Instead of raising almost $1 billion in campaign funds, spending most of his time campaigning for reelection, and further dividing Americans, President Obama should focus on doing the job the American people elected him to do – namely leading the country out of its economic crisis. Reelection is his individual objective and not his responsibility as president. Working part-time as president during a crisis to pursue an individual objective is irresponsible. The president has the responsibility to do his job full time. Imagine the CEO of a large company in crisis who is mainly lobbying to get his contract extended instead of leading the company, or a general focusing on politics at the Pentagon instead of leading his troops into a difficult battle. The analogy that comes to mind is a captain abandoning his ship in a crisis, so he can tend to personal business.

A courageous president could decide he will stand for reelection, but that his responsibility is first to the American people, so he will not be distracted by campaigning. Instead of raising money for media advertising to criticize his opponent, he will raise money for creating new jobs. Instead of worrying about politics, he will focus on the issues needed to turn around the economy. And maybe even, instead of further dividing the country with increasingly partisan politics to the point where nothing important will get done, he could use this as an opportunity to bring the country together. Although it requires courage, he could reach out to both parties right in the midst of a highly partisan election to forge a compromise. He could even go as far as supporting members of either party who commit to constructive compromise, instead of isolated partisanship.

Ironically not only is it appropriate for the president to focus on doing his job; if he did, he would almost surely be reelected. Instead of campaigning, running political advertisements, and debating, the president could just tell the American people that they would have had four years to decide if he is the best candidate to lead the country for another four years.  It’s likely that by itself, this courageous act of putting the needs of the country ahead his own needs and the desires of his party would get him reelected. Most of the American people want a courageous leader right now. Bitter campaign arguments have no winners, only losers – the American people. The Republican Party is gearing up for a big expensive partisan campaign to blame the president for the economy, but this could disarm them. How could they criticize someone who is ignoring them and trying to fix the problems, especially if he is embracing some of their better ideas?

Sure this bold courageous move could backfire. Bold moves sometime do. However, it could also be just what the country needs now more than ever, and who knows, maybe it could make President Obama one of the most courageous and respected presidents in American history!

]]> http://www.decidebetter.com/blog/?feed=rss2&p=57 http://www.decidebetter.com/blog/?p=56 http://www.decidebetter.com/blog/?p=56#comments Thu, 24 Nov 2011 15:43:43 +0000 mmcgrath http://www.decidebetter.com/blog/?p=56

Weak leaders keep delaying tough decisions because they are scared.

The Joint Select Committee on Deficit Reduction failure to make tough decisions is yet another failure of our national leadership to have enough courage to make tough decisions. The so-called “super-committee” failed to reach its mandated goal of agreeing to a compromise to reduce deficit spending by $1.2 trillion over the next 10 years. Why am I not surprised? As you recall, creating the super-committee was the supposed “decision” Congress made in August when it failed to make a tough decision for agreeing on how to cut future deficits in order to raise the debt ceiling for borrowing more money. The supposed consequences of this failure are to trigger $1.2 trillion of automatic cuts, starting in 2013, but this won’t happen either. Congress will drag its feet until after the election next year, and then delay the cuts. Weak leaders keep delaying tough decisions because they are scared.

In my 2009 book, Business Decisions, I discussed tough decisions. These are decisions that must be made even though none of the alternatives are attractive. Strong leaders recognize that they need to make these decisions even though the response will be negative no matter what they decide. They deliberate carefully, balance different alternatives and views, and then make the decision before it’s too late. Weak leaders procrastinate, try to pass off the responsibility, find excuses for not having the courage to make a decision. I’ve had to make tough decisions in leading a turnaround at a major company, and I know how hard it is.

The American political system encourages weak leadership when tough decisions must be made. Politicians are afraid of negative attacks when they campaign, and this fear immobilizes them. They are afraid to decide to increase taxes or reduce retirement benefits because they are afraid their opponents will criticize them for it, even if that decision is necessary to save the country. The two-party system also polarizes positions and prevents necessary compromise that is always part of tough decisions. Each political party entrenches itself in its own ideology. This enables each party to blame the other, increasing the split between the leadership. Tough decisions always require compromise, and our political system not only fails to encourage compromise, it encourages polarization, making tough decisions all be impossible.

The solutions are not easy because this is a systemic failure. In theory, a third political party could come forward with willingness to compromise and make the tough decisions, but the two parties have passed laws to effectively prevent this. The limit on the debt ceiling was supposed to force tough decisions, but the politicians found a way to circumvent this. Perhaps it’s time for a balanced budget amendment. Maybe it should force out all elected officials and call for new elections if they fail to make the tough decisions on a balanced budget.

Like Thomas Edison he was a great inventor, and not just of things but of new systems. Both Jobs and Edison created new complex systems. Edison created electric power, the devices to use it and the transmission network for it. Jobs created electronic media power, the devices to use it, and the distribution network for it. Like Walt Disney he created new animation. Disney did it with cartoons and Jobs did it with Pixar. Like Henry Ford he pioneered simplicity in products, low-cost manufacturing, making these products available for the masses. Like Sam Walton he created new retail distribution. Walton did it with an emphasis on low-cost high-volume retail for the masses. Jobs created new online retail distribution of electronic media. iTunes is the largest music store in the world, sells more applications software than anyone else, and is gaining momentum in books and movies. Oh, and on the side, he created the most successful retail stores; Apple retail stores have a higher dollar volume per-square-foot than any other of any retail store.

Ironically someone asked me earlier today if I could do a training session on how people could emulate Steve Job’s innovation techniques. I responded that I studied this in detail and nobody else could do it the way he does.

I study and write about decision making, and frequently use Steve Jobs examples. He was a master decision maker. He made more bold-move business decisions than anyone ever. His decisions on the iPod, iTunes, iPhone, iPad, and the Apple stores were all criticized. He had a vision of what people would want that they didn’t even know they wanted. He was a detailed decision maker. He made almost all the detail design decisions at Apple. He made the all the strategic, pricing, manufacturing, and branding decisions. He knew when to listen to advice before making decisions, but he was even better at ignoring conventional advice, making decisions based on his own vision. Sure he made bad decisions, such as the Apple Lisa, Apple Newton, and Next Computer. But he learned from all of these and came back again with a better decision. He was tenacious. Steve Jobs was not only a great decision maker – he may have been the greatest decision making EVER.

The president actually initiated this decision almost 18 months earlier, a couple of months after 9/11, by asking the department of defense to review and update battle plans for Iraq. He then spent more time trying to convince others to support it than he did evaluating the decision.

His decision rested on the critical assumption that Saddam Hussein had stockpiles of WMD. He didn’t. Experts searched the country and by the end of 2003 it was clear that there were none. The intelligence evidence behind WMD was incorrect. The former president admits his surprise, “No one was more shocked or angry than I was when we didn’t find the weapons. I had a sickening feeling every time I thought of it. I still do.” This was the most critical assumption in his decision; in fact the entire decision rested upon this assumption. In his book, the former president reiterates how widespread he felt this assumption was, “Almost a decade later, it is hard to describe how widespread an assumption it was that Saddam had WMD.”

The assumption of WMD was circumstantial. President Bush concluded the assumption was real based on the logic that, “If Saddam didn’t have WMD, why wouldn’t he just prove it to the inspectors?” Ergo, he must have them and is hiding them. Part of this explanation came after his capture when he told FBI agents that he was more worried about looking weak to Iran than being removed by the coalition.

There are a couple of lessons in this decision. The most obvious is that you must understand that correct decisions rest on accurate assumptions, and if the assumption is critical to the decision, you must do whatever is necessary to proof it before you rely on it. For a decision this big, the WMD needed to be conclusive, not circumstantial. In the Cuban missile crisis, President Kennedy had conclusive proof of ballistic missiles being installed in Cuba before he acted, and even then he didn’t invade Cuba.

Another lesson is to make major decision like this rigorously, not informally. There is no indication that the president and administration made this decision rigorously enough to the extent justified by a decision of this magnitude. The cost of the Iraq war is estimated to be more than $2.5 trillion, including the interest cost on the money borrowed that must be repaid by future generations. The cost in American lives is in the thousands, and the cost in other lives is even greater. Had the decision process been more rigorous, I believe the potential cost would have focused my attention on the validity of the critical assumption.

My intent here is not to pass judgment on the decision itself; some believe it was a correct decision and others condemn it. My intent is to use the former president’s book and his candid exposure of his decision process as a learning case study – and it give us a lot to think about.

By choosing this focus for his memoirs he has put attention squarely on decision making, creating a body of experience that he hopes will be useful to others. He also correctly emphasizes the central importance of decisions: “I have told the story of the White House by focusing on the most important part of the job: making decisions.” As I point out in my 2009 book, Business Decisions, I support the central importance of decisions to executives and throughout the company, as well.

He has said that he hopes this will help others learn how to make better decisions. He writes about the “decisions he got right, those he got wrong, and what he would do differently if given a chance.” The book provides some deep insights into critical national decisions from the perspective of the ultimate insider, giving us a rich set of experience to learn from. I’ve almost completed reading the book, and there are some good lessons to be learned, although not necessarily as the former president may have intended. In subsequent blogs, I will use his insights to examine some of his major decisions and the lessons that those who make decisions in business and government can learn, as well as lessons that we can all learn in making personal decisions.

Let’s be clear: a CEO is responsible for the decisions his company makes. He is responsible for setting the tone at the top. He is responsible for making sure that the appropriate decision processes are in place throughout the company. He is responsible for designing the appropriate incentives that lead to the right decisions. He is responsible for making sure organization structures (functional and cross-functional) are in place for the best decision making. He is responsible to put the right people in place to make major decisions, and to ensure that they are trained and skilled in making these decisions. He is responsible to identify what decisions expose the company to major risks, and ensure that these risky decisions are contained. Tony Hayward failed on many of these.

And this responsibility for decisions is also replicated throughout the organization. The VP of manufacturing is responsible for all of the manufacturing decisions. The VP of oil drilling is responsible for all of the drilling decisions. The VP of finance is responsible for all of the financial decisions. However, this does not mean that those above are relieved of their responsibility as decisions flow down through the organization. They share the responsibility, but it always rises to the top. That’s where the buck (or pound) stops.

In my 2009 book, Business Decisions, I discussed the importance of business decisions and how they should be made. Lately, I’ve been talking about what I call the Decisive Corporation – businesses that consistently make the right decisions. BP is not an example of a Decisive Corporation; they are a case study of what can happen when the CEO abdicates his responsibility for the decisions of his company.

Ford is a good example of what I like to call The Decisive Corporation. The Decisive Corporation knows when and how to make the right strategic and operational decisions throughout its entire enterprise. Like Ford, it makes strategic decisions in anticipation of an opportunity or potential threat. Too many other businesses make decisions only when forced to confront an immediate threat or as part of their annual planning process, which usually only focuses on budgeting decision for the upcoming year. They simply overlook or never get around to thinking about the critical strategic decisions.

Ford also made other important decisions after Alan Mulally joined the company in October 2006. He revamped the organization and some of its major processes to be more decisive. This resulted in getting new products out faster and improving its manufacturing and sales strategies. A leader like Mulally doesn’t make all the decisions – instead he shapes the business into a Decisive Corporation.

I’ve recently completed research on what makes a Decisive Corporation and will be launching a series of seminars on it in October. It is a combination of the right organization structure, effective business processes, and the competencies of groups and individuals to make decisions. Decisive Corporations, such as Ford, will succeed in the future – others will flounder or fail in the face of a much less forgiving economy.

When he was not phoning his general managers and managers with complaints or advice, he meddled in the smallest matters of ballpark maintenance. Mr. Steinbrenner changed managers and general managers with abandon. As the owner of the Yankees, 22 managers have come and gone, many (such as Billy Martin) more than once. Lou Piniella once called him “a great guy, unless you have to work for him.”

George Steinbrenner was well aware of his management style. “Some guys can lead through real, genuine respect,” he told Cleveland magazine. “But I’m not that kind of a leader.” He likened himself to George Patton: “He was a gruff son of a bitch and he led through fear. I hope I don’t lead through fear, and I would hope it was more love and respect, but maybe it isn’t.” He made all of the decisions and everyone knew it, including George.

He even promoted this “I make the decisions” persona as a recurring character on “Seinfeld”. Steinbrenner, the character, had a penchant for making poor decisions, including trading Yankee players unfavorably, cooking jerseys, scalping box tickets, and cancelling an important meeting because he couldn’t get his beloved eggplant calzone (naturally, this was George’s fault).

For more than 30 years, Steinbrenner lived up to his billing as “the Boss,” a nickname he earned and clearly enjoyed as he ruled with an iron fist. In my book Business Decisions (Business Decisions), I write about decisive and indecisive executives. He was decisive – good or bad – and I admired him for that.

So last night’s blown call by umpire Jim Joyce that cost Detroit pitcher Armando Galarraga his rightfully earned perfect game was the “perfect” opportunity to reverse a bad decision and teach the world that you can do the right thing, even after the fact. There was no doubt it was the last out of the game. You did not even need an instant slow-motion replay. The call did not matter to the outcome of the game either way; Detroit had a big lead and the runner didn’t score. Joyce should have reversed his call, even if it took a few minutes to reconsider.

Major League Baseball commissioner Bud Selig had the opportunity to reverse the call and teach everyone a lesson that it’s important to do what is right. But unfortunately he didn’t – at least not yet. Reversing the bad decision would not have set a precedent for other teams and other games. There won’t be any objections. Rules aren’t meant to be broken, but they are not meant to be followed blindly when a clear mistake was made. For years, people will use this as an unfortunate example to defend why they can’t change clearly bad decisions.

Bud, reconsider. Do the right thing: acknowledge the bad decision (and your initial bad decision to not change it), make it right, and set a good example for others.

BP and its contractors also made poor design and construction decisions. The well was designed with tight tolerances, using a 7-inch casing around an 8-1/2 inch hole. Some of the centralizers, designed to prevent voids in cement, were missing because somebody delivered the wrong ones, so BP decided to use only six instead of 20. BP chose the lower cost, but riskier, of two alternatives for the casing, so if the cement around the casing pipe did not seal properly, gases could leak all the way to the wellhead, where only a single seal would serve as a barrier. Using a different type of casing would have provided two barriers. I don’t intend to suggest that every decision must be ultra conservative, but you must consider the cumulative impact of related decisions that influence the same risk. If you cut costs in one place, you should be more cautious deciding on the safeguards – or at least be more cautious deciding to proceed when there are large abnormalities indicated around that risk.

Unfortunately we’ve seen this problem of drastic consequences of bad business decisions before, recently with Toyota and the financial industry prior to the great economic collapse. And this phenomena isn’t just recent. The litany of bad business decisions continues back in history with disasters such as the Challenger and enormous financial losses such as the AOL and Time Warner merger. I study decision making, and inevitably all major problems stem from bad decisions. Period. No exceptions.

The reaction here will be the same: more regulation, procedures, approvals, and policies. Why? Because people and companies simply can’t make good decisions? Sure there are some companies that make great decisions – such as Apple – but the frequency and consequences of bad decisions is becoming extraordinary. We can’t eliminate the need to perform that puts all companies and executives under pressure to make critical decisions. We can’t create more mountains of legislation to prevent companies and individuals from making poor decisions. If you look at the mountains of regulations to prevent companies and people from making bad decisions, they already are enormous.

The cause is actually so clear that it’s overlooked. People, including managers and executives, and companies are never trained on how to make decisions. It’s not taught in high school or college. It’s not taught in management training sessions. The are not qualifying tests on decision making skills before someone becomes a executive or a key decision maker on a deep water drilling rig. I guess that everyone is expected to be born with decision making skills or learn from their mistakes – but some of these mistakes are very costly!  Resources for help in making better decisions are available by visiting DecideBetter.com.