The Leadership Challenge

Reading Kouzes and Posner's The Leadership Challenge. I enjoyed the Practices of Leadership and Commitment to making overcoming the Leadership challenge.

5 Practices of Leadership

1. model the way
2. inspire a shared vision
3. challenge the process
4. enable others to act
5. encourage the heart

Commitment

1. Clarifying values by finding  your voice and affirming shared ideals
2. Set the example by aligning actions with shared values
3. Envision the future by imagining exciting and ennobling possibilities
4. Enlist others in a common vision by appealing to shared aspirations
5. Search for opportunities by seizing the initiative and by looking outward for innovative ways to improve
6. Foster collaboration by building trust and facilitating relationships
7. Strengthen others by increasing self-determination and developing competence
8. Recognize contributions by showing appreciation for individual excellence
9. Celebrate the values and victories by creating a spirit of community

2012 Reading List

Here's my list of 2012 all-star books to read.

1. Wolf Hall, Hilary Mantel's book on the rise of Ann Boleyn and Thomas Cromwell
2. Bringing Up the Bodies, Hilary's book on the fall of Ann Boleyn
3. The Book Thief, Zusak's WWII story of two teenagers in Germany
4. The Hangman's Daughter, Potzch's medieval German mystery
5. The Wolf Gift, Anne Rice's werewolves in Sonoma 
6. The Templar Knight, Guillou's classic recount of the Crusades
7. The Last Child, John Hart's fantastic mystery
8. Dissolution, Sansom's Tudor mystery
9. The Snow Leopard, Leston's tale of a European-born, Mongol general
10. Regeneration, Barker's story of Sassoon and the psychological costs of WWI
11. The Fall of Giants, Follet's tale of the demise of the ancien regimes of Europe and all they stood for
12. Berlin Noir, Philip Kerr's brilliant trilogy of 1930s-1940s Germany. His hero, Bernie Gunther, is fantastic.  Think murder mysteries at their best.
13. A Prisoner of Birth, Jeffrey Archer's modern day retellingn of the classic the Count of Monte Christo
14. The Bloodletter's Daughter, Linda Lafferty's very clever 17th century mystery set in Bohemia. 

Decision Tree Management: How to Build Structure Around Delegation

I recently noted the book Fierce Conversations as a very useful read.

One gem is the book is the decision tree model of delegation. Nothing is more damaging to moral than starving employees from autonomy and accountability. The challenge is how to draw clear boundaries around the areas where the team can act autonomously versus areas where management approval is required.  In banking, credit limits serve as boundaries, junior bankers can extend $5m loans, senior officers $10m, and corporate approvals for >$10m.

The Fierce Model Decision Tree Follows:

• Leaf Decisions - make the decision, act on it. do not need to report on action you took.
• Branch Decisions - make the decision, act on it, report the action you took on a calendar basis.
• Trunk Decisions - make the decision, report the decision BEFORE you take action
• Root Decisions - make the decision jointly, with input from many people.

Is it Government vs Free Market or Big vs Small?

The airwaves today are filled with contrasting visions for the future of government. Obama is arguing for greater resource allocation to government in order to safeguard the middle class and to restore jobs, while Romney is arguing for less capital allocation to government via lower taxes and the ability for the free market to allocate resources to their highest and best use.  More government! More free enterprise!

One camp appears to have no qualms with massive public organizations while the other no qualms with massive private organizations.

Like many debates, such a view is too simplistic and in fact the actual villain may well be size of organization and monopoly power. Be it government agencies (DMV, USPS), banks too big too fail, United Airlines, Novell or MSFT - a common model of failure is the absolute size of the organization.  

It seems axiomatic to me that monopolies and massive organizations are prone to waste, terrible customer satisfaction, and too big too fail syndrome whereby the political process is vested in the propagation of the too large entity in question - bailing out Citibank, the USPS, the Osprey - and blindly supporting continued funding of such entities independent of reason.  What scares me most about monolithic organizations is they appear impervious to the concerns of people vs the concerns of the organization and its own idiosyncrasies. 

Go the DMV and then ask do you want a single-payer system? Get on a 1-800 Large Company help line and then ask if you want too-big too fail?

Silicon Valley is tied to Schumpeter's vision of creative destruction and Clay Christensen's Innovator's Dilemma.

Organizations appear to fail once they reach a certain size, drift away from original mandate, and destroy capital. And...importantly this failure is viewed as both a necessary and good thing. Human, financial, and physical capital is freed from the constraints of too-big, too-slowness and flows to smaller, newer, more rewarding entities.

I suppose the piling of talent out of Facebook (ex Path) and Twitter (Square, Medium) is just an example of human capital flowing to the next small new new thing.  The movie Something Ventured chronicles the serial connection of talent from Shockley, to Fairchild Semiconductor, to Apple...and on. 

The market does serve a vital force in allowing such a flow to happen - ie in the Valley financial and customer capital seems to follow human capital. However, in banking, government, automotive, etc - there appear to be constraints to end of lifing things that are too big.

Clearly, not all government is per se bad (man on the moon, DARPA Internet, etc), but there appears to be a point when government orgs, like Citibank and its private brethren, grow too big to evaluate, manage, understand, and, therefore, to be able to reasonably decide whether to continue to fund.

In many ways, the core question of this campaign may not be public vs private but instead a question of size, quality of output, and tolerance for eliminating non-performing and failed programs.

Moreover, the biggest organizations then rig the system for capital and resource allocation, frustrating the "failure" process to return us to equilibrium.

As an example, in let's look at the growth in the Department of Education

• 1965 $1.5bn
• 2000 $33bn
• 2008 $68bn

Similarly, Citigroup has grown to $1.9 trillion in assets and 260,000 employees from $800bn at the time of its formation in 1998. I defy anyone to manage that beast.

How do we feel about size rather than public vs private as a more nuanced debate?

Are our organizations architected to allow failure?

In my mind too big to fail is as important a discussion vis a vis government as it is our banking system. 

How do we build a smaller, more nimble, shorter lived set of entities that we can count on for energy, results, and human-centric execution? How to explain failure is the expected state of being versus a symptom of national decline?

Government needs to tolerate failure and reallocate the massive capital to better uses, while too big to fail private enterprise should be viewed with equal suspicion.

Mindset Lesons from the Navy Seals

The Navy Seals are examplars of discipline, achievement, and overcoming adversity. The Navy studied the difference between the 25% of Seals who pass training and the additional 10-15% who should have passed but did not.

The difference? Mindset.

Here's a quick read from the blog The One Minute Mindset that highlights the learnings from Seal training success and failure.

1. Goal setting
2. Visualization
3. Self-talk
4. Arousal control/anxiety management

Managing Expectations

How happy are you at work?  On a scale of 1-100, how would you rate your marriage, your friendships, your relationship with your children, your career satisfaction?

Imagine for a minute that you are happy in your marriage 90% of the time. Is that good? 90% sounds pretty good to me. How about at work, happy 80% of the time? Is that good?

Another way to think through the scores is to translate the numbers into days. For example, if you have a great marriage and are happy 90% of the time, mathematically there are 36.5 days a year that you are not happy.  36.5 days, or more than entire month.

Similarly, if at work you are fulfilled 80% of the time, there are 74 days a year where you are not fulfilled.

What's the point?  The key idea, hat tip to Marv Wenger for sharing this perspective, is that a happy and fulfilled life is full of days that simply aren't that good.

Furthermore, rather than being surprised by a tough day, it is important to be sufficiently self-aware to not only expect tough days, but to recognize that having a tough day does not fundamentally challenge the quality of your relationships or work.

As an entrepreneur, there are plenty of challenging days. It pays to realize that is both normal and that a bad day, or 36.5 tough days, still means that 90% of the time things are really good.

Agile Marketing

I write to share an article we published today on iMedia, Why You Need to Consider Daily Marketing Messages.

The article introduces best practices, including a look at Gatorade's command center, for agile brand marketing. 

Agile marketing allows brands to become more iterative, relevant, and responsive to the lives, interests, and trends impacting the customer.

Turning 40

Today, I am 40. I write this from a small village in Baja, where I am celebrating the milestone with my wife and best friends.

40 is an iconic birthday and an occasion for reflection.

40 years ago, I was born to a US Air Force Captain and his wife, Kent and Marian, in Wiesbaden, West Germany. From birth, my life has been peripatetic. Six days after my birth, we moved to a small village on the Czech border. By the time I was twelve, we'd lived in Germany, Ireland (sister, Elizabeth, born), Northern Ireland, Nigeria (brother, Richard, born), the Ivory Coast, Taiwan, Hong Kong, and the United Kingdom. My father's job with the military and then with Citibank required frequent moves. True to form, at 14, I left London for boarding school in Connecticut. The moves averaged one every eighteen months and left an indelible mark on me.

First, I became very good at being the new kid. Adapting, making new friends, and dealing with the trauma of change.  Second, my body adapted to the rhythm of major change every eighteen months and I suffer from wanderlust.

The "risks" associated with change were blind to me, as evidenced by my equally peripatetic educational and professional experiences. High school in London and CT, college in LA, China, and Cambridge, banker in NYC, HK, and Singapore, teacher in Indiana, business school student in Chicago, and the last twelve years in venture capital and start-ups.  My childhood blessed me with the ability to adapt, while leaving me with a true sense of restlessness.

Fortunately, my wife, Caroline, helped me understand what I'd missed growing up - the power of community and consistency. While my email address continues to change, I've lived in the Bay Area for twelve years and my children have attended the same public school for seven years. My oldest son, Jack, is 11. By his age, I'd moved eight times to seven countries. I now see through him the importance of reinforced, persistent human relations and my wanderlust has dimmed as I enjoy long-term friendships and a feeling of connection.

In fact, over 40 years, I've come to believe strongly in the following:

• the value of investing in community
• I love being part of the Bay Area start-up community, mentoring, coaching youth sports in the Los Altos-Mountain View, playing my Sunday morning soccer game, running into friends at local restaurants, and building rich relationships born of years of common experiences and context.
• being present for my wife and children
• While I struggle with presence and mindfulness, I work hard to be fully home and to really listen, hear, and understand the lives of my sons and wife.
• Nothing gives me greater pleasure than time with my family.
• Thich Nhat Hanh's book, the Art of Power, is a great book to read and reread to help reinforce the value of mindfulness.
• pets
• I've come to love the presence of animals...a hike in the hills with my lab, Sierra, or hanging at home with our bird, Storm. Caring for animals grounds you and children simply love them.
• routine exercise
• I work out every morning from 6-7am and then have coffee with four guys. Its a ritual and commitment that makes the start of every day magical.  Every Sunday at 7am, I play soccer with the same eighteen guys, hit Peet's after the game, and head home tired and happy.
• never acting in fear
• Being new every 1.5 years at school is a lesson in overcoming fear and insecurity. As I studied mindfulness, I came to realize that I let fear limit my joy of live, which led to poor decisions. Being afraid to fail, to try new things, fear of looking foolish, ignorant, silly....these fears are self-defeating and something I've worked really hard to overcome.
• nature
• Simply put, I love being outdoors in the wilderness and work hard to find time every year to spend time with my family off-the-grid.  In my secular life, the church of nature fills a spiritual void and provides solace, energy, and peace. 
• redefining risk
• In my early 30s, I was diagnosed with a kidney disorder. At the time, I was told that my kidney would fail by the age of 40 and I would need a transplant. Thankfully, I am in remission and have been for six years. Nevertheless, for a few years, I lived with a heightened sense of mortality and a revitalized commitment to make every day really count.
• The modern economy is volatile and life-time employment a quaint memory. As I've worked on start-ups, my friends at McKinsey, Merrill, HP and other pillars of stability often remarked that they found my career path too risky. Many of them were later laid off as the economy soured.
• I've come to believe that greater risks lie in not finding out what you are truly capable of, in  seeking safety at the cost of possibility, and in thinking that there will one day be a "good time" to take a chance.

Here's to the next forty years and to my parents, wife, family, friends, teachers, and colleagues for making my first forty simply wonderful. I love you and thank you.

How to Fix The Economy

The Way Forward  
Moving From the Post-Bubble, Post-Bust Economy to Renewed 
Growth and Competitiveness 

by

Daniel Alpert, Managing Partner, Westwood Capital
Robert Hockett, Professor of Law, Cornell University
Nouriel Roubini, Professor of Economics, New York University



Good read.

Abstract of how to fix the problem. Read the paper to better understand their diagnosis for how we got in this mess.

5-7 year plan - a Marshall Plan, if you will, is required

1. We face an oversupply of capacity and a "demand hole as as the private sector de-levers
2. Requires sustained and strategically concentrated public investment in infrastructure, domestic energy, and technology.  Need to provide businesses confidence that demand will return.
3. Need to restructure private sector debt - reduce relative debt burdens. Major program of debt restructuring, refinancing, and relief. Will require recapitalizing banks but will avoid Japanse problem of "zombie banks" with billions in loans where LTV is upside down
4. Rebalance global trade and address structural deficiencies (best reflected in the US current account deficit), whereby China and growth economies begin to consume. Requires currency appreciation of the Renminbi.
5. Specifics
1. US Public Infra Spending
1. $1.2 trillion/5 year public investment program targeting high return investments in energy, transportation, education, R&D, and water-treatment infra
2. Debt Relief
1. Debt restructuring and regulatory capital loss absorption. Drive resolution of trillions in impaired debt where the nominal value of the debt is > asset value. ex. mortgages that are underwater
3. Increasing domestic demand in current- account surplus nations
1. Global Rebalancing - currency realignment, domestic demand growth, reduction of current account surpluses. China, Germany, Japan, and petro-dollar economies need to spur domestic demand, allowing local currencies to appreciate against the USD, letting wages rise, etc.  Requires China to develop social safety net, reduce export subsidies, pay out dividends and incomes, and increase wages, and most importantly, allow for currency appreciation