The Purple Dragon's Den

The Euro - Smoke and Mirrors!

2012-06-18T12:58:00.000-07:00

As a result of peoples’ blatant, pervasive ignorance of the enormous difference between money and wealth, their profligacy, cupidity, foolishness, lack of understanding of the laws of economics, and their reckless refusal to set limits on their borrowing and spending, the Greeks have sold themselves into bondage to the money lenders. As a result of blatant, pervasive, reckless disregard of the enormous difference between money and wealth, their cupidity, foolishness and refusal to set limits on their lending, the money lenders have been forced to impose the limits on further borrowing they should have imposed long ago — at the very beginning of the lending.

It is easy to say, “a pox on both their houses,” but that doesn’t solve the real problem that has led both sides to this pass. The problem is the lack of understanding that MONEY IS NOT WEALTH. This stems from the double function of money as both the instrument of commerce and as the measure of value. These are not synonymous terms. Real wealth, of course, consists in what is produced and consumed. One way to express the difference between money and wealth is: wealth is what money can buy or, conversely, wealth is what you can exchange for money. In any case, one shouldn’t spend money before it is earned through the creation of wealth!

The basic lack of understanding results in excessive Public Sector borrowing to support excessive Public Sector spending: the equivalent of people wanting to get something for nothing. The illusion is that it can always be at someone else’s expense. This can never work, except for those who are among the early exploiters of the situation. Those who follow will “reap the whirlwind.” As in Hosea, 8:7, for they have sown the wind, and they shall reap the whirlwind: it has no stalk; the bud shall yield no meal: and if it yield, the strangers shall swallow it up.

People need to get it straight: NO wealth can be created in the Public Sector; ALL wealth is created in the Private Sector. And, if the Private Sector exists to create wealth; it must follow then, that the Public Sector exists only to make sure there is a Private Sector.

It is important to remember that there is reflexivity present. Each segment enables the other. I indict both sides; the people and the money lenders who, of all people, should know the effects of what they are doing.

All money lenders (banks) are “regulated” by the government. The subsumed essence of my argument is that it is to the advantage of the government (politicians) and the cronies of the politicians to hold the populace in ignorance of the laws of economics. This allows the former to commit legalized thuggery on the latter. Thus, the politicians can, through sweetheart deals with their cronies in the private sector, plunder the treasure created by the people and get away with it.

Stops are needed on both sides. The citizenry needs to become educated enough to be able to realize what kind of monster they are creating when they insist on eating the pabulum provided "in the government trough." They need to realize that when they do that, they are just screwing themselves. They need to stop electing politicians that promise them money and money substitutes.

Fix the permeability of the ethical and moral barriers that should exist between the politicians and their cronies and most of that problem will go away. To be sure, it is not a perfect solution, but there is no perfect solution where human beings are involved. After all, Suntne angeli?

A Father's Day Musing

2012-06-18T12:24:00.000-07:00

My father, a powerfully built man, was born in Belfast, Ireland, immigrating to the U.S. when he was 12 years old. His father, also powerfully built, was a Blacksmith.

I, having been born and raised during "The Great Depression," can still remember and compare my experiences of those days to those of today. How he was able to do it, I don't know, but my "Da," a Journeyman Pattern Maker and Model Maker, working in wood, plaster and metal, at one time held three different jobs simultaneously (my mother worked simultaneously in two jobs but still was able to find the time and energy to volunteer at a local hospital as a Nurse's Aide.) Neither of my parents complained about the workload and, in fact, went out of their way to conceal from me and my two sisters the extent of the family's financial difficulties and what I subsequently came to realize were their labors of truly herculean magnitude.

The closest I came to realizing there was a problem was during one period in which neither parent was working. Every day, my Da went farther and farther from home in search of work. We had to "go on the dole," forced to go to a government facility to pick up powdered milk, flour, beans, rice and other basics. This was a time when to be "on the dole" was, most definitely, not a desirable position to be in. My mother told me not to worry, that this was only a temporary thing, and we would stop going there as soon as we were able. How hard those days were, I did not realize at the time.

I remember how central to our diet were teapots full of hot, black tea accompanied by "Saltine" crackers. Of course, we drank our tea Irish Style, with sugar and cream. Sometimes, this was three times a day. At other times, my mother would make a "mock apple pie" (with not a trace of an apple.) The saltines, to which were added some sugar and cinnamon powder, substituted for the apples. When we were out of flour, we reverted to just the tea and saltines. Still, I never got the idea that we were "poor." Oh, those were the days!

Groupon Pornography Deals Boycott Successful

2012-06-08T07:59:00.002-07:00

This is a followup to my Blog entry of April 27, 2012, entitled Groupon Profits from Hardcore Pornography. It gives credit where credit is due.

I am glad to report that the effort to convince Groupon to stop supporting activities that sexually exploit women has been successful. The following is a copy of a message from Morality in Media announcing it.

-----Original Message-----

From: Patrick Trueman, Morality In Media
Sent: 6 Jun 2012 14:38:23 GMT

UPDATE: The boycott was SUCCESSFUL!

Groupon stops all deals that profit from exploitation and torture of women

Over the last month, 20,000+ people joined our boycott of coupon giant, Groupon because the company was selling coupons to visit a porn studio. We know of at least three businesses that stopped their deals because of Groupon's decision to run ads for a torture porn company. In addition, 7 other national organizations joined the boycott too. We are writing to tell you that the boycott worked!

This message was sent to us:

"Given all the feedback from partners like you, we reassessed not only consumer interest but also merchant opinion on these types of deals. It's never our intention to offend customers or our business partners. Your feedback has been invaluable to us and executives are regularly informed of merchant response, both positive and negative. As a result of the feedback from the Armory deal, we have stopped running adult deals across the country.

The Playboy Mansion deal ran after the "non-adult" rule was enacted in the U.S. due to a process glitch. As soon as we became aware of it, the deal was immediately taken down."

Be encouraged that 20,000+ people stood with you this time. We hope that you feel as motivated as we do to continue to challenge pornography and the pornification of our society where and when you see it. We do not have to simply accept the mainstreaming of pornography and the devastation that results from it. We can fight back! Please continue to learn more, spread the word and take action when and where you can!

Best,

Patrick Trueman
President & CEO"

My thanks to all those who supported me in this effort. Good things can happen if we work together for Good.

Poor, poor, Italy...and The Ridiculous Euro

2012-05-22T08:47:00.000-07:00

A few days ago, I read an article by Judy Bachrach in the World Affairs Journal. Here's the URL:

http://www.worldaffairsjournal.org/blog/judy-bachrach/euro-lies-and-italys-crisis

I passed the URL on to others, with my comment, "Poor, poor, Italy...so, the ridiculous Euro has been a fraud from the beginning...why am I not surprised? Time to dump the Euro."

A cousin of mine, who happens to live in Sicily, commented, in return: "I would not trust in a German newspaper ... If Italy fails, the euro dies and even the United States'll have big problems with your dollar...The Italian debt is too large and a failure would drag down the entire western economy."

My cousin makes some good points. At the same time, I am not completely clear on what my cousin thinks a "failure" would look like. So, I replied, as follows:

"I would not trust any newspaper, including American. With a modicum of research and the application of wisdom, however, one can deduce the essence of matters.

What 'fail' means in the instant context is not clear. The euro was a terrible idea that was dead on arrival. It couldn't be anything but a rip-off from Day One. It exists only through the overweening cupidity of political thieves (synonym: politicians) and their cronies and wholesale, forcible application of political correctness on a gullible public.

The U.S. already has big and increasingly serious problems with the dollar. Our idiotic, socialist president is capable only of making the problem worse. Although he says otherwise, his actions are tantamount to modeling the U.S. economy on that of Greece. If he is successful, America will suffer the same way Greece is suffering; the same way any country will suffer from the effects of an overabundance of debt.

That Italy's debt, as America's, is too large, is scandalous. But, the real scandal (if one can penetrate the cloud of political correctness to see it) is that the debts represent, respectively, the amounts of wealth stolen from hard-working, productive Italians (and Sicilians) and Americans, by the political thieves and their cronies. It is the cronies who plot with the politicians to obtain special privileges in return for some type of quid pro quo.

What is the fix? The only answer is to make the debt smaller; reducing it to zero is ideal. But, how? The question is a simple one, but the answer is complex, therefore, problematic.

And, the problem does not lie solely with the political thieves. The political thieves can raise the level of government debt only with the quasi-collusion of their cronies and the 'vulgus mobile.' (Readers who are more familiar with the Greek expression than the Latin expression can substitute 'hoi polloi' for 'vulgus mobile.') I use the prefix 'quasi' here because the vulgus mobile are in a state of ignorance of the fundamental, insidious, highly deleterious economic effects innate to government debt of any kind.

In support of the scandal is that the vulgus mobile are deliberately kept in this state of ignorance by the political thieves, who look only to 'feathering their own nests' at the expense of others. They have convinced themselves that 'what is good for me is good for the country.'

The political thieves can get away with this theft because they are able to convince the 'economically ignorant' that they are being given a 'free lunch.' The 'economically knowledgeable,' of course, know this is a lie; they know there is no such thing as a 'free lunch.'

The bottom line is: regardless of the pronouncements of the political thieves as to whether a debt is 'good debt' or 'bad debt,' the Truth is: there is no debt that is 'good.'

All government debt is super-taxation, i.e., a spending of tax monies before they are expropriated from taxpayers and upon which interest (which must also be expropriated from taxpayers) accrues until the debt is repaid. Thus, as it is with tax monies already expropriated, government spending of debt monies is nothing but a redistribution of wealth from those who produce it to those whose only 'claim to fame' is that they are in good graces with the political thieves.

The Western economies are headed for the tank at ever-increasing speed. Somebody has to apply the brakes. The political thieves will not do it voluntarily."

[By the way, I used the Latin expression "vulgus mobile" (also written as "mobile vulgus" meaning "the fickle crowd") rather than the Greek because "mobile" is the origin of our English word, "mob." No disrespect was intended by its use.]

To the above response, I haven't yet received a reply from my cousin... and I may not receive one...

Perhaps you, the reader, will comment...

Groupon Profits from Hardcore Pornography

2012-04-27T13:15:00.000-07:00

This is a special message. You need to read this post all the way to the end because this is something you need to know about. Take especial notice of the part labeled “Here begins the last entry.”

Today, having requested and been granted permission to do so, I pass on (with minor editorial deletions) a request from my daughter, London Tyndale-Biscoe. The post comprises a sequence of messages that form an as yet incomplete dialogue between her and Groupon. There is an additional message to her from Morality in Media.

I am posting this material now because I think it is too important to wait. I will append to this post anything I receive further.

[Here begins her message.]

Dear Friends and Family,

Please help me in trying to fight the problem of hardcore pornography. I know it’s not easy to change the world, or even to want to become that involved, but we can all do a little something. Morality in Media have again asked its subscribers, of which I’m one, to ask five people I know to boycott Groupon because of its support of hardcore torture pornography that demeans and humiliates women. Can you help out? All it takes is little more than the press of a button! whether you are male or female.

Love,
London

[Here begins the message from Morality in Media.]

From: Dawn Hawkins, Morality In Media
Sent: Tuesday, April 24, 2012 9:34 AM
Subject: The Women with Groupon

Women of Groupon, where are you?? Groupon seeks to profit from exploitation and torture of women. What woman at Groupon vetted this company?

Dear London,

We wondered what the women at Groupon think. But, in our research, we cannot find any women who are among Groupon's senior management. One wonders if this is just another case of the boys-will-be-boys corporate culture?

Kink sells the sickest of hardcore videos and live online performances of “young, sexy teens who are overwhelmed and outnumbered…who need to learn a lesson by multiple men,” according to the Kink website. The girls and women are “bound, whipped, objectified and humiliated ... suspended and tied in rope bondage…tormented beyond all reason ...pulled in and out of cages, their tongues clamped, their bodies pinned.”

We want to know what woman working at Groupon vetted this company?

Contact Groupon again!

...
Our national boycott of Groupon is succeeding in getting the press attention we hoped it would. The company has been selling coupons for torture porn company Kink. We announced the boycott after Groupon defended Kink. Instead of taking responsibility and recognizing the concerns of their customers, the Senior Vice President of Engineering and Operations, Brian Totty, even tried to forward all of your complaints back to us. Needles to say, thousands have now canceled their accounts with Groupon.

Dawn Hawkins
Executive Director
Morality in Media

[Here begins London’s first message to Groupon.]

Subject:     REFUND & CANCELLATION - GROUPON #xxxx-xx
Date:     Tue, 24 Apr 2012 16:06:11 -0700
From:     London Tyndale-Biscoe
...
Dear Groupon Executives and Administrators:

I am copying you on the email I sent to your customer support since the cancellation I’m requesting is for a particular reason, the fact that your company is supporting another that markets hardcore pornography, which in addition even includes torture and involves teens. That email to customer support reads:

I want to cancel my membership and be refunded immediately for my Groupon #xxxx-xx for 2-Hiking Yoga Classes.

I purchased the Groupon the day before I became aware that you are advertising for Kink, which markets hardcore pornography that humiliates and objectifies young women, including teens. It also promotes torture. I will be sending an email to executives at your company in addition to this demand for a refund and recantation on your part.

As a woman and a human being, I find it incredible and despicable that you would involve yourselves in such damaging activities. Don’t you realize that by enabling Kink you are directly contributing to a profound, persistent and escalating social problem – that you yourselves as individuals and as a company are (ir)responsible for encouraging a sick and dangerous disrespect of women?

Appalled isn’t a strong enough word to convey how I feel about your advertising choice. It’s so flagrant and egregious that I cannot continue in association with your company. Please remove me from your subscription list and refund me for the above Groupon immediately.

Most sincerely,

Mrs London Tyndale-Biscoe

[Here begins a message response from Groupon.]

Groupon Support
Sent: Tuesday, April 24, 2012 6:11 PM
To: London Tyndale-Biscoe
Subject: Re: Dear Groupon Executives and Administrators: I am copying you on the email I sent to your customer service.

Hi London,

Thanks for your feedback. We certainly didn't intend to offend anyone.

We strive to offer interesting and exciting deals that will appeal to our diverse customer base. We've run deals with this specific business before, and while we realize it may not appeal to everyone, we've received positive customer feedback on past offers.

We thoroughly vet the businesses we feature, which is why we take these concerns seriously. We've found that the tour offered in this deal is historical and informational in nature and provides a unique look inside the landmark San Francisco Armory and its past.

If you'd still like me to unsubscribe you from our daily email list, please let me know and I'll take care of that right away.

Your feedback is extremely important to us and makes an impact in how we choose which businesses to work with in the future. Thanks again for taking the time to share your concerns with us, and please know that we value your opinion as a customer.

John T
Groupon Customer Support

[Here is London's response.]

From: London Tyndale-Biscoe
Subject: Re: Dear Groupon Executives and Administrators: I am copying you on the email I sent to your customer service.

Dear John T,

I appreciate that you have replied swiftly. Yes, I do want you to unsubscribe me from the daily email list. Thank you.

I also again request that my Groupon #xxxx-xx be immediately refunded. Please do that and inform me by email. I will look for the money to be refunded to my credit card.

A few words about your and Groupon’s vain comment about not intending to offend anyone --

Have you ever noticed that human beings sometimes, too often, offend when we don’t intend it? Like the woman who cheats on her boyfriend or husband? In pursuing her goal, she doesn’t intend to offend him. The person who steals from your wallet or maybe embezzles Groupon company funds never intends to offend anyone. The man who abducts your son or daughter, or someone else’s, tortures them, sexually abuses them, and kills them probably never intends to offend anyone. Yet damage is done.

The words ‘offensive’ and ‘being offended’ are of late tossed about without much thought, as if taking offense were the core of every disputed matter. But it isn’t. The core of every matter is the matter – it isn’t whether we are or are not offended nor is it whether we have intended or not intended to give offense. The core of the matter here is the question whether supporting and motivating the production, sale and viewing of violent hardcore pornography that revels in and profits from the subjugation and torture of women is morally right or wrong. The answer to that question for me and for many others is that it is wrong and morally reprehensible. I can assure you that I’m only ‘offended’ secondarily, that is, as a response to the primary and preliminary understanding that what Kink is involved in is extremely harmful to others (and to themselves whether they are able to admit this or not), and that your legitimization and promulgation of what you refer to as their ‘interesting and exciting deal[ ]’ implicates yourselves individually and as a corporation in spreading that harm. For my own part, I would be offended at myself if I continued in a relationship with Groupon since I would knowingly be helping you and Kink to spread ‘the compost on the weeds’.

I don’t believe, as I’m sure thousands of other people don’t believe, that what Kink is doing with your aid can honestly be accounted for by saying, ‘it’s only a matter of taste’. Anything can be justified on this flimsiest of arguments. Preferring red to white wine or blue to red clothing or biking to hiking is a matter of taste. None of these relations carry any significant ethical component. But: stealing is just a matter of taste? (the thief simply having a taste for your things). Cheating your best friend is just a matter of taste? Adultery is just a matter of taste? Slavery is a matter of taste? Persuading women to act as victims of sexual predation, humiliation and torture, and inciting others to watch is just a matter of taste? Is murder a matter of taste? Of course it isn’t, and you know it. And you know why. It’s wrong. So is cheating someone out of their money, or out of their trust and peace of mind in the case of a best friend, or that of a wife or husband in adultery, or forcing someone weaker in mind or body on pain of threats, beatings, torture and death to do your personal bidding as in slavery. Helping someone who has fallen in the street, sharing your food with someone who is starving, loving your children, these are good things. You know this also.

So glibly defaulting to the ‘diversity in taste’ argument conveniently allows you to let your own genuine personal and collective knowledge of ethics in human relations fly out the window and leaves you to operate instead on the bankrupt assumption that there is no morality except subjective morality, no truth but subjective truth, and that every point of view is only an opinion. By this valueless token, the victim of murder is entitled to his opinion that murder is bad, while the murderer is entitled to his opinion that it is good – and each, victim and murderer, will surely be offended by the other’s opinion -- neither, of course, having intended this. But of course, this doesn’t fly. You would agree, I hope, that murder is bad – the persons involved are not in the right relationship to one another -- and I strongly suggest that if you sincerely make an effort to investigate its social ramifications, you will have to admit that making, viewing, and marketing violent hardcore pornography isn’t good for human relationships and isn’t good for the human community at large -- and your promotion of it stinks.

That’s all I have to say.

Sincerely,

London Tyndale-Biscoe

[Here begins Groupon's final response.]

From: Groupon Support
Sent: Thursday, April 26, 2012 5:07 PM
To: London Tyndale-Biscoe
Subject: Re: Dear Groupon Executives and Administrators: I am copying you on the email I sent to your cus... (ticket #xxxxxxx)

Hi London,

I understand your disappointment, which is why I've gone ahead and refunded your requested Groupon. The refund has gone back to your original form of payment, so you can expect to see it reflected on your statement within 10 business days.

I've also unsubscribed your email address, and you will stop receiving all Groupon promotional emails within 48 hours.

If you decide to join us again down the road, we'd be honored to have you back. In the meantime, please know that we take feedback like this very seriously, and I will absolutely make sure it gets in the right hands.

Kind regards and sincere apologies,

John T
Groupon Customer Support

[Here begins my comment.]

I am pleased that Groupon is making a refund and acknowledging taking feedback very seriously. But this blog post is only about one situation, my daughter's. Groupon is silent on any change in affiliation with Kink that will affect countless others.

I now renew my personal request. Join in helping provide Groupon with the moral incentive to cease and desist from participation in the tearing down of the moral fabric of American Society.

Contact Morality in Media to give them support and contact Groupon to register your moral outrage and your agreement with us.

Thank you.

Should Governments Balance the Books

2012-03-12T09:16:00.000-07:00

If governments within a capitalist system believe they exist to serve the best interests of the people, they believe they should balance the books. But, due to their being polluted with socialist ideas, almost all governments within a capitalist system cook the books instead.

Governments within a socialist system do not have this problem. They believe they exist to serve the best interests of the people alright, but they don't believe they should balance the books. Why should such a government bother? The people can't really do anything about it. Keynes told the politicians they didn't have to and, besides, it's none of the peoples' business, anyway. After all, isn't that why the people have a government: to take care of all that complicated stuff for them?

Inflation: From Whence?

2012-02-29T09:43:00.001-08:00

Inflation is a condition that comes about when there is more money in circulation in the economy than is necessary to cover the amount of wealth in the economy. Everybody should know that wealth is not money; wealth is what money can buy.

Just as is the case with individuals, governments become indebted when they borrow money. And, like individuals, governments borrow money when they want to spend more more money than they are able to expropriate from the private sector in taxes. In the U.S., banks don't print currency; only the U.S. Treasury can do that. Moreover, governments the world over have reserved the authority to print currency to themselves. Because only they can control the amount they print, governments are the only entities that can cause inflation. There is no incentive in the private sector to do that. It would be insanity.

Rights Are Not Granted By The Government

2012-02-07T20:11:00.000-08:00

I read a Mark Steyn piece and was very impressed with the simplicity of his expression of the real guts of the operative portion of the concept of "rights. It is likely that Liberals will not understand what he said on the matter because they suffer from a highly skewed mental set. (If you do not believe that, let me know and I'll post a copy of a study that should prove it to you. It was done by a Liberal, no less.)

What Steyn said in his piece was: (substituting (in brackets) for his words "sovereign" and "state" the synonymous term "government") “RIGHTS” ARE NOT THOSE THINGS GRANTED BY THE [GOVERNMENT] AND ENUMERATED IN STATUTE, BUT THE PRECISE OPPOSITE. THEY'RE RESTRAINTS UPON THE [GOVERNMENT.] THEY'RE NOT ABOUT WHAT THE [GOVERNMENT] ALLOWS YOU TO DO, BUT ABOUT WHAT THE [GOVERNMENT] IS NOT ALLOWED TO DO TO YOU." (Emphasis mine.)

If those ideas sound suspiciously similar to those expressed in the U.S. Declaration of Independence and the first ten amendments to the U.S. Constitution, you are correct. (For those who may have forgotten, those amendments are also known as the "Bill of Rights.")

Why Do Politicians Love Keynes's Theory?

2012-02-02T12:36:00.000-08:00

Keynes's Theory is not only, itself, logically bankrupt, it ultimately must cause bankruptcy to all those adhering to it. Politicians love Keynes's Theory because it provides them an excuse for believing that government spending and borrowing do not have limits. Thus, they can evade all responsibility for the negative consequences of their redistribution of private funds they strip from the economy. It is application of The Theory that gives them their unreasonable power.

Simple arithmetic logic explains why there must be a limit on government spending and borrowing. Tax money is not created from thin air. By its nature, taxes constitute "legalized theft." Taxes can be taken by government vultures only through a confiscatory process from those who, through their hard work, must first earn the money. The well of taxation is not without a bottom.

It is right thinking to criticize the greed of the political elite. But, the average citizen must also disabuse himself of a different kind of greed: the greed engendered in him by the insidious process of his accepting government largesse. It is upon this kind of greed that the political elite feed themselves at the expense of the citizenry.

The bottom line is: if the average citizen is not willing to resist the temptations offered by the political elite, to accept from the government money he has not earned, he has very poor standing to criticize the same activity from the political elite. "Why do you see the speck in your brother’s eye, but fail to see the beam of wood in your own? How can you say to your brother, ‘Brother, let me remove the speck from your eye,’ while you yourself don’t see the beam in your own? You hypocrite! First remove the beam from your own eye, and then you can see clearly to remove the speck from your brother’s eye."

The average citizen must stop suspending logic and understand that the largesse does not come from the government. It comes from his fellow citizens (after the government has taken its "pound of flesh" from it.) A key element that can lead toward economic salvation is reduction of the dependence of the citizenry on taxation-funded benefits. This will, in turn, reduce the power of politicians to create new reasons to raise taxes from which, like the mafiosi, they will "wet their beaks."

Leadership and Performance Metrics

2011-12-18T14:39:00.000-08:00

I have been doing some strategic advising for a couple of not-for-profit corporations. It has been quite an experience for me. There are special challenges, not the least of which is that some have no paid staff; only volunteers.

Generally speaking, measurement of performance of for-profit corporations is easier than for not-for-profits; there are more "hard" tangibles in the for-profit area. The quid pro quo environment is one of "pay for work done." In addition, the interests of all stakeholders are more closely aligned: greater profit, higher dividends, etc.

For not-for-profit corporations, there are more "soft" intangibles. A great deal of work is done by volunteers; thus no "pay for work done." The volunteers must receive non-monetary satisfactions for their labors. And, the interests of all stakeholders are not as closely aligned. Nevertheless, performance measurement (in both quantitative and qualitative terms) is no less important for the not-for-profit; it still has to be done.

A couple of factors can make development of metrics on performance in a not-for-profit easier. They fall under the purview of the governance and management areas of the organization. The first factor is operation plans that are tied tightly to a well-defined corporate strategy contained in a strategic plan that is constantly under review. The second factor, critical to the measurement process, is a deep understanding by the leadership of the internal strengths and weaknesses of the organization. This deep understanding is a prerequisite to the organization's being able to deal successfully with the inevitable changes in external conditions of threat and opportunity facing the organization. The bottom line is that if the corporation cannot manage its internal challenges it won't be able to handle external challenges.

Some not-for-profit organizations are funded by dues paid by members of the organization. In this sense, dues-paying members are the analogue of stockholders who have made an investment in a for-profit corporation. Thus, in a not-for-profit corporation, the members can also look at the dues they have paid as constituting an "investment." Members have the right to ask the organization what the rate of "return on investment" is on those dues. This is aside from the fact that the organization has legal and fiduciary relationships with its members.

To succeed, the organization needs well-conceived strategic and operations plans based on clear statements of organizational vision and mission coupled to an effective leadership model (and the requisite resources.) These, taken all together, will allow the organization to provide materially better services to all classes of stakeholders in the organization. The evidence of these high levels of service will be reflected in the metrics ("the proof in the pudding") as it were. Over time, it is continuing evidence of benefits of this sort that will provide a significant part of the motivation for stakeholders to support the organization, financially and otherwise.

Implementation of any performance measurement must start with the top leadership (Board of Directors) of the corporation. Without sufficient emphasis by leadership on the building of the infrastructure of the organization as a whole, there can be no reasonable hope for it to be successful in carrying out its mission. Without well-functioning human and financial sub-systems within the infrastructure system, there can be no reasonable hope of growing the capacity of the organization to conduct its operations, now or in the future. These sub-systems are interdependent. Without the one, nothing much can be done with just the other.

The U.S. economy is becoming increasingly fragile due to its being intertwined with economies elsewhere that are even more fragile. Government, private industry and the academy are cutting back in many areas. If the organization is to have any impact, it will have to learn how to do more with less, even as its margin for error is being drastically reduced. To accomplish this, the leadership of the organization will have to bring people with strong supporting skill-sets onto the board and into executive positions. A good leadership model and rigorously applied performance metrics will provide people with what they need (critical infrastructure) to function properly. They will also provide the kinds of nourishment necessary for the people to build a corporate culture that will contain the elements necessary to sustain the critical infrastructure of the organization.

Phrases That Should Strike Terror Into a CEO's Heart

2011-12-11T11:33:00.000-08:00

"It is clear that in moments of stress, organizations do not always operate in the same way that they would in a normal operating environment." So, said Jon Corzine, former CEO of MF Global, while testifying in front of the House Agriculture Committee on Thursday, December 7, 2011.

Apparently, as it became clear to him that MF Global was melting down, and sometime before the firm filed for reorganization under Chapter 11 of the Bankruptcy Code, Corzine had said to his associates, "We've got to fix this." While acknowledging that "Someone could misinterpret" the phrase, Corzine also testified he had learned, only one day before the firm filed for bankruptcy, (Monday, October 31, 2011) that at least $1.2 Billion had "disappeared" from his firm's clients' accounts.

It's up for grabs right now as to whether there is any causation (or even correlation) between the latter pronouncement and the "disappearances." Regardless of that issue, though, Corzine is SO RIGHT about the possibility of misinterpretation of his words.

Depending upon the content of the corporate culture and the leadership "tone" set by the CEO, there can be a high risk that a CEO's words will be misinterpreted by subordinates. That condition of risk is rife any time the corporate culture is steeped in a "Your-wish-is-my-command" atmosphere and where the culture knows that the CEO places great emphasis on pragmatic ideas represented by such common catch phrases as: "In this company, we all have a 'CAN DO' attitude," or "In this company, we do whatever it takes to get the job done." Both of these catch phrases are positive in character. But, without at least the implicit qualification that "the job to be done" will only be done "as long as it is legal, moral and ethical," blind or sycophantic adherence to them has the strong potential to bring about disastrous results. Taken a face value alone, they are phrases that should strike terror into a CEO's heart.

The Road to Economic Chaos and Ruin is Paved with Keynesian Bricks

2011-12-07T09:58:00.000-08:00

Murray Rothbard, in his excellent study of Lord John Maynard Keynes, keenly observed that "Keynes, the man,—his character, his writings, and his actions throughout life—was composed of three guiding and interacting elements. The first was his over-weening egotism, which assured him that he could handle all intellectual problems quickly and accurately and led him to scorn any general principles that might curb his unbridled ego. The second was his strong sense that he was born into, and destined to be a leader of, Great Britain’s ruling elite."

Further, "both of these traits led Keynes to deal with people as well as nations from a self-perceived position of power and dominance. The third element was his deep hatred and contempt for the values and virtues of the bourgeoisie, for conventional morality, for savings and thrift, and for the basic institutions of family life."

Keynes, while at King's College, was a member of a secretive group called the "Apostles." "Two basic attitudes dominated this hermetic group under the aegis of Keynes and [his "friend"}, Giles Lytton Strachey. The first was their overriding belief in the importance of personal love and friendship, while scorning any general rules or principles that might limit their own egos; and the second, their animosity toward and contempt for middle-class values and morality. The Apostolic confrontation with bourgeois values included praise for avant-garde aesthetics, holding homosexuality to be morally superior (with bisexuality a distant second), and hatred for such traditional family values as thrift or any emphasis on the future or long run, as compared to the present. (“In the long run,” as Keynes would later intone in his famous phrase, “we are all dead.”)"

As Keynes himself wrote during his undergraduate days in a letter to his friend and co-leader, Strachey, “Is it monomania—this colossal moral superiority that we feel? I get the feeling that most of the rest [of the world outside the Apostles] never see anything at all—too stupid or too wicked”

This is the man who published, in 1936, his "new" theory of economics, the "GENERAL THEORY OF EMPLOYMENT, INTEREST, AND MONEY." The "Theory" is almost totally fraudulent because it is based upon a "house of cards" system of 'mythological mathematics" (my term) and a set of fallacies, themselves built upon still other fallacies. It is a "dream" handbook for politicians, giving them license to spend, borrow and waste assets that don't belong to them. Further, it is adherence by politicians to this egregiously faulty "Theory" in the "handbook" that has brought the Western World to the edge of economic chaos and potential ruin.

If we do a close examination of his "Theory" we will quickly see its "feet of clay." But we don't have to start from scratch. Henry Hazlitt has already done that for us in his superbly written analysis of the "Theory." To see just how stupid and out of touch Keynes and his followers are, just read Hazlitt's book, "THE FAILURE OF THE "NEW ECONOMICS: An Analysis of the Keynesian Fallacies." Beware though, reading it could change your life.

What's wrong with the San Diego Chargers?

2011-11-11T11:24:00.000-08:00

What's wrong with the San Diego Chargers? Who's to blame? Let's look at who and what's involved by starting from the bottom of the hierarchy that makes up the "team."

First, we have the players, then the HC (Head Coach, Norv Turner) then the GM (General Manager, A.J. Smith) finally the Owner (Dean Spanos.) The latter three form a "three-legged stool." The players play on top of the stool. If you take away one leg, the stool falls, along with the other two legs and the players, too.

Face it: the Chargers don't have a strong roster. Why? Because the GM has failed to get the best players and the HC has, obviously, not been able to convince him to get them. In addition, the Owner, who hired the GM, has hired somebody who should know better how to do that, but apparently doesn't. So, if you want to find the right person to blame, it isn't Norv Turner. He can only "go to war" on the field with who's on his roster. Who's on the roster is up to A.J. Smith, who serves at the pleasure of the Owner.

If you want to place the blame, place it on Dean Spanos. He can sit in his catbird seat and collect millions of dollars, whether he fields a winning team or not. One is logically entitled to think that he would want, not only the money, but a winning team. Apparently, logic has no place in this case.

What the Chargers need is an inspired, highly knowledgeable Owner who can assemble a powerful, fully functional team structure, starting with a powerful, fully functional GM. Not that he's blameless, but Norv Turner is stuck with working the field with the players provided to him, so you need to get off his case and get on the right one.

See the movie, "Moneyball" to get a better idea of what a good GM can do. True, the movie is about baseball, but the general principles still apply to football.

"Economic Forecasting"...the term reeks of oxymoronism.

2011-10-23T11:39:00.000-07:00

Forecasting anything to do with human beings and the choices they make under varying conditions is very much like trying to use your fingers to pick up a spoonful of mercury lying on a flat surface. Good-Luck-With-That!

In the field of Economics it's even more difficult. Peoples' wants change all the time. Any marketing manager worth the salt will tell you that almost all of the choices people make are, at best, irrational. They are irrational in the sense that people act on the basis of the emotions they feel that are generated as a result of their current perception of their environment and their place in it. They then justify their choices through the application of logic (though not necessarily good logic.)

This is not to say that an historical picture of the past choices of people cannot be painted nor that general patterns of behavior cannot be detected from a study of the picture. But, it is irrational to expect that the future will be just like the past. And this is where the idea of doing forecasting in the area of economics, with the idea of inducing changes, breaks down. To be fair, forecasting is not prediction, but I think most people unintentionally conflate the meanings due to fuzzy thinking.

To be sure, we do drag part of our past behind us as we go into the future. The past, however, is not a reliable indicator of future happenings, as any reasonably astute reader of history can tell you.

People have the ability to, and do, make choices, Despite the efforts of many economists to convince people otherwise, people, being animate and desirous of having an influence on their future, do not act like inanimate objects that follow the laws of physics. This truth seems to escape many economists who continually butt heads with it.

With respect to governments and economies, forecasting implies planning; planning implies control; control implies having the power to make people do things; having the power to make people do things implies the use of law; the use of law implies government intervention in peoples' private affairs, government intervention implies enforcement; enforcement can only be done by the state using its police powers. When a state can use its police powers to enforce its choices on how the economic factors of production are going to be used by those to whom they belong, it is, de facto, no longer a "free market." it is a "planned economy." "Planned Economy" is a synonym for "Socialism."

The Soviet Union tried it, Nazi Germany tried it, Italy tried it. They called it by different names but it was the same thing. The Soviets called it just plain Socialism, the Nazis called it National Socialism, the Italians called it Corporatism. It didn't work for even one of them. The reason: it can't. Socialism is self-contradictory and ultimately must implode.

The proof of the pudding with respect to forecasting gone berserk is to look at what is happening in a Europe that is essentially Socialist, right now. Those in power believed they could forecast what was going to happen when they interjected the government into private affairs. They just "knew" what was going to happen in the economy because, after all, one of the most famous economic forecasters told them so. His name: Lord Keynes. Just ask the people in Britain, Greece, Ireland, Italy, Spain etc., "How's your wonderful Keynesian economic system working for you?"

Why elected government should be able to "experiment" on its people with macro systems (or any other systems) is beyond me. Most of them don't even know how it's supposed to work. In their ignorance or desire to escape responsibility, will the elected government not turn to economists or scientists to help them do the "experiment?" Unfortunately, they have already done that, The economists and scientists are already there and involved in incessant experimentation using the government as their instrument and the citizenry as their lab specimens.

In the medical field, experimentation is going on all the time. Medical ethics require that the human subject of an experiment: certify understanding that there will be risks and consequences that cannot be known in advance. They must also have the options to accept the risks and consequences or decline to participate in it. In other words, the subject must be a full-fledged volunteer. A government-run experiment should be no different.

FDR so loved Mussolini's "State Capitalism" model that he wanted to shape the United States in that image and began the process by surrounding himself with Keynesians and implementing policies based on Keynes's theory. Those policies helped FDR to extend an economic depression from what probably would have been over in two to four years (as had all previous depressions) into one that, instead, lasted for ten long years. Isn't that why it is called "The Great Depression?"

None of the foregoing is to say that forecasting cannot be helpful. Marketing Managers use it all the time. What is different about the Marketing Manager operating in the private sector compared to the economist or politician is that the Marketing Manager knows there are risks involved that could kill his company if his forecast is sufficiently wrong. That's known as the "free market" in operation. To borrow an engineering term, it can also be known as "testing to destruction." In a free market, if his company goes down the tube, it's OK; it's possible for another can take its place. This is how the free market protects itself. Testing to destruction is not a viable option for a country. Need I bring up Europe again?

So, we don't need nor do we want a scientist to come up with a brilliant model of the economy and try to convince politicians to follow it. As previously said, they are already doing that with easily visible consequences.

It is asked, "Why [would] someone take the political cost today for something that could happen after ten years when someone else will be in the government?" Exactly right! What does that do to the forecast?

Financial institutions are heavily government-regulated already; maybe not the way they should be, but they are, nevertheless. It is asked, "Why [would] a banker accept to sacrifice his profits for the economy to benefit after many years?"  This misses the point that all profits benefit the economy when they are realized and sacrificing profits can lead to the bank not being around after many years, maybe even just a few years if the banker keeps that up.

The big picture here is that it is not only difficult, it is impossible to find the appropriate prediction model. "Appropriate" is a moving target that may be ephemeral. There is no real headache in persuading the right people to follow the right course of action. The real headache is in understanding that there are no "right people" in government. Governments can't do much of anything "right" on the short term. There is too much inertia.

The forecasting science can be further developed but due to inherent problems with the number of variables that must be considered, there is no way it can provide a proven success record. Right now, the only "common sense" in the field of economics is built on a foundation of fallacies.

If "we" want to don't want to "just go in the dark without using any of the forecasting tools we have today," keeping government in the forecasting business is what is not a viable option.

If "we" want to secure long-term growth for our economy, we have to get the government intervention out of the equation and let it do its constitutional duty to promote the conditions where its citizens can enjoy their individual rights to "life, liberty and the pursuit of happiness."

Government Job Creation Package: A Free Lunch?

2011-09-24T15:57:00.000-07:00

I know I've addressed the subject of government stimulus before, but the latest from the White House on jobs just begged to be readdressed.

When somebody tells you that your lunch is free, what you are really being told is that it won’t cost you anything — right now. People with “street smarts” know “there ain’t no free lunch” and that somebody, somewhere has paid for it — or will pay for it. Street smart people also know that, sooner or later, somebody’s going to come to you looking for reimbursement — with interest charges tacked on. Government stimulus packages intended to “pump” capital into the economy to “create jobs” are nothing more than offers of free lunch. How so?

To answer this question, let’s first examine how a pump works. Take a water pump, for example. It’s obvious to everyone that the function of a water pump is to take water from one location and redistribute the water to another location. It’s also obvious to everyone that it’s not possible for the pump to create the water it pumps. Thus, to operate the pump, the suction side of the pump must be connected to the source of the water and the discharge side of the pump must be connected to the intended destination of the water. It is further obvious that the water pump cannot redistribute more water from its discharge side than it can take into its suction side. In fact, due to leaks in the system, it could redistribute even less water than it takes in. The government job stimulus pump operates in the same way. And, contrary to commonly accepted myth, there is no magic multiplier effect, nor can there be. Anything that appears be like it is strictly an illusion based on fallacious reasoning.

So, if the government intends to “pump” capital into the economy, it must first connect the suction side of its “job stimulus pump” to a source of capital. Only one source of capital exists; it’s the only place capital can be created, the private sector of the economy.

It now becomes readily apparent that, because government cannot create the capital it wants to pump into the economy, it can only suck the capital out of the economy from one place, in the form of tax, and redistribute it to another place in the economy, in the form of stimulus payments. But, wait! we mustn’t forget the inevitable additional costs involved in this process of redistribution of capital. Additional capital must be drained from the economy to pay for the design of the pump, the manufacture of the pump, the energy it takes to operate the pump, as well as the maintenance and repair of the pump. These additional costs are, of course, incident to the hiring of people to do all of those things, all of whom are paid with additional taxes taken from the private sector.

Because jobs follow capital (the intended result of a job stimulus package), the jobs that could have stayed in the private sector, where they would have increased the supply of capital, are instead shifted to the public sector, where they will consume the capital. The result of that is there is now less capital in the private sector. Because there is less capital, the rate of production of goods and services must fall. This, in turn, lowers the number of jobs needed. Thus, paradoxically, the job stimulus package causes the unemployment rate to rise in the private sector. Because the government will now pay unemployment benefits to those it threw out of work, even more capital must be sucked out of the economy to make the benefit payments.

A really practical way of thinking about it is to think of it as if you own a store. One night a burglar breaks into your store and steals your money from your safe. The next morning, the burglar comes into your store and buys a bunch of stuff with the money stolen from you and you’re supposed to think you made money off the deal.

The bottom line is, “there ain’t no free pump — I mean, lunch.”

Are Organizations Reluctant to Accept the Existence of A Crisis Situation?

2011-07-02T08:16:00.000-07:00

It's not so much that organizations, per se, are reluctant to accept that they are in a crisis situation. It has more to do with the core perceptions of those in the organization who can define when a situation constitutes a crisis—those in an organization's decision-making loop. There is no crisis if "I've got everything under control." Often, employees who are not in the decision-making loop have concluded that a crisis exists long before the decision-makers come to the same conclusion.

Assuming that some kind of "control limits" have been devised, i.e., measurements of various aspects of operations are being made against a particular set of standards, in the minds of the decision-makers, a crisis doesn't exist as long as the measurements either remain within the control limits or do not exhibit a trend toward one of the limits. Obviously, the perceptions depend upon whether the control limits have been properly established, maintained and timely observed.

Low level employees work where 'the rubber meets the road." Decision-makers usually don't work there. They depend upon getting necessary information through the channels established for that. Often, there is excessive lag-time in the process and the message can become garbled.

The real truth is: (1) Crises usually start small and are "below the radar horizon." At that point, the situations don’t look like they will become crises. They are looked at in isolation—out of context. This makes what is happening look like an isolated case, rather than the beginnings of a pattern, and therefore, not a problem that needs immediate attention. As a result, when the problem does "pop up onto the radar," i.e., it gets big enough to “get in your face,” it’s easy for the decision-makers to have the impression that the the problem has appeared suddenly, without warning, almost "overnight." Cognitive dissonance has a strong hand in this. (2) Crises usually occur when one or more basic principles has been totally overlooked or, if not totally overlooked, under-appreciated.

Work and Sexism

2011-06-25T09:57:00.000-07:00

There's an article at usnews.com headlined: "The Myth of the ‘Queen Bee’: Work and Sexism." It's subhead reads: "New study finds that, in the workplace, women are often held to a different standard than men." The article refers to a "new study, which will be published in an upcoming issue of Psychological Science, a journal of the Association for Psychological Science."

(Full Disclosure: I haven't read the study, itself.) Without commenting on the truth of the headlines, I feel I must comment on the rationale of the writer of the article.

Baloney!

Putting aside any possibility of internal statistical or interpretive bias, let's look at the study as described by the writer of the article. It does not address "THE workplace" as announced by the headline. It addresses "A workplace" of a particular bureaucratic and operational character, a police organization.

If I understand anything from my past involvement with policing organizations, it is that they have an infrastructure characterized by an acculturation of their personnel toward the optimization of the use of force (physical or psychological) through the exercise of the police power of the State. Stripped to its fundamentals, the exercise of police power ultimately rests upon what goes on in the mind of a person who (literally or figuratively) has a finger on the trigger of a gun pointed at another person.

Any conclusions drawn from the study could be valid when restricted to that kind of infrastructure/culture. I make no other comment about their validity in that context. They are invalid, from the start, however, if extrapolated to any other workplaces not sharing a nearly identical culture.

Whatever merits it may have, when applied within the specific government sector workplace having been studied, this study cannot legitimately be generalized to the private sector workplace. It appears to have been ripped out of its proper context for the purpose of sensationalism.

Shame, shame, shame on the writer of the article

Leaders, Culture, Economics and Politics

2011-06-23T10:18:00.000-07:00

Part 05

In Part 04, I iterated my intention to highlight the differences in the ecology of the strategic planning process of leaders under capitalism and socialism. This part continues and concludes some of the background for understanding the differences. (Obviously, there is a ton more.)

The differences influence the part that ego plays in how a leader operates. My hope is that in by exposing the underbelly of Socialism, the comparisons with Capitalism will become more easily evident. I used the past rather than the present because, if properly motivated, people can more dispassionately dig up the history on their own without having to deal with their biases of the current day.

Frequently, to divert attention, totalitarian ideologues have tended to advance the concept that the Marxist-Leninist system is a political opposite to Mussolini’s Fascist system, as well as to German National Socialism and the various other ‘fascist’ systems in the thirties. (There were a bunch of them.) Mussolini was especially adamant on the point. (But, he was anti-everything.)

Yet the concept of opposites is based on inadequate criteria and even false premises. A spectrum that puts Communism and Fascism/Nazism at diametric extremes distorts reality in significant ways. Yet, rigorous comparisons of the ideologies, in most cases, have not been made. There have been cut short by the Western Intellectuals' Groupthink reverence for the great "intellectual" orthodoxy that Communism was a great and well-meaning experiment (trying to build Utopia) which, unfortunately, "created some excesses." No kidding! More than 100,000,000 "excess" dead!

According to Rummel, "Constructing this utopia was seen as though a war on poverty, exploitation, imperialism, and inequality. And for the greater good, as in a real war, people are killed. And thus this war for the communist utopia had its necessary enemy casualties, the clergy, bourgeoisie, capitalists, wreckers, counter revolutionaries, rightists, tyrants, rich, landlords, and noncombatants that unfortunately got caught in the battle. In a war millions may die, but the cause may be well justified, as in the defeat of Hitler and an utterly racist Nazism. And to many communists, the cause of a communist utopia was such as to justify all the deaths. The irony of this is that communism in practice, even after decades of total control, did not improve the lot of the average person, but usually made their living conditions worse than before the revolution."

Underneath it all, the end they sought was to control the factors of production, just in different ways and with different means. The supreme irony is that all claimed that what they were doing was to free their people from want by redistributing wealth. In fact, their major accomplishment was to institutionalize misery.

The bottom line of this series is that planning, strategic or otherwise, whether in a Capitalist or Socialist framework, implies both control and the power to exercise control. Control implies the existence of two entities: an entity that wields the controlling power and an entity upon which the controlling power is wielded. Further, Control requires the exercise of power and a structure to transmit it between the controller and the controlled.

Strategic planning requires the balancing of ends, ways and means. The basic environment in which the leader does his strategic planning is as important as his abilities because they govern his use of his abilities to lead. They also govern what is available to feed his ego.

Leaders, Culture, Economics and Politics

2011-06-23T07:29:00.000-07:00

Part 04

Previously, I cited the ecology of leadership and Socialist leaders. Then, I digressed a bit into the world external to the leader where my thesis is that no business leader can avoid dealing with the total human ecological environment.

Returning to the externals of my original example, my intention is to highlight the differences in the strategic planning process of leaders under capitalism and socialism. The essence of the difference lies in the fact that under socialism, to succeed, the leader must be leader-centric, while under capitalism the leader must be customer-centric. In the leader-centric context, it is easy to see how ego can play a significant part in a leader's approach to strategic planning.

Continuing with background information, much of the confusion surrounding Socialism, in addition to it's being self-contradictory, stems from the fact that the socialist movement takes great pains to frequently circulate new labels for itself as a way of covering up its true identity. As each attempt to make it work fails, another leader, who wants to give it a shot and put his own brand on it, appears. So, as each label gets worn-out, it's replaced by another label which raises hopes of an ultimate solution of the insoluble basic problem of Socialism—until it becomes obvious that nothing has been changed but the name.

As to a planned economy, which one might people choose? For those who might think a planned economy tailored to the wishes of advocates all along a spectrum from democracy to dictatorship are different; they are not, except in non-essentials. All are precisely as socialistic as the Socialism propagated by any other socialist group. The differences are not among the ends sought, they are among the ways and means to achieve them. This makes differentiating Stalin, Hitler and Mussolini like differentiating citrus fruits: different sizes and colors, maybe, but still citrus, nevertheless. Take the following examples.

The communists of the Soviet Union called themselves Socialists (as in Union of Soviet Socialist Republics, USSR, etc.). In Germany, the Nazis called themselves Socialists, as in "Nationalsozialistische Deutsche Arbeiterpartei," or, in English, National Socialist German Workers Party. (The term, "Nazi," is just the shortened form of Nationalsozialistiche.) Their significant differences were political. Until Operation Barbarossa, they were as thick as thieves, cooperating to carve out satraps from their surrounding territories.

Hitler was favorably impressed with Italian Fascism. The Italian Fascists called themselves Socialists. Mussolini, a Marxist who left the communists because he thought he could do things better and faster by putting his own spin on them. In fact, toward the end of his "term in office," (after the king had arrested him and the Nazis had rescued him, the Nazis set him up as the leader of a puppet government. He was titled "il Duce di Repubblica Sociale Italiana" or "Leader of the Italian Social Republic."

As to fascism (after "fasces," the symbol of bound sticks used a totem of power in ancient Rome), Mussolini said, "Fascism is a religious concept...[it] should more appropriately be called Corporatism because it is a merger of state and corporate power." Thus, fascism is just a highly nationalistic socialist movement. With this statement, "il Duce" was trying to give his political philosophy the color of a religion and, at the same time, blend it with economics. (With such integration, could he, perhaps, have been using concepts taken from Mohammed's model as a guide.)

More in Part 05

Leaders, Culture, Economics and Politics

2011-06-21T09:01:00.000-07:00

Part 03.

I'm taking a detour from my original path to address a couple of pertinent side issues. I'll get back on the path in Part 04.

Someone pointed out to me that the way in which a leader reacts has more to do with the person than his/her circumstances. Taken in isolation, and limiting the consideration to how a leader reacts to his circumstances, this is undeniably, logically true.

Different people react differently in the same circumstances. On the other hand, however, whether this makes any significant difference in a given set of circumstances can be determined only by measuring the outcome. There may be more than one path to success.

The outcome depends not only upon the internal (psychological) resources the leader possesses, but the constraints under which the leader is able to bring those internal resources to bear in those circumstances. In practical terms, assuming a given level of internal strength in the leader, attempts to devise a strategy that requires a greater level of external strength or resources than are available to the leader is bound to fail. It is to the latter that the externals refer. In strategic planning both must be recognized. This critical consideration is recognized as a part of a SWOT Analysis.

A personal SWOT Analysis is fine for self-evaluation but, in practice, the only times most people care about the leader's internals are when they want to study him for the purpose of emulation or when he screws up. When the leader's on a roll, most people couldn't care less what he's thinking. It's when he screws up that they want to know, "what was this guy thinking, and why was he thinking it?"

Furthermore, in my world, the leader isn't paid to contemplate his navel. The leader is paid to deal with the external world where everything else is. We assume that, as a leader, he has something of great value to bring to the table.

To get anything done, though, a leader has to deal with the organization's SWOT analysis instead of his own. That kind of strategic planning has to do with the world outside of the leader's head. With no disrespect intended, he can do his own SWOT (and pick lint) on his own time.

Designing a strategy is not a trivial pursuit. Part of the problem people have in strategic planning is that not a lot of people understand strategy. It's important to understand clearly not only what strategy is but what it is not. Policies, opinions and concentrations on internal factors are not strategy.

Strategy sits atop a "three-legged stool." The "ends" of the strategy, the "ways" the strategy will be executed and the "means" to be used in the execution comprise the three legs. If any one of the three legs is missing, there can be no viable strategy devised.

SWOT Analysis forces us to look at both internals and externals. Extended SWOT Analysis is an even stronger tool in that respect. A good working definition of strategy (John R.Boyd) "To improve our ability to shape and adapt to unfolding circumstances, so that we (as individuals or as groups or as a culture or as a nation-state) can survive on our own terms."

It's worth remembering that the term "strategy," comes from the ancient Greek, meaning, "thinking like a general."

More in Part 04

Leaders, Culture, Economics and Politics

2011-06-20T08:23:00.000-07:00

Part 02

Previously, I cited the ecology of leadership and the unholy trio of Stalin, Hitler and Mussolini as Socialist leaders. So, what about the strategic planning of leaders operating in the area of economics of a Socialist System? If the ecology of leadership is important, for the answer to this question to be meaningful, a contextual background is required.

First, the three traditionally recognized factors (or means) of production are land, labor and capital. (In a literal sense, of course, anything that contributes to the productive process is a factor of production.)

Second, although Socialism is a relatively recent phenomenon, it has a history of variation. It came into being as a result of the Industrial Revolution and it was Karl Marx who defined it. Over time, other "practitioners" have come up with "improvements," or variations, on the theme.

Third, to many people, the concept behind the term "socialism" is similar to the concept behind the term "god." In this respect, everybody can have a different take on the meaning and implementation. So, Socialism is an article of faith for many, perhaps for most, of its adherents.

Fourth, the term describes a system characterized by centralized government planning and control of the uses of national resources, private as well as public, operating "in the name of the people." Lenin said, "Account must be taken of every single article, every pound of grain, because what socialism implies above all is keeping account of everything." The function of a leader under this kind of system must be quite different from the function of a leader under a market economic system.

Fifth, although it is true that leaders have made certain "corrections," to the "original," or "pure," form of socialism, it is also true that the resultant forms diverge only in non-essentials. We can describe it more accurately if we start from the stated goals of socialists. They want to control the factors of production. Their ideal is not "equal economic opportunity" but "equal economic results." This has serious implications because, to that end, in the name of fairness, they plan to take from the more productive and give to the less productive, or to the nonproductive. This idea used to be called, "leveling". More modern usage calls it the "welfare state," or "spreading the wealth," or "redistribution of income." Among other measures, the expropriation mechanism of taxation is to be used to accomplish the "redistribution."

The essence of the foregoing points is, whatever the individual "takes" or descriptions, none of these can avoid the central point, which is: the aim of Socialism, no matter the variation in form or label, is its further propagation and, because the two systems are incompatible, ultimately and inevitably, the destruction of Capitalism.

The implications for leaders and their exercise of leadership and strategic planning are enormous. For example, those who do not consider themselves to be Socialists fail to realize that, given the pernicious nature of Socialism, their advocacy of so-called progressive political interventions in some economic matters must imply the ultimate establishment of full government supremacy in all economic matters; in short: Socialism.

How does a leader function, and what are the indicators of successful leadership, when Communism, Fascism, Socialism, State Capitalism, Authoritarian Economy, Planned Economy, Corporatism, Welfare State, etc., are rooted in the same concept? And what is the "magic ingredient," the resource that leaders doing Strategic Planning in a Socialist economy have available to them that those in a Capitalist economy do not have? This ingredient is one of the most attractive reasons that persons embrace Socialism; the veritable flame that attracts the moth.

Some will say, "this all sounds so confusing." Others will ask, "how can it be true when I have been taught otherwise?" We'll look into these issues in Part 03.

Leaders, Culture, Economics and Politics

2011-06-18T18:37:00.000-07:00

Part 01

Some people I know like to talk about leaders as if they were above the considerations of culture, economics or politics. Perhaps, well and good, but only up to a point. That point is, such separation is artificial. It may be fun to discuss the issue over a beer but, any way you slice it, it describes a fantasy universe.

In reality, leaders don't operate in a vacuum, they operate as a part of subsystems that operate within cultural, economic and political systems. It is a truism that, no matter how high a leader may be in a hierarchy, somebody is measuring his performance. And, the metrics of leadership are governed by "the rules of the game" established within the various cultural, economic and political subsystems that comprise the milieu in which the leader functions.

I would be egregiously remiss, therefore, to overlook the human ecology of leadership, i.e., the totality, or the pattern, of relations between leaders and their environments. As well, I can't overlook the various degrees of reflexive interactivity that obtain between leaders and the systems in which they operate. In fact, to overlook these real world conditions would be to relegate the substance of this thread to a fantasy world where the most important discussion is the discussion centered on how many angels can dance on the head of a pin.

To elucidate: in the present context, I will use the term, ecology, not in the sense of describing the physical environment of Earth, as it is most commonly used. Instead, I will use the term in its human sense, i.e., as a sociological term dealing with the spatial and temporal interrelationships between humans (in this case, leaders) and their cultural, economic, political and social organizations. It is my thesis, then, that leaders live in human ecological systems comprising many ecological subsystems.

The interrelationships between leaders and the systems within which they work, are enormously influenced, if not governed, by cultural, economic and political drivers. As a consequence, leaders are free to act only within the constraints imposed by the drivers extant in their respective sector subsystems.

In the area of economics, for example, under Capitalism, the demands on leaders in the private sector subsystem are different from the demands on leaders in the government sector subsystem. The reason the demands are different is because the constraint-sets in the sector subsystems are different. In turn, the constraint-sets are different because the structures of the sector subsystems are different. Likewise, the structures are different because the prime operational drivers of the sector subsystems are different. The private sector subsystem is driven primarily, but not exclusively, by the profit motive. (There are many not-for-profit businesses.) The government sector system is driven primarily, but not exclusively, by the cost-justification motive.

What about leaders operating in the area of economics of a Socialist System? I will pick that up in Part 02.

Why Should A Company Have A Strategic Plan?

2011-06-15T08:24:00.000-07:00

I was asked recently about why it was important for a company to have a strategic plan. Doesn't having a vision statement and a mission statement suffice?

The idea of having a strategic plan is to help to minimize the effects of being “blind-sided” by unexpected events and to be able to build into the organization’s infrastructure the ability to respond appropriately to changing circumstances both in the internal and external environments. For these reasons, preparing a strategic plan requires the consideration of alternative actions, all of which are intended to bring the strategy to fruition, although by different paths of action. It is a requirement for sustained success, primarily because it allows the organization to stay ahead of changes in its environment.

Without a strategic plan, the operating elements of the organization are in constant confusion. People mill about, confusing activity with accomplishment. Money and time are wasted on go-nowhere projects. Morale remains low. It is difficult to get people to participate in organizational activities. Everything that seems to “go wrong is always “somebody else’s fault.” And usually, everything is going wrong.

Drafting a strategic plan requires the planners to “think strategically.” A significant problem with thinking strategically is that few people sufficiently understand “strategy.” In fact, although the term is thrown about by almost everyone, most people don’t agree on just what it is.

So, what is "strategy" and how does one think and plan strategically? To simplify, “strategy,” as differentiated from “tactics,” which are the actions taken to fulfill a strategy, comprises the position one takes to reach a particular goal. In other words, “strategy” provides a direction so that, over time, choices of courses of action can be made that have a high probability of propelling the organization consistently in the direction intended.

Obviously, if an organization has no vision, i.e., where it wants to go, and no clear mission, i.e., what it wants to do to get there, planning strategically is impossible.

Can He Do It?

2011-06-15T08:02:00.000-07:00

Recently, someone asked me to comment on a situation in a company where the CEO, who is also the founder and principal business development resource, wants to move from day-to-day focus to a leadership role, planning for the future. My off-the-cuff comment was:

“Given the phrasing of your question, this may be easier to say than to do. The situation is cloudy.

If he is the CEO, he is already in a leadership position, but apparently has not been fulfilling some major requirements of that role. It seems obvious that he has not seen that planning for the future is at least as important for him to do as immersing himself in the minutiae of day-to-day activities. At this point, he is surely in for some really heavy lifting.

That he is still the principal business development resource doesn’t speak well of his actual intent or his organizational abilities. Changing the focus of his thinking from the operational to the strategic will take an enormous effort on his part. Given his probable history, whether he can make the required transition is problematic.

I am assuming, from your depiction, that this is probably not a sole proprietorship and that it is a small incorporated company where the CEO has been wearing all the hats from Day One. Most likely, he has not been planning for his succession or his exit from the business, for if he had, he would already have set a training program in motion, have delegated appropriately and wouldn't be in the present situation.

As the situation now stands, it appears that he wants to stay as CEO, but wants to change his job content. Accomplishing this kind of change will require an almost wholesale change in the corporate culture that has developed around him as a result of his exclusive hold on business development. He will need to re-engineer the business to make it happen. I am willing to make a small wager that he will not be able to do it on his own.”

What do you think?

Skillsets as Hats

2011-06-14T11:53:00.000-07:00

The skillsets required of a Leader are different from those required of a Manager.

The Manager wears the hat of the tactician, tending to approach his work in a fairly rigid context, with a tight focus on performance based on accounting periods of some length (month, quarter, fiscal year, etc.) Because of this type of constraint, the manager is almost forced to view his activities as involving a unending series of self-contained, unconnected, or at best, loosely-connected, independent operations. He lives in the present or the near future and works primarily under conditions characterized by a larger number of certainties compared to uncertainties.

The Leader, on the other hand, wears the hat of the strategist, viewing his activities as involving an unending progression of interdependent operations that are connected in an unbroken chain on a specified course leading to a particular destination defined by the mission statement of the organization. He lives in the medium and long term future and works under conditions characterized by a larger number of uncertainties compared to certainties.

As a practical matter, because the number of people who feel comfortable dealing with certainties is greater than the number of those who feel comfortable dealing with uncertainties, more people feel comfortable wearing the Manager Hat than feel comfortable wearing the Leader Hat.

There is, of course, no prohibition against one person wearing both hats...as long as he has both skillsets and feels comfortable wearing either hat. Of course, it is easy to see that certain difficulties will arise when one person tries to wear the two hats simultaneously.