Leadership and Performance Metrics

I have been doing some strategic advising for a couple of not-for-profit corporations. It has been quite an experience for me. There are special challenges, not the least of which is that some have no paid staff; only volunteers.

Generally speaking, measurement of performance of for-profit corporations is easier than for not-for-profits; there are more "hard" tangibles in the for-profit area. The quid pro quo environment is one of "pay for work done." In addition, the interests of all stakeholders are more closely aligned: greater profit, higher dividends, etc.

For not-for-profit corporations, there are more "soft" intangibles. A great deal of work is done by volunteers; thus no "pay for work done." The volunteers must receive non-monetary satisfactions for their labors. And, the interests of all stakeholders are not as closely aligned. Nevertheless, performance measurement (in both quantitative and qualitative terms) is no less important for the not-for-profit; it still has to be done.

A couple of factors can make development of metrics on performance in a not-for-profit easier. They fall under the purview of the governance and management areas of the organization. The first factor is operation plans that are tied tightly to a well-defined corporate strategy contained in a strategic plan that is constantly under review. The second factor, critical to the measurement process, is a deep understanding by the leadership of the internal strengths and weaknesses of the organization. This deep understanding is a prerequisite to the organization's being able to deal successfully with the inevitable changes in external conditions of threat and opportunity facing the organization. The bottom line is that if the corporation cannot manage its internal challenges it won't be able to handle external challenges.

Some not-for-profit organizations are funded by dues paid by members of the organization. In this sense, dues-paying members are the analogue of stockholders who have made an investment in a for-profit corporation. Thus, in a not-for-profit corporation, the members can also look at the dues they have paid as constituting an "investment." Members have the right to ask the organization what the rate of "return on investment" is on those dues. This is aside from the fact that the organization has legal and fiduciary relationships with its members.

To succeed, the organization needs well-conceived strategic and operations plans based on clear statements of organizational vision and mission coupled to an effective leadership model (and the requisite resources.) These, taken all together, will allow the organization to provide materially better services to all classes of stakeholders in the organization. The evidence of these high levels of service will be reflected in the metrics ("the proof in the pudding") as it were. Over time, it is continuing evidence of benefits of this sort that will provide a significant part of the motivation for stakeholders to support the organization, financially and otherwise.

Implementation of any performance measurement must start with the top leadership (Board of Directors) of the corporation. Without sufficient emphasis by leadership on the building of the infrastructure of the organization as a whole, there can be no reasonable hope for it to be successful in carrying out its mission. Without well-functioning human and financial sub-systems within the infrastructure system, there can be no reasonable hope of growing the capacity of the organization to conduct its operations, now or in the future. These sub-systems are interdependent. Without the one, nothing much can be done with just the other.

The U.S. economy is becoming increasingly fragile due to its being intertwined with economies elsewhere that are even more fragile. Government, private industry and the academy are cutting back in many areas. If the organization is to have any impact, it will have to learn how to do more with less, even as its margin for error is being drastically reduced. To accomplish this, the leadership of the organization will have to bring people with strong supporting skill-sets onto the board and into executive positions. A good leadership model and rigorously applied performance metrics will provide people with what they need (critical infrastructure) to function properly. They will also provide the kinds of nourishment necessary for the people to build a corporate culture that will contain the elements necessary to sustain the critical infrastructure of the organization.

Phrases That Should Strike Terror Into a CEO's Heart

"It is clear that in moments of stress, organizations do not always operate in the same way that they would in a normal operating environment." So, said Jon Corzine, former CEO of MF Global, while testifying in front of the House Agriculture Committee on Thursday, December 7, 2011.

Apparently, as it became clear to him that MF Global was melting down, and sometime before the firm filed for reorganization under Chapter 11 of the Bankruptcy Code, Corzine had said to his associates, "We've got to fix this." While acknowledging that "Someone could misinterpret" the phrase, Corzine also testified he had learned, only one day before the firm filed for bankruptcy, (Monday, October 31, 2011) that at least $1.2 Billion had "disappeared" from his firm's clients' accounts.

It's up for grabs right now as to whether there is any causation (or even correlation) between the latter pronouncement and the "disappearances." Regardless of that issue, though, Corzine is SO RIGHT about the possibility of misinterpretation of his words.

Depending upon the content of the corporate culture and the leadership "tone" set by the CEO, there can be a high risk that a CEO's words will be misinterpreted by subordinates. That condition of risk is rife any time the corporate culture is steeped in a "Your-wish-is-my-command" atmosphere and where the culture knows that the CEO places great emphasis on pragmatic ideas represented by such common catch phrases as: "In this company, we all have a 'CAN DO' attitude," or "In this company, we do whatever it takes to get the job done." Both of these catch phrases are positive in character. But, without at least the implicit qualification that "the job to be done" will only be done "as long as it is legal, moral and ethical," blind or sycophantic adherence to them has the strong potential to bring about disastrous results. Taken a face value alone, they are phrases that should strike terror into a CEO's heart.

The Road to Economic Chaos and Ruin is Paved with Keynesian Bricks

Murray Rothbard, in his excellent study of Lord John Maynard Keynes, keenly observed that "Keynes, the man,—his character, his writings, and his actions throughout life—was composed of three guiding and interacting elements. The first was his over-weening egotism, which assured him that he could handle all intellectual problems quickly and accurately and led him to scorn any general principles that might curb his unbridled ego. The second was his strong sense that he was born into, and destined to be a leader of, Great Britain’s ruling elite."

Further, "both of these traits led Keynes to deal with people as well as nations from a self-perceived position of power and dominance. The third element was his deep hatred and contempt for the values and virtues of the bourgeoisie, for conventional morality, for savings and thrift, and for the basic institutions of family life."

Keynes, while at King's College, was a member of a secretive group called the "Apostles." "Two basic attitudes dominated this hermetic group under the aegis of Keynes and [his "friend"}, Giles Lytton Strachey. The first was their overriding belief in the importance of personal love and friendship, while scorning any general rules or principles that might limit their own egos; and the second, their animosity toward and contempt for middle-class values and morality. The Apostolic confrontation with bourgeois values included praise for avant-garde aesthetics, holding homosexuality to be morally superior (with bisexuality a distant second), and hatred for such traditional family values as thrift or any emphasis on the future or long run, as compared to the present. (“In the long run,” as Keynes would later intone in his famous phrase, “we are all dead.”)"

As Keynes himself wrote during his undergraduate days in a letter to his friend and co-leader, Strachey, “Is it monomania—this colossal moral superiority that we feel? I get the feeling that most of the rest [of the world outside the Apostles] never see anything at all—too stupid or too wicked”

This is the man who published, in 1936, his "new" theory of economics, the "GENERAL THEORY OF EMPLOYMENT, INTEREST, AND MONEY." The "Theory" is almost totally fraudulent because it is based upon a "house of cards" system of 'mythological mathematics" (my term) and a set of fallacies, themselves built upon still other fallacies. It is a "dream" handbook for politicians, giving them license to spend, borrow and waste assets that don't belong to them. Further, it is adherence by politicians to this egregiously faulty "Theory" in the "handbook" that has brought the Western World to the edge of economic chaos and potential ruin.

If we do a close examination of his "Theory" we will quickly see its "feet of clay." But we don't have to start from scratch. Henry Hazlitt has already done that for us in his superbly written analysis of the "Theory." To see just how stupid and out of touch Keynes and his followers are, just read Hazlitt's book, "THE FAILURE OF THE "NEW ECONOMICS: An Analysis of the Keynesian Fallacies." Beware though, reading it could change your life.

What's wrong with the San Diego Chargers?

What's wrong with the San Diego Chargers? Who's to blame? Let's look at who and what's involved by starting from the bottom of the hierarchy that makes up the "team."

 

First, we have the players, then the HC (Head Coach, Norv Turner) then the GM (General Manager, A.J. Smith) finally the Owner (Dean Spanos.) The latter three form a "three-legged stool." The players play on top of the stool. If you take away one leg, the stool falls, along with the other two legs and the players, too.

 

Face it: the Chargers don't have a strong roster. Why? Because the GM has failed to get the best players and the HC has, obviously, not been able to convince him to get them. In addition, the Owner, who hired the GM, has hired somebody who should know better how to do that, but apparently doesn't. So, if you want to find the right person to blame, it isn't Norv Turner. He can only "go to war" on the field with who's on his roster. Who's on the roster is up to A.J. Smith, who serves at the pleasure of the Owner.

 

If you want to place the blame, place it on Dean Spanos. He can sit in his catbird seat and collect millions of dollars, whether he fields a winning team or not. One is logically entitled to think that he would want, not only the money, but a winning team. Apparently, logic has no place in this case.

 

What the Chargers need is an inspired, highly knowledgeable Owner who can assemble a powerful, fully functional team structure, starting with a powerful, fully functional GM. Not that he's blameless, but Norv Turner is stuck with working the field with the players provided to him, so you need to get off his case and get on the right one.

 

See the movie, "Moneyball" to get a better idea of what a good GM can do. True, the movie is about baseball, but the general principles still apply to football.

 

"Economic Forecasting"...the term reeks of oxymoronism.

Forecasting anything to do with human beings and the choices they make under varying conditions is very much like trying to use your fingers to pick up a spoonful of mercury lying on a flat surface. Good-Luck-With-That!

In the field of Economics it's even more difficult. Peoples' wants change all the time. Any marketing manager worth the salt will tell you that almost all of the choices people make are, at best, irrational. They are irrational in the sense that people act on the basis of the emotions they feel that are generated as a result of their current perception of their environment and their place in it. They then justify their choices through the application of logic (though not necessarily good logic.)

This is not to say that an historical picture of the past choices of people cannot be painted nor that general patterns of behavior cannot be detected from a study of the picture. But, it is irrational to expect that the future will be just like the past. And this is where the idea of doing forecasting in the area of economics, with the idea of inducing changes, breaks down. To be fair, forecasting is not prediction, but I think most people unintentionally conflate the meanings due to fuzzy thinking.

To be sure, we do drag part of our past behind us as we go into the future. The past, however, is not a reliable indicator of future happenings, as any reasonably astute reader of history can tell you.

People have the ability to, and do, make choices, Despite the efforts of many economists to convince people otherwise, people, being animate and desirous of having an influence on their future, do not act like inanimate objects that follow the laws of physics. This truth seems to escape many economists who continually butt heads with it.

With respect to governments and economies, forecasting implies planning; planning implies control; control implies having the power to make people do things; having the power to make people do things implies the use of law; the use of law implies government intervention in peoples' private affairs, government intervention implies enforcement; enforcement can only be done by the state using its police powers. When a state can use its police powers to enforce its choices on how the economic factors of production are going to be used by those to whom they belong, it is, de facto, no longer a "free market." it is a "planned economy." "Planned Economy" is a synonym for "Socialism."

The Soviet Union tried it, Nazi Germany tried it, Italy tried it. They called it by different names but it was the same thing. The Soviets called it just plain Socialism, the Nazis called it National Socialism, the Italians called it Corporatism. It didn't work for even one of them. The reason: it can't. Socialism is self-contradictory and ultimately must implode.

The proof of the pudding with respect to forecasting gone berserk is to look at what is happening in a Europe that is essentially Socialist, right now. Those in power believed they could forecast what was going to happen when they interjected the government into private affairs. They just "knew" what was going to happen in the economy because, after all, one of the most famous economic forecasters told them so. His name: Lord Keynes. Just ask the people in Britain, Greece, Ireland, Italy, Spain etc., "How's your wonderful Keynesian economic system working for you?"

Why elected government should be able to "experiment" on its people with macro systems (or any other systems) is beyond me. Most of them don't even know how it's supposed to work. In their ignorance or desire to escape responsibility, will the elected government not turn to economists or scientists to help them do the "experiment?" Unfortunately, they have already done that, The economists and scientists are already there and involved in incessant experimentation using the government as their instrument and the citizenry as their lab specimens.

In the medical field, experimentation is going on all the time. Medical ethics require that the human subject of an experiment: certify understanding that there will be risks and consequences that cannot be known in advance. They must also have the options to accept the risks and consequences or decline to participate in it. In other words, the subject must be a full-fledged volunteer. A government-run experiment should be no different.

FDR so loved Mussolini's "State Capitalism" model that he wanted to shape the United States in that image and began the process by surrounding himself with Keynesians and implementing policies based on Keynes's theory. Those policies helped FDR to extend an economic depression from what probably would have been over in two to four years (as had all previous depressions) into one that, instead, lasted for ten long years. Isn't that why it is called "The Great Depression?"

None of the foregoing is to say that forecasting cannot be helpful. Marketing Managers use it all the time. What is different about the Marketing Manager operating in the private sector compared to the economist or politician is that the Marketing Manager knows there are risks involved that could kill his company if his forecast is sufficiently wrong. That's known as the "free market" in operation. To borrow an engineering term, it can also be known as "testing to destruction." In a free market, if his company goes down the tube, it's OK; it's possible for another can take its place. This is how the free market protects itself. Testing to destruction is not a viable option for a country. Need I bring up Europe again?

So, we don't need nor do we want a scientist to come up with a brilliant model of the economy and try to convince politicians to follow it. As previously said, they are already doing that with easily visible consequences.

It is asked, "Why [would] someone take the political cost today for something that could happen after ten years when someone else will be in the government?" Exactly right! What does that do to the forecast?

Financial institutions are heavily government-regulated already; maybe not the way they should be, but they are, nevertheless. It is asked, "Why [would] a banker accept to sacrifice his profits for the economy to benefit after many years?"
 This misses the point that all profits benefit the economy when they are realized and sacrificing profits can lead to the bank not being around after many years, maybe even just a few years if the banker keeps that up.

The big picture here is that it is not only difficult, it is impossible to find the appropriate prediction model. "Appropriate" is a moving target that may be ephemeral. There is no real headache in persuading the right people to follow the right course of action. The real headache is in understanding that there are no "right people" in government. Governments can't do much of anything "right" on the short term. There is too much inertia.

The forecasting science can be further developed but due to inherent problems with the number of variables that must be considered, there is no way it can provide a proven success record. Right now, the only "common sense" in the field of economics is built on a foundation of fallacies.

If "we" want to don't want to "just go in the dark without using any of the forecasting tools we have today," keeping government in the forecasting business is what is not a viable option.

If "we" want to secure long-term growth for our economy, we have to get the government intervention out of the equation and let it do its constitutional duty to promote the conditions where its citizens can enjoy their individual rights to "life, liberty and the pursuit of happiness."

Government Job Creation Package: A Free Lunch?

I know I've addressed the subject of government stimulus before, but the latest from the White House on jobs just begged to be readdressed.

When somebody tells you that your lunch is free, what you are really being told is that it won’t cost you anything — right now. People with “street smarts” know “there ain’t no free lunch” and that somebody, somewhere has paid for it — or will pay for it. Street smart people also know that, sooner or later, somebody’s going to come to you looking for reimbursement — with interest charges tacked on. Government stimulus packages intended to “pump” capital into the economy to “create jobs” are nothing more than offers of free lunch. How so?

To answer this question, let’s first examine how a pump works. Take a water pump, for example. It’s obvious to everyone that the function of a water pump is to take water from one location and redistribute the water to another location. It’s also obvious to everyone that it’s not possible for the pump to create the water it pumps. Thus, to operate the pump, the suction side of the pump must be connected to the source of the water and the discharge side of the pump must be connected to the intended destination of the water. It is further obvious that the water pump cannot redistribute more water from its discharge side than it can take into its suction side. In fact, due to leaks in the system, it could redistribute even less water than it takes in. The government job stimulus pump operates in the same way. And, contrary to commonly accepted myth, there is no magic multiplier effect, nor can there be. Anything that appears be like it is strictly an illusion based on fallacious reasoning.

So, if the government intends to “pump” capital into the economy, it must first connect the suction side of its “job stimulus pump” to a source of capital. Only one source of capital exists; it’s the only place capital can be created, the private sector of the economy.

It now becomes readily apparent that, because government cannot create the capital it wants to pump into the economy, it can only suck the capital out of the economy from one place, in the form of tax, and redistribute it to another place in the economy, in the form of stimulus payments. But, wait! we mustn’t forget the inevitable additional costs involved in this process of redistribution of capital. Additional capital must be drained from the economy to pay for the design of the pump, the manufacture of the pump, the energy it takes to operate the pump, as well as the maintenance and repair of the pump. These additional costs are, of course, incident to the hiring of people to do all of those things, all of whom are paid with additional taxes taken from the private sector.

Because jobs follow capital (the intended result of a job stimulus package), the jobs that could have stayed in the private sector, where they would have increased the supply of capital, are instead shifted to the public sector, where they will consume the capital. The result of that is there is now less capital in the private sector. Because there is less capital, the rate of production of goods and services must fall. This, in turn, lowers the number of jobs needed. Thus, paradoxically, the job stimulus package causes the unemployment rate to rise in the private sector. Because the government will now pay unemployment benefits to those it threw out of work, even more capital must be sucked out of the economy to make the benefit payments.

A really practical way of thinking about it is to think of it as if you own a store. One night a burglar breaks into your store and steals your money from your safe. The next morning, the burglar comes into your store and buys a bunch of stuff with the money stolen from you and you’re supposed to think you made money off the deal.

The bottom line is, “there ain’t no free pump — I mean, lunch.”

Are Organizations Reluctant to Accept the Existence of A Crisis Situation?

It's not so much that organizations, per se, are reluctant to accept that they are in a crisis situation. It has more to do with the core perceptions of those in the organization who can define when a situation constitutes a crisis—those in an organization's decision-making loop. There is no crisis if "I've got everything under control." Often, employees who are not in the decision-making loop have concluded that a crisis exists long before the decision-makers come to the same conclusion.

Assuming that some kind of "control limits" have been devised, i.e., measurements of various aspects of operations are being made against a particular set of standards, in the minds of the decision-makers, a crisis doesn't exist as long as the measurements either remain within the control limits or do not exhibit a trend toward one of the limits. Obviously, the perceptions depend upon whether the control limits have been properly established, maintained and timely observed.

Low level employees work where 'the rubber meets the road." Decision-makers usually don't work there. They depend upon getting necessary information through the channels established for that. Often, there is excessive lag-time in the process and the message can become garbled.

The real truth is: (1) Crises usually start small and are "below the radar horizon." At that point, the situations don’t look like they will become crises. They are looked at in isolation—out of context. This makes what is happening look like an isolated case, rather than the beginnings of a pattern, and therefore, not a problem that needs immediate attention. As a result, when the problem does "pop up onto the radar," i.e., it gets big enough to “get in your face,” it’s easy for the decision-makers to have the impression that the the problem has appeared suddenly, without warning, almost "overnight." Cognitive dissonance has a strong hand in this. (2) Crises usually occur when one or more basic principles has been totally overlooked or, if not totally overlooked, under-appreciated.

Work and Sexism

There's an article at usnews.com headlined: "The Myth of the ‘Queen Bee’: Work and Sexism." It's subhead reads: "New study finds that, in the workplace, women are often held to a different standard than men." The article refers to a "new study, which will be published in an upcoming issue of Psychological Science, a journal of the Association for Psychological Science."

 

(Full Disclosure: I haven't read the study, itself.) Without commenting on the truth of the headlines, I feel I must comment on the rationale of the writer of the article. 

 

Baloney!

 

Putting aside any possibility of internal statistical or interpretive bias, let's look at the study as described by the writer of the article. It does not address "THE workplace" as announced by the headline. It addresses "A workplace" of a particular bureaucratic and operational character, a police organization.

 

If I understand anything from my past involvement with policing organizations, it is that they have an infrastructure characterized by an acculturation of their personnel toward the optimization of the use of force (physical or psychological) through the exercise of the police power of the State. Stripped to its fundamentals, the exercise of police power ultimately rests upon what goes on in the mind of a person who (literally or figuratively) has a finger on the trigger of a gun pointed at another person.

 

Any conclusions drawn from the study could be valid when restricted to that kind of infrastructure/culture. I make no other comment about their validity in that context. They are invalid, from the start, however, if extrapolated to any other workplaces not sharing a nearly identical culture.

 

Whatever merits it may have, when applied within the specific government sector workplace having been studied, this study cannot legitimately be generalized to the private sector workplace. It appears to have been ripped out of its proper context for the purpose of sensationalism.

 

Shame, shame, shame on the writer of the article

Leaders, Culture, Economics and Politics

Part 05

In Part 04, I iterated my intention to highlight the differences in the ecology of the strategic planning process of leaders under capitalism and socialism. This part continues and concludes some of the background for understanding the differences. (Obviously, there is a ton more.)

The differences influence the part that ego plays in how a leader operates. My hope is that in by exposing the underbelly of Socialism, the comparisons with Capitalism will become more easily evident. I used the past rather than the present because, if properly motivated, people can more dispassionately dig up the history on their own without having to deal with their biases of the current day.

Frequently, to divert attention, totalitarian ideologues have tended to advance the concept that the Marxist-Leninist system is a political opposite to Mussolini’s Fascist system, as well as to German National Socialism and the various other ‘fascist’ systems in the thirties. (There were a bunch of them.) Mussolini was especially adamant on the point. (But, he was anti-everything.)

Yet the concept of opposites is based on inadequate criteria and even false premises. A spectrum that puts Communism and Fascism/Nazism at diametric extremes distorts reality in significant ways. Yet, rigorous comparisons of the ideologies, in most cases, have not been made. There have been cut short by the Western Intellectuals' Groupthink reverence for the great "intellectual" orthodoxy that Communism was a great and well-meaning experiment (trying to build Utopia) which, unfortunately, "created some excesses." No kidding! More than 100,000,000 "excess" dead!

According to Rummel, "Constructing this utopia was seen as though a war on poverty, exploitation, imperialism, and inequality. And for the greater good, as in a real war, people are killed. And thus this war for the communist utopia had its necessary enemy casualties, the clergy, bourgeoisie, capitalists, wreckers, counter revolutionaries, rightists, tyrants, rich, landlords, and noncombatants that unfortunately got caught in the battle. In a war millions may die, but the cause may be well justified, as in the defeat of Hitler and an utterly racist Nazism. And to many communists, the cause of a communist utopia was such as to justify all the deaths. The irony of this is that communism in practice, even after decades of total control, did not improve the lot of the average person, but usually made their living conditions worse than before the revolution."

Underneath it all, the end they sought was to control the factors of production, just in different ways and with different means. The supreme irony is that all claimed that what they were doing was to free their people from want by redistributing wealth. In fact, their major accomplishment was to institutionalize misery.

The bottom line of this series is that planning, strategic or otherwise, whether in a Capitalist or Socialist framework, implies both control and the power to exercise control. Control implies the existence of two entities: an entity that wields the controlling power and an entity upon which the controlling power is wielded. Further, Control requires the exercise of power and a structure to transmit it between the controller and the controlled.

Strategic planning requires the balancing of ends, ways and means. The basic environment in which the leader does his strategic planning is as important as his abilities because they govern his use of his abilities to lead. They also govern what is available to feed his ego.

Leaders, Culture, Economics and Politics

Part 04

Previously, I cited the ecology of leadership and Socialist leaders. Then, I digressed a bit into the world external to the leader where my thesis is that no business leader can avoid dealing with the total human ecological environment.

Returning to the externals of my original example, my intention is to highlight the differences in the strategic planning process of leaders under capitalism and socialism. The essence of the difference lies in the fact that under socialism, to succeed, the leader must be leader-centric, while under capitalism the leader must be customer-centric. In the leader-centric context, it is easy to see how ego can play a significant part in a leader's approach to strategic planning.

Continuing with background information, much of the confusion surrounding Socialism, in addition to it's being self-contradictory, stems from the fact that the socialist movement takes great pains to frequently circulate new labels for itself as a way of covering up its true identity. As each attempt to make it work fails, another leader, who wants to give it a shot and put his own brand on it, appears. So, as each label gets worn-out, it's replaced by another label which raises hopes of an ultimate solution of the insoluble basic problem of Socialism—until it becomes obvious that nothing has been changed but the name.

As to a planned economy, which one might people choose? For those who might think a planned economy tailored to the wishes of advocates all along a spectrum from democracy to dictatorship are different; they are not, except in non-essentials. All are precisely as socialistic as the Socialism propagated by any other socialist group. The differences are not among the ends sought, they are among the ways and means to achieve them. This makes differentiating Stalin, Hitler and Mussolini like differentiating citrus fruits: different sizes and colors, maybe, but still citrus, nevertheless. Take the following examples.

The communists of the Soviet Union called themselves Socialists (as in Union of Soviet Socialist Republics, USSR, etc.). In Germany, the Nazis called themselves Socialists, as in "Nationalsozialistische Deutsche Arbeiterpartei," or, in English, National Socialist German Workers Party. (The term, "Nazi," is just the shortened form of Nationalsozialistiche.) Their significant differences were political. Until Operation Barbarossa, they were as thick as thieves, cooperating to carve out satraps from their surrounding territories.

Hitler was favorably impressed with Italian Fascism. The Italian Fascists called themselves Socialists. Mussolini, a Marxist who left the communists because he thought he could do things better and faster by putting his own spin on them. In fact, toward the end of his "term in office," (after the king had arrested him and the Nazis had rescued him, the Nazis set him up as the leader of a puppet government. He was titled "il Duce di Repubblica Sociale Italiana" or "Leader of the Italian Social Republic."

As to fascism (after "fasces," the symbol of bound sticks used a totem of power in ancient Rome), Mussolini said, "Fascism is a religious concept...[it] should more appropriately be called Corporatism because it is a merger of state and corporate power." Thus, fascism is just a highly nationalistic socialist movement. With this statement, "il Duce" was trying to give his political philosophy the color of a religion and, at the same time, blend it with economics. (With such integration, could he, perhaps, have been using concepts taken from Mohammed's model as a guide.)

More in Part 05

Leaders, Culture, Economics and Politics

Part 03.

I'm taking a detour from my original path to address a couple of pertinent side issues. I'll get back on the path in Part 04.

Someone pointed out to me that the way in which a leader reacts has more to do with the person than his/her circumstances. Taken in isolation, and limiting the consideration to how a leader reacts to his circumstances, this is undeniably, logically true.

Different people react differently in the same circumstances. On the other hand, however, whether this makes any significant difference in a given set of circumstances can be determined only by measuring the outcome. There may be more than one path to success.

The outcome depends not only upon the internal (psychological) resources the leader possesses, but the constraints under which the leader is able to bring those internal resources to bear in those circumstances. In practical terms, assuming a given level of internal strength in the leader, attempts to devise a strategy that requires a greater level of external strength or resources than are available to the leader is bound to fail. It is to the latter that the externals refer. In strategic planning both must be recognized. This critical consideration is recognized as a part of a SWOT Analysis.

A personal SWOT Analysis is fine for self-evaluation but, in practice, the only times most people care about the leader's internals are when they want to study him for the purpose of emulation or when he screws up. When the leader's on a roll, most people couldn't care less what he's thinking. It's when he screws up that they want to know, "what was this guy thinking, and why was he thinking it?"

Furthermore, in my world, the leader isn't paid to contemplate his navel. The leader is paid to deal with the external world where everything else is. We assume that, as a leader, he has something of great value to bring to the table.

To get anything done, though, a leader has to deal with the organization's SWOT analysis instead of his own. That kind of strategic planning has to do with the world outside of the leader's head. With no disrespect intended, he can do his own SWOT (and pick lint) on his own time.

Designing a strategy is not a trivial pursuit. Part of the problem people have in strategic planning is that not a lot of people understand strategy. It's important to understand clearly not only what strategy is but what it is not. Policies, opinions and concentrations on internal factors are not strategy.

Strategy sits atop a "three-legged stool." The "ends" of the strategy, the "ways" the strategy will be executed and the "means" to be used in the execution comprise the three legs. If any one of the three legs is missing, there can be no viable strategy devised.

SWOT Analysis forces us to look at both internals and externals. Extended SWOT Analysis is an even stronger tool in that respect. A good working definition of strategy (John R.Boyd) "To improve our ability to shape and adapt to unfolding circumstances, so that we (as individuals or as groups or as a culture or as a nation-state) can survive on our own terms."

It's worth remembering that the term "strategy," comes from the ancient Greek, meaning, "thinking like a general."

More in Part 04 

Leaders, Culture, Economics and Politics

Part 02

Previously, I cited the ecology of leadership and the unholy trio of Stalin, Hitler and Mussolini as Socialist leaders. So, what about the strategic planning of leaders operating in the area of economics of a Socialist System? If the ecology of leadership is important, for the answer to this question to be meaningful, a contextual background is required.

First, the three traditionally recognized factors (or means) of production are land, labor and capital. (In a literal sense, of course, anything that contributes to the productive process is a factor of production.)

Second, although Socialism is a relatively recent phenomenon, it has a history of variation. It came into being as a result of the Industrial Revolution and it was Karl Marx who defined it. Over time, other "practitioners" have come up with "improvements," or variations, on the theme.

Third, to many people, the concept behind the term "socialism" is similar to the concept behind the term "god." In this respect, everybody can have a different take on the meaning and implementation. So, Socialism is an article of faith for many, perhaps for most, of its adherents.

Fourth, the term describes a system characterized by centralized government planning and control of the uses of national resources, private as well as public, operating "in the name of the people." Lenin said, "Account must be taken of every single article, every pound of grain, because what socialism implies above all is keeping account of everything." The function of a leader under this kind of system must be quite different from the function of a leader under a market economic system.

Fifth, although it is true that leaders have made certain "corrections," to the "original," or "pure," form of socialism, it is also true that the resultant forms diverge only in non-essentials. We can describe it more accurately if we start from the stated goals of socialists. They want to control the factors of production. Their ideal is not "equal economic opportunity" but "equal economic results." This has serious implications because, to that end, in the name of fairness, they plan to take from the more productive and give to the less productive, or to the nonproductive. This idea used to be called, "leveling". More modern usage calls it the "welfare state," or "spreading the wealth," or "redistribution of income." Among other measures, the expropriation mechanism of taxation is to be used to accomplish the "redistribution."

The essence of the foregoing points is, whatever the individual "takes" or descriptions, none of these can avoid the central point, which is: the aim of Socialism, no matter the variation in form or label, is its further propagation and, because the two systems are incompatible, ultimately and inevitably, the destruction of Capitalism.

The implications for leaders and their exercise of leadership and strategic planning are enormous. For example, those who do not consider themselves to be Socialists fail to realize that, given the pernicious nature of Socialism, their advocacy of so-called progressive political interventions in some economic matters must imply the ultimate establishment of full government supremacy in all economic matters; in short: Socialism.

How does a leader function, and what are the indicators of successful leadership, when Communism, Fascism, Socialism, State Capitalism, Authoritarian Economy, Planned Economy, Corporatism, Welfare State, etc., are rooted in the same concept? And what is the "magic ingredient," the resource that leaders doing Strategic Planning in a Socialist economy have available to them that those in a Capitalist economy do not have? This ingredient is one of the most attractive reasons that persons embrace Socialism; the veritable flame that attracts the moth.

Some will say, "this all sounds so confusing." Others will ask, "how can it be true when I have been taught otherwise?" We'll look into these issues in Part 03.

 

Leaders, Culture, Economics and Politics

Part 01

Some people I know like to talk about leaders as if they were above the considerations of culture, economics or politics. Perhaps, well and good, but only up to a point. That point is, such separation is artificial. It may be fun to discuss the issue over a beer but, any way you slice it, it describes a fantasy universe.

In reality, leaders don't operate in a vacuum, they operate as a part of subsystems that operate within cultural, economic and political systems. It is a truism that, no matter how high a leader may be in a hierarchy, somebody is measuring his performance. And, the metrics of leadership are governed by "the rules of the game" established within the various cultural, economic and political subsystems that comprise the milieu in which the leader functions.

I would be egregiously remiss, therefore, to overlook the human ecology of leadership, i.e., the totality, or the pattern, of relations between leaders and their environments. As well, I can't overlook the various degrees of reflexive interactivity that obtain between leaders and the systems in which they operate. In fact, to overlook these real world conditions would be to relegate the substance of this thread to a fantasy world where the most important discussion is the discussion centered on how many angels can dance on the head of a pin.

To elucidate: in the present context, I will use the term, ecology, not in the sense of describing the physical environment of Earth, as it is most commonly used. Instead, I will use the term in its human sense, i.e., as a sociological term dealing with the spatial and temporal interrelationships between humans (in this case, leaders) and their cultural, economic, political and social organizations. It is my thesis, then, that leaders live in human ecological systems comprising many ecological subsystems.

The interrelationships between leaders and the systems within which they work, are enormously influenced, if not governed, by cultural, economic and political drivers. As a consequence, leaders are free to act only within the constraints imposed by the drivers extant in their respective sector subsystems.

In the area of economics, for example, under Capitalism, the demands on leaders in the private sector subsystem are different from the demands on leaders in the government sector subsystem. The reason the demands are different is because the constraint-sets in the sector subsystems are different. In turn, the constraint-sets are different because the structures of the sector subsystems are different. Likewise, the structures are different because the prime operational drivers of the sector subsystems are different. The private sector subsystem is driven primarily, but not exclusively, by the profit motive. (There are many not-for-profit businesses.) The government sector system is driven primarily, but not exclusively, by the cost-justification motive.

What about leaders operating in the area of economics of a Socialist System? I will pick that up in Part 02.