Posted by Adam Gordon on Jan 30, 2012 in all, decision-making, leadership, managing uncertainty, scenario planning, sense-making
Martin Sheen as Josiah 'Jed' Bartlet. Picture: @Pres_Bartlet
Even by the standards of modern political media prattle, this was odd: the Guardian yesterday invited and ran a “response” to Barak Obama’s State of the Union address, from Jed Bartlet the fictional president in The West Wing.
One should immediately add that the response was not that of Martin Sheen (the actor who played Bartlet) or anyone from the show. It was that of an unnamed tweeter who can be found here.
The reader vox-pop box was quick to cry foul, asking what next: a piece on space exploration by Captain Jean-Luc Picard, or 007’s analysis of the War on Terror?
Fair enough. But if there is a serious point to be made, and I think there is, it is that fictional leaders do have a role in real world business and policy leadership.
Fiction and storytelling is important and enduring in all human societies because it is an excellent vehicle for considering complex human situations, reflecting on competing motivations and interpretations, assessing choices made with incomplete information, and following these through to their win-or-lose conclusion. Fiction allows multifaceted situations to be captured without losing the complexity.
Parallels
Incidentally, this is why scenario method, which tells stories of alternative future situations, is such an effective planning device. But the point here is that fiction captures complex human situations and senior executives would be the first to recognize parallels between the challenges that imaginary leaders are put through and what they do in a real working day.
If fiction captures and communicates tricky situations well, it therein becomes a learning vehicle. Whether reading a difficult modern novel or watching a soapy TV show, we put ourselves in others’ shoes, vicariously experiencing their conundrums and learning from the outcomes of their decisions.
Would-be successful leaders could do worse than take note of the leadership attributes of winners such as Sherlock Holmes or Superman or Andy Dufresne; or unpick the illusions and ultimate failures of dark lords such as Voldemort or Mr Kurtz.
Furthermore, a good way to learn is to judge real performance against an ideal template. (Judging me against my clarinet teacher, for example.) Whether your politics aligns with the positions and preferences of The West Wing White House or not, there is no denying that Bartlet is set up as a model president in a model administration. He is thoughtful, caring, effective; manifests an ideal balance of intellect, EQ, and decisiveness; is respected and loved by his staff who will go to the ends of the earth for him. He is a template leader.
So it’s hardly off-the-wall to wonder what Bartlet would have made of Obama 2012. That said, it would have been far more interesting to know what West Wing screenwriter Aaron Sorkin or even Sheen, rather than abitrary unnamed tweeter, thought of the State of the Union address.
For the record:
The Lion: President Obama. Mangy, patchy, apparently underfed. Definitely caged. But he has a heart. Whether it is the lion heart of the ruler of Narnia … time will tell.
The Witch: Here we have to go with Shakespeare; in fact there are three witches: Romney, Gingrich, Santorum. On Tuesday Obama called for a fairer country. Notice they responded: fair is foul, and foul is fair.
The Warmonger: he that exited the presidency in 2008, having wasted 4,000 lives and $800,000,000,000 on a war as poorly judged as that of Douglas Haig at Somme, 1916.
Posted by Adam Gordon on Nov 24, 2011 in all, decision-making, managing uncertainty, social change
The future will be full of surprises and reversals. Can leaders and decision-makers get better at seeing them before they happen? Or better at themselves instigating and managing such reversals, in pursuit of social or financial benefit?
A fun and instructive example is the ongoing developments in Exhibition Road, a kind of ‘museum mile’ in London, where the distinction between road and sidewalk is being abolished to make way for a car, bike, and pedestrian free-for-all.
Have the city’s planning wonks finally, truly, verifiably gone mad?
Since the automobile first reared its fearsome fender, road-management wisdom has always been that pedestrians are safest when kept separate from 5,000lb of moving metal.
Evangelists for livable urban areas usually clamor for pedestrian-only streets; or failing that, bigger, better-marked walking, running, and cycle lanes from which drivers are banned.
But pedestrian-car segregation has its own systemic effect. It means drivers are less likely to expect people in front of them, and so less likely to be vigilant and more likely to speed.
Exhibition Road planners say making the street a mixed area makes drivers anticipate something crossing their paths at all times.
Monderman
The mixed-use-street idea is not new: it was pioneered by town planner and traffic engineer Hans Monderman in the Netherlands in the 1980s and 1990s. According to a Guardian obituary, Monderman “succeeded in challenging many long-established assumptions about safety and the relationship between pedestrians and traffic…
“Monderman pioneered an approach that respected the driver’s common sense and intelligence instead of reliance on signs, road markings, traffic signals and physical barriers. He recognised that increasing control and regulation by the state reduced individual and collective responsibility.”
The jury is out on how effective mixed-use streets are; or exactly where they are most effective.
But the leadership lesson is clear: all decisions and resulting directives rest on foundational assumptions. The more robust these underlying assumptions, the better the decisions.
In this case, the assumption that greater safety is achieved by separation of vehicle and pedestrian is being challenged, and may turn out not to hold up at all for specific city areas.
Where assumptions are weak — or become weak over time due to changes in technology or values or market needs — poor decisions follow.
Leaders who don’t identify and regularly revisit the assumptions that underly their past decisions abdicate the ability to manage reversals and transitions when required. And will be surprised and blindsided when others initiate them.
Posted by Adam Gordon on Oct 5, 2011 in all, decision-making, history, leadership, management, sense-making, strategic foresight
“The most vital, obvious, and underestimated lesson in the 100-year history of IBM is you must keep moving to the future,” said IBM President and CEO Sam Palmisano, opening the company’s recent ‘THINK: A Forum on the Future of Leadership‘ conference at the Lincoln Center in New York.
Further gratifyingly embracing the fundamental identity between leadership and successfully navigating the future, Palmisano continued: “It is so easy to stick with things that have made you a successful company or institution – a winning product, a profitable business model … but one of the core responsibilities of leadership is to understand when it’s time to change.”
And then, applying the mantra of respectable industry foresight analysts and practitioners (there are some): “It’s also particularly important to know what not to change, what must endure. To get that balance right is really, really hard.”
The full address is on Youtube.
The THINK conference is a key plank in IBM’s ongoing centennial year observance. It brought together 700 global leaders and IBM partners and employees, shining a light on leadership as a function that demands active, high-quality forward thinking.
Among the many insight nuggets was Carmen Medina, former Director of the CIA’s Center for the Study of Intelligence, commenting that “observing the present” is the only valid basis of future-exploration (correct); and that this sensemaking function is now being augmented by analytic and computational tools that make far better sense of all types of observed data and behavior, for example, social media behavior.
The old horizon scanning function really has become a much more complex, dynamic, and rewarding activity in the current era. Data visualization was also a key theme at the THINK exhibit.
Among the CEO delegates were Sir Howard Stringer (Sony); Jamie Dimon, (JP Morgan Chase & Co.); Jim McNerney (Boeing); Andrew Liveris (Dow Chemical); Peter Voser (Royal Dutch Shell); and Ellen Kullman, (DuPont.) Filling out Shell’s guest list were Abdullah II, King of Jordan; Felipe Calderón, President of Mexico; Laura Chinchilla-Miranda, President of Costa Rica; WTO Director-General Pascal Lamy; NY Mayor Michael Bloomberg; and media celebrities Charlie Rose and Tom Friedman. Selected video highlights are on the IMB100 site.
Posted by Adam Gordon on Aug 11, 2011 in all, decision-making, leadership, management
Jeff Bezos
When I was at INSEAD for my MBA, I noticed it was fashionable for young men on the move in their careers to wear genuinely expensive watches. We’re talking $5,000 a pop and more (and no doubt they would upgrade in time.)
Me, I’d rather invest in my wine cellar: each to his own. The point is, it’s nothing new for rich men to spend handsomely on their timepiece. And nothing new for even richer men to lavish a fortune on signature and-or vanity projects.
So it’s all to type that Amazon founder and CEO billionare,Jeff Bezos, is spending $42m on his timepiece. The clock the size of a building, which will still take a number of years to complete, is being constructed deep in the Sierra Diablo Mountain Range, Texas. It is designed to run for 10,000 years.
On the clock’s web site Bezos says: “It’s a special clock, designed to be a symbol, an icon for long-term thinking… As I see it, humans are now technologically advanced enough that we can create not only extraordinary wonders but also civilization-scale problems. We’re likely to need more long-term thinking.”
This is partly the standard, “world-going-to-hell-in-a-handcart unless we wake up and change our lifestyle” plea for a long-term, sustainable, perspective.
But, in fact, the general thrust of communications around the 10K Clock is refreshingly low on planetary doom. Long Now Foundation founder member Steward Brand says of the clock: “Ideally it would do for thinking about time what the photographs of Earth from space have done for thinking about the environment.”
Builders in clock tunnel. Image: http://www.10000yearclock.net/
So the clock is in fact about exactly what it says on the tin: just a symbol of long-term thinking, a monument to the value of a long-term perspective.
And while 10,000 years is no business horizon, it’s possible to interpret the clock as symbol not just socially, but also in terms of dollars and cents. In a short-term world, where most businesses are rated by the quarterly numbers, it is a living monument to making scaled-up and lasting investments, and not pulling the plug too soon.
Who better than Bezos to put up this monument? In his first report to Amazon.com shareholders in 1997 he said: “because of our emphasis on the long term, we may make decisions and weigh trade-offs differently than some companies.”
The company was founded in 1994, listed in 1997, and but didn’t post profit until 2001. But by the time it did, it was far bigger and more influential than imagined. It was on the road to becoming what it is today: the world’s biggest online retailer, period. Reflecting a final coming of age after 15 years, the share price (AMZN) has doubled and doubled again in the last two years.
Arguably Bezos’ true leadership genius at Amazon in the early days was not just seeing the long-term and scalable possibility (beyond book retailing) but also being able tactically to hold the short-termers at bay for long enough to do the building required.
As a business culture, we’re locked into annual reports and rapid product life cycles. We’re quick to say “fail-fast” and pull the plug on a fledgling project that’s in the red. Or we make a return, so good, let’s cash it in and do something else.
But Bezos was able to see and to say that a critical component of business leadership success is looking beyond your own or your competitors’ time horizons and scale horizons.
The leadership message in the clock is “Don’t think small. Forget short-term wins. Look beyond your time horizon. Give weight to the long-term possibilities. Build for tomorrow and allow the full potential of a project to evolve.”
Posted by Adam Gordon on Mar 16, 2011 in all, decision-making, forecast filtering, leadership, management, managing uncertainty, risk management, strategic foresight
Fukushima plant, Japan. Picture: digitalglobe.com
At the time of writing, Japan is battling a nuclear meltdown and radiation emergency, and Fukushima could become a word suddenly the whole world knows, like Chernobyl.
Bloomberg News has called the whole tsunami crisis Naoto Kan’s “Katrina moment,” and one can only hope and pray for all concerned that the Japanese prime minister is a more competent leader than Bush was at this moment of human catastrophe.
As to the nuclear meltdown: If ever we have been warned about anything in the future, we have been warned about nuclear plant catastrophes. Not only have there been, as it were, verbal warnings going all the way back to the 1950s, but real-world events such as Three-Mile-Island and Chernobyl have fully fleshed out the scenario of nuclear reactor failure or near failure in populated areas.
If nuclear-generated electricity makes sense anywhere, it makes sense in Japan, which famously has no coal or gas reserves. But these are nuclear plants … built right on the Pacific Ring of Fire? Japan is a small island with 125 million people densely packed into urban areas. As we face the possibility of this many people put at risk, however the next few days play out it’s clear the risk and reward of nuclear energy here is out of alignment.
This is hardly news. The question is, why are the plants are there? And the answer is not a simple one of collusion or corruption of government, or shenanigans of power companies, although there may be some of that. It comes down to a misapprehension of probability and risk among leaders and decision-makers such that it appears that risk and reward are in balance, when in fact they are not.
Year 869AD
To think about this, consider yesterday’s BBC Story: Japan tsunami ‘could be 1,000-year event,” saying last week’s tidal wave was equivalent to a giant wave that hit the Sendai coast in 869AD. The report says: ”It is not unusual for undersea earthquakes to generate tsunamis in this part of Japan. Offshore quakes in the 19th and 20th centuries also caused large walls of water to hit this area of coastline. But previous research by a Japanese team shows that (only) in the 869 ‘Jogan’ disaster, tsunami waters moved some 4km inland, causing widespread flooding.”
The point is, tsunamis are common, but “the big one” is a one-in-thousand year event — an extremely low probability outcome.
Here I’m strongly reminded of the days following the depth of the Credit Crunch, Bear Stearns’ collapse, and general world financial system meltdown of 2008. If bankers said one thing sensible through the whole period it was: “this was a one-in-ten-(hundred, etc.)-thousand probability outcome, and extreme ‘outlier’ event!”
A low-probability event means we can relax, right? Wrong. The problem is probability says zilch about impact. “Wild Cards,” or now more famously in Nassim Taleb’s terms, “Black Swan” events are low probability but of game-changing impact.
Taleb’s point, made repeatedly across his various books and articles, is that standard probability theory and Gaussian statistics lull analysts into thinking that because an event is low probability – an outlier in a normal bell-curve distribution – it is of low or lower consequence.
Ignoring the tail of the Bell Curve is okay if events are genuinely assessed as low impact. If they are high-impact aka “fat-tailed” events, they are the most important events we face in the future, in building or maintaining any system or organization.
A probabilistic framework misleads decision-makers because it degrades their attention to crucial events (by tagging them low-probability,) which means next thing they are betting banks on mortgage-backed securities, or building nuclear plants on earthquake fault lines.
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Posted by Adam Gordon on Mar 1, 2011 in all, decision-making, leadership, management, strategic foresight
In the pivotal moment of the movie “Remains of the Day,” US Congressman Trent Lewis (Christopher Reeve) in England in 1936 declares to the “gentleman-amateurs” around him who are blunderingly cosy-ing up to the Nazis: “leave politics to the professionals.”
It’s an expression of the 20th century zeitgeist shift to professionalization of not only politics, but all significant decision-making and management. Business certainly led the way through the century with the rapid rise of managers as a distinct class of professional, expecting the commensurate erosion of family-run firms of any real size and clout.
The problem with family firms are legion: under-qualified if not downright incompetent heirs thrust into positions they can’t cope with or don’t want, family wrangles, inheritance disputes, relative non-accountability of management leading to quixotic decision-making, secrecy mitigating against access to capital and therefore growth, and so on.
So the wisdom became that the family-firm management was appropriate in start-up mode, and then as companies scaled up and moved to external funding and responsibility to multiple stakeholders, professional management should take over for the good of everyone.
Generations
Or so we thought. There is a long-running counter-argument that family firms do many things better, even at scale. Key decisions are made with the fearless straight-talk that is often required, and without bureaucracy up and down the chain. Families may have their politics, but they don’t have the chronic office politics nor resume-polishing that besets so much of corporate life, wasting countless person-hours.
Furthermore, industry and business wisdom that is built up over generations stays in the firm rather than getting washed down the river every time the executive door revolves. The bottom line: family firms remain a more-than-viable model very much alive and kicking all across the world.
These are background issues to Randel Carlock (INSEAD) and John Ward’s (Kellogg) new book “When Family Businesses are Best,” (Palgrave, 2010) which is broadly about navigating a family firm in the changing, globalizing world.
What got my attention particularly is the authors’ contention that family firms are better at developing, retaining, and working to a long-term management perspective. That is, the family is an inherently long-term institution, and well-run family enterprises are run in such a way as to endure for the future for the family – and this is an advantage in navigating and surviving a changing world.
The term the authors’ use is for this kind of management is “stewardship.”
The root problem of most professionally managed businesses is they are run without stewardship – without concern for long-term well-being of the firm or its stakeholders. If we needed reminding, the banking crisis was the product of management that couldn’t be further from stewardship – taking absurd risks with other people’s money for short-term personal wins.
Banks have become the poster child for the follies of short-termism, but the reality is short-termism remains endemic across professional management, both in business and politics. Long after “après moi le déluge” CEOs have taken their packages and are on the golf course, others – employees, taxpayers, the environment, etc. – are paying the price.
What’s measured
At least, post-crunch, it is now incontrovertible that short-termism is an extremely poor strategy for managing a complex and uncertain future. “What gets measured gets managed,” and when what is measured is only the next quarter’s profit figures, bigger failure looms.
The family-run businesses offers a model of long-term management. It is a conservative non- “bet-the farm” model to be sure, but perhaps the path a real steward of value genuinely operating in the best interest of valued stakeholders would follow.
So how might one, without the real flesh-and-blood bond of family ties, get senior executives to think through the effect of their behavior on employees or stakeholders 10- or 20 years in the future, as the head of a family would? Surely only by creating incentive structures that mimic family stewardship – incentives that mean that leaders can’t walk away smiling until the organization (or the value it represents) has been safely passed on to the next generation.
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