“Baby on Board” – Dealing with Reality

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In the July 18, 2011 issue of Time, Joel Stein reflected on air travel with children and other sometimes-awkward realities. Mr. Stein suggested that airlines offer a section at the rear of coach for passengers traveling with young children. On a flight to Tokyo today, a passenger reminded me of the article; Mr. Stein recognized the realities of air travel for those of us who do not travel with children of our own, but frequently travel with
passengers who travel with their children, and the realities of those parents who travel with their children. Sometimes, passengers who travel without their children simply act like children. Sometimes, a reality check is healthy, but we do not always see consensus on what reality is.

Somehow, the debate on whether to raise the debt ceiling in the U.S. and, if so, by how much has devolved into politics. It is no longer about differences between political parties because, and the reality is, consensus within the two dominant parties in Washington, DC is, at best, poorly
defined and, more likely, hard to find at all. Pundits want to make the debate a Republican versus Democrat battle, but strong disagreement on a way forward seems just as present with each party as across party lines.

Blog postings by colleagues of mine point out how many times the U.S. Congress raised the debt ceiling during presidential administrations dating back to Ronald Reagan, as if a history of doing anything is a compelling argument for continuing to do something. With that kind of thinking, as the current television commercial suggests, people would still think the world is flat (actually it says that without innovation the world would be flat – preposterous since it never was flat – but that is a topic for another day).

The national debt of the United States has never been higher and has never been a larger percentage of the nation’s Gross Domestic Product. Some people believe that the United States needs to take steps to control it’s national debt before the United States faces a debt crisis like Greece and other European nations. I suspect in a de-politicized arena most representatives elected to national office in the United States might actually
agree that growth in the nation’s national debt cannot continue indefinitely, but we would find, and are observing, strong disagreement on how and when to resolve a potential debt crisis. Whether our representatives like it or not, they campaigned long and hard to be in the position in which they find themselves. Perhaps next time they will be careful what they ask for or, perhaps, we simply have the wrong people, collectively, in office.

When I am flying, I must accept certain realities that are not necessarily included in the terms and conditions listed on the ticket. Reality 1: I am not in a position to charter my own plane and, as a consequence, I must accept that I am going to be on an airplane with other passengers. Reality 2: Sometimes my fellow passengers include children, and people who behave like children, and that is included in the price of admission. Reality 3: Sometimes when I am fortunate to sit in the big seats in the front of the plane, my fellow fortunates will include passengers with small children; that is not my opportunity to revert to childlike behavior myself. Reality 4: The parent of an unhappy child is not any more thrilled to be traveling with an unhappy child than I am and they have the added discomfort of having fellow passengers look at them as if there was something they should be doing to control the child.

Looking at our elected representatives and their plethora of appointees, the electorate might find it refreshing to hear non-spun explanations of reality from politicians. Reality  A: Non-spun, politically neutral explanations of anything are unlikely from anybody elected to public office in a nation’s capital. If the first responsibility of a leader is to define reality, as asserted by Max DePree, then if those we elect to leadership positions somehow refuse to define reality and to communicate a compelling vision for a new reality, the electorate in the United States may need to face Reality B.

Reality B: Those who serve in elected office are not inherently leaders.

Reality C: Not all people in elected office are public servants.

Reality D: If e want people in elected office to lead us, we may need to elect leaders.

Reality E: the leadership vacuum crosses party lines; the party only helps clarify the possible vision.

It seems increasingly clear, facilitated by a potential crisis on the horizon, that the time is ripe for a leader to emerge. Will one?

“Wall Street, whose excesses caused this mess” – Really?

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In the June 27, 2011 print U. S. edition of Time, Joe Klein, in the context of suggesting that Republicans are against regulating Wall Street, made the statement in quotes in the title. Did it really?

Wall Street is not a club of innocents. On the other hand, the strongest case that Wall Street caused the current economic downturn is that analysts in Wall Street exercised their contractual right, and their obligation to investors and, probably, the SEC to return mortgages to originating lenders that appeared under-collatealized. That action did squeeze lenders into liquidity crises and cause the houses of cards to collapse. Why is nobody willing to probe beyond Wall Street. Do reporters like Mr. Klein simply stop at the first and easiest answer?

Mr. Klein cites presidential candidate Mitt Romney as suggesting that President Obama caused home values to collapse. Really? What caused home values, or prices, to rise to, unrealistically high levels in some markets, in the first place?

Some time ago, home ownership became part of the so-called American dream. Fulfilling that part of the dream seems to have always been dependent on where one lives in the country. Home prices naturally vary based on supply and demand.

Durning the Clinton Administration, a decision was made to make home ownership more feasible by loosening credit, by making qualifying for a mortgage easier. With more people able to enter the home-buying market, home prices rose, at least in some areas and neighborhoods in the United States. Concurrently, with fewer restrictions placed on lenders, prospective buyers discovered that they qualified for larger mortgages, even “jumbo” mortgages. Some buyers, wanting to capitalize on rising home prices, accepted mortgages with low “teaser” rates in anticipation of
selling or refinancing before the ultimate mortgage payments became due. Some home buyers accepted mortgages for more than the appraised value of the house. In addition, some appraisers seemed willing to appraise the home for more than the then-current value. With low or no down payments required, an apparently large number of homes were over-valued and under-collateralized.

In order to increase the pool of money available to fund mortgages, Wall Street received encouragement from Washington to create securities,
collateralized debt obligations, to provide mortgage lenders with a source of fresh capital with which to make more mortgages. These new securities allowed Wall Street to return individual mortgages to the original issuer for specific reasons, including insufficient collateral. These returned mortgages required cash compensation to Wall Street.

In 2007, Wall Street began taking a closer look at the mortgages it was buying, and began returning some, but not all, to the mortgage lenders. Soon, some mortgage lenders began facing a cash and credit squeeze. The squeeze prevented the issuing of new mortgages by an increasing number of lenders. With credit tightening, the number of eligible home buyers reduced. With fewer buyers, the prices of homes dropped and the construction industry entered a tailspin.

The credit crunch was detrimental to other sectors of the economy. Financial institutions that have no funding for mortgages also have no money for commercial credit lines and other purposes. The economy in the United States and other economies tied closely to it entered a downturn, the result of greed by some, and not just Wall Street, the decision by Washington to not regulate these new debt instruments, and a well-intended, even if politically motivated, desire to stimulate home ownership and the pursuit of the American dream.

Wall Street played a part, to be sure, but Wall Street had plenty of help from lenders, appraisers, real estate agents, and home buyers, all anxious to make an easy windfall courtesy of loose credit and artificially-rising home prices. People all over the country made artificial commissions or artificial profits. Some simply got caught when the house of cards collapsed. Mr. Klein and others find it so much easier to blame Wall Street than to blame everybody else who bought into the “greed is good” mentality.

The right kind of leadership and the right expertise

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From my previous postings, it may be clear that I have an interest, even a fascination, with the ongoing discussions of job creation  by people in positions of leadership about job creation.  I posted a question on LinkedIn last week asking how many of our senators and representatives in
Washington, DC have a background suggesting experience in creating jobs.  I raised the question because evidence indicating such experience seems thin after more than two years of conversation about economic recovery and the need to reduce unemployment through job creation.

Since several people responded that I raised a good question and nobody seemed able to answer the question, I spent part of my 4th of July weekend reviewing the biographies of each member of the U.S. House of Representatives and Senate, as found at house.gov and senate.gov.  The chart below shows the combined number from both chambers.

In these charts, I use the term “politician” to mean anybody whose indicated background includes only positions involved in negotiating and defining public policy or having no experience other than in those positions since 1980.  I use the term “entrepreneur” to mean experience owning, building, or starting a small business.

The data shows that 300 of 538 current officeholders in the House and Senate are almost equally divided between politicians and attorneys. 111 of our national legislators were businesspeople or entrepreneurs prior to election to public service and five more were accountants (one of which was also an entrepreneur); among the “Other” is one senator who was both a physician and an entrepreneur. Twenty were either physicians or nurses with two among the “Other” identified as dentists and one each of the “Other” an optometrist, a scientist, and a psychologist. Twenty-nine educators, eight engineers (one of which was also an entrepreneur), fourteen farmers, twelve members of the military, eight members of the law enforcement community, four community organizers, three homemakers, and three journalists round out the remaining non-“Other” legislators.  The “Other” include a football player, ordained ministers, community organizers, communications professionals and journalists, an entertainer, a health administrator, an ironworker and a millworker.

My research on leadership suggests that our culture shapes our perception of appropriate roles, practices, and behaviors of leaders.  My research also seems to indicate that the roles that we fill or play in life shapes our individual interpretations of culture, which itself reflects or defines our norms and values, and, therefore, influences how we view the world and how we lead in it.  We can expect, therefore, that
politicians view the world differently from attorneys who view the world differently from farmers and businesspeople and accountants and ministers.

It seems that the question we should ask ourselves, before we cast our votes, is does this person have the worldview and the background necessary to solve our problems and do we need people to develop solutions or are we better served by people whose background is in policy or in law? I realize that the problems of today are not necessarily the problems of yesterday or of tomorrow, but would we be better served by staff who know how to write policy and legislators who know how to fix things and make things work?  It appears that, when job creation and economic recovery is essential, we have too few elected leaders who have ever created jobs or stimulated a local or national economy and an abundance of people who should know how to negotiate and convince and write policies and laws. Does the United States have the right leadership with the right expertise?

The following four pie charts show the breakdown for democrats and republicans and for each of the two chambers. I leave it to the reader to draw your own conclusions.

 

Automobile-related Internet Portal

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Problem: Launch state-of-the-art Customer Care center as key element in portal’s support organization.

Solution: Evaluated Customer Care requirements and assisted in the selection of eCRM, eMail, Chat, and Knowledge Base technologies and outsource and ASP vendors to create a web enabled contact center. 

eProcesses created all process flows, workflows, and included the creation of all software training (leader lead as well as CBT) for Clarify and Interactive Intelligence. eProcesses introduced a system of management which included: Expert Behavior Models, Barrier Removal, Continuous Improvement Meetings, fully-integrated training and other effective management practices.

Results: Customer Care center solution implemented on time and under budget that enables efficient customer interactions with escalation and clear documentation of those interactions, scalable and changeable processes and technology solutions, multiple communication channels, and multi-site, multi-product line support.

Insurance Operational Audits and Training

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For more than three years after two initial projects with the client, the client request a series of operational audits involving each of their more than 20 offices to reinforce the aggregate changes implemented to improve operational and financial performance. When appropriate, these audits included a series of training sessions on the roles and responsibilities of supervisors, performance measurement and management, and work simplification and methods improvement techniques.

Audit Overview

The scope of the operational audits included the following:

  • Analysis of staff productivity;
  • Determination of cycle times for key office processes;
  • Identification of improvement opportunities in the areas of service, quality, responsiveness, and productivity; and
  • Documentation of work volumes for basic office activities and Key Volume Indicators.

Project staff provided Executive management and District management with an independent assessment of the staffing levels, resource utiliza­tion, and improvement opportunities within the client’s field offices.

Audit Results

For each audited office, a report was prepared showing Program Plan (budget) staffing and actual staffing and comparing each of those levels to levels recommended by a model developed by project staff. This model proposed staffing levels based on measurable volumes of work which were reported each month by the field offices.

The underlying assumptions made by the model were reviewed against actual activity levels in each of the audited offices. This review was also provided in the Audit Report.

The analysis of cycle times for mail processing, bill paying, word processing services, data entry/data processing, and other activities in most offices showed significant opportunity for improvement. Where improvement was needed, project staff made recommendations to remove process and organizational barriers.

The staffing and resource utilization analysis highlighted a definition problem for “actual” staffing. project staff recom­mended revising the Monthly Staffing Analysis to include Program Plan as well as Actual and Model Office staffing levels as one way to achieve reporting consistency. Some offices were found to have Actual staffing below Program Plan staffing; rarely do the offices exceed Program Plan levels. Project staff found most offices staffed at levels exceeding Model Office-recommended levels. Consistent with client policy, project staff’s recommendation was to reduce staffing through attrition to Model Office-recom­mended levels.

Training Highlights

In those offices that requested supervisory training, four half-day sessions were presented. The sessions included:

I.         THE ROLE OF THE SUPERVISOR

(District) Office – Current

Historical – General

The changing roles of supervisors – current trends

What does this mean in day-to-day terms?

Where are you now, individually, and where do you want to go?

II.        PERFORMANCE AND WORK MEASUREMENT

Performance Defined:  Productivity, Effectiveness, Efficiency, Quality, Profitability/Budgetability, Innovation, Quality of Work Life

Goals and Objectives – General and Supervisor-Specific

Policies and Procedures

Budgets, Forecasts, and Schedules

Performance Reporting:  What, When, Why, By Who, What Detail

Reasons for Measurement

Evaluation and Problem Solving

The Variable System

The SPAN System

III.    WORK ANALYSIS TOOLS

Process definition

Analysis techniques

Collection, analysis and presentation of data

Procedures and standards

Work Simplification and Methods Improvement

Defining the work process

Investigating the work

Challenging work details

Looking at alternate methods

Benchmarking, Brainstorming, and Enlisting other opinions

Implementing improvement

Following up on details

Measuring results

Each of these broad topics included some lecture, some exercises, and out-of-class assignments (“homework”). All were geared to the client’s culture in general, and the specifics of each field office and its supervisors in particular. Each assignment and exercise required some type of analysis of the partici­pants’ current situation or working environment. Each participant prepared a list of the activities that they were currently involved in, including how much time they spent doing these things. This was compared to a model which was developed during the class time.

Each participant evaluated one or more aspects of the area which they supervised. As time allowed, we looked at analysis and improvement of quality, time-and-motion studies, flow charting, and other applications as time allowed. Time was budgeted to allow for hands-on, one-on-one coaching in the specific applications, when desired by the individual supervisor.

Training Impact

As a result of the training and its related activities, District management reported an increased emphasis on objective rather than subjective measures of departmental results. Awareness of productivity, backlog, work volumes, absenteeism, non-productive time, and other areas of importance to the individual supervisors and to the overall performance of the field office increased. Increased use of measurement enhanced the sense of responsibility and accountability of the supervisors to their peers. Bi-weekly meetings were initiated to provide a forum for discussion of performance, concerns, and removal of process barriers.