Monday, January 19, 2009

Decide, Act, Lead

Aircraft commander Chesley Sullenberger has been rightly hailed a hero for his successful landing of his powerless Airbus in the Hudson river last week. Mostly overlooked in all of the coverage of this event, however, is what made his piloting so successful.

I would submit that there are a fair number of pilots in the airlines, graduates I suspect of military flight training, who are mechanically capable of making a successful water landing of their aircraft just as Captain Sullenberger did. This is not in any way meant to minimize what he did. On the contrary, what he did was magnificent. But, the skill level of many of our pilots, courtesy of the foundations of their training in Air Force and Navy flight training, is so high that many are, I am certain, capable of the same thing.

But, the important issue is what happened between the time of the bird strike and the water landing; specifically, the decision to land the aircraft in the water, and having done so, to land it near a series of water taxis. Simply put, it was and is Sullenberger’s decision-making that is exceptional. That decision-making is what makes great pilots. And it is what makes great leaders.

So, what lesson can be drawn from that? The lesson to be drawn has its roots in how a pilot like Sullenberger acquires that decision-making ‘skill.’ And the answer is, if you will, practice. Great pilots are not simply great ‘mechanics,’ who know how to physically handle the aircraft. Instead, great pilots (and great leaders) are constantly considering the situation around them, analyzing as many aspects of the situation as they can, and constantly asking ‘what if.’ This is something they do every day. They are also very critical of themselves, constantly considering and evaluating what they have done and asking themselves why something worked, why something else didn’t, and in both cases what else they might have done to make it better. They will do this with every little thing.

It is this combination of experience – the being there – and active consideration – the endless asking of what ifs – that is a key component of great leaders.

Of course, in most cases no one around them ever sees this; it is all kept inside and the outward appearance is calm, quiet and self-assured. But, inside, great pilots, like great leaders, are constantly taking apart every situation and reassembling it. Good pilots will take a look at any accident or aircraft incident, and as a general rule the aviation community is much more conscientious about analyzing incidents then any other professional community, and they will ask themselves: What would I have done in the same situation? What would I have been looking for and queuing off of in order to make that better decision and make it earlier? What incidents have I been involved in where I might have made this mistake and what should I have done?’ The list of questions goes on and on.

The point is this: great leaders don’t simply know what the ‘right thing’ to do is for a given situation, as if by magic. Nor are great leaders the ones who have had ‘great’ experiences. As I’ve said before, the batboy and Earl Weaver both had the same experience: they both stood in the dugout and watched 162 games. Experience without active consideration means nothing.

Rather, it is the combination of experience – the being there – and active, aggressive consideration – the endless asking of what ifs – that is a key component of great leaders. No matter what you are doing, flying an airplane, running a one man business, leader of ten thousand, or a million, you need a process in which you review your decisions, and the decisions of those around you – good and bad – so that you may understand what worked, what didn’t work, and Why. Great leaders learn from experience, they improve their decision-making; they have mastered the transition from observation to decision to action that is the key for leadership in a crisis. If you don’t you will never understand the reasons for either your failures or your successes. If you do, you will find yourself, like Captain Sullenberger, ready to handle the situation no matter how dire.

Thursday, January 15, 2009

Time for Leadership

President-Elect Obama is about to shed part of that title. In just five days he will become the President. Once that happens, the time for campaigning stops and the difficult part, the ‘sausage making,’ begins.

Until that happens he can ‘get away with’ the simpler parts of governing and leading: telling us what he intends to do and how he intends to do it. That is the meat and potatoes of campaigning and of political talk shows. As the economic crisis has dragged on, this has increasingly focused on discussions about the various bailouts: amounts, to whom money will be given, who will be responsible, etc., etc.

But, leadership is much more than telling people what to do or how to do it. Leadership, real leadership, involves developing a goal, a vision, and convincing others of that vision, convincing them to adopt that vision as their own. And that is done by communicating. But it is not simply communicating. The key to selling any vision is communicating why.

There is an old saw in Washington that ‘when you are explaining, you’re losing.’ It’s clever, but it also happens to be false, at least when it comes to real leadership, which probably explains why it is very popular among bureaucrats. In fact, on a day-to-day basis, leadership is all about explaining why; why we are headed in one direction and not all the others, and why we are doing A not B. There is a story, which I believe came from President Eisenhower, that during World War II he was confronted by a German General, a prisoner, who suggested that American soldiers were an undisciplined bunch who didn’t follow orders well. Eisenhower responded that in the US Army the belief had always been that if an officer explained what you were trying to do and why you were doing it, you didn’t need to give an order.

For people to follow a vision, to adopt that vision as their own, they must believe that the vision is going to fulfill them. Leadership is, except in the case of demagogues and true cults of personality, never about the leader. Rather, leadership is about the vision and how the vision connects to the each of the led, individually. And the only way that the leader can connect that vision to those he would lead it to explain to them why they should adopt his vision and why they should believe that he is going to successfully lead them there.

It is the nature of a democracy such as ours that the citizens already have a well formed, but not necessarily crystal clear, vision of the country and their particular role in it. More importantly for any potential leader who wishes to change the course of the country, each individual has his own vision, his own goal (or goals). To lead in a democracy the leader has to connect his vision, which is a national vision, with the visions of the individual citizens. And to do that he has to be able to explain why his plan is the best way to get to their individual goals, he needs to convince them that his broader vision is the best way for them to achieve their individual goals, and convince them to adopt his greater vision of the country as a whole as theirs.

And this leads back to ‘Why?’ The leader needs to be able to explain why this plan over any other plan, why this course over any other course, why these policies and rules and decisions over any other policies, rules and decisions. This is a process that most leaders don’t handle well. President Bush, despite a clear vision for providing security for the US, failed to adequately explain to the citizens of the US why he was doing the things he was doing, and why these steps were necessary.

This point is important. No one in this country will argue with the idea that President Bush should have responded to the attack of September 11th, no one will argue with his authority to use the armed forces to protect the country, or use the intelligence community to gather information needed for national security. But issue was taken when a majority was no longer clear on why certain things were being done.

To those who argue that President Bush did explain it, my answer is: not enough. Explaining why is not easy, nor is it simply necessary to only do it once. If that were so, we would only need one sermon on the wages of sin, not one a week, and parents would only need to explain once why kids need to eat their vegetables, not every night for 15 years. The leader needs a clear message that explains where we are headed, how we get there and why we are doing it this way.

And that is what soon to be President Obama needs to start doing quickly. The campaign is over, the parties and dances will soon be over. He needs to be ready to explain why we are doing it his way. If the explanation makes sense, we will let him lead us. But, it has to make sense. Tell us why.

Friday, January 9, 2009

More of the Same

There have been a rash of articles over the past month or two about the death of capitalism in the aftermath of the credit crisis and the seeming incompetence of many of the ‘great minds’ of the Wall Street financial institutions (and others). Frankly, one might as well predict the end of government in the wake of various scandals (which won’t be listed here as it would take too much time).

But, there are some real lessons to be learned from this crisis, and like most lessons learned, they will be ignored by almost everybody.

First, Stay within your means. While it would be a good thing for everyone who wants to own a house to have one, it turns out everyone couldn’t afford the one they wanted. That shouldn’t be a news flash to anyone, but apparently it is to many mortgage companies. There is no hard and fast rule to ‘stay within your means,’ but like the Supreme Court Judge Potter Stewart’s pronouncement on pornography, the banking community knew better and simply played stupid.

Before anyone gets confused, I’m not saying people shouldn’t have high aspirations. They can and should. But we all need to earn our goals, not have them handed to us.

Second, If it sounds too good to be true, it is. While it would be nice to think we’ve seen the last of mortgage companies convincing people to step into a mortgage that’s 8 or 10 times their income, we have the example of one of the Auto Companies using US government cash to lower the minimum credit rating to qualify for a loan to stimulate the market. This is the same kind of thing in the housing market that started the problem. But that’s not going to stop them from luring folks in off the street and convincing them to buy a new, and too expensive car so the dealer can keep his inventory moving. What happens when they can’t afford the payments? Another bailout?

Third, people are greedy. This is along the lines of the inspector standing up in ‘Casablanca’ and saying that he is ‘shocked, shocked to find there’s gambling going on in this establishment,’ as the croupier pushes his winnings into the inspector’s hands. People are greedy is as much a news flash as ‘people like sex.’

Fourth, politicians will exploit a crisis. This is as shocking as the news about greed. What is alarming here is how much play is given to the issue of greed and how little is given to the idea that politicians, whose hunger for power is usually much greater than the greed of the businessman, have seemed to get a ‘by’ from the media, while they engage in a grab for power that is leaving the intent of the founding fathers in tatters.

Fifth, there are a lot of stupid people in senior management positions. Did anyone really need a crisis to figure that out? But, when you add greed to stupidity, and throw in a little hunger for power, of course you are going to have problems. It’s been that way for about the last 6000 years of recorded history.

Finally, there is no such thing as a free lunch (TINSTAAFL). The Banks and Mortgage companies were right in believing that Uncle Sam would come to their rescue no matter how badly they messed up. He has, and he continues to ride to the rescue. All of this because, as we have been told again and again over the past two months, to not do so would mean a severe recession lasting years. Interestingly, now President Elect Obama is saying that we are going to have a severe recession lasting many years regardless of what we do. Obviously, part of that is simply preparing the groundwork so that, if things go poorly, he can, like any good politician, say that “I told you,” and, if things improve, he can take all the credit. I’ll accept that, it’s part of the job description for any politician.

Nevertheless, we, and I do mean we, all of us, are now looking at a national debt on the order of 10 to 11 trillion dollars by the end of 2009. That means something like $700 billion dollars per year for the next 20 years just to pay of the debt. And that assumes no more deficit spending for that 20-year period.

More worrisome, is that this means a return of inflation, which means that everyone who has (or had) a retirement plan, will see that plan eroded over the next 20 years as inflation eats into the plan. And for those who don’t think inflation will be that bad, the general rule here is that inflation is the great tool governments have to erase past debt. It will be in the government’s interest to provide a certain measure of inflation so as to expand the dollar figure for the GDP, irrespective of any changes in productivity. We might wonder what the government’s response to declining retirement funds will be in 10 years? Another bailout?

I have a good friend, who is an excellent doctor, and he often notes that ‘people die in the short term.’ His point, and it is an excellent one, is that you don’t engage in long-term planning when someone needs CPR (or the boat needs bailing, or whatever other analogy you choose). Something needed to be done to shore up the banks, and steps are being taken. Were they the right steps? Hopefully. In any case, it’s too late to undo them. The question is, assuming we kept the patient alive, what now?

We need to stop looking to the government for all the answers. We do not want the US government to continue to simply throw money at this problem. It was the meddling of government, and the firm (and perhaps unfortunately accurate) belief that no matter what happened, ‘Uncle Sam won’t let us fail,’ that led to this stupidity. It’s worth noting that Uncle Sam is going to be a bit stretched for the foreseeable future and we don’t want to make that worse.

We need to make corporate governance a real issue among stockholders. Stockholders need to take charge. The guys who have been in charge in many of these companies had great briefs, with lots of colors and lots of impressive academic records. They failed. Repeat that: they failed. They chased bad ideas, they focused on quarterly profits, they managed themselves ‘over the cliff.’ Stockholders need to throw them out and bring in new blood. One thing is certain: in many cases they can’t do any worse.

We need to return to common sense and long term planning. Virtually every major company on the planet has strategies and long-term goals and all sorts of planning teams. But when you ‘pull the string’ on them, the long term goals are constantly ignored as they pursue short term issues and quarterly reports, the strategies are nothing more than paper (and usually are poorly put together at that), and planning teams exist but without the necessary training or real access to the senior leadership.

In the months and years ahead we can count on certain things: there will be more bad news; the market will spike up then down; oil prices will surge, then fall; there will be wars and rumors of wars; the great will stumble. Nothing that we face today is really new and nothing is insurmountable. But it should remind us that, in the end, it’s basics that get us through, whether on a production line, a battlefield or a hockey rink. Let’s get back to basics.

Wednesday, January 7, 2009

Leading From Ignorance or Everything is Everything

During the past week Leon Panetta, former Congressman from California, Former Director of the Office of Management and Budget (OMB), and former Chief of Staff to President Clinton, was named by President Elect Obama’s to be the next Director of the CIA.

So far, there has been a bit of concern raised by those familiar with the Intelligence Community in general, and the CIA in particular, that this is a bad choice, that Mr. Panetta is ignorant of the workings of intelligence, and that the Director of the CIA needs to be an intelligence professional, or at least someone with a good deal of experience in intelligence.

Conversely, there are those who point to Mr. Panetta’s experience at both OMB and as Chief Of Staff to President Clinton and say that he has more than enough experience to lead CIA. The premise here is that one type of experience easily translates into another type of organization and that specific experience in this or that field is irrelevant.

Which leads to the question: can you effectively lead an organization without being experienced in the field of operations of the organization?

The obvious answer is yes, but it is a qualified yes. There are more than enough examples of an individual being placed in charge of this or that company or agency, having never led such an organization, and performing superbly. One obvious set of examples is the hospitals around this country that are run not by doctors and nurses but by businessmen. The same is true of any number of research labs, run not by scientists but by businessmen. But, at the same time there are many hospitals, and labs and other organizations that have experienced many difficulties when the helm has been given to an individual with no experience in their field.

In every case where there has been success, the success was a result not simply of the new leader, but also of a clear vision, communicated to the ‘rank and file,’ and supported and promoted by the rank and file. Simply put, if a novice in a given field can voice a vision that is consistent with the skills of the work force of the organization, and which they can, within the ethos of the organization, fully support, then his or her management skills will be more than sufficient to bring success to that organization.

At the same time, if the new leader arrives but has, or is perceived to have, little regard for the ethos of the organization, no matter what the vision, no matter how aggressive the communication effort, there is little likelihood of success.

What does this mean with regard to the CIA? Mr. Panetta certainly has the experience to lead a large government agency or a department. In a very real sense, no individual has the requisite experience to lead any one of these organizations until he or she has already done so, and in that sense all agency and department heads arrive with a handicap. Mr. Panetta, having extensive experience inside the White House of President Clinton has a great deal of experience that might be of benefit to any government organization.

Is there a material difference between CIA and other government agencies, such as the FAA or AID, etc? One might argue that there isn’t. Except that the CIA, as with several other offices of the US government, has a responsibility to provide warning to this country, to protect it from its enemies, known and unknown, a problem for which the consequences of poor performance are more grave then for other agencies. Has it always done so successfully? No. But, that is a reason to call for greater understanding of the problems facing CIA and the IC, not less.

Arguably, Mr. Panetta could be a good, even a great Director, if he were to arrive at CIA with both a respect for the ethos of the case officers and analysts and technicians who have worked and do work at CIA, and a plan to address their failings while building on their strengths. The new Director, whether Mr. Panetta or anyone else, who arrived at CIA and insisted that, together, they were going to make the CIA better then it has ever been, that new Director would, I suspect, receive the sport of the ‘rank and file’ at CIA irrespective of his experience.

The new CEO who takes over a hospital with the intention of holding down costs, patients be damned, will not be well received by the staff no matter how much he knows about medicine. But, in the end, that intention is not going to be set by Mr. Panetta. Just as with any new CEO, the key is what the ‘board of directors’ hired him to do. In this case the ‘board of directors’ equates to President Obama. Mr. Panetta is more than capable of performing the tasks assigned to him by the new President. The question we should be asking is what are those tasks?