THE ENTERPRISE--PEOPLE
THE TWELFTH REUNION CONFERENCE: THE IMPORTANCE OF PEOPLE
We finished our 12th Reunion Conference a week ago. As usual, the discussions were stimulating, the people intelligent and we had fun. We also had serious discussions centered around the theme--The Importance of People. We broke the discussions into 3 parts, each one led by a panel of highly qualified people from amongst our attendees. Obviously I can't summarize three intense 4 hour discussions in a few words, but I will try to list just the most notable conclusions or findings.
I--Finding the Best People & Keeping Them Engaged—On "finding, screening, selecting and retaining the best people.
The failure to use an orderly, sequential hiring and screening process, which starts with a "needs assessment and job specification" leads to failures in recruiting that follows. Not using qualified professionals to recruit, screen, interview and hire is equally damaging. Why do so many organizations make these errors? They are in a hurry and want to take short cuts.
The group did a sobering "breakout session" in which we tried to define the qualifications and specifications for hiring the President of the United States. As we did this, we began to realize why we get less than ideal candidates. Nobody really has defined what the ideal candidate is. We didn't either; but we were further along than most Americans have been.
II--Getting People Connected, Personally & In Networks—About "connectedness" involving organizational and networking connections between people--"getting connected and staying connected" personally, using technology, and combined.
There is a great lack of awareness of the analytical tools available to understand how organizations connect and get things done. There are also many new emerging networking tools, often using the Internet. These networks are still changing, but are popular with many, especially younger people. Used correctly, they can be powerful tools. Applied indiscriminately, and they can be immense time wastes, and security risks. The older generation needs to know more about how to use these new tools. The younger generation needs to know more about the context in which such tools are appropriate, effective and useful, not harmful.
III--Educating and Training People for the Future—A diverse session on education and training, "Where will we get tomorrow's work force, its leaders, and how prepared will they be?"
Our educational system is far from ideal, especially in primary and secondary schools. Even at the college graduate level, almost 100% of graduates require additional training before they can become productive in work situations. The misconception that everyone could, or should go to college further muddles the picture. Many people should not aspire to college, but rather to "applied education and training" in fields that are in great need. Medical support staff, machine tool operators--competent to understand both the tooling and computer controlled machines that use it, technicians, practical nurses, etc. are all in great need, and short supply, and virtually none of these jobs are filled with college graduates. New models of schools are emerging, which can succeed by targeting niches--based on parents and children who are willing to make the effort and desirous of the successful outcome. These schools spend longer hours concentrating on basic subjects (math, science, vocabulary/writing, history, etc.) rather than trying to teach "life skills," which parents have traditionally done. These new models must be funded and replicated. The same applies for focused training and re-training programs, which can prepare people to meet specific job needs in our 21st century economy.
A special segment featured three accomplished "turnaround executives" each of which described how they approached the "people situation" when starting a turnaround assignment. Surprisingly (to me anyway), all three used quite different approaches, yet all three have been proven successes with multiple turnarounds to their credit. This was a special learning for attendees
WHO'S TO BLAME FOR THE FINANCIAL CRISIS--PART 2
Democrats like CT Chris Dodd lead the parade. Republicans who were in control for 6 years previously share the blame. The Clinton era policies are also suspect, as are the lenghty periods of very low interest rates set by the Fed under Greenspan. Then there are the lenders (foolish, greedy, imprudent) and the borrowers (naive, irresponsible, dumb). Finally, the ratings agencies, who were at the heart of the worse debacles. Last, nearly everyone in charge has a piece of this one. Obama got the 2nd highest contributions from Freddie Mac and Fannie Mae (for his loyalty to them?) A McCain senior staffer took a healthy salary from them for helping them get overextended. Congress--especially the Democratic side--totally avoided anything to shut off the financial risk because they didn't want to jeopardize their benefactors that fund reelection campaigns. Don't be surprised. It works that way for both parties--just different donor with different needs. MONEY IS THE ROOT OF ALL EVIL--REMEMBER?
RATING AGENCIES--FRAUD OR FAULT?
The mis-rating of bundles of lousy risks into AAA rated tranches of securities was downright ridiculous. Think of what happened this way. If you recall "grading on the curve in school" it makes a simple explanation. Take all the mortgages and pretend they are students. Grade them on the curve and the best (lowest) risks are A students. Now pull them out and do it again, and let the best of the rest be A students. Now pull them out and do it again, letting the best of the rest be the A students. Common sense tells you that this last group was actually full of the worst students (worst risks). But by "grading them on a curve" the best of those were called A students by comparison. That's essentially what was done with mortgages. There were higher interest rates paid for the lower "classes" but they were still deceptively rated, and by doing it in the manner they did, all absolute risk/return measure were gone. It is the flood of defaults in these lower classes that no one wants to buy--making them almost worthless--and there were a lot of them (Billions of $$). IS IT FAULT? OR FRAUD? OR SOME OF BOTH?
NO PAIN--NO GAIN? OR VICE VERSA?
I said a few weeks ago, bailouts are bullshit. They are. That's why the big fuss about if, how and what to "bail out." And moreover, who's going to oversee that huge "blank check." And finally, how do we keep capable executives running these firms if they can be the target of scape-goating? I'd love to see what corporate speak calls "claw back" enforcements applied. That means going after the former executives who led their firms into trouble and "clawing back" a large part of their severance/retirement payments. Will it cramp their lifestyle? Maybe. But if anything over $10-20,000,000 in compensation is clawed back, they won't starve. They may just have to cut back to one mansion and a luxury condo and forgo the private jet to travel between the two. THERE HAVE TO BE CONSEQUENCES.
INFLATION: DEFINED--IT'S COMING!
The creation of more money backed by no more goods or actual wealth. Since the US owns the printing presses, it can create hundreds of billions of dollars quite easily. But if there is no more actual "backing" in good, valuable materials, etc. then each dollar is just worth less. That's called inflation. AS THE NUMBER OF DOLLARS IS INFLATED, THE VALUE OF EACH DOLLAR BECOMES LESS.
WILL RACE MAKE A DIFFERENCE IN PRESIDENTIAL RACE?
Sure. But in which direction? Blacks will vote 95% for Obama. Others will either be concerned about his race and the racial overtones of his wife's published views or Rev. Jeremiah Wright's ranting--or they won't. Nobody knows. It is human nature to be slight adverse to those of different racial origins. But enough to make a difference in the privacy of the ballot box? How much? THAT'S WHY WE HAVE AN ELECTION.
MCCAIN APPEARS TO BE ACTING ERRATICALLY, OBAMA IS LAYING IN THE WEEDS.
Barack Obama doesn't have to worry about ads citing his bad judgement in voting on things during his short term in the Senate. He seldom voted, and often when he did it was "present" instead of yea or nay. When you have no record, it's hard for an opponent to attack your record. John McCain has been in the Senate a long time, and thus has lots of votes open to second guessing. Beware of misleading ads that attack McCain based on his voting record. At least he has a record. As McCain tries to be McCain, it appears to many that he is acting erratically. That's his style. Only after the fact can we judge whether he was right on, or totally off the mark.
THE FIRST DEBATE REINFORCED WHAT THE CANDIDATES SEEMED TO BE
Obama was measured and articulate, well-prepared and with a great deal of information leading to well stated plans--albeit somewhat vague in places.
McCain was more direct, taking simplistic approaches largely based on a much greater level of experience, but with narrower focus and less articulate presentation.
So what's new about that? That is the way they are, have been, and will be. Obama's plans are based on more theory (and many advisors' views) of what can happen, might happen and should be done. McCain's are much more experientially derived, although he too has advisors (one wonders if or when he listens to them), and his outcomes are what he believes can happen, might happen and should be done--from a much more historic perspective. Their "liberal vs. conservative" positions vary considerably; yet, they actually agree on many issues, and have to extend themselves to make the difference seem greater. In my view, ironically, one of Obama's most effective attacks in the debate was on the "wrong" decisions about the war in Iraq. And yet, Obama stated (8 times, the media counted), "John is right." McCain was, not surprisingly, more contentious, stating repeatedly that "He just doesn't understand." Therein lies the great difference in age, experience and outlook—the theoretician vs. the practician. McCain's most effective moment was his closing. "I'm ready now." Is he? Or are either of them?
THE BIG QUESTION I AM PONDERING IS:
Who has the best shot at unifying America & helping create bi-partisan success? McCain has done it in the past--multiple times. Obama's more measured demeanor seems to be ideal for that task, but he has never done it. McCain has led, but "marches to his own music." Obama has never led, but makes a good case for how he would do it. Thomas Sowell ponders somewhat the same dilemma we all face in answering this question.
By THOMAS SOWELL | Posted Tuesday, September 09, 2008 4:30 PM PT
Conservatives, as well as liberals, would undoubtedly be happier living in the kind of world envisioned by the left. Very few people have either a vested interest or an ideological preference for a world in which there are many inequalities. Even fewer would prefer a world in which vast sums of money have to be devoted to military defense, when so much benefit could be produced if those resources were directed into medical research instead.
It is hardly surprising that young people prefer the political left. The only reason for rejecting the left's vision is that the real world in which we live is very different from the world that the left perceives today or envisions for tomorrow. Most of us learn that from experience — but experience is precisely what the young are lacking. "Experience" is often just a fancy word for the mistakes that we belatedly realized we were making, only after the realities of the world made us pay a painful price for being wrong.
Those who are insulated from that pain — whether by being born into affluence or wealth, or shielded by the welfare state, or insulated by tenure in academia or in the federal judiciary — can remain in a state of perpetual immaturity. Individuals can refuse to grow up, especially when surrounded in their work and in their social life by similarly situated and like-minded people. Even people born into normal lives, but who have been able through talent or luck to escape into a world of celebrity and wealth, can likewise find themselves in the enviable position of being able to choose whether to grow up or not. Those of us who can recall what it was like to be an adolescent must know that growing up can be a painful transition from the sheltered world of childhood.
No matter how much we may have wanted adult freedom, there was seldom the same enthusiasm for taking on the burdens of adult responsibilities and having to weigh painful trade-offs in a world that hemmed us in on all sides, long after we were liberated from parental restrictions. Should we be surprised that the strongest supporters of the political left are found among the young, academics, limousine liberals with trust funds, media celebrities and federal judges?
These are hardly Karl Marx's proletarians, who were supposed to bring on the revolution. The working class are in fact today among those most skeptical about the visions of the left. Ordinary working class people did not lead the stampede to Barack Obama, even before his disdain for them slipped out in unguarded moments. The agenda of the left is fine for the world that they envision as existing today and the world they want to create tomorrow. That is a world not hemmed in on all sides by inherent constraints and the painful trade-offs that these constraints imply. Theirs is a world where there are attractive, win-win "solutions" in place of those ugly trade-offs in the world that the rest of us live in.
Theirs is a world where we can just talk to opposing nations and work things out, instead of having to pour tons of money into military equipment to keep them at bay. The left calls this "change" but in fact it is a set of notions that were tried out by the Western democracies in the 1930s — and which led to the most catastrophic war in history. For those who bother to study history, it was precisely the opposite policies in the 1980s — pouring tons of money into military equipment — which brought the Cold War and its threat of nuclear annihilation to an end.
The left fought bitterly against that "arms race" which in fact lifted the burden of the Soviet threat, instead of leading to war as the elites claimed. Personally, I wish Ronald Reagan could have talked the Soviets into being nicer, instead of having to spend all that money. Only experience makes me skeptical about that "kinder and gentler" approach and the vision behind it.
WHAT TROUBLES ME MOST IS EXPLAINED BY THIS SIMPLE SET OF QUESTIONS CIRCULATING ON THE INTERNET
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143 DAYS?
You couldn't get a job at McDonalds and become district manager after 143 days of experience.
You couldn't become chief of surgery after 143 days of experience of being a surgeon.
You couldn't get a job as a teacher and be the superintendent after 143 days of experience.
You couldn't join the military and become a colonel after 143 days of experience.
You couldn't get a job as a reporter and become the nightly news anchor after 143 days of experience.
BUT.... From the time Barack Obama was sworn in as a United State Senator, to the time he announced he was forming a Presidential exploratory committee; he logged 143 days of experience in the Senate. That's how many days the Senate was actually in session and working. After 143 days of work experience, Obama believed he was ready to be commander In Chief, Leader of the Free World .... 143 days.
We all have to start somewhere. The senate is a good start, but after 143 days, that's all it is - a start.
AND, strangely, a large sector of the American public is okay with this and campaigning for him.
We wouldn't accept this in our own line of work, yet some are okay with this for the President of the United States of America?
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Thus, no matter how articulately he presents his plans (whether I agree or not with his political philosophy of more, rather than less government intervention in our lives), I am troubled that I don't know what he doesn't know. I don't know what he is totally unprepared for. He has never felt the pain of the truly hard decisions, been forged in the brutal heat of "battle" whether literally or figuratively. I don't always like John McCain. Anyone who says they do is probably lying. I know he can take the heat and keep on... I know he will always do whatever he thinks is best for America (whether he thinks I'd like it or not). I just don't know that about Barack Obama.
Best, John
PS: Of equal importance is that we get the best people elected to Congress. It actually makes the laws and controls a huge amount of our government. The people in there now are inadequate to the task. Many are dinosaurs that make John McCain look almost reticent and measured in comparison. Obama talks about "clinging"--many members of the Senate and House are "clinging" to their golden parachutes as bad or worse than the executives they so freely criticize. Let's throw some of them out! And let's set some term limits too.
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