Getting To Yes? Or Getting To What You Need To Know, Leading Daily?

Leaders face multiple fronts on which they need to understand what they need to know; they need to be able to get to the truth. They need to sort through true options in order to make decisions based on reality. They need to question astutely. They need nuanced interview skills for critical functions:

1. Leaders’ employees don’t always, and perhaps rarely, tell the unvarnished and entire truth upwards: shading reports, as Shakespeare noted, has long been conscious career strategy. Except in the rare environment, employees are notoriously not only afraid to “tell truth to power,” they don’t want to be the “bearer of ill tidings.” Yet leaders do need to get behind the formal presentations and the day to day blandishments of the people who report to them. They really do need the truth: they need to understand what the presentations made really mean and what their own direct reports really think. They may not need to know all that these people know, but they do need to understand what is known and not known, what the facts and factors really mean, and what the critical facts and potent looming threats actually are. They do need to be “in the loop” in order to lead effectively short term and long term.

2. Transactions are negotiated face to face by business leaders long before the work ever gets to the lawyers and accountants. How many acquisitions worked out on the golf course or in weeks and months of ‘conversations’ haven’t had major time bombs hidden inside them, from toxic material (Halliburton/Dresser) to massive fraud (as alleged by HP regarding its acquisition of Autonomy, over founder Lynch’s denials). Look at what Citigroup might have avoided had it asked the right questions and not lent $126MM to Stern in a tangle of schemes that extended to the N.Y. statehouse and New York City Council. Look at what Grant Thornton auditors might have stopped or even prevented but, in the event, left for Blackstone to dig through in its Parmalat discussions with the Tanzis. The fallout from bad acts and bad decisions lives for years.

3. Internal investigations have a new focus in a day of U.S. FCPA, AML, SEC, and other enforcement, and yet most leaders tasked with the internal role probably have never been trained in how to interview people effectively, nor have their outside counsel. In internal investigation, should there be room for muddling through by middling interview? Employees and suppliers’ employees out there in the value chain may be innocent, confused, clumsy, or simply not too bright. However, out there on the gray front, a culture of wrongs, illegalities, and downright high penalty felonies may also be forming. Lately we have seen a new ‘roll call’ of entrenched circles of corruption: FIFA, HSBC, GSK, Avon, MF Global, Libor, Forex…. (Read Prof. Mike Koehler on FCPA alone!)In most organizations, these cultures rarely operate out in the open; they wheel and deal, threaten and steal in a gray fog of lies, tricks, distractions, diversions, and intimidation to evade detection. The deeper criminality can be hard to ferret out amid the “busyness” and even social outrages. However, bad people are bad all the time; even when they are pretending to be good, they are acting from a perspective of bad and still do bad things. They don’t necessarily see the bad they reveal. But the good interviewer will.

Leaders need to understand what it is they need to know and how to get to that knowledge, not just directly, but across personalities, technical fields, organizational cultures, and, increasingly, national cultures. They need to be able to question and probe without triggering defenses and deceiving themselves.

Yet who of leaders up and down the organization has ever actually been trained in interview technique? (Hint-having watched “Lie to Me” and reading about “micro-expressions” doesn’t really count.) How do you get to what you need to know?

Copyright © 2015 Sulgrave Strategies LLC. All rights reserved.

Advertisements

When Management Doesn’t Want to Lead: Big Shoes For Everyone Else To Fill.

What C-team wouldn’t sometimes just like to stop leading?  Renounce management, titles and all, without actually retiring, leaving the company, or taking a voluntary demotion.  All that accountability, liability, and that muddled vision thing could just go out the window:  “O frabjous day! Callooh! Callay!”  The ideas that hit the wall would all be someone else’s fault….In any world other than Lewis Carroll’s dreams could this end well?

Recently I ordered a pair of Ferragamo shoes, and not from Ferragamo.  As happens in the shoe world, I realized that I had ordered the wrong color and contacted the seller to cancel the transaction.  I almost missed the first response thinking that the email from the seller’s self-described  ‘fairy glitter princess’ and her ‘sparkle wand’ was spam.  On closer reading, she seemed to be able to get the job done, but a second company response was almost lost in the “Disneyland” dreaming of a customer service “Mousketeer.”  It took two more responses from a “Shea Butter” and evidently the company’s sleigh driver to confirm that the order had been indeed cancelled.  Whew.  Now that’s “personal flair.”  Granted this is different, and different from “normal stagnant business communication,” but what if the customer isn’t channeling Disney or whimsy at the moment and just wants to get business transacted?  In a self-actualized non-management world, is the dominant tone playtime?

Playtime doesn’t last forever.  Bad actors step into the void, some already in the door, some spotting their chance, some let in at the back.  In the real world out there, crime happens every day; there’s money to be laundered, success to be “redefined.”  In a world where cyberthugs work invisibly to unleash damage, insiders play leading roles in leaving doors open and laying the cyberpaths. How does non-management lead in a troubled world, where bad things do happen and predators step into the vacuum with misfeasance, malfeasance, and their weapons, intimidation and abuse?

Fail to lead, step back and let the business, or the practice, self-run, and bad things are going to happen, from within and without.  Leaders take on the responsibility for thinking things through, choosing a concrete vision, and maintaining a respectful, self-aware, ethical tone.  When leaders abrogate their responsibilities, bad stuff fills the void. And when it does, managers cannot hide with the needle in the haystack, denying accountability and liability for the state of entropy that became their only vision thing.

Copyright © 2015 Sulgrave Strategies LLC.  All rights reserved.

HP to Twitter, Uber to Theranos: Dying Models. End of the Rock Star CEO?

Since the high-growth mantra first raised its ugly head and investing fashion drove good industries which made real (useful) things into the wall or off the continent, we have bred a generation of CEO’s incapable of finding quiet within themselves and thinking models through.  From the time Rebecca Mark rode a motorcycle into an Enron annual meeting until Sergey Brin videoed into a zeppelin for a vicarious sky dive, rappel and mountain bike up onto the stage, we have seen legions of would be CEO rock stars do their bounding-onto-the-stage thing, in costume or not, under the klieg lights.  They and their audiences have missed the point of leading.  Confusing performance art with business performance, CEO’s have eschewed quiet, introspection, analysis and foresight for a rock star interpretation of intensity, focus, and daring. They have tested teams with dare devilry from sky diving to bouldering.  Is it any wonder that as social media followed the dot com fate, fire walking had become the new new thing in team building? As Uber edges closer to self-immolation, is it only the Rock Star CEO that powers the “unicorn” (which is, after all mythological) and sweeps away even tough minded directors and what should have been strongly independent boards? Witness Theranos.

Disdaining introspection and the ability to be quiet, these CEO’s and their teams have lost sense of proportion, responsibility, and real growth.  But now from HP to Twitter,  Zynga to Uber we have finally begun to see the fate of the model.  Will we see the retirement of the rock star CEO or at least a new maturity and a business reality beyond myths and unicorns?  Just as you need to accept risk to make money but quiet thought to keep it, so too does the boldest plan only succeed long term on depth of knowledge, analysis, and, ultimately, quiet.

© 2012-2017 Sigrid Caroline Schroder. All Rights Reserved.

Governance: The Great Divorce (From Reality)

Call it a bad month for governance. If good things come in threes, so do bad, and Olympus, MF Global, and Dynegy Part II (III?, IV?) are that. The only question is which one is worst. Massive money lost, check. Corrupt machinations, check. Board must have known, check. Lies, investigations, clouds of prison–er, witness, check, check, check. So much for banishing management from the board room, conferring (self) righteously, and readmitting the lowly CXO’s back into the hallowed hall. The boards are into it up to their elbows. Or, as in the case of an Olympus or a Dynegy Inc., may well be the driving force. Are the words of governance just a pious happy chat while businesses go on doing pretty much what they want to do?

Is it any wonder that it has been a decade since “tone at the top” was first advanced, and moral “trickle down” has not worked yet? Clearly these three companies did not have the requisite morality at the top, a morality which places “doing right” over “the right numbers.” What about other companies, those implicated in bribery, embezzlement, and ‘rogue’ employee conduct: while they set the “right” tone at the top, do they turn a blind eye or even encourage improper influence and outright bribery and illegality on down ladder to get to the “right numbers”? If quality of governance truly mattered to boards, Olympus would not have fudged its losses for two decades and Icahn would not still be up to dirty tricks nearly three decades after TWA.

Policy, program, and performance bonus is what for employees and third parties embodies the ‘tone at the top’ regardless of the words. Do the rewards offered down the ladder really honor the spirit of the words? Well, no.

Common wisdom is that investment perspective has been so short term for so long that all investors care about is what management has done for them this year or this quarter, thus corrupting corporate mission and CEO vision. If quality of governance truly mattered to investors, we would not have had the continuing daytime drama at HP. We would not have the endless drizzle of corporate scandal from the US to Europe to Asia and beyond year after year. The real story is that governance has become an old dry story over the past decade. For a little while governance became its own feel-good industry, providing a sort of spiritual cover for the fact that the world pretty much goes on about its business as usual.

© 2010 Sigrid Caroline Schroder. All Rights Reserved.

Reference:
Cloud of Witnesses: Heb. 12:1
“Wherefore seeing we also are compassed about with so great a cloud of witnesses, let us lay aside every weight, and the sin which doth so easily beset us, and let us run with patience the race that is set before us.”

Dysfunctional Communications or It’s Too Technical

It was in the context of identifying distressed power assets and renewable energy technology for turnaround that I first came across the condition which cripples operations and development and is very much at the root of today’s banking, business and global economic crisis: Business and technical teams are dysfunctional in their communications, both unable and, more seriously, unwilling to understand the work and concerns of the other. Too often, critical knowledge and discernments are passed over or rebuffed as being the technical mumbo jumbo or neurosis of the other. Points are missed. Risks are unassessed. Business issues are overlooked for failure or refusal to look complexity in the face and work to understand.

Engineers do not want to understand the business model from the economics and legal risks to the depths of the customers’ needs and prejudices. Finance people just want to crunch the numbers. Geologists and designers don’t want to manage people; they just want to see inanimate patterns. And the business people just want to keep moving, trouble them not about risk and regulation; send the complications back to engineering and have IT stay late to do whatever it is they do with code and networks. Marketing people just want to get it out there.

While a systemic problem, this communication dysfunction is considered far too much the normal course of management engagement (or nonengagement). It is a complex problem rooted in attitudes towards risk, planning, deal making and project development. It is a matter of silo-ization, specialization and insulation from all the moving parts of organization, market and product. It actually requires not only education but re-education and attitude shifting (I hate to use the word ‘alignment’) to face the issue and resolve the conflict. It takes not just communication across and within all the parts of the organization and its outside consultants and stakeholders, it takes movement.

It takes getting up and sharing to know and do what is done throughout the organization and its associated parts and interfaces. It now takes daring to say ” No I don’t understand” or “”How does that work?”” or “Should it?” and “And then what?” It takes daring to say the emperor has no clothes or the CDO is bare. And it should not.

© 2009 Sigrid Caroline Schroder. All Rights Reserved.

Playing Nice: Work and Cooperation in the Age of Competition

Whatever you think (or don’t) of their politics (or their videos), not many years ago the Dixie Chicks wrote a smart little song which nicely captures the dark side of workplaces everywhere: “Not Ready to Make Nice.” While the drum beat of teamwork persists, and collaboration pervades the new tech tools of this competitive age, businesses, business columns, and lawyers’ workloads are full of Dixie Chick rage. Individual workers or entire organizations see work pirated, efforts distorted, performance undermined, contracts breached, and liability misplaced. The rage distracts teams, departments and entire ventures. This is not just true in the sick organization but in the healthy company left collateral damage by sector–or adjacent sector–risk and failure. It’s a familiar tune of the wider world as regardless of laws, treaties, codes, compliance and diplomatic pretense, tech theft, corrupt practices and contractual farces have driven the rhythm of business to a cynical beat. Brushed off, told to work around it, get over it, workers and companies do translate the brush off as “shut up and sing.” They sue. Or resort to the same or similar class of guerrilla tactics. Is this any way to run a business? You bet it’s not.

Hypercompetitiveness breeds fisticuffs, arrogance breeds contempt, and frustration breeds anger. With the global meltdown, where do you stand and what can you do?

Look first to your own organization: There has been a myth that only those who play nice get ahead, and yet we see every day that people who get ahead do not play nice. The nice managers you know will shock you by admitting they set up teams to fail or trick disfavored workers into irretrievable blunders. Pleasant people down the hall will take someone else’s work; underlings or the nice are bullied into surrendering credit. Part of playing nice has been “making nice,” letting deficiencies slide, overlooking offenses and “getting over it.” Yet the hurt feel the Dixie rage and may or may not back down.

Practically, playing nice is politically applied, favoring the insider, excluding the outsider, whether based on intrinsic value or alternative agendas. Maybe the one not ready to make nice has a point. The seriously hurt do not readily “get over it.” Do not discount the value of their hurt.

Use the downturn to set new standards. Level the playing field. Overcome the office wars. Lay down guidelines for collaboration. Hear the resentments; consider the injustices; don’t penalize the victims. Settle the scores equitably and teach values to those who have learned only the value of manipulation and competent legal advice. Times have gotten out of hand when you are counseled not to commend anyone’s work in writing but only confirm fact of employment by name (and serial number). Get back to communal values and forget the myth that the best always finish first. Darwinian competition will eventually kill the team. It encourages a culture of One and Self. Even Jack Welch says his culture went too far….Many victims later.

Global meltdown has a way of leveling the playing field while also tempting the desperate to further corruption. Look to your offices and to your practices. Be aware. Don’t sit on the signs of fraud or creeping deception. Reaffirm standards. Don’t back workers into cutting corners or tricking out numbers in fear of irrational quotas or punitive layoffs. Confirm the value of quality, responsiveness, people and customers. Look outside to your suppliers and retailers. Confirm not only the value of honest relationships but the value of their role in proving your own quality and integrity.

Whatever the laws, the procedures of compliance, the ethics of the company, and the politics of the workplace, anywhere, people abroad do not play nice. Time, distance, cultural difference and geographic immunity mute even the drum beat of teamwork in a joint venture. Far less do standards, ethics, codes and friendship matter across fungible suppliers, retailers and market outlets. Values and fairness are harder to enforce. The global meltdown exacerbates the effects and losses encourage governmental protection of its own. Corruption feels justified as emerging markets reverse or relationships shift power. Trade wars loom. Rage, cynicism and litigiousness rise in response.

The RIAA protects pop music more vigorously and enlists government enforcement than other industries secure their own value. Complacency, lethargy and permissive defeat had lower costs in a boom economy. Get active, enlist the ITC and USTR, participate in STOP. Not only enforce FCPA but educate your employees, agents, and partners in the practices and consequences. Exercise your power to force a level playing field in whatever corner you can. Don’t make nice to avoid playing nice and don’t make nice to avoid the discussions of playing nice.

© Copyright 2009. Sigrid Caroline Schroder. LLC. All rights reserved.

7 Warning Signs of Organizational Cancer

When one is asked to take a C-level or board position in the current environment, it can be very difficult to immediately gauge the true character of a company, public or private, regardless of filings, reports, disclosures, and discussions. The character of a company is just as important as its financial position and its corporate culture. There are, however, several signs which will warn you of a real battle ahead, one which you might even choose to miss rather than be additional inevitable collateral damage:

1. Orchestration of Information: Informational flow is heavily controlled by one person so that different teams, departments, and leaders all end up relying on a single source for critical direction.

2. Upwards informational sanitization in the guise of rank appropriate filtration.

3. Organizational terrorism enforcing artificial hierarchy and separation of silos, and stifling communication and joint action.

4. Extreme CEO/Chairman-in either direction-dictatorial or disengaged, central genius or out to lunch.

5. Extreme CFO-delegated central power, runs the company strictly to grow the numbers, and controls the numbers.

6. Nuanced discrepancies between the CFO’s words and personnel’s facts.

7. History of performance compensation calculated on value of closed transactions and/or short-term growth, regardless of quality, sustainability and durability.

© 2009 Sigrid Caroline Schroder. All Rights Reserved.