Improved Leadership. Competitive Advantage.

Sorry. If you think we’re dumb enough to pick a political point of view on this shocking election cycle, we’re not. Just because we won’t pick a side publicly, though, doesn’t mean that we aren’t fascinated about the Trump victory. After 30 days of soak time, we’ve dissected this event and offer some leadership and managerial lessons as it relates to the Trump Triumph and the Clinton Collapse. To be clear, we’re not choosing one over the other. Rather, we are spotlighting some colossal learnings that have emerged from this surprise victory.

The Dominant Logic Isn’t So Dominant. The day after the election it was widely reported that a staggering 113 out of 115 different national polls in the four days leading up to the election picked Hillary Clinton, some by a considerable margin, to be our next President. We travel a lot at ELP, and we often stack up our Wall Street Journals and read them in bursts. Three days after the election, over that weekend, we got caught up on our WSJs. Specifically, we read the issues from October 10th thru October 24th. Even the fiscally conservative WSJ was picking or assuming Hillary would be our next President. Believe it or not, there was also talk in that very paper about Republicans conceding both the House and the Senate. To be clear. Crystal clear. Everybody was wrong.

The Lesson? ELP operates in dangerous confines—in high risk/high hazard organizations. We consult for organizations where being wrong means environmental, industrial, or radiological tragedy. The lesson here, especially when the stakes are the highest, is to get that Devil’s Advocate. Seek hard for disconfirming information. Clearly, too many people did not do that here.

Limitations of Data and Big Data. Hundreds and hundreds of millions of dollars, if not billions, were spent on polling and predicting our next President. Superstar predictors from previous elections, such as Nate Silver, swung and missed. Big time. Imagine this. In the day and age when Amazon can predict when we’ll want something even BEFORE we want it or where IBM’s Watson can scan terabytes of data in tenths of a second to predict health outcomes or equipment failures, data, numbers, analytics, and number crunching all left us down and out. It disappointed. We won’t comment on the winner or the loser of this election. However, we will take a stand and say the Biggest Loser in this election was the business of prediction.

The Lesson? Hedge funds employ doctorates in Mathematics and generate unimaginably complex trading models. By the way, some of those same trading models disappointed in terms of predicting the housing crisis. Our lesson is that the human element still matters—more than you think. Getting down, getting out, leaving the office, walking the plant, field time, getting a grip on really what ground truth is—that’s all the human element. A regression or correlation coefficient will never be able to tell us that. Again, the lesson is to use numbers and make data driven decisions, but those decisions should always be informed by the human element. Those that focus on metrics, solely, do so at their own risk.

The Public is Always Different than the Private. In many ways, the Trump win was a victory for Psychology over the field of Sociology. Sociology focuses on how people organize and how we interact in groups—both small and large. Where Sociology is often the domain of the public, Psychology is the discipline of the private. Shockingly, in public settings and in public polling and across social media, people either lobbied or said they’d support Hilary Clinton. While Trump supporters were boisterous at the rallies, in response to media questioning or polling, they were quiet, reserved, and, perhaps, coy. Indeed, some point to this as the damning procedural failure. The inputs were biased or slanted. The polls reported those likely to vote. Even more striking, in the one or two out of the millions that predicted a surprise Trump victory, a ‘curtain effect’ was described. Specifically, when the curtain closed around a voter and public shaming and humiliation were removed from the equation, more people would vote Trump. Remarkably, that seemed to be exactly the case.

The Lesson? Some executives we know just love Town Hall meetings. We’re a touch more muted here. In public, people act differently. They don’t want to ask the stupid question, they don’t want to extend the meeting, and many just fear the social stigma of disagreement or being wrong. Privacy matters. The secret ballot has its advantages. The secret ballot = truth. A public proclamation can be political. A private proclamation is personal, is authentic. Leaders, in our opinions, shouldn’t shy away from the more intimate, deep, one-on-one conversations. That’s where ground truth can be found.

YES SIR/MA’AM!!!!! We are speaking both from what we’ve read in the press along with some inside baseball here. Through some very trustworthy connections (and also reported by some media outlets), we know that Hillary (or her campaign) spent $15 million for a campaign victory party at New York City’s Javits Center. There was even to be a ‘lights-out’ fireworks celebration that was quietly pulled. Our sources also tell us that what the media reported was, indeed, true—she had no concession speech prepared. Nobody spends $15 million and fails to pen a concession speech if he/she believes there’s any chance at losing. She believed, without fail, that she’d be the 45th President of the United States.

The Lesson? We feel, at ELP, that this is particularly damning. What this tells us is that everyone close to Secretary of State Clinton told her what she wanted to hear. The notion that the ‘emperor has no clothes’ applies here. The best executives are strong and humble (and wary) enough to surround themselves with people who will challenge assumptions, push back, and argue against orthodoxy. Without it, executives create an echo chamber where only the good news gets heard.

Advisors and political consultants failed and failed miserably during this political season. At ELP, we’re better than that. If you want expertise, guidance, and courageous feedback, we’re the best in the business. Email Robin Bichy at robin@elpadvantage.com to learn how we help your campaign!

By the time you open and read this newsletter, it is likely that Major League Baseball will be toasting a new champion. Nothing about sports in this newsletter, except to say that we feel that most of us should just bench Benchmarking. Yes, the Benchmarking efforts, as we’ve seen them firsthand, belong deep on the bench—riding the pine!

C’mon. We all know that it’s hardly ever done well. The subject of both laughs and scorn, consider some of the quotes that we’ve captured over the years:

"Since antiquity and spanning humanity, there's no greater waste of time than a Benchmarking trip."

"It's a vacation, and everybody knows it. It gets us out of the plant and allows us to breathe, but I’ve never seen a Benchmarking trip produce any tangible result."

"You kidding me? A Benchmarking trip is nothing more than a networking opportunity. People looking for a new job are the ones who like Benchmarking."

"They are downright expensive, and everyone pays. While we send a small team of leaders down to Benchmark, someone else—back here—needs to carry the water. Whatta waste!"

We’ve been around though, and, in essence, ELP is continually Benchmarking. With that said, we offer the Big Five below. While we’ll stop just short of offering a money back guarantee here, we do feel (and we’ve got some evidence to back us up!) that if you follow the principles below, you’ll go a long way toward improving your Benchmarking efforts.

  1. Keep the Focus Narrow. One of the great mistakes that we’ve seen time and again is that organizations and their leaders pursue grand Benchmarking efforts. In essence, there’s an effort to solve world hunger during many Benchmarking initiatives. These fail, bound by the problem that you are trying to solve and/or generate a focused purpose statement. Ideally—and we offer the following consultation—leaders should attach a 15-word (or fewer) purpose statement to all Benchmarking efforts. If you can’t explain the purpose of your Benchmarking effort in 15 words, then just don’t go. Focus is everything. For instance, we consulted with one client to narrow down their Benchmarking effort to something as simple as, “The purpose of my Benchmarking trip is to understand the tools they use for inventory control.” To be sure, there’s an added benefit of keeping the focus narrow: you save everyone’s time. By focusing your Benchmarking efforts, you, quite likely, won’t need to be gone as long. Also, you save the hosting organization some time as well. Remembering one client, they reduced their Benchmarking trip from five days to two by just applying a focused purpose statement.
  2. Do the Pre-Work. Many of the organizations that we work with are lean and, for that reason, many are hurried. Meetings and report generation chew up valuable time. Because of this, very few leaders adequately prepare for their Benchmarking trip. Some are lucky enough to grab their Benchmarking folder on their way out the door and have told us that they’ll study on the plane ride to the hosting organization. It’s kind of laughable, but we know these efforts to fail. 4.0 benchmarking trips require us to prepare and to even conduct virtually a Pre-Job Brief with our hosting organization. Part of this is just common courtesy. No leader wants to waste another leader’s time. So, let them know you are coming and hold a virtual PJB where you share your purpose, exchange reports and metrics, and nail down expectations. Very few organizations and leaders are prepared enough to do this. In our experience, though, it is a purposeful and thoughtful way to start the Benchmarking trip.
  3. The Benchmarking Report. This, too, could end up in a Dilbert cartoon. We’ve been told that upwards of 75% of Benchmarking trips never generate a Benchmarking Report—even if the procedure tells us to do so! The reason is quite simple, but it’s a loser’s excuse. What happens is that leaders come back from a Benchmarking trip and enter the whirlwind. While they’ve been gone (and because they didn’t follow the principles above) for 5 days, they’ve come back to their home organization and must confront 100 voice mails and 500 emails that are demanding their attention. The Benchmarking trip quickly, if not immediately, falls to the low priority. Because of that, we strongly recommend that leaders do the following: write the report within 48 hours of return. Just do it. By the way, with every passing hour, our memories along with the lessons that we learned begin to degrade. After 48 hours, if it isn’t written down, it is likely lost to our cognitive dustbin forever. Also, and this is every bit as important, try damn hard to keep the report to a single page—at max two. Nobody’s going to read a 15-page benchmarking trip report. So many leaders fail in this regard. The best leaders and individual contributors can pull out what’s most important and shelve the uninteresting and the low value noise. Staying to a single page forces us to keep the most important.
  4. Courses of Action and Corrective Action. Remember, we aren’t fixing world hunger here. So, one of the most important activities that a returning Benchmarking team can do is to enter two immediate courses of action/corrective actions. This is important for another reason as well: it focuses us all on things that could/should be fixed. To share an example, we worked with a leader who came back from a five-day benchmarking trip (yes, no purpose statement), and he mentioned culture over and over again. Of course, it’s important for leaders to see, feel, and touch when they visit another plant or manufacturing facility. We won’t dispute that. However, what corrective action can come from a cultural comment like that? We worked hard with this particular leader to identify actionable knowledge from his benchmarking trip. If it isn’t actionable, how could it possibly be an effective Benchmarking trip? Likely, it wasn’t. By immediately generating two courses of action or corrective actions, we are breathing actionable value into the Benchmarking effort.
  5. Report Up! Report Out. There’s both an accountability and a courtesy component to this principle. Before you leave on a benchmarking trip, get on your boss’s calendar two weeks after your return. The subject of the meeting is to brief your boss on the fruits of your Benchmarking efforts. Don’t wait for your boss to ask you how it went. Take the lead and schedule the meeting before you actually leave. Of course, the reason to do this is to put the stamp of accountability on the efforts. In addition to debriefing your boss, schedule a follow-up meeting with your hosting organization. We recommend doing this 30 days after the completion of the Benchmarking efforts. Remember, they gave up people, time, and effort to make you smarter. The least we can do is to close the loop and share our progress with those who attempted to help us.

In closing, the best way to move Benchmarking off the bench into the starting rotation is to follow the principles above. There are more, for sure. If you want to get even more out of your Benchmarking efforts, please reach out to one of ELP’s principals and co-founders, Robin Bichy at robin@elpadvantage.com.

A wise mentor once remarked to us that there's leadership lessons all around us, if we're only willing to stop, look, and reflect. We're going, now, to apply this maxim to the month of September as we canvas this turbulent month for some universal leadership lessons. True to the point above, we found no shortage of good and not-so-good leadership lessons from September. We offer our own version of a Top Three list below.

Wells Fargo. Wells Fargo bank has long been the darling of the investment world. As most banks continue to struggle even years removed from the Great Recession, Wells Fargo seemed the lone bright star in the dark. Investors and stakeholders often pointed to Wells Fargo as the exemplar in the financial world as well-run and earning top-performing labels from a variety of sources. Indeed, iconic investors, such as Warren Buffet, were vocal supporters. That’s over for now. And, just maybe, forever. The facts of the case are startling. In the retail arm of Wells Fargo, over 2 million fraudulent accounts were created without customer authorization. This is Enron-like in its breach of trust and flagrant disregard for ethical behavior.

Root Cause Evaluation. First, there was a Production over Integrity environment. In high-risk/high-hazard organizations, we need to ask not just if we are supporting a Production over Safety or a Production over Quality culture, we must ask the most pivotal of all questions — are we building a Production over Integrity culture? That’s what happened at Wells Fargo; at least in their retail banking arm. Second, we need to look at Procedures and Systems. Indeed, Procedure Use & Adherence (PU&A) is a big deal in the places where we consult. In complex, high-hazard organizations, leaders should ask whether the Procedures put the individual or plant in a safe space or in a compromising one. At Wells Fargo, their compensation and performance evaluations and bonus procedures helped drive individuals towards compromising positions. Specifically, employees were faced with the unthinkable—do I cheat and lie, or do I preserve my job? Ultimately, of course, there’s individual ownership and accountability. That said, shame on those who designed and institutionalized the Wells Fargo systems (compensation and bonus structures) for driving good individuals to a bad place. Finally, the buck needs to stop somewhere. Over the last 8 years, Republicans and Democrats have agreed on almost nothing. In our lifetime, we’ve yet to see this type of political polarization. But that changed, thanks to Wells Fargo. The CEO of Wells Fargo, John Stumpf, was able to unite Washington when no other issue possibly could. Whether you are the most conservative Republican, like Texan Jeb Hensarling, or a firebrand Democrat, like Elizabeth Warren, we can all agree—Stumpf’s absence of ownership is without excuse. At ELP, we lobby behind an unassailable truth—the most important activity a leader can do is to build a sustainable culture of success. Stumpf didn’t do that, and now the financial health of Wells Fargo is at risk. He should be held to account.

Hillary versus The Donald. September also gave us another first. Forget about the last episode of M.A.S.H. and the record-breaking Super Bowl! Okay, maybe not quite, but a staggering 84 million people tuned in, on a Monday night if you can believe that, to watch the Trump-Clinton debate. With 1 in 3 adult Americans watching the debate, it shattered the record books for the most watched Presidential debate in our history. But there’s another first here. Besides the Nixon-Kennedy debates, where Kennedy arguably won the White House on his preparation, this debate offered two diametrically opposed options from a leadership perspective. There was The Donald, a man who successfully won debate after debate after debate in the Republican run-up. When asked about preparation, he dismissed the idea, and to the contrary, was proud and, quite vocal, about his decision NOT to prepare. Incredibly, Trump continued to campaign up to the day of the debate! Hillary chose a different path. She hunkered down and got deep into policy. She prepared and she studied closely Trump’s history and previous stances. She delivered considerable body blows regarding his personal taxes, his treatment (or mis-treatment) of women, and, quite astutely, went after Trump’s treatment of the “common man”—people that Clinton said that Trump stiffed in his rise to big riches. At ELP, we offer no political opinion. We’re not that stupid to go there. Suffice to say, though, we are worried across the board about the future of our country given the choices we face. However, what we do know by almost every analytic and metric is that Hillary came out on top in this debate and most seem to believe that it came down to a pivotal decision—the decision to prepare versus the decision not to prepare.

What We Can Learn. If this is a theme that you think you’ve heard before from us, you’re right. In fact, just last month we talked about hurricanes and the pivotal factor of preparation. Whether you are building barges, creating rail cars, or about to perform maintenance on a Reactor Coolant Pump, preparation will always, always allow you to do the job more safely and to reach higher levels of quality. Doing a job-site review, pausing to do a solid and thorough pre-job brief and task preview—these are all elements of preparedness. Conceivably, one could be successful without preparing. But even the smartest of us, we contend, could benefit from job preparedness. To be sure, Donald Trump will have learned his lesson. Expect a better, more even rivalry during the next debate. No policy issues will have changed. In fact, nothing will have changed except to say that Donald Trump will be better prepared. There’s a lesson there for all of us.

Fernandez. This story starts badly, but ends incredibly. Jose Fernandez was on the starting rotation for the Miami Marlins, a major league baseball franchise, which was starting to make a run for the last wild card spot and a playoff berth. But on September 25th, he and two others were killed when their speedboat crashed into a rocky jetty off the coast of Miami. His teammates chose to honor him in a special way. First, all of his teammates wore a Fernandez jersey. Second, in a spectacular show of sportsmanship, Dee Gordon, the leadoff batter for the Marlins decided to honor Fernandez by batting right-handed (he’s left-handed) for the first pitch of the game. After that first pitch, he switched to his left-handed position and proceeded to blast a towering home run, his first of the season! As he rounded the bases, he exploded in tears. To watch this extraordinary event, click here.