Back to Business

Last week more than eighty corporate CEOs signed and published a manifesto, agreeing that our nation needs both spending cuts and revenue increases to move forward.  It was a simple, clear statement, meant to advise Congress and our soon to be elected President that it is time to break the stalemate.  Here is the text that appeared in the Wall Street Journal, October 25, 2012, reprinted for convenience:

“Policy makers should acknowledge that our growing debt is a serious threat to the economic well-being and security of the United States.

It is urgent and essential that we put in place a plan to fix America’s debt. An effective plan must stabilize the debt as a share of the economy, and put it on a downward path.

This plan should be enacted now, but implemented gradually to protect the fragile economic recovery and to give Americans time to prepare for the changes in the federal budget.

In order to develop a fiscal plan that can succeed both financially and politically, it must be bipartisan and reforms to all areas of the budget should be included.

The plan should:

Reform Medicare and Medicaid, improve efficiency in the overall health care system and limit future cost growth;

Strengthen Social Security, so that it is solvent and will be there for future beneficiaries; and

Include comprehensive and pro-growth tax reform, which broadens the base, lowers rates, raises revenues and reduces the deficit.

The recommendations of the bipartisan Simpson-Bowles Commission, which saved $4 trillion and addressed all parts of the budget, provide an effective framework for such a plan.

The plan should be conducive to long-term economic growth, protect the vulnerable, include credible enforcement mechanisms to ensure that debt reduction is achieved and leave the next generation better.”

Strangely the formation of this consensus among competitors from a sample of highly influential business leaders on multiple sides of the political divide did not receive more attention.  No, it’s not a perfect proclamation or unusually eloquent, but it could be a spark to ignite meaningful pressure on those in our government who need it most.

Perhaps there is too much noise out there to hear the unified voice of corporate direction demanding an end to party stalemate.  Agree or disagree with the particulars, but it is time for the entire population to embrace the same demand.  No action  by Congress is not a reasonable response to the Fiscal Cliff we face together.  No deal in Congress means all Bush-era tax relief will be eliminated at the end of 2012, while across the board federal budget cuts will be mechanically enacted in virtually all areas of non-entitlement or interest expense as a result of sequestration in our failure to address the debt ceiling.  Both parties agreed late last year to sequestration in the event that well-considered budget policy could not be deployed on a line by line basis, with expected care and diligence applied to the hard decisions that have to be made rather than whacking the morass with a machete.  You would think dedicated, elected officials would have long ago embraced the gravitas of their charge.  Sadly, the time for surgical precision is quickly running out.

Any common ground has to agree that the Fiscal Cliff is not worth any ideological mandate.  The nation cannot afford a repeat of last fall’s debt ceiling fiasco, which in my opinion was one of the worst failures of democracy and representative government in a generation.  We need to get back to business.

As I have written before with respect to innovation, building a consensus is not the same as caving to compromise.  There is cop-out compromise and there is collaborative compromise.  Cop-out compromise means walking away from one’s core values, abandoning that which is fundamental to being constructive, the undermining of sound judgment.  Collaborative compromise arises from acknowledgment of the real prize — progress that likely cannot include every single designated component serving an agenda.  Collaborative compromise is guided by consensus, a combining of good ideas around an agreed set of goals articulated and guided by sound leadership.  The eighty-plus CEOs who delivered their move-ahead manifesto understand how to build a consensus because they have to do it everyday to hold teams together, get stuff done, and create economic value.

When compromise means abandoning one’s truest values to survive then I agree that is not a good definition to support, but I don’t see that in our economic dialogue in Washington.  If compromise means reasonable give and take to support a well-advised consensus as illustrated in the CEO Manifesto, then it is time for our government to compromise.  More than time.  It is the essence of representative democracy.  It is what they were elected and hired to do.

We must get back to business.  People need to work.  Government services have to be provided so we don’t bump into each other.  Taxes need to be fair and they need to be paid.  Credit markets need to flow.  The economy needs to function.  All of this underlies the free markets we cherish.

No candidate should ever take your vote for granted, you award it as your precious right.  Reasonable action by Congress is overdue.  Contact your representatives now.  Tell them that walking us over they Fiscal Cliff will cost them their authority.  Sequestration means they didn’t do their jobs.  Demand leadership, demand shared vision.  We need to overcome the impasse immediately following the Presidential Election.

Let’s get on with it.  Back to business.


The Grating Divide

CBS News recently reported that there is no longer a group we can consider as “moderate” in the U.S. Senate.  In a report on November 22, 2011 looking back on the past 40 years, Scott Pelley sourcing research from the nonpartisan National Journal noted that in 1982 there were 60 Senators who could be described as moderates, while today there is zero.

Zero moderates?

Two questions come to mind: 1) What criteria could we be using to define the concept of moderate that would rule out everyone in the Senate; and 2) If this is truly the case, how can this possibly be good for the nation?

If the essence of this analysis is that all Democrats are left of center and all Republicans are right of center, I suppose that would leave us with zero moderates.  Yet we all know this is not the case, the party labels of Democrat and Republican have largely become just that, where we all know Democrats we consider more conservative than some Republicans as well as some Republicans we consider more liberal than Democrats.  Clearly President Obama is receiving as much if not more criticism for the actual agenda he has pursued from vocal members within his own party for “not being liberal enough,” and the most significant criticism articulated about once leading Presidential Candidate Romney by numerous members of his own party is that he is too liberal.  Here we have a handful of labels that are useful to certain individuals on any given day for campaign positioning, high profile op-ed pieces, and extremely uncomfortable holiday table rhetoric, but beyond that, these labels aren’t doing us much good.

That doesn’t mean the divisiveness in our nation is any less real; it remains as the CBS News story implies a disease that is killing us.  The problem is that regardless of monolithic labels like moderate, liberal, and conservative — descriptors that tend to have almost no meaning in our day-to-day lives where business behavior and social interaction demand a level of civility and tolerance for anything to get done in a timely manner — our elected leaders at the national level have fully separated themselves from anything that vaguely represents the real world and isolated themselves in a war between two parties that does not reflect the desires, hopes, dreams, and aspirations of a people who really do wish to be united under visionary leadership.

The divide is on party vote, creating a climate where the mandate of political survival necessitates that whether in truth moderate, liberal, or conservative, an elected official still votes along party lines so as not to be perceived as a traitor to the party.  The party articulates a definitive point of view — whether that is no tax increase can be on the table or a tax increase of some sort must be on the table — and there you have it, intractable postures.  The result?  We still haven’t resolved the debt ceiling with intelligence, we are going to allow it to be done by mathematical computation.  If preordained formulas are going to be the measure by which critical decisions of how precious and limited resources are going to be allocated, one starts to wonder exactly what we are getting for the time and money of those being sent to our nation’s Capitol as voices of representative democracy.  We are willing to go to war with enemies overseas to advocate that democracy is the best possible ideal for self-determination of nations, yet at home we allow our own democracy to languish while our leaders fight among themselves for agendas of their own career advancement that are entirely irrelevant to the people paying their salaries and standing on the sidelines waiting to be rescued from stagnation.

Now while Congress fights (before it vacations again) over whether current extension of tax cuts and jobless benefits must be tied in a single package — another all or nothing argument that mirrors the failure of the Super Committee — millions of Americans are facing the end of year holidays in complete fear they could lose everything they have before they can get back on their feet because our government cannot do its job.  There can be no more excuses here — the needs of the nation must trump the needs of those who manage the nation, and those who will reap the lucrative benefits of post government service with lobbying jobs that continue to compromise the very fabric of fairness in practice.  Not much holiday spirit there, and no rhetoric makes things right when the bank forecloses.

I have written before that polarization is not only anathema to advancement, it is largely not tolerated in the business world.  Indeed a corporation is not a democracy, it is run by a CEO with executive authority that can be autocratic when necessary, but those of us in the working world know how seldom a successful CEO exercises that kind of power — the use of a blunt instrument is too often demoralizing to employees who thrive when they are empowered.  Is there career advancement at risk in a corporation?  You bet, every single day.  Are there winners and losers on a personal level, despite the fortunes of the company?  Yes, sometimes.  Do companies on occasion forget that competition is outside the walls of the enterprise rather than down the hall?  Oh yeah, happens all the time.  Yet to maintain one’s stature and upward mobility in working life, most of us come to realize the wisdom and benefit in building consensus viewpoints around difficult measures — and the more complicated the problem, the more upside there is to be found in working toward consensus.  Consensus is not the same as compromise, but it incorporates tactics of compromise to allow the best of ideas from different points of view to come together to form more enlightened arguments and better constructed resolutions.  The winning formula in consensus understands there is always a big picture, and in standoff bifurcation there is only momentum for standstill behavior.

Any organization frozen solid when facing a crisis is likely to fail.  Strong executives understand that this is often the difference between positive and negative earnings, and rather than worrying about getting their way on every detail because they so strongly believe it, they worry about obstructions to the organization’s success.  A leader articulates a vision, listens, is decisive, and then sees to it that anything blocking success is removed from the path, not cemented at the crossroads as a monument to unhelpful ideology.

There are any number of points of view on any number of critical issues facing our nation, but my sense is that real question before us is how we rediscover the commonalities that make us a great nation and not a divided people.  If we have no moderates in government that we have no one who represents the voice of the people, which by definition in its aggregate is moderate.  Dividing lines may help individual careers and fuel unlimited punch lines for the evening talk show hosts, but they aren’t helping you and they aren’t helping me.  If Washington can’t get over it, then we need to show them where they are wrong.  If our elected officials simply refuse to lead by example, then it is time for the rest of us to show them how.  There is a lot at risk here, way more than an election, way more than claimed vindication.  We cannot meet our challenges if we remain divided, not a chance.  We must find a consensus and a shared voice of which we can be proud.

Demand more, demand better.

To Protect, To Serve – Really!

Some things are not right.  Given the current economic turmoil around us, there seems to be an abundance of things that are not right.  It’s almost eerie how the public debate ebbs and flows as we near year-end from one troubling scenario to another.  A quick gaze through recent headlines gives even the most hardened cynic pause in light of the values so many people with different points of view might otherwise consider to be common ground.

Our government is teetering on the edge of being unable to govern.  It is almost impossible for the average American to believe that party divide has accelerated to such a level of dysfunction that we can no longer take for granted the day-to-day work of ensuring the well-functioning of basic social institutions.  We granted Congress the opportunity to redeem its inexcusable failure in not reaching agreement earlier this year on the debt ceiling through an extended negotiation through this week via an appointed Super Committee — and they failed again.  They literally gave up, threw up their hands and said sorry, we can’t find a way to do this, “we” cannot agree.  The “we” referenced is the “we in Congress, not the “we who elected them.”  It is not so much that they failed to make “a deal” as much as it is that they failed to prove the vitality of our democracy, that at its core our celebrated process of governing by, for, and of the people is dependable.  Government failed, and that is not OK.

Last week we learned that one former Speaker of the House does not see an issue with accepting a seven-figure payday from now bankrupt Freddie Mac for providing consulting services of an undefined value other than to say its business model was problematic.  Another former Speaker of the House does not think it necessary to respond to the question of whether being invited to participate in an IPO is a potential conflict of interest for an elected official entrusted with legislating financial policies.  Neither of those is OK.

We also recently got to hear the lavishly compensated CEOs of Fannie and Freddie tell a Congressional panel that they needed to have discretion to continue to pay taxpayer funded bonuses to prevent further brain drain in their organizations.  What talent is it that they need to protect?  They are bankrupt.  Can they be less bankrupt with better paid people to mop up the remains?  National unemployment is still above 9%, many of those people with accounting degrees and MBAs who really want to work.  Bonuses paid from tax dollars are not OK.

Police at UC Davis assaulted non-violent demonstrators with pepper spray.  We have seen the video; there was no threat to the police, the demonstrators were exercising their Constitutional right to free speech and assembly.  For that, they were attacked by armed authorities.  That is not OK.

MF Global “can’t find” over a billion dollars of client money.  Their recent bankruptcy filing reveals sloppy and incomplete accounting throughout a period of aggressive and speculative bets on European debt.  The firm’s CEO was a former Governor, Senator, and CEO of one of the most substantial financial firms in the world.  That is not OK.

Students at a university rioted because their head football coach was terminated in light of a child abuse investigation where he did not report allegations to legal authorities.  They rioted — destroyed public property — because they were angry their football team might not have the leadership to continue winning.  That is not OK.

We also were asked to believe that pizza is a vegetable and should be classified as such for children in our schools.  Even Kermit the Frog found this appalling (for those who missed it, last weekend the Muppets dropped by SNL).   As Seth and Kermit expertly teed it up: Really, the food lobby actually thinks this is acceptable marketing?  No, that is not OK.

These are just a sample of the kind of news we hear daily, as if none of it is out of the ordinary, and all of it will somehow correct itself.  We are numb to hearing of crisis and scandal, and as angry as we become, we turn the page knowing that the next story will break soon enough, and we have to keep our wits about us.  Many of us wonder if these are extraordinary times, or just another chapter in our nation over which we will triumph.

I do think we will triumph, that the bad news can’t go on forever, but I see a very definite trend that will have to become primary before we get from here to there.  What is missing is leadership — true leadership, a sense that management is not good enough, that trust is a higher virtue and brings with it a burden of selfless decision-making.  We won’t get from here to there with party politics, blame, opportunism, poorly constructed argument, well-crafted media bites, or even anger.  We will get there when we chose courageous, well-versed leaders — government, business, and social — who have chosen the path of leadership for the right reasons, where integrity in articulating a vision and administering an agenda far outweighs the perks and power of the office.  The rewards of leadership for those who have enjoyed it as intended are more intrinsic that extrinsic, much less tangible than we imagine from headlines of cynical manipulation, but until we elevate leadership that embraces a giving ethos into high level authority, we aren’t going to get from here to there.  We have to be involved in the selection process by the act of choosing to follow, and we have to demand better.  If we don’t, we’ll continue to be assaulted with more of the same — just like the pepper spray.

As I have written before, it is an honor and a privilege to lead.  If someone chooses to lead, they consistently must accept their responsibilities de facto with the interests of others put before their own gain.  When they do not, they compromise our trust and the fabric of social interaction suffers injury.  Let it happen too often and the very institutions we most cherish can lose all their meaning and authority.  This is not lofty, it is everyday behavior.  Leadership means accepting trust and being willing to be held to the standard of evaluation for that trust.  All leaders can benefit from a remedial lesson in why they have their jobs; if they fail to remind themselves, we need to help jog their memories.

This week we celebrate Thanksgiving.  We express appreciation for the blessings in our lives, for all we have that is good, for the good fortune we enjoy.  That does not mean we offer reprieve to the status quo or give a pass to those who have forgotten what they owe as a result of asking for our trust.  If someone has chosen as a life commitment to protect and to serve, he or she needs to be held accountable for that commitment.  They are responsible for the portfolio they have accepted to oversee or lead.  We are responsible to ensure that they act in the public interest where humility outweighs dissonance as most befits this gracious holiday.  Yes, really.

Deadlines, The Final Frontier

Looks like we dodged a bullet.  The United States of America will not default on its debt, We The People will be allowed to borrow more money to stay current in our obligations by way of a vague deal to curb deficit spending going forward that the House, Senate, and President will find a way to stomach late in the 11th hour.  Why don’t I feel proud?

In my mind, the process for resolution which was recently described by Senator McCain as “bizarro” has been a farce of such epic embarrassment, it is impossible to comprehend as somehow reflective of our shared values.  Last minute threats and posturing and leverage and mano a mano entrenchment ignore the obvious framework of achieving a shared vision — that working relationships must continue long after the dirty work is done.  Last week in a fairly heated discussion thread about the debt ceiling on another social networking site, an astute friend of mine wrote:

…the whole situation is disappointing. No one on the national scene has really acted that well.   Should we even give them praise for negotiating?  Has it come to that–we have to praise people for doing what sensible people do?

His exasperation is well-founded, and leads me to ask again, why must we accept one set of standards of conduct for business and a different set for government?  This is especially troubling since so many people in government have spent at least some of their career working in the private sector, where market forces determine the kinds of norms of acceptability and consequence our elected officials seem to ignore.

To be clear, I am not talking about mission structure — government service is not profit minded by design, so of course decision-making is not intended to be ROI focused, that would be absurd.  We go to war because our security is at stake, it is a cost.  We fix roads and build new infrastructure because they are the backbone of our shared needs, they are cost centers paid for by taxes, they are not profit centers so boardroom discussions will always be different.  I am talking about standards of conduct, behavioral norms — like honest discussion and earnest debate and timely resolution.

Consider that last one for a moment: timely resolution.  Anyone who has ever worked on a project knows the meaning of the term deadline.  Anyone who has ever taken a class knows that the date does not move for the final exam.  Anyone who has ever paid a bill knows that the due date is not negotiable, miss it and you pay a penalty out of your pocket and potentially suffer a credit score impact.  Anyone who owes a balance on their taxes knows that April 15 is not negotiable — it’s not magical, it’s just not negotiable, it is the law.  Although deadlines appear to be abstracts — fictitious creations of human imagination imposed as structure on others to compel action — deadlines are part of life.  They are real.  We learn as children to address them and as adults to manage them, or we suffer the consequences personally and professionally.

Deadlines teach us to manage two of the great success factors of businesses and careers: timeliness and urgency.  Timeliness means just that, occurring at a suitable or opportune time — being appropriately on time according to expectation and need.  Urgency is the competitive advantage of not being satisfied with timeliness, getting ahead of the curve so that winning is more possibly in reach by better applied and more efficient use of time to create distance ahead of the competition.

What can we learn from government with respect to timeliness and urgency? Does government consider these to be core values, even expectations of government’s viability?  Does government consider timeliness and urgency as Nice-to-Have or Must-Have?  We observe their philosophical commitment in their actions.  My sense is, there is not much here worth emulating.  If anything, government process is the antithesis to lessons a good business understands — and that includes leaving big blocks of time for rigorous review.

Our elected officials for whatever reason simply do not seem to take the notion of deadlines as seriously as the rest of us.  In some ways, a lack of respect for deadlines is the very notion of an entitlement culture — if you do what is expected, you get paid, and if you don’t do what is expected, you still get paid, right up until you get thrown out by the voters.  When you get thrown out by the voters, you get a pension.  Perhaps we are seeing the reason why deadlines don’t seem to matter in the halls of Washington.

Perhaps the reason our government has become so dysfunctional is because we have allowed it to be so.  In the working world, there are rules, and if you violate them, there are consequences.  In elected office there only seem to be two rules:

1) Don’t be party to a scandal that your opponents can manipulate to your demise.

2) Get elected, then reelected.

Pretty much everything else seems to be forgivable.  A missed deadline is a missed deadline.  Since there is no profit motive, there is no personally assessed penalty.  That’s just wrong.  It lacks humility.

Bosses are often accused of setting arbitrary deadlines.  What is the difference between an arbitrary and real deadline?  Not much, really.  If the boss sets a schedule and declares that milestones must be accomplished according to the schedule, there is usually nothing empirical or even mythical about the published dates — well, maybe the December holidays for retail, or similarly calendar driven events.  Most deadlines are made up, they are criticized and chastised and the stuff of Dilbert moments — but imagine a business enterprise without them.  Someone has to be Dilbert.  Someone has to create urgency.  Urgency combined with innovation are the stuff of success, creativity combined with timely delivery are the stuff of investment payoffs.

Most of us hate deadlines, but we all know they drive us to make hard decisions sooner, get past analysis paralysis, come together as teams and deliver.  Deadlines are the stuff of anger and stress and resentment — and the stuff of competition and collaboration and reward.  We hate them, but we embrace them, because we aren’t given a choice.  Arbitrary or organic, deadlines make us get stuff done to the best of our ability given the time allotted, and with some success, we then often get the chance to come back later and improve on our progress.  Deadlines are motivation and measurement, realities we learn to meet as challenges.  That’s why bosses set “arbitrary” deadlines — because timeliness is an expectation for compensation, and urgency is often a path from good to great.

I am not a big fan of rules just to have rules, but as a boss, I have to insist on a few or work does not get done and value is not created.  Deadlines are sometimes extended or forgiven for good reasons, but anyone who has worked in a high performance environment knows not to take forbearance for granted.  An occasional exception for truly improved work or some extenuating circumstance?  Of course, that’s possible.  The same rotten outcome I could have had yesterday a week from tomorrow?  Not a chance.

Just hitting a date with no breathing room and a lousy set of deliverables is not making a deadline, it is surrendering to mediocrity and living to play another day.  If that is allowable process, dysfunction has triumphed over reason.  It’s not urgency, and it’s not okay.  In business, you would likely get fired for it, or your business would go under.

Urgency is hard.  Urgency is a factor in competitive advantage.  Urgency matters.