Youth Sports

In the news is the claim that youth sports has a tremendous positive impact on those that participate.  Interesting stuff considering all the negative influences that lurk for young people today.  Yet, my initial reaction was that the conclusions drawn by these authors is a bit too far reaching in its praise.

The premise they build is that young people who play sports are much more likely to be successful (based on career earnings).  The rationale is that athletes come to appreciate competition and because of the work they exert they come to appreciate that hard work, not luck, determines their success.

Some questions I have. First, can't young people challenge themselves in endeavors other than sports (and I love sports and played them as a child).  If anything, I see this as an indictment on schools for making learning so trivial (by promoting values in popularity and social interaction among peers) that sports is a lone outlet to express themselves in a way that challenges them. No doubt, many a young person who has run afoul of basic social norms has found a safe haven in organized sports.  I would think (and I have seen it in my own kids) that at age 14, 15, and 16 people can get fully engaged in non-athletic activities that challenge them improve and measure themselves against others (e.g., writing books, starting businesses, drawing, sewing, experimenting, Eagle Scouts, etc. etc.).  The problem is that K-12, with a few exceptions, completely stifles this type of engagement, instead spending time getting kids ready for tests [which by the way is an unfortunate byproduct of the school culture where many a student challenges themselves to be a good student not for learning sake but for the competition of getting grades].

Secondly, not mentioned in the article are possible negatives to youth sports.  In general, I think they are quite positive; but like any good they can taken too seriously and too often.  Are families being controlled by youth activities (not just sports) so that young people have little time other than going from activity to activity.  Are all the people in youth soccer really using it as a platform to improve themselves and engage in useful competition or are some of them simply using it as one more thing to take up their time -- so they don't have to account for free time to do things like reading and helping out with the family chores?

Well anyway, on to other current events:  Our seniors and many graduate students officially graduate tomorrow . . . I look forward to seeing them get recognized for the commitment to finishing their degree.  Congrats to them.

Morale and CEO Pay

My last post cited the WSJ article (April 30) that claims CEO pay is out of control and affecting employee morale.  Does CEO pay really disrupt morale?  Maybe, but I can think of more important reasons.  

First, being part of a losing team will impact morale.  When layoffs start, people and the press may grumble about the salary of the CEO.  They are grumbling because of the results of the company -- if the company is doing well the salary is practically irrelevant (just like the Celtics morale is high even though Garnett makes so much money).

Second, when people are working they are not likely to be thinking about the CEO's  salary unless there are other problems that are distracting them from working.  There are lots of units inside big companies that operate very well regardless of the CEO, salary and all.  People will commit to business goals even if they dislike corporate staff or the CEO.  Poor morale is caused by poor management below the CEO that cannot establish clear goals that allow people to succeed and use their skills.

Inflated CEO salaries are the rightful concern of Boards of Directors (as the agents for the shareholders).  For those doing the work I doubt it has the impact many would assume.

 

CEO Pay run Amok

In today’s Wall Street Journal, Carol Hymowitz reports that the growing pay gap between CEOs and average workers is “fuel[ing] worker woes.”  It got me to thinking about the claim.

She reports the gap has roughly doubled since 1994 to 180 times – the multiplier for the difference between the CEO and an average worker wage.  With the average CEO salary about $8.8 million, the average worker wage is just short of $50,000. 

It is hard to argue that such a disparity might be dispiriting to workers.  Further the incredible golden parachutes awarded to deposed CEO’s [that is, ones who have been chief of a losing company] is disconcerting if not sickening.  The unfairness of a failing company rewarding its departing CEO with such largesse (millions of dollars in some cases) while laying off workers living from pay check to pay check is obvious.

But is morale really a function of the CEO pay?  I did a quick check of some NBA salaries to see what kind of disparity they work under.  Take the Boston Celtics who had the best record in the NBA this year and are favorites to win the title.  The highest paid player on the team is Kevin Garnett who makes $23,750,000 this season.  I compared him to the lowest paid contributing member to this excellent team—Glen Davis who made $427K as a rookie this year.  This is a differential of 55 times between peers who must work together as a team!

This kind of pay gap is not unusual; the Denver Nuggets highest paid player make just over $20 million and a frequent starter (Linas Kleiza) makes about $1,000,000. One of the points of the article is that the ones affected by the high CEO salary is the rest of the executive team.  General Electric CEO Jeffrey Immelt is quoted in the article, “Should the CEO make five times, three times or twice what this group [Executive Team] makes? That’s debatable, but 20 times is lunacy.”  Well the best team in the NBA has a gap of 55.  Next time I will explore further the common assumption on high executive pay.  

My apologies for the month "sabbatical" from blogging.  I want to write just a bit about my 2 1/2 year old son Paul (the picture is him about a year ago).  At the end of February he had surgery to remove a swollen lymph node on his right jaw; about 10 days ago we finally got a diagnosis from that biopsy.  The very good news is that Paul does not have any cancer.  He has a a bacterial organism called MAC.  This is a slow growing thing, thus the time from surgery to diagnosis.  The bacterium is nearly ubiquitous in our environment -- dirt, dust, etc.--and most people are able to handle it.  In a small number of cases an otherwise healthy child gets an infected lymph node from the bacterium.  Although related in some way to the TB bacterium, MAC is not contagious in any way.  

This bacterium is mostly localized and the way to get rid of it is to cut the skin. Based on our latest visit to a doctor at Children's Mercy, Paul will likely need another surgery to get rid of this. In the meantime he will be taking some anti-biotics.  You can imagine this has caused some stress for our family -- though not too much because Paul is pretty healthy otherwise.  We are very thankful that this is curable even as we must be patient for it to heal.

It is amazing how little control we have over things like health.  The doctor said that this was probably just "bad luck."  I know there are many, many other families dealing with much tougher circumstances and in many cases are the victim of bad luck, too.  Not unlike managers who must depend on getting results from others they have no control over . . . oh by the grace of God . . .

Addendum to Political Brands

Many corporations have sufferred mightily over the years because they failed to respond to a crisis quickly and decisively. Firestone a few years ago dismissed the relatively small percentage of accidents attributed to faulty tires and it nearly killed them (even a small perecntage can lead to deaths of real people).

Political candidates face similar crises -- and Barrack Obama is facing one now with the mainstream media showing inflammatory sermon clips of his pastor. While there are political arguments pro and con, I am interested in how the crisis is managed by the campaign. In this case, I would think Obama must confront the issue quickly and head-on for two reasons: 1) the image of the pastor compromises the brand image Obama has worked so hard to create and 2) left to fester this could mitigate his effort to become candidate with mass appeal (national candidates cannot be niche players that appeal to only one market or demographic).

Managing Campaigns

To come back to the application of management to politics . . . yesterday the New York Times ran a headline: Sniping by Aides Hurt Clinton’s Image as Manager. The article is interesting, but I think it overstates the management analogy; for example, at one point the authors say she has been a "detached manager" and that she is now trying to get more into the day-to-day. The article casts a negative light on Clinton's management skills and while I am not a Clinton fan myself I think this charge is a bit unfair because the problems she is dealing with are quite common for about any candidate running a large campaign.

Large campaigns are never managed by the candidate -- that is why they have campaign managers. I suspect Huckabee may have done more managing but that is because his campaign was much smaller. From the article, “She hasn’t managed anything as complex as this before; that’s the problem with senators,” said James A. Thurber, a professor of government at American University who is an expert on presidential management. “She wasn’t as decisive as she should have been." From here the authors describe her management style as "insular," meaning only a few people had access to her. Nevermind the chaos that might occur if she let lots of people have access to her or if she spent much time on the day-to-day campaign stuff.

Her problems in managing the campaign are actually quite common and predictable (McCain last summer had lots of problems, as well). First, management is not a natural skill. If so many have trouble doing it even with MBAs and experience in business where bottom line results bring reality real fast, why would politicians be any better at it? I doubt her problems were one of access but simply not having any reliable systems in place to know what was going on in terms of low morale and sniping in the lower staff (something, again, lots of business executives don't do well either). Further, candidates are different from CEOs in that the candidate is the product and thus must spend most of her time doing PR and boning up on issues -- leaving not much time for management.

Actually, the real problem with her "decisiveness" is the same one many politicans suffer from: inability to replace loyal aides. This is a problem George W. Bush has had as well -- valuing loyalty more than competence or results. How do you reassign or fire someone who has loyally stood by you and someone you trust is for you? Again, this happens in business as well -- loyalists who hang on even as they are unfit to carry on the tasks needed, but is especially evident in politics. In another context think of the Kansas City Royals -- a couple of years ago they the worst franchise in the league and many fans were blaming the owner. Yet, it is the job of the general manager to improve the team and he was failing miserably, unable to stick to a strategy and unable to manage the organization. The owner was at fault because he would not replace the general manager -- it was not about the owner's management style nor did he need to get into the day-to-day. Candidates often hire managers they trust based on loyalty, not based on getting results.

So, while I think such backroom news on camapaigns can sometimes illustrate the character of the candidate (e.g., John Kerry's behavior in 2004 did not always show him in a good light in terms of character), it is a stretch to translate campaign management to decision making in the Oval Office. Quite frankly, most candidates don't have a clue. And if that is the criteria, then we better start soliciting people like Andy Grove, James Kilts, Robert Rubin . . . or Mitt Romney.

Learning How to Manage

Have been underwater the last couple of weeks due to illness in our family . . . but all is well again.

One of the reasons people like me get into education is the high of seeing people learn. Often the aha occurs after the course. Yesterday I talked to a "former" student from an executive development course I helped facilitate in January. This person could hardly hide his excitement at the success he was having as a manager (more accurately the success his department was having). Put simply his department was now delivering more effectively as measured by customer surveys and new projects were being diverted to his department because of their success.

And how was he doing it? By him doing less. Now he was empowering his subordinates to do the work by giving them focus and direction. He was using the tools he learned in the January course. Importantly, he was now feeling like he was helping develop his people rather than fearing he might get them fired.

I find this type of aha -- learning to manage -- quite fascinating. That's why I work with people interested in the challenge of managing.