Category Archives: Business

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Big League Debuts

I get choked up when a baseball player makes his first official appearance in an MLB game. When I say choked up, I mean I viscerally feel what is taking place on the field. I was in Dodger Stadium when Dustin May first pitched. I recently watched Gavin Stone and Bobby Miller do the same on television with no less emotion running through me.

Those first starts are the culmination of endless sacrifice, physical preparation, and mental resets. There are so few positions available in professional sports it is almost ludicrous to bet one’s future on it. When I see young ballplayers walking onto an MLB field for the first time, usually with their families in the stands on very short notice, I feel a sense of awe and trepidation. A lifetime of dreams can continue for years after that debut, or possibly end right there on an underwhelming performance and a flight back to a playing field a tenth in size.

The power of hope and the threat of failure are all at once alive in a single and unrepeatable moment. I struggle to find the words to convey the meaning of that spotlight and the unknown future it presents as a test, but seeing that ballplayer suited up for the first time and given a spot on the roster by a manager is always in my eyes volcanic.

Then there are the veterans who perform even better late in their careers than they did when they first came up. Clayton Kershaw won his 200th game this season, becoming only the third Dodger to achieve that milestone, reaching an achievement shared with just 96 players in MLB history. I’d like to tell you Kershaw’s debut clearly foreshadowed the legendary career ahead of him, but five weeks after his first MLB game, he was sent back to the minors for fine-tuning. That’s when he recommitted to getting back in The Show and proving he belonged on a big league roster. Nothing could stop him from realizing his potential. He has worked hard every day of his career.

Why does talent reaching the launching point of potential bring me to stunned silence?

The why is as simple as I can say it: I revere talent.

You might have guessed, this isn’t just about baseball. All talent climbing to the apex of a focal point is forever for me an uncanny unveiling. A launch in the majors is not the real start of a career, that happened back in grade school, then again in high school, then again in the draft, and any number of games won or lost along the way in each leg of a player’s journey. Walking onto a big league stadium field for the first time in uniform and on the official roster is a moment of recognition, an entry in a time capsule that isolates a key reward point. It is real to the individual and a metaphor to all who are watching it in real time.

When talent sees the spotlight, when one person’s dream becomes reality, we all can look inside ourselves and see the shape of our dreams.

Talent is such an overused, even abused term. Talent is precious. It’s part nature and part nurture. When it reveals itself, the world breathes differently. At least I do.

There are all kinds of talent: sports talent, artistic talent, design talent, scientific talent, leadership talent, mentoring talent, teaching talent, parenting talent — you name something difficult to do, and if you see someone doing it better than a lot of others, it likely involves talent.

Some start with more natural ability than others but when we see talent at work it is seldom a lightning strike or an accident. Behind the realization of talent is a regimen of development that calls upon all the same forms of dedication and commitment evidenced in the training of athletes. I don’t believe it’s different for doctors, dancers, or poets, perhaps just less visible to the unsuspecting.

I often hear business people talk about the war for talent. That phrase troubles me. Filling jobs is not a war for talent. Creating an opportunity that attracts talent to unlock its potential is not a war at all. If your company is doing work of significance and someone with talent becomes aware of that opportunity, the fit will become natural. That is precisely the scenario where one plus one equals three, five, or ten.

Plug real talent into an ordinary opportunity and little exciting is likely to happen. Attempt the impossible with ordinary applicants and equally little is likely to happen. Marry real talent to real opportunity and the sky is the limit. That to me is the power of talent. That is why I revere talent.

I have been blessed over the past four decades to work beside a number of individuals who quietly changed the world through their talent. Some were gifted beyond imagination. Some just worked harder than all those who thought they wanted to compete with them. Most of their names you will never know, but they were game-changers in my life and the many seemingly impossible hurdles we crossed together. They weren’t just good. They were as good at what they do as Clayton Kershaw is at what he does.

When you are in the company of talent, almost nothing seems impossible.

Bobby Miller won his first three games and then encountered reality and lost a huge one. Gavin Stone at the moment is back in the minors. Their talent remains unquestionable, but how it will reveal itself fully won’t be known for a long time, Neither will debut again, but those debut dates will be memorialized on the scoreboard every time they appear in their active careers.

You had a debut and so did I, maybe not tied to a specific date, but close enough to remember the circumstances. We will watch others do the same. The inspiration of seeing talent emerge is unlimited in scope. When you see the next young ballplayer walk onto the field in that brilliant moment of emergence, remember the applause you offer is your own moment of celebration.

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Photo: The Author at Dodger Stadium, Miller’s Home Debut

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The Uplifting Wisdom of Fred Smith

I recently enjoyed the privilege of participating in a small group online discussion with Frederick W, Smith, the founder and longtime CEO of Federal Express. Imagine being at the helm of a global disruptor like FedEx for an uncanny five decades. Think someone like that might have a few things to say about the life and times of business, society, and learning? You might be as surprised as I was about the big ideas he would most want us to embrace.

Legend has it that the initial business plan for FedEx emerged from an economics paper Smith wrote as an undergraduate at Yale University, describing the need for a reliable overnight delivery service. He best remembers receiving a grade of C on that composition. That idea grew out of his experiences as a young pilot, occasionally offering to deliver important packages for New England technology companies that he would carry in his personal travels.

Equally important in the formation of his character was a four-year stint in the U.S. Marine Corps commencing in 1966 where he received officer training and served in Vietnam. “Yale taught me to think, and the Marines taught me to do,” notes Smith in shaping his vision and leadership of FedEx, which he founded in 1971. The company began regular operations in 1973 and just celebrated its fiftieth anniversary. Smith has transitioned to executive chairman but is every bit as engaged in the company’s direction as he was at the outset.

Early market studies confirmed Smith’s thesis that there was an enormous opportunity for an integrated global delivery network that would be realized by harnessing the power of transportation machinery and sophisticated data systems. He took on the daunting task of merging the capabilities of technology with the mapping of logistics, bringing together physical assets and mathematical calculations on a vast scale. He knew that building this kind of network was a frontloaded bet, but that once established, the barriers to entry of challenging that network would create both a competitive advantage and a trusted brand among customers.

Today that network generates $90 billion in annual revenue, employs 550,000 people plus another 150,000 contractors, moves 16 million shipments each day, operates in 5000 locations in 220 countries, manages 650 planes, and coordinates 210,000 vehicles. FedEx accomplishes this through endless innovation, precision execution, and constant reinvention.

What can we learn from an incomparable entrepreneur, celebrated business leader, and caring philanthropist that might be even more exemplary than an indefatigable work ethic? My key takeaway from listening to his carefully chosen words is that humility is a choice, and Smith embraces humility not just as a core personal value, but as a motivating force that drives him to an always improving game. “The world does not begin with your birth,” he reminds us. “There is much to learn in studying the thinkers who came before you.”

Given the ceaseless advances in information technology, Smith believes it is the CEO’s job to stay immersed in the evolution of change management. In addition to the legally required standing committees of a public company’s board, he has found it essential to maintain a carefully identified technology advisory committee well versed in applied science beyond his company’s core competencies at any time to make sure those technical abilities become core competencies.

He also makes it a point to stay close to senior military leaders both formally and informally for their deep understanding of complex systems and human motivation in urgent circumstances. He has reciprocated over the years serving on key government panels and presidential commissions to help bridge the gap between private business and government, share emerging ideas, and offer his hard-won knowledge as a quiet contribution to public service.

Smith is now keenly focused on embracing the fast climb of artificial intelligence, yet another strategic inflection point both in the growth of his company and the world at large. The threat of cybersecurity has always loomed large on Smith’s short list of key concerns around systems risk, where he sees generative A.I. both exacerbating the problem and potentially forging a path to workable responses. “It will help remove the friction of international customs,” he suggests. He is also passionate about carbon capture, driving FedEx to a carbon-neutral future not just because it is the right thing to do for the environment, but because the companies that get there first will enjoy ongoing business advantages in proving models with measurable returns on investment.

The culture of FedEx remains focused on innovative practices as a competitive platform that is rooted in the company’s founding and ingrained in the necessity of proactive thought leadership. Not surprisingly, he is obsessed with teamwork and team accomplishment over individual ego and achievement. “You’re not the smartest person in the world, be humble,” he reminds us. His observations of multidisciplinary success in business, military, and government enterprises reinforce his championing of building and sustaining team dynamics.

Smith is concerned that people are now spending so much time behind video screens that their sense of reality is being distorted by inadequate forms of communication. “Thinking behind screens” does not bridge viewpoints or bring people together. He observes in social media that it creates “a place where outrage has found a business model.”

Now, about that lasting wisdom: Here’s where Smith brings down the house with his clarity of life’s lessons and unassuming purpose. Staying on the edge of technology and reinvention no matter one’s current success is more tactic than strategy for this highly accomplished individual. What is core to Smith is his embrace of mortality as a further reflection of humility. “Life is short and it ends, the clock is ticking,” he advises. “Don’t get all wrapped up in your personal self, that’s a very unhealthy thing to do.”

What is key to reminding us of our humanity in his worldview? “Maintain a sense of humor, because life in many ways is absurd, and you need to be able to laugh at yourself.” Smith clearly understands irony, has seen his share of farce, and with sporadic investments in the arts, knows a funny story when he hears one.

There you have it from one of the most successful innovators of our time: be humble, remember your mortality, and don’t lose your sense of humor. I would never have guessed that’s what I would take away from this conversation, but how delighted I am to have experienced such a treasure of actionable advice. Fred Smith understands leadership by example. Humility is evident in his journey, mortality is certainly at hand given these reflections, and if you listen at length he might just make you laugh.

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Photos: Pexels and FedEx.com

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The Pros and Cons of Generative AI

Generative AI refers to the technology that can generate new content such as text, images, music, or videos. Like any technology, it has its advantages and disadvantages. Here are some of the pros and cons of generative AI:

Pros:

  1. Creativity: Generative AI can generate new and creative content that can be used in various fields, including music, art, and advertising. It can come up with novel ideas that humans might not have thought of.
  2. Efficiency: Generative AI can create content much faster than humans can. For example, it can generate thousands of images or pieces of text in just a few minutes.
  3. Personalization: Generative AI can create content that is personalized to the user’s preferences. For example, it can generate music or art that is tailored to the user’s tastes.
  4. Automation: Generative AI can automate repetitive tasks that would otherwise require human intervention. This can save time and resources, especially in industries such as marketing or content creation.

Cons:

  1. Quality: The quality of content generated by generative AI can vary widely, depending on the quality of the data used to train the model. The content may be low-quality or even nonsensical.
  2. Bias: Generative AI can perpetuate biases that exist in the data used to train it. For example, a generative AI trained on a biased dataset may generate content that is discriminatory or offensive.
  3. Ethical concerns: Generative AI can be used to create deepfake videos or other content that can be used to spread misinformation or deceive people.
  4. Intellectual property: Generative AI can create content that may infringe on intellectual property rights, such as copyright or trademark.
  5. Lack of human touch: While generative AI can create content quickly and efficiently, it lacks the human touch that makes content truly unique and memorable.

In summary, generative AI has many potential benefits, but it also comes with significant risks and challenges. As with any technology, it is important to weigh the pros and cons carefully and use it responsibly.

Note: This special guest post was created in its entirety other than the title by ChatGPT.

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Photo: Pexels

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A Letter Regarding Financial Faith

Dear Financial Community:

The failure of Silicon Valley Bank is enormously troubling. Call it an isolated circumstance all you want, but it has further stressed our nation’s dialogue. An echo of other bank failures has followed SVB down the drain. Long lines of anxious customers waiting outside banks are never something we want to see. This was unnecessary. This was bad form.

As dependability in our institutions continues to fray, I worry increasingly about where we’re headed. As divided as we are in this nation, can we withstand a true crisis of faith in our banking system? What understandable assurances are in evidence that wider contagion is not possible, that limits can be maintained on the ramifications of remarkably poor judgment?

Where does resilience meet its match and cause us to lose faith in the basics of our grand experiment in economic expansion?

Our economy works on a number of elusive factors in concert with tangible reporting. One of those is faith. If we lose faith in our banking system, the notion of ongoing growth and innovation at scale seems to go out the window. The economic miracle we have created together freezes solid and then melts into the ordinary.

Ample credit fuels dreams. Intelligently borrowed capital brings to market hopeful new companies and bolsters the expansion of existing businesses. Financial institutions, mostly banks, have to lend money for ideas to become enterprises.

Lending money as its own business only works if there is leverage in lending. We understand the rules of engagement: a bank keeps some cash on reserve and lends more than it has at any given time. This works fine as long as there are no unaddressable runs on banks.

Should redemptions exceed liquidity, banks are forced to liquidate assets at any price to return cash to depositors. Trust in the banking system and the FDIC is required of depositors to prevent runs from melting down banks. Trust is a reflection of faith. Lose all faith, lose all trust, we all lose.

Here’s ground zero: If we lose faith that banks can get our money for us whenever we ask for it, deposits cease. If there are no deposits, there can be no lending. That’s the endgame you are teasing when you fail to do your job and cautiously manage risk. Kill deposits, kill lending — that’s a death spiral in the making.

Faith is increasingly becoming a conflicted proposition. Reckless financial engineers test us every decade. The savings and loan crisis. Long-Term Capital Management. Sub-prime mortgages. Washington Mutual. Collateralized debt obligations. Lehman Brothers. One day the combined impact of these attacks on faith may succeed in fully undermining the little faith we have left.

Then the thinning ice cracks for good.

Don’t tell me this time it’s about rising interest rates that weakened your balance sheet. You’re smarter than that. You know history. You knew interest rates had to rise. Nearly free money is never forever. You’ve been making loans as long as you’ve existed. You understand liquidity. You understand it so well that you spend millions lobbying against the very regulations you need to stay in business.

There are no excuses. You take bonuses for being clever. When you’re too clever, the damage has the potential to become systemic. When faith in the system evaporates, apologies are meaningless.

A brand is a promise. When a bank’s brand fails that promise, the entire concept of for-profit banking is soiled. We are only human. Serial violations of trust reveal fragile faults in what we’re repeatedly told is a robust system. We can only experience so many failures before trust is gone.

If we come to believe that U.S. Treasuries are the only safe place to park our money, what happens to commercial lending? If commercial lending retreats, how do the entrepreneurial efforts of the next hundred years replicate the last hundred years?

Do we really want to depend on government to keep righting the wrongs of irresponsible, conniving executives? Government’s role is to referee where self-regulation has proven farcical. Regulate, yes. Adjudicate, yes. Underwrite exponential losses, unsustainable.

If government must guarantee every deposit regardless of the amount in order to maintain faith in those deposits, how can bank executives ever be trusted to take risk seriously?

There’s a lot at stake, more than many of us may yet realize. We’re shell-shocked, but we’re supposed to maintain faith. Each day it’s harder. Each day we put our own historical investment paradigm at risk.

In simplest terms: Please stop putting our nation’s future at risk and punting your unnecessary failures to manufacture compensation you haven’t earned and don’t deserve.

Seek to restore our faith. You need deposits. We need loans. Keep our money safe to put it to work properly. We’ll pay our installments. That’s the contract. It’s a virtuous circle. We all have to abide by the rules, not wait to get caught if enough oversight is available.

Please make the rules work to all our advantage and believe in something more than your own benefit. Prosperity hangs in the balance. You’re toying with breaking everything. Let’s look to another hundred years of wise lending and liquidity to continue investing in positive outcomes we can’t even yet imagine.

Yours in faith,

A dissatisfied lifelong banking customer

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Photo: Pixabay