Are you living with “Plan B?”

Plan B is what your parents meant when they admonished you to study something in college that would enable you to get a good job, rather than pursuing your dreams. You have an artistic orientation and some talent and passion for portrait photography? That’s nice … study accounting just in case!! You want to pursue a career as a dramatic actress? Really? Go to school to get an engineering degree and purge the notion of THAT!!

Here’s the bottom line: Plan B will not make you happy! Plan B will pay the bills, but that’s it. Many a mid-life crisis has been incited by the pursuit of Plan B. Instead, push all of your chips to the center of the table and bet big on Plan A. Go “all in” on Plan A!

I’m dedicating the next couple of months to Plan A – figuring it out, aligning your skills and your passion, and creating momentum. It’s never too late to recreate your life!

Enjoy and until June, get real, get tough and get going!

Does Your Work Make Your Heart Sing?

Janice was the CEO and founder of a mid-sized company. Over a ten-year period, she created and built a commercial real estate leasing firm with about $50 million in annual revenue. The company had offices in a dozen states and was privately held by Janice and three partners.

Measured financially, Janice was very successful. Her net worth approached $25 million. Now 45, she chose to devote her life to building her enterprise. She engaged me to lead a strategic planning effort for her and her partners.

Although I didn’t see Janice every day, the times I did she appeared to be distant, distracted or disinterested to a degree that I found troubling. I scheduled some “off-line” time alone with her to share my concern and to gently probe for the reason for her malaise, hoping I might be able to help.

During our ensuing discussion, she began to tear up, then looked at me and confessed, “I’m not happy, and I don’t know why. I built a great company. We employ lots of hard-working people who love what they do. I have all the material things I want, but somehow, for me, the whole is less than the sum of the parts.”

Janice asked me whether I would help her figure out the source of her distress while continuing to work with her team. I agreed.

After reading the few details I’ve shared, you might be tempted to call this a temporary mid-life crisis and recommend that I urge Janice to “tough it out.” In my experience, however, when this kind of problem surfaces, a person ought to spend time with professional help, figuring out what’s going on.

After deciding together that coaching and not therapy was the right approach, we spent the next few months wading through the problem and “game-planning.” We discovered that although she excelled at what she did, Janice no longer felt a passion for her work.

Again, you might be tempted to read this and say critically or dismissively, “Poor Janice. She’s rich, has a great lifestyle and can do anything she wants. I feel really sorry for her.” If you believe Abraham Maslow, however, self-actualized people “must be what they can be.” He spoke of needs, not wants. He spoke of being, not having.

Unsatisfied needs are the single most prevalent cause of personal dissatisfaction. Needs are prerequisite conditions for personal fulfillment. Most of us don’t sufficiently build conditions of fulfillment in our lives; we fill our tanks with wants (i.e. “stuff”). There’s nothing wrong with wants, but they will only increase happiness if our needs are fulfilled first. If you remember nothing else, remember that!

Back to Janice: After some assessment work and discussion, we found that the things she loved doing were the things she did when she started the company. She was a creator, a builder and an innovator. She was not a manager or an organizer. Starting an entrepreneurial enterprise and running a mature company require distinct and vastly different skill sets. Although Janice had become adept at managing, she hated it.

Over the course of the next several months, my work with the leadership team grew tentacles. We discovered that all of the four partners were exasperated with their roles, because while their individual assignments played to many of their strengths, they didn’t align well with their passions. After re-crafting roles, these leaders became visibly reinvigorated; so did their enterprise.

My recommendation to you: Take the time to figure out what you really love doing. Most of us believe that, especially in mid-life, it’s at best a flight of fancy and at worst an irresponsible distraction. Here are a few questions to get started: If you are a business owner, what are the roles you fill and things you do that drive you bananas? Who else in your organization could do those things better and with less anxiety? How much stress do you endure because your pride requires you to be the center of your organizational universe? If you are an executive in a larger organization, do the methods employed to place people and design jobs consider the fact that passion creates energy and apathy creates lethargy?

Today’s environment of hyper-competition requires that we all leverage our people assets as never before. By aligning personal passion with personal strengths and organizational priorities, you’ll create incredible energy.

Additional Thoughts: Success Alignment

See if the following scenario sounds familiar: Dave is a marketing specialist. He’s just been assigned to lead a product development team in your organization. Dave has never in his life led a product development team – or any team, for that matter. He’s a really bright fellow and hasn’t been demure about accepting new challenges; so you figure that with a bit of training and help, he’ll do just fine.

Your training and development specialist came upon a brochure for a course offered by AMA entitled “How to Lead Teams.” A brief review of the course outline leads you to believe that this is just the ticket for Dave. You send him. After the four-day workshop, he returns to your organization full of new knowledge, ideas and enthusiasm. You have high expectations that Dave will be supremely successful in his new role.

Dave fails! What might have happened?

Let’s start by differentiating among the words knowledge, skills, performance and success.

• Knowledge is about knowing what to do. It can be acquired by reading a book or attending a workshop. New knowledge dissipates over time if it isn’t used.

• Skills are about knowing how to do something. Developing skills requires practice, repetition and feedback. Like knowledge, skills degrade over time.

• Performance is measured by the achievement of planned results. Without defining acceptable results, performance cannot be managed.

• Success is a unique concept. From an organizational point of view, I suppose one could say that performance and success are synonymous. From an individual’s point of view, however, that’s not the case, because personal success requires personal fulfillment, and each person defines that differently. Many people never stop and think about it or define it. As was the case with Janice in our lead article, they float along ricocheting from one experience to another with a case of the blahs, never inquiring why.

In Dave’s case, the workshop probably imparted new knowledge, but knowledge isn’t enough. For his new knowledge to be relevant to his company, Dave needed new skills. Skills develop with practice, application and feedback. Once he returned from his workshop, Dave never got the support required to translate his new knowledge into new skills.

Organizational and individual success are inextricably linked. For organizations to achieve and to sustain success, knowledge and skill development, performance management and the priority of each person’s fulfillment must be aligned. We can help you achieve your organization’s potential with a process we call Success Alignment. Give us a call.

Welcome to spring! Did we really have winter? I still have leaves on the ground from November that I expected Mother Nature to eliminate. It didn’t happen.

I’m looking forward to the baseball season this year with mixed emotions. I was raised to hate the Boston Red Sox, but with my friend Bobby Valentine now managing the team, I may have to change my mind. The thought of wearing a navy blue baseball cap with a big red “R” on it has always been totally unacceptable to me. My answer may be to now become a Washington Nationals fan – abandoning the American League altogether! We’ll see.

Three brief and instructive articles this month. All deal with “people leadership.” The first focuses on a couple of requirements for successfully hiring senior leaders. The second identifies the “macro-questions” you must answer in developing human capital strategies. The third pinpoints five requirements you must fulfill if you expect people to perform at high levels.

Enjoy April and as always … get real, get tough and get going!

When Hiring Leaders, Do These Things

Most executives’ hiring skills are sorely lacking. A couple of years ago, I consulted with a medium-sized company’s Board of Directors to sharpen their recruiting and selection of senior executives from the outside, after a couple of bad hiring decisions had nearly buried the company. As a first step, I completed a post-mortem of a couple of catastrophic hiring decisions with the chairman and executive committee. Both revealing and disturbing, these experiences are also instructive.

First, in neither case did they develop a list of the specific strategic hurdles facing the company, and the special challenges they posed for executive hires. This point is critical: “Generic” management or leadership challenges do not exist; nor do generic leaders. Organizations, like products, have life-cycles. A company facing a growth challenge in a hyper-competitive market has leadership priorities and, by extension, recruiting challenges that are different than those facing a company, department or division confronting bloated expenses.

Second, when looking for executives, this Board of Directors never searched for the attributes of personality and character that would comport with the company’s unique challenges and profile. A candidate is more than the linear progression of job experiences detailed on her résumé. She is also more than a bundle of knowledge, capabilities and skills. Two questions you need to answer when hiring senior executives:

• To what degree are courage, focus, discipline, resourcefulness, resilience, perseverance, persistence, endurance, physical fitness, self-knowledge and self-regulation important?

• How do you uncover the presence or absence of those attributes in the recruiting and selection process?

If you haven’t answered these questions, you need to.

Third, this Board of Directors was ill-equipped to conduct senior executive interviews. Each interview was an awkward dance resulting in only the following two outcomes:

• They knew if they liked each candidate, at least superficially, and

• They got clarity on the elements detailed on each candidate’s résumé.

Behavioral interviewing is now the accepted gold standard in interviewing. Here’s how to do it: Start every probe with the following phrase: “Tell me about a time that you …”

I tell my clients that the best place to start, after getting through the niceties, small talk and courtesies, is with the following request: “Tell me about time that you failed.” You will learn more about an executive from her response to that request and follow-ups than any other question you ask; I guarantee it.

Executive selection is too important to consider it a “nice-to-do” process. By dedicating the resources necessary to do a great job, you’ll avoid pain and additional cost down the road.

Talent Management – The Big Questions

If you want good answers, you have to ask good questions. If you want compelling, potentially life or business changing answers, you have to ask huge questions. I refer to these, simply, as the “big questions.”

What are big questions? They’re questions that assault the status quo. They undermine preconceptions. They rattle you. They make you really dig deep. They require answers that provide new context.

Obviously, smart, high-performing people are required for any organization to be successful. We have a tendency to consider the recruiting, selection, performance and development of people within a group of very confining, incremental questions like “What does a good performance appraisal contain?” or “How do you conduct a counseling session with a poor performer?” Those are necessary questions to be sure, but they are derivative; they are not big questions. I believe that the following five, externally focused questions must be asked and answered for any organization to successfully leverage their most important resource.

• What knowledge, skills, attributes and talents are required, and in what amount and combinations, to create and sustain value for buyers?

• How will you recruit, select, develop and leverage relevant knowledge, skills, talents and personal qualities to create value for buyers?

• What will you do to translate people’s competence into performance?

• What will you do to integrate individual performance into a cohesive “whole?”

• What will you do to maximize individual and collective contribution to the achievement of planned results and value creation for buyers?

Marinate in these questions and answer them in a detailed way. I believe that your human capital strategies will have a better shot at creating value.

If You Want Performance – Do These Five Things

I’m going to fill you in on something many leaders don’t get: You must fulfill five very basic requirements if you expect people to perform.

• You MUST give your people an explicit sense of the overall organization’s mission and values, and why they should care about them.

• You MUST develop specific, precise, granular and measurable performance expectations with each of your people.

• You MUST review people’s performance against those expectations on a systematic, regularly scheduled basis with them. Together, you must identify variances from expectations and develop plans to get back on track in real time.<

• You MUST give your people a sense of how their contribution fits into the whole.

• You MUST give honest feedback to people on their prospects for long-term success along dimensions that are important to them. Concurrently, you MUST help people develop reasonable, achievable aspirations.

One of my clients, the CEO of a Fortune 100, spends an average of 600 hours per year reviewing the performance and prospects of his company’s top 150 (or so) leaders. He believes in focusing and leveraging his time. His company consistently achieves shareholder, customer and employee expectations. It consistently appears on “best-managed” and “best places to work” lists.

He gets it; how about you?

People who know me understand I’m literally obsessed with the impact that mental toughness has on success. I believe that while many variables contribute to accomplishment in any field, mental toughness is the common – or UNcommon – denominator.

Baseball’s spring training has begun. In this month’s solo article, I feature Philadelphia Phillies pitcher Roy Halladay as Exhibit A of mental toughness. A certain first ballot Hall of Famer upon retirement, he’s currently baseball’s “gold standard” of toughness and discipline. The “story behind the story,” however, is that his career tanked for a time a decade ago. Then he met H. A. Dorfman. Their story, and its very real and very important lessons for you, is the subject of this month’s Real Deal. I know you’ll find it provocative and instructive.

I’ll see you in April. Until then, get real, get tough, and get going.

Meet Roy Halladay – The Phillies Mr. Mental Toughness

If you’re not a baseball fan, you may not know his name. Here’s a primer: He’s the best pitcher in baseball. That’s not only my opinion; it’s the overwhelming opinion of his peers. Complete games – Halladay. Innings pitched – Halladay. Earned run average – Halladay. Average wins per season – Halladay. Command of his pitches – Halladay. Most importantly to me (and hopefully to you) are not the stats and tributes; it’s Halladay’s mental toughness and discipline.

Eleven years ago, after being the “it” guy among young pitchers in the major leagues, his career hit the skids. He was relegated to the minor leagues to regain his mojo. While there, his wife bought him a copy of H. A. Dorfman’s book (sounds like a geeky cartoon character?!), The Mental ABC’s of Pitching. He then began working with Dorfman, who was/is a renowned sports psychologist, and everything changed.

From Sports Illustrated: “And that’s when I saw the biggest difference,” Halladay said. “The first part was trying to rebuild confidence, having a positive mentality. The second part was to simplify things. Sometimes you get caught up in the big picture – the seven innings, the three runs or less, who you’re facing – and you get away from what makes you successful, which is executing pitches.

“Knowing when I go into the game that I prepared the best I possibly could was a way to help build confidence. I didn’t always need success on the field to feel like I was going to be good. I felt like I could create that on my own the way I prepared.”

Says Brandy (Halladay’s wife): “Dorfman really taught Ray to focus on one thing at a time. When he gave up a hit, he learned to think about the next hitter. He helped him deal with those mental stumbling blocks every person has to deal with. The book and Dorfman helped his pitching career, our marriage, the way we looked at life in general… it absolutely saved his career.”

Many business people (maybe you?!) are so busy thinking about the next promotion, the presentation to the CEO in three weeks, or checking their smart phones for the 100th time in a day that they forget to “be present.” They forget that the only thing they can control is what they’re doing in any given moment. They forget that by focusing on being the best they can be RIGHT NOW, IN THIS INSTANT, DOING WHAT THEY’RE DOING TODAY, all of the other stuff – the money, the broader responsibilities, the career trajectory, the ultimate success – will all take care of themselves.

Many business leaders with whom I work underestimate or dismiss the power of their minds to control (or at least significantly influence) their outcomes. They operate while being completely distracted by yesterday and tomorrow. They do a pretty good job of learning from the past and planning for the future, but on the “living in the moment” part, they blow it.

I’ve always been a “jock,” and my entire business is geared to helping leaders develop mental toughness and discipline; therefore, Halladay’s story, and one’s like it, naturally intrigue and enthuse me.

One of my primary interests is the power of the human mind to propel or torpedo success. I have two bookshelves in my office full of books on the subject, many of them by renowned, accredited scientists. Through my learning, I’ve found that the selective application of certain principles has helped me in my own life, especially in the last few years.

After doing some research, including talking to a number of major league ballplayers, I decided that Dorfman’s approach to counseling athletes might help me in my work with executives. I ordered and read copies of two of his books: Coaching the Mental Game and The Mental Game of Baseball: A Guide to Peak Performance. I’ve found both books totally relevant and very useful. Following are some tidbits that can contribute to your effectiveness and maybe incite your interest sufficiently to read Dorfman’s books.

Dorfman cites a study by Albert Ellis wherein he documents 10 irrational beliefs that he found to be common in our society. Dorfman mentions them in a baseball context. They have just as much significance in other areas of life, including business management and leadership:

* You must have approval all the time from the people you find significant.

* You must be thoroughly competent, “producing” every time.

* Things must go the way you’d like them to, and it’s terrible if they don’t.

* Others, particularly “superiors” in rank, must treat your “fairly” and “justly,” and it’s terrible if they don’t.

* When threatening and/or “clutch” situations present themselves, you must become preoccupied with them and the consequences (as YOU perceive them).

* It’s terrible when you don’t immediately find solutions to your problems, on and/or off the field.

* Your emotional misery comes from external pressures, and unless these pressures change, you can do nothing to make yourself “better” (i.e., more effective as a player and/or person).

* It’s easier to avoid responsibility (be passive or quit) than to take charge of your life and/or a situation.

* You are helpless to cope with the overriding influences of the past.

* You can gain happiness and/or effectiveness by inertia or by uncommitedly “having fun” and waiting/hoping for the right things to happen to you.

Do any of these points (maybe ALL of them) ring true for you?!

Dorman adds several others of his own to Ellis’s list: emotional swings; negative thinking; pressure and anxiety; slumps; pain; anger. In my experience, while the issues on Dorfman’s list are derivative of those on Ellis’s list, they’re every bit as relevant.

How does Dorfman help players overcome these problems? It’s called “discipline” for a reason. He helps players regularly employ some practices that better enable them to stay “in the moment” and be productive. He says, “the athlete knows what direction he wants to take and how to take it. Now he disciplines himself to take it. He controls his mind; he disciplines it.”

Dorfman calls his approach the “cycle of control,” and it contains four steps. Here they are along with Dorfman’s complete descriptions. Assess whether these steps, employed consistently, would make you even more effective than you already are. For the sake of example, imagine yourself preparing to give a presentation to your company’s Board of Directors.

The Cycle of Control

* Control through awareness: The control of the ability to recognize what you are thinking, feeling and doing, and what is happening to you. This control gives you the understanding of where your attention is directed and, if it’s not where you want it to be, the reason it isn’t. You are then able to follow the cues you know that can help you concentrate on the task.

* Control through thoughts: This control is exerted after concentration has broken down or has been “given a break.” These thoughts should be rational and relevant to the task of the moment. They redirect focus.

* Control through self-coaching (self-talk): If the quality of your thoughts has deteriorated, you control the words you speak to yourself – internally or externally. These words are directives to get you back to a general positive attitude and to concentrate on positive function.

* Control through behavior: This control is of physical behavior, guided by rational, rather than emotional, directive; the “final instructions” provided by self-talk. Examples: “See the ball.” “Be easy.” “Find the open man.” “Stay low.” Regardless of how you feel, you act out of what you know, what you’ve been reminded of. After that action, you assess your behavior, and the language that directed it. You come full cycle and anticipate greater success in the next cycle.

More from Dorfman:

“Of course there will be many external and internal challenges. The extent of the discipline applied will determine the success you have in executing your task effectively. Mental discipline requires great effort. It’s worth having; worth that effort. An unyielding persistence is a part of that discipline. It will ultimately allow you to focus on your task in the toughest of times.”

I call it mental toughness; Dorfman calls it mental discipline. Whichever, it is an absolute prerequisite for success in any field of endeavor, including yours. A solid commitment to developing and sustaining these practices, or ones like them, will propel your effectiveness and success.

Two of my favorite subjects this month: goal setting and living the life of your dreams. The former is a very brief tutorial on a VERY misunderstood and generally poorly implemented idea – that being if you don’t know where you’re going, in very specific and granular terms, any road will take you there (sound like Yogi Berra?). The second highlights John Goddard. This is the third time I’ve written about John. I defy you to read this and not suffer from some dissonance. He’s the ultimate goal-setter and adventurer.

How about the weather this winter; is it crazy or what? Global-warming, global-cooling, climate-change … whatever!!!!! I love it. As I’m writing this in St. Michaels, Maryland, it’s January 27th at 8am and 58 degrees. The Chesapeake Bay has no frozen spots, and my back yard is soft from the rain and warm temperatures. Keep it coming, Mother Nature!!!!

I’ll see you next month. Until then, get real, get tough and get going!

Your Goals Must Be S•M•A•R•T

This month, I’m going to differentiate well crafted from poorly crafted business goals. Your ability to manage your business, your work, your budget, your people and yourself depend on this skill, so spending the next five minutes digesting this brief material can be a game changer for you.

Let’s start with a quiz. The following are two actual performance goals from two clients of mine from years past. The question: What do they have in common?

* “Ensure that the business makes good investment decisions.”
* “Deliver financial results for 2003 while maintaining a high quality of execution.”

Here’s the answer: Neither of these is a legitimate goal or objective.

Both of these statements provide good categories for objectives, but neither of these meets the criteria for a well-written business objective. Whether you’re creating a business plan or criteria for a performance evaluation, well-written goals or objectives (for our purpose here, the terms are interchangeable) meet five acid tests, symbolized by the acronym S•M•A•R•T.

Goals must be:

* Specific. The goal “work out with a personal trainer three times a week” is much more specific than “start exercising.” Both of my client goals cited earlier were really too general.

* Measureable. If you can’t measure it, you can’t manage it. That does not mean that measures have to be in dollars. If your goal is not measurable, however, it’s an aspiration, a good idea, or (more often than not) a hallucination. I used to work for a guy who, when reviewing generic, immeasurable goals would ask, “So, how do I know when we can declare victory?”

* Attainable. When you begin setting goals, you learn a lot about goal setting and about yourself. Goals that seem like they “stretch” you too much initially seem perfectly reasonable shortly thereafter. “Attainable” does not mean easy. In 1970, martial artist Bruce Lee wrote the following: “By 1980, I will be the best known Oriental movie star in the United States, and I will have secured $10 million.” Now there’s a goal.

Stretch goals engender commitment, activate energetic responses, stimulate the generation of creative action steps and “close the exit doors” on excuses. Make sure that “attainable” becomes more challenging over time.

* Realistic. This is the first cousin of “attainable.” If you’re 65 years old without a college education, it is probably unreasonable to expect to “become a world-class neurosurgeon within five years.” It is not unreasonable to aspire to “obtain a college degree and a medical degree within 10 years,” if you are totally committed to doing so. On a personal note, I gave up the dream of being the next Mick Jagger about 25 years ago, although I still occasionally fantasize about it!

* Timely, or (my preference) time-bound. By when are you going to achieve your goal? If you’re a sales person, a plan to produce $10 million in new business by 12/31/12 has teeth. Without a target date, it’s an illusion.

Some additional points about goals/objectives:

* Goals are commitments. Viewing them that way will ensure greater diligence. If it doesn’t, ask yourself the following: “How am I dealing with the other commitments in my life?”
* Goals should represent aspirations that you can control or significantly influence. Otherwise, they’ll become a source of frustration, and you’ll likely abandon them.
* You must craft action plans that detail how you’ll achieve your goal. “Chunk down” your goal into interim measurables and incremental steps to get you there. These must specify the “who,” the “when,” the resources necessary, and the feedback mechanisms you’ll use to track progress.

Obstacles you must overcome:

* Plans can become credenza ornaments. Your plan won’t achieve results; you must. Focus and discipline are really important.

* Plans can be too unspecific. You cannot assess your progress against lofty, philosophical abstractions.

* Personal change is difficult. Here’s something most goal setting literature doesn’t tell you: If you are not comfortable setting goals, this can be a really scary proposition. When you create objectives and action plans, your actions will take place sometime in the future. Your enthusiasm for doing what you plan to do will diminish when you confront the difficulty of doing it. Commitment is easy when its implications are remote and abstract. When it’s imminent and concrete, it’s another matter. To be a goal achiever, your resolve must be greater than your resistance.

* Without accountability, goal setting is a waste of time. “Accountability” is an overused and misused word. For accountability to exist, there must be consequences. If your goals are your personal secret, your only accountability will be to yourself. In an organizational context, many (maybe most) bosses profess accountability but enforce the following:

NOT ACHIEVING GOALS + A GOOD EXCUSE = MAKING GOALS

Goal setting is an art more than a science, but I can say the following unequivocally: Virtually all high achievers are goal setters. Setting goals helps them become who they want to be. Achieving goals helps them determine who they then want to become.

Are You Waiting to Live Your Life?

John Goddard will turn 84 years old next year. Several years ago, I first wrote about John in an earlier iteration of this newsletter. He is the ultimate achiever. An explorer, raconteur and man-of-the-world in the best and broadest sense, he documented his list of 127 goals that he wanted to experience or achieve in his lifetime at the age of 15. By the age of 40, he had achieved 103 of his goals. Today, he has 16 to go. His goals included:

* Climbing 16 of the world’s tallest peaks
* Becoming proficient in the use of a plane, motorcycle, tractor, surfboard, rifle, pistol, canoe, microscope, football, basketball, bow and arrow, lariat and boomerang
* Shipping aboard a freighter as a seaman
* Watching a cremation ceremony in Bali

To watch a short piece from Dateline NBC on Goddard, click this link: John Goddard on Dateline, and then come back.

Many (or most) people sleepwalk through life or ricochet from one experience to the next without intention. Per Thoreau: “The mass of men lead lives of quiet desperation.” When you look in the mirror, do you see the reflection of a person who has led the life of her dreams, or one of a person who has settled for something else? Has rationalization replaced aspiration and inspiration?

In the scheme of things, you are here for the equivalent of a cup of tea! What are you waiting for?

With three other recent University of Texas grads, my friend Roy Spence started GSD&M forty years ago. Owned today by Omnicom, it was once the largest independently operated and full service marketing and advertising agency west of the Mississippi. At one time or another, they have handled both Walmart and Southwest Airlines. Roy also coined the now famous tagline for his home state: “Don’t mess with Texas.”

A couple of years ago with his associate Haley Rushing, Roy authored the book It’s Not What You Sell, It’s What You Stand For. The book’s proposition is that extraordinary businesses are driven by “purpose.” Helping companies translate that assertion into practical marketing reality has become GSD&M’s raison d’etre during the last several years.

That’s the backstory. What follows is the reason for bringing Roy to your attention: In a recent interview, Roy discussed founding his business, and the relationship that he has enjoyed with his three partners during the past forty years. His admonition is great advice.

Roy said that the commitment he and his friends made together forty years ago was this: “If we’re going to start this thing together, we’re going to finish it together.” He went on to say that being a partner is easy; what’s hard is dealing with the “ship” (as in partnership). The same might be said of leadership and friendship. His point: The tough work of life is acting in accord with the things that we theoretically support. Partnership, friendship and leadership all require action!

As you begin 2012, I hope Roy’s words resonate for you, and that you’ll commit to supporting your words with your actions. Remember as you undertake this: Progress is more important than perfection!

My lead article this month emphasizes the need to develop your strengths as a high priority. I’ve also included a brief piece on the importance of understanding and acting in accord with your needs, wants, and values.

I’ll see you in February. Until then, get real, get tough and get going!

Develop Your Strengths and Starve Your Weaknesses

I once worked as a partner in an international consulting firm. As a part of that assignment, I helped executives learn to think strategically. Strategic thinking and strategic planning are distinct but equally important disciplines. While strategic plans are frequently and inappropriately linear extrapolations of the past, real strategic thinking requires vision and creativity – “what if” thinking.

In those days, I invariably took clients through a SWOT (strengths, weaknesses, opportunities and threats) analysis. Executives detail their organization’s current strengths and weaknesses as well as current and prospective competitive, economic and regulatory opportunities and threats. The ultimate objective is to develop plans that will leverage strengths and improve weaknesses, while exploiting opportunities and alleviating threats.

During completion, executives initially focused on weaknesses, their thoughts being: “Why should we spend our time doing anything about our strengths? They’re already strengths!”

Here’s why!

Peter Drucker once said, “The primary job of a manager is to make strength productive.” Most executives spend too much time improving weaknesses and not enough time leveraging strengths. With the velocity of competitive change that exists today, by the time an organization builds a new core competence, it’ll likely be irrelevant. Leveraging existing strengths is also a less expensive proposition than building or buying new ones.

Today, I spend much of my time helping individual executives develop and implement actions that’ll propel their own performance. The challenge is similar. People almost always want to focus on improving their weaknesses. I constantly hear comments like the following: “My company’s CEO thinks I’m a really great creative thinker. She doesn’t believe that my “follow-through” is as good as it needs to be.”

This person’s usual approach would be to craft a development plan focusing on improving follow-through. Here’s the problem: Depending on how large the deficit, this person’s follow-through skills may only become marginally better, and then only with a lot of work. Both the organization and the individual might be better off figuring out ways to leverage his strengths.

I’m not advocating the neglect of skill deficiencies. What I am saying is that organizational leaders and their associates generally expend too much energy and money on deficiencies and attend insufficiently to augmenting or leveraging existing capabilities.

Next month, I’ll take this examination one step further. Even when people sufficiently acknowledge and exploit their strengths, they rarely integrate an equally important consideration: What are they really passionate about? Being skilled and being excited are equally important dimensions of personal effectiveness.

Additional Thoughts: Needs, Wants, Values and Priorities

I once worked with an executive who stated with certitude that his family was his number one priority. He also lamented the fact that he spent virtually no time with his wife and kids. I responded that priorities are defined by how and where we spend our time and that, by definition, his family was not his number one priority.

During the next month, develop a list of your needs, wants and values. “What’s the difference?” you ask. A need is something you must have in order to be your best, such as time, space, money, love, information, food, etc. A want is something that you relate to by trying to acquire or experience it, such as a car, a vacation, a house, a promotion, etc. A value is something that you naturally gravitate to or that is prompted from within and not by needs or wants. The same thing can be a need, want or value for different people or for the same person at different times. Here are some guidelines:

• If there is urgency, it’s probably a need.
• If there is a craving or desire, it’s probably a want.
• If there is a natural and uncomplicated pull, it’s probably a value.

Next, complete a “calendar audit.”

Look at your calendar for the last couple of months. Take every bit of time, personal as well as business, and compare your expenditure of time with your needs, wants and values.

Last, create objectives and action plans to better align your words and your actions.

Welcome to winter. I hope your Thanksgiving was enjoyable, and that you spent it with the people you love. As Christmas approaches, so does the winter weather. With any luck, we’ll be spared any weather catastrophes this year.

Just a reminder: Back before the NFL season began, I picked Aaron Rodgers to be the league’s MVP this year. I’m feeling pretty good about that pick. I also chose the Packers to beat the Ravens in the Super Bowl. Ditto! Just who will beat the Packers?!

This month’s article, “Why Smart Executives Make Dumb Decisions,” covers many of the reasons that we all occasionally go astray in our decision-making. It’s an admonition that I think you’ll enjoy.

Happy holidays!

Why Smart Executives Make Dumb Decisions

When I help senior leaders with their strategy creation efforts, I’ll review past strategies and then the results, financial and otherwise, that those strategies produced. I’m frequently amazed when I see that smart, capable executives have developed and implemented strategies that should have been obvious losers from the get-go. Here’s an example: Company A, a financial services powerhouse, acquired a mutual fund company – a business that they had not been in previously. The deal team and CEO together believed that mutual funds would round-out their product portfolio, enabling them to cross-sell, improve customer retention and, as a result, increase revenue and drive down acquisition costs. While I’m grossly oversimplifying this example, on the surface, it made sense.

Here’s what didn’t make sense: Post-acquisition, the inquisition began. The acquiring company began summarily firing executives from the acquired company, believing that because they (the acquiring company) were bigger and more profitable, they could and would run the acquired company better than the executives they inherited were running it. Keep in mind that the acquiring company had no experience in the mutual fund business. A couple of years later, they folded their tent in the business because they ran the acquired business into the ground. How did this happen? How did really smart and capable people conclude that this course of action would work?

Read on!

The emerging fields of behavioral finance and economics help explain why smart people make dumb decisions. These two disciplines use social, cognitive and emotional factors to understand the economic decisions of individuals and institutions performing economic functions, including consumers, borrowers and investors, and their effects on market prices, returns, and resource allocation. They integrate the insights of psychology, economics and finance. In turn, these disciplines have spawned an even newer field – behavioral strategy – which helps decision-makers anticipate and either avoid or ameliorate the impact of their own inclinations or impulses when making strategic decisions. Traditional economists disdain and/or dismiss the emerging fields of Behavioral Economics and Finance because in their world, the economy operates without the messiness of human interaction.

In reality, we all make decisions based upon fancy as much as fact. Whether in business or government, leaders frequently succumb to the following:

• Hubris. We’re the best. We’re the smartest. We’re the Masters of the Universe, but, of course, we’re humble. For some reason, smart and capable executives often believe that they are infallible. The truth: We all achieve success because of our strengths and in spite of our weaknesses.

• Excessive optimism. I do believe that optimism is good. There is a difference between optimism and Pollyannaism, however. (I once had a CFO working for me that I called “Dr. No.” One time during a meeting break, No pulled me aside and asked, “You wanna know how I got so pessimistic … by financing optimists!”). I have sat through many meetings with executive teams that started with a rational debate of issues and concluded with “group think.” Somehow, legitimate challenges often get underestimated because executives want to take a specific action or complement of actions to achieve a pre-determined end.

• Confirmation bias. That’s the screening out of data that doesn’t support a predetermined conclusion. Recently, I observed an executive team meeting conducted to assess the wisdom of entering a new market. During the PowerPoint presentation by the Division President to the CEO, CFO and General Counsel, I noticed that several relevant and potentially game-changing points that should have been included were not. When I asked the Division President after the meeting why that was the case, he responded: “Our CEO really wants to do this. I didn’t want him to confuse my countervailing argument with resistance to the initiative.”

I see this kind of behavior frequently among executives and companies of every size in every industry.

• Availability of data. That’s a reliance on information that’s easily accessible to make a decision. The relentless pursuit of the truth frequently requires deep digging for data and thorough analysis. Hard, but necessary.

• Overconfidence. While “excessive optimism” may explain front-end blunders in decision-making, overconfidence explains why many executives assume that they can overcome negative circumstances by (pick one or more): Our people are great – they can do it; the current prevailing economic winds will not continue to blow and if they do, we can handle them; the aggressive, predatory competitive environment will certainly abate but if not, we’ve successfully dealt with it before, etc.

• Confusing intuition, beliefs, feelings and facts. 2 + 2 = 4; everything else is subjective. We all impose our perspectives, informed by our experiences, on any situation. The BEST executives are able and inclined to differentiate among facts, intuition, beliefs and feelings when making decisions. I’m not implying that only facts matter; I am implying that facts are facts and those other things are not facts.

• Faulty or short memories. The best among us learn from experience. It’s called wisdom. As I’ve said many times, while wisdom is developed from experience, it is not the automatic by-product of experience. Here’s the formula: Wisdom = experience x reflection x relentless honesty x accountability (accepting consequences with no blame, no finger-pointing, no excuses, no whining, no escape-hatch) x behavioral change. Each of these elements is necessary, but alone, each is insufficient; it takes them all.

• Deference to “experts.” A lot of executives who retain strategy consultants defer to the recommendations of said consultants without significant challenge. Many consultants play to the preconceptions of executives, intentionally or not. Frequently, the result is not pretty!

• Under-appreciation of the power of their voices. An executive’s voice carries heft. When a CEO asks a question and implies a right answer, he shouldn’t be surprised when he gets answers that comport with his own opinion. A “nudge” from a CEO during a meeting often results in a lack of challenge, an absence of debate, and a preponderance of “group think” that mirrors the CEO’s own thinking.

When executives review this list of decision flaws, most recognize each as an affliction that affects other people, but certainly not them. Maybe the biggest decision-making flaw plaguing executives is this one: The failure to acknowledge their own decision-making fallibility and making sure that they create cultures of aggressive inquiry. “Smart” does not mean “insightful.” “Smart” does not automatically imply the inclination to confront and challenge. “Smart” may be necessary, but it’s insufficient.

As I’m writing this, the Northeast is being pelted by an early snowstorm. Early? It’s October 29th! Climate change proponents will now use this as an example of the absolute, incontrovertible evidence of climate change; others will dismiss this storm as an anomaly. I suspect that the right answer is somewhere in the massive gray area in between. I do know this: I don’t remember an October snowstorm this early in the season.

You’ll enjoy this month’s articles. The first is an admonition to get your priorities in order. The second is particularly appropriate if you lead people. Its message: Treating people fairly does not imply that you should treat them all the same.

As you won’t be hearing from me again until December, have a Happy Thanksgiving and remember, as always: Get real, get tough and get going!

What Good is a Mercedes-Benz if You’re Jabba the Hut?

I recently read a staggering statistic. More than 40% of college graduates never read another book after they graduate – EVER – FOR THE REST OF THEIR LIVES!

If you are not among that 40%, congratulations; you are among the living. If you are among that 40%, how are you growing? How are you developing new perspectives? How are you challenging your preconceptions? Who are you becoming?

Personal development philosopher Jim Rohn said, “success is not something you search for and find; it is something you attract by the person you become.” If you aren’t reading, you are becoming more of the person you already are.

Wow!

Only 3% of the public in the United States have library cards. Double wow! 3%. All of my previous comments apply to the 97% missing the boat.

About 20 years ago, I was the number 2 guy at a medium-sized company. On one particularly spectacular spring afternoon, I was driving to a sales meeting we were conducting. The lady accompanying me was complaining that I wouldn’t let her smoke in my new car, which I was driving at about 70 mph down the Pennsylvania Turnpike.

After about 15 minutes of her cigarette tirade, she admonished me to slow down, not because of my unsafe speed, but rather because she said that new car engines should be broken in slowly. I knew that she was right, but my reaction was, “it’s a car!”

This person was really on top of the requirements for car maintenance, but she was ruining her health with a two pack-a-day habit. What is wrong with that picture?!

As a nation, we have become obsessed with “stuff.” There is nothing inherently wrong with “stuff,” mind you. What is confounding is that many of us value our stuff more than we value ourselves. We validate ourselves with other people’s opinions of our stuff. We eat fake food designed to addict us. We live on debt. We devour reality TV.

If Simon Cowell’s face is more recognizable to you than that of the Chief Justice of the Supreme Court, what does that imply about who you are and what you value?

It can be different; you can be different. Do these things beginning tomorrow:

• Limit your TV watching to five hours per week.

• Read one book a month – at least.

• Purchase nothing in the supermarket from the inside aisles. That’s where all of the synthetic food is located. Buy food from the outside aisles only.

• Walk vigorously for two hours per week.

These are “bare minimum” recommendations. If your reaction is, “I don’t have the time,” please consider your priorities and their implications very carefully. Don’t take too long, however. Your psyche and your body are wilting while you wait.

Repeat After Me: I Will Covet My Game Changers

Danielle was an account executive with Forman and Company, a professional services firm that conducted high-end research, primarily for Fortune 500 companies. During her career, she had sold products and services ranging from time-shares to computer software and consulting – all with outstanding results. At some point in her career, she migrated from “rainmaker” to “game changer” status.

As contrasted from rainmakers – the name given to top salespeople – game changers redefine success. If a firm’s rainmakers typically bring in $1,500,000 of new business in a given year, a game changer might bring in $2 million or more, a significant disparity. This is the kind of person who makes a CEO sit up, take notice and inquire, “What is this person doing that none of our other successful sales people are doing?” This was precisely the case with Danielle. The senior leaders at Forman sought her advice on cultivating client relationships. In executive level sales, she had no peer.

Several years ago, Danielle became ill and missed six months of work. Because she was not productive during this time, Forman terminated her. Their rationale: She was not being productive nor could she guarantee, because of the nature of her illness, when she would (or could) return to work.

During her short time at Forman, Danielle booked over $3 million in new business IN ABOUT NINE MONTHS. My questions: As she was their leading sales person (out of about 250) during her first full year, what would her results have been during the next ten years? What did Forman lose in new business over that extended period because of their short sightedness? What statement did they make about what, and who, they valued? In their effort to appease marginal performers or make some ridiculous statement, did they arbitrarily cut off their collective nose to spite their face?

Too many companies and leaders go down this road. They are willing to appease the masses, while not recognizing and cultivating game changers. If you want to be successful, heed this lesson: You must covet your game changers.

I hope that October finds you healthy, wealthy and wise, or that you’re well on your way. My two articles this month may help.

Many people fall into fixed habits and routines by adulthood and their clock stops. If you want to evolve, you shouldn’t let that happen; if you want to be really successful, you cannot let it happen! The first article suggests some strategies to get out of your comfort zone and keep growing.

In the second article, I admonish you to go “all in” in your life. If fully committing to dramatic action is difficult for you, my eight questions may shake you up enough to begin.

If you want to see a guy who is committed to excellence in his life – a guy who is “all in” – click here to view a compendium of interview highlights with actor Will Smith. After getting a perfect score on his SATs (1600 at the time), he was accepted to MIT. He convinced his parents to let him try the “show business thing” for a year. The rest, as they say…

I’ll see you in November. Until then, get real, get tough and get going!

Seven Tips to Keep You Growing

According to the late John Gardner, by midlife many of us are “accomplished fugitives from ourselves.” I agree! Someone else once said, “Anyone who has the same beliefs and attitudes at 50 years old that they did at 30 years old has wasted twenty years.” I believe that by the age of 40, many people (actually, maybe MOST people) have developed such fixed attitudes and routines that they could be described as having “psychic sclerosis” (hardening of the attitudes).

Dramatic personal change is difficult! My friend David Neagle describes the process as “going into the abyss.” The abyss is the lonely space that one must occupy between giving up something in the past and fully realizing the benefits of future opportunities. When most of us step into the abyss, the emotional pull of “what was” is so much stronger than the appeal of “what will be,” that our natural inclination is to return to the comfort of past, embedded routines. When we’re in the abyss, we have a strong tendency to pay much more attention to the gravitational pull of yesterday than to the appeal of a dramatically different tomorrow. Further, every time we allow the fear of that tomorrow to become overwhelmed by the security of yesterday, our resistance to future change and growth opportunities congeals. Pretty soon, we’re stuck … forever!

How can you build mechanisms in your life to become more comfortable with personal change and its attendant growth than the average person? Some tips:

• Read a lot, especially books that repudiate your preconceptions. Most people only read material that validates who they already are, and what they already believe. I am especially proud of the fact that if you were to go through my personal library of about 500 non-fiction books, you would have no clue as to my beliefs. Challenge everything, every day!

• Travel a lot, especially to countries with cultures dramatically different than ours. Most Americans speak one language and only travel to countries whose alphabets have 26 letters. Visiting Canada or western Europe does not count! If you want to get a taste of the world, visit an orphanage in Kenya or go trekking through the base of the Himalayas. Do it OFTEN!

• Stop making excuses for your habits and/or blaming your parents for who or how you are. Many people live on automatic pilot and invoke the following when what they’re doing isn’t working: “It’s just how I am; I’ve always been that way,” or “Blame my parents; they raised me this way. I’m just like my father.”

At some point, we have to give up the excuses. At some point, living successfully means not allowing what we’ve done in the past to control today’s choices. Successful people are truth-seekers who aspire to achieve wisdom.

I believe strongly in self-management and course correction. Wisdom is NOT an automatic by-product of experience. Here’s the formula: Wisdom = experience x reflection x relentless honesty x accountability (accepting consequences with no blame, no finger-pointing, no excuses, no whining, no escape-hatch) x behavioral change. Each of these elements is necessary, but alone, each is insufficient; it takes them all.

• Accept nothing at face value. Accept nothing as absolute truth without scrutiny, investigation and inquiry. Too many people will (for example) read newspapers and ascribe absolute, objective truth to what they read. My metaphor: 2 + 2 = 4; everything else is subjective.

• Distinguish between “acceptance” and “resignation.” Then, live accordingly. I believe in “acceptance” (giving in to reality). I DO NOT believe in “resignation” (giving up on possibility). I used to have a problem with the entire concept of acceptance because I perceived that it meant “giving up.” Clarifying the concepts of acceptance and resignation created a useful distinction for me.

• Accept accountability for outcomes but relinquish control of outcomes. I am a firm believer that I am responsible for my actions and accountable for the results of those actions – the good and the bad. At some point in my life, however, I learned to let go of the outcomes and not be controlled or defined by them.

• Let life touch you without letting it destroy you. This is one of the many practical admonitions from the great Jim Rohn. He meant that we should not fear experiencing all of the joy and pain of life. Many people avoid deep connections with others and emotionally disruptive experiences because they don’t want to experience pain or disappointment. No pain/no gain has application far beyond physical exercise.

When it Comes to Owning Your Life, Are You “All In?”

In poker, the term “all in” is used to describe the act of pushing all of your chips to the center of the table – letting it ride; going for broke. When it comes to living our lives, how many of us live so timidly that we will not go “all in?”

Do you linger forever on your successes, or do you celebrate and then set higher, tougher goals?

Do you consistently show up late, or are you rigorously punctual?

When you say you’re going to do something, do you actually do it – every time?

Do you under-commit and over-deliver, or the other way around?

Are you a “no excuses” person, or do you consistently and constantly rationalize, justify and blame others for your failures or shortcomings?

I’m an advocate of “burning the boats.” When you set a new goal, leave no room to return to the past and have no “plan B.” It’s the equivalent of sailing to an island and burning the boats. When YOU set a course, do you burn the boats or always give yourself an “out?”

Are you insatiable or do you “settle?” Do you strive for greatness, or is good enough, enough?

Likewise – are you satisfied being “just OK” with your life, or do you aspire to being “wildly happy?”

As I write this, we in the mid-Atlantic are emerging from one of the most bizarre weeks I can remember. We started with an earthquake and ended with a hurricane. This week, I’m preparing for famine and locusts!

The football season is upon us. Last year I picked the Packers to win the Super Bowl, and Aaron Rodgers to be the league MVP. Let’s see … how’d I do? As I recall, the Packers did, in fact, win the game, and although Tom Brady was the league MVP for the season (deservedly so), Rodgers was the MVP of the Super Bowl. I know that you’re interested (?) to read my picks for 2011. Here goes:

NFC East – Philadelphia Eagles
NFC South – New Orleans Saints
NFC North – Green Bay Packers
NFC West – St. Louis Rams

AFC East – New York Jets
AFC South – Houston Texans
AFC North – Baltimore Ravens
AFC West – Kansas City Chiefs

NFC Champion – Green Bay Packers
AFC Champion – Baltimore Ravens

Super Bowl Winner – Green Bay repeats

My pick for league MVP again is Aaron Rodgers.

Bet your net worth on my picks. I may not be Jimmy the Greek, but I am Rand the German!

My one article this month concerns my political evolution, but it’s really about the priority of having a cohesive philosophy of life, and then manifesting that in your choices and actions. I’m a Libertarian, but that has little to do with the point, which is this: Consistency among philosophy, actions, and choices in your life will make you a happier and more effective person. Lastly, the tenth anniversary of 9/11 is approaching. Use part of that day to remember!

Until October, get real, get tough and get going!

Do You Have a Consistent Philosophy and Belief System?

Most people assume I’m a Republican. I’m a former CEO, former CMO, and now a business coach and consultant – you get the idea! The fact is, I have NEVER been a Republican. I was once a Democrat. Then I became an Independent, and for the last several years I’ve been a registered Libertarian. When I tell my friends that, especially those who I haven’t seen in several years, their eyes roll back. The assumptions that they and many people have about Libertarians is that we’re either selfish “me first” people, right-wing reactionaries, or stay-at-home vegetative types who just want to be left alone! I’m actually none of those things, but I do contain small pieces of EACH of those things.

The diversity of our ranks and beliefs, however, speaks volumes about us. We agree on a few key things and disagree about plenty. Most of us believe strongly in individual freedom, a small, Constitutionally-based Federal Government, individual responsibility and accountability, and low taxes. Most of us also migrated to libertarianism after some reflection and self-examination. That’s what incited and then propelled my journey. When I began comparing my personal beliefs and philosophies with my voting history, it created dissonance.

Here’s my story:

When I began voting in the 1970s, I was a staunch Democrat. My view of life was idealistic rather than tragic (“tragic” as in the context of Greek tragedies), and my belief was that government could be a force for good. Over time, as I assessed the results of government actions, such as various permutations of “wars on drugs,” interference in the operation of the free marketplace, efforts to mitigate poverty, etc., I became convinced that legislative solutions, more often than not, were “throw money at it and hope for the best,” and that the follow-through by agencies charged with execution was generally ineffective. (It’s important to remember here that I speak MY truth, not THE truth. I’m not writing to challenge your perspective – only to challenge you to HAVE one!)

In 1980, after what I considered to be the disastrous Presidency of Jimmy Carter, I took my first leap into non-traditional voting waters by casting my ballot for John Anderson, the Independent candidate for President. His views seemed less governed by any party dogma than by his own conscience, and I liked that. From 1984 through 2008, my Presidential voting record would have given a few clues as to my overall philosophy, which was beginning to congeal (more about that later) – Reagan, Bush, Bush, Clinton, Bush, Bush, nobody.

About 15 years ago, I began to develop my own philosophy; not a political philosophy, but rather how I aspired to live my life, and what I believed ABOUT life. Some of its current elements follow:

• I own my life. I am responsible for my actions and accountable for my results. PERIOD!

• I believe in “acceptance” (giving in to reality). I DO NOT believe in “resignation” (giving up on possibility).

• I believe that personal growth is our primary, life-long mission.

• I believe in self-management and course correction. Wisdom is not an automatic by-product of experience. Here’s the formula: Wisdom = experience x reflection x relentless honesty x accountability (accepting consequences with no blame, no finger-pointing, no excuses, no whining, no justifications or rationalizations) x behavioral change.

• Our natural tendency – one that we must reject – is to surround ourselves with people who affirm who we already are, rather than those who inspire us to reach higher and do better. In order to grow, we must surround ourselves with the kind of people that we want to be, not those who mirror our own character defects.

• Real friends put truth telling above peacekeeping. They place the welfare of their friends above the survival of comfortable friendships.

• I believe that without discipline, aspiration is hallucination.

• The formula that most people employ to rationalize (to themselves) their own dysfunctional behavior is this: Doing the wrong thing and a good excuse = doing the right thing. I believe that when we suffer discomfort from dissonance, we must use it to instigate action and growth rather than inertia or excuses. Personal responsibility must always trump convenience.

There are more but you get the idea. My objective is to have a belief system and then to conduct regular “self-audits” to ask myself: “How am I doing?”

I have failed that test many times. Instead of making excuses, I ask, “What have I learned?” and “Can I commit do DOING better and to BEING better?” I’ve also learned, from the teachings and examples of others, that I can still be kind to myself and accept my flaws without letting myself “off the hook,” and being resigned to their permanence.

Concurrent with this journey, I refined my view of the role I believed government should play in my life. That view was based on my assumptions about our government. Some of THOSE follow:

• Government will naturally grow in a metastatic way.

• Federal, state and local legislatures and government agencies often address the same issues in an overlapping, expensive and bureaucratic way (Somebody explain to me why we need departments of education at every level!!).

• Local answers to issues and problems are almost always more effective than nation-wide answers. (I feel the same way about the solutions to issues and problems in corporations).

• Competition among states is a good thing.

• In order to accomplish SOMETHING when they cannot accomplish RELEVANT things, legislatures (at every level) will often pass legislation whose costs far outweigh their benefits.

• Cause and effect are never linear, time-bound, and absolute. As a result, solutions to problems often create other problems. Even when solutions are effective, they rarely comport with election cycles. So the election (and more importantly, re-election) of government officials can almost never be tied to their results, except over a very long period of time.

• Most government agencies reward their employees for “inputs” (“tenure” being a notable example) rather than “outputs” (results). The natural consequence of that is an inward focus. That is not a good thing.

Again in this case, there’s a lot more!

When I lined up my personal beliefs, how I want to live, and my views about government against my views and voting record a decade ago, I reached the conclusion that I was a hypocrite. I always voted for one of the two political party candidates and almost always opted for the person who I felt would do the least harm. No more!

My admonition to you: Develop your own philosophy. Live your life, to the degree possible, consistent with that philosophy. When you feel dissonance, undertake self-examination and make changes to your actions rather than invoking excuses, rationalizations or justifications. Own your life.

When it comes to your political persuasion, don’t react to what’s out there and available. Be true to yourself, your beliefs and your values. Assess your affiliations and candidates based on actions, not on speeches.

I am ecstatic that the NFL labor dispute has been resolved. Football is really the only team sport that I still enjoy watching. As my Redskins enter their second season under Mike Shanahan, I’m optimistic. In their Division and with their ownership, anything but last place is a reason for celebration. I think that’s doable.

Last year, I picked the Packers to win the Super Bowl by beating the Ravens. I selected Aaron Rodgers as my MVP. I’m repeating those exact picks for 2011. I’ll reveal the remainder of my omniscient selections in September.

This month’s article is a rant on our Federal debt and deficit. It’s really the first of a two-part article.

I realized after talking to a lot of smart people, that the whole issue is harder to comprehend than I thought. With that in mind, I’ll provide a very elementary tutorial on the subject. Indulge me please. I am really upset at this whole mess and its outcome. Many of our country’s leading newspapers have called the result an “historic debt deal.” Here’s the real deal on the debt deal: dissemble, delay, defer.

In September, I’ll detail my migration to the Libertarian Party. Hopefully, I’ll provoke you to undertake some personal examination of your own beliefs. There’s no right answer or template for what to believe or how to live your life, but as someone once said, “Anyone who believes at 50 years old everything they believed at 20 years old has wasted 30 years.”

Next month, I’ll also include my brief review of a new book by (playwright) David Mamet, entitled The Secret Knowledge – On the Dismantling of American Culture. I am reading it right now, and it’s a great book about one man’s evolution.

Enjoy and as always, get real, get tough and get going!

Do You Understand Our Financial Malaise?

My interest here is to provide a very basic explanation of our country’s financial condition and not an analysis of “who shot John,” or a prescription for our salvation. With that in mind, I’ll keep my personal politics, philosophy and beliefs out of my argument.

During the last several months, I’ve engaged a lot of very smart people in discussions about the USA’s deficit/debt problem. I’ve learned the following things:

• Many people … maybe even MOST people … don’t know the difference between our national debt and the deficit.
 
• Many people actually believe that we still operate on the gold standard (we don’t and haven’t since 1971).
 
• Lots of folks (including, apparently, our Congress people) think that if our government needs more money, it can just print it with no detrimental side effects.
 
• Apparently people think that it’s OK to be virtually owned by China.

The following dialogue, which is to serve as a tool, is typical of discussions I’ve had on the subject of late:

Them: “So Rand … I don’t get this whole deficit/debt thing. What’s the difference, and what’s the big deal?”

Me: “Let’s start here: The deficit is the annual difference between what the federal government spends and what it takes in, in taxes. Currently, the government is spending about 40% more than it takes in. Here’s an analogy to make my point clearer and more personal. Let’s say that you make $200,000 a year. If you were operating with the same deficit as the government, you’d be spending $280,000 a year. I also didn’t include your personal income tax implications in my example.”

Them: “What? I couldn’t do that!”

Me: “Of course you could. You’d go to the bank and borrow $80,000 so you could pay the difference between your living expenses and your income.”

Them: “Yes, but then I’d be in debt to the bank, and if you include interest and depending on the length of the loan, that $80,000 could end up costing me $250,000 or more.”

Me: “Exactly. Now, what if you had to do that every year?”

Them: “You mean borrow $80,000 every year?”

Me: “Yep.”

Them: “If I did that for four years in a row, I could be in debt around $1,000,000.”

Me: “So let’s review where we are so far. You make $200,000 a year, and you spend $280,000; that’s 40% more than you take in, just like the federal government. After four years, you are $1,000,000 in debt. You have to pay your debt and cover your expenses, so you have to continue borrowing more and more money. At some point, banks will then only loan you money at ever increasing interest rates because you are a bad bet for them. Those increased interest rates result in your debt multiplying multifold. Eventually, you can’t get out from under.”

Them: “So how does the government make up the difference?”

Me: “Here’s what the government does: It sells bonds. When you buy government savings bonds, what you’re doing is loaning money to the federal government.”

Them: “What? That’s not true!”

Me: “What do you think bonds are?”

Them: “They’re bonds, not loans.”

Me: “Bonds ARE loans. When you buy corporate bonds, you’re loaning the company money. When you buy government bonds, you’re loaning the government money.”

Them: “I didn’t know that! So that’s how the government borrows money?!”

Me: “It’s a gross oversimplification, but yes. There’s more: What if you went to a bank to borrow one of the many times you had to do that and you said this: “I promise to get my financial house in order if you loan me more money. Next year and for the next ten years, instead of spending $80,000 more than I make, I’ll only spend $40,000 more than I make. Isn’t that great?”

Them: “I’m still increasing my overall debt but reducing the amount of my annual deficit! You’re not telling me that’s what our government is doing, are you?”

Me: “That’s exactly what I’m telling you. Our President and both parties in Congress are arguing over how much to reduce the deficit. No one is talking about the fact … AND IT IS A FACT … that out debt will continue to grow exponentially because we cannot service our debt, PERIOD, under any of the scenarios.”

“The Country is broke, and we have a bunch of political hacks debating whose irresponsible approach is the best and patting themselves on their backs for their respective solutions.”

“Unless things change fairly quickly (and they WON’T), we are in very deep yogurt for a very long time. So, by the way, are your children.”

My realization that our political system and its players are either disinclined or unable to deal with problems of this magnitude informed my migration to the Libertarian Party several years ago. I’ll write more about that and my other epiphanies that compelled it in next month’s issue.