You Can’t Change Change

Someone asked me today to write about managing change.  I know it’s a popular topic but when he said it, it sounded so absurd to me.  Manage change?  The very nature of change is that it’s unpredictable.  I think what he really was asking was about how you manage your *reaction* to change: what you do when change happens, rather than maintain the illusion that you actually change the direction of the change.

So here’s my advice:

First, give up the illusion that you control the changes in the universe, or even your little corner of it.  All you can control is your reaction to it.  React with fear and it will feel like you’re in the middle of an ocean with huge waves of change crashing over you.  Keep paddling toward home, toward the vision and values that guide you, and keep your eyes on their beacon.  Things will calm down and yesterday’s change will be today’s acceptable reality.

Second, admit you are not the center of the universe any more.  Yes you were, at least in your mother’s eyes, for a few brief moments shortly after your birth.  But humans are social animals and we are all in it together.  Change doesn’t affect you and no one else.  Take comfort in that and reach out to other people.  They are your lifeboat in the maelstrom.

Third, listen to a political slogan on occasion.  With thanks to Barack Obama, get some of that “change we need.”  Because we need change.  Without change there is no innovation, no technology no new toys.  Think of the goodies it brings if you can’t embrace it because it’s the incontrovertable evidence of a life well lived.

The Bailout – Enron End Run Revisited

I was going to write something on the bailout but when I started thinking about it, I realized I’d already written what I wanted to say.  This was originally published in 2002.  The situation is just more of the same (snafu, for the literary) so I’m going to recycle it here.  My submission was entitled Enron End Run.

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The media update us hourly on the Enron situation about courts and lawyers, documents and shredders. They ask a lot of quality journalist questions, but I have one. How did Enron make such bad decisions? After all, they could afford the best executives money (stock options, deferred income, perks, golden parachutes, etc.) could buy.

Rarely are decisions made alone. Even when the guy (and in the US, it’s usually a guy) in charge wants something, there’s usually a team that needs to agree to it.That’s called getting “buy-in,” a rather unfortunate term considering the price that Enron execs will likely pay at some time in the future. Within a series of decisions, you’ll find a series of interactions of the people who make them, of opportunities for correcting a runner who’s straying out of bounds.

Any executive team decision is just one stop on their problem-solving mission. But when you analyze the series of their decisions, you see patterns that repeat, patterns woven of the interactions of the key players on the team. And at Enron, as at so many corporations, that team was missing a few key players.

A good executive team is diverse. Not in the sense of political correctness, necessarily, but in the sense of recognizing the value of differences in people’s styles, what team theory refers to as their Roles, as opposed to the things they do on a day-to-day basis, their tasks. One simple way in which diversity serves a team is that of the ten team roles, there are three that serve to contain action, to stop and think of the consequences, to converge on the true path of the team’s mission. In other words, getting things done in a business environment requires power and control. Enron had plenty of power. What they lacked was effective control.

I’m not much of a football fan, but I have a good friend who explains what I want to know in language I can relate to. Today I asked him about end runs. Are they common, I asked, wanting to know if they are as performed as often on the field as apparently they are off the field. Enron is not the first, nor will it be the last, playing the game this way. He explained that there are maybe six or so end runs in a season and that many teams don’t even do one because once you’ve done one, you’ve bent the rules enough to cause others to wonder if you can ever straighten them out again. I was intrigued when he told me that sometimes it is only two or three people on the team who know that they will be attempting an end run. I wonder how they make this decision. Is it in the passion of needing to win at all costs or is it thought out? Are the pros and cons given voice? And does anyone know how many team members were involved in the decision and how many just went along with it because it was a winning play?

Regulation, de-regulation, re-regulation: none of it helps when the problem lies in management. FASB, GAAP, IRS: all just letters, as in “the letter of the law,” worthless without the spirit and intent of the law. The new rules to come will further regulate “balance sheet partnerships” but will do nothing to insure against the poor decisions made by an “end run” team.

According to team theory, certain roles serve to move the ball, to further the overall goals of the team. Others focus the effort to move the ball in such a way as to end up winning the game. Without focus, the ball moves out of bounds and while the referee might miss this occasionally, sooner or later it’s going to be caught. In a professional football game, this pattern is caught in practice before the game. A player who constantly and needlessly runs out of bounds is not going to do well. The idea is to move the ball within the boundaries required. The better someone is at that, the better the player. The better the players, the better the team.

Did Enron have someone there who could provide the control over the power that the key players had? CBS News reported that they did. Robin Hosea, a senior accountant, worked in the benefits department. She apparently reported that some Enron departments were spending employee benefits money without approval from her department. She said she reported this to her superiors and was told to keep quiet. She was soon laid off. If money was spent this way, it constitutes a criminal offense. Her job in the company was to work on the team as a control agent. She was, in part, there to focus the efforts of the management on moving the efforts of the organization forward while keeping within the boundaries required. When they ignored her, they lost that essential focus. They lost the containment they so sorely needed.

Capitalism is arguably the most effective economic system ever developed but unbridled capitalism is based on greed. Now there is nothing wrong with a little healthy greed. That’s what motivates for-profit companies. But greed is powerful. If it is allowed to range unchecked, it will eventually destroy everything around it.

Governments are supposed to place various constraints on what actions a company may take in order to protect the welfare of the rest of society. Sometimes they work, sometimes they don’t. Far more effective are the constraints that an ethical, diverse management team, with its interplay of forces of power and control, places on itself. Without control to balance it, a team with an excess of power almost inevitably sets up the kind of conflict that led to the Enron collapse.

Enron executives were simply trying to make money. Most of them probably believed they were abiding by the letter of the law. In the end though, the company collapsed. Just consider what would have happened with that same kind of power and drive under tight and disciplined control, constrained and focused not by broad laws that regulate all companies but by cooperation with team members who were also interested in the long term interests of the company. Instead of free-ranging action with an eye on the short-term, they would have been focused and directed, power under control, to accomplish what they wanted without paying such a high price. It might have taken longer but it would have cost them – and their victims – a lot less in the end.

Lessons From My Mother

My mother passed from this world last week at age 85, having suffered from Parkinson’s and dementia for too many years.  This was my eulogy, which I called Lessons From My Mother.

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When I think of who my mother was, I think of her as a woman much younger than I am now. I think of the time when I was on my late teens and she was around 40, when it was her mission to teach me everything she knew about being a good woman.

She was an excellent manager of money, as many who survived the Great Depression were, but she was never stingy, neither with her money nor her time, even when there wasn’t much of either. She could figure out how to spend the same dollar twice and how to make you feel there was all the time in the world, even when she had to get ready to go to work. She could turn what she had into what you needed, whether that was a bargain basement dress she made special by changing the buttons or the time she found – or made – to play Scrabble with me. Like most valuable lessons, that is something you teach by being an example and letting your protégée see how you do it, step by step.

Her second lesson was about accomplishing. That was her word. Whatever it was we set out to do, whether a trip to S. Klein’s On The Square to shop for my trousseau or spending the morning with a can of Johnson’s Glass Wax cleaning the windows of our apartment on Walton Avenue, when we were done, she would get a satisfied look on her face and say to me, “We accomplished.” I realize that was the beginning of my understanding that things that have meaning, the big and the small, are done by teams. It is an illusion that we are so powerful that we accomplish things in a vacuum by ourselves. It was not my strong point but interdependency – what we call teamwork – came naturally to her and she was my model for how I do it now.

Her third lesson was to respect everyone, no matter who they were or what they did. By this, she meant not to forget them, not to assume that they were taken care of. Again, the Great Depression was probably an influence on her, but she also had such a good example in her sister Jeanette, may she rest in peace.

So to honor her memory, I ask that you do three things today.

First, be pleased with what you have been granted and make it into what you need. Try spending it twice, whether it is in money that you use to create more value to the world or time that you not waste on trivial things.

Second, accomplish something with someone else. It doesn’t matter what it is, only that it’s something you’re both proud of.

Third, remember people you would not ordinarily think of and find a way to make their lives easier in some way.

And as you leave today, remember, as I will, that she was not a weeper and wailer, but rather a rememberer of good times. Even as her own memory failed her, she could speak of the past, always of family and friendships, of trips and adventures. Remember her at in the most wonderful times you had with her – the birthday parties of our childhood, the hot dogs at Coney Island, whenever it was that you were with her. And wish her well on her newest journey, the one we will all someday join her on.

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She was a Watchdog.  (If you are unfamiliar with the Roles, you can find out about them by listening to the webcasts on The Ten People You Really Want on Your Team!)  She enjoyed it and she was good at it, both at home and at work, where she was in senior management and patiently taught her reports how to do things right.

She taught me all the favorite tasks of the Watchdog – budgeting, accounting, repairing and making do with what you had – but I never really enjoyed doing them.  She didn’t understand why I did the things I loved – starting businesses, speaking, writing, networking.  She was just happy that she had done her job right and I could do something to make a living.  We respected, trusted and had faith in each other.  She is on my team, and in my heart, forever.