The FDR Legacy

Today is the 65th anniversary of FDR. I have always found him to be an interesting and powerful character in our history. I suspect he may have been even more of a figure of controversy than our current President.
His initial inaugural address is particularly interesting. He describes an economy that to me at least represents a situation similar to what we face today;

"Values have shrunken to fantastic levels: taxes have risen, our ability to pay has fallen, government of all kinds is faced by serious curtailment of income, the means of exchange are frozen in the currents of trade, the withered leaves of industrial enterprise lie on every side, farmers find no markets for their produce, the savings of many years in thousands of families are gone.
More important, a host of unemployed citizens face the grim problem of existence, and an equally great number toil with little return. Only a foolish optimist can deny the dark realities of the moment."

Maybe that seems to be overstating it a bit, but even though the market has passed 11,000 again I have to ask myself if the average American sees themselves as significantly better off than a year ago and wouldn't see some parallels to what FDR described.

I find one of the other statements in his speech intriguing as well;

"...there must be a strict supervision of all banking and credits and investments; there must be an end to speculation with other people's money, and there must be provision for an adequate but sound currency." Is it just me or are we seeing some parallels here as well?

In fact his language may have seemed bombastic at the time and equally bombastic today when he speaks of "waging war against the emergency" in fact he asked for broad executive powers to fight that "war" in a similar fashion to fighting a war against an invader or foreign enemy.

Some of the other concepts that he mentions are interdependency and personal responsibility;
" ...the neighbor who resolutely respects himself and, because he does so, respects the rights of others. . .the neighbor who respects his obligations and respects the sanctity of his agreements in and with a world of neighbors." Although the context FDR was using here was that of participating in the world with other countries I can see its application on a domestic level as well.

I also find his comments about the idea that when there is no vision people perish and the recognition that " happiness lies in the joy of achievement and the thrill of creative effort."

Roosevelt was a highly controversial figure even in that time. He ushered in a level of government "participation" and social reform that didn't see anything of that magnitude until the Great Society programs under LBJ. His personal influence and control concerned the power structure to the point that they passed the 22nd Amendment to prevent a repetition of his historic election four times.

My point here isn't to suggest that his approach was correct then or now, but I am curious is to what he would think of our current situation and the "progress" we have made in the 65 years since his death. When we take a look at where we are at as as an economy, the state of disengagement and other factors is it time to declare "war" again...?

Cautious Optimism

I just read a post on MSN that causes me to be cautiously optimistic. In the post it describes President Obama's desire to reposition much of the bailout strategy to community banks and small businesses. I think that would represent an excellent move.

I run a small business and work with many others. While I have seen many of the large financial institutions benefit from the bailout and in fairness pay back much if not all of the bail out money I can't say I have seen enormous quantities of the money "trickle down" to small businesses or lenders loosen up and provide loans to help refuel a real recovery.

As a "little guy" while I am pleased to see the stock market creeping back up I am not quite ready to declare the recession over. I live in a world of intimacy. I deal with my clients one on one. I see them continue to struggle. The community I reside in still has high unemployment and relatively low affordability, the ability for people to buy a home relative to their income. There is no grand strategy to deal with this issue in our local economy that I have seen.

I am not going to blame all of where we are on the "big banks" and the Administration. I have felt and still feel that the recession represented and continues to provide an opportunity for community banks and credit unions to step up and play a bigger role in their communities and how people see them. I have been pretty underwhelmed by the innovation and risk taking I have seen to date.

I hope that if the President is successful in this new direction smaller banks and credit unions "invest" in their communities rather than follow the example of the mega banks. At least in theory we are part of these communities. I am a big believer in the concept of think globally, but act locally.

So I will be curious to see what happens. For those in the "community" banking world if these funds come through it will be our opportunity and responsibility to step up. It has been easy to hide behind the excuse that we didn't benefit from the first round, but what will we do with our turn at bat if we get it?

Is There A Rainbow Behind This Cloud?

As some of you may have noticed I posted a question on LinkedIn about our focus on leadership as opposed to management last week. More specifically I asked whether or not we were focused on leadership to the exclusion or minimization of management. Needless to say I got pretty good response to my inquiry.

A few people "educated" me as to the difference between leadership and management. Although I feel I recognize the differences between the two I appreciate the insight and feedback that people provided to me. Others challenged my assertion that we needed to focus on management as opposed to leadership and discussed the "leadership" void we find ourselves in in some many elements of our society, but especially it would appear in government and industry.

In candor I wasn't taking a position that we need management rather than leadership. My point is that both sets of skills are essential in a high functioning organization.

Marcus Buckingham has said that the most critical role of leadership is to create and reinforce organizational clarity. I agree with him. He states that clarity is the most important attribute of leadership; not charisma, technical ability, presence, or any of those other ethereal qualities we ascribe to and pine for in our leaders.

Richard Rumelt of UCLA says that the most important role of management is to remove ambiguity for employees. To create a direct personal connection of the tasks and activities we expect them to perform in support of the organizational mission. The CEO does that at a very high level for the whole organization, managers do that for their employees.

As a practicing human resources professional and consultant for almost 30 years I can tell you that both the "vision" and the removal of ambiguity are critical. People need clear expectations, constructive feedback, and ongoing coaching on a personal level. Charismatic leadership will not replace that.

There is some potential good news. Harvard Business School professor Bill George says that our current economic crisis may be both the wake up call and the catalyst for creating a new generation of leaders. He states, "... this new group will build organizations that produces long lasting value for employees and customers, not short sighted strategies focused on 'shareholder' value. Rewards will be for performance, not transactions."

Maybe I am reading into it too much , but that sounds a lot like engagement to me. If you look at where we are in the financial crisis I would submit that much of it derives from that focus on transactions not performance.

A colleague of mine who is focusing her energies in the criticality of trust in creating high performance cultures has been somewhat a victim of the "transactional" mindset. Her potential clients want to see statistical "evidence" of the link between trust and performance. They want a transaction process, not a relationship. I defy anyone to show me an organization with long term sustained high performance that has not created true engagement and didn't build that on a foundation of trust!

I recognize that there are organizations that have enjoyed a level of "transactional" success through the utilization of down sizing, outsourcing, and other "cost" based tactics; but now that we have run out of emerging economies to exploit and operate in a global economy how is that working for them?

I see questions on LinkedIn and other sites seeking the "technological" solution to creating engagement; guess what, there isn't one!

As my colleagues in LinkedIn pointed out to me we desperately need a new "leadership" model that has elements of both those ethereal qualities and heroes that we seek, but also the competencies of effective management. We also need a new value proposition based on relationship, not transactions. We need that between employee and employer, supplier and customer, and citizen and community. Transactions; creating short term value at the expense of others, is what got us here. The old solutions aren't relevant and simply won't work. So what do I suggest:

• Respect
• Personal responsibility
• Shared information
• Equitable rewards
• Mutual loyalty

Hmmm, sounds a lot like relationships based on trust on mutual benefit doesn't it. Who knows, maybe it will catch on.

The "Turtle" or the Hare

In hockey there is an interesting expression called "turtling". It generally means that a player curls up rather than fight when confronted by a member of the opposing team. It struck me that businesses are going to have to make some of those same decisions as we continue in this economy for what looks to be the foreseeable future.
There are some strategies that are available to businesses right now to "survive" this economy and in fact even position yourself.
I was reading an article about President Obama and it was commenting on leadership and strategy during "turn around" times that have some interesting implications for these times as well.

One of the first "weapons" you want to have in your arsenal in times like these is great leadership. I want to be clear about what represents great leadership in my mind and to me it comes down to a couple of key factors- the first being what Marcus Buckingham describes as clarity. Clarity is ensuring that everyone in the organization understands the mission and where they fit in. If you are the CEO or another C level person that is absolutely critical right now.
I believe this is also a time for executive courage that is demonstrated by being visible, available, and personally accountable. This is not a time to hunker down in your office or in a conference room with your executive team. That's turtling.

If you are a middle manager your role is to minimize ambiguity. As managers our primary role is to remove the complexity from situations and make it very clear what each employee's role is and how it contributes to the bigger picture. In times of stress that becomes even more important.

I believe this is an excellent opportunity for transparency. By transparency I don't mean an "open" book policy. especially if you haven't previously had one. What I do mean is showing people the respect they deserve by being honest with them about the situation and potential outcomes and actions. They are adults. They need to be led not parented.

I think this is a great opportunity for collaboration. Most of us like to believe that we hire and retain competent management staffs. If that is the case why do we exclude them from the decision making process? I can't tell you how many times I have been in situations where the executive team dictated the "solution" to an issue, without engaging the participation and input of the people managing the actual work processes.. I am not necessarily arguing for negotiation about targets, but I am proposing that you may dictate the "what", but give them an opportunity to participate in the how.

I am a great believer in cautious optimism. They need to believe that you believe that you will come though this a stronger organization. If you don't and you feel that the "end is near" then do the right thing and resign and leave the leadership to someone who is still committed!

I am also a believer in making the tough decisions. Many people don't like Jack Welch's tough performance matrixing model, but the reality is that everyone doesn't perform at the same level. High performing organizations know this and they evaluate their talent pool constantly. People who can't or won't perform at the expectations set by the organization are given an opportunity to find a better fit at another organization. Consistency is highly overrated in the absence of good performance management. Consistency means we treat everyone exactly the same, the problem with that is everyone doesn't perform the same way. Your processes should be consistent, the application should not be. There is nothing illegal about treating your best performers and your non-performers differently, or treating your best performers differently than your "average " performers. Before you do an "across the board pay cut" ask yourself if you have the right people in the life raft.

As you all know from my previous blogs, writings and rantings I am a big believer in engagement. I am going to go on record here and tell you that engaged organizations will not only weather the impact of this recession, they will emerge stronger!. You see they have their foundation of clarity, transparency, trust, and commitment already in place.

So in this case the hare is better. One of my favorite expressions is "when you are being run out of town get out front and make it look like a parade". Curling up and "turtling" is not going to get us through this recession, but the recession could cause us to take actions we have neglected and build a new foundation.