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A Song For Me at 23

If I could tell my younger self what matters in professional life…I would tell him this.

I walked out of college a free man, but I didn’t know it.  I may have been a free man with a limp and a headache thanks to a few too many days on the football field, but I was free.

I had no money to speak of and drove my girlfriend’s car. Luckily, I now know, I also had no debt. Along with that, I think I had a healthy appreciation for hard work.

Still there are a lot of things I wish I had known at that age as they relate to business and executive life.  There are things you just don’t learn in school, and many of them relate to interpersonal or even personality-based observations. That’s why I’m writing this. I figured that I can put out a few points that I wish I had known at 23, and I figure they might help someone else along the way.

One thing is for sure, they will help you understand my professional worldview.  If you read this blog, you know that it’s about worldview, and these points represent scar tissue; none of them has been fatal (totally), and some of them represent processes that have made me the professional I am.  Read them, and then tell me where I’m wrong (or right).

____________________________

 

Dear 23-year-old self:

You are about to embark on a career.  It’s going to be fun, frustrating, and probably not as fast-moving as you would like, so I’m going to list a few suggestions here that will give you a leg up in your career, and perhaps in your life.  Many of them you won’t be able to understand until you’ve experienced the situations themselves, and that’s just life, but some of them might help you be better prepared for the situation.

  1. Invest the time on your own or in a class to learn principles of accounting and finance cold.  I know it’s an odd “reflection” to start with on a list like this one, but it’s true. Sure, your liberal arts education is valuable because it helps you to think…Sure, whatever.  But what’s really valuable is knowing how to assess organizations’ financial health, understand the time value of money, and peer into how decisions are made vs. how they should be made based on the numbers. No matter where you sit, knowing the numbers gives you a leg up, so you need the tools to learn how to know the numbers.  If you don’t know what a T-account is or can’t explain why a company would invest in a project that will lose money for five years, you need to go back to school.
  2. Acquire a healthy skepticism for title and wealth. These are not always an indication of the quality of person you are dealing with.  Like British accents, titles and wealth can lead you to a false sense of security that the person you’re working with is smart and accomplished, and that is in fact often the case, but not always, and the same goes for degrees and credentials–the guy with the engineering degree from State can often run circles around the Harvard MBA.
  3. Beware anyone who thinks work hours are defined by the calendar.  “My” holidays and “my” vacation are signs of a paycheck player.  If you’re on a professional track, opportunity comes at all times in all shapes.  That guy who calls you at 9 pm on a Friday?  He probably has something important to say.  I once had a manager answer the phone in Europe at 2 am local time when I called from the U.S.  I had no idea where he was, and he made no protest during the call.  I didn’t find out until later that week, after he had returned to the U.S., that he had even been in Europe when I called. I asked him why he answered, and you know his response?  “Might have been important.”  I love that guy.
  4. Working harder than other people does not guarantee you success or wealth.  It might provide you with some dignity, however.  Remember Boxer from Animal Farm?  He was the noble horse who always worked hard for the cause, no matter the direction.  The work didn’t take away from his nobility, but it did kill him–he literally worked himself to death.
  5. Learn and understand the snowdrift problem in game theory.  This one is kind of nerdy, but it’s real everywhere. There will always be people whose first move in a tough situation will be to wait for somebody else to do the hard work.  Be sure that you think about accountability carefully, and if you’re always the one shoveling snow, be bold enough to get out.
  6. Recognize that there are people without consciences, and they are probably better at the political game than you.  I once observed an executive execute the most deceptive game of bait and switch I’ve ever seen, and shortly after that, he offered advice and support to the person who had been baited.  The kicker?  The executive knew he was being deceptive–he offered his advice with the phrase “I don’t know why you would trust us, but here’s the advice.”  The nerve.
  7. Find a way to serve.
  8. Learn to manage for the short term, but get out of any situation that manages to only be short term, because your life will (hopefully) be long. It’s important to learn how to manage for the short term–to cut costs and rein in spending or maybe seek additional sales to cover a shortfall elsewhere. And it’s okay to manage to the short term–that’s where we all eat.  But it’s also important to realize that just as alcoholism is the diseased extreme of enjoying a good drink, short-termism is both a disease and a kind of addiction: The more you do it, the more it becomes insidious.
  9. Hotheads aren’t always bad.  I had a boss early in my career who was the greatest guy to ever throw his keyboard across a room; he was a tantrum machine, but he was also a guy who genuinely cared.  Know the difference between a grade-A jerk or asshole and a good person with a strong sense of duty but also a temper.  There is a difference.
  10. Where there’s no contract, there’s no contract.  Here’s a piece of advice that’s going to sound more cynical than it is.  No, I’m not saying “always have a contract”; I’ve negotiated multi-million dollar consulting engagements that were founded on the client’s trust and the consultant’s commitment to excellence, and I believe in the power of a person’s word and handshake. But, and this is an important but, many people like to use the ambiguity of no contract to gain advantage.  So my advice to you is to always know when there is no contract–know your counterparty/client/customer, and your boss (see what I did with that last one?), as well as you know yourself.  Don’t rely on contracts, but know when you don’t have one; no amount of flattery and gushy feelings at the start of a relationship will overcome the poor values of a counterparty who won’t define or fulfill commitments.
  11. Beware anyone who goes out of their way to say they are giving you friendly advice.  They probably are neither giving you advice nor being your friend.  True friends don’t have to reiterate the point; you know them by their deeds.
  12. Liquid net worth provides flexibility. Whether you’re a shop floor worker or a CEO, money is important, but it’s really liquid net worth that matters; I know plenty of senior executives who are miserable but completely locked down to a bad team, bad company, or bad leader due to their own financial choices.  Always keep enough liquidity on hand to be able to walk away without regret; that means you should accumulate a few thousand bucks when you’re just out of college, and it might mean hundreds of thousands of dollars once you’ve “made it.”  Financial handcuffs are tough, which brings me to my next point…
  13. People make really bad decisions when they’re under financial stress.  This can include executives cooking the books (or even “just” shading them surreptitiously) to make their bonuses, but it can also include things as innocuous as salespeople treating customers poorly or manufacturing workers doing their jobs poorly.  You really don’t want to have a workforce that’s worried about whether they can make their next grocery bill, and more than that, you don’t want a CFO who will make rotten financial and personnel decisions just to make a bonus.  The love of money is the root of all sorts of bad things–I read that somewhere.
  14. Care.  Yes, I mean that: Care.  You will be tempted (in fact, encouraged in some environments) to acquire social and emotional distance from the people some think you will have to hurt to be successful; it will come with the challenge to “do what it takes” to keep your job.  But don’t be fooled–care.  I was once offered a role that implicitly came with the need to fire a couple of people I had coached and mentored and whose capabilities were strong. It wasn’t the right thing to do, so I didn’t; I chose to leave.  On the way out, I was goosed with a comment and critique about not doing what it takes, but that’s just a consequence of caring.  You know what else is a consequence of caring?  Loyalty, love, the ability to sleep well at night.  In short, your life will be better because you took the time to care.
  15. Trust is cumulative…in both directions.  You will live life with a sense of trust in people you know you can rely on, but you have to learn to know when you have enough evidence to know you can trust someone, and also to know when you can’t. 
  16. Respect the dignity of other people.  There are a lot of instances in life when it’s easier to double cross, lie, shade the truth, and walk away–resist that temptation. Stripped bare, we all rely on others. So respect that, and you’ll go a long way.
  17. Life and business are not zero-sum games. You’ve made it through college, and maybe played some sports.  If so, you’ve gotten used to winners and losers, but life isn’t like that.  In life, there are winners of all sorts and losers of all sorts, and sometimes there are situations when everyone is a winner (or at least not losers).  Really effective executives I know think about when they are playing a zero-sum game and when they have the opportunity to grow the pie, so learn to realize the beauty of growing the pie.   Zero-sum games are in actuality very rare–we only make them common. On a related note,
  18. A spreadsheet can’t show you how to grow the pie.  Unfortunately, math without vision only leads to reductive incrementalism.  Very, very few spreadsheets would have predicted the rise of Standard Oil, the emergence of digital music, or the turnaround of Apple Computer. Numbers don’t lie, but they don’t think either. Vision has to be injected into that spreadsheet; don’t mistake tools and math for strategic vision.
  19. When it comes to people, where they (and you) stand depends on where they sit.  Upton Sinclair famously noted that it is difficult to get a man to understand something when his livelihood depends on his not understanding it. Perspective matters, and if you get good at taking different perspectives, you’ll start to understand how other people think, although it does take time and practice.  By altering where you sit and then thinking about where you stand, you start to think interesting thoughts when it comes to business strategy.  Funny thing is, you also start to think differently about the world.  Perhaps John D. Rockefeller (of Standard Oil) really did save the whales; perhaps Steve Jobs is actually the cause of a generation of hearing loss and an epidemic of traffic fatalities; and perhaps, just perhaps, what you’re being paid to do isn’t good for the organization or the world.  Get beyond your salary when it comes to what right and wrong look like. Stretch your thinking, and be bigger than your smallness.
  20. No matter how much garbage they eat, seagulls are not really good creatures to have around. Seagulls fly in, beg for food, take a dump, and then cackle a lot; some people are enamored with them, but in reality, they’re just rats with wings (as we used to say back home on the Gulf Coast).  Seagulls live at the beach and the dump, and in human form, they often live in corporate environments.  My advice for you is to learn to be a problem solver, not a problem finder; cultivate a constructive approach to life, not just an observational one. Justify your existence, and don’t be a seagull.
  21. Know how to incrementally assess situations.  The incidence of “good from far, but far from good” in people and companies is increasing because the channels of communication are increasing; it’s far easier for companies to cultivate high-profile brands that cover up lowlife cultures.  On the flip side, it’s far easier for motivated individuals to learn a lot about any situation in a short time frame. Learn to assess situations at first glance, after a few minutes, after a few days, and after months.  Learn to take the time to sleep on decisions, and do your due diligence, but also trust your gut.  This is especially true about people: If people look and smell unethical even though they’re wearing ethics as a badge, disregard the badge and go with look and feel.
  22. Don’t be a “yes” man, but realize that being a “no” man is just as bad.  Yes men are common in any culture; they go along to get along.  It’s a fact of life, but not a very edifying existence, so find a way to have your own point of view or else you’ll be redundant.  But the opposite position is equally bad; the “no” man rarely encourages growth or expansion.  Try to think about growth as coming from a combination of yesses and nos, and live in the mess between the absolutes.
  23. Be exceptionally careful about “following orders.”  Just following orders can give you a mental freedom that allows you to ignore basic ethical principles, and ultimately it can corrupt your values.  Have the self-respect to reflect on orders, and recognize that they shouldn’t supersede your humanity.
  24. Your network is everything, but you have to know what a network is.  A real network is not the number of people you’re connected to–it’s the number of people who will do something for you if you’re in need, and there is a huge difference between the two. In my early days, people thought networking was collecting business cards; nowadays it’s probably LinkedIn connections–but both are wrong. Networking is finding reciprocal relationships that help you by your helping others.
  25. If you’ve made it this far, you probably already know this, but reading is a highly underrated skill.  I’d argue it’s second only to listening.
  26. Finally, and perhaps as a wrapper…Preserve your self-respect.  There will be plenty of times in your career when you’ll be faced with choices that can erode your self-respect; sometimes it’s just as simple as taking a call in the middle of a family event, and sometimes it’s worse. You’ll find months of your career that are bad for your health–it is going to happen. But even if one day you find that you have to make a choice you know is wrong but you have to do it to preserve a broader agenda or position, just be sure you know the stakes.

I’m sure you’re off to a fantastic career.  Enjoy it, and maybe one of these points will save you from a scar or two.

Sincerely,

Your much older self

The New England Patriots and Uncanny Perfection

As the New England Patriots may be showing, the best evidence of a poseur, cheat, or a fraud is uncanny perfection.

This article is about how outlying behavior without explanation demands scrutiny. Perfection, or near perfection (especially if neatly calculated) is so uncommon as to be an indication of ill-dealing.

The NFL’s New England Patriots are only a prop. This applies to all of us.

Watch out for it.

Logical links to prior thoughts on this topic

Last year, I wrote on the use of Bayes’ Rule to uncover when enough evidence was enough to make a decision.

Link: When Enough is Enough

The thesis in that one was that one powerful indicator of deviant behavior or a long history of slight deviances were equally enough evidence to underpin a decision to promote, accelerate, or move on.

Last week, I wrote on the interesting (to me) ethical questions raised around the New England Patriot’s winning big while allegedly cheating in the AFC Championship game.

Link: Deflated Footballs and Minor Ethical Lapses

Many, many people claimed, and still claim, that the alleged cheating didn’t matter because it didn’t affect the outcome of the game.

My point was that process matters.

Nothing new there.

Now, there’s a fascinating bit of information on the New England Patriots that has come out that brings another ethical insight to light that combines these two theses.

Today, I get this link in my inbox. It’s an article picked up by Slate.com and written by a sports handicapper named Warren Sharp.

The link is to an analysis of team fumble rates in the NFL under different conditions. In a nutshell, it says that the New England Patriots have an uncanny and longstanding ability to avoid dropping the football. Here’s the operative quote:

Based on the assumption that fumbles per play follow a normal distribution, you’d expect to see, according to random fluctuation, the [fumble rate] results that the Patriots have gotten over this [2010 – 2014] period, once in 16,233.77 instances.

To quote Lloyd Christmas’ question: “So, you’re telling me there’s a chance?”

Yes, but a shockingly remote one.

The bigger chance is that the Patriots are different from other teams. They have figured out a competitive advantage. Conjoin that with the newest revelation of potential cheating by deflating balls, and a clear history of cheating in the franchise in the past, and?

The most likely explanation is that they have been cheating for years, acquiring a competitive advantage that is as immense as it is unlikely.

This isn’t about a single game whose outcome didn’t matter…But rather about longstanding, likely ill-gotten gains.

Sound familiar? Enough is enough.

Because it’s a global audience…a digression for the un-versed…

For those who aren’t versed in the cheating accusations against the Patriots, let me give the one sentence explanation:

The Patriot’s alleged use of deflated footballs would enable better grip by those players who handle the football, resulting in better control–especially in wet or slippery conditions–when throwing, catching, or running with the football and therefore a lower probability of drops, fumbles, and subsequently turnovers.

For those who don’t know, an American Football team’s turnover margin (that is the net number of times the ball is relinquished to or recovered from opponents through error) in a given game is an extremely powerful indicator of win likelihood. An advantage in grip on the ball is therefore significant.

The shocking, interesting, and applicable analysis

Mr. Sharp, in the midst of multiple cuts at the data, compiled this view of the NFL offenses’ fumble rates per play from scrimmage. I’m reproducing it here for commentary. The analysis is fully Mr. Warren Sharp’s.

Fumbles are the small circles, fumble rates (per play) are the orange boxes. New England is on the far right. Two things you notice immediately:

First, that New England (the far right side team) has a fumble per play rate that is in the stratosphere. They have a fumble every 187 plays. That’s truly exceptional (as the chart shows).

Second, as the article outlines, is that the next three best teams–the ones who even approach being outliers–are dome teams.

Not only is New England great at protecting the football, but they also do it better than teams with structural advantages that New England doesn’t have.

All of this is over a very long period of time (5 years) so “noise” should be shaken out of the analysis to a large degree.

Impressive? Yes. Fraudulent? Probably.

What the message is…

Such an analysis has real world applicability beyond the game of American Football. And, I’ll tell you why: If I told you that a team was so good at a key aspect of the game over the long run so as to be a near statistical impossibility, and then told you they had possibly been caught cheating in a way that would directly affect that aspect, what would be your conclusion?

The Patriots’ out-performance on fumbles is striking. Especially when you consider the conditions they often play under (in New England and outdoors). It’s akin to a company in a mature, commodity industry constantly and significantly outperforming companies in high value added, high growth industries. It can happen easily over the short term, and could possibly happen over the long term if the company were doing truly special things within the rules; but it deserves some scrutiny.

Statistical, financial, job performance, or any other kind of perfection should raise your fraud antenna in the first place. Combine it with observation of ethical “grayness” and you’d better watch out.

The message is that practical perfection should be applauded, but also scrutinized. The more perfect your investments, subordinates, or superiors are, the more you ought to ask the penetrating questions on why. The moment you observe lying, cheating, stealing, or (note this) aggressive isolation of people who decide to ask questions; you should be careful.

That isolation point is an important one: Remember when Jeff Skilling at Enron called an investment analyst an “asshole” on an investor conference call? The analyst only asked a practical question: Why couldn’t Enron produce a balance sheet?

Here’s a link to that episode.

It’s a fascinating moment in the unmasking of a fraud.

Interesting isn’t it?

This is especially important if you are the senior executive or board member who is benefitting from current ethical grayness.

Earnings look too perfect? Ask the question.

Reports on operations or people or sales too rosy? Ask the question.

I can assure you that Robert Kraft, owner of the New England Patriots, now wishes he would have asked a few questions over the past few years.

3 practical applications

I guess there’s a message here for people looking to ferret out or avoid being entangled within a fraud…Look for the quiet successes–individual or organizational–that lack any semblance of failure. Perfection is great, but not common.

A few more points:

  • Watch out for “tsk tsk” behavior by those who benefit from the perfection. Righteous indignation is the first and scariest refuge of the fraudster. When you ask someone about their methods, and they give you the “how dare you” act, you have a powerful indication. The Patriots tried this early last week, but the situation quickly got beyond their control.
  • Statistics matter. If someone is “perfect” or winning by a lot and can’t really explain what they are doing so well, take that as a hint. A “perfect” executive likely buries a lot of skeletons. A company with “perfect” financial performance likely carries a lot of fat or a lot of creative accounting. The Patriots’ statistics show how creative they are, we just don’t know how (yet).
  • Observations matter. Ask around. If others indicate ethical grayness exists in the historical record; or they simply won’t talk, you probably have your answer. Closed ranks or a history of crushed complaints provide you the indication you need. The Patriots were branded cheaters years ago, and such a track record will be in the record during this current “scandal.” If you are a board member or executive, all you have to do is ask, but you might have to ask the second order question… There have been no ethical complaints? What if the environment is such that nobody would dare complain? Go to the source at least once or twice at decade.

I have no particular axe to grind when it comes to the New England Patriots. I do, however, think that there are lessons to be learned from the “Deflategate” scandal both in the behaviors of the Patriots franchise and in the peculiar reactions to it by fans and pundits.

The Patriots’ statistical “perfection” is starting to look more and more like a fraud, and while it pales in comparison to famous frauds like Enron, Worldcom, Tyco International, or AIG; it provides some of the same human elements that all these others had in common.

The lesson? Be vigilant, especially when things are too perfect.

What’s Your White Whale?

The types of goals we set, and the manner in which we pursue them, have consequences for us and for the people around us.

“…to the last I grapple with thee; from hell’s heart I stab at thee; for hate’s sake I spit my last breath at thee…”

– Captain Ahab, in Moby Dick by Herman Melville

And like that, a captain lost his life, a ship, and all men aboard save one left to tell the tale.

Call him Ishmael.

Focus, intensity, and drive are all fantastic things. Identifying a goal and driving toward it can differentiate a professional in the earliest stages of their career. Such drive and focus is valuable for teams, organizations, and yes, families.

But it is in how we define our goals that we establish our course and set sail.

Sometimes…sometimes we choose goals that–when played out–are destructive to us and to those around us. They are outwardly worthy, and inwardly virulent.

The more senior we are, the more influence we have, the more damage we can do.

Ahab did this when he let a blinding, to-the-marrow hatred of a monstrous white whale cause him to lead his men to the edge of the earth and ultimately to death. He took his ship off its profitable whaling mission to pursue an obsession, a blood vendetta against a big mammal that took his leg.

Of course, you or I would never do that, right? Ahab is fiction.

Well, not really.

The way we define our goals–or help execute the goals others define for us–defines us; and the more driven we are in achieving misguided goals, the more destructive we can be. We might not kill our crew, but we could very well kill an organization, a partnership, or a marriage.

Take a moment and think: Do you harbor a goal like Ahab’s lust for killing the white whale?

Worse yet, have you, as a board member, senior executive, or manager, provided people with incentives to pursue a white whale goal?

A white whale goal is one of two things: In its first and simplest guise it’s an obsession. It is a goal that is so deeply held and so exclusively pursued that its pursuit alone is destructive to relationships, damaging to professionalism, and ultimately distracting from real performance. A foolish, simpleminded pursuit of money, power, position, prestige, image, “winning,” or–wait for it–the moral or intellectual high ground are all examples.

Yes, that last one is a doozy that we too often forget or forgive. Self-righteousness blows up as many relationships as most any other thing listed.

In its second guise, a white whale goal can be a misguided goal propagated by proxy, where boards and senior leaders provide a framework of thinking (for example “grow profits”) without guidance on and transparency in boundaries, value, or values; or with specious accounting and accountability.

This second version of the white whale can lead both to brutal decisions by middle managers “just doing their jobs” and to baffling decisions in the ranks where people struggle for clarity. All the while the board and senior managers maintain the real innocence of propagating “good” goals. Or, at least, they maintain plausible deniability.

The epitome of these two types of white whales playing out–an obsession that leads to a vicious goal by proxy–is the assassination of St. Thomas Beckett of Canterbury.

King Henry II, obsessed with the church as an interference, is reported to have said “will no one rid me of this turbulent priest?”

After which, of course, somebody did; to the ignorance of the historical significance of the act.

But, the King didn’t order the martyrdom of a future saint…Did he?

You as a senior executive didn’t really order the curtailing of investment in pursuit of current earnings…Did you?

You didn’t handicap the sales team by introducing turgid administrative tasks in the name of greater openness and transparency…Did you?

You didn’t order leaders to take unacceptable safety and fire risk by curtailing costly planned outages and maintenance…Did you?

Surely, there are honest-to-goodness unintended consequences; and then there are white whales.  Sometimes they are hard to tell apart. Foolish or obsessive pursuit and propagation is the sin qua non of the white whale.

Remember Enron?

Consider the Enron scandal. The tragedy of Enron was equal parts a criminal lack of professionalism (which has been well publicized and rises to the level of obsession for some people involved) and a broad based propagation of and adherence to financial frameworks and incentives that many people in the ranks knew made no sense–misguided goals.

This second part gets missed and dismissed, especially as the Enron case recedes into memory as a quaint blip preceding the global financial crisis of 2007-’08.

The second aspect–the misguided goal set–is actually the most important aspect of the Enron case for professionals to consider these days.

A good example of the incentive issue was where “mark to market” thinking led leaders to be paid handsomely on the modeled Net Present Value of development projects, but not on the actual fulfillment of the projects themselves. Baffling? Yes. Still, senior management–operating within a framework endorsed by auditors, consultants, and board members–defined the goals. Those goals played a big part in destroying the company.

Sure, a few Enron employees went to jail and many professionals were sullied forever; but the true “crime” that gets missed is how top down incentives drove otherwise professional people toward behaviors that they wouldn’t have even paid themselves for.  They were white whale goals acted on by proxy.

That is perhaps the best test of a white whale by proxy. Would you pay yourself to fulfill the incentive set you have?

White whale goals by proxy are usually present when you hear people lament that they are “just doing their job,” or “doing what they are told,” or “doing what they get paid to do,” or in the worst of the worst cases “protecting the company.”

Massive autocracies and ignominious genocides stand on the shoulders of white whale goals by proxy, particularly when they are proxy to an obsessed leader. Let’s not participate in or propagate them.

What do some simpler ones look like?

To keep this closer to home, here are a few modern goals that can become white whales in our professional lives, and a brief explanation of why:

1. A superlative image and “personal brand” – The phony focus on image in the mold of “fake it ’til you make it.” If pursued as an end in itself, vs. an outcome of a life of substance, then…well, it’s a deleterious focus on a goal that is ultimately not merely self interested, but selfish in a harmful sense.

2. Great pains for small wins – The dominance of the clean desk, starched shirts, pursuit of dominance on every point in the negotiation. Basically, this is idealizing stuff that doesn’t matter. In WWII U.S. Army slang, foolish adherence to critical standards on things that didn’t matter to the mission was known as chickenshit. I’m not sure what it is called now, but whatever it is it’s damaging to the mission and morale.

3. Rent-seeking – Seeking wealth without the creation of wealth. Placing defense of title, position, and income ahead of principle and value. Jerry Pournelle’s Iron Law of Bureaucracy puts in pithy words this white whale; and provides an explanation for countless managers’ sometimes oddball behaviors: They defend the bureaucracy at the expense of the mission. It’s a classic white whale. Similarly, acting purely on incentives without regard to the value they create (or destroy) can be a white whale goal as outlined in the Enron case. This is often the case when incentives are based on individual drivers (like revenue growth or headcount or output) in isolation that systemically create no value.

4. Temporal goal misalignment – Addressing the “now” without a focus on the “later” or vice versa. How often do we see short term decisions made that have a readily measurable, net negative long term impact; but that are characterized and lauded as magnificent wins. So, you closed the deal and got paid. Was it a good deal for shareholders and employees–the people who live with the longer term decisions? Interestingly, the opposite is the case as well: Many bankrupt companies lie foundered on the rocks of “long term investment.” How often do we see 5-year plans that lack a 1 or 2-year plan component?  The white whale lies in the lack of explicit balance.

5. Vengeance – I’m just going to go ahead and list it because, well, I started with Captain Ahab; and this was his issue. Pursuing personal vendettas, particularly those that drag your organization, family, or friends along with you; is the ultimate in white whale thinking. 9 times out of 10, the bitter pursuit of revenge against other people or other organizations only serves to take your eye off the ball. To be clear, this doesn’t mean simply the pursuit of crushing vengeance a la Ahab. It can also be as simple as an overweening need for one-upmanship or the constant need to be seen as ahead of the object of your bitterness. All this is wasted motion when it comes to life and performance.

So what?

Knowing whether you are pursuing a white whale is tough. Generally, the white whale looks like a worthy goal to the person obsessed with it.People who are genuinely obsessed can’t generally be reasoned with. But, they can be removed from their position…and, that’s worth pondering.

The best way to spot a white whale is to lay out the “True North” that everyone agrees to–what winning really looks like from a fiduciary, professional, and values standpoint; and then to identify how far off that azimuth your immediate goals are.

White whales pop out easily at that point as twisted and torqued visions of winning. They link to True North via paragraphs of logical backflips instead of a sentence fragment of concise clarity.

Like any other blind spot, these goals require reflection on your own part to spot. They also require willingness to tolerate a person or two in your midst who will challenge your view, your goals, your passions, and your obsessions. That person might be a trusted friend, a mentor, a pastor, or–if you are lucky–a spouse. In a really functional team, it can also be a subordinate or a peer.

In any event, you have to listen to them.

The gist of Melville’s story about Ahab and his hatred of the whale was that Ahab destroyed everything and everyone around him in pursuit of a definitively odd goal: Revenge against the single whale that took his leg.

There were many other whales in the ocean.

But, the white whale did him and his crew in. No–strike that–Ahab’s obsession with a white whale goal did it.

Don’t let a white whale–yours or somebody else’s–do you in.

What are some examples of white whales from your own professional, political, or personal lives?

When Enough is Enough…

Know how to really know when to say when.

Last week, I posted (here) about grace as an under-appreciated leadership trait. Given the very positive response to the topic both online and off, I thought it timely to discuss the other side of grace.

I’ll refer to the other side of grace as judgment because it is a term that is applicable across disciplines and into the professional realm. Some might say that the opposite of grace is justice. I won’t quibble with that interpretation; but justice implies an abundance of objective truth, and judgment implies an abundance of ambiguity.

The business environment offers far more ambiguity than truth.

So…Judgment.

Get your thinking cap ready for this one. It’s bit of a climb, but there’s quite a view.

First, an anecdote.

Recently, pundits and fans expended a tremendous amount of energy on the NFL’s Ray Rice domestic abuse incident, and rightfully so. While there is plenty of nuance to the discussion, one thing became clear: Once video of a grown man striking his soon-to-be wife with enough force to knock her unconscious became public, it was enough.

He was fired and roundly vilified.

The NFL’s Neanderthal and perhaps cynical decision processes aside, the case of Rice’s dismissal is a study in decision making.

To wit: Plenty of people can logically argue that grace in this instance might be merited. Mr. Rice has been an upstanding citizen and model representative of his NFL club (until he beat his significant other…that is). In fact one need not look too far to find plenty of people blaming the victim and justifying Rice’s actions as forgivable if not acceptable.

Others, particularly those in higher profile positions in the professional community, know the score. They know that one highly deviant data point is all it takes. When a person breaks a social contract in such an egregious manner, the evidence is sufficient to pass judgment.

The application of evidence, from the mundane to the shocking to the stealthy, to judgment and decision making is what this post is about.

When is enough…enough?

We deal with ambiguity in all sorts of situations. How do we know when to go full speed ahead with a plan, when to cut ties with a boss or business partner, or when to at least alter approaches with others based on the evidence we see?

Most of us want to give people and plans the benefit of the doubt… Some of us do it to such an extreme that we lead ourselves into professional peril or, worse, purgatory. Grace for grace’s sake. The benefit of the doubt as a rule vs. an option.

When do we know enough to make a decision?

The answer? When we see one or two powerful indicators, or many, many subtle ones. The art is in knowing the indicators and their strength and in avoiding errors of intuition around them.

I’ll explain that in a moment.

Probabilistic thinking, when applied to situations at home and work, can allow you both to give the benefit of the doubt AND to maintain a meaningful level of decisiveness in the face of ambiguity. The concepts in this post are just as applicable to human relationships (both personal and professional) as they are to strategic plans.

Let’s dive in.

The Foundation:

Depending on your disposition, you would have either been fascinated or bored to tears if I went into detail on the foundational subject matter for this post (in short: Bayesian Inference); but others have done it better than I can. So, I won’t. I will give a short overview instead.

The basis for the rest of this article is a formula for probabilistic thinking known as Bayes’ Rule and a method using it known as Bayesian Inference. I’ll work with a slightly bastard interpretation of both. For those of you who know better, bear with me to the end.

Bayes’ Rule was formulated by a man named Thomas Bayes…a thinker ahead of his time (and behind his own thinking, some would say–he never published his work). If you have no idea what Bayes’ Rule is, you might study it elsewhere (links to good, popular/accessible summaries are out there. Here is one).

Bayes’ Rule is a formula for evaluating the impact of evidence. It is the foundation for Bayesian Inference, which is a process that provides a quantitative method for combining new evidence with prior beliefs–for “objectifying the subjective.” It is, at its most simple, a formula for taking:

  1. A “prior” hypothesized probability that something is true or false–“I’m 80% sure Johnny has ADD.”
  2. An observation that provides evidence (the “test” –> “Johnny sat for 30 minutes reading a book.”)
  3. And a set of 2 conditional probabilities based on the prior assumption and the observation (1. “If Johnny has ADD, there’s a 5% chance of Johnny sitting still that long.” and 2. “If Johnny has no ADD, there’s a 60% chance of Johnny sitting still that long.”)

These things come together to create a “posterior” probability that the hypothesis is true. The formula looks like this:

The term “P(A|B)” is the posterior probability that A should be true given that B was observed. Enough said, right? To make it simpler for the practical uses I’ll put together later, the calculator I’ll use (here’s an online version) looks like this:

Based on the posterior probability that Johnny has ADD based on this test (the green box, which is now 25%, down from the prior of 80%), Johnny’s parents can rest a bit easier.

If you are still with me, you are wondering “So friggin what?” Right. Well, this little primer is necessary because the power of Bayes’ Rule in your everyday life is real. It’s a way of updating your thoughts on a strategy, a relationship, a bet you want to make in Vegas, and any number of other things, by just applying evidence and judgment. And it doesn’t require you to sample forever in order to increase or decrease your conviction.

More importantly, it’s a way of battling a sympathetic and highly anchored intuition. Almost all of us have it. For example: I’d bet you dollars to donuts that Johnny’s parents, when asked what their “posterior” should be after the observation above, might update from 80 percent to “oh, ah, about 60 percent.” The reality was a fraction of that (25%).

Your intuition isn’t great when it comes to judging the meaning of highly deviant events or behaviors, and that can cost you. It can cause you to write people off based on a bad streak when it isn’t warranted, or it can cause you to be far, far too forgiving to someone or something (like a plan) that looks nice but isn’t performing.

Thus…Bayesian Inference.

Constant updating with new information can make you a better professional (and poker player), and frankly allow you to live a better life.

But…How?

Let’s apply it to a situation like the NFL’s with Ray Rice.

Case 1: Ray Rice and Firing Decisions

Take the Ray Rice example. Imagine you have a high profile employee in your organization who does as Ray Rice did. There are really two considerations that come into play in a case like this. Call them Reputation and Values.

  • Reputation: Given the evidence available, prior experience, and the profile of the person, what is the likelihood your organization can weather the reputation storm?
  • Values: Given the evidence available, what is the likelihood the individual’s actions could be reconciled to your organization’s values?

The NFL, at first, applied the reputation question to its calculus; and it looked something like this:

Round 1: Evidence available was an ugly video of Rice dragging his fiance out of an elevator car. Ugly, yes, but who knows what happened in there. Right? The NFL has weathered many, many of these similar storms in the past without indefinitely suspending a player, so experience was on Rice’s side. The NFL took the intuitive view that Rice wouldn’t hurt its reputation because his actions were on a continuum of behavior. Bygones and all that. 2 game suspension.

Then? Video of the actual incident leaks. Woah. A firestorm. What happened?

Round 2: Well, let’s consider the values case, which is what the NFL was ultimately forced to do after video of Rice actually cold-cocking his soon-to-be-wife comes out. It results in more of a binary conclusion. Here’s a simple calculation based on the hypothesis that “Ray Rice is aligned with the values we espouse.”

See what happened there? A guy punches his fiance, and suddenly there’s no way he can represent the values that some people expect the NFL to protect (simple things, like “don’t beat up your girlfriend”). Rice goes from “model citizen” to “persona non grata;” from a 2 game suspension to fired with indefinite league suspension. It’s not a continuum, it’s a cliff.

Keep that in mind: Powerful evidence deserves a powerful response–a cliff, not a slope.

A case of an employee filmed publicly beating his significant other is probably too egregious and easy for most leaders to judge. It’s pretty much binary. Still, cases of legal or moral misconduct and how we handle them hold the mirror up to us in ways that few other cases do. The outward appearance of when enough is enough for you as a leader or follower reflects on your morals more than you’ll ever know.

What’s the equivalence point between grace and judgment when it comes to an employee’s misconduct? You have to make that call, and I’m offering one set of tools. Even the most “pure as driven snow” of ethical leaders probably has an expense or two that could be called into question even if just via poor recollection (let’s see, was that 15 miles to the airport or 18…?). In the case of small deviations, it takes a lot of them. In the case of big ones? not so much.

Let’s move the cases a little closer to issues you probably face in your workplace.

This is where these approaches get juicier.

Case 2: The Change Leader Who Doesn’t

People are keen observers of behavior. When a leader declares a change, and doesn’t change behavior, people know it; even when the leader INTENDS to change. Intentions don’t matter. Observations do.

Let’s say a leader declares a tremendous new initiative for his organization that is going to require all parties to think and act differently. Problem is, his behavior reveals no real substantive indication that anything has changed.

Some people will say “yes, sir” and attempt to implement change.

Others? They will assess the conditional likelihood of change given their observation of the leader. They won’t necessarily use math, but if they did… Applying Bayes’ Rule, it goes something like this:

Situation: I’ve been told by my leader that things are changing.

Prior Probability of Real Change: Let’s say the organization has been quite good at implementing change, so 60%.

Observation of the Leader: Once he announced the change, my leader does nothing to reinforce or role model the change (probability of observing this given real change? Let’s say its 10%. Probability of observing this given no real change is actually going to happen? Let’s just say it’s 90%).

The calculator looks like this:

See how easy that was? We go from an announced change effort that had an estimated 60% chance of success to a quick, mathematical assessment that change is only about 14% likely to happen given the leader’s lack of change.

In short? Why bother changing? Nobody else is. This from a single assessment of the actions of the announcing leader.

By the way, this gets worse the more case history there is. The more “flavors of the month” get launched and abandoned, the more fatigued and rational people become about change. “Going through the motions” and “why bother” mindsets are real things.

Case in point: If I had started with a 20% likelihood of real change as my prior estimate, the calculator outputs 2% as the posterior probability.

Yeah, that’s right, if you are bad at implementing change, people may qualitatively stop believing you; but the reality is that their cynicism is justifiable with numbers.

Such assessments show why role modeling by leaders is so critically important in transformational change environments. While people in the rank and file won’t typically do the math; they will, in most circumstances, read the clues. The math just reinforces it.

If anything, in my experience leading change, I’ve observed that people get on or off the bandwagon quickly based on their assessment of commitment and consistency of senior executives in charge of the change in a fashion very similar to that presented here.

Let’s look at another case you might find familiar.

Case 3: The Stretch Role

The age-old question of when a person is ready for a promotion can be tackled with a Bayesian approach in order to avoid “has-to-have-been-there-itis” where nobody is good enough for promotion to a role they’ve never held before.

Let’s say you have a budding manager who wants to step into a more senior role. What do you need to see from her in order to gain confidence in placing her in a stretch role? Pick a few triggers and use them as tests.

Maybe the triggers for her to be considered ready for the stretch role are (keeping it bland and general) organization, acumen, and foresight; but all people have some doses of each of them without being ready. So, how do you handle it?

This is where the compounding or iterative approach to Bayesian Inference matters. The “Posterior” of your first test becomes the “Prior” of your next. The analogy here is a poker player updating his assessment of his probability of winning as each card is played.

Let’s say your “prior” probability is 60% that your charge will be ready for the stretch role, but that you really need to get to 80% to pull the trigger. What do you do? You keep track of how she does on the “trigger” criteria.

So, you use the calculator in an iterative way this time…

Reading from left to right, you can see that you’d be justified in placing the person in a stretch role (85% confidence) after observing the confluence of 3 observations on the triggers. The addition of evidence for organization, acumen, and foresight support the decision. This is overly simplified, of course.

There could, in turn, be a column here for evidence that is contravening, and it would be factored in. That’s right: The iterative power of this mode of thinking is real; and it works in both directions.

Let’s have some fun with one that demonstrates the bi-directional nature of Bayesian Inference along with the asymmetric power of different types of observations.

This time I’ll use an unpleasant but all too common situation.

Case 4: The Asshole*

Let’s say you establish a “No Asshole” rule in your life. Perhaps this means that you will do you best to either remove them from your team or, failing that, remove yourself from contact with them.

Some assholes are easy to identify (in a Lloyd Christmas kind of way, they’re obvious). But sometimes, especially in a professional setting, you have to figure out when enough is enough through evidence and observation. The issue is this: Assholes can act like good people at times–sometimes even better than good people. They can be charming, or attractive, or smart and polished. But, deviant behaviors stand out.

I’ll demonstrate.

Imagine a new colleague comes into your organization. Let’s say that your No Asshole radar is completely inactive. They might be an asshole, but you see no reason to think so. You assign a 10% chance of asshole-dom at the start (perhaps the base likelihood of encountering one of these animals in your professional experience). Then, over the course of six months, you observe the person being actively deceptive, politically pitting people against each other, backbiting, and bullying.

Taken individually, these actions could come from anyone. Even a great executive could backbite once in a while. For that, I’ve used 10% to 20% as the probability of a “bad day for a good person” in the “Behavior|Not an Asshole” line below. But, as observations mount…it becomes clear:

The person is an asshole. 100%.

Get away.

But wait, you say? They are nice, have a warm smile, have charisma, are active in the community, and are great with their family.

That’s the issue, so are people who aren’t assholes.These aren’t deviant behaviors like the first set of observations, so they really don’t count for much. It’s the old “I’m just an intense person sometimes” or “my job requires it” shibboleths that assholes like to trot out. The person is already over the cliff. Statistically speaking, adding in nice but common behaviors has no power in the assessment.

All the goodness in the world can’t overcome a multitude of highly deviant behaviors that tag your colleague as an asshole. Find a way to get away and preserve yourself and your organization.

Here’s why this matters: Outlying behaviors are huge signals, and should be taken as such. In-lying behaviors (like smiling and acting nice, for instance) are actually not all that big a signal. Even the biggest assholes in the world smile and act nice frequently, just like “normal” people. It’s simply a posture–like crossing and uncrossing one’s arms. Observers of actions know that it’s much harder to hide deviant behaviors over the long run.

This is why true acts of deception and bullying, especially within a purported culture of integrity, should sound the alarms…now…loudly. Enough is enough.

So What?

It all comes down to this: When considering evidence in order to make a judgment or decision, a series of small signals can add up to a lot of conviction, but it takes a lot of time. A single, clear, outlying signal can remove any doubt, even in the presence of small signals to the contrary. When it comes to judging people’s actions (like in Case 4), it’s a cliff that can’t be walked back up.

After the presentation and consideration of some types of evidence, no amount of earthly grace is indicated.

Here are 5 practical ways to apply this kind of thinking everyday:

  • Have a point of view going into any interaction, particularly those with significant ambiguity. Be vigilant. And, update your point of view as you judge events and actions, to the good and to the bad. Your “posterior” estimate of reality is what matters.
  • Place checkpoints on strategic plans that call for evidence based tests of whether the world is what you thought it would be. Update!
  • Hold performance reviews with people that allow you to mutually update your understanding of how things are going and ideally to steer away from misunderstandings of performance or inference. Get intentions out on the table to match with actions.
  • Remember that your actions are what people see, not your intent. The best thing about using Bayes’ Rule is that it relies on observation and evidence. The worst thing about it? When others use it. You can’t weasel your way out of being an asshole once people are onto you and get over their tendency to let you slide.
  • Tolerate, but only to a certain degree, bad behavior. That goes for bad behavior from your superiors or from your subordinates. Everybody has a bad day. A bad day is not an indicator of a bad person. A single data point can’t indicate a trend, but it can indicate a probability of the underlying personality, which has been the point of this post.

A friend recently related to me an adage from his years in the U.S. Army: “Once is happenstance, twice is coincidence, three times is enemy action.” Such is the type of thinking I’m encouraging here, with the slight adjustment that sometimes, once is enough.

Grace is a critical element of leadership, except when it’s time to use judgment. Using the concepts in this post can allow you to know when enough is enough.

Now, go mind your posterior.

* I would like to thank Stanford University professor Bob Sutton for popularizing the notion that the word “asshole” has no polite substitute. I am using it here as professor Sutton would. If you have not read it, Sutton’s book The No Asshole Ruleis worth a look.

Geoff Wilson hopes that this overlong and somewhat technical article did, in fact, provide a view that was worth the climb. Offer your comments or critiques below or offline.

What Problem Solving Isn’t…

Watching out for some critically bad behaviors can improve your effectiveness as a problem solver.

 

This is the first of a few posts I’ll share on the topic of problem solving.

We in the professional ranks toss the concept of “problem solving” about like it’s a common sense concept. It isn’t. Problem solving is about being effective in moving forward with a potential solution to a given problem—regardless of scoring political, influence, or style points unrelated to the solution. It is with this focus on effectiveness that I’m posting on the topic.

Let me say up front that I lay no claim to being among the problem solving elite. That is for others to judge. I offer my thoughts as more of an experienced social observer and capability builder on the topic. In practice, problem solving is messy, like most other things not written in textbooks.

Countless negative mindsets and behaviors masquerade as good problem solving, and we all need to be on the lookout for them. That’s the topic of this post.

As someone who has interviewed hundreds of aspiring problem solvers and worked alongside some of the best (and possibly some of the worst) in the world, I have gleaned a few points of view on what problem solving is NOT. So, in the interest of going negative from the start, let’s explore a few of them.

Problem solving is NOT being merely smart. Many very smart people are very bad problem solvers. Why? Really smart people suffer from a couple of common flaws that, if they aren’t known and mitigated, can derail problem solving. First, many really smart people are naturally oriented toward finding an answer vs. a direction. They have to learn to think in terms of risk and opportunity vs. correct and incorrect. Second, many very smart people suffer from the “smartest guy in the room syndrome;” meaning they struggle to listen to others’ viewpoints.

Great problem solvers are flexible and incorporate a very broad number of viewpoints.

Problem solving is NOT merely having excellent energy and drive. Action-orientation is a virtue. Practical action-oriented problem solving is as well. However, some leaders confuse the drive for action with the drive for effective action. Being driven in a business setting is an excellent virtue if it is combined with sensitivity, structure, and at least some patience.

Too much drive with too little collaboration can lead to a bullying approach to problem solving. Combined with power, mere drive can lead to problem solving via fear, and to the closing off of channels of communication. Oddly, excess drive leads to a lack of listening, just like too much “smarts.”

The urge to do something is a good one if it’s managed. Great problem solvers manage it.

Problem solving is NOT problem finding. Problem finders, or mere whiners, are out of scope here. While issue identification can be a positive skill, too often leaders and their subordinates use it as a passive aggressive pseudo problem-solving surrogate. Those who are talented at lobbing quasi-professional bombs by identifying other people’s problems may score points in some organizations’ political games, but they aren’t problem solvers.

In most professional contexts, I’d estimate that problem identification is less than 5% of the effort required. Great problem solvers don’t congratulate themselves for being great at spotting issues.

Problem solving is NOT solving the wrong problem. We all have our own skills and tools to apply to a given problem. Always keep in mind the proverb “To a person with a hammer, all problems look like a nail.” It’s powerful. A very common problem solving failure springs from misapplied expertise. How often have you observed the process expert seeing every problem in terms of process, or the patent expert seeing every problem in terms of intellectual property, or the talent expert pointing only to talent? Often, I’ll bet.

Great problem solvers reflect on the definition and potential solutions for a problem before acting.

Problem solving is NOT a heroic pursuit.With all due respect to the proverbial mad genius problem solver who comes up with truly novel solution to a very tough problem, your run of the mill problem solver is more likely to be a structured thinker, clear communicator, and fantastic networker who may not even be the person in front of the group when the problem is solved.

Many of the world’s best problem solvers are unsung heroes.

I could go on about what problem solving is NOT, but I won’t. You probably get the picture. The question to ask when presented with a behavior or a contribution to your team that doesn’t feel on point is “yeah, but will it make us more effective?”

“He’s so smart/driven/insightful/savvy!”

“Yeah, but does he make us more effective?”

It’s a simple test.

Please consider sharing thoughts on barriers to effective problem solving from your own experience.