What They Did Teach At Harvard

George W Bush remains probably the most controversial figure in recent history. The quasi-medical term “Bush Derangement Syndrome” describes the condition in which perfectly rational people become irrational on the subject of the 43rd President of the United States. The vilest abuse of him will get a cheer from some in the media. He also has his defenders: there is money to be made from merchandise bearing Mr Bush’s face and the slogan “Miss Me Yet?”

This blog tries hard to be as non-political, or at least as non-partisan, as possible, so it is not our place to comment on his policies or his Administration – suffice it is to say that, like any politician, he has entries on both sides of the ledger, and the final accounting may not be complete for some time.

However, it is worth noting, as yet another example of how poorly we are served by the mainstream media, that their cartoon image of Mr Bush’s personal character is grossly inaccurate. They persist in portraying him as a semi-literate playboy when the facts – should anyone be interested in them – are that Mr Bush came to the Presidency as a well-educated bookworm with a wide-ranging and, eventually, very successful career in private business to his credit.

It is also worth noting that, for a man who is supposed to be unintelligent, Mr Bush has written a singularly intelligent book, Decision Points – which we recommend very strongly to entrepreneurs, less for its political content than for the insights it gives into economics and leadership at the highest level.  

Anyone who is still determined to buy into the media caricature can, of course, retreat into conspiracy theories about “ghost writers”. There is simply no convincing them. Nevertheless, one of the most telling indicators of authenticity is that Mr Bush, a graduate of Harvard Business School’s notoriously tough MBA programme, gives a brilliantly concise one-sentence summary of what he learnt on the course:

“I came away with a better understanding of management, particularly the importance of setting clear goals for an organization, delegating tasks, and holding people to account.”

Whether Mr Bush’s own Administration lived up to those principles is for history to decide, but the principles themselves are sound. The current Administration – in which the lack of private business experience has already had a noticeable effect – would do well to adopt them. America needs clear goals, delegation to people who understand their business, and, above all, those people being held to account.

The 300 Samurai

It is impossible not to be awed by the sense of duty of the Japanese workers who are fighting to secure and clear up the Fukushima nuclear power station after it was knocked out by a tsunami. Exposed to high levels of radiation, they expect to die, but still they work.

The numbers involved have varied: at one point, it was reported to be 300 – which immediately evoked the memory of the Three Hundred Spartans, a suicide battalion who marched against an unbeatable enemy fully aware that there was no hope of survival.

The workers have also evoked memories of an honourable tradition within Japan’s own culture – that of the Samurai, the warrior-servants for whom death was preferable to the disgrace of failing their lords.

Western managers look on with a little envy mixed with their admiration. Would Western workers behave as Samurai in a similar situation? Or would they be straight on the speed dial to their personal injury lawyers?

If, as we suspect, the latter is more likely, can anything be done to infuse our own employees with more of the Japanese work ethic? This is a question with which Western managers have long been obsessed. Some may remember that, from the 1960s until the end of the 1980s, there was a real vogue for all things Japanese in Western corporate circles.

Western executives bought katanas, took karate lessons, and read the likes of Miyamoto Musashi and Yamamoto Tsunetomo – usually missing their main points entirely – in the vain hope that all this would, somehow by osmosis, result in Japanese levels of productivity.

It never worked, and the fashion faded with the Japanese economy. The great secret of Japanese management is that it was always a product of a broader culture of mutual loyalty and obligation of employer and employee that extended beyond the workplace, and which did indeed go all the way back to the relationship between a Daimyo and his Samurai.

It is impossible to replicate that relationship without the associated broader culture, and the culture is itself the unique product of centuries of Japanese history. Indeed, many assumed it was dying out even in Japan – or at least they did until Fukushima.

Missing the Point

Our Bad Management of the Week Award – which we have just invented for this week and this particular case – goes to Carlisle City Council, who have banned staff from chatting on Council time.

Staff must now “clock off” if they wish to talk about non-Council business in the office.

Never mind the resentment and ill-will that this generates among employees. Never mind the fact that, if this new policy were to be carried out to the letter, it would cost far more in administration than could ever be saved.

The real objection to the new policy is that gossip is good – at least so long as it is kept within reasonable limits.

Informal communication between employees is an efficient method of conveying useful information. “Lateral systems” avoid the hassle of sending data up and down the formal hierarchy. Many businesses actively encourage their development by sponsoring social activities among staff.

Put simply, it is cheaper to say something at the proverbial water cooler than to send an official memo.

Of course, excessive chattering and gossiping in working hours can become a problem. However, there are better ways to deal with it than decreeing counter-productive policies that simply alienate the employees on whose goodwill the organisation depends.

The best is to set employees tough, challenging objectives that engage their interest and keep them too busy in working hours to waste time.

The problem in Carlisle, as in most of the developed world, is that challenging objectives, engaging people’s interest, and being too busy to waste time are not concepts usually associated with local government.

The Kids Are All Right

Have we inadvertently become trend-setters?

Our previous post summarised the story of Apple in three acts. Act One: visionary but young founder of successful high-tech company feels obliged to bring in experienced CEO to manage growing business. Act Two: successful high-tech business loses its vision in new corporatist culture. Act Three: visionary but now not-quite-so-young founder returns and takes over as CEO.

It was no sooner posted than exactly the same thing happened at Google.

In 2001, Google co-founder Larry Page, then aged 27, head hunted the experienced Eric Schmidt from outside the company to serve as CEO. Schmidt was brought in to provide – in his own words – “day-to-day adult supervision”.

This he did – but at a price. Although Google increased its market share under Schmidt, so that the verb “to google” has practically replaced the verb “to search” when applied to the internet, this success is built on sand. Customer dissatisfaction leaves room for a strong competitor and the company faces the danger of anti-trust litigation of the sort that brought an end to Microsoft’s drive for world domination. At the same time, poor decision-making over the controversial Street View and censorship in China has undermined public goodwill.

So it is no surprise that Schmidt has now been eased out as CEO – although he remains Chairman of the Board. What is interesting is that his replacement as CEO is none other than that same Larry Page who hired him.

Like Apple’s Steve Jobs, Page has developed wider business experience during the intervening period – most notably, in Page’s case, through his work on alternative energy. Unlike Jobs, Page has remained closely involved with his original company.

Perhaps we are seeing the beginning of a new law of business succession. The classic paradigm is that a visionary entrepreneur founds a company and then hands it on to more experienced professional managers who take it to the next level.

The new model may be that the experienced professional managers are not the heirs to the visionary entrepreneur but the trustees or guardians of his estate. In a manner somewhat similar to the way a child is treated if he inherits something under a will, the young entrepreneur is not in full control of the successful business he established until he has built up the experience to manage it himself. Then the “day-to-day adult supervision” becomes unnecessary.

Blessed Are the Meek

According to the UK’s Chartered Management Institute, 44% of managers polled consider that they “excel at people management”.

Yet of those who took a diagnostic test only 14% excelled.

Neither of these figures is surprising. Few managers are actually good with people, and poor management in general has been a particular problem in some British companies for decades. At the same time, British managers can be among the most arrogant in the world – a psychological hangover from the days when middle class Britons effectively ran the world.

Indeed, some British managers are particularly bad because they are particularly arrogant.

The best leaders are humble.

This goes against the traditional image of “The Leader” as the self-confident alpha-male, striding around masterfully and shouting out orders without a moment’s hesitation or, apparently, a moment’s weakness or doubt.

Yet those loudmouths are usually the worst leaders in practice. Convinced of their infallibility, they see listening to others as indecision and they refuse to admit it when they are wrong – which, as a result, they frequently are. Since they lack all self-perception, they do not realise that their subordinates can see all this very clearly and hold them in contempt for it.

The good manager, by contrast, is always learning. He is always listening to others – both because others are more likely to co-operate with him if they feel he has listened to them and because he knows they might just be right. He is always open to the possibility that he might be wrong. He is engaged in a permanent quest to improve how things are done.

Above all, he is dissatisfied with himself. This is the key to all self-improvement. Where someone is perfectly content with himself and his situation, he has no incentive to change anything. Positive change can come only from unhappiness with the status quo – and the greater that unhappiness, the greater the openness to change and the motivation to improve.

The meek will indeed inherit the Earth – not least because they are more willing to adapt than the arrogant.

 

Definitely Not A Role Model

If ever a man deserved to hang it is Reichsmarschall Hermann Goering: his pudgy fingerprints are all over the letter that led to the horrifying Wannsee Conference.

As if that were not enough, many on his own side would also cheerfully have strangled him, albeit for very different reasons: his incompetent handling of the Luftwaffe, the mighty German Air Force, in World War Two was a major contributory factor in Germany’s defeat.

Goering

Yet the same Hermann Goering also deserves credit, if that is the word, for creating the Luftwaffe in the first place, and for building it from nothing into the most feared fighting service in the world in just six years.

It is an astonishing feat, but even more astonishing is that Goering accomplished it. Physically brave, personally charming, and politically cunning, he was not without natural gifts, but management skills were not among them.

This lazy incompetent achieved great success on his own terms by accepting that he was a lazy incompetent, and by hiring active and able subordinates to cover his weaknesses. More importantly, having hired them, he let them get on with their jobs with the minimum of interference – unlike his master, the paranoid meddler Adolf Hitler.

One of the most talented of Goering’s deputies, Field Marshal Albert Kesselring, made a perceptive comment in his memoirs about his chief’s leadership style:

“Even if he was a past master at getting his subordinates to do his work, occasionally his very frequent hours of leisure were devoted to casual reflection which bore many fruitful suggestions.”

Many executives today would say the same of their own boss. While Goering should never be a role model for anyone, it is foolish to try to write him off as a fool. He was intelligent enough to know his limitations and to build an organisation around him that took them into account. It cannot be denied that his management system has been much imitated, and it can be very effective in turning weaknesses into strengths.

However, Kesselring made another perceptive comment, this one about Goering’s greatest opponent, the man who beat him, which every entrepreneur should memorise as a far more reliable formula for success...

“Every undertaking is a risk, and needs, besides planning, relentless execution and a certain optimism. Churchill fulfilled these conditions in the highest degree.”

 

If This Is Feminism, We Approve

Experience dictates that someone with the title “Equalities Minister” (sic) is not likely to be a friend of business.

We are therefore delighted to be able to write in praise of Lynne Featherstone, MP, for her excellent suggestion that Joan from Mad Men should be a role model for women.

Her point is that women should be proud of their natural body shape and that the fashion for women to look like stick insects is a marketing con. As we pointed out in a previous post – under some business pretext or other – this is a point on which both men and feminists are agreed.

Yet there is a broader point that Mrs Featherstone missed but which supports her case for Joan as a feminist role model.

Anyone who has seen the television series – highly recommended, by the way – will know that Joan is the best manager in the advertising agency for which she works. While the partners seem to spend most of their time drinking and committing adultery, Joan is the one who actually runs things.

Joan is loyal, intelligent, organised, socially perceptive, efficient, and a born leader. Think of her as a Company Sergeant Major with the curves of a D-Type Jaguar, or perhaps a sexy version of Margaret Thatcher.

The last season saw her sidelined, married to an unappreciative dolt. Things went downhill at the agency without her. The priapic partners had to sober up and set up a new agency in just 48 hours. Chaos ensues until one of them says he knows someone who might be able to help. Cue Joan’s dramatic return – the moment she walks through the door, everyone knows everything is going to be all right.

Yes, Mrs Featherstone is right on this one: we need a lot more Joans. Every businessman fantasises about having one – and not for the reason most people might think.

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