Monthly Archives: April 2014

The Warren and Charlie Show at Berkshire Hathaway’s Annual Meetings

Berkshire Hathaway Annual Meetings

Berkshire Hathaway Annual Meetings

At the Berkshire Hathaway annual shareholders meetings in Omaha, Warren Buffet and Charlie Munger sit at the center of the stage in front of a dark sea of shareholders. Warren Buffet first fields questions from the audience and a panel of journalists and stock analysts. Warren answers them and will ramble on a bit in his unique way (often with a one-liner or two mixed in) for a few minutes.

Then, Warren will look over to his partner and query, “Charlie?” Then Charlie Munger will either lean in and make a sharp, critical, pithy, often derisive comment (which usually extracts gasps or loud chuckles from the audience) or simply remark, “I have nothing to say,” which can be entertaining particularly after a long-winded digression from Warren Buffett.

Berkshire Hathaway annual shareholders meetings are normally held on the first Saturday of May in Omaha, Nebraska.

Berkshire Hathaway Annual Meetings

Berkshire Hathaway Annual Meetings

Berkshire Hathaway Annual Meetings

Recommended Reading

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Posted in Investing and Finance

Definition: Darwinism

Charles Darwin - Darwinism Largely, the term Darwinism refers to the sum total of all hypotheses that consider the development of species, including the human species, as an outcome of competition among and within species. Such completion weeds out the less fit.

The system that drives this process is that of the selective retention by the environment of those individuals who possess specific genetic features that give them competitive advantage over comparable others. Such “naturally selected” individuals then pass on these genetic features to their offspring.

Recommended Reading

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Posted in Philosophy and Wisdom

Life Lessons from Jane Rosenthal

Jane Rosenthal, movie producer and co-founder of Tribeca Enterprises

Jane Rosenthal is a movie producer and co-founder of Tribeca Enterprises with actor Robert De Niro and New York real estate investor Craig Hatkoff. Tribeca Enterprises organizes the annual Tribeca Film Festival. Jane Rosenthal is the producer of many films, including the Fockers series ( “Meet the Parents”, “Meet the Fockers”, and “Little Fockers”) and the “Analyze This”- “Analyze That” series.

In the 10-Apr-2014 issue of BusinessWeek, Jane Rosenthal offers three valuable life lessons:

  1. Having the right work-life balance is important, especially when you are a parent.
  2. You can have it all, but you cannot have it all at the same time.
  3. Work hard and make good decisions. The rest will work itself out.
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Posted in Education and Career Leaders and Innovators

Investment Process: Do your Homework Thoroughly

Investment Process: Do your Homework Thoroughly

Successful investing incorporates a unique combination of knowledge, discipline and rules that distinguishes them from average players on Wall Street. Warren Buffet has asserted umpteen times that an astute investor must invest in stocks of a company that has relatively uncomplicated products and services. It is decidedly indispensable that an investor must comprehend the business that the company is dealing with so that the investor is easily capable of following the financial and non-financial business situation of the company. It is exceedingly important that before an investment transpires, an investor must scrutinize the essentials of the company and perform a comprehensive analysis in order to establish the current value of stock and the potential prospects of the company. In the 1999 annual meeting of Berkshire Hathaway’s shareholders, Warren Buffett added,

You might think about picking out 5 or 10 companies where you feel quite familiar with their products, but not necessarily so familiar with their financials …. Then get lots of annual reports and all of the articles that have been written on those companies for 5 or 10 years…. Just sort of immerse yourself.

And when you get all through, ask yourself, “What do I not know that I need to know?” Many years ago, I would go around and talk to competitors, always, and employees…. I just kept asking questions…. It’s an investigative process—a journalistic process. And in the end, you want to write the story…. Some companies are easy to write stories about and other companies are much tougher to write stories about. We try to look for the ones that are easy.

In the 1999 annual meeting of Berkshire Hathaway’s shareholders, Charlie Munger said, “I don’t think you can be a really good investor over a broad range without doing a massive amount of reading.” Building intrinsic value will almost always lead to outperformance. In fact, Warren Buffett values the performance of Berkshire Hathaway not by it’s market capitalization or it’s stock price, but by book value growth. In the 2012 letter to Berkshire Hathaway shareholders, Warren Buffett wrote,

One thing of which you can be certain: Whatever Berkshire’s results, my partner Charlie Munger, the company’s Vice Chairman, and I will not change yardsticks. … It’s our job to increase intrinsic business value—for which we use book value as a significantly understated proxy—at a faster rate than the market gains of the S&P.

Charlie and I believe the gain in Berkshire’s intrinsic value will over time likely surpass the S&P returns by a small margin. We’re confident of that because we have some outstanding businesses, a cadre of terrific operating managers and a shareholder-oriented culture. Our relative performance, however, is almost certain to be better when the market is down or flat. In years when the market is particularly strong, expect us to fall short.

The average investor does not consider that active fund managers are rationalizing their fees and expenses through outperformance over index-funds or passively managed funds, in general. Over the past two decades, there’s has been a strong shift toward index investing. Twenty years ago, 94% of U.S.-equity mutual funds and ETFs were invested with active mutual funds. Today, the composition of the market is 64% active and 36% passive. Over the next decade, passive investing strategies could overtake the actively managed portfolios and cross the 50% landmark.

Recommended Reading on Warren Buffett & Value Investing

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Posted in Investing and Finance

Brief Reviews of Recommended Books on Business History and Biographies

“Titan: The Life of John D. Rockefeller, Sr.”

'Titan: The Life of John D. Rockefeller, Sr.' by Ron Chernow (ISBN 1400077303) A biography of John D. Rockefeller traces his life the archetype of the American Dream. John D. Rockefeller began his life as threadbare country boy with nothing, remained an evangelical Baptist, and ended with the success and riches of royalty. As the Standard Oil magnate he controlled 90 percent of the oil market and went on to become the world’s richest man at the height of his active career. After the break-up of Standard Oil, Rockefeller became a legendary philanthropist and donated millions to medical research and education.

Buy ‘Titan: The Life of John D. Rockefeller, Sr.’ by Ron Chernow

Walter Isaacson’s Biography of Steve Jobs

'Steve Jobs' by Walter Isaacson (ISBN 1451648537) Drawn from three years of exclusive interviews with Apple co-founder Steve Jobs, established biographer Walter Isaacson offers a comprehensive portrait of the most prominent genius of our times. This thoroughly researched biography provides a fantastic insight into the process that made the Apple co-founder such a giant in computers. Jobs had an extraordinary obsession for creating “insanely great products” and had a vision of integrated architecture for Apple’s products and Apple’s processes for how engineers, designers, and marketers implemented a brilliant innovator’s ideas.

Buy ‘Steve Jobs’ by Walter Isaacson

“The Starbucks Experience: 5 Principles for Turning Ordinary Into Extraordinary”

'The Starbucks Experience: 5 Principles for Turning Ordinary Into Extraordinary' by Joseph Michelli (ISBN 0071477845) Joseph Michelli outlines that a huge share of the success of a trendy Seattle-based coffee shop that has turned into a lucrative international franchise comes from its creation of experience for customer and business culture. Michelli recognizes five fundamental values (‘make it your own,’ ‘everything matters,’ ‘surprise and delight,’ ‘embrace resistance,’ and ‘leave your mark’) that forms the success formula for the Starbucks culture and provides a number of anecdotes based on how the company and its employees have reinforced their connection with customers.

Buy ‘The Starbucks Experience: 5 Principles for Turning Ordinary Into Extraordinary’ by Joseph Michelli

“When Genius Failed: The Rise and Fall of Long-Term Capital Management”

'When Genius Failed: The Rise and Fall of Long-Term Capital Management' by Roger Lowenstein (ISBN 0375758259) Since the ’90s, practically every major investment house employed highly paid statisticians and mathematicians in their trading divisions. These “rocket scientists” developed and deployed complex, computer-aided trading strategies trying to beat the market. With two Nobel Prize winners among its partners, Long-Term Capital Management, a multibillion-dollar hedge fund, relied on computers to find historical relationships between related securities. If one security would trade out of line in comparison to historical patterns, the firm would place bets that prices would get back into the pattern predicted by their mathematical analysis. The combination of absolute-return trading strategies and high financial leverage employed by the hedge fund, ineffective regulations on hedge funds, imprudent banking, hubris led to a $4 billion- loss in investors’ capital and triggered the near collapse of the world’s financial system.

Buy ‘When Genius Failed: The Rise and Fall of Long-Term Capital Management’ by Roger Lowenstein

“The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance”

'The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance' by Ron Chernow (ISBN 0802144659) A 150-year multi-generation history of one of the greatest regal dynasties of American commerce and the banking empire that the Morgans built. Ron Chernow effectively captures the personalities and eccentricities of many of these key figures, Junius Spencer Morgan (who started merchant banking firm J.S. Morgan & Co.,) J. Pierpont Morgan (who lead a banking coalition that stopped the 1907 financial crisis and thus dominated the nation’s high finance) and John Pierpont ‘Jack’ Morgan, Jr. (who financed the Allies during World War I, the 1929 Crash of Wall Street.) An overarching theme is the long-term effects of regulation on the banking industry. In the second half of the 20th century, federal regulation made it progressively difficult for banks to make profits and financial institutions engaged in ever-increasing risk-taking in order to maintain revenue streams and profitability.

Buy ‘The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance’ by Ron Chernow

“Liar’s Poker: Rising Through the Wreckage on Wall Street”

'Liar's Poker: Rising Through the Wreckage on Wall Street' by Michael Lewis (ISBN 0393027503) Liar’s Poker is the very funny autobiographical account of Michael Lewis’s three-year, dog-eat-dog climb at Salomon Brothers. Salomon Brothers single-handedly invented a market for mortgage bonds that made the firm wealth. At Solomon, Liar’s Poker was a figure of speech for the Salomon culture of intense risk-taking with immediate payoffs. Lewis rose in the firm from a training program newbie to the highest paid salesman in his trading class. When Lewis made massive loss for clients by selling them bad investment; yet Lewis’s co-workers gave him kudos for his impressive sales maneuvers that profited Solomon, as was the nature of the culture of Salomon Brothers. The firm’s greedy and innovative bond-selling practices resulted in a Treasury bond scandal in the early ’90s.

Buy ‘Liar’s Poker: Rising Through the Wreckage on Wall Street’ by Michael Lewis

“Small Giants: Companies That Choose to Be Great Instead of Big”

'Small Giants: Companies That Choose to Be Great Instead of Big' by Bo Burlingham (ISBN 1591841496) Bo Burlingham profiles companies that resisted the temptation to grow for the sake of growing. The book contends that being small businesses may in fact be turned into a competitive advantage if we learn how to take advantage of nimbleness. The central thesis is that small businesses able to follow the leader’s intuition, gather information more quickly, act on ideas swiftly with less need for justification. Being small can also allow extraordinarily personal relationships amongst employees, and with customers and suppliers.

Buy ‘Small Giants: Companies That Choose to Be Great Instead of Big’ by Bo Burlingham

“The Big Short: Inside the Doomsday Machine”

'The Big Short: Inside the Doomsday Machine' by Michael Lewis (ISBN 0393338827) A succinct, clear, and compressed explanation of the build-up of the subprime mortgage crisis and credit bubble during the 2000s and the resulting banking crisis of 2008. In a quest for profits, lenders, no longer concerned about whether borrowers could pay them back, used deceitful tactics to convince Americans to give up the equity in their homes and take on mortgages they could not afford. The credit default swap market bet against the collateralized debt obligation (CDO) bubble. The credit-rating agencies gave top ratings to risky assets, which opened the door to a huge market of CDO buyers. Many of key players bet against the CDO bubble and thus ended up profiting from the financial crisis. Michael Lewis highlights the unconventional nature of the type of traders who think against the grain and bet against the market.

Buy ‘The Big Short: Inside the Doomsday Machine’ by Michael Lewis

“Barbarians at the Gate: The Fall of RJR Nabisco”

'Barbarians at the Gate: The Fall of RJR Nabisco' by Bryan Burrough and John Helyar (ISBN 0061655546) An excellent account of backgrounds of the key players, the bidding sequences, and the events that led up to the leveraged buy-out (LBO) of RJR Nabisco by Kohlberg Kravis Robert (KKR.) In the late ’80s, executive Ross Johnson who, through a series of cunning moves, became the head of RJR Nabisco. Discontented with the low valuations by Wall Street, Johnson launched management-led leveraged buyout (LBO) of RJR Nabisco. This led to a bidding war involving Johnson (aided by Salomon Brothers and Shearson Lehman Hutton), Kohlberg Kravis Roberts (KKR), and Forstmann Little & Co.

Buy ‘Barbarians at the Gate: The Fall of RJR Nabisco’ by Bryan Burrough and John Helyar

“Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron”

'Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron' by Bethany McLean and Peter Elkind (ISBN 1591840538) Kenneth Lay, the former chief executive officer of Houston Natural Gas founded Enron as an interstate pipeline company in 1985 by combining Houston Natural Gas with Omaha-based InterNorth. By 1999, 90 per cent of Enron’s income came from trades over Enron Online, the company’s website for trading energy-related commodities. Enron quickly rose to become America’s seventh largest corporation and constituted what was principally a Ponzi scheme that manipulated and gambled its energy-trading business. “The Smartest Guys in the Room” contends that Enron was a con game almost from the start and shows how the company used cunning accounting techniques to keep the momentum of earnings growth.

Buy ‘Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron’ by Bethany McLean and Peter Elkind

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Posted in Business and Strategy Investing and Finance

Advice to Entrepreneurs: Virgin Group’s Richard Branson on the Advantage of Being Smaller

Entrepreneurs are born of new ideas. They thrive by discovering creative ways to transform their ideas into commercially viable products and services. Here is advice from Richard Branson on the advantage of being smaller. Richard Branson is the founder and chairman of Virgin Group, the multinational venture capital conglomerate company.

  • Richard Branson, founder and chairman of Virgin Group On an entrepreneur’s most important advantage: most people who start a business from scratch or taking on much bigger corporations. But you have the advantage of being smaller. You’re more nimble. You can move quicker. As long as you use your tactical advantages, you can survive.
  • On survival: there is a very, very thin dividing line between survival and failure. You just got to fight and fight and fight and fight to survive.
  • On philanthropy: if you’re an entrepreneur incapable of building businesses to make money, you should also be capable of using your entrepreneurial skills look at some of the intractable problems in this world.
  • On passionate entrepreneurism: ideally, since 80% of your life is spent working, you should start your business around something that is a passion of yours. If you can indulge in your passion, life will be far more interesting than if you’re just working. You work harder at it, and you’ll know more about it.

'World Changers: 25 Entrepreneurs Who Changed Business as We Knew It' by John A. Byrne (ISBN 1591844509) Source: “World Changers: 25 Entrepreneurs Who Changed Business as We Knew It” by John A. Byrne. John A. Byrne is the former executive editor of BusinessWeek, former editor-in-chief of Fast Company, and former associate editor at Forbes, and co-author with Jack Welch of Jack: Straight from the Gut In “World Changers,” John Byrne presents potent advice on entrepreneurism and fascinating insights into what it takes to succeed as entrepreneurs from successful business luminaries such as Apple’s Steve Jobs to HARPO’s Oprah, from India’s Ratan Tata to Brazil’s Eike Batista. John Byrne deduces that the three essential characteristics that help entrepreneurs succeed are the ability to see opportunities where everyone else sees problems, problem with authority and status-quo, and an astounding ability to live with risk and the prospect of failure.

Recommended Reading

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Posted in Business and Strategy Leaders and Innovators Management and Leadership

FDR and the Four Freedoms

Franklin Delano RooseveltIn his State of the Union address to Congress on 6-Jan-1941, US President Franklin Delano Roosevelt asserted ‘four essential human freedoms’ in the following canonical form:

  1. Freedom of speech and expression
  2. Freedom of every person to worship God in his own way
  3. Freedom from want
  4. Freedom from fear

They are usually cited in abbreviated form as freedom of speech and of religion, and freedom from want and from fear.

During the Second World War, FDR’s Four Freedoms was commonly considered as a succinct statement of the aims of the Allies, notwithstanding prominent failures to accomplish these ‘freedoms’ among the Allies.

The Universal Declaration of Human Rights

The Four Freedoms are a succinct anticipation of what would later become the various ‘human rights’ asserted by The Universal Declaration of Human Rights, which was adopted by the UN General Assembly on 10 December 1948. This declaration was the result of the experience of the Second World War.

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Posted in Global Business Leaders and Innovators Management and Leadership

Dealing with Deference: Causes and Solutions

Dealing with Deference

We often defer to the boss’s suggestions, even if we disagree with an idea or, worse, think the idea is moronic. We withhold our objections to these “ridiculous ideas” for obvious reasons: We want to be polite and nice and continue making the house payment. But deference plagues organizations, saps effectiveness, stalls success, and erodes resources. While some managers are blind to the deference disease, others are desperately seeking an antidote.

Once the boss of a company I was working for called and asked if it would be okay if he took home the “wood scraps” to use for fireplace kindling.

Two hours later I received a phone call from the boss’s wife thanking me for the “lovely wood” that was delivered to her home. As the boss’s request reached the people assigned to pick up the scrap, the request was transformed into a command. So, instead of sending over discarded scrap wood, employees cut expensive oak planks to size, banded the wood, and transported it to the boss’s home. Then they complained the boss was misusing resources. The boss had no idea this was going on.

Four Clues to Recognize Deference

People often complain about deference to authority, in fact, it comes up in almost every survey. Here are four cues to help you recognize deference, as well as some dos and don’ts for dealing with it.

Cue #1: A pause should give you pause.

You’ve just shared an idea with a direct report who thinks it’s sort of stupid, but he doesn’t want to hurt your feelings or get canned. So he thinks, “How can I let the boss know I’m not keen on this idea?” He pauses to think. Of course, his brain is moving at light speed as he conjures a script. Nevertheless, there is a two-second pause as he searches for just the right words.

DO: Now, if you’re a caring, sensitive, high self-monitor, you immediately recognize the pause as a warning sign. You think to yourself, “Oh oh, there’s a pause. My bet is he’s thinking of a way to let me down gently.”

DON’T: If you’re like most people, you desperately want your idea to be implemented, so you are not looking for signs of disapproval. You’re looking to make your argument quickly, articulately, and with as much enthusiasm as possible. So you completely miss the two-second pause and don’t back off.

Cue #2: Faint praise should hit you like a truck.

Following the brief pause the other person chokes out a response. Since he’s worried about the horrific things that might happen if he disagrees, he consents to your whacked-out suggestions—but woefully. He comes back with something like: “I don’t know,” (he pauses again while looking distressed) “I guess your idea might work.” This, of course, is code for: “Are you nuts? Your idea will crash.”

DO: The savvy individual would read the concern reflected in the pause and pay attention to the tentative language (“might,” “maybe,” “perhaps”). This tepid approval is bogus and means the person is afraid to speak his opposing views. The most obvious hint the person has serious doubts is his halted delivery and pathetic look of distress.

DON’T: You’re so hyped on the sheer genius of your idea you pay no heed to tentative language, pregnant pauses, or expressions of distress. For you to pick up on the vibe that your direct report wants to express a concern, he will have to fire off a flare, grab you with both his hands, and shout: “Listen up, I have real concerns here! Do you hear me? Real concerns!” After all, you’re excited about your idea and are looking for people to agree with you. So, you read any ambiguous clues as signs of approval.

Cue #3: Words of concern should be a signal to probe, not to defend.

Deference to Authority

As the conversation continues, you take your subordinate’s lukewarm response as genuine acceptance and move in for the close. At this point, your direct report realizes his subtle hints have gone unnoticed and he’ll have to say something clear, forceful, and out loud. So he says: “Actually, I’m a bit worried about your plan. I can see you’re excited about this idea and that you’ve given it a lot of thought, but I’m wondering if…”

DO: Note your subordinate’s clever words. He’s acknowledged your excitement, given you credit for thinking about your plan, and only tentatively shared his opposing views. It’s a textbook response tailored to catch your attention without making you defensive. Read these words as a clue to probe for more detail. After all, the person in a position of less authority took a risk and needs to be rewarded. At this point, it makes sense to stop and thank him for his candor and seek more information.

DON’T: By this point, you’re completely committed to your idea and aren’t interested in hearing objections—no matter how well stated—so you don’t listen. Instead, you move from being enthusiastic to being argumentative. What you’re really saying is you’ve made your mind up and if the other person doesn’t agree, you’ll keep serving up arguments until he crumbles. And, oh yes—did you forget to mention—you are the boss, right?

Cue #4: Fear should cause you to look at yourself, not to increase your attack.

'Never Mind the Bosses: Hastening the Death of Deference for Business Success' by Robin Ryde (ISBN 1118474406) As you step up your debate tactics, the other person starts to look frightened. His eyes dart wildly as he looks for an exit, sweat forms on his forehead, and he prepares for a full frontal attack. He has this really bad idea he has to contend with, his boss is turning up the heat, and he doesn’t know what to say or do. Savvy individuals take one look at the fear in the other person’s eyes and realize they have done something to create this unfavorable reaction. They also know that it now falls on them to restore the conversation. They’re in a position of power, they’ve probably caused the fear (even if they’ve been on their best behavior), and they’ll have to fix it.

DO: To restore safety (and kill mindless deference) you might say: “I don’t want to force my view on you. I really want to come up with an idea that serves us all well. My plan might cause problems with your team, and I’d love to hear any objections you might have.”

Notice how these words help restore safety by establishing mutual purpose, softening your position, inviting differing opinions, and playing devil’s advocate. This doesn’t come naturally. You must fight your tendency to increase your attack at the first sign of fear. If you want to nip deference in the bud, you have to find a way to create safety.

As you enter a high-stakes conversation with a subordinate, you’ll likely offer up a hefty load of deference unless you create safety. And since others are likely to avoid disagreeing with you directly and openly, you’ll have to pay close attention to subtle signs.

First, watch for each pause. Hesitancy will be your first warning. If a pause is followed by a visible drop in confidence and half-hearted support, assume others have differing views but are holding back. Invite their opposing views. Explain that you want to hear all sides.

If the other person finally suggests an opposing view, embrace the information. Don’t attack it. You can make your points later. For now, encourage others to clarify their opinions. Value criticism —it’s your best tool for continuous improvement. Thank the other person for his or her candor and ask for details.

If you see fear in others’ eyes, take this as a cue not to step up your debate tactics, but to step out of the conversation and restore safety.

Don’t pound your point home. Instead, establish mutual purpose. Share your good intentions. Make it safe for others to speak openly and honestly

Recommended Reading on Dealing with Deference

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Posted in Management and Leadership Mental Models and Psychology

Victor Hugo’s Finest Peom: “To the One Who Stayed in France”

Victor Hugo, French Poet, Novelist, and Dramatist Victor Hugo wrote “Notre-Dame de Paris” (1831), usually translated as “The Hunchback of Notre Dame”, when he was in his twenties. Set in fifteenth century Paris, The Hunchback of Notre Dame tells a moving story of a gypsy girl Esmeralda and the deformed, deaf bell-ringer, Quasimodo, who loves her. The success of the book in France gained Hugo great fame and renown. He used his celebrity to criticize the autocratic regime of Napoleon III and encourage the French to revolt.

Napoleon III declared Hugo an enemy of the state. In 1851, just before soldiers arrived to arrest him at his home, Hugo managed to flee the country in disguise. He lived in exile in Guernsey, an island in the English Channel, until the revolution against Napoleon III in 1870.

In exile, Hugo wrote at a fast pace. “Les Châtiments” (“Castigations”,) a volume of aggressive invectives against the emperor, appeared in 1853.

It was also during his exile that he wrote his masterpiece, “Les Misérables” (1865), about Jean Valjean and other characters’ struggles for human rights, love, revolution, and redemption through a period of 18 years. Les Misérables was hugely popular, and when Hugo returned to his homeland in 1870, he was elected to the Senate of the new Third Republic. By the time he died in 1885, at the age of 83, he was a national hero. In Paris, two million mourners joined his funeral procession from the Arc de Triomphe to the Panthéon, where he is buried.

Laments For Leopoldine, the “One Who Stayed in France”

Leopoldine Hugo, Daughter of Victor Hugo, the In 1843, Hugo’s oldest and favorite daughter, the 19-year old Léopoldine Hugo, drowned shortly after her marriage in a boating accident in the river Seine at Villequier in northern France. When her boat overturned, she was pulled down by her heavy skirts. Her young husband Charles Vacquerie also died while trying to save her.

“Les Châtiments” was followed by “Les Contemplations” (1856), (“The Contemplations”,) the belated laments for Leopoldine. “Les Contemplations” concludes with “To the One Who Stayed in France,” a major elegy and one of Hugo’s grandest poems.

“To the One Who Stayed in France”

During his exile in the English channel, Hugo was unable to continue his annual visits to his daughter’s grave. Hugo offered “Les Contemplations” as surrogate, and asked a minimal favor of the visionary world; some hope that his daughter somehow will receive “this strange gift of the Exile to the Dead!” in her eternal rest.

Well, may at least this book, this somber message, reach
The silence as a murmur
The shore as a wave! May it fall there—sigh or love-tear!
May it enter the grave where youth, dawn, kisses,
Dew, the laughter of the bride,
Radiance and joy have already gone—and my heart along with them:
Indeed, that has never come back! And may it be
A song of mourning, the cry of a hope that can never tell lies,
The sound of a pale farewell in tears, a dream whose wing
We feel brushing against us lightly! May she say:
“Someone is out there—I can hear a noise!”
May it sound in her darkness like the footstep of my soul!

Victor Hugo (from “The Contemplations translated by E. H and A. M. Blackmore”)

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Posted in Music, Arts, and Culture

High Performance Teams Reject Conventional Wisdom

High Performance Teams Reject Conventional Wisdom

Conventional wisdom isn’t getting companies where they want to be. In only 10 percent of companies are workgroups high performing, meaning that they make money for the company and introduce new products, services or processes. About half are average performing, and 40 percent are non-performing.

Research has confirmed five observations that defy conventional wisdom about creating high performance:

Reason 1: Short-term thinking kills performance

'The Wisdom of Teams' by Jon R. Katzenbach (ISBN 0060522003) Conventional wisdom says that meeting quarterly goals is a measure of success. Ironically, the number-one inhibitor of high performance is short-term thinking—living for today at the expense of tomorrow. To meet quarterly financial goals, companies are cutting staff and budgets, resulting in overworked, frustrated employees.

On the day they announced their IPO, the founders of Google vowed to concentrate on the long term. “Outside pressures too often tempt companies to sacrifice long-term opportunities to meet quarterly market expectations. We request that our shareholders take the long-term view,” wrote Larry Page and Sergey Brin. Google encourages employees to spend 20 percent of their time working on whatever they think will benefit the company in the long run.

Balancing the short and long term is perhaps the leader’s single biggest challenge. Not all leaders have the fortitude to sacrifice short-term results. However, they can collaborate with their teams to attain an intelligent balance.

Senior leaders need to engage members of high-performing workgroups in discussing the challenges that face the company and the financial targets the company proposes for the workgroup. Are the goals achievable? How will meeting the targets affect future as well as current performance? Once senior managers and workgroup leaders agree on realistic targets, the group should decide how to achieve them. Across-the-board cuts may not be the answer.

High-performance culture

Reason 2: It’s the environment, not the leader

'Building High Performance Teams' by Tom Massey (ISBN 1931741530) Conventional wisdom says that the leader is the most important factor in achieving a high-performing workgroup. However, the workgroup environment is the most important factor in driving high performance. No single personality or style defines an effective leader. Effective leaders create an environment that values people (treating smart people as if they are smart), optimizes critical thinking (minimizing emotional responses by matching words and actions), and seizes opportunities (creating learning environments that turn challenges into opportunities). They create environments where people want to go to work every day.

You can stop this dependence on leaders by making the group responsible for creating a high-performance culture.

One way to do this is to conduct a 360-degree feedback process to evaluate the environment, gathering input from the group’s leader, members, and customers, as well as other workgroups. The group should discuss what it can start, continue, or stop doing to drive results and make the workgroup something people want to be a part of.

Reason 3: It’s the workgroup, not the individual

'The Wisdom of Teams' by Jon R. Katzenbach (ISBN 0060522003) Conventional wisdom says that hiring and nurturing high-potential individuals will drive high performance. Individual performance is influenced by the environment. You can put your best workers in the wrong environment, and they will not do their best work. Leaders need to develop high-potential individuals by providing training and mentoring, helping them plan a career path, and placing them in high-performing workgroups where “B” players becoming “A” players.

If you have people who care more about looking good than helping the group look good; who do only what will advance their own careers; or who define “winning” as beating their teammates, they will destroy the high-performance culture. High-performing groups accept that “we are in this together.” Leverage the skills of group members by playing to their strengths—not only their functional skills, but their natural abilities. This enhances the group’s ability to collaborate effectively.

High-potential individuals

Reason 4: Even top-performing groups have room to grow

'High Performance Team Coaching' by Jacqueline Peters (ISBN 1460225678) Conventional wisdom says that the best way to improve performance is to eliminate low-performing groups. Even high-performing workgroups could do better. In fact, the best way to increase performance is to increase the performance of those groups already at the top by encouraging members to “speak the unspeakable,” pass the ball to the right player, and practice respectful communication.

By instituting a process for high- and average-performing groups to collaborate on solving problems and overcoming barriers, you increase performance.

Reason 5: Your employees can solve your problems

Conventional wisdom says that if you’re facing a tough challenge, get outside help. While consultants can provide valuable insight, first consult your own people. They know the company well, and they usually can figure out how to solve the problem. Offer “amnesty” to employees for telling the truth about what needs to be done.

If you have the courage to defy conventional wisdom and sacrifice short-term results to attain long-term goals and trust that your people have the secrets to success, you will likely attain high performance.

Recommended Reading on Building High-Performance Teams

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