The Limits of Charisma: The “Sequestration is Dumb” Edition (a.k.a How on God’s Green Earth Did we Get Here)?
Having written about some of the greatest leaders of the 20th century, I have always believed that charisma and leadership have little to do with each other. That idea is hardly new. It has been espoused most eloquently by the late, great Peter Drucker (the “Father of Modern Management”) when I met with him in 2003—as well as in several of his classic books.
Drucker also asserted that charisma, as defined by Merriam Webster as ”a special magnetic charm or appeal,” could also be used as a construct to explain the evil influence of some of the worst leaders of the 20th century, like Stalin or Hitler. But, for the sake of this piece, we will use “charisma” to describe a positive leadership trait.
Before moving on, let’s get back to Drucker for a moment. To underscore the difference between leadership and charisma, he wrote: “Harry Truman had no more charisma than a dead mackerel,” but accomplished great feats of leadership and legislative victories nonetheless. In contrast, Drucker asserted, “John F. Kennedy was perhaps the most charismatic president of his day, but “few presidents got less done.” I take exception with that characterization, since Kennedy both inspired a generation, and saved the world from a potential nuclear exchange during the Cuban Missile Crisis.
Let’s fast forward more than five decades to today’s occupant of the Oval Office. In ways that were similar to JFK, Barack Obama has the gift of oration and charisma, two qualities that helped to get him elected twice. Obama is a gifted and intelligent president. His command of the bully pulpit typifies at least part of what makes a great leader, but only a part. For leaders of states and nations, there is no substitute for authentic leadership and effective legislating. Consider them as two sides of a coin. Opponents of Obama have labeled him the “campaigner in chief,” because whenever a difficult choice must be made by him and the congress, he takes his argument directly to the people, passing “go,” both houses of Congress, and the media in one fell swoop. But presidents must do much more than campaign.
The most effective leaders don’t just talk, they act. They articulate a path forward—a vision of the finish line—and get others to follow; this is true for people they don’t like or who hold different views than themselves…especially those that think differently from themselves. That was the best part of Lincoln—the President (as well as the movie). It is in this regard that Obama has consistently let us down, especially when it comes to the economy. Even though his common sense ideas are almost always more popular than any that emanate in Congress, he still comes up short when it comes to getting others in Congress to follow his lead. Recently Obama has reached out to members of congress by hosting a lunch and a dinner with key members of congress (but not the leaders of either house of congress).
Of course, John Boehner and the other House Republican’s obstructionists (e.g. think Tea Party zealots) have actually made congress less popular than cockroaches (I kid you not). Their responsibility in sinking the U.S. economy into the sequester quagmire is equal—and even greater—than President Obama’s. Most Americans blame Republicans for hurling us into this mess which according to the government, could easily spark the loss of 750,000 jobs just when the United States was getting on solid ground following the great recession of 2008/2009. One very recent Bloomberg headline summed it up as follows: Congress Budget Cuts Damage U.S. Economy Without Aiding Outlook
POISONING THE WELL
And in one way important way, Republicans spoiled the well in a way that Obama will never forget.
Several years back, on the floor of the Senate, Leader Mitch McConnell announced that his main priority was to “make sure that Obama never gets a second term.” That is unprecedented—and politics at its worst. One would think that creating legislation that leads to a stronger economy and the ending of two wars would rank higher than ridding the White House of its current occupant—or any sitting president for that matter. Think of it. What if one of your colleagues at work said the same thing to the entire company you work for—that getting you fired is his main priority. There is no way that would be tolerated by the leader of that organization. But the 2013 Republican party is both a leaderless and rudderless party. That did not happen overnight. They had to work at it to be so out of touch with the American mainstream.
I view Obama, who boasts a more definitive swagger after his second term win, as a determined prize fighter landing blow after blow on the entire Republican party. Don’t misunderstand me. He did not want this sequester to go into effect, but, as many pundits pointed out, he “miscalculated” by overplaying his hand. He thought that the Republicans would cave again because they could not tolerate the cuts to the Defense Department. Clearly he was wrong. And there are more “cliff-like” moments coming at the end of March and in the ensuing months that follow.
In the early days of March, no one knows what effect the Sequester will have on the economy and the financial markets. That’s because this is an unprecedented event for the U.S. (a self-inflicted $850 billion wound). People in far-away lands are incredulous—they can’t believe that the greatest country on Earth cannot get their fiscal house in order. In light of that, who knows what they will think of us if we are unable to come up with a new budget in the next few months. Stay tuned!!
Many managers are afraid to hire people better than themselves. That’s a huge unforced error. As Jack Welch once said, “the smartest people in the world hire the smartest people in the world.”
If you hire weak perfomers, “Bs” and “Cs” rather than “A’s,” you are doing yourself and your organization a serious disservice. This is something that great business thinkers have understood for quite some time.
One of the most surprising things I learned about Peter Drucker was how he felt about Franklin Delano Roosevelt. While most historians and citizens from the era regarded FDR as a great leader, Drucker felt that our 32nd president was so insecure that he sought to “undercut” anyone he viewed as a threat. That convinced Drucker that FDR was a poor administrator and a weak leader in important areas.
Jim Collins, author of Good to Great, felt the same way about hiring. He said that management’s first priority is not coming up with the right strategy, but making sure that you have the right people “on the bus.” All else follows getting the right team on board first.
If you fear so much for your job that you would consider hiring a sub-par performer, then you have already lost. The most effective leaders know this in their bones, which is why they try to fill every position with strength. Focusing on strengths rather than weaknesses is a key theme in The Unforced Error. It is the responsibility of every manager to bring strength to his or her organization whether we are talking about products, ideas, or people—especially people.
In the last posting I discussed how hiring the wrong person is one of the greatest unforced errors a manager could make. Close behind that one is keeping the wrong person even though you know he is all wrong for your unit and/or company.
How do you know when someone doesn’t belong?
He may not live up to the rules of the organization, especially the unwritten ones. Or he or she may simply fight against every key management initiative. Or an employee may simply be over his or her head in their current position. In these unsettled times, with unemployment at about ten percent, there is no reason to keep someone who does not perform with distinction. In most industries, there are others on the bench and unemployment lines just waiting for a chance to show you what they can do. But that’s besides the point.
Jack Welch was roundly criticized because he eliminated the bottom ten percent of the GE workforce every year. Early on he was called Neutron Jack (for eliminating people but keeping the buildings standing) and far worse by those who felt the full impact of this particular leadership tenet. But, as Welch pointed out, the New York Yankees fire the weakest players every year, so why shouldn’t his company? After all, both want to win and ridding the organization of non-performers increases one’s chances of winning. My new book, published today, The Unforced Error, increases chances that you will be retained and promoted rather than fired or left to twist in the wind.
The key is to make sure that when you discover someone who does not fit your company, move quickly. One of the greatest confessions made of big time CEOs is that when it comes to important matters, they never moved quickly enough. There is a lesson there for all of us, particularly those procrastinators who can’t ever reach inside themselves and make the really tough decisions that need to be made.
Tennis players often get to choose their doubles partners. In the world of business, you can’t always choose the people you work with. As a new employee or manager, you are assigned to a particular team or unit. However, one of the big responsibilities that comes as you rise into the ranks of management is the authority to hire new teammates. And it is in this critical area that managers often make the biggest unforced errors of all.
The best managers understand this. Under Jack Welch, less than one percent of GE’s “A” [best] managers jumped ship, demonstrating how well GE hired and developed people under his leadership. The legendary CEO Alfred Sloan, who turned General Motors into the world power it became in the 1920′s, 30s, and 40′s, would spend hours interviewing potential managers for positions that seemed insignificant from his vantage point on the org chart. However, when Peter Drucker asked him why he spent four hours interviewing a manager for his Toledo plant, Sloan answered unflinchingly: if I don’t spend those four hours now, he said, I will have to spend 400 hours cleaning up the mess. And that’s time I do not have.
Hiring bad partners or colleagues is obviously not restricted to sports and business. In my new book, The Unforced Error, I use the example of Sarah Palin. At a time when the Republican candidate was five to seven points behind his Democratic challenger, McCain panicked. Even though his strongest case for voters was his experience—veteran senator, war hero, foreign policy experience—he abandoned all of that when he chose the inexperienced Alaskan governor, Sarah Palin, as his running mate. The junior senator from Illinois, in contrast, ran a near-error-free campaign. At first, Palin energized the base. However, when Katie Couric interviewed Palin in prime time, the Alaskan governor choked. Not being able to answer what magazines or newspapers she read was a huge unforced error that proved to the world that she was not ready for prime time. When she said she could see Russia from her living room as evidence of her foreign policy experience her fate was sealed. Soon after her numbers sank and along with it any chance for a Republican victory. While very few of us get to run for any office at that level, the story illustrates how choosing the right people is one of the most important decisions any manager ever makes.
In the spring of 1933 FDR announced major initiatives to lessen the impact of the Great Depression. The nation was a disaster. Things were so bad that historian Arthur Schlesinger made the following statement at Roosevelt’s inauguration: “It was now a matter of seeing whether a representative democracy could conquer economic collapse. It was a matter of staving off violence — even, some though — revolution.“
Between March 9th and June 16th, 1933, Roosevelt proposed an unprecedented number of new bills that were quickly passed by both houses of congress. Roosevelt’s legislative orgy set off a presidential practice of evaluating the first 100 days of every new presidential administration
It is worth noting that when Roosevelt took over in March of 1933 the unemployment rate was an eye-popping 25% and all banks were closed and no checks could be written or cashed (can you imagine if that happened today?). Even though many a pundit have thrown around the “D” word (Depression) in recent days and weeks, we are nowhere near where we were in 1933. That’s one of the two key reasons we should get rid of the 100-day litmus test. The other reason is even more pertinent.
In the course of a presidential administration, 100 days is nothing. It is very much a short-term phenomenon. And therein lies the rub. There should never be an incentive for a leader to favor the short-term over the long-term. This is not to deify the present administration. They just went along with the hype by discussing it and hosting a press conference and a giant town-hall meeting. Former GE chairman Jack Welch was adament about this, as was Peter Drucker before him. Said Drucker: “There is one more major factor in every management problem…an additional dimension: time. Management always has to consider both the present and the long-range future.”
As long as a commander-in-chief has one eye on the 100-day calendar there is always the incentive to favor the short term over the long term health of the nation. And that is never a good thing.
Last November—when news came that Tim Geithner was going to be tapped as treasury secretary, the stock market soared. It not only soared, it had one of its best days in history—rising by more than 500 points to regain the 8,000 mark once again.
Then came February 10th when the Treasury Secretary announced what amounted to “a plan for a plan.” Wall Street hates plans for plans—that’s because it abhors uncertainty— and sunk the market to the tune of almost 400 points, and an even greater percentage on the S&P (a 5% haircut). Many barbs were tossed in Geithner’s direction along with calls for his head.
Then this week comes the actual plan to get toxic assets off the books of banks. Geithner is a man with absolutely no charisma. But as Peter Drucker taught us, charisma is not leadership, it is “how to make friends and influence people.” The President was the one selling the plan to the American electorate, as Geithner presented the plan to reporters behind closed doors. Whomever sold it. Wall Street loved it
Since then, Geithner has had a much easier time testifying beforre congress. The Dow is up a stunning 21 percent in thirteen trading sessions, which technically constitutes a bull market. The Treasury Secretary found it much easier to talk to politicians when the market is soaring.
On Monday the stock market got back what it lost on that infamous February day and more, rising just under 500 points (nearly 7%) Monday—the fifth largest point gain ever. And we are about to close out our third week in a row with solid gains.
One of the real sparks to the market is the toxic asset bank program. We finally got the details, and anything that even looks like an actual plan was going to bring life to the market. The government is still financing the greatest part of the purchasing of toxic assets, but this time some private money should enter the picture. As long as the markets continue to rise—both the stock market and the credit market—taxpayers and private institutions, will make money. That didn’t stop some high-powered economists like Paul Krugman to declare the plan a complete failure before anyone had a chance to see if the plan had a chance!
As for Tim Geithner, he is still in the “what have you done for me lately” business, and more than any other Obama cabinet member, likely to stay in the crosshairs for the duration. Everything he says or does is likely to be examined under a Wall Street microscope, and if Wall Street doesn’t like what they hear, they will shoot more poison arrows at him until they get their way.
As for me, I’m in the minority. I think Geithner is going to help lead us out of this mess, and will be heralded as one of our most effective Treasury Secretaries in history. Not that there won’t be bumps along the way. We all need to fasten our seat belts and hold on for a wild ride.
In an earlier post, I talked about how being a strong #2 to your boss can be a great work strategy to get ahead. I have approached my job with that mindset for many years and it has worked well for me. However, what if your boss does not control your future?
Being a strong #2 assumes that you have a strong boss, meaning that that he or she is smart at setting priorities, knows how to hire, fire, delegate, manage up, manage down etc. But what if you have an incompetent boss or worse, a toxic one? Someone who beats up on his people, uses employees as pawns, has a bad temper, and never seeks out the opinion of his direct reports? In this case, it is very difficult being a strong #2, and in any event, who wants to work for such a person, never mind helping him to succeed?
But let’s take a step back and get a broader view of your entire workplace. You need to know who the real decision-maker is, who makes the real calls on your future. In sports there are referees and line judges. In the world of work, things are often far murkier.
It may be that your boss has no power at all, having no real power or ability to make a decision. Your boss could simply be clueless, someone who got promoted because of a technical expertise, not out of any managerial know-how (that’s why there are so many ineffective managers out there). Or it could be that his boss is a micro-manager, using your boss as no more than a puppet.
The key is to figure out who the real “decider” is, and to do that, you need to find out who holds the greatest influence over your boss. In several companies I worked for, my boss’s boss was the one who made the greatest decisions affecting my life—and the life of my direct reports. And often you do not figure this out until something happens, some event that causes your boss to show his cards, so to speak, where you can get a more complete picture of what is really going on inside your organization.
Or, your boss might indeed make the call, but listens to people that would shock you. I’ve worked for managers who listened to their peers (which makes sense in many instances), but also to people levels below them. That could be a positive development, but not if the boss is playing one person off of another, causing one manager to bad-mouth his peers. I have seen situations in which back-biting, turf wars, and petty politics are permitted to triumph over what should take center stage: competence, loyalty, and the ability to put company goals above personal goals.
If your company more closely resembles the back-biting one with petty politics, then you might want to seriously consider a move to a different company. That’s because an organization which permits such God-awful behavior is much like a dead fish—it stinks from its head. In my experience companies that have such managers not only tolerate such behavior, they know about it and are complicit in it. You probably cannot make a move now, in the midst of such a serious recession. But when things look like they are turning around, get ready to make a move. I know is is difficult to ponder such a huge change, but it is necessary. Have your resume in order and compile a short list of organizations that you would like to work for. Believe me, there isn’t much of a future in turf wars and pettiness.
One of the ways I have always gotten ahead in business is to make sure that I thought of myself as a “number two,” as a sort of partner to my boss. As a middle manager for many years, regardless of what the org chart said, that’s how I regarded myself and my job. Never mind that I wasn’t always the number-two manager in the division, that was very much beside the point (although it is worth noting that for much of my career I did report to the head of whatever division I worked for).
The primary job of the number two is to ensure the success of number one. If number one succeeds, we all succeed, I reasoned. If I played an instrumental role in helping my boss to achieve his or her goals, I thought, the more invaluable I would be perceived and the more secure the position would be. Does this mean that I ignore my own personal performance goals? Hardly.
I always memorize my goals as soon as I get them, and at some point early in the year, I ask my manager the specifics about his or her goals. It doesn’t take a genius to recognize that the goals of the division president were basically the same goals of the division, so every manager I have ever worked for was eager to disclose his goals to me and the rest of his direct reports (and often to the rest of the division). Once you know your boss’s goals, then you must commit to help him or her make those goals a reality.
In the publishing business, as in almost all businesses, the most important goals are quantitative. They include a top line revenue number and a bottom line profit number. Those were always up and away my boss’s two primary goals as well as the two key divisional goals. There were other goals—such as the “number of books to be published in a given calendar year”—but that goal was almost always less important than the other two goals (I say “almost always” because I had one manager who seemed completely obsessed with the number of books we published).
So how do you make sure that you are a strong Number Two? Consider the following:
* Acknowledge that being number two is as much a mindset as a methodology: Being a strong number two means adapting the mindset first. It means adjusting your thinking to encompass the reality that you have, in essence, given yourself an extra set of goals to worry about.
* Use as little time and resources of the unit head as possible: This means being decisive and relying less on your boss. Remember the oft repeated phrase that it “is better to ask for forgiveness than permission.” Remember that your boss’s time is one of the most critical and costly assets of the division. Rather than seeking “face time,” do the opposite. Let your great work speak for you.
* Look for any opportunity to help your boss achieve big things: I am not talking about jockeying for position or playing office politics. This means that you will have to think bigger and broader than yourself. It may mean subordinating your own goals to your manager’s goals when the right opportunity comes along. In my full time job in publishing, it might mean volunteering my time to help my boss with a manuscript or book that would help the division but one that I receive no credit for.
In conclusion, even if you feel overwhelmed by your own workload, consider being a strong Number Two anyway. You might find it fun and challenging at the same time, while giving you a different view of your unit than you might have by focusing only on your own goals.
In Inside Drucker’s Brain I include a most remarkable story about two of the people who had their greatest influence on Peter Drucker’s life and his career choices. As we are still in the first days of a New Year—which to me means deep reflection—this is a particularly timely tale.
In addition to being a gifted and prolific writer of 38 books, Peter Drucker was also a first class educator who taught for many decades. Along the way he turned down a Harvard teaching offer (and Stanford as well), explaining to me that he did not believe in Harvard’s case approach (“I have no use for cases personally,” he told me). So Drucker was happy to teach at Bennington College (1942-1949), and NYU (from 1950-1971), before founding one of the nation’s first executive MBA programs for working professionals at the Claremont Graduate School of Business in California. That school was later re-named—the Peter F. Drucker Graduate School of Management.
I always wondered how Drucker got into teaching, and he told me—like so many things in his life, it happened by accident. But he had sworn that he would have never got into teaching at all if it wasn’t for the two greatest teachers of his life, two teachers that he had at exactly the same time. I figured it must have been some of the great college professors he had on his way to get his PhD—but I was far off the mark. I was stunned to learn that the two greatest teachers of his life—the two teachers responsible for Drucker’s decision to become a professor—were two teachers that Drucker had in the fourth grade! Their names were Miss Elsa and Miss Sophy—and they were sisters.
Miss Elsa, Peter’s homeroom teacher and the principal of the school, told Peter that she would meet with him each week to give feedback and check his progress on a variety of subjects. If a student did something totally out of line, like cheat repeatedly, Miss Elsa would give that guilty child a “tongue-lashing that flayed us alive,” said Peter. But that kind of dressing down was never done in front of others, it was always done in private.
Peter thought he was terrible at math but Miss Elsa set him straight, explaining to him that he was not bad at math at all. It just was that he didn’t check his work so he made careless errors. That helped him to turn his math grades around.
Miss Elsa would focus on the strengths of each of her students, and then set both short-term and long-term goals to develop those strengths. Then, and only then, would she address her student’s weaknesses. She then provided the kind of feedback that would allow students to improve their own performance and “direct themselves.” This would later become a key Drucker tenet—he contended that employees should be given the feedback to direct themselves, for “all development is self development.”
Miss Elsa knew every child’s name and every child’s characteristics, and above all, his or her strengths, and within the first week of school! ”We did not love her, but we worshipped her,” Drucker asserted.
Miss Sophy, Miss Elsa’s sister, was almost the polar opposite of Miss Elsa. She could not remember a single student’s name, yet there was always one in her lap. Children brought Miss Sophy their problems and triumphs, and she was always there for a hug, praise or congratulation. She taught arts and crafts out of a magical studio that exploded with color, a room that had everything a child could hope for—including paints and easels, crayons, brushes, sewing machines, materials, hand tools, and more. Miss Sophy would let children try out most anything, “always willing to help but never offering advice or criticism.”
Miss Sophy taught her students “non-verbally and silently.” When a child was drawing or wood-working, she would watch for a few moments before taking her very small hand (she was a tiny woman) and guide the child’s hand until he or she got it. Or if a child could not draw, she would take the crayon or brush and paint “a purely geometric figure that bore all the elements of a cat.” Suddenly the student would see the cat amid the shapes and start laughing. This would bring a smile to Miss Sophy’s face, which was the “only praise she ever gave, but one that was pure bliss to the beholder.” She never, ever criticized a child, no matter what.
Drucker called Miss Elsa “the very perfection of the Socratic method,” and Miss Sophie “a Zen master.”
In the opening days of 2009, it is good time to reflect on how you got to where you are now. Who is your Miss Elsa and Miss Sophy?
On Monday there was an interesting article in The New York Times about the state of the state in the book publishing industry (Puttin’ Off the Ritz: The New Austerity in Publishing). For those of us who make our living in publishing the article contained few surprises—yet many of the details were interesting and revealing.
Since the beginning of October 2008, book sales have been down about 7 percent (all book sales, not just business book sales). That’s no surprise. Back in late October, Len Riggio, the CEO of Barnes & Noble, sent a memo to his employees in which he declared that in all of his years in the business, never had he seen a worse outlook for the economy. He also used the term ”Financial Tsunami” to describe the overall economic situation. However, he assured his people that they will be there for the long term, no matter what happens to the economy in the future. B&N is the #1 book retailer in the industry, and as Peter Drucker and Jack Welch taught us, #1 always has the best chance to make it out alive of a bad market.
Unfortunately, Barnes and Noble’s biggest competitor, Borders, can’t promise the same thing. Their company’s stock is selling for a stunning 61 cents per share on this day, meaning that the entire company is worth only $35 million. Their very uncertain future is one of publishers’ greatest concerns in 2009, since they are one of the top three retail accounts of most publishing houses (Barnes and Noble and Amazon being numbers one and two).
The best line in that Times article belonged to Amanda Urban, the literary agent who represents Toni Morrison and Cormac McCarthy, who said “the business was never meant to support limousines.” Urban’s right: I have never regarded publishing as a business for limousines, $500 lunches, or over-the-top sales meetings in foreign, exotic locations. However, I am not naive. Just because my career hasn’t included such things, it doesn’t mean that some publishers haven’t splurged on these items over the years. But, if the CEOs of the three biggest publishers were summoned to Washington to testify before congress you can bet that there would be no private planes fueled up.
The truth is that few of us ever go into publishing for the money—or the perks. We do it because we love books and the writen word. I got into publishing by accident in 1982 and I never looked back— not once. (I started at a particularly modest $14,000 per year). That’s why those of us who love the industry are almost as concerned about the future of publishing as we are about our own personal futures. What would happen if Border’s wasn’t around anymore?
However, many publishers are being as proactive as possible in saving money to help guard against their extinction. Job and salary freezes are common now throughout the industry. Some have cut jobs. One publisher went so far as to declare that they have put a “freeze” on new manuscripts altogether. That move seems too severe to me. As an author, I would be hesitant to sign with such a publisher when they announce that they are turning the spiggot back on. I would be too afraid that they might announce other draconian measures such as cutting back on marketing and promotion. In any event, I have never heard of a large publisher freezing the acquisition of new books/authors, so that tells you how serious the downturn has become.
Yet, there are reasons for optimism, especially in the business book field. The sales of business books have customarily moved with the stock market, and things are beginning to improve on Wall Street. We are about 1,500 points off the low, above 9,000, and by all appearances, the markets have stabilized. We are not seeing the 300-400 point swings these days (they are the exception now, not the rule), and the market has been rising against a backdrop of truly terrible news. That’s always a good sign, and one that has often indicated that a market bottom has been put in place. Earlier this week I predicted that we would see Dow 10,000 in 2009. If that happens, that will restore some confidence throughout the economy. That would stem bankruptcies and likely put a cap on unemployment—two essential ingredients for a turnaround in our economic fortunes.
So who needs limousines, anyway? They are overrated, not all that comfortable, and too big to talk to the driver. Besides, if you ever want to know what is really happening in a city or to the economy as a whole, ask a cab driver. They are the real sages of our day.