Bob MacDonald on Business

Sage Advice on Insurance and Financial Services from the Perennial Maverick

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Simple Is As Simple Does

March 8th, 2010 · Business Management

Watching the health care reform package twisting slowly, slowly in the wind, I am reminded of the basic difference between those who get things done and those who don’t. The difference, as Forrest Gump so eloquently stated. is this:  “Simple is as simple does.”

Often leaders are simply “too intelligent” for their own good. This is particularly true for leaders gifted with high intelligence. For some reason, they have a tendency to prove that they are really intelligent. And they do this by taking simple things and making them complicated.

I am coming to believe that when it comes to successful leadership, high innate intelligence is overrated. Leaders do need to be “smart,” but there is a difference between being intelligent and being smart.

No one would accuse Ronald Reagan of being a member of the intellectual elite. On the other hand, Jimmy Carter is considered to be one of the most intelligent men to ever occupy the White House. Which of these presidents is considered to be the most successful as a leader? Reagan was not conspicuously intelligent, but quite smart about the way he set about delivering on his agenda. Carter was intelligent, but not very smart about the way he went about things. (George W. Bush is in a class of his own, being neither intelligent nor smart!)

Exceptionally high intelligence often becomes a disability for a leader because his intellect gets in the way of getting things done. They see all the challenges, alternatives, problems and issues that stand in the way of accomplishing an objective. This normally results in two types of response. They either become paralyzed by the options and never make a decision, or they attempt to settle each and every issue, no matter how tangential. Either way, the result is that the objective becomes unduly complicated and any attempt to achieve it, needlessly convoluted.

The more simple-minded leader tends to focus only on the objective and the simple steps needed to achieve it. In short, the intelligent leader sees the things that are complicated and the smart leader sees the things that are simple. And in reality, big things are accomplished by simply doing simple things.

The story of health care reform is a classic example of this conflict between being intelligent and being smart. Clearly President Obama and the people around him are highly intelligent, but by their actions they have shown that they are not all that smart.

The objective was simple: Reform the health care system in a manner that would allow those who do not have basic health coverage to obtain it.

Using their high intelligence, the Obama Administration produced a plan that was highly detailed and sought to address each and every issue regarding health care. As a result they produced a confoundedly complicated plan full of twists and turns – running more than 2,000 pages in length. It was a plan that few could understand and even fewer could support. No one should be surprised by the failure to achieve the original objective.

The less intelligent, but smarter leader would have kept the solution simple. There are already two national health care plans in operation – Medicare and Medicaid. Medicare currently covers individuals age 65 and over who can afford to pay for their coverage. Medicaid is a federally-funded health care plan for those who cannot afford regular health care plans.

If the objective is to provide health care coverage to those who do not have it, then the simple plan would have been to – over a period of time – expand Medicare to all ages for those who could afford it. Those who couldn’t would be enrolled in Medicaid. Such an approach would eliminate the need for the myriad state programs and free up billions of dollars to pay for the plan.

This is not to suggest that such an approach is the best way to achieve the objective or that it would pass Congress, but clearly it is much simpler and easier to understand than the plan that was proposed. Moreover, because the plan is simple, it is easier for the voting public to understand and support.

And the Moral of the Story …

It takes intelligence to make simple things complicated, but that is not smart leadership. A smart leader takes complicated things and makes them simple.

Making things simple is one of the most important secrets to successful leadership. Where the highly intelligent leader tends to look at every possible issue and give them equal weight, the smart leader steps back and focuses only on the most critical. He asks the question: What is important here and what is not? Once the critical issues of an objective have been selected, it becomes much easier to find simple solutions. In the end, the successful leader achieves the objective by identifying simple things to do and encourages his followers to simply do them.

As Forrest said, “Simple is as simple does.”

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Old MacDonald’s Farm: Growing a New Crop of Leaders

March 2nd, 2010 · Business Management

Here is your opportunity to join a new effort designed to grow a new type of leader for new times.

For political and business leaders in America, the onset of the 21st century has brought with it a millennium of change and challenges. Politically and economically, the world is now a different place than it was as the 20th century drew to a close.

Today every point on the compass portends crisis and conflict that is difficult to delineate and even more challenging to resolve. Believe it or not, as perplexing as the political world may be, the business world has become just as convoluted and confusing. That’s because the American economic system has been at war with itself since the start of this century.

It was not so long ago – in simpler times – when top and bottom line growth (no matter how achieved) was the only objective of business leaders. The simplicity of that model and the abuses it perpetuated has caused the very fiber of the business world to unravel. As a result, we are now trying to figure out how to climb our way out of “The Great Recession.” Everyone now accepts that the same will never be the same again and if we as a society are going to effectively respond, it is incumbent upon us to grow a new type of leader who can respond to new times.

It is my pleasure to be associated with a group Old MacDonald’s Ethical Leadership Farm.  This group is dedicated to growing a new type of leader. Traditionally our society attempts to grow leaders by planting the hybrid seeds of ethics and leadership skills into an individual at a young age.

This group believes it will take more than the traditional concept of being ethical and more than the classic traits of leadership to emerge as a new type of leader who can be successful in these new times. What new leaders will need to do is to absorb all they are taught regarding ethics and leadership and then take it one step further. Doing so will enable them to break away from the crowd to become an exceptionally effective and successful new type of leader.

While we have learned all the rules of ethics and the traits of leadership, what has not been taught – and what Old MacDonald’s Ethical Leadership Farm seeks to impart in a new generation of leaders – is how to go beyond the basics of ethics and leadership in a way that allows them to be merged into a new system and philosophy of ethical leadership.

Here is what I mean.

Traditionally being an ethical leader means doing the right things that are required to be done. However, to meet the new times we face, being an ethical leader means doing the right things that are not required to be done.

It is no coincidence that companies that operate under the aegis of ethical leadership consistently perform better than those that don’t. It does not mean that competing companies are managed by leaders without ethics, but only that those with ethical leadership traits are able to outperform on every business level.

Some may not fully see the payoff for ethical leadership, but just like consistently scoring only one shot better in a round of golf creates a significant difference in results over time, the evidence is everywhere in the business community that ethical leadership, as defined here, does make a difference.

For example, every year Fortune magazine surveys and then rates the top 100 companies to work for. Not surprisingly, analyses of the companies that achieve the “Best Place to Work” list share common traits, each springing from the wellspring of ethical leadership. Each company has developed a cultural environment that goes well beyond the standard of ethics an employer is expected to offer an employee. This activity is not limited to simple salary and benefits but reaches to the very heart of a motivating relationship between an employer and employee to create a place where people really want to work and contribute.

Many see the results of ethical leadership but have never been taught to understand it or trained to practice it. Old MacDonald’s Ethical Leadership Farm seeks to change that dynamic, offering ethical leadership programs for grade-schoolers through high school and college.

And the Moral of the Story …

Leaders and companies that exhibit traits of ethical leadership operate in a constant, consistent, respectful, parallel and open manner. They are willing to share the success of the organization with those who helped achieve it. Ethics does not require that they do this, but they do it anyway because they fully understand that for every inch they go beyond the norm, they will always be paid with a foot, even a yard of a more harmonious, successful business.

The objective of the Old MacDonald Ethical Leadership effort is to fill in the gap between understanding ethics and learning to be a leader by discovering how to combine these attributes in a way that will allow individuals to become an ethical leader who will stand out from the pack.

And your opportunity? If you would like to learn more about this groundswell effort and how it might help you or others become more effective leaders by becoming ethical leaders I encourage you to visit and explore the Old MacDonald web site. Go to www.ethicalleader.net.

Let us know what you think.

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Slippery Slopes are Paved with Entitlement

February 22nd, 2010 · Business Management

Those who have analyzed, parsed and nitpicked at Tiger Woods’ mea culpas have all missed the most important lesson to be learned from his very public failures. While the media focuses on the most salacious acts of infidelity and sex – suggesting sexual addiction – they have missed the real reason for Tiger’s problems. They missed the point – one that Tiger clearly identified in his statement – and that is his highly-developed attitude of entitlement.

To say that Tiger’s problem was caused by an addiction to sex is a cover-up and deflection of the real Bob MacDonald on Tiger Woodsissue. (Let’s be honest here. If every guy were given the opportunities presented to Tiger – women throwing themselves at them at every turn – then sex addiction clinics would be a growth industry.)

Tiger may have an addiction, but it is, in reality, a distorted craving that comes with an attitude of entitlement. Sex was simply Tiger’s way of exercising his “right” of entitlement: the mistaken belief that one’s achievements entitles a person to some particular reward or benefit—whether it’s illegal, immoral, or unethical. Just listen to Tiger: “I convinced myself that normal rules didn’t apply. I thought I could get away with whatever I wanted to . . . [that I] deserved to enjoy all the temptations around me.”

Tiger is not the first, and certainly will not be the last to fall prey to the destructive addiction to entitlement. Those who attain any level of success, influence and power are constantly exposed to the temptations of entitlement. And, the truth is that most fall victim to it in some form or another. For Tiger, sex was the expression of his entitlement; for others it may be money, perks or status. For some, it is all of that and more.

For athletes the attitude of entitlement is brought on by their unique ability to perform on the playing field and the hero worship such feats engender. From the time an athlete first exhibits the talent to do what others cannot do they are pampered and given privileges not available to others.

Worse, superstars like Tiger are surrounded by a phalanx of aides who are only too willing – in order to gain something for themselves – to tell the athlete how special they are. If the athlete comes from a disadvantaged background or lacks the experience to keep these adulations in perspective, then the attitude of entitlement is not easy to identify and resist. It becomes difficult for the athlete to distinguish the worship of his achievements from his persona.

In Business as in Sports

Athletes are not alone in facing the challenges of entitlement. Business, political and even religious leaders succumb to the addiction of entitlement.

For these individuals entitlement is brought on by a, “but for me” attitude.

The successful business leader can develop the attitude of, “But for me the company would not be as successful or as profitable.” No one would argue that Jack Welch, the retired CEO of GE, was not an honest and outstanding leader. He built GE into a juggernaut of success and profitability. For this, he was paid hundreds of millions of dollars. And yet, when he retired (with a $400 million parting package) it came to light that GE was paying for an apartment in New York, his season tickets at Yankee Stadium and that he had the right to use the corporate planes for free. Clearly, Welch could have easily paid for these items himself and there is nothing illegal about the actions, but they are a great example of being addicted with entitlement. Welch argued (and believed) that for all he did to make GE successful he was entitled to these benefits. After all, compared to all the profits “he had made” for GE, these benefits were just a drop in the bucket.

Over the past few years we have witnessed scores of business executives exposed, and is some cases criminally indicted, for lavish spending on themselves and their families. Some of these executives were – pure and simple – crooks. However, I would argue that the vast majority of them did not intend to do something illegal and did not see themselves as crooks. These individuals saw nothing wrong with their actions, because they had become addicted to entitlement that caused them to feel that “but for them” the company would not be successful and they were entitled these outlandish benefits. That attitude of superiority was never more neatly encapsulated than by Leona Helmsley, the billionaire New York City hotel operator and real estate investor, who famously declared, “We don’t pay taxes. Only the little people pay taxes.”

Politics is no Different

Political leaders are especially susceptible to entitlement; in big and small ways. After all, they are “doing the work of the nation,” and are entitled to the benefits of such work. Forget the politicos who take bribes, addiction to entitlement can show itself in small ways. A few years ago on a rainy day in Boston, a Senator from Minnesota pushed his way to the front of a long taxi line. When challenged, he indignantly responded that he was a United States Senator doing the work of the nation and was entitled to move to the head of the line.

Other politicians see no problem accepting free trips, gifts and dinners. These are not bribes in their eyes, but rather something they are entitled to because of their position. On a grander scale, Richard Nixon stood before the nation and stated, “I am not a crook.” In his mind he was not a crook, but in his position as President of the United States he was severely afflicted with the addiction of entitlement that made it okay to do what he did, because he was – well the President. (We won’t discuss President Clinton’s perceived entitlements here.)

Even religious leaders will fall prey to the affliction of entitlement. Twenty years ago Jim and Tammy Faye Bakker were the most prominent of a gaggle of television evangelists. They had a daily television show – PTL – that was broadcast worldwide and collected millions of dollars to “do God’s work.” The Bakkers started their mission with the best of intentions. They sincerely believed they could help people. However, as their ministry grew in prominence, power and wealth, they both became exposed to and afflicted by the disease of entitlement.

They began to spend millions of dollars of money collected by PTL on fancy cars, homes, private jet travel and extravagant shopping tours. (It was reported that on one shopping trip to New York Tammy Faye bought so many items that a second jet had to be chartered to carry them all back home!)

When exposed for their actions – which landed Jim in prison – their rationale was that they had raised so much money to help the poor, they were entitled to the benefits they took. Their convoluted logic – which they actually seemed to believe – was that if they raised $5 million dollars for PTL and spent $1 million on themselves, that it was okay because the mission still had $4 million it would not have had if it had not been for them. And two sets of books temporarily kept their entitlements flowing undetected.

As Tiger Woods has learned only so well, entitlement can be a deceiving and disastrous addiction that can quickly and easily destroy all the good work a person has done that caused them to be exposed to entitlement in the first place.

And the Moral of the Story …

The infection of entitlement is devious. It can make good people – folks as good as you or me — do bad things. Fortunately, there are actions that if taken can inoculate against and offer immunity to the sickness of entitlement.

It starts by understanding and recognizing the temptations of entitlement. If the CEO truly believes he is the reason for the success of his company, he will be highly susceptible to the lure of entitlement. However, if he recognizes that he is successful only because of the efforts of others and if he also recognizes that people who pander to him do so because of what he is, not who he is, then he will have resistance to the perils of entitlement. If the politician truly believes that his election only entitles him to the privilege of serving the interests of the people, he will be less likely to fall prey to other entitlements. If the athlete believes that his unique talent is a gift that allows him to achieve much, but that such talent does not make him different from others in a way that puts him above the rules, then he will be able to rise above the feeling of entitlement. In all cases, entitlement is compounded when those who surround the successful person become enablers of entitlement, because they benefit personally in a way they never would be able to on their own.

In his statement Tiger Woods acknowledged he had yielded to the affliction of entitlement and the addiction it can create. Let’s hope that he is sincere in this and can learn from it. But more importantly, let’s hope that all of us can also learn from this unfortunate situation.

When we find ourselves believing we are entitled to something that others are not entitled to, simply because we believe we are better than others, then recognize we have started down the slippery slope of entitlement.

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