Receive GCMG News

Send a blank email with SUBSCRIBE in the subject line to to receive notice of risk management ideas and information added to BarrettWells and T3P websites.

Sunday, February 22, 2009

Time for Thinking

I’m sure we have all endured management practices that seemed to be more examples of how not to manage successfully rather than the role models we had hoped to find. Nevertheless these management practices all too often seem to be successful as organisations are carried along on the tide of a benign market cycle. They are only tested when the cycle turns negative.

The result of a negative turn of events is usually howls of anguish from those who have done little, thought little, cared little, planned and strategized little; yet drained their organisations of much. Executives with no vision and no leadership skills but big pay-packets, no, obscenely large pay and benefits packets, wonder how their genius could have suddenly escaped them…..

Robert Heller writing in the January 2009 Letter to Thinking Managers remarked:

‘….the effects of working for the largest company in the industry for so long; managers become ‘comfortable, insular, self-referential and too wedded to the status quo’. Such habits, folklore would argue, will get driven out of supine corporations by the threat of failure and the impact of competition. But this process is not automatic at all.

….twin cults have played a noxious part in the fall of America’s one-time world champions. The Cult of the Chief Executive elevated some quite ordinary men into mini-heroes and mini-heroes into gods. The Cult of Shareholder Value, perversely enough, extracted large wealth from the value that rightfully belonged to the investors. The Congressional hearings on the Big Three auto giants and their pleas for bail-outs showed cultism at its silliest. The three CEOs turned up in separate corporate jets, with no documents or plans, giving the committee a field day. Would the trio accept a cut in pay to $1 a year? The Ford man reckoned that his massive $22 million was just about right.

The banks sum it all up: overpaid colossally, professionally incompetent, immensely conceited. That’s no way to run a bank, a car company - or the world economy.’

Today we hear only bad news, but is it all bad? It cannot be bad that inefficient, and incompetent leaders who lack vision and act only out of selfish greed are removed from the corporate decision making process. It is not bad that excess productive capacity is trimmed – redirecting scarce world resources to more useful activity.

There is no doubt that we live through a time of painful transition for many people, a transition that could have been eased, less radical, and spread over a longer time period if corporate leaders had had the skills and vision for which they were so handsomely rewarded.

Edward de Bono wrote in his January 2009 Letter to Thinking Managers:

‘Most executives regard thinking as a luxury. It is enough to follow the routines. Continuity is everything. Now and again there is a need to analyse a situation to identify a standard element and then the standard response can be applied.

When things are going well, then this continuity works because you are carried along on the tide of success. Unfortunately, the reverse happens when things are going badly, because the tide is going in the opposite direction.

Better thinking is never a luxury. Better thinking is an absolute necessity in difficult times.

This better thinking includes creativity. There is a need for creativity in order to look at things in a different way.’

Although many businesses will benefit from the state of transition in which we find the world economy; let us hope that new leaders of vision and compassion will emerge to enable the whole world economy to expand and prosper to the benefit of all participants.

Ron Wells

Members can subscribe to the Letter to Thinking Managers at