There are some very positive values that were inculcated in me through the way the teachers dealt with us, the stories we were told, the structure of the school: compassion, gratitude, sharing, discipline, respect, charity, hope, love.
The 3 Worst Things We Learned As Children
However, there are some aspects that get deeply driven in to us as children that I don’t think are helpful to our productive adult life:
Conformity – Society crushes the outsiders, school is brutal on those who are outside the “norm”, grades push you to meet the pre-existing answer – not explore other options. Most of life’s important decisions can not be calculated in an excel spreadsheet and solved with calculus.
Perfectionism – “Don’t make mistakes!” is reinforced day after day after day by the exam and school work feedback that we receive over years and years.
Validation – “how did you do on the exam?” “I don’t know, I haven’t received the results yet.” We learn to stop looking at how much of our potential we delivered into a course, a project, a homework – and start to only evaluate our performance based on someone else’s judgement of our finished work. I know whether I gave 10% or 50% or 90% of myself to a piece of work – this should matter more than A, B or C.
Leadership requires breaking free from these 3 things. Great leaders don’t seek external validation (No: “how did I do?”), understand that mistakes allow improvement (No: “who screwed this up?”) and that diverse people and diverse ideas (No: “that will never work!”) need to be brought together to see more fully the paths that are available.
What are the important values that you took from your schooling? What are the attitudes that do not serve you that were conditioned by school?
There is a wonderful tradition that was described to us by Sandiya of Storytrails this morning as we walked through the backstreets of Chennai, India.
Every house we passed had a chalk-like drawing on the pavement in front. I asked Sandiya “what are these drawings?” (my new shoes are visible in most of the pictures!)
Chennai traditional households draw this every morning
She told me “Every morning the woman of the house draws a picture. She can draw whatever she wants. If the family is celebrating, it will be colourful and large. If the family is mourning it will be small, or maybe even non-existant. Each morning she expresses herself and the mood of the house.”
I thought “what a wonderful way for a neighbourhood to know each other. You don’t have to say ‘how are you?’ it is written on the street as you pass each house”
At dinner last night, I was talking with my father about my sense that we have had a collapse of trust in the institutions of the western democracies over the last decade.
A good society has a sense of fairness. I feel that this sense of fairness has been lost. There is a widespread intensifying of the sense of injustice around me in Spain where I live, in Ireland where my family live, and in each of the countries I visit on vacation and work (UK, USA). I have a feeling that some segments of society have been punished while other groups have got away with grand scale corruption.
The big question at dinner last night was why have no bankers gone to jail? There have been some massive fines payed by almost all of the major investment banks – big numbers – but not a single individual banker is at risk of time behind bars. How can this be?
The Straw that broke the Camel’s Back
In the case of the financial wrongdoings of Bernie Madoff, we had a clear case of one single individual breaking clear laws over a 35 year timeframe. He was clearly guilty and went to jail.
The Financial Crisis has complex causes that remind me of the fable “the straw that breaks the camel’s back”. Imagine a camel loaded with straw. There are a team of people loading the camel. They keep adding straw to the camel’s back. One piece is added, the camel is ok. Another piece is added, the camel is ok. A third piece is added, the camel collapses. Who is to blame? The person who placed the final piece of straw? The government who did not set a clear weight limit for camels? The transport company who owns the camels?
In the Financial Crisis, we have a similar situation. One bit of deregulation didn’t break the camel. One poorly underwritten mortgage didn’t break the camel. One innovative but complex new financial product didn’t break the camel. The camel was broken by the combination.
Causes of the Financial Crisis
The financial crisis that began in 2007-8 with the collapse of the mortgage-backed securities has caused enormous stresses on governments and people’s living standards. The International Monetary Fund estimated that large U.S. and European banks lost more than $1 trillion on toxic assets and from bad loans from January 2007 to September 2009. These losses are expected to top $2.8 trillion from 2007 to 2010. U.S. bank losses were forecast to hit $1 trillion and European bank losses will reach $1.6 trillion. Between June 2007 and November 2008, Americans lost an estimated average of more than a quarter of their collective net worth. (source http://en.wikipedia.org/wiki/Financial_crisis_of_2007–08)
What caused the crisis? There are 7 major factors that drove the financial system towards the crisis of 2007-2008:
Growth of sub-prime lending – lending to people without stable income or liquid assets increased massively between 2004-2008; they went from 10% of all mortgage operations in 2004 to over 20% of mortgage operations in 2007.
Housing price bubble – Between 1998 and 2006, the price of the typical American house increased by 124%.
Easy credit – From 2000 to 2003, the Federal Reserve lowered the federal funds rate target from 6.5% to 1.0%
Weak underwriting practices (and fraudulent in many cases) – by the final years of the U.S. housing bubble (2006–2007), the collapse of mortgage underwriting standards was endemic.
Deregulation – Allowing for creation of derivatives (mortgage-backed securities) and off-balance sheet financing. Warren Buffett famously referred to derivatives as “financial weapons of mass destruction” in early 2003. Financial institutions in the shadow banking system are not subject to the same regulation as depository banks, allowing them to assume additional debt obligations relative to their financial cushion or capital base.
Over leveraged consumers and institutions – USA household debt as a percentage of annual disposable personal income was 127% at the end of 2007, versus 77% in 1990. In 1981, U.S. private debt was 123% of GDP; by the third quarter of 2008, it was 290%
Financial Innovation – which added massive complexity to the system. FT columnist Martin Wolf said that “…an enormous part of what banks did in the early part of this decade – the off-balance-sheet vehicles, the derivatives and the ‘shadow banking system’ itself – was to find a way round regulation.”
It was Countrywide Financial that led the subprime boom – the process of selling mortgages to anyone – no matter their collateral, no matter the value of the underlying assets – and then packaging them up into groups of thousands of mortgages, getting them “rated” as investment grade.
Were banks guilty of criminal activity?
I think the key three factors under banker control are weak underwriting practices, over leveraging and financial innovation.
In the case of over-leveraging, even the Fed chairman Alan Greenspan believed that the world had entered into a new, safer era where central bankers had achieved control over inflation. The world view of all bankers and economists was that major volatility was removed from the financial system. In this situation, higher leverage would be a rational strategy. This was not criminal activity, purely a rational response to a widespread belief about volatility.
In the case of weak underwriting practices – this was something that was clearly allowed to happen by management, but no senior banker seems to have actively promoted this practice. I still think that a leadership responsibility is to be aware of how the results are being achieved – it seems many senior bankers were happy with the results and asked few questions about the process. There is little provable criminal activity at leadership ranks; however this is profoundly poor leadership. In the military, senior officers would have no option except to resign if soldiers regularly ignored rules and regulations.
In the case of financial innovation, it seems that many of the innovations were not designed to deliver a product that was better suited to the customer needs – they were innovations deliberately structured to sidestep regulation. There was a deliberate strategy to create mechanisms to avoid the regulator. This is a crime. Individual bankers created and sold these new innovative products.
Were individual bankers responsible for these practices?
In the case of the Financial Crisis, we have a much more complex and interconnected set of actions that in their combination led to the crisis. If a person with a house and a mortgage loses his job and cannot pay the mortgage, this is not criminal action. The person and his bank realistically believed that he would receive a salary long enough to make his obligatory payments on the loan. In some ways, the banks were surprised by the major collapse in house values – something that was not predicted and had a massive impact on the viability of their business model. If it were this alone, then the bankers were not guilty of any crime.
However, major fines have been paid by most of the major investment banks. Why have they paid financially, but not with individual loss of freedom? How can a corporation be guilty if no single individual has done wrong? A corporation is legally separate from a person, but it represents the actions of people.
Why have no bankers gone to jail? “Plausible Deniability” Our courts assume innocence until proof of guilt. This requires criminal action to take place, have witnesses and be under the responsibility of an individual. Bankers and lawyers are able to build good stories that muddy the waters of individual responsibility. The fact that no bankers are in jail is not because the world’s criminal prosecution services have a love of banks – I bet any number of middle ranking prosecution lawyers were looking to make a career out of nailing a big name banker. If they haven’t nailed a banker, it is not through a lack of prosecution effort to build a case.
Boris Johnson, mayor of London and future candidate for Conservative Prime Minister of the UK has proposed this week a change in the law regarding British Citizens who travel to Syria, Iraq. Instead of the prosecution having to show without reasonable doubt that the purpose of their trip was to commit criminal activity with the Islamic State; the individuals would be required to show that their trip was clearly not to participate in any criminal action. It worries me the idea that individuals could lose the right to presumed innocence. However, there needs to be some areas of life where it is not enough to put the onus on the other side to prove guilt, there should be some onus to show that you are fully responsible for your, and your team’s actions. If someone is a leader at a major bank or if someone takes a trip this month to Syria – I think there should be a balance toward that leader or that traveller needing to document that they have proactively been fully responsible for the consequences of their actions.
Leadership responsibility needs to include a responsibility to audit the actions of your subordinates. This is a value system problem rather than a regulation problem. We cannot regulate trustworthiness.
I’ll leave it to a future post to explore the systemic actions that can rebuild trust between people, and trust in major institutions.
The First World War began in 1914. Today marks the day that Britain and Northern Ireland entered the war.
Over 9 million soldiers died in the 4 years until 11 November 1918. Total direct casualties were over 37 million (source).
My great grandfather Sidney was in the trenches in the Great War. He never spoke of his experiences.
The causes of the war are complex. The trigger for the war was the assassination of the Crown Prince of the Austro-Hungarian empire, Franz Ferdinand in Sarajevo by a Serbian nationalist.
The true causes of the war?
The rise of Nationalism. “My country is better than any other” was a popular belief in Britain, France, Germany. This storyline blinded the population and the leadership to the real facts of the situation.
The rise of Imperialism in Germany threatening Great Britain’s sense of world superiority. Germany were rapidly building a powerful navy and Great Britain were concerned about Germany overtaking their control of the seas. Germany wished to build an international empire “worthy” of their status as a leading power. Britain felt this ambition threatened their own empire. Both Britain and Germany had interest in a valid reason to “adjust” the balance of power.
Delusional Arrogance of the aristocratic leaders of Germany, France, Russia and Britain. They were surrounded by “yes-men”. Roles were filled by family connection not by merit. Each leader was led to believe by their advisors that they had massively superior military capabilities. Each country believed that the conflict would be over in a matter of weeks. “It will be over by Christmas” was the general view of the British soldiers as they headed off to war. Germany’s first 3 days of war was so incredibly successful (Belgium and northern France collapsed entirely) that the country got very excited by the war.
Political Power more important than Human Rights. Military and Political leaders who saw soldiers like pawns on a chess board – expendable units for a few yards of advance. Military technology had moved ahead in giant leaps, but military tactics remained locked in the distant past.
Internal weaknesses in Russia and Germany – the senior leaders needed an external enemy to avoid revolutions and major changes in their own regimes. Russia had lost a recent war with Japan and needed a victory to boost moral. Germany was a weak confederation and Kaiser Wilhelm needed a common dangerous enemy to unite factions.
“Sleepwalking” diplomats that watched the events unfold without having a sense that the continued build up would reach all-out war. Europe had not had a major war in almost 100 years and senior diplomats were often chosen for their family ties, not for their experience or wisdom as spokespeople for their nations.
The song “The Green Fields of France” is often sung in pubs in Ireland to remember the fallen of the war. It is an intensely sad song that always makes me feel an intense gratitude to be alive today and to live in a time when myself or my friends and children are not under the threat of spending 4 years in trenches. The song asks whether we have ever learnt the lessons of the war. I hope we do. My own personal ambition is to teach the world to use words so powerfully that guns are not needed. This is a big challenge.
The Green Fields of France
by Eric Bogle
Well how do you do, young Willie McBride,
Do you mind if I sit here down by your graveside
And rest for a while ‘neath the warm summer sun
I’ve been working all day and I’m nearly done.
I see by your gravestone you were only nineteen
When you joined the dead heroes of nineteen-sixteen.
I hope you died well and I hope you died clean
Or Willie McBride, was it slow and obscene.
Did they beat the drum slowly, did they play the fife lowly,
Did they sound the dead-march as they lowered you down.
Did the bugles play the Last Post and chorus,
Did the pipes play the ‘Flooers o’ the Forest’.
And did you leave a wife or a sweetheart behind
In some faithful heart is your memory enshrined
Although you died back there in nineteen-sixteen
In that faithful heart are you ever nineteen
Or are you a stranger without even a name
Enclosed and forgotten behind the glass frame
In a old photograph, torn and battered and stained
And faded to yellow in a brown leather frame.
The sun now it shines on the green fields of France
The warm summer breeze makes the red poppies dance
And look how the sun shines from under the clouds
There’s no gas, no barbed wire, there’s no guns firing now
But here in this graveyard it’s still no-man’s-land
The countless white crosses stand mute in the sand
To man’s blind indifference to his fellow man
To a whole generaation that were butchered and damned.
Now young Willie McBride I can’t help but wonder why
Do all those who lie here know why they died
And did they believe when they answered the cause
Did they really believe that this war would end wars
Well the sorrow, the suffering, the glory, the pain
The killing and dying was all done in vain
For young Willie McBride it all happened again
And again, and again, and again, and again.
Everyone wants to be Bruce Lee, but few want to put in the 10,000 (or more) hours of practice and preparation. It is only when the bar is held high that we can consistently put in the practice and push our skills to the highest levels.
What makes for an ‘A’ Player?
The simplest possible definition is “somebody you would enthusiastically re-hire”. Imagine you got to re-hire your team each morning. Who would be the first people chosen? These are your “A players”.
What attracts “A” Players? Two things – other “A” Players and a meaningful challenge.
How do you create a culture of “A” Players? There is only one path: Zero tolerance of mediocrity. At the end of this post I describe this leadership attitude.
Positive Attitude – Resilient; life gives us all blows… some keep moving, some get knocked down. A players keep moving.
Adaptable – Open to Change, Flexible; what was right yesterday may be wrong today, what worked well yesterday may be ineffective today.
Reliable – write things down, get things done, relentless follow through, do what needs to be done
Big Picture – they know where they and their team are going, they have a personal sense of why they are doing the work that they are doing; building skills not just for today, but for where they want to be tomorrow.
Connected and Influential – Plays well with others, listens actively, open to being influenced and capable of shaping the perspectives and attitudes of others.
Always Learning – reading books, attending seminars, open to culture
How to run your talent program like FC Barcelona
At a conference at IESE Business School in 2011, Geoff Smart spoke to the audience about how to source, select and attract top talent to your organization. He asked “has anyone ever hired someone who looked great on paper, only to find out weeks or months later that it was a terrible decision?” Many hands were raised in the air.
Jim Collins, in his book Good to Great, says that the very first step of leaders who create massive success in their businesses is “get the right people on the bus”… and the corollary… get the wrong people off the bus.
There are 4 parts to hiring well.
Know clearly what you want the person to achieve. Go beyond vague descriptions of skills. eg. “Analytical Thought Process” develop further to “Distinguishes key facts from secondary factors; can follow a progressive thought process from idea to idea; makes sound observations.”
Go to where the best people are. Where are the best people? They are not looking at job adverts. They are not spending their weekend reading job websites. They are passionate about their current role. It is unlikely that those who are actively searching through non-personal channels are top performers. The top performers are still doing well in their current jobs. How to find the best people? There is only one way: Network. If you want talent: ask who the best people are, get to industry events, meet people at conferences. Watch people in action, know them through their activity, read their books, their tweets, their Quora profiles, their blogs.
Selecting the A players: focus on the past, not the future. Don’t ever ask “how would you solve the problem?”. Ask “tell me about a time when you solved a similar problem?” Everyone can tell you a great story about what they would do. The top performers are not smarter, don’t have better to-do list systems, better technology. The differentiator is that they have found the way to overcome procrastination. They actually do the things that they say they will do. Give them a present problem and ask them to solve it. See their creative thinking, not necessarily the solution. Look for performance, don’t ask for opinions.
Selling the opportunity, building the culture. Selling the opportunity to an A player does not mean “be their friend”; it means sell them on the personal growth, the professional growth the opportunity to impact the world on a massive scale. This is what great people want. Not more friends. They want to be pushed and demanded and be allowed to change the world for the better. Jonathan Davis says that culture is hard to build and easy to destroy. Jonathan turned down a hiring contract recently with a big company. He told the CEO “You cannot be client of ours. I’ll tell you why. Your VP of sales is a !@#$%^!. He won’t waste an opportunity to tell you how awesome he is. We can help you recruit a great employee, but he will leave.” It is the culture that you build that will really attract and keep the top talent. If you create a great culture, you don’t need to pay employees to bring people in… they will bring their ambitious, high performing friends in. The online shoe retailer Zappos pay $2000 for people to leave.
Finding, Recruiting and Retaining Talent is Hard Work
How do you do this without any effort? You don’t. Good talent doesn’t just happen because you are showing up. One of the hardest things in business life is removing a loyal but mediocre performer from your team. There may be bonds of friendship, there may be many good shared experiences in the past, feelings of connection. However, the continued presence of mediocrity in your team is a cancer that will eat away at your ability to achieve important goals. One way to reduce the pain of having to let go of mediocre performers is to get very good at only hiring star performers into your team.
Leadership sometimes means Letting People Go
My father once told me that the greatest service you can do for an unhappy, under performing employee is to let them go – it frees them to search and find a place where they can contribute and find greater meaning. They won’t thank you in the moment, but this is the service of a leader – it is not about giving – it is about serving; it is not about the easy answers, it is about the right answers.
Highly Demanding, with Love
How would you get Leo Messi to play for your football team? It would help if you had 3 of the top 5 footballers in the world already on the team. How do you attract the top talent to your team? Build a culture of high performance around you.
This starts with a zero tolerance of mediocrity.
A participant on my course last year began his speech “I have often wondered whether it is better as a parent to be permissive or authoritarian. Which is better? At a conference a few years ago, I had the opportunity to speak to one of the world guru’s on child development. I went up to him after his talk. I congratulated him. I asked him the question: ‘is it better for a parent to be permissive or authoritarian?’
The guru smiled and said ‘highly demanding with love’.”
It is the same as a leader – can you be highly demanding, with love. Expect the best from those around you and they rise to the challenge. Accept the worst, and they will coast in comfort.
My entrepreneurial friend David Tomas has a mission. He calls it #InspiringMondays. His mission is to build a company culture that has people as excited arriving to work on a Monday morning, as most people generally feel when they about to leave work on a Friday afternoon.
On this (potentially) inspiring Monday, I have 3 questions for you:
What will you do differently for the first time in a long time?
Who will you take action to build a deeper relationship with?
On a scale of 1 to 10, how well do you use use your free time?
I would love your answers, ideas, reflections and links to powerful online resources in the comments below. What’s your thinking?
I came across a study reported in Mark Murphy’s book Hiring for Attitude. (Here is a summary of Hiring for Attitude [pdf]). The findings are based on 5,247 interviews. Mark and his team categorised the top five reasons why new hires failed (were fired, asked to leave, received disciplinary action or significantly negative performance reviews).
The 5 Biggest Reasons why New Hires Fail
The following are the top 5 areas of failure, matched with the percentage of respondents.
Coachability (26%): The ability to accept and implement feedback from bosses, colleagues, customers and others.
Emotional Intelligence (23%): The ability to understand and manage one’s own emotions, and accurately assess others’ emotions.
Motivation (17%): Sufficient drive to achieve one’s full potential and excel on the job.
Temperament (15%): Attitude and personality suited to the particular job and work environment.
Technical Competence (11%): Functional or technical skills required to do the job.
Technical competence is fairly easy to test. Don’t ask people how they would do something, Ask them about a time they have already done it. Don’t allow people to tell you hypothetical stories, make them share real experience.
Coachability, emotional intelligence, motivation and temperament are more predictive of a new hires’ success or failure than technical skills are. How can you begin to decide if potential new hires have what it takes to be coachable, emotionally intelligent, self-motivated and have a balanced temperament? Mark says this is more difficult, but you can watch how they are during the interview process.
Positive Attitudes of High Performers:
They take ownership of problems
They’re highly collaborative
They aren’t afraid to make mistakes
They meet commitments
They’re empathetic towards customers’ and colleagues’ needs
Negative Attitudes of Poor Performers:
They always find the negative
They respond to feedback with an argument
They only do the bare minimum expected of them
They get overwhelmed by multiple demands and priorities
They always find someone else to blame for their mistakes
They’re unwilling to leave their comfort zone
How’s Your Employee Engagement?
My friend Bart Huisken is founder of Celpax. They have a wonderfully simple business model. They install a “good day/bad day” detector in the exit of a building and are able to track how HR initiatives impact the attitude and engagement of employees in the companies. Have a look at this 35 second video to see how Celpax work: http://vimeo.com/67047557
“Koyaanisqatsi” is a Hopi word. It means “life out of balance.” The Hopi are a Native American people who primarily live in the region around Arizona. The name Hopi is a shortened form of Hopituh Shi-nu-mu (“The Peaceful People” or “Peaceful Little Ones”).
What is balance? What is a balanced life? Does such an ideal really exist?
Life out of Balance
The ideal of balance in life is a dangerous belief. There is no balance in life. There is this moment. In this moment, you are enough. There is the next moment, in that moment, you are enough.
When you are running, run. When you are reading, read. When you are talking with your child, be with your child. When you are writing, write. When you are eating, eat.
The lack of balance is a feeling, not a reality. The feeling comes from not being here. It comes from trying to be here and to be there. I am with my daughter but I am thinking about a meeting with my boss tomorrow. I am neither here nor there – this generates that feeling that is described as Koyaanisqatsi, “life out of balance”.
I heard this question asked to a full conference room recently: “Do you know how to use the internet?”
All hands went up. Everybody in the room felt that yes, they know how to use the internet.
Then, the speaker asked a second question: “Ok, show me what you have created?”
“Show me what you have Created”
At first there were only confused faces in the room. What did he mean?: “what have you created?”
If I say I can use an oven, it means that I can create delicious food with it. If I say that I can use a car, it means I can travel to interesting destinations with it. If I say I can use the internet, what do I mean?
Who uses who with the TV? Do I use it? or does it use me?
Who uses who with the internet? Who benefits most when you spend 10 minutes updating your status on facebook? You, your friends, or the owners and managers of Facebook, Inc?
There is a saying: “On the internet, if it is free it is because it is using you”
What have you created with the internet? It is not ok to just be a giant consumer.
Lots and lots of other ideas… communities… online CVs…
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