The Vampire Squid has Done it Again March 14, 2012Posted by Lane Savage in management.
Tags: company culture, goldman sachs, greg smith, vampire squid
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To generalize is to be an idiot; to particularize is the alone distinction of merit. William Blake
It’s fashionable in these post-crash times to heap scorn on the financial services industry. A quick Google search for “banksters” yields 2.8 million results. Clearly, the term has legs – or I should say, tentacles. Because no firm has come to symbolize the rise of what Tom Wolfe called the Masters of the Universe quite like the men from Goldman Sachs. Present at the creation of “every major market manipulation since the Great Depression,” the great vampire squid is not merely a symbol of an industry gone wrong, but a cautionary tale of a company culture come undone.
Writing in today’s New York Times, Greg Smith, a 12-year Goldman veteran and executive director based in London who resigned today, pens a scathing review of Goldman’s descent from a culture merely lacking humility to one that’s lost touch with integrity:
It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as “muppets,” sometimes over internal e-mail. Even after the S.E.C., Fabulous Fab, Abacus, God’s work, Carl Levin, Vampire Squids? No humility? I mean, come on. Integrity? It is eroding. I don’t know of any illegal behavior, but will people push the envelope and pitch lucrative and complicated products to clients even if they are not the simplest investments or the ones most directly aligned with the client’s goals? Absolutely. Every day, in fact.
The lesson here isn’t Goldman, or even Wall Street itself. What’s happened to Goldman – at least in one (former) executive’s opinion – can happen anywhere. Businesses exist at the pleasure of their customers; organizations take the shape of the people who run them. But in an industry built on greed, Goldman once stood for something more. The people are the same. It’s the culture that has changed.
Is Goldman going away? Hardly. Will its culture be its downfall? Not likely. But treating customers like marks and morons is rarely a good long-term strategy. For like the giant squid with which it will forever be twinned, Goldman may end up neither the predator we thought nor the only one in the sea.
Career Decisions: some restrictions apply March 8, 2012Posted by Lane Savage in management.
Tags: choices, consequences, decision-making, decisions, leadership, negative feedback loop, politics, quotes
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If you limit your choices only to what seems possible or reasonable, you disconnect yourself from what you truly want, and all that is left is a compromise. Robert Fritz
Driving back from Chicago last night, my daughter and I were debating the pros and cons of a job offer she’s just received. The offer would require a move to Chicago, not pay very well to start, but when finished in 12 months provide a master’s level education in her chosen field. Her skills would increase dramatically, her options geometrically; the world might be her oyster. A year of pain for a lifetime’s gain. Easy answer, right? If only.
What’s troubling my daughter is the same negative feedback loop that impedes so many of life’s big decisions: reducing our options to what’s “feasible,” “practical” or “realistic.” Rather than sitting down, being very still, and listening to – and trusting – our gut, we rationalize. We talk ourselves into – or out of – opportunities. Bills to pay, kids to feed. I’ve got responsibilities, I can’t do what I want. I do what I have to. Maybe.
It’s trite to say that we should all “do what we love.” It’s also true. But you can’t figure out what you love if you’re locked in a struggle between your head and your heart. A strong intellect can be a devious master, leading us into situations that seem “logical,” but for which we lack anything resembling “passion.” One we can manage, the other only manipulate.
The compromise Fritz describes exacts a heavy toll. By trading – or evading – what we really want for what we convince ourselves to choose, we’re adding another dimension to John Scalzi’s definition of poverty, “…having to live with choices you didn’t know you made when you were 14 years old.” Sure, you have to think, but you have to feel, too.
As I said to my daughter, “be sure that you’re making your decision for the right reasons. Strip away the excuses, artificial obstacles and assorted fears of failure, and look inside yourself.” Big decisions are a matter of the heart, not just the head. And once you’ve made the call, move on. Steve Jobs said in his now-famous commencement address at Stanford in 2005, “Remembering that I’ll be dead soon is the most important tool I’ve ever encountered to help me make the big choices in life.”
For the things that really matter, we only get one shot. Trust your feelings.
Executive Job Search Tip of the Day: give up March 2, 2012Posted by Lane Savage in management.
Tags: executive job search, rejection letters, talent management
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Thank you for the interest you have expressed in employment opportunities at (deleted) and for taking the time to apply for the Chief Operating Officer. Your qualifications have been carefully reviewed. However, this particular position requires an MBA or BS in Business Administration. We encourage you to visit our website as new positions become available.
We appreciate your interest in our company and wish you success in your search for a suitable career position.
Human Resource Services
Rejection during your job search is a feature, not a bug. Hemingway got enough rejection letters from publishers to paper his bathroom wall. But that won’t happen to you. In this economy, companies are flooded by applications for every job they post. Volumes grow so far and so fast that they simply can’t keep up. Most don’t even try. Generally, you’ll hear nothing and the silence can be deafening. At least these guys were kind enough to tell me that they wouldn’t waste my time.
If you’re fortunate enough to have your application make it past the company’s “talent management system,” and onto the desk of an actual human, its next stop – and likely final resting place – will be the event horizon of the corporate black hole known as human resources. Like its astronomical cousin, the black hole of HR occupies a unique place in the space-time continuum: it wields a gravitational pull so strong that nothing, not even light (and certainly not your application) can escape, while at the same time emitting a steady stream of high-frequency radiation called “corporate recruiting.” Even the professionals doing it know it doesn’t work.
It’s “don’t call us, we’ll call you,” and you already know they won’t. But you need a job and this ain’t working. So what’s a candidate to do?
Give up. Seriously. Give up on anonymous online applications. Give up on monster.com. Don’t waste your money by joining The Ladders. Quit spending your days trolling LinkedIn. Forget about recruiters. Steer clear of Bernard Haldane.
Do it the way it’s always been done: talk to people you know to find out who they know. Find a lead, turn it into a prospect. Learn about their business, show how you can help them solve their problems. Make your pitch, ask for the job, then convince them to make you an offer. You’ve got to kiss a lot of frogs before finding your prince, but it’s how the game is played.
Your PhD in Sales in 3 Minutes and 30 Seconds February 28, 2012Posted by Lane Savage in management, sales.
Tags: music man, river city, sales training
Salesman 1: Ya can talk, ya can talk, ya can bicker ya can talk, ya can bicker, bicker bicker ya can talk all ya want but it’s different than it was.
Charlie: No it ain’t, no it ain’t, but ya gotta know the territory.
Those lines are from the opening scene of The Music Man, the 1962 big screen version of the Meredith Wilson Broadway play. Not because I once had the part of a salesman on that 1912 train do I think the lyrics of “Rock Island” are worth remembering. It’s more that the lessons it offers up have stood the test of time. It’s a PhD in selling in three minutes and thirty seconds, and it won’t even cost you a dime.
So whaddya talk, whaddya talk? The salesmen themselves say it best…so click the link and see.
Cash for the Merchandise: The salesmen on the train are in universal agreement that credit is ‘old fashioned.’ Maybe not, but the first lesson I learned in sales training was “Your time is your biggest asset. Don’t waste it trying to sell to people who aren’t going to buy.” So qualify well, because if your prospects don’t have any money, they aren’t too likely to spend.
Why it’s the Model T Ford Made the Trouble: Long before the Internet, Henry Ford put the customer in the driver’s seat. No longer willing to wait for the next visit from a traveling salesman, customers could drive to the next town – where a better deal might just be found. Buyers today are smarter and better-informed than ever. So leave your laptop in the trunk; save the PowerPoint pitch for later. Sit down and get to know them. Help solve their problems and you might even earn the sale.
Who’s Gonna Patronize a Little Bitty Two-by-Four Kinda Store Anymore? The bigger the client, the fewer vendors they want to manage. If you’re selling to the enterprise, never underestimate the appeal of the one-stop-shop. Systems integrators like Accenture may not do everything well, but what they do they do well enough. If you can’t compete on size, you need to find another need angle.
What’s the Fellow’s Line? On the train, the salesmen are mystified by the legendary “Professor” Harold Hill. The salesmen are in awe, shocked to learn that while Hill know nothing about what he sells – musical instruments – he still manages to “live like a king.” It’s an object lesson in separating product knowledge from salesmanship. Today, most companies split the roles: pre-sales owns the solution while the salesman owns the deal.
But He Doesn’t Know the Territory: And he doesn’t need to. Chances are, your reps don’t either. If you’re screening sales candidates based on the number of years they’ve been in your industry, whether they’ve worked for your competitor or been calling on your customers, you really ought to stop. It’s the fallacy of sales experience and there’s a better way to do it. Hire for future potential, not just a track record from the past.
Not knowing who he is, one of the salesmen on the train asks Hill, “How far are you going, friend?” He answers, “Wherever the people are as green as the money.” Harold Hill started out a con man, but one with a heart of gold. He’s got ego-drive and empathy, and in the right proportions, too. By the time the play has ended, River City has gotten its band, Harold Hill has learned his lesson and somehow got the girl.
And the salesmen on the train keep missing the point.
Sounds about right to me.
What’s the Big Deal about Big Data? February 27, 2012Posted by Lane Savage in management.
Tags: accenture, big data, data driven business, willy wonka, zettabyte
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Big Data just got bigger. In the pantheon of lots-of-zeros superheroes, there’s a new Mister Fantastic in town. They call him the Zettabyte, and he’s coming to crunch your numbers. What’s a zettabyte? One billion terabytes, or approximately twice the amount of data contained in the entire Internet in 2009. Growing at nearly 50% a year, it’s like Willy Wonka’s boat, certainly showing no signs of slowing. It’s Big Data and it is a Big Deal.
So what exactly is it, this Big Data? It’s “a term applied to data sets whose size is beyond the ability of commonly used software tools to capture, manage, and process the data within a tolerable elapsed time.” In layman’s terms, Big Data is the capture of very nearly every digital interaction on Earth, increasingly over the Internet and in near-real time, stored in massive data centers run by government and commerce. Collected, parsed and analyzed by software from IBM, SAP and others, it’s Big, it’s Data and some of it is Yours.
Big Data drives decisions at retailers, airlines, mobile phone companies and social media concerns every minute of the day. And most of those decisions are advertising: which ad, which user, what device, what time and at what price? In an online world where nobody pays for content, advertising foots the bill. That seems fair, but what happens when it’s not? Does your customer really want Target to figure out that his teenage daughter is pregnant before he does?
The market for Big Data-related products and services is growing at about 10% per year, roughly twice as fast as the IT market as a whole. Vendors are jumping on the bandwagon, sensing the Next Big Thing. Infatuated with the possibilities, executives talk of creating the Data Driven Business, a place where numbers tell the tale, data makes decisions and intuition is out of style. Well, I’m sorry, Dave, I’m afraid I can’t do that. According to the chief scientist at Accenture, Kishore Swaminathan, you don’t want to either.
As Dr. Swaminathan says in this interview, “Data is a double-edged sword. When properly used, it can lead to sound and well-informed decisions. When improperly used, the same data can lead not only to poor decisions but to poor decisions made with high confidence that, in turn, could lead to actions that could be erroneous and expensive.” Organizations must continue to rely on informed human judgment, the collective know-how of their employees, when making crucial decisions.
There will never be enough data to make a decision, only to create confusion. But the zettabyte is coming. Be ready and beware.
One Foot on a Banana Peel: mediocrity and its enablers February 24, 2012Posted by Lane Savage in hiring, management.
Tags: hiring, management, mediocrity, peter principle, screening
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Writing in yesterday’s Atlantic online, Derek Thompson examines the problem of “Failing Up: Why Mediocre Workers Keep Getting Promoted.” An extended meditation on The Peter Principle, Thompson’s piece posits that because the cost of making a bad personnel decision outweighs the benefit of a great one, companies routinely split the difference and promote the merely average. Whether in entertainment, sports or business, it’s the mediocre who are minding the store.
Drawing on research published in a 2008 paper by Marko Tervion, Thompson attributes the rise of the mediocre to the top of their fields as a function of a basic labor market fallacy: the belief that there is a scarcity of talent at the the top, making a “safe pair of hands” in short supply. Accepting this as gospel, organizations compete with one another, bidding for the services of a few “proven performers.” Not surprisingly, the intense demand for the handful of names on “everybody’s short list” serves to drive up compensation for those individuals, while depriving other, potentially more capable, managers from ever getting a shot.
Why does this happen? Two reasons: 1) the folks on “everybody’s short list” must have been good at something at least once. Problem is, what they were good at before may have little to do with what they need to be good at now. But once their ticket’s punched, they go to the head of line 2) people doing the hiring tend to look for people like themselves: similar backgrounds, personalities and interests (“tennis, anyone?“), while, perhaps unconsciously, rejecting those who are not. It’s called confirmation bias and it’s a part of being human.
So what’s to be done?
First, hiring managers need to remember that – especially when making the initial decision to take a worker and make her a manager – that promotion should be based on demonstrated ability to do the job for which they’re being considered. The fact that she was a super salesperson does next to nothing to predict whether she’ll make it as a manager. And it’s no less true for executives: success at GE didn’t predict the performance of Bob Nardelli at Home Depot (but it did earn him a $210 million severance package).
Second, build objectivity into your hiring process. Lessen the tendency toward confirmation bias with objective testing and third party screening. Conduct a structured interview. Standardize procedures, put all candidates through the same process and score them each accordingly.
The conventional wisdom is wrong. There is no shortage of talent, only of managers willing to look. There’s water, water everywhere. You only need to drink.
Type-A Person in a Lifestyle Business? frustration guaranteed February 23, 2012Posted by Lane Savage in management, sales.
Tags: business, careers, management
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“If you can start a story, I can finish it. I’ve heard ‘em all.” So said the legendarily flinty CEO of company where I used to work. I still shake my head and smile every time I hear it; it’s funny because it’s true. Ride the bus to work for a couple of weeks, the passengers become familiar. Stay in business long enough, company problems all look the same. If you’re going to solve them, sometimes it’s the people who have to change.
Writing in response to a recent post, a reader yesterday asked for my advice. Unmotivated, unmanaged and generally off his feed, he wondered what he could do to get back up and trucking. Knowing nothing of his business, a specific prescription was hard to give. So rather than offer answers, I posed a few first-principles questions instead:
Why is your company in business? What are the objectives of the owners? What really motivates them? What really motivates you? Are those two things in sync? Are you out of the loop because management doesn’t share information or because you disagree?
When I asked the question in a post last week, “Why would a guy like you take a job like this?” it wasn’t just rhetorical. That 40% of executives quit, fail or are forced out within 18 months of hire, wasn’t some random stat from Freakonomics. Do you crave autonomy, but instead are micro-managed? Need supervision and feedback, but don’t get either one? You’ll feel just like my reader, unfulfilled but unsure why. They’re points to ponder because they affect your life, not only your career.
It all comes down to values, management’s and yours: do you share their goals or don’t you? Can you change your mind or can’t you? Are you just too far apart? If so, a change may be in order, for your good as well as theirs. But before you decide remember this: where you stand depends on where you sit.
A Passage to India: consulting in mumbai February 22, 2012Posted by Lane Savage in International Business, management, sales.
Tags: India, world markets
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I’d never been to India but had always wanted to go. Land of the Buddha, former British colony, emerging market dynamo. The assignment was a good one: help a sales team struggling with more demand than it could manage to become the market leader. More demand than it could manage. Unless you were in the outplacement business, it’s safe to say excess demand was not keeping you up at night in early 2009. Companies that weren’t shrinking were collapsing. Think Apocalypse Now and you aren’t far wrong. Boarding the flight to Mumbai I felt a little like Martin Sheen, but leaving the Heart of Darkness instead of heading upriver to it.
The first thing you notice in India are the people. There are so many of them. And they all seem intent on moving to Mumbai – more than 300 families do each day. No wonder it’s one of the most densely populated cities on earth. If you’ve seen Slumdog Millionaire, you’ve seen Dharavi – the largest slum in Asia – you know just what I mean. And here’s where it gets interesting.
The Indian economy is growing at approximately 7% per year. While some 900 million people remain poor, living on as little as $1.25 a day, opportunity is in the air. Never have I seen the fundamental industriousness of a people on such vibrant display. Everyone is hustling, from rag pickers to sidewalk barbers to titans of global commerce. Mumbai is capitalism, and Bollywood its star. It’s dirty, corrupt, unequal and unfair. It’s also on the move.
If you think India is only outsourcing, you need to think again. The team I worked with in Mumbai was young and ambitious, assertive and proud. They had good educations and great aspirations. In fact, they’re just like you and me, products of rising GDP. So take heed. And take advantage. A nation of 1.1 billion consumers won’t be ignored for long.