A lesson that continues to evade someone

A certain man in a global leadership position continues to avoid learning an important lesson. Not only does it hurt his efforts, but it is harmful to this country’s relationships around the globe and within its leadership ranks. The lesson is his failure to vet decisions and communications of such with key people before a broader announcement.

Yesterday, this man decided to walk away from a summit with North Korea without giving advance notice to a key ally in South Korea. As a result, the US relationship with South Korea is strained. Now, he may be whipsawing them again as he has done all week saying the summit may still be on.

But, this is not the first time he has done this. After pleas from our European allies, he walked away from the Iran nuclear deal.  The echoes of that change continue to strain relationships with our allies to the point an EU leader said “with friends like these, who needs enemies?”

His first major change was so horribly vetted and communicated, it was pulled after two days. He failed to discuss with Congressional leaders in his own party that he was instituting a travel ban. He also failed to gain input and buy-in from affected agencies who had to implement the change. It was as he likes to say a “disaster,” but this one was on his shoulders. Soldiers often refer to poor decisions like this with a word beginning with “cluster.”

But, there are many more examples. What may turn out to be his Waterloo is he fired James Comey without telling him. Comey found out from a TV news report. Further, he failed to give advance warning to his communication team, leaving them to make plans in the White House bushes while the reporters waited. That may be the best metaphor for his Presidency.

Yet, for a man who used to have a faux-reality show where he fired people, he has a hard time doing this face to face. He fired Rex Tillerson without telling him. He had Andrew McCabe fired as he cleaned out his desk to retire, an especially vindictive move. Not telling people they are fired beforehand is extremely poor management. And, for someone who likes to talk tough, it reveals those words are part of a false bravado.

His followers like to say what a great businessman he is, but while he is accused of being a great merchandiser, he is rarely accused of being a good manager. Managing a multi-organization business or government is complicated. It requires diligence, input, time, communication, planning and a dose of compassion. For someone who makes decisions on the fly and bullies people, he is at odds with the tools for successful implementations or relationships.

But, as the man once said. “I, alone, can solve this.” With all due respect, no you cannot, but you sure can screw it up.

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Context is important with news

Context is key to understanding. It enables one to understand why a change or news item is important and when people are masking over a problem or blowing smoke.

Here are a few examples of why context matters:

Mark Zuckerberg, the CEO of Facebook testified to Congress of his concerns of privacy of data. He may say he is concerned, but his business model is to sell access to your data to marketers. Unless that model changes, our data will be exposed. Facebook was told to address these privacy issues five years ago and failed to act. It may be a new company, but it has learned to feign concern like an old one.

Football helmets are very high tech these days to soften the impact of blows to the head during this violent game. Yet, no matter how much cushion is offered, the problem is they cannot stop the fact the brain rattles around inside the head when it is struck. Unless football outlaws head hits, the game may have to require players to sign a waiver acknowledging the potential damage before they play and youth tackle football may be banned.

The changes needed in governments are obvious to many, including the legislators. But, they won’t happen. Why? Change will not occur if the people who need to make it are too aligned with what needs to be changed. Politicians are too enamored with keeping their job to actually do their job. Money matters too much in these equations.

Let me close with a final example. There is a difference between someone who does the right thing 19 times out of 20, but screws up one time versus someone where the opposite is more true. The one error for the first person may be similar to one of the second person, but they deserve a closer look. I have seen good people fired because managers ignored this kind of math. Context is key.

Thoughts for Thursday

Here are a few random thoughts on a rainy Thursday, with more rain to come in the days ahead.

A retired ambassador said recently, the US strength is more than its military, it is its relationships with allies. What concerns me is we are devaluing our allied relationships. This is echoed by the European Union Chairman Dean Tusk. Tusk said the EU must be more united than ever before to deal with what he called Trump’s “capricious assertiveness”. My question is this how we want to be viewed by our friends?

Another retired ambassador to Israel said while he agreed with the move of the US embassy to Jerusalem, the US administration made two mistakes. It should have been announced in the context of moving toward a two state solution. In essence, the US placed little obligation on Israel for this move. Also, celebrating the opening on the anniversary of Israel is an insult to Palestinians. This date is not viewed favorably, so the celebration rubbed salt in a wound.

Assuming the role of ambassador for the disenfranchised in the US, a huge opportunity missed occurred during the rushed tax bill which hugely favored companies and the wealthy. I favored some relief on the corporate tax rate, but we went way too far and are negatively impacting our huge and growing debt. The additional opportunity missed I am referencing is not imposing a requirement on companies to provide raises. One way of doing this would have been a concurrent increase in the US minimum wage moving it from $7.25 to a living wage of above $10 per hour. Token one-time bonuses are actually the barest minimum of what could be done with an annual tax break – how about a raise instead? More income to people in need is accretive to the economy.

Finally, I have seen footage of conservative news sources highlighting Venezuela’s problems as an indictment of socialism. While I am a capitalist, I also recognize our country is a mixture of both. Social Security, Medicare, Medicaid, unemployment benefits, and bankruptcy laws are all forms of socialism. We also have other restrictions to prevent unfettered capitalism. Venezuela’s problems are due to corruption and mismanagement that can be traced even back to the popular Chavez. His successor, Maduro, has shown a level of incompetence that is quite visible to all.

That is all for this Thursday. Please share your thoughts.

US CEO Pay has reached epic differential

As reported in The Guardian today, US CEOs now make in pay 339 times the pay of the average worker according to a Bloomberg study of 225 companies. In retail companies, the ratio is 977 to 1 on average. Let that sink in a little.

A quote from the article entitled “‘CEOs don’t want this released’: US study lays bare extreme pay-ratio problem” by Edward Helmore is very revealing:

“According to a recent Bloomberg analysis of 22 major world economies, the average CEO-worker pay gap in the US far outpaces that of other industrialized nations. The average US CEO makes more than four times his or her counterpart in the other countries analyzed.”

Some people may push back and opine that US CEOs may be worth 4X that of their non-US industrialized nation counterparts. If that were true, it would mean US company performance is 4X that of non-US companies and there would be a huge flight of capital to the US.

In my years as a consultant, I have seen CEO pay ratchet up over time, rewarding CEOs with stock grants and options. What happens is a competitive totem pole exercise, where the competitive pay analyses are upward elastic and downward inelastic (they go up more easily than they go down) over time.

I have also observed the 80/20 rule applies to CEOs as well, with 20% of the CEOs earning their keep. I have worked with egalitarian CEOs, benevolent dictator CEOs and some of the greediest SOBs you will ever meet. Seeing CEOs who realize the teamwork involved in the company making money is admirable. On the converse, seeing CEOs who are imperialistic is off putting. As I write this, I am thinking of the handfuls I worked with and some who were notorious over the years for their greed.

On the bottom end of this exercise are efforts to flatten pay for the average worker. Over time companies will use a variety of rationales and tactics to put lids on pay increases. The salary increase budget may be limited because of the uncertainty in the economy, the company is having some hardship or the company expects to have hardship. Sometimes concurrent with the salary budget, groups of people are laid off. Why is the timing an issue? By moving on lower performers, people whose salary increases would have kept the average percentage increase down are removed from the equation meaning better performers will now get lesser increases.

Coupling this with pressure on not increasing the minimum wage and to diminish the power of labor unions (that is another story), these ratios result. I respect greatly the need for incentives to help reward successful CEOs, but we must not forget who helped them earn those numbers.

We have a poverty problem in this country. We have a middle class where too many are living paycheck to paycheck. Yet, our leaders passed a tax law that benefits CEOs, their companies and the wealthy by a large margin. It would have been nice to have at least obligated the pass through of salary increases or an increase in the minimum wage to a living wage. So, do not expect this ratio to measurably decrease any time soon.

Execution matters

Very early in the Trump presidency, he signed an executive order to institute a travel ban. It was so poorly conceived, vetted, communicated and staged, its disastrous rollout was canceled in a couple of days. A key example was he failed to tell (or involve) the people who would execute the decision what they needed to do. He also did not advise beforehand the Speaker of the House and Senate Majority Leader who found out when we did.

Earlier this week and over fifteen months later, the President decided to pull the US out of the Iran nuclear agreement. Whether people agree with this decision, the State department had a very difficult time answering questions the next day as to what this all meant. The did not know answers to questions on the impact on business transactions underway, business transactions that had multiple parties from various countries, business transactions where US suppliers provided parts to French companies working with Iran, etc.

One reporter noted it was shocking how little the State department people knew on what needed to be done and the answers to many questions. They were not briefed. Apparently, the lessons of the first travel ban and other poorly rolled out decisions have not been learned. This is what vetting, planning and communication tries to avoid. Just because a regal person says to do something does not mean it can easily happen. Execution matters. Time matters.

As a former consultant and business manager, I can assure you execution is as important as good ideas. This is a key reason companies spend time and money in project management training. With that said, it is not uncommon to see execution challenges. I recall one prospective client telling me a new software was going to go live a certain date. I asked what alternatives they had considered if certain things did not happen as planned. His answer was of course they would happen on time. It is rare that things go as planned and this was no exception as the start date was delayed.

Yet, what we are seeing from the White House should not be a surprise, as one only needs to look at the business history of the leader. While the confident President would never admit this, what financial reporters and biographers have known for years is Trump is a terrific merchandiser, but they would not confuse him with being a good manager. Managing by chaos and loyalty are not conducive to the very necessary boring competence. Even vetting candidates for jobs is essential and is not a competency for which this White House is known.

Execution matters. Vetting, planning, communication, and time are essential. Without doing these things, too many people are caught off guard. A visual metaphor is White House communication staff hiding in trees from the press after they just found out Comey was fired. Not only did Comey find out after the media did, but so did the Communication staff. Without execution, you have chaos and confusion.

US is going alone again

Unless we alter our course, this period of time will be remembered as when the US ceded its global leadership role. We are following a path of nativism and retrenchment. And, there is one thing for certain – we cannot shrink to greatness.

First, we drop out of an Asia/ Pacific trade partnership early in the Trump presidency. The remaining countries proceeded without the US and inked a deal at the end of last year. Why is this important? When approached to do a bilateral agreement, Japan told Trump to reenter the Asia/ Pacific agreement.

Second, last June we decided to leave the Paris Climate Change Accord, leaving an agreement with pretty much the rest of the world. Even ExxonMobil told us to stay in the accord. Fortunately, businesses, cities and states are picking up the dropped baton, but more is needed from our DC leaders.

Third, we do our darnedest to restrict immigration into our country from several countries and are actively seeking to expel both undocumented immigrants and children who came forward under DACA. What we fail to understand is immigration is accretive to our economy and this is a key part of our ideals.

Fourth, we have introduced tariffs on our allies and trading partners. Not only are we acting like a bully, we are acting unwisely, so say 1,140 economists including Nobel laureates and Presidential advisors. We could be precipitating a retrenchment of the global economy, of which we are a key part. The economists say this is how recessions start.

Fifth, by pulling out of the Iran nuclear agreement, we are heightening global risk. But, we also have turned our back on our allies who asked us to work with them to stay in the agreement. With the reimposed sanctions any EU countries doing business with Iran will also be sanctioned. This will invite sanctions by the EU on the United States’ companies doing business there.

The President views the world in a transactional way which is why he prefers bilateral agreements. He must win the transaction. In multilateral agreements, everyone wins some and loses some. He also does not value diplomacy as we have retrenched in those capabilities. The hard work is done by these folks and China is lapping us in their diplomatic efforts.

We cannot go this alone. We should pay attention to the words of French President Emmanuel Macron when he spoke to the US Congress. He beseeched us to remain involved working with others.

 

Would you work for…

Would you work for a manager that routinely threw people under the bus for problems she created?

Would you work for a manager that told people someone was fired before she told that person?

Would you work for someone who routinely took credit for any good news and blamed others for the bad?

Would you work for someone who treated the truth as a commodity, only using it when it benefited her, but lying most of the time?

Would you work for a manager that was mercurial keeping people on edge?

Would you work for someone who undermined your efforts by releasing information contrary to the mission without letting you know?

Would you work for a manager whose reputation for trustworthiness is poor impacting your credibility?

If you read between the lines, this manager is not a woman. This manager is the President of the United States. And, the answer to all of these questions is no. So, why is it OK that he is President?