Bob MacDonald on Business

Sage Advice for Superior Business Management

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Creating an Entrepreneurial Culture in a Bureaucratic World

July 27th, 2014 · Business Management

Do you have to be an entrepreneur to build an entrepreneurial culture?

There is no doubt that we live in a bureaucratic world. It is a structured world,  often frustratingly so,  defined by rules, process and procedures. And while the world seems to embrace bureaucracy, there are many — maybe just like you — who chafe under its constrictions and yearn for a more enterprising way of corporate life.

The generally accepted antidote for bureaucracy is what is called an “entrepreneurial culture,” and everyone wistfully talks about the value of building this type of culture. But behind the talk lies a very real trap: Those who are smothered in a large bureaucratic organization feel powerless to create an entrepreneurial culture.

bureaucracyWhen you’re mired in the bureaucratic trenches it’s difficult to believe you are in a position or have the power to fight bureaucracy by building an entrepreneurial culture. Why? Because many are handcuffed by the mistaken belief that being an entrepreneur is a prerequisite for creating an entrepreneurial culture. It is as though our notions of being an entrepreneur and crafting an entrepreneurial culture are conjoined as steadfastly as Siamese twins; that you can’t have one without the other.

That restrictive mindset prevents many from even attempting to build an entrepreneurial culture. They think that, since they can never be an entrepreneur, they give-up and give-in to bureaucracy; they’re convinced that creating an entrepreneurial culture in a bureaucratic world is nothing more than a pipe dream.

That is a false conclusion. It is not only possible, but also fairly easy to build an entrepreneurial culture in a bureaucratic world, even for those who are not entrepreneurs.

The right road to bureaucratic freedom is to first, rid yourself of the belief that the attributes essential to being a successful entrepreneur are the same characteristics that form the basis of an entrepreneurial culture. That’s not the case; they can be very different.

For example, while intuitively it seems likely that an organization led by en entrepreneur will have an entrepreneurial culture, the reality is that more times than not, this is not the case. The seldom-acknowledged truth is that while the culture of an organization led by a strong entrepreneur may not be bureaucratic, it is apt to be more autocratic than entrepreneurial.

Experience has taught me that what really constrains the creation of an entrepreneurial culture – especially in large organizations – is a matter of semantics. For lack of a better term, we have fallen into the trap of identifying a culture that offers members of the organization some of the benefits of being an entrepreneur – doing the job for their own benefit – as an “entrepreneurial culture,” but this creates more confusion than understanding. It would be better to let the concept of “entrepreneur” stand on its own and think about creating a “culture” that also stands on its own.

If we can just clear our minds of the accepted idea of what an “entrepreneurial culture” is supposed to be and instead, think in terms of an “open culture,” it will enable us to look at culture building from a completely different perspective. And while we are at it, let’s also cheat on the traditional rule that says only those at the top of an organization can determine its culture.

Over and over again I have had people say to me, “I am just a small cog in a large bureaucratic organization. How can I bring about cultural change?” The answer is to ignore the larger bureaucratic culture and think of creating a distinct culture within your span of control, such as a team leader, department head or division leader. Remember that culture for the group is defined by the style of the leader at any level.

So if we are willing to open our minds and suspend the rules that inhibit the creation of an entrepreneurial culture in a bureaucratic world by working to build an “open culture,” what would it look like? How would it behave?

  • It would be a culture with a strict adherence to a core set of values.
  • The culture would constantly focus on clearly defined objectives along with continuous support for members of the group and free flowing transparent communication.
  • It would be imbued with a sense of urgency as a operating lifestyle.
  • Stress accountability where risk is clearly encouraged and accomplishment rewarded.
  • When the group is successful, all of those within the group share in the sense of ownership, participation and rewards for the success achieved.

There is nothing in this concept of an “open culture” that can’t be adopted by any leader, at any level in any size organization – even the most bureaucratic. Don’t believe it? Are you going to suggest that within your span of control you can’t have a core set of values? That you can’t clearly define the objectives of the group you lead? That you are not allowed to have constant communication with members of your group? That just because you are not an entrepreneur, you can’t create a sense of urgency among those you supervise? The truth is that you don’t have to be an entrepreneur or CEO of a company in order to build an “open culture” in your area of leadership and control.

A Real-Life Example

My first job in corporate America was as second vice president of marketing support for a large, bureaucratic insurance company. Admittedly I was naive to corporate politics and bureaucracy and certainly was not an entrepreneur, but I stumbled onto the idea of creating a “culture within a culture.” In dealing with those in the marketing support department my objective was to build a culture that some might see as “entrepreneurial,” but I only thought of it as being “open.” It may have been different from the general culture of the company, but because this was within my province of control, I had the power to implement it. (As a symbol of rejecting the overall bureaucratic culture of the company, I even moved from my private executive office to a desk in the open area with members of the department.)

My approach was to create a common goal and mission for the department; establish a sense of “we” by forming parallel interests with all members of the department. I worked hard to offer consistent transparent communication, encourage risk taking and to share the success of the department with everyone. It was not long before the marketing support department was being recognized as one of the most efficient and effective in the company.

This success even motivated other department heads to begin making an effort to duplicate our “culture” in their departments. As a result, the culture of the company began to change from the bottom-up. This experience in culture building taught me a great lesson and propelled my career forward. The point here is that despite being in a relatively low-level position in a very large bureaucratic company, it is possible within your span of control – with the right attitude and approach – to build an “open culture.”

And the Moral of the Story …

While virtually everyone sings the praises of an entrepreneurial culture, there is also virtually universal belief that only an entrepreneur can create an entrepreneurial culture. It is this misunderstanding that leads to the conclusion that it is not possible to create an entrepreneurial culture in a bureaucratic world. If we continue to cling to the traditional beliefs of culture building, then the bureaucratic world will always win. But if we are willing to open our minds to what the culture is really all about, instead of what it is called, then it is possible to build an “open culture” in a bureaucratic world. And those who are willing to adopt this approach by implementing the concepts of an open culture will ultimately achieve success and recognition that will be the envy of any entrepreneur.


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Change Agents Are More Effective When They Are Inside Rather Than Outside

July 20th, 2014 · Business Management

Often those most identified with the status quo have the most power to change it.

You may not have taken much notice of the recent dueling op-eds written by two high-powered Republicans, Gov. Rick Perry of Texas and Sen. Rand Paul of Kentucky, but their squabble is more than just two wannabe presidential candidates trying to score points with the Republican base. It offers an excellent lesson in leadership and being a “change agent,” in both business and politics.

At the core of this Republican intramural struggle is Rand Paul’s effort to be an agent of change and Rick Perry (photo below) staunchly defending the status quo.

RickPerrySince the end of World War II, the mainstay of Republican foreign policy has been uncompromisingly interventionist, a “policeman of the world” mentality. The Republicans have consistently used this aggressive stance to paint the Democrats as “weak on defense” and taking actions (or non-actions) that weaken America and put the country at risk. It is an old song, based on old ways, but the Republicans – especially the far-right – have stuck to it and it has become a litmus test for any would-be Republican leader. During the “Cold War” this strategy did appeal to most Americans – especially to those who viewed themselves as conservative.

But times and attitudes have changed. The threats to American security have morphed from armies composed of masses of asses to cells of rag-tag terrorists. The lessons of Vietnam, Iraq and Afghanistan should have taught us that legions of “boots on the ground” and “shock and awe” are tactics no longer effective in dealing with new millennium threats to American security.

Indeed, most Americans have learned this lesson. A recent Pew Research survey discovered that for the first time in decades the majority of us are opposed to traditional military intervention in foreign disputes. The research revealed that even 52 percent of rank-and-file Republicans now oppose the traditional “boots on the ground” American involvement in regional conflicts.

As much as the “establishment” of the Republican Party recognizes that the majority of Americans now reject the long-held interventionist military policy of the Party, they are constrained to change by the knowledge that the only group of Americans not to have changed are those on the extreme right—precisely those who form the base of the Republican Party (along with most of the big-money special interest groups that fund Republican candidates). The establishment of the Republican Party understands that to have any chance to win the presidency, the Party must change its foreign policy position. But they are faced with the conundrum that any effort to make this change will split the Party, leading to even more election losses.

In steps Sen. Rand Paul. No potential Republican candidate for president has more credibility and gravitas as a right-wing conservative Republican, than does Rand Paul. Initially opposed by the establishment of the Republican Party, he would not be a senator today without the full-bodied support of the Tea Party faction and virtually every other leader on the Republican far-right. No one seriously questions Paul’s RandPauldeep commitment to the beliefs of those on the right and because of this he has the requisite credibility to talk change with the Republican base. The “establishment” of the Republican Party, and certainly those outside the Party, has little hope of causing change on the Republican right. However, if someone of Rand Paul’s stature and history with the Republican right is willing to talk about change, then, at the very least, there are those who will listen, because he is one of them.

If Rand Paul can change the thinking of those on the right or even just mute their knee-jerk opposition to a change in the approach to foreign policy, it will benefit the Republican Party in general and specifically Rand Paul. Instead of being considered just a fringe candidate, Paul could garner the support of all segments of the Republican Party.

The only reason why Rand Paul has this opportunity is because he has always been identified with the status quo that he now seeks to change.

That’s a Lesson to be Learned

The reality is that real change in business and politics has almost always been brought about by those on the inside, rather than those who call for change from the outside. There can be pressure for change coming from the outside, but real change comes best and easiest from the inside. The reason for this is that those who are most connected to the status quo have the credibility to call for and implement a change to the status quo. It does not mean there will not be opposition to change. After all, Rick Perry, Sara Palin and John McCain have all criticized Rand Paul (notice also that no one at the center of the Republican Party has attacked his position), but they have a problem. It is easy to attack President Obama or even the Republican center, but Rand Paul is one of their own; his credibility becomes a shield to ward off these criticisms.

The Bottom Line

When a change is called for and is proposed by an insider, the resistance of those who support the status quo soon becomes irrelevant and ineffective. American history is replete with examples of how change is best effected when those on the inside and most identified with the status quo seek to change it. Probably the best example of this change from within is Richard Nixon’s recognition of Communist China. Nixon built his reputation and entire career on the basis of being an indomitable anti-Communist. No one could ever accuse Nixon of being “soft on Communism.” And yet, it was Nixon – the staunch anti-Communist insider – who was able to see the broader perspective and need for change who opened the door to China. We may look back now, 40 years later, and see the recognition of China as simple realism, but the reality is that only the credibility of Nixon’s anti-Communism gave him the power to implement what appeared at the time to be such a radical change in American policy.

Franklin Roosevelt, Lyndon Johnson and Ronald Reagan could also be cited as “agents of change” because they used their credibility with the status quo to change it. Roosevelt came from a wealthy upper-class family who changed the perceived role of government from one of protectors of business and wealth to the protector of the weak and poor. Lyndon Johnson was a died-in-the-wool Southerner who supported segregation and yet used the credibility of this background to push through civil rights legislation that changed America for the good forever. Ronald “we begin bombing Russia in 5 minutes” Reagan, the icon of Republican conservatism, used his credibility as a hard-nosed militarist to strike disarmament deals with Russia that only he could accomplish.

Using That Lesson in Your Business and Personal Life

Personal experience taught me the lessons of change from within. From the time I entered the life insurance industry in 1965 until I became president of ITT Life in 1980, I had been a true believer in the products and status quo of the insurance industry. However, when scanning the landscape of the insurance industry seeking a path to growth for what had been an also-run company, it became obvious that what I had always believed had been good, had become outdated. The truth was that the industry had grown lazy resting on its past success and had been insensitive to changing consumer needs.

There were those outside the industry calling for change, but they had little credibility within the industry and could be brushed off. It was obvious to me that ITT Life was not going to grow by doing what other companies were doing. My response was to publicly acknowledge that the products I had believed in and sold for almost 20 years and become obsolete and needed to be changed.

To say the least, the “establishment” of the insurance industry was not happy with me. Defensive attacks against me and my position came from all corners of the industry. But because my calls for change came from within the industry by one who had the credibility of being part of the status quo, it was impossible for the call for change to be ignored. And the industry did reluctantly change, not because of me, but in good part because of the debate that I – an insider – triggered. Of course, I benefited as well. The upheaval in the industry stimulated growth at ITT Life and ultimately gave me opportunity to start LifeUSA based on the changes that had been called for; the rest is history.

And the Moral of the Story …

The point to be learned here is that to be an effective leader and change agent, one must be willing to question and challenge even their most fundamental beliefs and experiences. It is difficult – if not hypocritical – to ask others to change their beliefs, if we are not willing to change our own beliefs.

It is when one has been clearly identified with the status quo that they have the power to change the status quo. Change may be uncomfortable and unwanted by many, but when it is proposed by those who have the credibility of an emotional connection with what needs to be changed, it makes it easier for others to accept and move forward. It may be the only way to effect real change.


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Have These Politicians No Shame Using Thousands of Innocent Children as Pawns in Their Exploitation of Immigration as an Election Issue?

July 13th, 2014 · Improving Your Business Leadership, Politics and Politicians Gone Awry

Understanding the despicable actions of political leaders who use children to fan the flames of fear and ignorant bigotry to win an election.

As Americans, it has to be embarrassing to witness our so-called leaders – Republicans and Democrats – stooping to use eight-, nine- and 10-year old children as political pawns to score points in an election campaign. Illegal immigration is a serious challenge for this country, but it is not an insoluble problem. The only reason the conundrum of illegal immigration has not been resolved is because neither the Republican nor Democratic leaders want to solve it. Both parties see illegal immigration as a cheap, yet valuable political issue that can be used to stimulate and appeal to their “base” and win elections.


Photo by James S. Wood for

The Republicans are sacrificing tens of thousands of young children who have illegally immigrated to the U.S. on the altar of political expediency because they are rapidly losing out on the issues that have motivated their “base” in past elections. The Republican base of support is mostly comprised of Tea Party-type individuals who tend to be white, poorly educated, intolerant of change and bigoted toward anyone not like them. These predispositions make them susceptible to immigration fear-mongering tactics that the Republicans are happy to exploit each election cycle.

The Way Things Were

In the past, Republicans could rely on traditional issues such as the “call to war,” the “war on drugs,” the immorality of the “right to choose” and the “sanctity of marriage” to mobilize and motivate their base of voters. These were surefire issues to touch the hearts and minds of their constituents.

But now even the Tea Party-types are tiring of war, legalized marijuana is spreading through the states faster than it can be grown, the battle over abortion is on the back burner and the right to same-sex marriage is virtually universal. In short, the value of these issues as a partisan rallying call has nearly evaporated. Is it any wonder, then, that the Republicans are so fixated on the illegal immigration problem—not to solve the issue, but to have something to rail against?

In fairness, there are a large number of Republican leaders who are uncomfortable – even embarrassed – by their party’s hypocrisy over the illegal immigration issue; especially making young children the focal point of the debate. However, every time someone such as House Speaker John Boehner or Sen. Marco Rubio – both hardcore conservative Republicans – even hints at proposing a rational solution to the immigration problem, they are accosted by self-serving idiots such as Sara Palin and Sen. Ted Cruz and others, who see prolonging the illegal immigrant debate as their ticket to more media coverage and votes.

The Democrats are just as duplicitous as the Republicans. Rather than proposing immigration reform that is sufficiently balanced to win bipartisan support, they propose solutions that are sure to be rejected. Then they use this “irresponsible rejection” to appeal to their base in elections.

And no wonder. That Democratic Party base tends to be a compilation of ethnic minorities, socially liberal younger people and those who generally believe the government is the solution, not the problem. To appeal to their base, the Democrats attempt to “box-in” the Republicans by making them appear to be insensitive and uncaring when it comes to the humanitarian side of any social issue, such as thousands of young illegal immigrants penned up in cages.

There are some who see the intent of the actions taken by Democrats as a deceitful effort to actually exacerbate the immigration issue, so that it can be used as an appeal to their base in elections. During the 2012 presidential election, President Obama took executive action by declaring the Deferred Action for Childhood Arrivals (DACA). This declaration basically granted children under the age of 15 (about 1.7 million) who were illegally brought to America by their parents (also illegal) to remain in the country. The actual impact of the Obama announcement was minor. It certainly did not solve the problem, but it was clearly intended to appeal to the base of the Democratic Party during the election. The Republicans are now claiming, with some justification, that the DACA policy has been misused to encourage parents to send unaccompanied children to America and this is creating the current crisis. Despite the reality and narrow application of DACA, the Republicans contend that it is seen as a form of “immunity” offered to any child who can brave perilous freight cars, blazing hot deserts, and polluted rivers to reach our borders.

Send “em Back where They Belong?

The Republicans are clamoring for Obama to begin the immediate deportation – despite current law that requires certain process and procedure for deportation – of these innocent children back to an uncertain and possibly dangerous existence. Such an outcome is of little concern to the Republican base – indeed they may favor it – but for others, it makes the Republican Party seem cold, insensitive and uncaring; just what the Democrats want.

As further evidence of the “games” being played, when Obama came to Congress requesting the funds necessary to expedite the deportation of the children, the Republicans opposed the request. Of course, Obama structured the request for funds in such a way that he knew it would guarantee that the Republicans would respond as they did.

And Speaking of Deportation . . .

Just how confusing can the positions taken by Republicans and Democrats on deportation be? Well, the Obama administration deported more illegal immigrants in 2013 – 360,000 –than the George Bush administration did in eight years. And yet the Republicans are widely viewed as the “throw them out” party and the Democrats are the “let them stay” party. (One reason the Republicans are less aggressive in deportation is because they recognize the negative impact the deportation of undocumented immigrant workers would have on the economy and business profits. These illegals are a source of cheap labor and profits for corporations.)

A Lousy Management Philosophy

The Republicans use fear of the impact of illegal immigrants as a tool to garner votes from their base. But fear is the weapon of last resort used by weak, unimaginative leaders. Using fear as a leadership technique is a debasement of leadership itself. Fear confuses an issue; it does not clarify. Fear narrows the vision of those affected and that inhibits solutions based on broader approaches. Wordsworth wrote, “What is fear but voices empty? Whispering harm where harm is not. And deluding the unwary, till the fatal bolt is shot!” But it is what the Republicans see as a winning strategy and they are going to stick to it. After all, this type of approach has worked in the past.

Also with a certain amount of justification, the Republicans charge that if the Democrats really wanted to solve the illegal immigration problem, they would make more of an effort to seal off the border to prevent the continued influx of immigrants. Republicans suggest that once the border is sealed, they would be willing to discuss a reasonable solution for those undocumented immigrants already in the country.

But don’t bet on it. The issue is just too valuable a connection with the Republican base. And as long as the Democrats feel that they can use immigration to mobilize their base of support, they will also keep the issue alive.

As a result, a problem that could be easily solved is allowed to fester and grow worse because both the Republicans and Democrats believe it is to their political advantage to do so. Even if innocent children suffer as a result. But who cares? The kids can’t vote and that’s all that counts.

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