Tuesday, September 30, 2008

Age Old Warning about Miss Aligned Interests

Humpty-Dumpty sat on the wall.
Humpty-Dumpty had a great fall.
All the kings horses 
And all the kings men,
Couldn't put Humpty together again.

I worked on Wall St and have deep emotions for the people who work there.  However, Wall St always had a problem in that it was all about money and profit justified anything.

Are your hopes and dreams aligned with the company where you work?  It's very easy to point fingers and accuse people of doing horrible or foolish things, but what about the things your doing?  Could you stand up to the same scrutiny?

Get angry and demand answers about the incompetence that passed for leadership on Wall St, but then think hard about your own leadership, your own company and your own actions.  If you had had the same temptations, you might have done the same things.

Consider Wall St an example of the failings of leadership, because with all the kings horses and all the kings men and huge sums of money wasted [Editor: Steady], we will not put Humpty together again.

Monday, September 29, 2008

Leaders Intentionally Blind

But I’d shut my eyes in the sentry-box, so I didn’t see nothin’ wrong.

- Rudyard Kipling

There's plenty of evidence that leadership has failed in many financial institutions and the costs are going to be horrendous.  If a leader chooses not to see, hear or speak about evil, whatever the excuses of complexity are, nothing else can be aligned.

One could argue that financial instruments had become so complex that it was not practical for leaders to understand and be savvy about what was happening.  If that is the case, then they are no longer leaders.  Other, possibly more accurate terms, spring to mind, but we will not go down that path.

It is very popular to talk about people as being leaders.  Somehow it seems this word has some semantic coolness about it that everyone wants to be associated with.  There's another "L" word which somehow seems more accurate - lemmings.  

It is frequently pointed out, lemmings as a whole, have a lousy reputation, but no lemming has ever been singled out for their foolishness, neither has one ever been identified as a leader.

Next time people are bandying around the title "Leader", ask yourself if they are truly a leader or simply the lead lemming?  Then ask if you really want to align yourself with where they are going?

Photo Credit: Mr Rad

Thursday, September 25, 2008

The Misunderstood Story of King Midas

Many people are familar with the story of King Midas.  The old miser who wanted money so badly he asked the gods to make everything he touched turn to gold.  Unfortunately the lesson of Midas is often misunderstood.

Was the lesson about the perils of arvice and greed?  No, not really.

The gods didn't punnish the miser for being greedy, they punnished him for not understanding the real value of money.  Money or gold, in and of itself, is not worth anything.  You can't eat it, build with it, write with it or anything else.  It's value comes from its ability to be exchanged for things which are truely valuable: food, water, houses etc.  

It was only upon being granted his wish that Midas realized the true value of gold.

Do you want money or the valuable things money enables you to buy?

Have you aligned yourself to get money or things that are truly valuable?

Photo Credit: DigitalMoneyWorld

Monday, September 22, 2008

How to Determine a Leader’s Effectiveness?

When we talked before about our different levels, bricklayers, coaches, division heads and league commissioners, the question comes up, how to determine if they are effective?  Many times people study different factors.  In Built to Last, the eight factors one should look at are: strategy, execution, culture, structure talent, leadership, innovation, mergers and partnerships were used to determine if companies were going to last.

In Search for Excellence there were also eight factors: a bias for action, staying close to the customer, autonomy and entrepreneurship, productivity through people, hands on – value driven, stick to the knitting, simple form – lean staff, simultaneous loose-tight properties. [Editor: What do you know about any of these?]

All of these are excellent measure and they tell us something about the business, but they are like a thermometer with different parameters: temperature, barometric pressure, humidity etc.  They give us a lot of insight into the weather or ways to measure a company, however, no amount of studying a thermometer is going to change the weather. Likewise, someone taking the lead in the introduction of a new order of things, is so consumed by the daily details and so effected by the changing environment in which they work, that knowledge of these things doesn't predict effectiveness. 

Being familiar with these things might make someone more effective or it might make them less effective. The major determinant is going to be the influences of the outside environment. Environmental conditions (weather, altitude etc.) will affect brick laying more than strategy, past experience or culture. Whether we call someone a manager or a leader and the degree to which these ideas have an effect at different levels of the organization is an interesting question, but will it determine their effectiveness?

Beyond a certain point, do you think studying the aspects of a thermometer make you a better weatherman?  How much does one need to know about the parameters of leadership to lead?

Tuesday, September 16, 2008

How Do You Define and Align Expectations at Different Levels in an Organization?

If you're a brick layer, it's very easy to determine who the best brick layer is. Count the bricks. Some smart, clever brick layer may come up with a more effective way to lay bricks.  That’s wonderful and they may become a lead brick layer and be deemed a "leader". 

If we want to improve things, we might decide that it's a good idea to have someone coach a team of brick layers. We might say that a coach should work with 11 brick layers to find ways to make them all more effective. Determining the most effective coach is pretty easy. Count the total number of bricks laid by each team. You'll find that some coaches are more effective than others. 

Experience and brick laying skills are probably important to the coach.  If the coach has previously worked as a brick layer, it's reasonable to assume they'll be more empathetic and effective. Good coaches will also have different ways of organizing their teams, different methods of laying bricks, different attitudes towards laying bricks, etc. Clever coaches will use different techniques to maximize their teams.  If you’re laying bricks in the mountains you might want different types of people than if you’re laying bricks in a dessert.  Still, it’s pretty easy to measure a coach’s effectiveness. 

Now, let's say that we want to create a larger organization. We might have a division. A division consists to 10 teams of brick layers. In order to resolve disputes and make things more organized, we might say that we have a division head. This is necessary because everyone is trying to improve so there are competitions between our brick laying teams. [Editor: teams from the Big-10 seem particularly skilled at laying bricks…]

Now, the skills necessary to be an effective division head are not necessarily the same skills necessary to be a good brick layer or even a good coach. Also, complicating the issue, how do you measure who is an effective division head? Looking at the total number of brick laid might be effective, but they are pretty far removed from the brick laying process and the things they handle on a day-to-day basis are probably not similar to the brick layers or the coaches. 

If we elevate this one more level and create a league, the problem becomes even more obvious. The league is composed of 10 divisions. Some of these divisions are in the mountains, others are in the dessert and others have to deal with great lakes and snow storms. The types of bricks that each division can get are different just as laying bricks at 2,000 feet above sea level presents different challenges from laying bricks in the dessert, which is completely different from laying bricks in the middle of a Wisconsin winter. 

How do we determine if our league commissioner is effective? A brick layer or a coach may have innovative ideas and it's easy to asses their effectiveness. But determining the effectiveness of a division or league commissioner is more problematic. 

How would you approach this?

Friday, September 12, 2008

Is it the Environment or the Actions which Make You Successful?

If you want something to be successful, do you create the environment or pull the trigger? If you are going to have a successful project, the correct environment needs to be created. Pulling the trigger is nice and that is what people will notice, but success depends upon preparation. That preparation is rarely noticed. The most aggressive actions in the wrong environment end up looking silly.

Think about it this way, do forest fires occur when someone carelessly throws away a match? Well maybe. If you throw away a lit match in a green forest with rain falling all around you, it's very unlikely a forest fire will result. If it is in the middle of a heat wave with the grass burnt brown and hot Santa Ana winds blowing at night, a roaring forest fire may result. What is critical is the environmental conditions in which the match was thrown.

It's the old line about the straw that broke the camels back. Straw is essentially weightless, but under the right conditions, it can wreck havoc. Maybe those conditions are an overloaded camel or some other environmental situation.

If you want tremendous results, look at the environment, the necessary preparation to succeed within that environment, get the preparations underway and then at the right time, pull the trigger.

Thursday, September 11, 2008

Have You Prepared Yourself for the Opportunity to be Lucky?

Someone once said that luck is the intersection between preparation and opportunity. If you prepare yourself and hit on the right opportunity, you have made yourself lucky. Congratulations, you are participating in a good life. You should be happy and your friends should be happy for you.

If you want to create something, doesn't it take more than luck? You need an idea for what you want to create. You need a plan and to know what the plan will require and whether it's feasible.

If you have a feasible plan, you need to find the missing pieces. When you find the people with the correct preparation to complete your plan; you need to articulate it in such a way that, it is in their best interest to make your plan succeed. They need to see your plan as their opportunity to make themselves lucky.

If the plan requires capital or assistance to be successful, then everyone needs to see how it benefits them to have your plan succeed. They all need to provide input to fill in the missing pieces so the plan has the best chance of success.

Finally, you must have enough time. It takes time to come up with an idea, make it feasible, find the right participants, get meaningful assistance, refine the plan and then execute it successfully. All of these things are important, but they all start with you. Have you prepared yourself for the opportunity to be lucky?

Photo Credit: Eric Lafforgue

Wednesday, September 10, 2008

What Makes a Project Succeed? The Project or the Management?

What is it that makes a project succeed? Is it the methodologies, the risk analysis, the reporting, the communications ability and talents of the managers or is it the project? This question came up as a result of a discussion about a story that Richard Feynman told, explaining what he called Cargo Cult Science. The story goes as follows:

In the South Seas, there is a cult of people. During the war they saw airplanes land with lots of materials, and they want the same thing to happen now. So they've arranged to make things like runways, to put fires along the sides of the runways, to make a wooden hut for a man to sit in, with two wooden pieces on his head like headphones and bars of bamboo sticking out like antennas - he's the controller - and they wait for the airplanes to land. They're doing everything right. The form is perfect. But it doesn't work. No airplanes land. So I call these things Cargo Cult Science, because they follow all the apparent precepts and forms of scientific investigation, but they're missing something essential, because the planes don't land.

How many project are really important or are there times we're waiting for planes to land?

Photo Credit: escapista

Monday, September 8, 2008

What does the take over of Fannie and Freddy Mac mean?

Sometimes its worth looking at what's happening in the larger world and think about what it means for you. With the US Government announcing the nationalization of Phoney and Fraudie, [Editor: Fannie Mae and Freddie Mac, thank you] think about what this means to you in your working life.

Through most of US capitalistic history, housing prices were about 3 to 4 times after tax income. This is not exactly true, but if you think about how much one can afford to pay on loans, it's reasonable.

If you consider that the average household income in the US is around $44K, the median is about $43K, to make the math easy, lets go with a pretax income of $45K. assume that around 33% will be paid in taxes, so the take home income will be $30K, or an after income of $2,500 per month.

The average home price in 2004 was about $264K, the median household price was about $221K. To make the math easy, let's go with a house price of $250K. On a 30 year, 6% interest loan, the monthly payment would be about $1,500. That means the average household is paying about 60% of their after tax income in house payments. Not sustainable.

For comparison purposes, if we look at the average house price in 1989, it was $120K, the average household income was $30K, so the median, after tax take home pay was $1,675. With an average monthly payment of $720, after taxes, homeowners paid 43% of their income for their house. Still high, but there have been a lot of assumptions made, so it's probably closer to 35%, but it's really only for comparison purposes.

As a point of reference in 2004, average rent price was about $650 per month, or about 26% of monthly, after tax income.

Now, let's just say, for the sake of argument, that someone makes the reasonable assumption that they don't want to pay more than 1/3 of their after tax income to own a home. That means that someone earning $45K doesn't want to pay more than $825 per month. On our same 30 year, 6% interest loan, that means the average home price would be about $138K.

Compare this amount to the average home price in 2004 of $264K, and you've got to think house prices can drop drop another 50%. In places like California, it could be even worse, considering the median income is $54K and the median home price is $514K.

If housing prices drop that much, how much will other assets fall? What will this mean for you?

Data information:

Home prices 1989:

Real median income 2004: http://www.census.gov/Press-Release/www/releases/archives/income_wealth/005647.html

Real median income 1989:

Rental price information:

Average home sales price in 2004:

Average and median prices of homes between 1963 and 2007:

Tuesday, September 2, 2008

Top 10 Posts

In the interests of shameless self promotion, here are the top ten posts as decided by the highest number of pageviews.

  1. Project Management Excuse List Part II
  2. Project Communications and the Terror of the Troubled Project
  3. How to Engage People
  4. How Do You Engage People?
  5. Do Surpluses of Information Lead to Deficits of Attention?
  6. Aligning People or Letting Them Align
  7. Does PMI (Project Management Institute) find Value in Project Management?
  8. Tips for Project Management Success
  9. Does Technology Create Transparency or Mirages?
  10. Should You Manage People or the Environment?

Are You a Tribal Leader?

How does a manager get their power? Maybe it's organizational, maybe it's access to information, but if you're on a project team to initiate something in a company, it comes from the people on your team. Do you understand the stages and dynamics of the team interactions?

Dave Logan has a great book out discussing different team stages and their dynamics. I consider Dave a friend with great insights. [Editor: Yea and you've also deluded yourself into thinking Natalie Portman would be your friend.]

Working with BNET, Dave's released a video describing these stages.

Briefly, the Five Stages are:
1. Life sucks.
2. My life sucks. [Editor: Working with you, that's me!]
3. I'm great.
4. We're great.
5. Life's great.

Check out the video and buy the book. You and your teams will be more successful.