Gulf catastrophe exposes rudderless leadership

July 6, 2010

It is very easy to jump on the popular bandwagon and attack those in charge of the BP disaster, yet I feel it is important to examine (and hopefully learn from) the lack of leadership occurring on many different fronts – from the middle of the Gulf to corporate offices in England to the White House.

Who, exactly, is in charge here?

While the roots of the problem may go back to previous administrations and the Department of the Interior, President Obama and BP officials have totally dropped the ball in their response and (mis)handling of the situation from Day One.

It took far too long for this crisis to become a priority for the administration. BP’s initial communications efforts were no better with (now) outgoing CEO Tony Hayward spewing forth a series of unfortunate and inappropriate sound bites (remember the ‘it’s a big ocean’ quote)?

And, unfortunately, amid growing public discord and pressure, when the president did finally get involved, his lack of executive managerial or leadership experience in handling a crisis of this magnitude was sorely evident. President Obama is smart, compelling and, at times, a brilliant orator. Here, however, he was too scripted, too academic and too short on practical problem solving experience.

In good times and especially in bad, those in “command” have to be immediately visible and tangibly demonstrate they are 100% focused on the task at hand. In crisis situations this means assessment, determining answers and, ultimately, decisive and corrective action.

In the Gulf, we need rolled up sleeves (and pant legs), steely determination and true solutions.  In short, we need leadership. Instead, it remains in short supply.


Let’s shake on it

June 30, 2010

Remember when someone’s word meant something?

I can still recall the days when a simple firm handshake sealed a pact. No need for lawyers or pages of documents with footnotes to sign in quadruplicate.  You simply looked your potential partner in business squarely in the eye and moved forward in earnest and with best intentions.

So, what happened? Somewhere along the way, we stopped trusting each other.

Unfortunately, precedents of bad behavior set the tone for a bad business environment.  A litigious society, further, forces one into an often defensive stature where it is imperative to protect yourself against people who say one thing and do another. To be sure, even supposedly “fool-proof contracts” designed to avoid future disputes, are often not worth the paper they are written on.

Thankfully, it is not all “doom and gloom” and Gordon Gekkos

hellbent on stabbing you in the back in order to feed egos and fatten back pockets. In fact, in the wake of high-profile cases of corporate deceit (from Enron to JP Morgan), there has emerged a movement in the business world towards renewed honesty, integrity and transparency.

Portraying and maintaining a positive image and reputation are important again. (Just look at the NFL and the intangibles, beyond talent, that helped make Tim Tebow a first round draft pick).

Today, I still prefer the handshake to seal a deal and I continue to maintain many arrangements, in particular with colleagues, sans paper.  Who knows, maybe we are on the path to once again doing what we say we’re going to do as a rule and not an exception.

What is your recovery modus operandi?

June 23, 2010

Nobody’s perfect. An old adage that is time worn, tested and true.

In a service industry like ours, there is a term called “recovery” that deals with the approach to corrective action you take in the face of adversity. First of all, you should never assume you are going to be mistake proof. No matter how much you plan, prepare or prognosticate, we are, at our core: fallible, human.

The key: How, ultimately, we communicate and then correct the inevitable error?

Recently, I was having lunch at one of my favorite Detroit-area restaurants, Bacco, when a member of the staff realized they had made a mistake with my meal. The very minor faux pas was immediately acknowledged, apologized for and, further, the “corrected” fare was provided to me as a carryout. I was, in turn, appreciative and look forward to many return visits.

How Bacco handled things is absolutely how Dover and our property management arm, Paragon Properties, LLC., approach “recovery.” First and foremost, we are very conscientious about how we serve our customers and property residents. Our clients know that we will do whatever it takes to serve them to the greatest extent possible. And, when we do make a mistake, they also know we will communicate to them with transparency (not try to skirt the issue or “cover our tracks”), apologize and inform them as to how the problem is being corrected. (Then, we do what we say we are going to do).

All of this said, we are forever focused on making sure mistakes do not occur and that if and when they do, we are learning from and avoiding them in the future. That, in turn, builds trust, credibility and a reputation of integrity—vital components for retaining and attracting residents and customers.

Creating a sound decision-maker

June 2, 2010

As a mentor who has helped develop executives over the course of my career, I have always stressed one major aspect of the job: competent decision making. After all, one poor decision can send a company crumbling while good decisions can lead to expansion and increased profitability.

In the beginning, young executives in training need an explanation of how and why certain decisions are made. In time, they should be allowed the latitude to begin making business decisions. I like to inquire as to the process they went through to get from point A to B. Did they consider all pertinent factors prior to making that decision, including the possible impact one, two or even five years from now? I don’t second-guess the choices made; rather, we discuss the rationale and thinking involved, which is important in promoting confidence and understanding their thought process.

Anyone can make the “right” decision, by accident or even luck, but examining the process will help you decide whether or not you’ve got a true leader on your hands. The process is equally important as the outcome. Your budding executive should also understand the business from the ground up and how their decisions affect those in the organization.

Taking a Zen-like approach to business helps decision making as well. This style allows you to take a step back and see the whole picture, one where you must accommodate for personalities, organizational evolution and the long term impact of your decisions.

Mentoring that next generation of decision makers is both rewarding and vital to the future viability of any organization. Search for that person who enjoys being in a team environment but is also comfortable in a decision-making role.  Most important, find that person who exhibits good common sense and strong judgment and you’re almost there.

Decision-making in business

May 26, 2010

I’m a big believer in having minimal layers in business. It helps to eliminate “red tape” and ensures operations run smoothly. Too many layers tend to slow down decision-making and decrease efficiency.

If you need group meetings to make every decision, you should re-think your business plan. Meetings should be for information gathering rather than decision making. You gather 75 to 80 percent of the information from a meeting or sources, and the rest is strong business intuition. Think Lee IaCocca or Jack Welch, guys that made intelligent decisions based on a combination of information and intuition. Consider some of these great IaCocca quotes.

Ideas for discovery, change and improved efficiencies should come from the bottom up. Decisions regarding compensation, benefits and major structural changes in an organization and the like are made at the top and distributed throughout the organization.

A good decision-maker has great instincts, can cut through the noise and not get distracted. They understand the weight of a decision and its short and long term implications; appreciates the potential unintended consequences of any significant decision; and appreciate the fact-finding and information-gathering process. They also take into account the “top-10 percent influence”, which tells us decisions involving PR, crisis management and financial issues should be made at the very top, by a competent CEO. But don’t underestimate basic common sense and good judgment.  They’re the foundation of any good decision maker.

How do you and your company make decisions? Does the process work, or do you need to reevaluate processes and outcomes?

Contemplating Michigan construction cones, zones

May 19, 2010

On a lighter note this week, you know its spring when both the trees and the orange barrels start to bud.  Of course, the former is eagerly anticipated while the latter seems to become more and more frustrating and confusing with each passing year.

Even with the recent availability of stimulus dollars, municipalities, counties and the state are fiscally challenged.  You would think, then, that there would be more method to the madness aimed at greater efficiencies.

Travel to states west and northeast and you will see more roadwork at night. Worker overtime is involved, but overall productivity also increases when minimal late-night traffic and delays allow large stretches of roadway to be completely shut down. My office is on Telegraph Road in Bingham Farms in the midst of a construction zone that limits travel for many miles both ways. Why not smaller stretches at a time?

And what is the rationale behind simultaneously closing or limiting traffic along parallel routes? Why not coordinate and consolidate? Focus resources so that they don’t compete but, rather, get completed in a more time-effective manner without throwing a metropolitan area in a state of gridlock. Such methodology might also work to ease some of the financial duress on businesses along throughways embattled by roadwork. High-profile, advance notice can also make a difference. Remember “Dodge the Lodge?” You knew what areas to re-route around and, thankfully, alternatives I-75 and I-96 were not similarly plagued.

Here’s another one for you: Work on Orchard Lake Road in front of West Bloomfield High School is currently wreaking havoc on a zone already known for its bumper to bumper traffic. Isn’t school out in just a few more weeks?  It would seem some of those involved are already “out to lunch.”

Getting a fiscal house in order

May 12, 2010

Of vital importance in running a big city, as I mentioned last week, is getting finances under control and balance sheets resonating black. Unfortunately, the City of Detroit has operated far too long without a proper system of checks and balances and without city officials working in the best interests of their constituents. The City needs to run more like a business. Mayor Bing is trying to accomplish just that.

Take, for example, bus routes in the City. While there is no denying that public transportation is necessary and often lacking, there also exist many routes that travel where very few people live. Mayor Bing is now trying to make the tough, unpopular decisions that must be made to not “downsize” but rather, “right size.” There is simply no way around it.

If such moves are not enacted, the only alternative I see for the City is receivership. Bonds have helped Detroit Public Schools recently, and can help the City as well. But it’s only a temporary fix to a problem that has plagued the City for far too long. Because of Detroit’s tentative financial condition, its credit rating has been reduced, bordering on “junk” status. Hence, some past bond issues not sold out or future bond issues will cost the City much more due to having to pay bondholders a much higher interest rate. Investors see a much higher risk of bond defaults if the City does not get its fiscal house in order.

Mayor Bing recognized that increasing taxes is not an option. Detroit already has significantly higher property taxes than elsewhere in the state. Raising taxes will only exacerbate the problem of suburban flight.

Instead, the city’s return to profitability will be predicated on attracting a larger population of those living and working in the city; Rock Financial’s pending move to Detroit is a step in that right direction. Prudent cost cutting, including the “right sizing” of some services must also continue.

Bottom line: Detroit must operate more like a business; getting its fiscal house in order to increase its bond rating from “junk” to investment grade and create a climate which is an incubator for new business