play well with the electorate.  As he noted, voters don't sweat those kinds of details.  They group people based on their overarching understanding of with whom they are affiliated (in this case the Democratic Party) and not based on this vote or that.

His most telling comment, however, was:

"In the majority you can be a swing vote....In the minority, no one cares.  I mean, the Republicans don't need Blue Dog votes.  No one needs Blue Dog votes.  And it's truly delusional if the Blue Dogs think that John Boehher (R-Ohio, presumptive Speaker of the House) is going to be knocking down their door for anything.  He does not care.  They are dead to him."

As a result, if the Blue Dogs who are left think that they're going to get anything from the Republicans, they're simply wrong.

And that takes us back to organizational politics and the waste involved in playing games.

There is an agenda for the organization.  It's explicit in the organization's strategy.  The execution of that strategy is the demonstration - by all - that they are in alignment with that agenda.  They may disagree - which is healthy - but they are not going to go against that agenda (and the most senior executive or corporate heads who set it) simply for their own purposes.

You have to fight your corner.  It's your job to do so.  You have to bring the best of what you have to offer in all the arguments you can present so that those with whom you work have the benefit of your knowledge, experience and perspective.

You know things that they need to know so that you can all create success.

But, once the decision is made and a direction is taken, there's no more time for politics or game playing. Because whatever time you're spending on that is being spent - exponentially - by your people who, correctly, reflect what they believe to be your management agenda.

And in the end?  When things change - which they will, because they always do - if you're seen not to be a "team player," just like those Blue Dogs, you, too, are dead.

The cost is far too high - to you, your people, your organization and its stakeholders - to take that risk and waste that time.  Because, just like the Republicans have won the House of Representatives, made great gains in the Senate and are positioning themselves for a White House win in 2012, whatever entity constitutes your organization's primary competition will have that same opportunity.

And then you - and everyone else - will have to worry about being out of a job.

It's not worth it.  Not for a moment of self-perceived gain.  Because the thing that corporate politicians forget is that when they shine, others - in their organization and out - see their accomplishments very clearly.  And that's what they're looking for.  Exactly what you have to offer.

No politics or games required.