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.

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Media please focus on the big issues

With a man occupying the White House who has hard time with truth, civility, history and criticism, there is a bounty of things the media could focus on. And, that is part of the problem. I look at various news feeds and sources and see too many pedestrian foibles that get discussed. Yet, the countless criticisms dull our focus on the more important issues.

My concerns are several, so let me highlight those areas:

– we are borrowing from our future to make a long performing economy a little better, doing the opposite of what is needed to limit our debt from increasing from $21 to $33 trillion by 2027.
– we have ignored our allies and reasonable voices in the US to pull out of various multiparty agreements hurting trade, environment and security.
– we have pulled back several regulations making it easier for industries to pollute and ignoring the federal government’s role in fighting climate change.
– we have blamed immigration for a host of problems and focus on remedies that won’t help people or solve problems.
– we have held up the constitution as sacrosanct, while ignoring the sections on protecting the rights of all citizens, protecting the right and importance of the media and ignoring the clearly defined roles of the three branches of government. It is of vital importance to respect the judiciary’s pursuit of truth, even if the President does not like it.
– we have continued down a path which ignores truths and facts tolerating a man who makes more than a few decisions off misinformation and even disinformation. Governing well is hard enough when we use real facts, it is nigh impossible when we make things up.

Of course, there are other issues, but I attempted to group several concerns into larger categories. In closing, please remember these three cautions – we cannot shrink to greatness, we cannot continue to pee in our global swimming pool, and we must respect the rights and opinions of all people, not just people who agree with you or compliment you.

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.

This zero-sum discourse needs to stop

What does zero-sum discourse mean? It means framing topics in terms of who wins and who loses. I fault politicians, pundits and reporters for this mindset. This mindset preceded the current White House incumbent, but he views most everything through a very short-term transactional lens. Did I win?

The dilemma in discussing who wins and loses on actions, speeches or tweets is it takes the focus away from the issues. Does this decision help or hurt the people, environment or region?

I heard a news discussion on whether the US pulling out of the Iran nuclear deal helps or hurts Trump’s image? That is the wrong question among many better questions. Does it make the US safer? Does it make the world safer? Are we harming our relationships with our allies? Are we making a fact based decision as other leaders are questioning the veracity of this decision? And, so on.

Whether it is healthcare, debt, taxes, environment, financial protection, etc., I do not care who wins or loses politically. When people care too much about winning or losing, I can tell you who gets screwed – it is the people they represent.

Americans want Congress to address healthcare, with the majority saying to fix Obamacare. Instead, the President and leaders in Congress have sabotaged it over the past three years making premiums even higher. They want to see it politically fail while screwing American people.

I am tired of the lack of collaboration. I am tired of the abuse of factual information. And, I am tired of this zero-sum discourse. To be frank, our leaders need to stop trying to keep their job and start doing their job.

Let’s fix the larger gun death problems

Mass shootings are very tragic and heart wrenching. Homicides are also tragic. Yet, the biggest gun problem and another tangible and avoidable problem make up between 60% and 70% of annual gun deaths in America. The lion’s share of gun deaths in America are suicides. Last year, over 23,000 of the 38,000 plus gun deaths were suicides. This ratio is not unusual and tracks pretty well year in and year out.

The other much smaller, but more avoidable gun death problem is accidental shootings. And, tragically the ones doing the shooting or getting killed are children who come across a weapon. To lose a child is the worst nightmare I could possibly imagine. But, to lose one because you did not put away your gun, is even more traumatic. The gun owner has to live with the guilt. While accidental shootings are about 2% of gun deaths, they seem to be ones we should be able to avoid irrespective of one’s fervor for the 2nd Amendment.

After each mass shooting, there is concern registered by kids and parents about not letting this happen again. The people for and against more gun control go into camps with some saying now is not the time, while the others asking when is the time. I must give a huge amount of credit to the Parkland kids and others around the country who are forcing action. But, outside of a little lip service in Washington, nothing tangible happens. They may regret inaction come November.

These past few months, the barest of minimum change was done, but there was the President of the United States speaking before the NRA convention last week. He was the one who taunted Congress representatives for not standing up to the NRA. These were obviously just words, which we should be used to by now. With this said, I do give kudos to Florida who acted a little more demonstrably than DC.

To prevent more suicides, background checks on all sales with elongated waiting periods are needed. Doctors must be permitted to ask patients if there is a gun in the house as the propensity for suicide is much higher than one without. All it takes is an impulse and it is over. We must add more psychologists and counselors to schools. The greater gun risk is a depressed student taking his or her life. And, we should expand Medicaid in the remaining 18 states along with its mental health benefits.

As for the accidental shootings, the majority of states require guns to be locked up at home, but why do not all states have such a requirement? I have shared this before, but I asked my father-in-law to lock up his weapon, as I did not want his grandkids around a loaded weapon. He did so. One idea that has merit is requiring a finger printed trigger, where only the owner can use the weapon.

Please note that none of the above speaks of taking weapons away. These steps would help reduce the number of suicides and accidental shootings. Even if the number is only 100, 500 or 1,000, those are lives saved. Isn’t this what it’s all about?

 

 

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.