Miki’s Rules to Live By: How To Live

Sometimes when things get tough it helps to have something right in front of you to grab hold of; not so much to keep going, but to help you change course.

Changing course is often the best way to get past a problem; it’s no that you ignore it, rather you approach it from another direction—or find that it’s not necessary and just let it go and move on.

Ten years ago my niece sent me a card that I framed. It’s hung on the wall by my desk at three different locations and it still works.

It’s from a hand made card by Mary Anne Radmacher.

Live Loudly

Peer over the edge of your possibility.

If you’re looking for a very special message, for you or someone else, check out her website or look for them in a good card shop.

Image credit: francescopozzi on flickr

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In Praise Of Failure

Failure isn’t really failure unless nothing is learned.

Learning from it means that you need to look at it differently.

Few individuals or companies enjoy dwelling on what they consider failures; most pick themselves up and move forward; the strongest dissect what went wrong.

They take the time to decompose the thoughts and actions that didn’t work and document them in a ‘lessons learned’ report.

Good so far.

But what happens to the report? Is it neatly filed with the project information or under another heading?

Investing effort in lessons learned reports only to file them makes it more likely that the errors will be repeated again in the future.

And that is frequently the case.

Instead, if the goal is to learn, then learn to LAUD IT.

Look at what went wrong, not what worked;

Analyze what was done;

Understand why it was done;

Determine how to fix/improve both thoughts and actions.

IT refers to using technology to share the information, making it easily available to everyone and searchable.

Try it. LAUD IT.

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Wordless Wednesday: How To NOT Learn

Now check out my other WW: How You Learn

Image credit: Mike Licht, NotionsCapital.com on flickr

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Barrett’s Briefing: The Cost of Unintended Consequences

Actions have consequences—mostly unintended.

One of my clients in Texas acquires houses out of foreclosure, rehabs and rents the properties, then sells the properties to investors.

Yep, they “flip” houses—one of the emerging business models in this new economy. The secret sauce in this business is in acquisition and resale, not in the rehab.

This company acquires houses through county foreclosure auctions, which are an amazing example of the unintended consequences of government regulation.

At every step in the foreclosure and auction process, the government regulations are clearly designed to protect an abstract concept of fairness. As a result, the process inflicts the maximum financial damage possible on the unfortunate homeowner, who is already losing a house.

Foreclosure processes are controlled at the state and county level, so we’ll use Texas as the example, although many other states are even more peculiar.

Big problems often start small, then grow.

To give some perspective, each month Harris County (Houston), Texas has around 4,500 bank foreclosures and 500 county tax foreclosures. This is about ten times more than 18 months ago. That’s growth on the scale of the internet—or health care.

After a hundred years, things may change…

Texas foreclosure laws, mostly written in the past 50-100 years, require that all foreclosure auctions must be conducted on the first Tuesday of every month, on the county courthouse steps, in an “open outcry” auction. Rain, shine, or holidays, eager bidders convene on the courthouse steps every first Tuesday to search for bargains.

But this is not just one auction. Harris County has eight precincts, each with several constables, and each constable conducts his own tax auction. To add to the confusion, trustees, who hold the property title for the foreclosing banks, also must conduct their auctions, at the same time, and on the same courthouse steps.

So, on the first Tuesday a property investor will find ten to fifteen constables and thirty to fifty trustees all auctioning off foreclosed property in open outcry, at the same time. It’s more like a flea market than an auction.

Texas law specifies the method of notification. Foreclosure notices must be posted on the courthouse wall by the 18th of the month preceeding the auction. An investor has only two weeks to review 5,000 properties, estimated a market price, and make a personal inspection.

Texas law also specifies the method of payment – cash or cashier’s check – and the bidder qualifications. A bidder can bid only for himself. Stand-ins are not allowed. So an investor may find 10-20 properties of interest, only to discover that they are being auctioned by different people, in different places around the courthouse, at the same time.

Constables and trustees do not identify the property by its street address, but use a tax ID number – a string of 14 digits, with no alpha characters or other breaks, so there’s yet another challenge for the potential investor in identifying his selected property, attempting to listen to a soft-spoken constable amidst many other auctions.

Government regulations tilt the playing fields.

Finally, Texas law specifies the remedies for a buyer at the auction who may make a mistake. There are none. Once the bidding is done, the county cashes the cashier’s checks and the investor owns the property.

No possibility to recover from any mistake. It’s a huge opportunity for investors with lots of cash, lots of time to do the homework, and with nerves of steel. As a result, bid prices are very, very low.

It looks almost as if the state of Texas designed a process to minimize the bids on foreclosed properties at auction. While each of these regulations made some sense at the time, they look very dated now and one significant unintended consequence is to destroy any homeowner equity remaining in the foreclosed property. Another major unintended consequence is to shift the advantage heavily to full-time investors with lots of cash—the “fat cats” who have the time and knowledge to game the system.

It’s easy to poke fun at the process; but that’s not to the point. If we investigated government-run insurance, government-run construction projects, or any other government operation, we would find exactly the same situation.

Regulations create exceptions and processes that experts can exploit.

More regulations create more exceptions, more experts, and more gains.

Is there any solution for the unintended, unfair consequences of government regulation?

Next week we will explore goals, judgment, and transparency. Can these play a role in reducing unintended consequences? What are their unintended consequences?

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What Are Values?

What would your reaction be to an executive who, when asked about company values, replied, “What do you mean by ‘values’? Do you mean ‘value’? I don’t understand what you mean by ‘values’.”

That was Sir Alan Sugar’s response at a recent conference when asked if he’d ever sacked someone because their values conflicted with the company values. (In case you’re wondering, Sir Alan is the counterpart to Donald Trump on the British version of The Apprentice.)

Based on what we’ve seen lately, Sir Alan has a lot of company.

So I have some questions for you.

• How do you establish values in your company or in your life?

• Do you depend on a set ideology or do you determine them yourself?

• Are your values absolute or are they flexible? Why?

• Are they sustainable?

I hope that many of you will take the time to respond and add your own thoughts.

Hat tip to the Leadership Hub for this quote.

Image credit: Arenamontanus on flickr

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mY generation: Tweeting Like A Bunch Of Chicks

See all mY generation posts here.

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Saturday Odd Bits Roundup: Three On Culture

As you all know, I’m a corporate culture addict; I follow stories on culture the way most people follow celebrities. I have three to share today.

As anyone who follows business news knows Alan G. Lafley, CEO pf P&G for the last nine years is stepping down. Read this McKinsey interview with Lafley from 2005 and compare it to what he did. This is a guy who walks his talk. Then take a look at this short comparison by Bruce Nussbaum of Lafley and Bob Nardelli and decide which one you’d rather channel.

Want to read a short short story about changing corporate culture? Good, because here is one.

Last is a fascinating story on how to innovate from the outside in. Which leads you to Innocentive and the opportunity to innovate on your own and get paid for it. Don’t laugh, real creativity doesn’t have a job title, nor do colleges offer degrees in ingenuity.

Image credit: MykReeve on flickr

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What’s Your Management Attitude?

Years ago when I was a headhunter I recruited “John,” an inarticulate hardware engineer who wore his hair like Willie Nelson, had a beard streaked with gray, no-fashion clothes and was a bit vague about the world.

But John was brilliant and a genius in his work. He could look at a circuit design and know that it wouldn’t work, although he couldn’t always explain why.

The vp he worked for at the time ignored him, dismissed his opinion, built the circuits anyway and was shocked when they wouldn’t work.

All that changed when I stole him for a client whose focus was content, not looks or delivery.

“Jim” had no belief in intuition, but a deep belief in what he called ‘unconscious pattern recognition’, which, he said, was why John knew a bad design when he saw it.

John told me years later that Jim was the only person in his whole career who seemed to appreciate and value his skills.

According to Jim, in many ways John was a pain to manage, but his value to the product development effort more than off-set the irritation factor. He said that if managing people was easy managers wouldn’t be paid a premium.

And that brings us to the point I want to make.

I’m really tired of hearing managers constantly complaining about

• needing to hire ’self-starters’ so they can focus on building their leadership skills;
• the amount of time they spend settling team member disputes;
• how childish their people can be; and
• how the time spent hiring take them away from their ‘real’ work.

If you choose to become a manager you need to understand that

• no matter your level your people will always take precedence over everything else, because without people there is no company;
• people do become childish when thwarted or upset and that one reason that you make more money is that it costs more to hire a trained, adult baby-sitter than a teenager;
• few stars are born, rather they are the result of how they are managed; and
• if you don’t like the above three points you shouldn’t be a manager.

Management isn’t everybody’s cup of tea, so how do you know if you are/will be good at it?

Look in the mirror and answer this question:

Would you be happy and engaged if you reported to yourself?

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Are Women Catching Up To The Wrong Men?

There’s a lot of talk that women wouldn’t have taken the same risks if they had been running Wall Street. According to Betty Spence, president of the National Association for Female Executives, that’s because “women don’t tend to bet the farm because their children live there.”

Don’t be too sure.

Perhaps women just haven’t been in a position to bet it, but they’re getting there.

“As early as this week, though, an American start-up company, AltaRock Energy, will begin using nearly the same method [that caused earthquakes in Basel, Switzerland]  to drill deep into ground laced with fault lines in an area two hours’ drive north of San Francisco.”

Susan Petty, a veteran geothermal researcher, founded Alta Rock to do geo-thermal research.

“In a report on seismic impact that AltaRock was required to file, the company failed to mention that the Basel program was shut down because of the earthquake it caused. AltaRock claimed it was uncertain that the project had caused the quake, even though Swiss government seismologists and officials on the Basel project agreed that it did.”

Am I the only one who is reminded of the expert warnings that were disregarded from people such as Warren Buffet regarding derivatives 5 years before they blew up or Harry Markopolos warnings a decade before the lid blew off Bernie Madoff’s Ponzi scheme?

Maybe Bella Abzug’s comment that “our struggle today…is for a woman schlemiel to get as quickly promoted as a male schlemiel” is finally coming true.

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Wordless Wednesday: How Social Are You?

Now click for another social consideration.

Image credit: Intersection Consulting on flickr

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