I’ve been too busy with other Ideasphere Partners business lately to take the time and write another entry into my public blog, but this morning I was looking through my “Things I don’t like but have to do this week” list and noticed a pattern that made me want to scream, or at least vent in public.  Almost all the things on the list have to deal with potential litigation stemming from differences in the definition, and lapses (at least in my maybe-not-so-humble opinion) in ethical business and personal behavior.  Since, unfortunately, illegal and unethical are not always aligned, and ethical standards vary, there are always multiple views on what to do.  Here are some situations from my current and some older lists arranged from worst to not-as-clear-as-I-may-think unethical behavior. Obviously I can’t share the specifics but, as always, I look forward to your e-mails on the subject.

The work Camp Sunshine (www.mycampsunshine.com) does for children with cancer and their families is simply the stuff miracles are made from. It’s not often we can contribute to a miracle, and as many of you know, for the last eight years, my good friend Steve Brown, who has volunteered for over 20 years, and I, give a week of our time to be camp activity counselors teaching Karate to the 7-12 year old campers.  For the last couple of years we expanded the program to include two more instructors, Tara and Victor, and the kids just love it. 

It is one of the most treasured and important things I do each year, and the motivation behind this (now annual) e-mail.  Those of you who know me well can attest I am generally not prone to bouts of sentimentality for anything other than my own kids, except when it comes to our campers; Camp Sunshine deserves that for many reasons.  Not only is it an organization run by some of the best people I know, and it is a charity worthy of a special place in our hearts; it also has a special meaning for me because of the relationships I have built with the kids, even some who are no longer with us, over the years.  Being part of the “Karate Crew” and spending a week at Camp with children that are undergoing treatment, or have survived cancer, and still come to Karate practice and give it their best is a very humbling experience that places the importance of many things I deal with on a daily basis in the right perspective.

Unfortunately, volunteering time - emotionally rewarding and contributory as it might be - is only half the job of those who support Camp Sunshine.  As with every operation, until there is a cure, Camp Sunshine must raise money every year to support activities for the children and their families.  Tugging at your heart strings to help us raise money is the real purpose for this e-mail. 

Raising money, pays for children to go to summer camp and spend a week in an environment where living with cancer is not the exception, but rather the shared experience.  This is an environment where children with cancer can be just kids, amongst other kids like them, enjoying their summer. 

There are many events put together by the many friends of Camp Sunshine.  For those of you that don’t know about those events, or cannot participate, I humbly ask you to help Steve and me raise money during our participation in the  Keencheefoonee Road Race.  The race is one of the major fund-raising events for Camp Sunshine and it is driven entirely by the camp volunteers.  This is the most amazing group of people I have ever met in all my travels around the world.  Even though they volunteer their time, each year on the Tuesday morning of camp, before the campers awake, they start their day with a 5k run , or - as is the case of old fogies like Steve and me – walk, on the famous road to raise money. 

I hope you can find it in your heart, and in your wallet, to make an online donation to Camp Sunshine through the Online Donation link ( http://mycampsunshine.kintera.org/faf/r.asp?t=4&i=344806&u=344806-289243289 ) before June 18^th (or to send me a check made out to Camp Sunshine).

Please indicate you are supporting the Karate Crew and the Keencheefoonee Road Race.  For your tax records, their EIN number is 58-1872217.

And if you are interested in volunteering for Camp and want to know what it feels like to be a part of such a great group, please call me anytime.

Those who listen to National Public Radio, know the Lake Wobegone motto that “all the women are strong, all the men are good looking, and all the children are above average."  In a Cognitive Dissonance Environment certain beliefs exist that are so ingrained in the company’s culture that they force people to collect data supporting them, but ignore data not consistent with those beliefs.  Over the years I have seen slogans and buzzwords become embedded in the company’s folklore, migrate to becoming consistently held beliefs, and eventually becoming sacred beliefs that could not be challenged.  When things go wrong, or not as planned, teams assess reality as it is defined by those credos, and transport themselves to the Lake Woebegone Universe.  They will address all other aspects of the company, but ignore any data indicating the problem may be because of one of those long held beliefs. 

This was a lesson I learned after an investor group asked us to assess the reasons for the declining revenue of a manufacturing company in their portfolio.  The company founder, started the company thirty years earlier based on the core belief that engineering excellence was the key to success.  He hired “the best and the brightest” and the company prided itself on its engineering prowess.  Every facility was adorned with engineering award plaques earned in the early years of the company’s existence and engineering had a special seat at the table.  So when sales declined, an internal team spent six months analyzing data to understand the reasons.  High prices, and the lack of an advertising program were identified as reasons and the team launched projects in both area to address them.  Alas, that did not generate any meaningful results.  By not questioning the “best and the brightest engineers”, they missed the one major contributing factor to the declining sales.  The market place viewed the latest products from the company as shoddily built and poorly engineered.  The team failed to recognize that in reality, the founder was no longer involved in engineering and had not been in fifteen years despite the rousing speeches on the subject.  And to make things worse, the engineers who designed the original product had been retiring for the last ten years, and the company could not hire the “best and the brightest” based on its past glory because competitors paid much higher salaries.  Even questioning the role of engineering was sacrilege for so many years that presenting our assessment was an extremely tough day for all involved.  But, after the company traveled back from Lake Wobegone to the Relentlessly Objective Reality universe, it hired a new director of engineering, re-structured its campus-recruiting and compensation package, and bought a small engineering firm to jump start development of the next generation of products.

Those who have worked with me, even for a short period of time, know that I am a big fan of Ayn Rand and objectivism in general, and I use the terms Relentlessly-Objective-Reality (ROR) and Relentless Objectivity to define my personal, as well as the Ideasphere approach of defining any problem we work on, and structuring the search for solutions to it.  Even though it can be painful at times, and requires extra effort from all of us to engage in dialogue and hold Crucial Conversations rather than debates and witch-hunts, that practice is what makes the work we do at Ideasphere so effective in the long run.  Relentless objectivity enables any executive, interim or permanent, to see what current reality is before the start of an operationally oriented transformation or corporate renewal project, and to develop realistic plans to deal with it.  It also ensures that actions and strategies are meaningful and will produce the desired results.

Unfortunately relentless objectivity is neither easy, nor generally practiced (kinda-like common sense).  Over the years I have been surprised by unintended consequences that were a result of a team missing a key reality, or deploying a “going through the motions” solution that sounded good but did not work.  Teams that missed something that lurked in the background during the initial phase of a project, that should have been obvious, or an failing to conduct an objective assessment of the impact of a proposed solution that could have prevented an ineffective solution being deployed.  Even though some teams eventually recover, their transformation takes longer, or costs more than it should.  Even though the kinds of projects we work with are high risk/high reward projects, this situation is not unique to transformational projects.  Some research indicates that more than half of strategic projects fail to deliver on their promises.  Even more depressing is the acknowledgment by two thirds of senior executives participating in a McKinsey survey of executives from around the world, that their organizations rarely succeeded in achieving major change objectives.  Since making promises to clients and keeping them is what pays the bills around our office, avoiding becoming a part of that statistic has been one of our major goals. So in the process of continually improving the way we work, I have kept a running list of projects where I’ve seen bad things happened, and kept looking for answers to the question “What caused that?”. 

So, with apologies for the bad Star Trek analogies, I think there are four wormholes that transport a team from the Relentlessly Objective Reality (ROR) universe to one of the four Fake Abstract Reality (FAR) worlds.  Because these universes are parallel (or at least that’s a common view), a transformation team can be operating in one, or more, of those environments at any given time.  Frankly, I’ve seen at least one team operating in all four simultaneously.  So, based on my experience, here are the Four FAR worlds and the wormholes that lead teams there:

1)      The Content Free world through the Executive Arrogance wormhole

2)      The Lake Wobegone world through the Cognitive Dissonance wormhole

3)      The Borg world through the Groupthink wormhole, and

4)      The Cardassian world through the Confirmation Bias worm-hole

An old client of Ideasphere Partners, and now a dear friend, asked me a couple of months back to spend a day with an executive team reviewing a project.  It was one that had gone horribly wrong in a small company he owns in his semi-retirement from executive life.  He was frustrated!  It was an important project with his full support, well planned , with good objectives, and managed by one of his young “Ivy league educated” stars.  A project “guaranteed” to succeed, that not only failed; it did so in a spectacular way.  It was something no one saw coming until it was too late.  After we worked through the project history, a pattern emerged that made it, in hindsight, obvious it was doomed to fail from the beginning.

“What went wrong in our project planning?” was the question my friend asked and the one got me started with this blog about a month ago (never enough time to write for fun these days).  As we worked through their project, and I thought more about projects I have seen fail over the years, including some of my own, the more interesting question became “why do perfect plans many times produce perfect failures?”. So here it goes:

Andy Serwer, the managing editor of Fortune magazine and a man I admire, recently wrote a piece in Fortune Magazine on the insane amounts of information and channels available (think Facebook/twitter/etc) calling it the end of blogging.  I like Andy’s view and he made some great points, but I have another perspective.

This deluge of information and the continuing reduction of content to sound bites is not the end of blogging.  It’s the end of critical thinking.  It’s the beginning of an Attention Deficit Disorder pandemic.

One of the constant challenges we face at Ideasphere when working on operational turnarounds with our clients, besides high debt leverages, inefficient operations, lack of technology management expertise, founderitis, Demday disease, etc., is how to improve performance of the current operations without burning working capital or taking on more debt. Following our People-Process-Systems model, we always start with the people and what we can do to improve everyone's performance. 

This blog entry is a result of a research paper a friend sent to me on how the US Navy worked to improve the performance of the Navy Special Warfare Community and increase the completion rate of their SEAL training programs.  

It’s been a couple of months since my last post because of Ideasphere client work and some vacation, but I am back to share some ideas and continue this on-going dialogue with those of you who e-mail me about these musings.  Recently, one of our clients asked me to help him assess two executives he was considering for a promotion to a very important job leading a major transformation initiative we had suggested to the company.  That was not an unusual request, since evaluating people is one of the three components of our People, Process & Systems approach to company transformations.  What was unusual was that one of them was a ten year veteran in the company and had almost twenty years of total experience as a senior executive in their industry, while the other had come from six years in a completely different industry and only had three years with this company.  Both executives were considered solid performers and valuable players on the executive team.

With the presidential election theater going on these days, it’s hard to avoid conversations about politics at the Ideasphere offices, even with some of our clients.   Even though I generally reserve conversations about personal, political, and religious beliefs for a very small group  of close friends, I got to thinking about similarities between politics in the public service arena and politics in the corporate world.  So, even though not my regular practical blog entry about operations or management, here are some thoughts to consider about politics in general and corporate politics in particular.   As always, I would love to hear from you and post your replies to this blog at c.papageorgiou@ideasphere.com.

I think most of us developed our political beliefs based on some initial ideas from our family and upbringing, and some from our cumulative life experiences.  We are what, and who, we are because of the ideas we collected and the choices we made at various point in our lives.   As one of my favored Zen saying goes:  Careful what you think; It becomes what you say.  Careful what you say; It becomes what you believe.  Careful what you believe; It becomes what you do.  Careful what you do; It becomes who you are.

What we think about inevitably shapes who we are.  Our political beliefs depend on the Thought-to-Action path we traveled and the path dependency is the same one that shapes our approach to corporate politics.  Just like our political beliefs, our view of corporate politics is either the result of a conscious process, or one of random occurrences and happenstance we have allowed to shape our thoughts and actions.  Depending on how we came to acquire our political beliefs, we either have an appreciation of the political theater going on in America today, can see the benefits of the ebb and flow of power - and appreciate the maneuvering - or we have a disdain for one party or another and all we want is for our candidate to win and our beliefs to prevail regardless of the process.  Politics; If we can objectively appreciate the process, it can be a great learning experience.  If not, what a shame to be part of such a great show and choose not to pay attention.

So here I go where angels fear to tread:  Corporate Politics, a necessary evil that if it did not exist we would have to invent it.

A question my partners and I at Ideasphere have been getting more frequently by operating executives at our client companies is whether an acquisition by a Private Equity Group (PEG) is a good or a bad thing for them.  Based on our experience with many transactions over the last ten years, our answer is, it depends on who the buyer is. Just like assessing Venture Capital (VC) firms who invest in some of our startup clients, the answer depends on the type of money the PEG represents: Green, Gray, or Red.  Depending on that, an acquisition can be good, great, or a really bad thing….Green, Gray, or Red Money? Please allow me to elaborate.

·          Green Money is just that:  A financial buyer who recognizes an opportunity to buy an asset that will grow over time and generate returns with little need for direct involvement by the buyer.

·         Gray Money is green money plus brains:  A financial buyer who recognizes an opportunity to increase the value of an asset by bringing intellectual capital (their business network and access to management talent) to the table, along with real capital (their money).

·         Red Money is like getting in bed with the Devil; No matter what you do, you’ll wake up with horns. Red Money is a financial buyer who recognizes the value of an asset can be increased through non-value-adding financial and operational engineering that consciously cripples the asset in the long term, but generates a short term pop in value that can be exploited for a great return.

There are many mediocre managers, but true Moron Bosses, just like truly Exceptional Leaders, are rare.  None of us scores zero against the Moron Boss’ Thirteen but a true Moron Boss is a unique experience to behold.  In my twenty years as a manager, operating executive, or management consultant I have experienced dozens of bosses and clients, and I can truly say I only had one manager who was truly a Moron Boss, and an unethical and vindictive one to boot…  But that particular executive is a discussion for another time after a couple of years go by and my non-disclosures expire. 

A couple of years ago, after my annual physical, our family doctor informed me my cholesterol was trending higher than my IQ and it was time for a pill.  I was shocked! I am a healthy individual; I exercise and generally watch my diet; I know the research and what I have to do to keep my cholesterol low; so why should I take a pill?  I decided to go without it.  After a year of trying the daily Oatmeal breakfast routine and watching my fat intake, my cholesterol had become significantly higher than my IQ.  Call it a blinding insight into the obvious, but after a year I recognized for certain ailments, even if it’s a bitter thing to swallow, a pill is the right answer. 

Look around your company; are projects frequently falling behind schedule and going over budget? Is quality declining? Are sales dropping and customer complains rising?  Are your earnings lower than forecast for more than two quarters in a row?  If the answer is yes to any of these, it is time to check around for signs of the dreaded Demdey disease.

The Grass Growing Forever (GGF) trap is a classic case of forecasting gone wild.  It generally happens when a group of highly credentialed consultants, investment bankers, financial analysts, or maybe a couple of freshly minted MBA’s from the corporate development group, gather in a room to model an acquisition strategy, analyze the growth potential of a product, or assess the future value of an M&A transaction.  More often than not, with no operator in sight, they look at the last three years (or some other legitimate sample period), identify a few critical variables, and create a model extrapolating a baseline growth curve for the next set of years.  To make the model work, they include some “accelerator assumptions” that when manipulated produce the classic Hockey Stick Curve that extends upwards into infinity.  An Internal Rate of Return calculation is generated; a great PowerPoint presentation is made to the investment committee or budget review team by the most articulate of the group and, voila; a budget with positive earnings and stock price impact is calculated and the plan is approved. Soon enough some poor operator is handed a budget and assigned the task of “make it happen” and off he, or she, goes to deliver what the model promised. Unfortunately, a year or two later, real life does not match the predictions of the model and the search for a guilty party begins.