Matt Yglesias on long-term budget forecasting:
The other thing, of course, is that “stuff happens.” Nobody sitting down in 1925 to write a 25-year budget forecast would have made the funds available to win World War II. It’s nice to think that you have a plan that leaves headroom to engage in some deficit spending if it turns out a meteor is going to strike the earth…
Clear and credible expectations + consistently administered consequences = accountability: That’s the principle we preach in LWE. Evidence that it works–and not just in the workplace–in this Washington Monthly piece:
As a former career prosecutor and U.S. attorney, Alm had more than a little political clout and was accustomed to getting results. Why, he asked the probation officers, was he only hearing about drug problems when they spiraled out of control? If this was the tenth violation, what happened the first nine times?
The probation officers explained that each one of them had responsibility for at least eighty-five felons. (That was for those with “high-risk” caseloads; the other probation officers had caseloads twice that size.) Most of those offenders sporadically fell afoul of the rules. The officers couldn’t possibly spend two hours writing a report every time a probationer failed a test or skipped drug treatment or anger-management class—there would be no time for anything else. As the officers saw it, their job was to harangue those clients who would listen to get back into line, and refer those who wouldn’t listen back to court after they had accumulated enough offenses to justify sending them away.
Alm could see the logic of the system, but he didn’t think it was the right kind of logic. “You wouldn’t raise a child that way,” he told the officers. “You wouldn’t train a puppy that way. You’d establish clear rules and have immediate consequences for breaking them.” [emphasis mine]
So Alm devised a new plan. He asked the probation officers to select a group of seemingly incorrigible scofflaws, probationers just one slipup shy of a revocation hearing. Every time one of them missed or flunked a drug test (or broke any other probation rule) he would land in court—and in jail—right away. Alm enlisted the help of prosecutors and public defenders to ensure that a hearing could be held within forty-eight hours of a violation. He corralled the federal fugitive task force to chase down anyone who refused to come into court. To cut down on paperwork, he eliminated the long report, documenting a long history of misconduct, that had previously been required from a probation officer before a revocation hearing. In its place, he substituted a two-page fill-in-the-blanks form, which dealt with only a single missed or dirty test or other violation.
Then, instead of “revoking” probation and condemning the offender to years in prison, Alm would “modify” probation, sending the offender to jail for a few days and then releasing him back to probation supervision. Alm reasoned that a brief stint behind bars would make the probationer more cooperative when he returned to his officer’s caseload.
Read the rest.
Tanya and I took the afternoon off to attend a lecture up the street by one of our intellectual heroes, Nobel Prize winner Daniel Kahneman. Two chapters in LWE take a profound Kahneman insight and expand on its practical applications for business leaders. McGraw-Hill has made one of those chapters–”Use the Other F-Word to Tap Hidden Sources of Motivation”–available for a free download. Check it out.
Our friend Mike Klein has a great post up predicting what leaders may do in the age of wikileaks to (try to) preserve confidentiality…and what they should do instead. (And there’s a nice plug for LWE, too.)
Now, with WikiLeaks a household name, and with the speed and ease with which corporate “secrets” can be made public, more than a few in the business world are asking the question: “Is confidentiality today what privacy was last year– a once cherished source of protection that is about to go out the cyberwindow?”
For business communicators, the implications are massive. After nearly twenty years of constant progress fuelled by the acceptance of communication tools that have increased interactivity and transparency both with internal and external audiences, the threat to confidentiality incubates the seeds of a backlash.
Why, according to Amazon, is Leadership without Excuses frequently purchased alongside books on detective work? After all, while I’m a big fan of Michael Connelly’s novels, LWE is about leadership, not law enforcement. This recent fan mail clued us in:
Your new book, “Leadership Without Excuses,” is one of four texts included on our promotional test for [police department] captain. In fact, it’s the last of the books for me to read (because it was the last delivered). I’m on page eleven…that’s eleven…and felt compelled to send you this email.
After page eleven I jumped forward and scanned the first paragraph or two of the following chapters. I want to thank you for this excellent text. You and I are of like mind and reading this is going to be a joy. This book is polar opposite from the three other books, which made me consider eating my gun.
But seriously, it’s rare for me to run across a management or leadership book with such good information and direction so blatantly slathered on every page.
Thanks! One of the most satisfying things about writing the book is hearing from teachers, parents, police officers, and others outside our primary target audience (senior business executives) who tell us that the LWE philosophy is completely applicable in their world.
I recently had a conversation with David X Martin. David is senior vice president for AllianceBernstein, which has more than $450 billion in assets under management. Formerly Chief Risk Officer at AllianceBernstein, he also held senior risk management positions at Citibank in its heyday. David is also the author of a new book, Risk and the Smart Investor, which I’ve read and recommend. Here are some highlights from our discussion.
Jeff: One of the things that make being a senior leader so challenging is that you’re constantly forced to make decisions with incomplete information—while balancing the need to deliver short-term results with the need to protect and promote the organization’s long-term interests. In your experience, what are the traits or habits of leaders who are most successful at making decisions with eyes wide open and, as I like to say, “preventing excuses before they happen”?
David: I had lunch with Margaret Thatcher in Singapore and asked her why she went to war with Sadaam Hussein. She simply said, “When I was a kid I was taught to not let bullies get away with things. So I just called up George H. W. Bush and we went to war.” What impressed me was she had very deep-rooted principles that guided her decision-making.
Jeff: So it’s about principles. But it’s also about discipline in putting them into practice. One of the things clients pay us to do is to help them implement rigorous new practices that will improve decision making and help them more effectively lead high-stakes change. Of course, it’s one thing to believe in new practices enough to put them in place. It’s another thing to have the discipline to keep them in place over time. On that score, I’d like you describe the Windows on Risk tool you implemented at Citibank…and what happened after you left. What did you learn from that experience?
David: Windows on Risk was the first enterprise risk management system—ever. I implemented a disciplined portfolio management process designed to acknowledge the global business environment, determine our portfolio’s risk profile, and to adjust its management accordingly. This required an explicit understanding of our risk-loss appetite, the construction of walls around the portfolio, and the use of caps to ensure the portfolio remained within the risk level we were willing to live with.
After leaving Citibank, I maintained a friendship with Bill Rhodes, a Vice-Chair of Citibank. He had an office in the C-Suite and one day, after a long lunch, he took me back to meet members of senior management, all of who told me how thankful they were that the bank had Windows on Risk. While I appreciated the praise, what they didn’t know was that Bill had told me that same day that the bank, over his objection, had all but stopped using it. The following day I sold all my shares in Citigroup.
My brother Jeremy recently introduced a breakthrough concept he calls Positive Apparency ™. In this clip he explicates his ideas and juxtaposes his philosophy to mine. He’s the one with a Ph.D.–and it shows!
Tanya and I have written a couple of articles for 1to1 that are online now. The first is about the Puke Point and other insights into employee engagement. The second is about rallying employees in tough times. Check ‘em out.
Are you looking for some instant credibility; something to demonstrate that you really mean what you say about holding people accountable? We’ve found one of the strongest “convincing decisions” that leaders can make to demonstrate the importance of something on their leadership agenda is to measure…then act.
As organizations increasingly rely on metrics and dashboards to guide employee efforts, one highly effective way to get people’s attention is to ask for their feedback about how well you’re creating the conditions of accountability–and then to be very transparent about what you heard from them and how you plan to act on it to take excuses out of the system. And, this approach offers some nice side benefits: (1) You make better decisions when you know the landscape in which you’re operating and (2) You’re more likely to get employee buy-in for your plans when you’ve listened to their input first.
To help get you started, we’ve added a “Self-Assessment” tab to the navigation bar at the top of the page and have shared some of the core survey items we’ve used in client assessments. As somebody we know once said (probably a member of our research team): “If it’s important to you–and you want others to know it–measure it.”
–Jan Lee
Subscribe