The Light of Day Test

"Perceptions are real to those who hold them."

I don't remember where I first heard this phrase or even if it was a quote from someone, but in my experience I have found there is great truth in it.

How one measures the "value" of someone to an enterprise is like talking about "quality." It is a subjective term, and obviously means different things to different people.

It has also been my experience that if someone is judged to have significant "value" to a business and is recognized for this by way of title, compensation or otherwise, the real test for those who have made the judgment comes when the decision is made public.

When I was in the corporate world we used to call this "the light of day test" and on more than one occasion it was a good notion to apply to actions before deciding whether or not to take them be they personnel moves or otherwise because once made public, it didn't take long to see and sense if the person's peers as well as the rest of the organization agreed or disagreed with the action.
We still seeem to live and work in a world where "score" is kept on lots of different criteria and AIG, etc. notwithstanding I doubt this sort of score keeping is going to go away anytime soon, and as speechless as I am at what we have all heard and read over past few weeks, I am not even arguing that it should.

At the end of day, if the decisions that senior leaders make in terms of handing out kudos (monatary or otherwise) pass the light of day test first, they are probably not going to find themselves the lead story on the 24/7 news cycles for weeks at a time.

Someone much smarter than I am taught me a long time ago that as managers we really get paid to do just three things: hire, fire, and evaluate.

Translation: We are paid to exercise judgement and what makes that so uncomfortable at times is that subjective judgement is just that. I can't defend it other than to say "after considering all the factors, this is what I feel is the right thing to do (i.e. this is my belief).

Beliefs come from personal value systems and where value systems are absent or broken we get the Madoffs of the world.

Defining Worth

When I talk about the quality of our Roundtable discussions, those who read this blog who are ExecuNet members will understand immediately when I say that given the financial and economic turmoil boiling around us it is both educational and comforting to be able to listen to and learn from an audience that, while deeply concerned, continues to bring much needed perspective, and dare I say it - hope.

When confronted with the headlines that blind us with one disaster after another in 60 point font and right underneath one reads about the unconscionable compensation connected to the "leadership" of these organizations, it is easy to understand the profound disappointment and anger that millions of us feel at the betrayal of leadership.

Over the past couple of weeks we have seen discussions ranging from members sharing their thoughts with a reporter from the Wall Street Journal who wanted to get their reactions to the impact of all this chaos on a manager's ability to support and motivate staff through such uneasy times to, as you might guess, executive compensation packages that to any rational being seem to be a total disconnect between reward for performance and anything else.

I wish there were space here to share all of the dialogue that went back and forth on this issue, but 21st century attention spans being what they are (even ones that might actually have an interest in the subject) would clearly make that prohibitive.

In following the thread of this discussion, there was, however, one response in particular that stuck with me and which I am happy to say its author Greg Davall graciously gave me his permission to share here.

Executive Compensation For High-Flying Executives - Excessive or Not?

I have been on the Board of Directors of a publically held company, worked for a closely held privately owned company and owned my own manufacturing company. I agree that the majority of compensation should be based on performance; but is stock performance the best measure? It is relatively easy to slash and burn for near term profit at the cost of sacrificing the long term competitive position and future value of the company. CEO spin doctors can convince their shareholders and sometimes even themselves that the near term unrealistic gains that are achieved by non-sustainable practices are what is "best" for everyone; only to cash out and leave it to others to pick up the pieces.

IMHO treating the company as if it were your own, communicating with clarity at all levels and accomplishing what you say you are going to for the reasons that you publically stand behind reinforces the values and integrity that will sustain American industries into the future and longer term continue to differentiate us from others with less transparent agendas. The correct compensation in this scenario is the true long term value added by the management team and should be able to stand the public scrutiny of all stakeholders... Being able to look employees, owners, suppliers and customers in the eye and tell them what you are worth because of the value you have brought to the table. If one can honestly apply this test and still sleep at night without praying for forgiveness then chances are good that you are worth what you are getting paid!

Point? At the end of the day, "worth" and how one defines it is among those subjective subjects that will always surround a lot of things in our lives and as Charlie Brown says "Happiness is different things to different people." All true to be sure.

Did you get far enough to digest Greg's last sentence? It speaks volumes on behalf of the thousands of those working as hard as they know how to lead organizations where all those associated with the enterprise can both make a living and, as Greg put it so well, sleep at night.

Where Have You Gone Joe DiMaggio?

I guess with the title of this post I am showing my age, but what the heck, if you didn't see the movie (i.e. The Graduate for those who might not recognize the line) , it's well worth it no matter what your age.

I picked the line from the Simon and Garfunkel song because it is a line that laments the loss of ideals and values and seeks guideance from a "leader." Even in the context of the movie, it isn't that much of a stretch to translate the message to the corporate and/or political arena and the headlines we unfortunately see all too often.

If you asked around our office here at ExecuNet, anyone will tell you that I am not a Yankee fan, but when our days become as filled with Bear Stearns and Spitizer as they have recently, it is understandable that there are indeed lots of folks who are wondering where Joe D went.

With all that in mind, maybe that is part of the reason I was so struck by a quote attributed to Jeff Immelt of GE that I have had tacked up on my bulletin board ever since I found it.

When I see it, especially after hearing about some other CEO taking a "perp" walk, it helps to remind me that as disappointing as all that stuff is, there are far more leaders who understand what Immelt is saying and do all they can to build organizations where what he suggests represents the cultures they believe in.

If you have not seen this quote before, if it resonates with your value system, maybe you'll find a spot for it on your bulletin board too.

Manage by setting boundaries with freedom in the middle.

“The boundaries are commitment, passion, trust and teamwork. Within those guidelines, there’s plenty of freedom. But no one can cross those four boundaries.”
Jeff Immelt, CEO, General Electric

Organizational Potential: Real or Imagined?

One of my favorite parts of the day is when I get my summary of what discussions are taking place in our member executive roundtables. The roundtables were set up to provide with members another channel to exchange ideas and information on business issues and challenges and get to know each other better in the process. In reading over the exchanges, not only do I always learn something, but I am also reminded of just how powerful the sharing of ideas and experience really is.

Over the past week or so, there has been a fascinating discussion going on started by George Bradt, founder of Prime Genesis and author of The New Leaders 100-Day Action Plan. He began by saying:

My working premise is that transformational leadership is about inspiring and enabling people to do their absolute best, together, to realize a meaningful and rewarding shared purpose...So, how have you done that? What advice do you have for others seeking to turn their organization's potential into something meaningful and rewarding?

George clearly touched a nerve as the responses poured in from all points of the compass and as you might expect with observations and comments ranging across a broad spectrum. One of those who put in his two cents was member Kerry Bensman. I thought what he had to say was not just powerful, but powerfully put, so I asked him if I could pass it along and he generously said I could. For the sake of space, here are a couple of the highlights from Kerry's post:

Your question presupposes a couple of basic assumptions. One is that the organization has unrealized potential. Another which is more important is that it has the ability, experience, and expertise to embrace a vision and drive towards it. (Of course, how often have any of us listened to the newest twist on a vision statement only to have the organization driven in a different direction.)

Working harder and smarter is not always the answer. In the computer business, we had this saying: "It always works well in Powerpoint"

There is real buy-in and there is "fake" buy-in. Your top performers know the difference and they also know where the weak links are. Unless the organization believes you are being realistic and is not being set up for failure,the entire effort is DOA.

I worked for a general manager who had an interesting philosophy. He set the goals so we could over achieve. Why, I queried? "We all feel better being 102% of goal rather than 98% of goal. Does wonders for everybody." he responded.

I have never forgotten that. No one likes to feel they are pulling an oar they are chained to in the galley along with Ben Hur.

Both George and Kerry are right of course, but I was particularly struck and with Kerry's reminder that what "works well in PowerPoint" really doesn't matter unless those who are tasked with making the vision come alive are committed to and led by leaders who understand that while words can inspire, they need to come with the investment in the training and tools to really make it happen.