Chief Investment Officer
BirdsEye Viewmanaging currently
Greetings from Spain, where Dick, Gil, Arik and I are busy seriously depleting the ham supply in the country while investigating various chocolate producers in between museum visits and Flamenco shows. We look forward to spending New Year's Day at home with everyone including Dave, our Marine, and his brother Matt, munching on home-made chocolate-frosted doughnuts and smoked chicken.
Bill Perroti, Chief Risk Officer of Frost bank, had some penetrating insights in response to my last BirdsEye View and the "Subprime bailout":
"I strongly disagree with a "cramdown proposal"; once this precedent is set it will only get wider the next time it is used (and there will be a next time) unless we outlaw greed. We do not have enough bankruptcy judges to deal with masses even if they work 24/7. More time would be spent deciding who is eligible to file - individuals, investors, speculators, partnerships, etc. The initial flaw in this proposal is that bankruptcy judges have no experience, history or training in restructuring loans. I say that knowing that the lenders, as it relates to sub-prime and alt-A, did not know how to originally structure the loan either. The lenders forgot or disregarded the fundamental axiom of "balance" when they structured these loans. These loans did not make sense from the get-go. As structured the only "balance" that had to result in the long-term was "lose - lose", and 20/20 hindsight was not needed to predict that outcome. Once again greed on the part of the lender, borrower and investor was the underlying motivator.
A congressional solution is usually driven by political aspirations rather than the best answer for the greater-good. Most or our "founding fathers" would probably disavow that term given how we are about to act or react in this situation. The legislature will waste countless hours and money creating multiple bills sponsored by multiple "leaders". If Congress wants to effectively tackle this situation, a true bipartisan effort is needed. After all we are dealing with the "American Dream". The folks in DC, with the aid of facilitators, like you, should be locked away for about a week and craft a proper solution. If you are not available, I would love to see Tim Russert help Congress - you talk about someone with some sense (at least in my opinion). "
Liat wrote a great review of Marius, our favorite restaurant in Rio de Janeiro, in BirdDroppings, and I added two recipes of their desserts that are easy to make and perfect for the holiday season -- light and out-of-the-box.
The article below is about building a sense of urgency within an organization. This tactic has worked for me over the years, and it will work for you if you apply it. In 2008, a challenging year for sure, the importance of effective execution is greater than ever, and "managing currently" is an essential ingredient to achieve crisp execution.
Wishing you and yours a healthy, prosperous, joyous and FUN 2008,
We are accustomed to managing to historical information. Most of the reports we see are monthly, and are received two weeks after period-end , which implies a six week time lag between action and result . Yet we consider them the best source of actionable information, and modify tactics and behaviors based upon those reports.
In today's warp-speed environment, when the life cycle of a sneaker is three weeks, acting on month-old information is simply not fast enough. It permits a full month to go by before mid-course corrections can be made, trends can be reversed or reinforced, and timely recognition given for major accomplishments. Managing to historical information is not very effective in a high velocity world.
California has been on the cutting edge of many trends, and the "Managing Currently" trend in banking started there as well. The pace of the high tech companies has permeated even banks, and there are lessons to be learned from them.
Managing Currently involves managing to the moment, to the hour. The time unit you manage to is not a month or a week, but a day or even (in retail banking for example) an hour. There is tremendous value in this approach for many reasons:
In short, Managing Currently creates a sense of urgency, a recognition that time matters.
How do you execute Managing Currently? You ask your managers to report results on a handful (no more than five, three are even better) key parameters every day, using pagers, email and voicemail as the communication devices. Managers report to their supervisor or team lead each evening on the results of the day on specific behavioral parameters (such as number of prospect visits for a commercial lender; profit dollars per banker for a retail banker) and specific result categories, both leading and lagging indicators. Of course, what you measure is key, but, if you measure the right things, you create both focus (since you measure so few items) and urgency.
I know what you're thinking: This onerous reporting must be deeply resented by the troops, it smacks of micro-management, and it must be too time consuming. In fact, people seek feedback and thrive on it. Frequent reporting works extremely well for team members, so long as management acts on it and provides feedback, both positive and corrective. If management does not voicemail the teams and individual members back quickly, Managing Currently defies its own purpose and creates frustration among team members. Conversely, if management responds to the information with either positive or negative feedback in a timely fashion, the troops are energized and inspired by it. They receive validation of focus and reinforcement of direction and activities, which fires them up to do even better.
Timely information also allows all management ranks to immediately recognize accomplishments by calling the banker that achieved success and acknowledging their success. This is a powerful tool that links management and the team more closely together. The more frequent the reporting, the more opportunities for positive feedback are available to management, and, as we all know, recognition and positive reinforcement are most effective and inexpensive management tools.
As we all know, timeliness of information is everything. If your dog poops on the rug and you shove their nose in it three days after the fact, it has much less impact than if the shoving occurs a few minutes after the event; the dog simply doesn't connect the two acts if they don't occur in close proximity. Kids are no different (spoken as a mother of six&), and, I fear, neither are adults. They get the connection, but the power of the message is inversely correlated to its timeliness.
This management style changes people's perception of time and its value. It changes the time unit in which people think, and enhances their sense of urgency. It supports a highly nimble organization. A currently managed company can turn on a dime and is a better execution machine than slower companies. In today's world, this is a significant and sustainable competitive advantage.