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Most of the present economic and financial problems have been caused primarily by a single flaw: an almost total failure of leadership

The most obvious lesson of the so-called “credit crunch,” and all the financial and economic problems that flow from it, is going to be the hardest one of all for organizations to swallow. Their over-paid and over-esteemed leaders made the most obvious mistake of every amateur: they invested heavily in things they didn’t remotely understand — “collateralized debt obligations,” “credit default swaps,” and “auction-rated bonds” — and then went on doing it, even after problems began to emerge.

Why? Because those weird financial widgets were fashionable, everyone else was doing the same, and other people told them to.

Like the most amateur of investors, they jumped on the bandwagon as wiser heads were getting off. They listened to “experts” and nodded their agreement, even though they had no idea what the experts were talking about. In their arrogance and greed, they imagined themselves to be far more knowledgeable and competent that was true.

But these people are not supposed to be amateurs. They’re paid big bucks because they claim to be skilled professionals.

Leaders lead. Over-promoted managers screwed up

How did we get into this mess? How did we end up with top executives who have proved to have no idea what is happening in the organizations they are supposed to be controlling? Who followed every fashion and missed every indication that trouble was dead ahead?

It may be the financial institutions and banks in the firing line today, but let’s not forget the Enrons and Adelphis of just a few years ago. Arrogance and incompetence flourish in boardrooms far beyond banking. What we have today is just the latest result of a long-term crisis in leadership throughout business, government, and the regulatory authorities.

  • As organizations grew and multiplied, demand for leaders far outstripped supply. Organizations expected every paltry management role to require a leader to fill it — never mind that its duties contained not a trace of true leadership activities: the setting of long-term strategy and vision, then creating the motivating force that would persuade others to follow it.
  • In an effort to bridge the gap, leaders have been trained to a formula, not given the time and discipline needed to develop into a true leadership role. It has been yet another in a long and dismal series of quick fixes.
  • As organizations focus more and more closely on the shortest of short-term goals, the actual need for leadership has shrunk, not expanded. Even as they were crying out for more leaders, organizations really needed fewer, since leadership is essentially a long-term activity and they no longer paid attention to much beyond the next quarter’s results.
  • Universities responded by churning out hoards of ”instant” leaders, all trained in formulaic leadership approaches. But formulas can only ever be based on what seemed to work in the past — that’s the only source of the “certainties’ needed to build academic formulae. Given the necessary time-lags in the education system, that “past” is often quite a long time ago.
  • In place of seasoned leaders, trained much more by experience than theory, organizations were flooded by people who had little to offer save the theories they had learned in business school. When these proved inadequate to cope with reality — as most did in a few months — these “instant” leaders fell back on the only other source of formulae: rules-of-thumb, management myths, fashionable panaceas, imitation, and folk-tales.
  • As circumstances in the world changed, the formulaic leaders drifted further and further away from current realities. Few had either the ability, or the understanding, to do more than parrot the formulae they were taught, so they had to stick with those, however poorly they fitted the needs of the times. They were in plentiful company. In a situation where all the candidates for leadership were much the same — all taught to the same limited, short-term, and formulaic standards — promotion choices were made on extraneous factors, such as whether the person looked and dressed like leaders are imagined to; whether he or she had the right contacts; and whether the chosen candidate would fit in with the current people at the top. It became a self-perpetuating system.

The result has been a generation of supposed leaders who have proven to be incompetent to fill any kind of leadership position — let alone the lofty ones they have reached through office politics, schmoozing, and the “good ol’ boy” network. As current events have shown, on both sides of the Atlantic, a good many leaders have been wildly over-promoted; not just to their level of incompetence, but way beyond it.

In the times of boom, no one noticed. The rising tide of economic growth — based in reality on little more than a massive expansion of cheap and easy credit — raised all the “ships” — competent and otherwise. Executives became convinced of their own brilliance. So when bad times returned, they were slow to grasp the new reality, still relying on those same formulae that they credited with causing their previous success. It has taken a real mess to drive home the truth: that far too many “brilliant” careers were founded on nothing but dumb luck.

These are the burning questions we all need to ask

  • Why do we need so many leaders? True leadership positions are quite few: they are only those concerned with setting long-term direction. Most executive roles are managerial or even administrative.
  • How can we return to an adequate supply of true leaders and ease out those who have been so grossly over-promoted?
  • What should be the training regime for future leaders? It makes more sense to plan for a lengthy apprenticeship than rely on paper qualifications. Like so much else, leadership has been warped by the cult of instant gratification. It takes decades to train and season a top leader, not two or three years in some fashionable business school.
  • How can we get back to the point where leaders have to prove themselves before getting responsibility, not just look and sound good or have powerful backers?

I wonder if we can even afford to allow the current generation of leaders to see out their time. They are liabilities waiting to cause future problems. Most have shown that they have no idea what is actually going on in their organizations (see Société Generale, for only the latest example). Few have any true leadership ability. The past decade has seen a series of economic bubbles and crashes, all caused by essentially the same process: arrogant leaders and financiers whose true ability fell far short of their imagined brilliance. How can we quickly get rid of the worst ones and corral the rest?

Leaving the market to its own devices has failed miserably. It can hardly do otherwise, since it allows fashions to rise and fall without any concern for their effects on ordinary working people. The bosses rarely suffer much for their mistakes — they have attorneys to make sure their wealth is protected and most have already amassed enough to allow them to live in luxury until they die. It’s the middle and junior managers, the technical professionals, and the ordinary workers who pay the price of the bosses’ failures in pink slips and lost wages; while in the worst cases, taxpayers — that means all of us — have to pick up the tab.

What we need urgently is a system of sensible regulation that won’t stifle future initiative and produce yet another layer of (mostly incompetent) leadership. The trouble is, it will take true leaders to devise such a thing; and we know how rare those are today.

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This post is part of the “Become a Slow Leader” series

  1. What every manager ought to know about communication
  2. Courage can build a leadership style to be proud of
  3. Beware of expansive (and expensive) egos (including your own)


Why egotism is fatal to good leadership — and why it is so common today

“To have without possessing,
do without claiming,
lead without controlling;
this is mysterious power.”

Tao Te Ching, Lau Tzu (tr. Ursula K. Le Guin)

Egotism causes blindness, selfishness, over-confidence, and arrogance.

It inflates people into domineering monsters focused on petty personal victories. It wrecks relationships. It encourages leaders to try to keep everything under their personal contro, in the erroneous belief they’re the only people sufficiently capable to handle important issues. It makes them deaf to concerns and blind to looming problems. Look at the executives of Citigroup, or Bear Stearns, or — most recently — Société Generale.

Buddhists and Taoists have long claimed that a false belief in the importance of the ego is a principle cause of human suffering. I’m inclined to agree with this. In the Buddhist view, there is no ego. It’s a mental concept without true substance, generated by incorrect thinking and a poor grasp of reality. Because it isn’t something that can exist on its own, it must be constantly fed with the three elements in the quotation at the head of this article: possession, belief in personal “ownership” of events and outcomes, and delusions of control.

“I’m the one in charge!”

Let’s look at what happens when a leader can’t have without possessing. Everything becomes his. It’s his team, his authority, his areas of responsibility and command, his decisions alone. No one must be allowed to share his power — or his rewards — so no one can share the burdens either. Any questioning of his decisions becomes a personal attack and proof of disloyalty. To take anything of his away threatens his existence.

This is a quick route to paranoia, dictatorship, and burnout. The leader who can’t let go of his ego-driven urge to possess everything can’t accept colleagues, only subordinates and servants. He can’t allow others to do whatever they can do as well — or better — than him, in case that makes him look insufficient. No one can help him, no one can support him, because he cannot share anything. In his crazed urge to possess it all, he sets himself up to lose it all instead.

“I’m the star!”

The leader who claims every success, every gain, every useful action as hers frustrates all those around her. She cannot do without claiming.

It’s all hers — except the failures, of course. She won the order (though she never met the customer); she had that great new idea (after someone else explained it to her); she’s the one solely responsible for exceeding the budget and cutting costs (though her team created the plan, implemented it, and bore the burdens of lost jobs, overwork, and excessive working hours).

What she’s truly responsible for (but never claims) is alienating her people, irritating her colleagues, and becoming so filled with inflated ideas of her own importance she’s a universal pain in the butt — and a danger to the business as a whole.

Why is there a need to claim anything? If it’s done — and done well — what more is required? If someone else did it, give them the praise they’re due. Only peoples’ needy, insecure egos demand constant reassurance it’s all down to them.

“I’m in control!”

True leaders don’t need to exercise control as they lead. People follow them because they want to; because they like, respect, admire, emulate — and sometimes even love — the leader.

There’s no call for books of rules, enforcement, punishment, and informers: all the paraphernalia of the typical command-and-control culture. Such organizations have to operate like police states because the leaders’ egos crave the false reassurance that they’re in control. The more any leader resorts to commands and enforcement, the less he or she leads. It’s their ego which is calling all the shots.

I’ve drawn these pictures in harsh outlines, but we’ve all suffered under leaders who show some — sometimes most — of these destructive behaviors, at least in less extreme forms. Egotism is a pervasive curse. The claim that all power corrupts is a direct consequence of the malignant ability of an inflated ego to turn a previously pleasant, competent manager into a monster.

Institutionalized egotism

The blame for so much egotism isn’t all down to the human flaws of leaders. Many organizations encourage it. They try to stimulate personal competition between people, falsely believing that this will encourage higher standards and productivity. They publicly sort people into winners and losers. They tie pay to results so tightly that co-operation becomes impossible without losing money on your next bonus or pay-check.

Many of these organizations have accepted the folk-myth that sport provides the best way of understanding motivation at work: that turning an organization into something like a tennis tournament or a football team will encourage employees to work harder, so that their “team” will win or they will ascend the winner’s rostrum themselves.

Yet sport is different from business in so many ways. Individual sports champions are driven by ego, sure, but also by love of the game, competing against themselves, and the search for records and perfection in their sport. Teams strive to win for money, in professional sports, but also because they are small, tightly knit groups, supporting one another against other, similar groups.

An organization isn’t like a football team; it’s like the whole league — or a league of leagues. It’s full of teams. If you encourage too much overt competition, those teams will compete against one another, instead of against outsiders. You don’t produce a 70,000 member team, because no team even a tenth of that size can mean anything personally to its members.

What you produce is what you see everywhere today: teams, departments, and divisions all struggling and competing against one another — and all denying co-operation and hoarding information — while the “competition” against otuside corporations is more or less ignored.

Leadership is a “mysterious power”

True leadership is a mysterious power because the leader doesn’t appear to do anything except be herself. It seems effortless; yet it’s powerful beyond expectation.

She gives away authority, power, position, and recognition as if she has no interest in such possessions — which is true. She hands out rewards, praise, respect, and support to all who merit them; then, mysteriously it seems, receives more in return than she gave away. She has everything, yet claims nothing for herself. She gets everything done, yet points to others as the ones who did it.

Ask them and they’ll tell you she was the one responsible. They did it for her, under her oversight, to meet her specifications. She never appears to control anything. There’s no need. Everyone rushes to accomplish what she asks. Better still, they strain to anticipate her wishes before she ever articulates them. They love working for her and they love her. Why? Because she makes them feel wanted, needed, and valued.

Let go of all that ego. It’s a burden you don’t need. Besides, it doesn’t really exist — unless you act as if it does. To achieve the power that enables, not corrupts, stop possessing, claiming, and controlling — and try leading instead.

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“The Great Dictator” is distributed by, and copyright of, United Artists

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Why the temptation to see individuals as key to organizational success is more dangerous that you think

It has once again been proved that we misunderstand the true causes of organizational success. Egged on by the media, who dote on simplistic answers to complex situations, we thoughtlessly treat the actions of CEOs and top teams as the primary — sometimes nearly the sole — causes of organizational performance. This belief is not true and never has been. The high-pressure, anxiety-ridden workplace culture thus created is both the root cause of today’s obsessive, “macho” management style and its catastrophic over-emphasis on short-term results. Our heroes aren’t seeking dragons; they’re attempting the impossible — and doing it with our money.

The worst aspect of this error is the other common assumption that providing huge financial incentives, typically share options, will encourage top executives to work harder, thus ensuring rising profit goals are met. This is often described as aligning the executives’ interests with those of the shareholders. They both want money, and, since the shareholders believe the executives’ actions are the key to producing it, almost no amount is too great if results seem to follow quickly.

After years of this nonsense, we find ourselves again in a sorry mess. Top salaries have never been higher, so — by the logic just explained — corporate performance ought to be stellar, especially in those parts of the business world where executive rewards have been greatest: the financial sector.

Instead, we have self-inflicted chaos, due largely to a potent combination of greed, short-termism, and incompetence in managing risk. The “brilliant” individual executives on whom the whole edifice rested have been found to have feet of clay. Meanwhile, the middle-class is becoming poorer and the poor have been ignored altogether. As a society, we have lavished money on a group who have shown themselves to be as helpless to avert disaster as they were greedy in bringing it about.

A mistaken faith

Conventional management ideas are based on the assumption that individual executives — especially CEOs — have a major influence on performance. It’s directly akin to the old-fashioned view of history as a chronicle of the acts of “great men” (plus a tiny handful of great women, only grudgingly admitted).

Of course leaders have some impact, but it’s far less than most people believe. There are far too many variables, complications, and sheer unknowns for any one person — or even a whole group of senior executives — to be able to impose what they want on the world at large. As recent events have proved yet again, the reality is that most of those at the top stared at the spreadsheets, sat through the presentations, and nodded to their “experts,” without having more than the sketchiest idea of what was happening in their name.

And that’s without the fact that for every Company A that wants the market to go in one direction, there will be a Company B (and probably Companies C, D, E, and F too) who wants more or less the opposite, and is working just as hard to bring that about. No one can be the winner in this fantasy game of changing reality; the truth is that none of them have much effect on the universe — yet when chance turns one into a temporary success, they gladly take the credit.

Let’s bring these two points together and see what we have. First, we have the basic assumption that the actions of leaders are the main determinant of corporate success. It’s false, but everyone seems to believe it — including most of the leaders themselves. Next, their remuneration is closely tied to short-term business outcomes. Can you can see why it is inevitable that leaders will do everything they can to bring about a series of short-term booms, virtually regardless of the longer-term busts that follow?

By then, they will have taken their money and moved on. Due to this system of rewards, executives imitate the actions of a high-stakes gambler and ignore the careful choices needed by a long-term builder of corporate and community growth. Like nearly everyone else, they do what pays them most.

Where individual leaders really do matter

When it comes to creating the culture of a company, the actions of people at the top have enormous influence. Ever since hierarchies came about, those below have studied — and copied — what those above them do. People emulate the boss’s behavior (after all, it worked for him or her, didn’t it?) and apply some subtly flattery at the same time. Besides, going against what the boss thinks isn’t a smart way to win favor. Subordinates study, analyze, and copy the boss all the time. No boss thinks of copying their subordinates.

The outcome of this erroneous belief in the superman-type leader is two-fold: it makes leaders devote all their waking hours to the impossible task of trying to force the future to turn out exactly as they want it to; and it causes subordinates to get the idea that doing the same themselves is the key to making it to the top.

Knowing they will be blamed for every short-term failure, and richly rewarded for every equally short-term success, leaders become extremely anxious. They strain every nerve to try to bring about favorable results, including hounding and harassing all those around and below them. Their subordinates copy their actions faithfully, assuming this will propel them upwards in their turn. Meanwhile, no one is watching the store. In a game of winner-takes-all, the most outrageous, blind risks are dressed up as courageous decisions, and short-term fluctuations in the market as clear signs of personal brilliance.

The resulting corporate culture is high-pressured, full of long hours and anxiety, and riddled with stress. It cannot be otherwise, since everyone is devoting themselves to doing the impossible: to making reality move according to their personal wishes by sheer willpower and effort.

It’s time to slow down and return to reality . . . before we make things even worse

The truth is that actual organizational results come in the main part from a shifting combination of luck, being in the right place at the right time, and favorable effects from a myriad of people you don’t even know about. All this anxious striving and worrying is mostly for nothing.

Copying the actions of successful leaders of the past, following the latest management panaceas, hiring expensive consultants — none of them have more than a marginal impact. The continual anxiety and stress at the top quickly gets replicated throughout the organization, until everyone, at every level, is straining and obsessing over how to impose their will on the immediate future. No one stops to ask the simple question: “Does any of this make any measurable difference to reality?” If they did, maybe they would notice that, once again, the emperor has no clothes.

Let’s all calm down. The future will be what it will be. We can, at best, only have some limited impact on the small part of it that directly surrounds us. The further away the thing we desire lies, the less we will be able to make it happen by force. In the long-term, we can try to work with events to encourage good outcomes. In the short-term, we can keep our nerve.

Business has always been more about commonsense and teamwork than the flashy actions of a few “stars.” Commonsense in lending would have prevented the sub-prime mortgage mess. Involving others and listening to a wide range of views might have allowed leaders to admit to their own ignorance, instead of jumping into risks they neither understood nor could measure.

The trouble with heroes is that, for every one who manages to slay the dragon and rescue the damsel, many more ended up as that dragon’s dinner first.

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How managers and leaders misinterpret chance events

We all know that a “fair” coin, when flipped, has a 50:50 chance of coming down heads or tails. So what will happen if you make the experiment and flip one, say, ten times in a row?

If you guessed that you would get heads five times and tails five times, you are very likely to be wrong. The real answer is that you have no way of knowing. It might return nine heads and one tails, or the reverse — or any combination, up to and including ten straight heads or tails.

Of course, if you got heads ten times in a row, people might wonder if the coin or the flip was truly fair — and they might be correct in their dark assumptions about what you did, if you stood to gain by such a result — but there is no reason why such an outcome should be any less random that getting the “expected” five heads and five tails.

Being fooled by sample size

The reason, of course, is sample size — or, in many cases, time. Ten flips is simply not sufficient to demonstrate the true effects of random flips with a fair coin. If you went on flipping longer — maybe a hundred flips, or a thousand — you would be more likely to get a result close to the “random” 50:50 spread.

It’s an obvious matter to point out, but no less important for that.

Patience and time are in short supply today. People want results quickly and they have little appetite to wait around to see what happens if some action or assumption is tried out more than a few times.

As a result, they find themselves constantly judging outcomes on the basis of very small samples: perhaps no more than one or two.

Take the fashionable nonsense of “industry best practice.” Of course, what this means is nowhere near what the words imply. Who has the patience — or the time — to survey a huge sample of practices within an industry to check out what is being done; let alone wait for maybe ten years or more to see the true results of each one?

What it is in reality is the mindless following of whatever business currently seems to be making most money or achieving greatest popular success.

That’s the equivalent of valuing heads more than tails in a coin flip, then noting that one person threw eight heads out of ten and copying whatever he or she appeared — or claimed — to be doing at the time — perhaps whistling “Dixie” or wearing blue pants. Within weeks, “Dixie” whistling is compulsory throughout an industry and the manufacturers of blue pants see their profits climb to stratospheric levels.

The superstitious manager

Another powerful force in making fools of otherwise intelligent people is superstition: the tendency to assume — often wrongly — that something unusual must be significant.

To go back to our flipping of that coin, it would be very easy to jump to the conclusion that getting heads ten times in a row was not random at all; that it “meant something.”

Humans like meaning and don’t like randomness. After all, if you can ferret out the meaning in something — if you can understand what caused it — you can perhaps control or influence it in your favor. Random is simply . . . well, random. It can go either way and there’s nothing you can do about it.

People also like to take credit for favorable outcomes. Suppose you wanted to get heads and you did — ten times out of ten. Wouldn’t you happily bask in the applause and accept that, after all, the fact that you were flipping the coin did have something to do with it? Even if you simply said that you must be lucky?

Coin-flipping isn’t the basis of a career, but taking risks in investments certainly is. So when certain people began to see those risks fall out the right way, time after time, they definitely believed that it had a lot to do with their ability — and made sure others believed it as well. Who is going to turn around in such a situation and note that it could very well have been entirely due to random fluctuations in the long-term progress of the market? Who would admit to having little or no real idea of what the actual risks were, or why he or she was taking them — save that everyone else was doing the same?

Now, when so many of those risks have gone bad, the world is full of wiseacres pointing to the obvious: that buying risky investments you don’t understand is the act of a fool.

I would even go further. If doing that is the basis for earning millions of dollars, then I want to state, right know, that I am eminently well-qualified for the task. I am certain that I could buy and sell risky investments, based on total ignorance, as well as anyone else. Who knows, I might even get ten heads out of ten — for a while.

Random is always random

Much of our world, including the business world, is governed by random processes. Odd and striking results — ten heads out of ten — can happen at any time, but most often mean nothing. The sample is too small. We haven’t allowed enough time to pass to judge whether what we think produces good results actually does so in a variety of different conditions. They make no difference to the randomness of the event, viewed in a proper perspective.

Today you’re a hero; tomorrow you’re seen as a crazy for doing the exact same thing. It’s all fashion and superstition. Meanwhile, the true driver of events — randomness — moves on unaltered.

Many, many of the worst mistakes in the world of business are due to the simple process of being fooled by randomness; seeing something happen and attributing the cause to something people did, or claimed to have done, when the true reason was blind chance. Repeating some folk wisdom or management mythology and failing to notice that there was never any true evidence to support it outside a small, short-term sample, often taken in circumstances long past. Erecting some temporary result into an unalterable law of business success.

The true value of slowing down

The real value in slowing down is that it allows you to collect more evidence to support or refute any belief, so you are less likely to be fooled by random events. It helps put things into a proper perspective, so that odd, but still completely chance events are show for what they are. It lets fashions pass and circumstances change, revealing what works in many situations and what only worked in one.

For centuries, age and experience were valued as a source of precisely that kind of wisdom: not based on intellect, but on having been around long enough to recognize the continual shifting of randomness at work. Only in recent decades, and in predominantly Western cultures, has youth become so highly prized and older people relegated to homes, where that can molder away out of sight.

Of course, when you’re young, the last thing you want is some old fart telling you that your brilliance is based on nothing more than luck, and your tremendous insight into the causes of some odd event is nothing more than fantasy and superstition. And by the time you’re old, what you have learned is generally dismissed as out-dated and useless.

Modern life may be speeded up, compared to the past, but that’s the only difference. Randomness is still randomness, and making decisions faster and faster merely adds to the problem of small samples and allowing too little time to pass to see the true outcome.

If we all slowed down to the pace of the elderly, we would see more and see it better.

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Our quality of life is in our own hands

Choice is a constant theme of Slow Leadership. It’s so easy to stumble into the future, eyes wide shut, repeating the conventions of past and present and missing the opportunities open to us to make our future different — and better — from what has gone before.

Until today, mankind’s steady increase in wealth — very unevenly distributed, to be sure, but still real — has been accompanied by an equally steady increase in constraints. We assume prehistoric man was free to make virtually all his or her choices, but lived at a scarce subsistence level, in continual danger of starvation and harm from wild animals and aggressive neighbors. By medieval times, poverty was less miserable, but constraints were present in full force: unquestioning obedience to some petty noble and, through him, to the king; swift and violent punishment for misdeeds; total subjection to the rules of the church.

The industrial revolution brought a significant increase in wealth, yet many of the daily constraints remained, no longer to the church and nobility, but to the factory owner and overseer. Work was hard, hours were long, pay was small, and benefits minimal. The factory owner no longer commanded obedience by threat of execution, but striking factory workers quickly found he had the full majesty of the law on his side.

Today and tomorrow

Today, in the industrialized world, our wealth is far beyond the dreams of our ancestors. Are we more free from constraints? I don’t see it.

People work ever longer hours, still fear the arbitrary loss of their employment, and are expected to obey corporate procedures no less rigid for being written in less personally commanding terms than the edicts of kings. Work and the economic needs of shareholders and executives still rank higher than the needs of the individual employee for time off, relaxation, and a working environment free from undue stress and the consequent threats to mental or physical health.

The future is our choice. We can continue to trade freedom for wealth; we can hand over the freedom, only to find the desired wealth is no longer available; or we can decide that wealth is good, but wealth with freedom is still better.

As long ago as 1971, J.K. Galbraith explained the dilemma in typically blunt terms:

The quality of life will also suffer if individuals are not an end in themselves but an instrument of some purpose that is not their own. This too is a danger of our situation. We have developed an economic system of great power. We have reason to be grateful for its achievements. But it has its purposes and it seeks naturally to accommodate people and society to these purposes. If economic goals are preoccupying, we will accept the accommodation of society to the needs of the great corporations and the supporting apparatus of the state. We will regret our surrender but we will reconcile ourselves to the inevitable. If we have economic goals in proper perspective, we will question the desirability of such subordination.

Improving our perspective

It can hardly be claimed, 36 years later, that we have our economic goals in proper perspective. Thank goodness some few, at least, are questioning the continued desirability of putting economics first and people a distant second.

There is still time to slow down, take a deep breath, and ask ourselves whether the direction we are headed is the one we want to follow. Every day makes this choice seem harder and following the status quo seem more obvious. If we don’t call a halt soon, it is possible we never will.

Consider this statement by Alan Watts, written 56 years ago:

Consequently our age is one of frustration, anxiety, agitation, and addiction to “dope.” Somehow we must grab what we can while we can, and drown out the realization that the whole thing is futile and meaningless. This “dope” we call our high standard of living, a violent and complex stimulation of the senses, which makes them progressively less sensitive and thus in need of yet more violent stimulation. We crave distraction — a panorama of sights, sounds, thrills, and titillations into which as much as possible must be crowded in the shortest possible time. To keep up this “standard’ most of us are willing to put up with lives that consist largely in doing jobs that are a bore, earning the means to seek relief from the tedium by intervals of hectic and expensive pleasure. These intervals are supposed to be the real living, the real purpose served by the necessary evil of work.

So much for our much-vaunted progress since 1951. If we want to do better, we had best start right away.

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Facing up — logically — to the start of another year

 
Do you ever ask yourself unanswerable questions, such as: “Why do so many people talk so much about change and do so little different in their lives?” or “What makes companies and managers believe that the same ways of operating that got them into some mess are going to get them out again?”

I do, although I also know there isn’t an answer — other than to sigh at mankind’s invincible ability to screw things up (yet we claim to be the most intelligent creatures on this planet!) — but I have to hope that facing up to the question is at least better then pretending things are alright as they are and going to the Mall, which is what we are generally encouraged to do today.

Once or twice over the holiday period, I have been tempted to tackle this unanswerable question: “How did it happen that so many highly-educated and massively over-paid people on Wall Street and elsewhere managed to get caught out putting their money into investments that have been proved to be based on unquantifiable — in fact, largely unintelligible — amounts of risk? Why were so many supposed experts caught doing something outlawed in Risk Management 101?”

Giving up on logical thought

We all know that human beings, as a species, are remarkably poor at making rational decisions. We may claim to be thinking animals, but nearly all our decisions are made on an emotional basis and justified afterwards. We do what feels good and use our powers of thought to dress up the choice in an acceptably rational outfit later.

Yet these executives and professional investment managers are paid to think. They’re employed precisely because it’s supposed (falsely, as it turns out) that they can make rational choices and act according to the facts, where you or I would cross our fingers and hope, or pick out an investment with a pin.

Then, if times turn tough, these same people are expected to remain calm and rational, not act like any Tom, Dick, or Harriet, and run for safety, screaming “sell!” as loudly as they can.

In fact, they’ve been no more rational or logical in their actions than the most ignorant, amateur investor. They’ve bought investments without understanding them, or the risks they posed, and followed every passing whim of fashion. They’ve been as discriminating in what they gobbled up as a starving sewer rat; as willing to follow an independent path as a frightened lemming.

What’s going on?

I said at the start that the subject of this post is an unanswerable question. That’s not because there is no reason; more that there are so many linked causes and sub-causes that it’s impossible to sort them all out.

But I think there is one thread that unites many of the issues involved: the notion, prevalent for some years now, that being emotional is warm, attractive, and ultimately “good,” while being objective and logical denotes some inner deficiency of feeling. You see it in schools, where social skills are often prized above knowledge or critical thought. You see it in journalism, where “human interest” takes the place of news or analysis. You see it in the cloying sentimentality beloved of so many advertisers.

There are, of course, situations that do call for emotions; no one feels comfortable around someone who remains cold and withdrawn all the time; nor with those who use their imagined intellectual superiority to put others down. But there are many, many situations that demand rigorous logic and the courage to look reality in the face, even if what you see is horribly ugly. Investing is one of those, as are the large majority of actions involved in running a business.

You would hope that top corporate leaders have the sense to see when objective logic is needed, and when empathy is required instead. Yet what we have today are leaders who neither empathize with their employees struggling to earn a living — what does someone who earns millions every year know or care about the problems of paying the mortgage, or finding affordable healthcare? — nor show the ability to act logically in calculating risks and stay away from investments so exotic that nobody — including their own subordinates — has any clear notion of what those risks really are.

It used to be said (often by those same, smug “professionals”) that ordinary people always lose money because they are blinded by greed when things are going well, and driven only by fear as soon as the market turns down. If that’s so, it’s hard to see any difference between these over-paid professionals and anyone else in the present situation.

Learning our lessons

If executives do not act differently from the ordinary person; if they do not stay objective in good times or bad, and make choices based on logic. facts and fiduciary obligations, rather than personal greed and emotional whims, what basis is there for paying them large salaries? If leaders fail to lead, because they are themselves being led along by fashion and the wish to keep up with the Boardroom Joneses, what credibility should they retain?

The lessons we should take from the sub-prime debacle are human, not financial. The idea of the infallibility of free-market policies has been shown to be simply another ideological myth — along with the myth that attending to quarterly results will ensure long-term viability. Logic dictates that long-term success requires long-term thinking. Reason shows that taking on unquantifible risks is equivalent to making a blind guess. Justice demands that those who fail to earn the rewards they claim by right of superior understanding should forfeit them.

Logic and reason can be as beautiful and delicate in their use as the most refined emotions. Humans crave the joy of solving puzzles and following quests to their ultimate fulfillment. If they did not, there would be no long shelves of mystery books and fantasy novels in every bookstore and Hollywood would be out of business. It is as natural to take pleasure in using your mind to reach a logical conclusion as it is to use your emotions to feel love, joy, or happiness.

Thinking and logic cannot save you from every kind of mistake — nothing can do that — but they surely beat following each emotional whim, running with the crowd, and hoping for the best. Let’s stop deifying emotion, as if all emotion were created equal. Love is an emotion, but so is hate; altruism is an emotion, but so are self-centeredness and greed.

Logic may lack obvious warmth, but it also lacks much of the power emotions have to let us imagine doing whatever we want is also doing what is right.

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New Year’s resolutions are easily made and even more easily abandoned. Yet only one is needed: to follow your own path in life, despite the difficulties this appears to offer. Anything else means either walking in your own footsteps — which must keep bringing you back to where you started — or trying to follow others who are headed for places you neither chose nor are likely to relish.

 
IMAGINE SOMEONE TRYING TO WALK THROUGH DEEP SNOW; I mean really deep, maybe three feet or so. It’s hard work. Slowly, this person pushes forward, carving a thin path where he or she has stepped. From time to time, rest is necessary, for the effort is draining.

In one of these rest breaks, our person looks back at the path behind. There’s still a lot of snow there, but it’s much less deep. If you walked back that way, the going would be easier.

That’s what the person does, retracing former steps, going back where they came from. And it is easier to walk, much easier. At the starting point, the person turns around again. Now the snow in the pathway they have made is even less deep, trampled down by two sets of tracks, going and coming back.

The person sets out again. Even easier. After several repeats, the snow path is reduced to a residue of hard-packed snow that it’s possible to walk on with only the occasional slip.

Other peoples’ paths

Of course, going backwards and forwards along a single path is easy, but it does become rather boring. So when our person finds someone else has crossed their pathway, making fresh tracks that veer off to the side, it seems like a good idea to follow for a while. That other person has done the really hard work of making a fresh path through the snow. Walking in their footsteps isn’t too difficult.

But that track goes where the other person wanted to go, and our walker decides he or she mustn’t stray too far from their own path way. They return, trampling down the new track nicely.

Now they have two paths: their own, original one, and the part of the other person’s track they were willing to follow.

As a few more unknown people cross their path, they carve out more tracks, each one moving away from their own path in a fresh direction — at least until they realize they are going too far from their chosen direction and turn back again.

In time, they are moving around a small network of trampled tracks. The going is easy, even if they are no longer heading anywhere in particular. These tracks feel safe and familiar. As still more snow falls, the areas outside this network become deeper and deeper — and harder and harder to push into.

Maybe our person tries once or twice to push again in their own direction, but the untouched snow is now four or even five feet deep and it feels nearly impossible to make any progress. So they turn back again; back to the familiar, well-trodden paths, where fresh snow is soon trampled over and they can move without much effort.

Hemming yourself in

In time, of course, even the extended network of well-trodden paths becomes stale. It’s like eating the same, once-favorite food for every meal. What was once a pleasure becomes wretched and nauseating. But moving outside these familiar pathways seems impossible. The snow has piled up to a point where pushing into fresh areas would take massive effort — if it could even be done at all.

Our person is trapped, frustrated, and unhappy.

No matter that he — or she — did it to himself. The result is a limited, tightly circumscribed pathway in life. At work, it means laboring over and over again at tasks that have long lost any challenge or interest. IN the rest of life, it means spending time in boredom — or maybe trying drastic means such as drink or drugs to bring some spark of difference. Any effort to change has become impossible. Motivation is now as flaccid and stale as life itself.

One resolution for a New Year

If you recognize any part of your own experience in this fable, beware. Millions of people before you have gone through the same, self-inflicted frustration. They gave up on their own path or career hopes, because it felt too difficult to make it through life’s snow drifts. From time to time, they tried paths others had already started — only to turn back when they found those paths headed only towards what that other person desired.

At this time of the year, people begin to make resolutions for the year to come. Most scarcely last through January before being abandoned. Our minds are so good at creating reasons to drop what seems to be too much effort. By March, the vast majority of resolutions are forgotten, as well as abandoned.

Only one resolution is needed: to make your own path through your life and career, despite the apparent effort. Winter snow does not last for ever. The path you make towards your own destination will soon reach a time when the snow melts and the going will be easier. There may be other difficult areas to cross later, but at least you will be going where you want to go.

Your own path will never become stale. There will be more than enough challenges to keep your mind sharp and your interest high. And whether that path is long or short, leads to dizzy heights or stays in the valleys, when you reach the end it will always have been yours.

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If your luck is mostly what you make it, how can you make it better?

 
I don’t believe in luck. Before you start pointing out all the times things happen entirely by luck, let me add that I definitely understand that chances — pure randomness — plays a major part in events, often the greatest part. We live in a world dominated by chance. Unfortunately, few people recognize this and substitute the false notion of luck instead (( If you want to understand more about the ways human minds are fooled by entirely chance events, I strongly recommend Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets by Nassim Nicholas Taleb)).

Chance is random. That means it occurs with no fixed pattern. Luck is assumed not to be random. Some people are supposed to be luckier than others; others suffer life-long bad luck. Luck is even assumed to be affected by simple actions like crossing your fingers, carrying a lucky charm, or avoiding black cats.

I am certain that what we call luck is no more than an observation that some people seem to find more opportunities, and suffer fewer setbacks, than others do. Events come along more or less randomly, but some people have a pattern of dealing with them more effectively. You make your own luck by what you do in response to what life throws at you. Suffering from instances of “bad luck” isn’t anyone’s fault; but that doesn’t mean there is nothing you can do to improve the situations.

There are ways you can influence your luck for the better — not by superstitions, but by clear choices of action. Here are those I believe are most useful.

Don’t outsource your choices.

Many people allow their choices in life to be made for them by fashion, other peoples’ expectations, friends, or family members. Never do this. You can’t improve your luck by expecting others to do it for you.

Allow yourself enough time to see how events are going to turn out. Many bad choices are made in haste, long before it has become clear what impact events are really going to have. Slow down. Don’t allow fear, anxiety, or foolish pride to push you into action before you are ready.

Don’t allow yourself to become too attached to specific plans or hopes.

I don’t mean that you shouldn’t be passionate about your future; non-attachment doesn’t mean some kind of spacey disinterest in what is going on around you. Be as passionate as you like about what you want to achieve (this will help your motivation to stay firm), but don’t get too attached to any particular way to get to your goals.

Life may block your ideal road and, at the same time, open up some wholly unexpected alternative. If you’re stuck on one route only, you’ll waste time and energy cursing your “bad luck” while completely missing the new option.

Manage your commitments, especially financial ones.

If you’re completely spent out every week, or — much worse — living on credit, you’ll never be able to take the risks needed to pick up the opportunities that life continually offers you. Instead, you’ll have to limit yourself to whatever can make you enough money to keep going, even if that means doing a job you hate.

It’s easy to overspend, given all the marketers who devote their lives to making that happen. If you’re in a tight financial situation, one of the best ways to improve your luck is to slow down your spending and work steadily to move into the realms of greater financial freedom. If you routinely take on more than you can handle, your “luck” will suffer as a result.

Ignore fashion.

The surest thing about fashion is that it will soon change. It’s like basing your choices on the way the wind is blowing.

In fashion, timing is everything. Get too far ahead of the crowd and you’ll have the “bad luck” to find your ideas are ignored. Get too far behind, and you’ll also find “bad luck” — the bad luck of being dismissed as a sad sack who jumps on the bandwagon when everyone “in the know” is already moving on to the next big thing.

Be realistic about relationships.

Good relationships are an enduring source of “good luck” in life; bad ones produce exactly the opposite. Sadly, nearly all of us vastly over-estimate our own value to others and their interest in our well-being. As a result, we set expectations for many relationships that were never going to be met. We set ourself up to experience “bad luck” in our dealings with others.

Being realistic doesn’t mean shying away from relationships, or being negative. It means allowing relationships time to reveal what they can bear, then staying within those bounds. Those who have constant “good luck” with others are always careful to keep each relationship at a level where it’s beneficial for both parties. They don’t demand more than others are willing to give; and they don’t push more onto others that they are willing to handle.

Put yourself first.

This isn’t being selfish: that’s demanding others conform to your wishes, regardless of their own needs. Putting yourself first means recognizing that no one is more interested in your well-being than you are — so if you don’t look out for yourself, how can you expect others to do better?

Learn more. Practice more.

When you experience the “bad luck” of finding you can’t get where you want to go because you lack some knowledge, skill, qualification, or experience, recognize that all of these are things you can change. Just about anything you lack can be learned or worked around. All it takes is a little sustained effort. Ask just about any professional sports player. the more they train and practice, the better the luck they have during competition.

Don’t over-dramatize or get caught in short-term thinking.

These are the biggest sources of “bad luck.” When something goes wrong — as something nearly always will — you focus on the immediate hit, over-dramatize the result, and instantly conclude that your world is coming to an end.

“Lucky” people often suffer just as many reverses, but they look beyond them and don’t let them get out of proportion. Instead of becoming depressed, they begin at once to think about how to get past the blockage. That way, they don’t give up and they often notice the other opportunities chance has brought their way. What seems to be a reverse may be a nice piece of “good luck” in disguise.

Open your mind.

Don’t worry if you’re not sure where you’re headed is right for you. Go along until you find out. Don’t be rigid. When things change — as they will — rational people change their minds. Only irrational, inflexible people cling to the past, marching on into the mire and suffering more and more “bad luck” as a result.

Listen, learn, think, and never rule out what you don’t yet understand. The more you learn, the luckier you’ll become as you begin to see chances and choices hidden from your by your previous ignorance.

Learn to laugh a lot.

Good humor is a wonderful remedy for the blues. If you can laugh at events — and at yourself — they’ll lose their power over you. The world is a crazy place, full of people grimly determined to do wonderfully stupid things. Many of the things we get wrong are truly funny — if only we didn’t get so serious about ourselves.

When you mess up, have a good laugh, learn what you can and start again. If you do that, you’ll end up being one of the luckiest people around.

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Why leaders should practice benign neglect

 
Things (and people) almost always work better when you stop messing with them. All that probing and peering, opening things up and fiddling to try to improve how they work, checking and supervising, absorb time and effort that would be better spent on doing the job itself. If you want results, focus on that and leave the rest alone.

My father was an expert gardener. His garden was the envy of the neighbors, and the food he grew kept our family supplied with fruit and vegetables year-round. People used to ask him if he spent all his time in the garden. Of course, the answer was no. It wasn�€™t his actual job, just a hobby. It wasn�€™t even his only hobby.

The secret of his success with plants was simple. He made sure the soil was in good condition, he planted at the right time, he kept the weeds and pests in check, and then he left the plants alone to get on with growing, flowering, and producing crops.

�€œNeglect them a bit,�€� he used to tell me. �€œDon�€™t be fussing around them all the time. Plants thrive on benign neglect.�€�

A necessary lesson for today

Most organizations could learn something from my father. Instead of fussing and fiddling with organizational structure, so-called management techniques, and all manner of supposed incentives, they could save themselves a good deal of time, money, and wasted effort if they did just four simple things:

  • Provided civilized working conditions that gave people stability, a living wage, and the benefits needed to be able to concentrate on doing their jobs.
  • Made sure that everyone is given work appropriate to the current level of ability and experience; neither over-stretched nor kept in boring jobs that don�€™t challenge their capacity.
  • Acted to curb anything that interferes with time spent doing the job they are paid for. That includes needless meetings, today�€™s fetish of staying in contact 24/7, and demands to provide pointless information for people in the home office with nothing to do beyond compile statistics.
  • Let people get on with doing their work, making supervision minimal and limiting reporting to the essentials.

Good leaders practice benign neglect. It�€™s the idiots that cause the problems, always fussing around their staff, probing and peering and generally interfering with them doing their jobs. They�€™re like children who plant a few seeds and want to dig them up the next day to see if they�€™re growing. You can forgive children, but adults should know better.

How to neglect people to best effect

Here are three simple ways for any leader to help people find success and develop themselves:

  • Make sure they have the right conditions — the authority, the resources, the training and clear direction, and the time needed — and then ignore them as much as possible while they get on with their work. It�€™s their job, not yours. If they�€™re busy, you don�€™t need to be. Neglect them a little. Do your own work and stop messing with theirs.
  • A major part of any leader�€™s work should be keeping down the weeds. Keep others away from interfering with your people�€™s work. Cut out unnecessary demands. Pull up useless meetings and slice off pointless reports. Weeds like that can choke any hope of good results. Be ruthless. Clear a space for your team to thrive and grow.
  • Give them the time and space to do their job and develop as they should — plus the knowledge that the organization will let them get on with it, unless they call for help.

Benign neglect works with people because it shows that you trust them. It shows you believe in their commitment and ability. It proves that you believe in their ability to deliver what�€™s needed without being watched all the time and treated like small children.

Plants thrive on a bit of neglect. So do people. Try it.

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Don�€™t fall for wrong ideas about work/life balance

 
In many ways, the most important principle of Slow Leadership is building a balanced life between work, housekeeping, and leisure. It isn�€™t an easy task, especially in the present climate. But it isn�€™t being helped by the advice that�€™s given to look for answers in al the wrong places.

To find balance, you need first to know what it looks like. This is especially true of work/life balance—a topic that consistently produces more confusion than enlightenment.

It�€™s easy to say what balance is not:

  • It�€™s not a fixed state. Life circumstances and work and career expectations continually change. What seemed desirable only a few months ago may now be unacceptable.
  • It�€™s not some mathematical ratio between hours spent working and leisure or family time—let alone a 50:50 split.
  • It�€™s not a way for organizations to try to turn reasonable and civilized working patterns into supposed �€œbenefits�€� and pass them off as part of remuneration.
  • It�€™s not an excuse for trying to get more paid vacations or better maternity (or paternity) leave arrangements.
  • It�€™s not even a matter of time management or day-to-day decisions about when, how, and whether to spend time on all of life�€™s various aspects.

The real demands of creating balance

The real demands of creating a balanced life are all about choice, responsibility, and being alert to the consequences of all your actions—on yourself as well as on others.

How you spend your time is a consequence of your thoughts and intentions. What do you value most? What do you want to achieve? How do you wish others to see you and estimate your worth?

These are all key work/life balance choices—and you are responsible for them all the time, whatever external pressures are placed on you.

Suppose your organization demands extra working hours. Can you refuse? Yes, so long as you are willing to accept the consequences. Of course, if you want most to be seen as a hight flier and a model of corporate loyalty, a choice against extra working is not going to be a good one. But it�€™s still a choice you can make—and for which you are responsible.

Suppose you decide to start a family. That choice comes wtih a great many consequences—not least those that may cause you to wish to limit time away from home and cut lengthy working hours. Should organizations make the implications less negative in career terms? There are good arguments that it�€™s in their interests to do so, but that doesn�€™t change the fact that it was your choice to start a family and you must be aware that there are consequences. You can�€™t duck out of your responsibility for that choice.

Choices and consequences

Decisions about how to spend our lives are tough and the outcomes often uncertain. It�€™s tempting to try to shift responsibility onto others and claim that we had no choice. It�€™s also tempting to duck such choices altogether by demanding a �€œright�€� to have it all: a rich family life, with time off whenever it�€™s needed,and unaffected promotion opportunities. There is no such right and never has been. It may be an ideal we could work towards, but it’s not a right anyone can demand, any more than we have a right to good health or a right to be prosperous, or loved, or happy.

It won�€™t wash. Finding balance can neither be handed over to others, nor avoided by claiming a non-existent right to �€œhave it all.�€� It�€™s down to you to make the best choices you can, based on the best information available to you at the time.

In life, incompatible desires and clashing priorities are constant. There are no ways to avoid them. Nor can you avoid the consequences of whatever choices you make. Even failure or refusal to make a choice consciously won�€™t help. It�€™s still a choice after all.

Building a balanced life requires waking up to your responsibility to do the best you can and accept that it�€™s never going to be perfect. It�€™s making choices consciously and carefully that others maybe try to avoid or pass off onto circumstances or fate. It�€™s accepting that whatever balance—or imbalance—characterizes your life, it�€™s there because that�€™s what you chose. And it�€™s finding ways to meet work and non-work situations with intelligence and wide-open eyes for the likely results.

You are what you choose and what you fail to choose. Save in conditions of slavery or actual imprisonment, there are always other options.

It�€™s just that we usually don�€™t like them very much and prefer to believe our mistakes are forced on us.

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