Tuesday, February 26, 2013


“The future has no lobby, so there are inexorable pressures favoring present consumption over future investment.” David Brooks

Society in our day and age appears to be thriving on polarization. Not just between Democrats and Republicans, city liberals and rural conservatives, tax payers and entitlement recipients but now – ominously – also between current and future generations.

David Brooks, the New York Times columnist, has repeatedly warned that Washington is all too willing to sacrifice the interests of the very young and unborn (who do not vote) for the interests of the large, growing and politically influential group of older Americans who are represented by an enormously powerful interest group called AARP.

The young and unborn don’t have an equivalent of AARP to represent their interests and it shows (in Congress). For more than two decades now we have unabashedly been robbing the cradle by charging trillions of dollars of routine, operational expenses, to our national credit card, raising the National debt from $ 4 trillion in 1990 to in excess of $17 trillion at the end of 2013.

The administrations responsible for the debt explosion were Republican and Democrat, so neither party can claim the moral high ground. Their actions and inactions that have led us to the brink of a debt crisis are both economically detrimental and morally decrepit.

Economically detrimental, because we did not go into debt to invest in a better future for Americans but simply because we allowed the expense of running the business of the country to exceed, year after year, the revenues we were collecting. We accepted year after year a budget deficit and, more recently, we abandoned the principle of budgeting our expenses altogether and we just funded our runaway expenses with a series of continuing resolutions. To the point that our national debt now just about equals the size of our economy.

There are all kinds of good reasons to leverage the size and dynamism of the US Economy by borrowing to cover calamities like wars, natural disasters and cyclical downturns or to invest in the future in the form of infrastructure improvements, research and development and investment in our human resources, but it is economically unwarranted to finance ongoing operations with debt. And that is what we have been doing.

We are deep in debt and we have not even put our existing entitlement programs on a path to long term solvency. We are deep in debt without having addressed our decaying infrastructure or our education deficit compared to the rest of the developed world. We are deep in debt without having taken any steps to protect our people and property from the negative effects of global warming.

That is where the moral argument comes in. Our generation has selfishly spent to accommodate its bad habits and utter lack of fiscal discipline. It protects ad nauseam the interests of its senior citizens in programs like Social Security and Medicare that were last written into law in a different day and age and with a very different outlook on demographics and economic realities. And, unless Congress reverses course and negotiates the grand bargain that is now required, we will present the bill for our spending spree to our children and grand children.

We have a real problem in America when we allow interest groups like AARP to dictate public policy with utter disregard of the legitimate interests of Americans who do not have a vote.

On paper, our nation and economy should be strong enough to serve the interest of its young and its old without having to favor one over the other.

If Congress would just stop bickering and pass measures that will foster America’s competitiveness and growth – including measures that will bend the curve on the growth of our national debt - we should not have to favor one constituency over the other. But if we do, we should do what Americans have always done and give its young and coming generations an outlook on a better future than we ever had.

Tuesday, February 19, 2013

Efficient Management

My beliefs about what makes for effective management in this day and age have been shaped by a lifetime of work in business on both sides of the Atlantic in large corporations and in small business.     
At the occasion of my retirement in 2011 from the last executive position I held in someone else’s organization, I reflected on what my experience had taught me and I articulated my conclusions in “twelve secrets to success in business”. Upon further reflection, I find that these twelve business principles are all cornerstones for effective management of business organizations. Here are these twelve rules for business leaders to follow:
1.  Know what you’re in business for (your Mission) and make sure everyone around you knows it as well.
2.  Know who your stakeholders are and never deceive them.
3.  Make sure your organization runs on all cylinders.
4.  Exhibit at all times situational awareness.
5.  Control the things you can control and don’t waste any time worrying about things you can’t control, including your competition.
6.  Simplify your life and your business; cut through the clutter and get rid of distractions.
7.  Accept that there is always more than one way to skin the cat.
8.  Realize that you can’t save your way to prosperity; entrepreneurship is all about putting capital at risk.
9.  Don’t burn any bridges.
10.Know at all times if, when and where you are making money (or not).
11.Judge people by what they bring to the table not by the hours they spend on the job.
12.When in doubt say no before you say yes; you can always reverse a decision but you can’t renege on a promise.

Aileron* is writing the book on best practices in management in this day and age. They call it “Professional Management”. They focus on small privately owned business, where management (much less professional management) is not always a well practiced discipline.

By my definition, “Effective Management” means building and maintaining a purpose driven organization of people who chase a dream, all aligned behind a clearly articulated mission, who are competent and accountable for their function within the business and are thriving in the corporate culture established for the business by its owners.

Let’s look at the constituent elements of this definition.
Building and maintaining.  An effectively managed organization does not come about automatically. Having a business does not imply that there is an effectively managed organization. It has to be built over time and then groomed, cultivated and enhanced.
A purpose driven organization. There is no effectively managed organization without a well defined and clearly communicated purpose. Typically this is written in a corporate vision- and mission statement.
People chasing a dream. An effectively managed organization consists of people who are all engaged and motivated by the dream of realizing the vision they are collectively pursuing.
Aligned. The organization is not effectively managed if not all the personnel are aligned behind the stated purpose.
Clearly articulated mission. This is the purpose for which the business exists. It has to be clearly and unambiguously articulated so that there cannot be a misunderstanding among owners, employees or other stakeholders about what the business wants to achieve or how it is going about achieving its purpose.
Competent. An effectively managed organization is a pool of human resources where individuals represent different disciplines that are relevant to running the business and where each individual is highly competent in the discipline he/she brings to the table.
Accountable. You know an organization is effectively managed if it is holding each and every employee – executive or not – accountable not only for the results he/she is supposed to bring to the table but for the organization reaching its objectives and fulfilling its mission.
Thriving. If employees are not thriving – both spiritually and materially – the business is not effectively managed.
Corporate culture. The corporate culture is the environment, the ambiance, an effectively managed organization fosters for itself. It is the glue that brings and keeps like minded people together in an organization and for a purpose they identify with. The corporate culture is a vital contribution – in addition to contributing an idea and capital - made by the entrepreneur/owner, largely by leading by example.
An effectively managed business where the owners practice the twelve secrets to success in business is sure to come out on top and be around for awhile.

*Aileron is a training and support institute for small business owners in Dayton, Ohio (www.aileron.org). Readers who are business owners in a range of up to $50 million in sales and want to bring their operation “to the next level” should check out this incredible resource with its own entrepreneurial origin!

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