Bob MacDonald on Business

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Disappointment is the Residue of Misperceiving Management as Leadership

September 14th, 2014 · Building Better Business Managers, Business Management, Effective Leadership

There are many outstanding managers but very few true leaders

Barack Obama has been president for almost six years and sadly, the most consistent and persistent criticism has sought to portray him as a feeble leader who is neither decisive nor effective.

Much of this perception arises from the coordinated, concerted effort of obstreperous Republicans. Lacking the President_Barack_Obamapower, creativity or willingness to offer anything constructive, they have adopted a strategy of belligerent hostility in an effort to thwart any Obama plan of action. The result is to further erode the opinion of his leadership skills.

At first blush it may seem incongruous to suggest that someone with the ability to twice be elected president of the United States lacks strong leadership skills. Nevertheless, the claim of Obama’s deficient leadership qualities would have fallen flat if there was not some truth in the charge.

Barack Obama is an extremely intelligent individual with exceptional talents, but a natural born leader he is not. On the other hand, Obama is one of the most effective managers ever to occupy the Oval Office.

The Record Speaks for Itself

Any objective review of Obama accomplishments, especially in the face of the ferocious, lock-step resistance from Republicans and right-wing wackos, is clear evidence of his effectiveness as a manager. But that does not qualify him as a true leader. In reality, any success that Obama has achieved is evidence of his exceptional ability as a pragmatic and practical manager—not his visionary leadership skill.

True leaders are, by nature, so passionate about the vision they seek to achieve and lead others to accept that they are rarely practical and pragmatic. When was the last time you recall a leader being accused of being “deliberative, detail oriented and anal?”

Conversely, the essence of management skill is to be practical and pragmatic, almost to a fault. Rarely will a manager – no matter how successful – be described as a “visionary leader.” And it is this misperception of the important elements of management as leadership that ultimately creates disappointment and is at the base of Obama’s low approval ratings.

A Proper Definition of Terms

The problem is that few concepts are more bandied about, misunderstood or misconstrued than leadership. (“Love” might be the only one that comes to mind.) And because the mantle of leadership is so exalted as to be something everyone should strive to achieve, the meaning of leadership has become adulterated and diluted.

Many mistakenly believe that leadership is bestowed by title or position of power. How many times have you seen companies identify the senior management group as “the leadership team”? But just calling someone with management responsibilities “a leader” does not make it so and this misperception can lead to confusion and disappointment, for both the manager and the followers.

One reason the concepts of management and leadership become hopelessly tangled is because success in any endeavor is dependent on the commingling of both. The vision of a leader requires management to make it become a reality. Management without a vision is no more than wayward bureaucracy.

In simple terms, the leader has a vision of what should be done, while a manager has a plan to get it done. What makes a leader seem weak and a manager bureaucratic stems from the fact that very few visionaries are effective managers and even fewer managers are visionaries. That is the reason why, once a company has achieved a certain degree of success, the visionary founder is often replaced by those charged with managing the effort to retain the success. (Often with little success.)

Obama, in truth, is a much better manager than he is a leader. In most situations – especially in business – this would not be a significant problem. But Obama is President; Americans revere and expect leadership qualities in a president and discount their management ability—a skill even more important than vision.

Jimmy Carter was far more effective as a manager than Ronald Reagan ever was, but given the choice between the manager and the perceived visionary, the people rejected Carter and embraced Reagan. Today, Reagan is an icon and Carter is an afterthought. My guess is that if you asked the average person to list the five most effective U.S. presidents, the names of George Washington, Abe Lincoln, Teddy Roosevelt, Franklin Roosevelt and John Kennedy would be most often mentioned. What these men all had in common was the aura of leadership and visionary thinking, not their effectiveness as managers.

The closest parallel to what Obama faces as a more effective manager than leader would be to compare the dynamics TeddyRooseveltof the temperament and style of Teddy Roosevelt (left) against his handpicked successor, William Taft. Roosevelt was clearly the type of hyperactive visionary leader that attracts a strong following. He had a vision for a “progressive” America in which the role of government was to protect the weak against the strong, as opposed to a government that empowered the strong to abuse the weak that existed when he became president. Roosevelt passionately and aggressively set about to “bust the trusts” and change the rules of government in an effort to create a level playing field for all.

Clearly this is the definition of a leader: One who seeks to change the system, rather than manage it. Roosevelt’s vision generated heated hatred from the powerful and loving adulation from the powerless. The truth is that Roosevelt set the vision, but he was unable to manage it to fruition and failed in most of his efforts to change the system. Constrained by an admittedly impertinent promise not to run for re-election, Roosevelt turned to his good friend and protégé William Taft to succeed him as president. Taft believed in the vision Roosevelt had created, but he was a methodical, consensus-seeking, pragmatic manager, not a visionary leader. History reports that Taft was able to use his management skills to pass more legislation, change more laws and bring about more of Roosevelt’s vision than Roosevelt himself. And yet, it is the visage of Teddy Roosevelt on Mount Rushmore, not that of Howard Taft.

You see, Americans love their leaders, but give short shrift to managers. And viewed with even more disdain are managers dressed in a leader’s clothing. President Obama shares in the blame for the electorate’s disappointment in his leadership abilities, because in his effort to be elected president, he positioned himself as a “transforming visionary leader.” His election as the first African-American was certainly a transforming event for the country, but when the “vision” failed to materialize and when Obama naturally fell back on his inclination as a manager, disappointment and disillusion in his leadership ability took hold.

In fairness to Obama, from the day he was inaugurated, he was faced with the most serious economic challenge since the Great Depression. It was a challenge that called for sober management – not inflammatory rhetoric – in order to prevent a “total meltdown” of the economy. Obama’s strength – managing the problem – was successful in preventing a debilitating depression and setting the stage for a fairly rapid economic recovery. On the other hand, Franklin Roosevelt met the same type of economic challenge with visionary leadership but lacked the coolness of an effective manager and the Great Depression dragged on for a decade. And yet, it is Roosevelt – not Obama – who is revered as a great leader.

If you need even further proof of how leadership and management can be confused – and how hungry people are for real leadership – all one needs to do is return to the election of 2012. By any measurement the presidential election was Romney’s to lose – and he did. Break the 2012 presidential election down to one defining tipping point and it is this: Obama reiterated a promise of visionary leadership while Romney stressed his experience as a manager and promised more of it. Even though Obama had failed to deliver on the promise of visionary leadership, the people chose the hope for leadership over the promise of management.

It could be argued that what is needed in these complicated and confusing times is an effective manager, and, in truth, we probably did end up with the best manager, but for the wrong reasons. The only problem is that when management is misrepresented and misperceived as leadership, the residue is always disappointment—even if the manager is successful.

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Sometimes the Best Boss is No Boss at All

September 7th, 2014 · Building Better Business Managers, Business Management

If you want to be successful in business, the last thing you should strive to be is a boss

Do you have any “bad boss” horror stories? If not, just wait; if you work long enough, you will. And when you have a bad boss you will know it from the angst and frustration you are forced to endure. And if that’s not bad enough, a recent Swiss study determined that those who work for a bad boss have a 40 percent greater chance of suffering a heart attack.

Bad bosses have their own individual traits any one of which they can employ to make your life miserable. They are, in a word, “bossy.” They micromanage all you do, and communicate as clearly as a monk under a vow of silence. They hoard credit in the fashion of an obsessive-possessive personality disorder and are all-American, professional blame-game players.

The University of Florida researched the phenomena of “abusive bosses” and even came up with a term to describe bad bosses; it’s called “power poisoning.” The Florida research determined that bad bosses are bent on satisfying their own need and wants, while devoting little or no attention to the needs and wants of followers. In fact, they act as if the rules do not apply to them. All of this is bad enough, but what is even worse (the heart attacks notwithstanding) is that most bad bosses don’t even know they are bad bosses; they confuse loathing with love, alienation with admiration.

Why “Bosses” Fail

Bosses who fail tend to be those who believe their job is to “be” the boss, as they mistakenly understand that role. They view their job as being a supervisor, the chief, the one in charge and superior to all others. That’s why the term often conjures up negative feelings from the rank and file: their bosses so often made them feel like underlings, peons, cogs in the machine, and worst of all, lowly subordinates. For me, the very concept of a “boss” is an anathema to effective leadership and the last thing a successful boss does is to boss people around.

From a personal perspective, there was always a feeling of failure if anyone ever responded to me by saying, “Well okay, you’re the boss.” As a “boss” your goal should always be to have those who work for you to want to do what you want them to do, because they are motivated to do so; not because you are the boss. From my observations and experience, companies would create a more productive environment, increase productivity, build loyalty and increase success if the very concept of “the boss” was eliminated. And there is evidence to validate this assumption.

A Wall Street Journal article titled “Who’s the Boss? There Isn’t One,” proves the point. In it, the editors profiled the Valve Corporation, a company that makes a conscious effort to operate in a “boss-free” environment. Valve, founded in 1996, is a highly acclaimed and successful video-game maker. The Journal article pointed out that the company is structured with a flat hierarchy where pay is often determined by peers and the workday is directed by employees themselves. The Valve website says the company has no managers or assigned projects. Instead, its 300 employees recruit colleagues to work on projects they think are worthwhile. The idea of mobility and the option to work on different projects at Valve creates a sense of flexibility and mobility among the workforce; and is symbolized by having desks mounted on wheels, allowing them to move around to form new work areas.

The WSJ article suggested that Valve may be an outlier, but pointed out the company is not alone in the effort to outsource bosses. “Companies have been flattening out their management hierarchies in recent years, eliminating layers of middle management that can create bottlenecks and slow productivity,” the article reported. “The handful that have taken the idea a step further, dispensing with most bosses entirely, say that setup helps to motivate employees and makes them more flexible, even if it means some tasks, such as decision-making and hiring can take a while.”

Frank Shipper, a management professor at Salisbury University (Salisbury, Md.), has spent two decades studying “flat management” structures and concludes these types of structures help a company stay innovative, “because ideas can come from anyone in the organization, regardless of tenure or position.”

The WSJ article identified a few very large companies that have benefited from a “boss-free zone.” General Electric was cited as a company that has run some aviation-manufacturing facilities with no foremen or shop-floor bosses. One leader, the plant manager, sets production goals and helps resolve problems that may arise, but does not “boss” the daily activity of the workers. Teams, whose members volunteer to take on various duties, meet before and after each shift to review work, set goals and address problems.

Sign of the Future?

It may not be practical to adopt a “no bosses” approach at all companies, but it is possible to create “boss free zones” within any company. I have experience with one company that encouraged employees to take it on their own to find, develop and implement ways to simplify processes and procedures within the company’s operations.

These groups were called “Work Simplification Teams,” and they were made up of volunteers from all areas of the company. The groups would get together – with no management present – to identify areas of effort, elect leaders and plan the activity. (All of this was taken on with no expectation of extra pay and in addition to their normal job responsibilities.) Once the group had completed its work, the team would present their findings and recommendations to an all-company meeting where their ideas would be questioned and discussed and then presented to management. This approach kept the company on the cutting-edge of efficiency by allowing those who are expected to do the work to determine the best way to do it.

An ancillary benefit to this approach was that it allowed younger workers to learn how to lead – not from a position of authority – but by communicating, listening and convincing others to accept their ideas. It also helped them learn to understand and respect the ideas of others; all of which enabled them to become better bosses when they became a boss.

The conclusion to be drawn by all this is that a person being a boss does not make people better, but people who are given the respect, freedom, encouragement and opportunity can make a person a better boss.

And the Moral of the Story …

The best boss is the boss who does not act like a boss. The best boss makes an effort to get out of the way, instead of in the way of those charged with doing the job. The best boss does not tell others how to do their job, but sees their job as providing the information, support, tools and encouragement to others, so they can determine the best way to do their job. The best boss does not see themselves as a boss, but as a mentor, teacher, coach and cheerleader for others. If a person in authority adopts this philosophy, they are not a boss, but a leader. Clearly, individuals and companies would be more successful when there is more of a commitment to have fewer bosses and more leaders.

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The Biggest Risk of Failure is the Unwillingness to Risk Failure

August 31st, 2014 · Building Better Business Managers

Facing the risk of failure is less threatening when one understands the difference between a risk and a gamble.

Risk permeates the drive for success like garlic in an Italian restaurant. It is the 600-pound gorilla in the success equation. And when it comes to achieving success – either as an individual in the corporate world or as an entrepreneur – risk both discourages and encourages.

The risk of failure in any effort to succeed paralyzes many, while actually empowering others. Risk reveals cowards, heroes, fools and fortune hunters all at the same time. Some equate risk with the fearsome thought of swimming among a pack of hungry sharks, while others embrace risk like a skilled lion tamer in a circus.

Risk cowers many for the simple reason that it is often highly overrated. Risk is often overestimated as a threat to success because most people equate risk-taking with gambling; they believe they are one in the same. The truth is that a risk and a gamble are not interchangeable concepts; indeed they are antonyms not synonyms. The only connection between a risk and a gamble is that the ultimate outcome is unknown.

The Certainty of Uncertainty

By its nature, risk is something with an uncertain conclusion, but with experience, planning and management, it can be mitigated and the outcome influenced. On the other hand, a gamble has an half-domeunknown outcome that is impervious to external influence. In short, a risk can be managed but a gamble cannot. There may be risk for an experienced, highly trained rock climber to attempt to scale the northwest face of Half Dome in Yosemite Park, but for those who have no experience, planning or training, such an effort would be a pure gamble; and as with any gamble, failure becomes a virtual certainty.

The key philosophical difference between those who shrink from risk and those who embrace it is that the former seek certainty, while the latter are willing to accept uncertainty. Risk takers can live with uncertainty, because they understand that while risks can’t be eliminated, it can be managed.

The irony is that those who are uncomfortable with the uncertainty of risk often are taking the biggest gamble, because they abdicate any possible control of the outcome. Those who are motivated to accept risk understand that the reward for accepting uncertainty is significantly greater than the penalty for failure.

Many also fail to take into account that risk is relative. They tend to see risk as solitary and in a vacuum, but often risk is interrelated to other actions. Sometimes not taking a risk creates an even greater risk that few take note of in their deliberations.

A Personal Report

In 1987 I was president and CEO of ITT Life Insurance (a subsidiary of the Hartford). By all accounts this was a great job. To those on the outside, the position offered power, prestige and great compensation; it was a sign of my personal success. And yet, I walked away from all this “success and security” to join with others in an effort to start a new company. Friends and family – including my parents – uniformly questioned my sensibilities in taking the risk – in their minds a gamble – to walk away from what seemed a safe and secure situation.

From my perspective the risk was relative. For me it would have been more of a risk – really a gamble – to stay at ITT Life, trapped in the stultifying, suffocating bureaucratic culture of the Hartford. While others viewed my escape from the cocoon of the bureaucratic security at Hartford as a pure gamble, my analysis convinced me that the real gamble would be to stay put. The alternative of striking out on my own was a manageable risk that offered far greater rewards and, in reality, less downside risk if I failed. At least I could influence the outcome; whereas at Hartford I would be at the mercy of events I could not control. (That is unless I was willing to sell my soul to the bureaucrats, which would have been an even greater risk.)

Besides, having spent over two decades in the life insurance industry I was comfortable with my knowledge of the business. I recognized an industry in the midst of fundamental change and had a plan to convert the upheaval into opportunity. This meant that a risk not taken – to leave Hartford – would have been the biggest risk of all.

Those who ultimately achieve success in their careers do so by first learning to distinguish the difference between a risk and a gamble. They do not pin their future hopes on the randomness of a symbolic turn of a card or a roll of the dice in their career. Instead, they became a risk manager, by assiduously studying hazards to success and developing ways to minimize them as much as possible. The person addicted to taking a gamble, whether in a Las Vegas casino or by attempting half-baked business ventures, always loses in the long run, and loses big. A person who is prepared and willing to accept reasoned risk-taking will sometimes lose as well, but they will win more times than they lose, and the wins will always be bigger than the losses.

In the end, success boils down to the individual’s experience and ability to accept and manage the risks that are the prelude to any success. Every time a cardiologist performs heart surgery, there is a risk of failure. It is the doctor’s knowledge, experience and training that reduces the risk to acceptable levels.

When you come down to it, the odds for or against success are meaningless. Sure, 93 percent of all new businesses will fail, but that only tells part of the story. The vast majority of those who failed did not understand the difference between a risk and a gamble, and as a result were unprepared to succeed. The secret is to figure out how to be one of those seven percent who learn how to mitigate risk and be prepared for success. You’ve probably heard the popular saying, “Fortune smiles on the prepared.” It was Louis Pasteur who said, “Chance favors the prepared mind.” (Sara Palin is the exception that proves the point in that, “Chance favors the impaired mind.”) We may not always win, but the chances for winning are enhanced when we can recognize the difference between a risk and a gamble and when we are prepared to deal with risk. Those are things failures all fail to do.

Certainly success has been achieved by those who were oblivious to risk, but when that happens, in falls more into the category of the gamble taken to win the lottery. It can happen, but do you want to stake your future on that approach?

Likewise, sloppy risk management can sometimes be worse that just taking a gamble on the future, because such an effort offers a false sense of security. There will always be something unanticipated that will happen and unless you are prepared to manage this risk, it becomes no more than a gamble. Mitigating risk depends on identifying the specific risk, analyzing options available to meet it and taking specific action to overcome it. There is no gamble in facing risk with that attitude and approach.



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