For Your Consideration

For Your Consideration for December 1, 2010

December 1st, 2010 | post a comment

One of the clear messages I take away from our program about President Obama and leadership is the importance of inspiration and the travails of both hope and fear.

First hope and fear. When President Obama was a presidential candidate, he stirred hope in young and old. He activated a significant portion of the population who had long ago abandoned the political process and believed that there was no reason to trust any politician with the possibility of change.

Hope is a powerful activator. It can brings tens of thousands of people to their feet and get them into action. Hope, unfortunately is the flip side of an equally powerful activator – Fear.
Hope is a tenuous feeling. In general hope must bring immediate results or we quickly become uncertain of its potential.

As we gave up the Hope that we felt so strongly with President Obama we went to the other side of that pendulum. We became afraid. Fear is a feeling we are far more familiar with than hope. Fear will motivate us to abandon good reason and to allow acts that we don’t believe in to be carried out.

Fear brings us also to our feet and into action. The action of fear is repression and contraction. Fear is inflamed by much of our media and a leading presidential contender for 2012 is using this powerful emotion to attract interest and support.

In time of fear, we become more and more consumed with what is broken and our tribal instincts are more acute. Its often a time when bigotry and discrimination rise.

There is a middle road that can bring people together without the wild emotional ride of hope or fear. This middle road is inspiration. Lance Secretan said the difference between motivation and inspiration is that motivation lights a fire under you and inspiration lights a fire within you.

In the situation we are in, we require great leaders. Leaders who can inspire rather than motivate. The modern political campaigns are almost exclusively about motivation. This is why we have to regenerate our energies each time there is an election.

Inspiration is about having people see the value of change from a very personal perspective. Change that will create a world that we believe will be better not only for ourselves but for many others.
When I think of great leaders like Mahatma Gandhi or Martin Luther King or Nelson Mandela, I can see their ability to inspire. They inspired people to do the right thing even when they were afraid. They inspired people to do the right thing because it benefited all. They inspired people to do the right thing without violence or recrimination.

Inspiration is not about emotional highs. Inspiration is about inner strength and certainty. Support those who inspire. Let them be the leaders we encourage and rally around. For true inspiration is the only way out of our current situation of fear and anger.

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[audio:http://businessmatters.net/fyc/fyc-101201.mp3]

For Your Consideration for November 3rd, 2010

November 3rd, 2010 | post a comment

Well the election is over. Maybe we can now get back to our standard fare of television programming. Not so fast…. The current campaign is a lesson for all of us. What the pollsters tell us is that we are mad. “Hmmm…” I wondered, not actually feeling so mad, maybe a bit disillusioned.

You know, not so long ago the Democratic politicians were telling us that all our problems were because of the tight control the Republicans had of the Congress and White House. The way to get what we wanted was to give them the ability to put checks and balance in place with President Bush. OK… sounded like a good idea so we had a sweeping sea change and a Democratic controlled congress was installed.

In the midst of all this animosity, we are faced with one of the great financial crisis of the past hundred years. We are frightened into a massive bailout of the most influential Wall Street powerhouses. This action was proposed, we have forgotten by President Bush with the overwhelming support of a shell shocked Congress.

We then move to the the elections of 2008. We are not happy and want something more than the paralysis of a Democratic congress and Republican president. We are inspired that we can make a difference. The chant “Yes we can” fills millions of people who have never participated in the political process with HOPE. Hope that change can really happen. Hope that the ideals they hear from candidate OBama will soon be realized.

Now fast forward two more years. We have gone from the moving inauguration of the first African American President to some of the most polarizing political maneuvering and rhetoric in modern history.

The real problem, we are told is the Democrats. They want to create a Socialist state in America.. What we need, the Republicans and Tea Partiers tell is a free market system. Stop having government involved in health care. Get government out of the way of the financial markets. Loosen our environmental standards on mining and petroleum exploration. Business will solve the problems in our lives.
You know this is like watching a tennis match. Each side in the game is hitting the ball back and forth and the only thing that is happening is the most of us are getting poorer.
Why is it that we are swinging from one side of the pendulum to the other. Its almost like there’s a metronome to the beat of six years.

What can break this cycle? We can. That’s right you and I. We can bring this cycle by using a bit of discernment. We can become our own news analyst. Rather than letting Fox News or CNN or whatever blog editor you listen to, why not build your own ability to figure out what’s true. For one thing only you know what matters to you. Only you can see the world from the perspective that is truly in your own best interest.

We will break this cycle when we vote for candidates based upon their actions and spend our money with companies that represent our values. The real opportunity is to take back control of how we look at the world. Its only then that we will begin to have the world we dream of.

Broken Trust with the Financial System

October 19th, 2010 | post a comment

Since we first reported on the potential of a $144 billion payout of compensation to the key players on Wall Street, I have found myself disturbed. At first I thought it was the injustice of it all. To some extent it is. Yet it felt as if I was overlooking something even more troubling.

Today’s comments from our regular contributor, Michael Mandel, brought into focus the root of my discomfort. It appears that we have transcended the need for trust at the very root of our financial and governmental systems.

Here’s what I mean:

The key participants are acting with seeming impunity. Sure we jail and vilify the occasional “big crooks” like Bernie Madoff, but even in that case, there seems to a two tiered system of trust at work. It appears to be okay to continuously strip away the wealth (and peace of mind) of the working class, but please oh please, don’t do this to those folks like us who have wealth. We expect to be treated differently.

Michael made the point that there may be a backlash by some of the wealthy who were left holding the bag when the bottom fell out on the value of the collateralized debts. They bought these debts on the promise that they were as good as gold. My sense is Michael’s wrong and the system is finding a way to take care of these bruised egos so trust will be restored within this group.

That leaves the rest of us. We are asked to trust the system once again. For without our trust it will again fail.

I feel a bit like Charlie Brown. I am being asked by Lucy, who has again teed up the football, to trust once more that she won’t move it when I am ready to kick.

In looking into the basis of the large Wall Street payouts I again see trust as an important issue, at least for me. You see the larger profits of financial institutions are based upon their reporting lower credit risks. Yet if you look around at our neighborhoods, the unemployment offices and soup kitchens the picture is much different.

What you may not be aware of is that the rules for accounting for risk by our largest banks have been radically altered. During the depths of the financial crisis, the federal government under the direction of Henry Paulson, then Secretary of Treasury (and you may recall a former CEO of Goldman Sachs) forced the Fair Accounting Standards Board (FASB) to rewrite the rules of how banks accounted for potential bad debts. In the past the rule was that you would value your assets at what was called fair market value (or the price you could sell it for today if you needed to). You may have heard this called Market to Market. Seems reasonable, but if the banks had to continue to follow these rules then they would be insolvent. Since we couldn’t have that, we forced FASB to allow banks to set the value for their assets. Kind of like letting you say how much your house is worth when you apply for a loan. We know how well that would go over, in fact, you could be prosecuted. With this new rule in place, banks have been slowly reducing the amount they set aside for bad debts. This allows their profits to rise. So much so that Citibank, which was almost out for the count, reported over $2B in profits for the quarter ending in September.

Why does this matter? Well, it’s the profits of the banks that set up the basis for bonuses. Starting to see the problem? I set the rules that allow me to make more money and get big money to take home for myself. This is the same set of incentive structures that led to the financial meltdown.

Now back to trust… If the system is based upon a false set of understandings, how long can it last? Not too long without some other support from you and I. So I have lost trust in the whole system – banks, regulators and legislators. This broken trust can only be repaired through authentic dialog that doesn’t exist.

So what am I doing? I am continuing to support my local community bank. I am doing all I can to buy whatever possible from local providers of goods and services. I am not pretending that something challenging isn’t going to happen. I am shedding all debt and reducing our family spending. If there is a backlash to the breakdown in trust I am prepared. If I am wrong and things go on just as they have, well then I am still better off. Think about it… You do make the difference.

Our Dilemma

October 13th, 2010 | post a comment

I think that we are kind of beaten down in this country right now. We are feeling the effects of the most traumatic recession in modern history. We have experienced the greatest drop in housing value and the number of foreclosures has never been higher. Unemployment seems stuck at almost 10%. The number of poor has substantially increased with an alarming number of children not having enough food.  Politician’s attempt to hide this reality by coining new terms like “food insecure” so we don’t have to feel that it really is hunger.

These circumstances aren’t about some third world country. They are about the U.S. What is shocking to me is the contrasting data. Financial institutions are reporting all time high profits which in turn are producing record executive bonuses reported to be over $144 Billion (that’s right Billion). Major corporations who have access to public sources of money are getting all the cash they need and more. In fact, they have on hand deposits in excess of $1Trillion dollars. Simultaneously small businesses that are owned by our neighbors and friends continue to be strangled and are doing all they can to just survive.

The forces that brought about the recession seem to have been rewarded for their behavior and those of us that followed the rules have been given the bill. In fact, a recent report exposes that our government and the Federal Reserve Bank has hidden the real state of the largest U.S. bank balance sheets by allowing them to list home mortgages at full value even when they know they are worth 30 to 40 cents on the dollar.

Ok. So I don’t like the way things are. I am clearly not alone – just look at the attraction of the tea party and its friends in the conservative media. But I’m not going to take that route. That route is about tearing apart people trying to make things work and stating that the free market system is what we need. We know that’s code for “let’s get out of the way of big business and let them do what they do best – make more money.”

It’s this sentiment that has my attention. In the background there is a movement that is gaining some traction. We talked about it on the Business Matters program today. It’s the conscious capitalism movement. At its foundation is the belief that sustainable, successful businesses are about taking care of all their stakeholders. That means the customers and the employees and the vendors and the local communities and the planet we inhabit.  What motivates the leaders of these organizations and all the workers is a shared purpose. A Conscious Business has a higher purpose that transcends profit maximization. It is clear about and focused on fulfilling that higher purpose, which evolves dynamically over time.

Conscious businesses are centered in true shared accountability. This shared accountability isn’t focused on controlling the actions of workers. It’s about an intrinsic trust that promotes flexibility, satisfaction and individual passion.

Conscious businesses embody leadership that serves as a steward to both the company’s and its stakeholder’s deeper purpose thereby facilitating a harmony of interests, rather than personal gain.

Business as usual isn’t working. The good news is there are companies who are embracing the conscious capitalism movement. These are public companies and private companies. They are creating new rules of the game of business and the funny thing is, contrary to conventional wisdom, they are also very profitable.

You can play a part in this change. Find out about the companies you buy your goods and services from. If their focus is on maximizing profits, while disregarding its responsibilities to its employees, the environment and society, consider sending them the most impactful message a consumer can. “No thank you.”  This message is best delivered by simply not buying their products.

For those companies who are operating in this new, more responsible way, let them know you like what they are doing. Become their customers. For in the end, you do make the difference.

The Impact of the Toyota Crisis

March 15th, 2010 | post a comment

The March 5 Business Matters program focuses on the impact of the problems at Toyota. One thing we haven’t talked about yet is the impact in real dollar terms to the current owners of Toyota’s cars.

When customers loose trust with companies the impact is broad. As we heard in the interview with Tom Asacker, Toyota’s customers are having a bit of an identity crisis. They expected Toyota to have the highest quality, best reliability and great safety. Customers were less concerned about status than practical considerations.

These customers take their time when then buy and don’t like the feeling that maybe they made a mistake

Right now, those what bought Toyotas are finding that the value of their car has dropped since this crisis of confidence began.

According to the recent Kelley Blue Book Market Intelligence data, 27 percent of those surveyed  that said they were considering a Toyota prior to the recall now say they no longer are considering the brand for their next vehicle purchase.

In addition, 28 percent of those who said they were considering a Scion and 23 percent of those who said they were considering a Lexus prior to the Toyota recalls, now say they are no longer considering those brands.

Now nearly half (49 percent) of the car shoppers who have defected from Toyota say they are not sure if they will consider the brand again, even once Toyota’s problems are resolved.

This shows in quantifiable terms the impact of this crisis of confidence on future purchases. But what about all those Toyotas sold. As Toyota was loosing its focus on customers and paying attention to market share and profits,  millions upon millions of Americans were buying their automobiles believing Toyota’s promises.

Again according to Kelly Blue Book,

  • All Used Recalled Toyota Models: Used-car values have declined between 3 and 6%
  • New 2010 Prius:  New Car Blue Book® Value (transaction price) has dropped by $1,000 – $1,500

“We are seeing a softening of both used Toyota values and the New Car Blue Book values of new Toyotas this week,” said Juan Flores, director of vehicle valuation, Kelley Blue Book. “The softening of values is a product of weakened consumer demand, and the realization that Toyota is going to have to offer lower prices to get some consumers to consider Toyota vehicles again.”

Now I know that we consumers are a fickle bunch and may change our mind at some point. We’ll just have to wait and see.

What I believe is important for all of us is to realize is the systemic impact of a break down in trust with customers. In the case of Toyota, the company will see falling profits and possibly losses that may extend well into the future. By some estimates their US dealers are loosing over $2B per month. The manufacturing line has been shut down at two US plants with more closings possible. None of this takes into consideration parts suppliers and the economic impact on all those who either do business with Toyota or provide goods and services to Toyota’s dealers and their employees.

Why is all this happening? While we don’t have the detailed information on the specific problems, we can glean from the Toyota executives’ appearances before congress that it was because Toyota lost sight of what they valued. The old values of quality and customers first were replaced with growth and profitability.

How could this happen? Just look at most crisis and you can find similar stories. Corporate leaders don’t want to hear from anyone who is going to slow down the growth train. Even one of the best corporate systems, such as the Toyota Production System, can be subverted by fear and greed.

Good lesson for us all to remember.

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[audio:http://businessmatters.net/fyc/fyc-100305.mp3]

Can we have successful businesses that are good for everyone?

February 26th, 2010 | post a comment

As I was again listening to today’s program, I found myself thinking of a conversation I had seven years ago with a very successful professor turned corporate guru. During our dinner discussion, he turned to me and said, “I don’t think its possible to operate a successful business based upon love. I wish I wasn’t right about this.” As conversations do, we drifted on to other topics, yet this portion of our conversation has stuck with me like a seed waiting for the right conditions to sprout.

For the past few months germination of this thought has slowly been erupting. You may remember our program of January 15th where we talked about worker-owned cooperatives. I am impressed by the ability of people to come together in mutual interest and create businesses that seem to be great for everyone.

I wondered if this was a peek into an answer of the question I had been considering, ‘What does it mean to have a business based upon love?” Often we think of love in terms that come from literature or the media. It is soft and feels good and warm.  You know, the kind of love that makes great sayings on greeting cards and is filled with emotion. Many business leaders would say that businesses can’t be operated in this emotional backdrop. I agree.

I have never thought this was the kind of love that we were talking about at our dinner conversation seven years ago. It felt more like agape, which means selfless love. We have become cynical. We believe that if we don’t take care of ourself no one will. Yet those that are the loudest advocates of this intense focus on self-interest don’t seem any happier because of it.

On February 23, I was driving around tuned in to our local NPR station when I heard a story that was like giving a shot of fertilizer to this notion of businesses based upon love. The story was about Macy’s European Coffee House, Bakery and Vegetarian Restaurant. They are in Flagstaff Arizona and are celebrating their 30th anniversary.

In the interview, Tim Macy, who calls himself the caretaker of the business, rather than owner, said, “The whole dream was that we wanted it to be a microcosm of the way the world could be”

Listening further to the radio piece, I found that those that work at Macy’s are referred to as family rather than employee and one family member remarked that Tim writes “love you” on every pay check.

Now I don’t know if Macy’s is the model for a business based upon love. I will go there and find out for myself. What this story did, though, is further my consideration that a business based upon love is not only possible, but can flourish. What do you think about that?

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[audio:http://businessmatters.net/fyc/fyc-100226.mp3]

Be Accountable

January 29th, 2010 | post a comment

This topic of accountability goes far and deep. It is so important that we dedicated an hour to it on today’s Business Matters program.I offer you a very personal view of why accepting accountability may be the most important thing you can do.

We are a country where we blame others when things don’t go our way. We are clearly the most litigious country in the world with the highest per capita number of lawyers anywhere. I don’t think any of us believes that we have a culture that is more devious or more careless than the rest of the world. So why so many lawyers.

I know my thoughts may seem simplistic, and I still challenge you to consider the consequence of this situation. I suspect we have so many lawyers because we are afraid to be accountable.

When something doesn’t work out the way that we expect, often our first response is to find someone to blame. If I have a car accident, our first response is often, “what is wrong with the other driver, what is wrong with the maintenance of the streets, what is wrong with the way the car was made”. The list goes on and on.

What would happen if the first question when something doesn’t work is, “what is my accountability?” This simple questions doesn’t absolve others from being accountable – I’ll address that in a minute. Let’s just stay with you.

If I start considering this question, “what is my accountability?” several possibilities appear. The first is that I can learn from the situation. In the case of the automobile accident, maybe I was also distracted, or maybe I was driving faster than necessary. The second outcome can be a sense of having more control over my life. One of the big worries in this country is people feeling that they have lost control over what’s important in their lives. Well here’s a way to get that feeling back.

Let me address the issue of the accountability of others. I believe that we are all accountable for the situations we experience. That means that you are accountable and I am accountable. With this approach, we start honestly finding out how we both contributed to a situation. Then we can work together to create the kinds of outcomes we both would like to have.

On the January 29th Business Matters program, we found that businesses that create cultures of more accountability have improved relationships with their customers, their shareholders and themselves. Not only that, they are more profitable.

Why not extend this commitment to accountability to your local community or your state or this country. Sure there will moments when someone else doesn’t accept accountability and want to blame others, maybe even you. Don’t let that stop you. This accountability thing works. Why not give it a try?

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[audio:http://businessmatters.net/fyc/fyc-100129.mp3]

Who’s watching over us?

January 22nd, 2010 | post a comment

I have often wondered about the need in this country for consumers to be protected by our federal government. We have a number of regulatory agencies that want to take care of the unsuspecting consumer so that unscrupulous companies can’t take advantage of us.

We have the Food and Drug Administration, Federal Trade Commission, and the Consumer Product Safety Commission that are augmented with non-profit organizations like the Better Business Bureau, National Consumer League, the Consumers Union and the Consumer Federation of America. All these groups are watching out for my safety.

All this protection has me a bit nervous. For one thing, I wonder why they are protecting me. In this day of almost unlimited information, what is it that I need protecting from. Sure a few companies might sell some stuff that is substandard, but if I check the web before I buy, I will know about these folks. It’s almost like I have acquired a new parent. Someone who has decided what is in my best interest and because they know better than me they will make sure I am not taken advantage of.

One of the problems with this way of thinking is that these organizations assume they know what’s right for me. I believe that for the most part they have good intention, But I wonder how they can know what’s best for me. Particularly, when I haven’t talked directly to any of these organizations. So what are they basing their criteria for what’s best on? Is there a belief that we can homogenize our needs as humans to the extent where a set of standards will fit everyone? So when someone decides for me what’s best, it might be good for me to know how they reached their decisions. Otherwise, I become a tranquilized couch potato that has lost touch with my world.

Now I can delegate my decisions to others if I like. That seems to be a bit contrary though to having a strong country of informed and accountable citizens.

The second thing that bothers me about all this protection is that it doesn’t seem to work in some important areas. For instance, who protected all those folks who got sub-prime loans whose interest rates skyrocketed after the first year? Or who has protected consumers from high bank charges or escalating interest rates on credit cards or consumer check cashing offices that effectively charge 300% interest? Or how about the rush to get H1N1 vaccine to market only to have hundreds of thousands of doses recalled?

It seems that the best protection for me and you is to be well-informed and acting deliberately. I have a good idea about I want, why its valuable to me and what I am willing to pay in terms of money and safety to get it. I am not advocating a time of letting everyone fend for themselves. I think guidelines are great and that standards are fine as long as there is transparency in the standard setting process and we only apply standardization for high risk public safety concerns.

This week’s Business Matters program on raw milk had me wonder why it was so important for the FDA to take care of me when I can make an informed decision about this product. I appreciate their input and accept a requirement for consumer labeling, but if public safety is the FDA’s concern why don’t they focus on alcoholism and tobacco addition?

So let’s be more informed. Let’s reduce the need to be taken care of. I have a sense that we will all feel safer if we do.

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[audio:http://businessmatters.net/fyc/fyc-100121.mp3]

Move Your Money

January 14th, 2010 | post a comment

These is a lot of talking about how mad we are that the big banks are paying out strongBillions/strong of strongDollars/strong in bonuses when they had their hands out just a year ago. Remember, they were telling us they needed the governments help to even survive. In fact, they were so convincing that they scared Congress into doing what they wanted with no strings attached.

Now a year later, they are telling us they made records profits and the executives deserve to be paid for their hard work. Now some folks are calling this one of the greatest frauds perpetrated on the US. Bill Black, a former government official during the Savings and Loan crisis laid this case out on our Cronie Capitalism program . Could be. But it doesn’t look like anyone in Washington is going to do anything substantive about this. Sure there’s hand wavering and lots of talk, but no real legislation and the dollars from Wall Street firms and big banks continue to flow in to the campaign coffers of both political parties.

But don’t despair. Maybe there’s something we can do about it. Something that doesn’t require the President or anyone in Congress to do anything. Something that can have a profound affect. What would that be, you may ask?

Over the holidays a group of people that included Ariana Huffington of the Huffingon Post were talking about what they could do about this clear inequity. They decided to start a campaign to recommend that people move their money from the large banks who has taken our taxpayer dollars to enrich themselves while failing to help homeowners or small businesses.

Take this money and move it to financial institutions that are part of the solution. The movement is called Move Your Money. It encourages people to move their money from the big banks to credit unions and community banks.

I know how convenient it is to have you account at Bank of America or Chase or Citibank, I was stuck in the convenience situation myself. But I realized that I am part of the problem unless I take action personally. So I did, I opened my personal and business accounts at a local community bank.

Some will ask are they safe? When you look at the problems of the financial crisis, you don’t find credit unions or community banks holding Credit Default Swaps or packaging up mortgages into securities and loosing contact with their customer. Sure profits may be down, but they still do business the old fashion way – face to face. They know you and you know them.

I am encouraging you to consider taking action. Find out more about this movement. Go to the moveyourmoney.info website and see what others are doing and saying. See if it this feels like the right thing for you to do. Remember that you can make a difference .

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[audio:http://businessmatters.net/fyc/fyc-100115.mp3]

FREE ON-LINE EVENT

January 12th, 2010 | post a comment

This month, we begin our series of monthly Dialogues that bring our listeners in direct contact with some of our most interesting and provocative Business Matters guests. We choose a topic for the Dialogue that touches on a vital concern. Thomas White and our guest engage in a wide open exploration of the topic that serves as a catalyst for the dialogue with our audience that follows. We then open the phones and web to questions from anyone who is part of the Dialogue. You might say, it operates a bit like a town hall meeting.

We are providing this service free on a first-come-first serve basis. The first 35 people who send us an email requesting attendance at the Dialogue will be sent information on how they can participate in this live event. If you don’t get to be part of the live Dialogue, will record the session and provide a free download in Podcast form on the Business Matters website.

This month our guest is Michael Mandel. Michael, until recently was the Chief Economist for BusinessWeek. Michael has launched several entrepreneurial ventures that touch on innovation and economic education. Mike will share with us more details during the Dialogue.

There is so much conflicting news about the health of the economy and what we can expect in the future. Michael and I will talk about the underlying factors that got us into the situation we are currently experiencing. We will then explore the role that innovation will play in changing the economic playing field. Finally, we will talk about what al this means to you both professionally and personally.

So send us an email at register@businessmatters.net to be part of this event. Then think about what you want to ask Michael during this unique experience. If you have any questions, comments or suggestions for future Dialogue guests, I invite you to write me at thomas@businessmatters.net.

DETAILS: Dialogue – JANUARY 28th – 3PM EST

Whose Accountable?

January 7th, 2010 | post a comment

President Obama has often spoken about a new air of accountability in Washington. He has extolled business leaders to bring a sense of ethical responsibility to their activities. Yet……

It doesn’t seem that much is different. On Christmas Day Umar Farouk Abdulmutallab attempted to blow up a Northwest Airline jet as it was landing in Detroit. It is clear from all accounts that Abdulmutallab was someone whom the intelligence communities were aware held a potential threat to US security. Yet with no apparent difficulty, he was able to board a US airline flight in Amsterdam and almost succeed in creating another public drama.

What’s at the bottom of this failure. My sense is that it about lack of accountability. After 9/11, there was much made about the inefficiency of the US intelligence system. Often agencies within the government act as if they are competing with each other to get the best information. These turf wars were shown by several investigations to have kept the clear picture of terrorist plotting 9/11 obscured.

OK, we make mistakes, but we are hearing the same kind of stories about the Abdulmutallab situation that we heard after 9/11. The intelligence organizations who had parts of the puzzle didn’t talk effectively to each other. This is the case even after hundreds of millions of dollars were spent to redesign the intelligence structure even putting in a new cabinet level leader as the Director of National Intelligence.

So why did we not succeed in tearing down the walls that block the free flow of information? I see this problem often in the businesses I work with. Companies have a crisis of some sort – perhaps its a financial disaster or a creditability problem that’s onerous. The board (like Congress) steps in to fix the problem. The way they look at it is that they can fix the problem with a new structure, a new set of rules and maybe a new leader. Mostly this fails, just like the situation in Washington.

Why? Because the root cause of the problem has not been addressed. The root cause is often the internal behaviors that can’t be easily reshaped by rules. Iterative change won’t work. What is needed is from the ground up transformational change. To bring this about requires great leadership who lead by example and inspire everyone to act in a manner that fundamentally changes the organizations mindset.

The first step to this change is leadershipo that is both transparent and knows how to not be trapped by the adage, “That’s how we have always done it here”. This sentiment comes from the comfort zone of insiders who don’t really want much change. After all, if change was real, what would it mean to their personal power and relationships? So the leader has to listen with discernment. Listen with ears that let them understand what’s real and what’s just a story to keep things the way they are.

The second requirement for real change is to establish a set of standards for accountability. Now this is not as easy as it sounds. I have never found an organization that’s having problems where there is real accountability from top to bottom. Now the good news is that the change can simply start with the new leaders and their key people.

What does accountability mean? It means that I am responsible to do what I say when I say it in a way that provides value. This means that personal agendas have to be set aside for the overall health and vitality of the organization. Like I said, we all make mistakes, but what we can allow is these mistakes to continue. If someone doesn’t learn from their errors, they are clearly in the wrong role and perhaps the wrong organization.

The last requirement for real change is to instill meaning into the work of the organization. Let those who work there know why what they do is important to themselves, their colleagues those who buy their good or services and to their communities.

In this short space, I won’t go in to more detail. I will say that its clear that none of these three requirements for transformational change occurred in the US intelligence apparatus. So change was impossible. I hope the current lessons will lead to real change before a tragedy becomes us.

Is War Necessary to Create Peace?

December 18th, 2009 | post a comment

The following is an except from the speech by President Barak Obama when he received the Nobel Prize for Peace:

“So part of our challenge is reconciling these two seemingly inreconcilable truths — that war is sometimes necessary, and war at some level is an expression of human folly. Concretely, we must direct our effort to the task that President Kennedy called for long ago. “Let us focus,” he said, “on a more practical, more attainable peace, based not on a sudden revolution in human nature but on a gradual evolution in human institutions. A gradual evolution of human institutions.

What might this evolution look like? What might these practical steps beAs I have read and re-read this speech, I found my reaction went from anger to despair to resolution.For those of you who haven’t either read or heard the entirety of this speech, I encourage you to do so by checking out the links for it on our website.

It seemed offensive to me for President Obama to reference Martin Luther King, Jr and Mohatmas Ghandi and then say they are wrong minded because its not possible to use non-violence to change the actions of a despot or groups acting with disdain for other’s human rights. He said that the only way for countries to defend themselves was with the use of force. He did give an eloquent rationalization for this point of view.

Its felt that the President has taken a pill since he was candidate Obama and his perspectives about war and peace had been altered. There has been a large cry of outrage from many who backed his run for President who now feel betrayed.

That may be true, and I believe that the President missed a golden opportunity to expose and begin a dialogue to truthfully bring about an end to war and an emergence of a sustainable peace not only between nations but within nations.

On the December 18th Business Matters program, we talk about the role of capitalism in reducing war between nations. Its not good business to fight each other. OK, but let’s take that all the way.

We have a huge war machine in the US. For example, in the fiscal 2010 US Government budget, $1 Trillion is allocated to either defense or national security spending. That accounts for ½ of all the money spent in the world these areas. Imagine – all the countries in the world combined, including Russia, China and India combined spend what we alone spend

This enormous machine has links into over 100,00 businesses of the US alone. These businesses that involved in war are naturally going to fight to keep the existing system alive. For many of them it feels like a battle for survival.

So without a transitionary plan to redirect the work of these businesses and others like them in other parts of the world to peace oriented production, wars will be waged in some manner or form.

If we continue to spend at this level, there will not be adequate resources for the fundamentals of peace like food security, education and the environment. Its time for national governments to start having the hard conversations about redirection of resources. After WWII, there was an unpredicted restructuring of the war machine to peaceful applications. The time is now for such a commitment.

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[audio:http://businessmatters.net/fyc/fyc-091218.mp3]

When Will We Ever Learn

December 11th, 2009 | post a comment

I was wondering this morning about what it takes to learn life’s lessons. We hold ourselves out to be the most advanced species on the planet. Yet our behaviors just don’t seem to uphold this point of view.

Think of it this way, a zebra is walking along the edge of the jungle when he looks up through the brush and sees a lioness racing after one of his cousins. The lioness, far swifter and more powerful than the zebra, pounces on her prey and voila – lunch. Do you think that the zebra watching all this unfold will be as careless as his cousin? I doubt it. Animals learn from what they observe or they die.

On the December 11th Business Matters program, we talked about the S&L crisis of the late 80s and early 90s. A bit of refresher on the consequences of that national dilemma. Over 700 institutions were shuttered and the U.S. Government shelled out $125 Billion to make sure that none of these Samp;L depositors were left holding the bag. The year after the depth of this terrible crisis, the number of new homes built was the lowest since WWII.

As the situation unfolded there were the usual congressional investigations and industry self-examinations. As Bill Black ,a key regulator during this time, pointed out, the root cause of situation was well- understood and provided the basis for new laws and regulatory oversight such as the Financial Institutions Reform, Recovery, and Enforcement Act of 1989. Even the S&L industry group, The US League of Savings Institutions concluded that this crisis was caused by many of the same issues that are at the bottom of the current financial crisis.

Yet we find ourselves in an even worse situation. The Big Banks have been bailed out and the vast majority of Americans have seen a dramatic decline in their net worth, income and job possibilities.

We have been unwilling to correct the real cause of the problem. Its not that we don’t know how to regulate complex systems. We learned from this program’s interviews that’s not true.

We are unwilling to confront an underlying premise that our financial and political systems is founded upon – greed, which is a human condition, will be managed by a free market system. Seems that that’s just not so.

For example, the US political system is fueled by monied interests rather than serving its electorate.. Large financial institutions and very wealthy individuals use their financial position to fund the campaign machine needed for officials to be elected. They use fear to maintain control of the game. Just like Henry Paulson telling congress if they didn’t give him $700 B without any rules or accountability there would be rioting in the streets.

I don’t know, maybe rioting in the streets is a good thing. Maybe we need to have the voice of those who are not being served by our congressional and government leaders heard so that they realize the system can’t continue. Here we are in the third year of the financial crisis and NO NEW LEGISLATION HAS BEEN PASSED TO REGULATE WHAT IS CLEARLY NOT WORKING.

Its clear that the current structure serves very few at the expense of many. Reforming this structure requires mature and honest controls that recognizes the power of greed and puts in place consequences for the abuse of financial or political power. This change is not easy and calls for extreme courage and determination. The benefit is the end of the dramatic cycles of boom and bust that lay hidden in fraud and deception. It also send a message to those who abuse power that there are real consequences for their actions.

Think about having your voice heard in the halls of congress. Our politicians will respond when the voice of the electorate is loud. Write or call your congressional delegations and let them know what matters to you.

Let’s show we are the smartest species on the planet. Let’s make sure we learn from the past and don’t become some predator’s lunch.

December 4, 2009 – Activism

December 4th, 2009 | post a comment

As we were putting together the Business Matters program on consumerism, I was reminded of the long history of activism here in the US. I think of activism as doing something intentionally to bring about social, political, economic or environmental change.

Over 200 years ago, people just like you and I felt that the system of government that was in place in the British colonies was one they could not support. Coming together in small towns and cities, they acted with courage and a level of determination that was uncommon. At the heart of this birth of the American system was vigorous public debate, an orientation for building consensus, and a commitment to strong action to bring about needed change.

Activism has many forms including civil disobedience, boycotts, culture jamming, peace marches, propaganda and strikes. Activism knows no boundaries of age or ethnicity or cultural orientation or economic condition. Activism often brings to its participants a sense of aliveness that they don’t feel at other times in their lives. It feels good to be committed to a cause that I believe in and have a sense that MY actions will make a difference.”

Kalle Lasn, one of our guests today and the founder of AdBusters, has been an activist for over 20 years. He challenges the impact that consumerism has on the economic, political and environmental sustainability of our plant. I asked him if the actions that are underway would alter the course of climate change and economic decline. He said he didn’t know. Maybe we will experience our worst fears and yet, there will be a future of some sort. What he was certain of is that the actions of activists today shape that future. This lesson is good to remember particularly for those of us who were involved in the 2008 Presidential campaign. Hope for a future with a new form of governance called forth activism in so many. As this promise seems elusive, a sense of despair is being felt. Yet, maybe these actions are what Kalle Lasn was referring to, maybe they are the seeds of our future..

I have considered for the whole tenure of this program what our role is. As I speak to you today, I am certain for perhaps the first time. Business Matters is about activism. Activism is a personal choice. It means that I am willing to speak out and act when I feel the need for change, without concern for the short-term impact these actions have on my income or comfort. Our activism is telling the stories of people, who through a passion for change, commitment to a purpose and deep courage, are doing something they believe will change systems that are not working.

One important aspect of activism is often overlooked. Best spoken by one of history’s great activists, Mohatmas Ghandi, ‘ Be the change you wish to see in the world.” For instance, if I feel that its important to reform the financial system and a great way to do this is to support community banks, do I put my money in these smaller institutions? If I feel that its vital to reversing climate-change by reducing greenhouse gases, do I consider the distance that my food travels when I purchase it? The examples are plentiful, you get the idea. I sometimes find myself in the category of well intentioned folks who either contribute money to a worthy cause or lend support to an organization involved in change, yet I don’t take time to make sure that all my actions are supportive of the change I am advocating.

In closing, I invite you to consider what you can do to improve your local community. It is often said that all politics is local. That is also true for activism. Find a place to start being involved. It doesn’t have to be huge or “earth changing”. Just have it be something that really matters to you. The experience may both surprise you and change your life along with the lives of others.

We will make a difference.

Thomas

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