A few weeks ago I told you about my client who “acquires houses out of foreclosure, rehabs and rents the properties, then sells the properties to investors” and the consequences of the unintended craziness involved in the auctions in Texas.
Unintended consequences sometimes seem to be the primary result of human actions. It is safe to assume that no one planned to cause global warming or the current economic meltdown.
These are just unintended consequences, but each one is much, much larger than the sequence of intentional human actions which led up to it. Given that we do not have perfect foresight, unintended consequences appear to be truly unavoidable. But they don’t have to be tragic.
Goals, Judgment, Flexibility, and Transparency
We can reduce the negative effects of unavoidable consequences.
Consider a sailor navigating a sailboat into a harbor marked by a lighthouse. Unfortunately, this sailor does not have GPS or an electronic autopilot, so he has to steer the boat manually, using the tiller. He sets the boat on a course to the harbor, using the lighthouse as the marker. Almost immediately the wind, waves, and tide push the boat off course. The sailor constantly corrects the boat’s heading to keep it on course for the harbor. Sometimes the boat has to change course to avoid larger ships heading into port. Most of the time the boat is off course, but due to the sailor’s constant corrections it makes progress toward the goal.
Passengers on the boat may not know how to sail, but they can see the lighthouse and can use the radar screen to track the progress of the boat amidst other ships. They can tell, for themselves, that the boat is on track and making progress.
The sailor has a clear goal and uses his judgment and flexibility to keep the boat heading to port. The analogy to our economic situation is obvious—while the sailor is guiding the boat to a safe harbor; our economy feels like it is careening out of control, heading toward the rocks.
Things to Think About
Given that most of us cannot significantly influence the government or the national economy we need to look closer to home.
How do you guide your business?
How does your team set goals?
How do you encourage transparency?
How much freedom do you allow your employees to use their own judgment?
Do your policies look like the US Constitution (only 4,440 words) or like the US Tax Code (over 400 volumes)?
One More Consequence
Recently I have found a new opportunity, much too interesting to pass up. To pursue this new opportunity with the attention it deserves, one unintended consequence is that I must let go of this blog. With great appreciation for you readers and with many thanks to Miki Saxon, who gave me this opportunity to speak directly with you.
I close with the heartfelt wish that you follow your dreams all your life; that you may fulfill your dreams and that they may fulfill you.
In a nutshell: Jim is an executive and his CEO planned to scale necessary pay cuts so that young, single employees would take the biggest hits and those with children the smallest. Jim questioned the legality in terms of reverse discrimination, but worse he believed that the differences would become known and that would destroy employee trust and decimate the company’s culture. He wanted ideas on what to do.
In the first round of comments everyone agreed that Jim shouldn’t say anything, but also agreed that it was unlikely to remain a secret.
Everyone commented that what Jim could do was dependent on how open his CEO and the culture was—I assured them that Jim had indicated that it wasn’t a done deal and that she was completely open to other approaches.
Rob Hooft suggested that “within each function group, establish a base salary (e.g. comparable with the lowest starting salary in the group), and cut a percentage of what the people earn in that group above the base. An employee with a salary of 55k in a group with a 40k base and a 20% cut would lose 20% of 55-40=15k, that is he will be cut to 52k.”
But I’ve found that complicated actions are frequently misunderstood, so I couldn’t recommend this to Jim. However, Rob also said, “The cutting of the morale must be prevented by positive communication around the process, a real hard job for the CEO.”
Everyone agreed that this was critical to whatever solution was finally adopted.
Rick pointed out that “…the CEO that her pay needs to be cut more (in amount, not necessarily percent) than anyone else’s, and the amount of the cut needs to be leaked. Or, she could simply announce her own cut without any hoopla.”
Phil Gerbyshak suggested that when she makes her statement she should “mention that this cut was done in place of massive layoffs or in place of selling the company, something nobody wants.”
My own suggestions parallel most of the comments, but while I agree that the CEO cut needs to be the largest, the percentage can’t be smaller than her employee percentages or it will look like a scam.
Additionally, I think all the execs needed to feel the pain and exempting so-called stars could destroy the rest of the organization’s moral.
The CEO might also use a series of Town Hall meetings to solicit ideas and input from employees at all levels on ways to cut expenses.
Sunday Jim and I discussed the suggestions so far; he is excited and is planning to show the thread to his CEO.
He’s hoping that over the next few days more ideas will come in to fuel a discussion with the rest of the executive team this week.
I’ll post updates as the come in and share the results when a plan is decided.
“I would be interested to hear your thoughts on differences between personal ownership and group ownership. From first glance those differences seem subtle, but I have a feeling that they are far reaching.”
I thought about that, not just in the context that Mary Jo wrote it, but in the larger one of companies and individuals with whom I’ve worked over the years and here is what strikes me.
I think the difference isn’t just far reaching, but of critical importance because they can be dangerous to the organization.
How so?
Think of group ownership as a form of nationalism with the company in place of the country.
Now think of personal ownership as an ideology.
As long as the nationalism and individual ideologies are aligned or, at the very least, synergistic, then the organization benefits.
But when they are in conflict disagreements become wars, whether overt or covert, energy is wasted, productivity lost and progress comes to a grinding halt.
You have only to look around the world to see how inflexible ideologies tear countries apart and set one part against the other.
The solution to this starts by hiring people that are good fits with the company’s culture. That doesn’t mean they always agree—the last thing you want is a homogenized team—but it does mean that they are flexible enough to put the company first, and their personal ideology second.
Another critical factor in keeping the various ownerships aligned is communication.
By providing complete understanding of the company’s goals, how each person can best contribute to their accomplishment and how those contributions will help achieve the individual’s own goals unites the team and helps it achieve more than any member thought possible.
What else would you do to increase ownership convergence?
I became a thinking adult watching him deliver the news starting in 1962 and when he stepped down in 1981 I stopped watching TV news—I wanted intelligence and objectivity, not image and opinions.
How can those of us who are familiar with Cronkite convey what he did for us? How do we explain to a generation that thinks bloggers, Howard Stern and morning TV are viable news sources what Walter Cronkite gave us?
Walter Cronkite understood the meaning behind Lao Tzu’s words, “To lead the people, walk behind them.”
Here are a few of his comments that I especially like…
“I feel no compulsion to be a pundit.”
“In seeking truth you have to get both sides of a story.”
“I think it is absolutely essential in a democracy to have competition in the media, a lot of competition, and we seem to be moving away from that.”
“We are not educated well enough to perform the necessary act of intelligently selecting our leaders.”
“America’s health care system is neither healthy, caring, nor a system.”
“I want to say that probably 24 hours after I told CBS that I was stepping down at my 65th birthday, I was already regretting it. And I regretted it every day since.”
I hope all of you will click the link and read more about this truly unique man; our country would be different without him.
I know of no better words with which to end today then as Cronkite ended each of his news shows—
I have two special stories for you today, the kind that make you realize that there really are rays of hope piercing the hypocrisy so prevalent these days.
Special because they highlight two very different people and their accomplishments against the odds.
First is the story of a company and its employees who really do live by the professed corporate values. The employee is Jim Sinocchi who broke his neck and was paralyzed from the neck down. Instead of walking away, Sinocchi’s employer created a position for him; he is now director, Workforce Communications at the corporate headquarters. That was 28 years ago, long before passage of the ADA or advent of politically correct actions. The company? IBM.
The second is definitely a story of our times.
Management Today named Kate Craig-Wood one of its 35 Women Under 35 2009: Heroines For Hard Times. Here is what they say about her.
“Craig-Wood began her career at Arthur Andersen. She co-founded web and IT hosting provider Memset with brother Nick in 2002 – it now turns over £2m. In 2008, transsexual Craig-Wood won a NatWest Everywoman award. She was the first woman to tandem skydive onto Everest.”
As most of you know I write a series on Thursday called Leadership’s Future that looks at education, parenting, kids, Millennials, etc. In the course of my reading I see a articles that would be of interest, but I can’t fit them all in, so I thought that today I’d offer up some of the good ones that I haven’t had time to feature.
Assuming you live on this planet you’re aware that there’s a recession going on, so what’s happening in the world of youth and parents?
Do you tweet? Some college professors are finding uses for Twitter in their teaching, although enhancing spelling isn’t one of them; speaking of education, some schools are delivering sex ed via cell phone.
Multiple studies by professors at a variety of universities show that having interracial roommates reduces prejudice. Not that surprising, it’s hard to hate a real individual vs. a hypothetical stereotype.
Finally, there’s a new texting champion (control your enthusiasm) who practiced by sending 14,000 texts a month. Isn’t that thrilling?
What do you do with a slightly-below-mediocre company that keeps its business going by staying in small markets where its dominance is assured by an almost total lack of competition; a company with little regard for its employees and less for the communities in which it operates?
You bring in a CEO who has a passionate belief that the interaction between customers and frontline associates has the greatest influence on success and that the greatest impact on that is the way their leaders/managers treat them.
In other words, employees at every level do unto customers as their bosses do unto them.
Jack Rooney is as far from a rock star CEO as you can get, but he understands that real leadership must permeate the entire company and knows that while true cultural change is neither fast nor cheap it works and therefore is worth the effort.
Rooney calls his approach the Dynamic Organization; he developed it under challenging conditions at Ameritech and brought it to full fruition at US Cellular, which he joined in 1999.
The Pursuit of Something Better tells both stories, Rooney’s and US Cellular’s; they are told by Dave Esler and Myra Kruger, the culture consultants who worked with him at USC and his previous company.
Both stories are the culmination of a man who believed in doing the right thing and a company that was changed accordingly.
“Jack Rooney and his slowly-expanding team of believers challenged the long-prevailing assumptions that business is a blood sport, that the advantage inevitably goes to the ruthless and the greed, that the only way to win is to hold your nose and leave your values at the door. He has proved beyond question, once and for all, regardless of what happens from her on, that a values-based model works, that it can raids both a company and the individuals who are part of it to undreamed-of-heights, to peak experiences that will last a lifetime and change the way those lives are lived.”
And while the authors do a great job of telling the story, the real leadership that Rooney provided, along with his concept of the Dynamic Organization, aren’t broken down or spelled out as a set of lessons and how-to’s separated for you to memorize.
It’s your responsibility to learn from what was done, drawing out those lessons that are most in synch with your MAP, because if they aren’t in synch there’s no way you’ll be able to implement them.
And in case you’re tempted to shrug it off as a fluke, I suggest that you give some long hard thought to Zappos and its ilk.
I highly recommend The Pursuit of Something Better. It’s fun, it’s fascinating. You might even start to believe that you don’t have to leave your ethics at the door; at the very least you’ll know what to look for in your next interview.
I have a question for you today and I’ll post my thoughts on the subject Monday.
I had a phone call from an executive today, “Jim.”
In short, Jim said that he understood why his boss was instituting pay cuts across the board, but had found out that the cuts were scaled with those who were young and single taking the biggest hit, older or married less and those with children the smallest.
This isn’t public information and when he asked his boss about the rationale, she said that the company had limited resources and that those with fewer responsibilities should be willing to make a greater sacrifice for the sake of those with greater ones.
Jim believes that this action isn’t legal and will open the company up to a lawsuit and even if it is legal it won’t remain unknown, will destroy employee trust and decimate the company’s culture.
The CEO sees it as the fairest way to deal with the problem.
Jim called looking for ideas on how to convince her that this is a bad idea; further, he would like to offer a better approach.
What’s going on? This post is a call for your thoughts.
I simply don’t understand what today’s parents are thinking—assuming they are thinking at all.
18 years ago Wanda Holloway tried to hire a hit man to improve her 13 year old daughter’s chances of making the cheer-leading squad.
More recently Lori Drew helped her teenage daughter fake a MySpace page that drove another teen to suicide.
Parents launch efforts to destroy teachers who don’t hand out ‘As’; they scream at referees and umpires when they disagree with a call; they threaten coaches who don’t allow their kids to play enough.
On one hand they enable their kids to avoid all responsibility and on the other castigate them for not living up to whatever parental dreams they are trying to realize.
I know that it’s not all parents; and this isn’t a new rant, but it’s one to which I keep coming back.
And it came back with a vengeance, in fact you might say my outrage cup runneth over, when I read that Senator John Ensign’s parents paid off his mistress.
“The wealthy parents of Sen. John Ensign (R-Nev.) gave $96,000 last year to the staffer who was then his mistress and to her family, his attorney said yesterday.
The gifts to Cynthia L. Hampton and her family were given “out of concern for the well-being of longtime family friends during a difficult time,” according to the lawyer, Paul Coggins.”
Ensign’s parents aren’t Gen-Xers and probably not Boomers, so this problem isn’t new.
You read stories about helicopter parents all the time, but when does it end?
How can anyone expect a person to make good choices when their mistakes (and worse) are ‘handled’ for them by their parents?
What do you think about Ensign’s parents’ actions? Obviously, pay-offs aren’t in the same class as murder; are they better or equal with bullying?
I don’t have any answers, but we’d better find some—and fast!
An open discussion is a place to start so let’s hear your thoughts.
Entrepreneurs face difficulties that are hard for most people to imagine, let alone understand. You can find anonymous help and connections that do understand at 7 cups of tea.
Crises never end.
$10 really does make a difference and you’ll never miss it,
Unintended consequences sometimes seem to be the primary result of human actions. It is safe to assume that no one planned to cause global warming or the current economic meltdown.
In a nutshell: Jim is an executive and his CEO planned to scale necessary pay cuts so that young, single employees would take the biggest hits and those with children the smallest. Jim questioned the legality in terms of reverse discrimination, but worse he believed that the differences would become known and that would destroy employee trust and decimate the company’s culture. He wanted ideas on what to do.
The solution to this starts by hiring people that are good fits with the company’s culture. That doesn’t mean they always agree—the last thing you want is a homogenized team—but it does mean that they are flexible enough to put the company first, and their personal ideology second.
First is the story of a company and its employees who really do live by the professed corporate values. The employee is 
Assuming you live on this planet you’re aware that there’s a recession going on, so what’s happening in the world of youth and parents?
What do you do with a slightly-below-mediocre company that keeps its business going by staying in small markets where its dominance is assured by an almost total lack of competition; a company with little regard for its employees and less for the communities in which it operates?
In short, Jim said that he understood why his boss was instituting pay cuts across the board, but had found out that the cuts were scaled with those who were young and single taking the biggest hit, older or married less and those with children the smallest.
18 years ago 
