Deep click

Waiting for "Deep Throat"

Taking a cue from the spy trade, The Wall Street Journal has just launched its new website for tipsters and whistle-blowers naming it the WSJ SafeHouse. It comes with instructions and a set of legal disclaimers or Terms of Use.

This digitized approach to gathering news certainly lacks the drama of some of the more established methods known to reporters -- the strange package, the halting voice on the telephone, the ranting letter or the stranger in the lobby.

Alas, the news business has joined the ranks of e-commerce and created a user interface that's easy to use, which is particularly critical to the first-time user.

One can only imagine the kind of material that will come in over this digital transom. Our money is on photos -- real or fake -- of a certain late terrorist.

Opportunity cost

With the death of Osama bin Laden, we now begin the great opportunity cost debate. At the center of the discussion is the question: what has the war on terror cost us in terms of resources -- human and financial -- shifted from basics needs such as education and health care, to security and military expenditures over the past ten years.

Opportunity cost is an economics concept intended to give proper recognition to largely incalculable and intangible costs of a "road not taken", in the words of poet Robert Frost. It is a useful tool in all those circumstances where we have to make choices, usually big choices -- an acquisition or divestiture; targeting a market; making or buying a product or service; or expansion into less familiar territory. The common element in all of these situations is constraint; we don't have the people, time or resources to exploit every opportunity that comes along. We have to make choices.

While estimating opportunity costs has considerable value at the time a choice is made, it has zero value ten years later.  And who's to say that our education and medical care systems would be better today if we had invested more heavily in them for the past decade. In the case of medical care, for instance, the problem seems to be that we spend quite a lot -- more than any nation on earth -- but don't get full value for the investment.

Over the course of ten years, the choices change, whether it's in business or politics. Likewise, the opportunity costs have to be recalculated.

Philosopher John Stuart Mill, who first developed the concept of opportunity cost in the 19th Century, said this: "War is an ugly thing, but not the ugliest of things. The decayed and degraded state of moral and patriotic feeling which thinks that nothing is worth war is much worse."

Out of the ashes

Wreckage of Operation Eagle Claw

There is a saying among experts in dealing with setbacks of all kinds, that a crisis is a terrible thing to waste. It should be a learning opportunity.

If the resounding success of today's news regarding the mission to take out Osama Bin Laden isn't an indication of the validity of this notion, then nothing could be.

The simple truth is that the three crucial elements of the mission -- special forces, organizational capability and intelligence gathering --  were born of total disaster.

They were:

The Bay of Pigs invasion.  Little more than a month after this flawed attempt to overthrow Fidel Castro, President Kennedy asked Congress to significantly increase funding for special forces, saying: "In addition our special forces and unconventional warfare units will be increased and reoriented. Throughout the services new emphasis must be placed on the special skills and languages which are required to work with local populations." In the very same speech, The President famously launched the mission to the moon by the end of that decade.

Operation Eagle Claw. This mission to rescue the Iran hostages in 1980 ended in a debacle in the desert with eight servicemen losing their lives.  The ensuing investigation, however, pointed to a lack of inter-service coordination in the planning of the mission and led to the creation of the Special Operations Command. That entity now oversees all special operations, service wide, and was instrumental in the successful mission in Pakistan yesterday.

The 9/11 Attacks. The widely-praised investigation into the root causes of the terrorist attacks on the U.S. mainland revealed numerous holes in our ability to collect and act upon good intelligence in a part of the world where we had few assets on the ground.  It appears that at least some of those holes have been plugged, to say the least.

There is little glamor in leading the post-mortem of a crisis. Critics say that they can lead to useless finger-pointing and degenerate into witch hunts. Nevertheless, some of the best, game-changing, ideas come from just such exercises.

One of us

Our President has had to go to some extraordinary lengths recently to convince at least a portion of the electorate that he is indeed "One of Us";in other words, he is a native-born an American.

The need to fit in is an urge that drives a lot of human activity and inspires much of our great literature.

In business life, finding the right fit can be a difficult quest, whether it's for our own career or for an open position we're trying to fill.

Looking in on this evergreen topic, FORTUNE Magazine today posted a story entitled, "Is it better to hire for cultural fit over experience?" The story points out the shortcomings of interviews, psychological tests and detailed job descriptions as effective tools in predicting a candidate's likely success in the particular job.

One technique that seems to get an endorsement from the FORTUNE article, however, may be the oldest one of all -- the network referral. Relying on current employees to bring in people they think will feel comfortable in the organization has proven to be an effective recruiting tool in all kinds of organizations.

 No single approach is sufficient, of course. There are drawbacks to networking.  One is that the network may be too small or too narrow relative to the company's expanding opportunities and customer base.  Another is that a large number of recruits who share a common background -- IBM, General Electric,  the Navy Seals, Wal-Mart ...whatever -- will hijack the existing culture in a given company.

Like our country which has historically expanded the pool of presidential candidates to match its changing demographics,  the biggest challenge for corporate leaders may not be finding people who are "One of Us."  It will be defining what "Us" means.

Another way of looking at this is to recognize the dynamic nature of teamwork. As William James wrote:"The community stagnates without the impulse of the individual. The impulse dies away without the sympathy of the community."

And then there were six

In its All Things Digital blog this morning, The Wall Street Journal reports that Google has updated its management page to reflect the numerous recent changes, including Larry Page taking back the title of CEO.  In the process of doing so, Google has cut a list that once contained 70 members to just six.

The Journal's take on the situation focuses on the lack of transparency being provided by Google owing to its slow pace in announcing the numerous changes. In another recent Journal piece, the search company also came in for some criticism for the manner in which it handles its quarterly investor conference calls.  Fair enough.

There is, however, another aspect to this news that has little to do with transparency and a lot to do with leadership and decision making. One could draw from it that Google is telling the world that there are six people in the company whose perspective is taken into account when policy decisions are being made. If that's the case, it should be taken as good news by all Google stakeholders.

We have found that leadership teams generally work best with five to seven members. In larger organizations, that of course means that some areas of expertise may not be directly involved regularly in making significant policy decisions. CEOs , though, need to have a clear notion of who it is they want in the room as they wrestle with major issues.

 Some things for leaders to consider are:

• Making sure they avoid an even number to eliminate the possibility of tie votes;
• A team smaller than five tends to diminish creativity and provide fewer perspectives;
• As a team expands beyond seven, so does the possibility for conflict and the emergence of sub-groups;
• Membership demands a very high level of trust.

It should be pointed out that there is plenty of room in this framework to expand the group at any time to provide perspectives needed for a given topic.  Many also believe that communication technology has made it easier for a CEO to stay in closer touch with a larger team than in the past. Nevertheless, when it comes time to bring the matter to closure -- preferably face to face --  it's best done, and done in a more timely fashion, by the smaller, core team.

C-Level change

The concept of hiring temporary executives who parachute in to fill a hole in a company's management structure is not new. In the current environment, however, it is seemingly getting some new traction, as evidenced in an article entitled, "The rise of the hired gun C-suite", posted on FORTUNE's web site.

The FORTUNE article highlights several case examples involving companies who had a sudden and immediate need for an executive, sometimes in the middle of a challenging transition such as a merger or a turnaround.

One of those quoted in the article is Charles Dunlap who is on his fifth CFO assignment. According to FORTUNE "Having interim executives can be especially helpful during tense situations such as restructurings, Dunlap adds.'We can be brought in as an intermediary who allows the financing structure to remain. We handle the tough negotiations. We engineer [the restructuring], so when we go away, some of that negative feeling goes away.' "

Whether the transitional role Dunlap describes is done by an insider or an outside advisor, the dynamics are the same. Leading during a major transition calls for insights and experience that do not spring from day-to-day management. Some of the risks and opportunities of such a period include:

• •Many decisions, with long-term impact, are made in a relatively short time•
• •The organization must develop new attitudes and work habits 
• •The leadership team may not on the same page
• •The • right people are not consulted or  listened to
• •A proper frame of reference is not set
• •There is a drift from roots and values 

Perhaps the biggest challenge is for a leader to channel the energy -- the corporate adrenaline, if you will -- that's generated by transitions such as mergers, turnaround, or accelerating growth.Making the most of a transition depends on how leaders approach change as much as what they do. This starts by standing back and giving some thought to the environment in which a major change is taking place The analysis supporting any given transition looks very similar from one company to the next. But the context – culture, history, relationships, identity – is unique to each one. How leaders bring these elements together day to day has a big impact on implementation.

Another way of looking at this is to recognize the power of transitions, as Machiavelli did when he wrote: "One change always leaves the way open for the establishment of others."

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As the world tweets

It is a quote that you would expect to hear on Dr. Phil.

Near the end of a lengthy FORTUNE Magazine cover story under the ominous headline, "Trouble@Twitter", one of the company's directors, Peter Fenton of Benchmark Capital, sums up the current environment in the management ranks thusly:

"The act of getting from there to here was violent," he says. "We've had a revolving door of senior leaders who leave." But he says he's pleased with the current crew. "The attribute I've now been able to see is that the team is building the respect and affection that is required to get to the next level."

Respect and affection? These were indeed the  missing ingredients in a company that had money, millions of loyal users, and squadrons of engineers.  Writer Jessi Hempel  observers:

"The problem is a board and top executive team that don't always appear to have control of its wide-ranging cast of characters, including founders who have attained near-celebrity status (another co-founder, Biz Stone, is a regular on NPR, and earlier this year Dorsey was profiled in Vanity Fair), headstrong and divisive managers, and investors used to getting their way. For some time Twitter's runaway growth -- in the first half of 2009, Twitter added more users more quickly than almost any web service in history -- masked its execution problems."

For a team to come together to develop an idea into a commercial product it takes some continuity, focus and time.  Think of how the long hours they played clubs in Germany -- and spending lots of time together -- gave the Beatles a chance to jell as a group and provided the foundation for their ultimate success.

Unfortunately, Twitter apparently grew up in a world that was more Jerry Springer than Dr. Phil.