I want to be the moderator at the next Presidential candidate debates. There are a couple questions I would like to ask about their plans for creating national wealth.

In this age, the well-being and security of the country are not determined by the number of tanks or airplanes, but by the human capital, the spiritual wealth, the intellectual competence of our people, and by the degree to which people in other countries and cultures feel affection rather than alienation from us. The wealth of our country is not merely the measure of GDP or national debt. It can be measured by the five forms of capital described in previous posts on this blog.

So, I would like to judge our candidates by the quality of their thinking about the wealth of our country and how they will enhance it. OK, so now I am going to get to be the moderator of one of their debates. Here goes…

“Dear Candidate, given that the President is the Chief Executive of our government, and given that it is well accepted that CEOs should have a strategy for increasing the net value of that over which he or she is “Chief,” what is your overarching strategy for increasing the total wealth of our nation? I have a few follow-up questions after you provide an over-arching framework.”

We can then assume response that has little to do with our question, but will surely touch on the three talking points, which the candidate’s polls have indicated are the hot buttons for their most important interest groups. It would be a shock if the question was answered with an actual strategic framework… but, we can hope.

“Thank you. I would now like to ask you about some of the specific aspects of your strategy. We know that democracy relies on internal sociability or what de Tocqueville called the “art of associating,” a characteristic that has proven to be a leading indicator of economic well-being. What is your understanding of the trend regarding this quality, and what would you do to improve this foundation of democracy and free enterprise?”

“Well, that is an interesting approach. You have obviously given some thought to how you may influence the culture of our nation.”

“This brings me to the issue of our external relations with the rest of the world. As you know, most corporate strategy includes a plan to improve the brand-equity, the market’s perception of the firm’s brand. As a nation, our ability to gain support on issues of security or trade, our ability to attract the best minds, or sell our products, is largely based on the degree to which we are trusted by the leaders and citizens of other countries. How would you go about improving the value of our nation’s brand?”

Of course, our candidates would surely have given great consideration as to how they might improve both the internal and external social capital of the country and their answers would no doubt be illuminating. So we will now turn our attention to human capital.

“Madam Candidate, I would now like to ask about education and the competence of the American (insert your own country’s name) workforce. As I am sure you know, China is now graduating three times the number of engineers, more MBA’s, and the trend is similar in other countries. Given that our economy is built, as I am sure you agree, on the foundation of knowledge and technology, what is your strategy for ensuring that our country maintains its competitive advantage?”

Well, you get the idea. Is it unreasonable to judge candidates by the quality of their thought, for the logic of their plans, to improve the well-being of our country? I think not. Is it unreasonable that the legislative branch attempt to assess the wealth of the country in a comprehensive manner and develop a plan to increase all forms of wealth? Again, I think it is not unreasonable.

The skeptic is likely to resist the idea of a national strategy to address the five forms of capital due to the absence of a clear and universally accepted system of measurement and accounting. I will suggest that this is a lame excuse for failing to seek to improve the very qualities upon which our future economic well-being and security depend. Can we accurately measure our military might relative to other countries in any reliable way? I would argue that we cannot. The number of bombs, planes, or missiles was not predictor of success in Vietnam and it is likely not a predictor of success in Iraq or elsewhere. We don’t know how to measure genuine military power. That has not stopped us from investing in military power. Why should it stop us from investing in social or human capital?

If I were President or King for a day, I would create an Institute of National Wealth Strategy (INWS, of course, it must have an acronym! Everything in Washington does.) I would charge the director of this new agency (it can be small in numbers and costs, by the way) with developing an index to measure each of the five forms of wealth, along with a strategic plan for the improvement of each. I would then charge each cabinet member with the task of defining his or her plans in light of the overall strategy to increase aggregate national wealth.

This poor blog has been too neglected in recent months and there is only one guilty party, me.

Now I promise to be better behaved. I have just finished a book, again, again… Yes I thought I was finished with this several times previously, but this time it is off to be published and should be available very soon.

For those who don’t know, this is about my fifth book (I say about because it all depends upon what you choose to count, training manuals, very short books, etc.). The title is Competing in the New Capitalism.

From the back cover:

This book is about the self-initiated, free enterprise transformation of capitalism into something better. Capitalism is transforming, not because of the external force of regulation, but because of the internal exertion of virtuous self-interest.

Today, every organization is struggling to create the new currency of competition. In the early days of capitalism, money mattered most. We have entered a new phase of capitalism and the rules have changed. To be a player in the tomorrow’s business, you will have to master the creation of five forms of capital or wealth: social, human, spiritual, financial and process or technology. These are the keys to competition. However, most organizations have not yet learned to manage these new forms of capital. This book is about creating the currency of competition in the new capitalism.
This new capital resides at three levels: the organization, team and individual. This book defines the most important disciplines that unify energy and effort toward common business strategy. These are the currencies, which build the bank account of each of the five forms of capital. The pursuit of all five forms of capital will define not only your organization’s success, but also that of your team, and your personal net worth.
Mr. Miller has redefined the nature of wealth and given us a roadmap to achieving it.
The workplace of today is different because of the competitive urge to produce innovative and high quality goods and services. Creativity and commitment are the fuel of commercial competition and they only come from people who are fully engaged. We, the business community, will transform capitalism again, not because of compliance to external regulation, but because we must, to compete.

Mr. Miller has brought unity to the concept of wealth. He has provided a roadmap for creating both personal wealth, effective teams, and an organization that creates not only economic value, but ennobles the human spirit.

And, here is a wonderful and helpful interview of……me! I think they did a good job.

http://www.managementfirst.com/management_styles/interviews/miller.php

The preparations for and the handling of hurrican Katrina will be the subject of case studies in management workshops and courses for years to come. For anyone who was unconcerned about the quality of leadership and management in our government, this should cure their oblivious stupor. Folks died, children suffered trauma, and we all suffered through nights of the most hellish reality show ever aired on television as we watched in complete frustration as our officials didn’t “get it” and the stranded begged for help.

So, what is to be learned from this mismanagement crisis? Here are some random thoughts:

1. Process matters over structure. It is perfectly obvious that the current structure inhibits the process of responding to a crisis and delivering aid, security and medical resources rapidly to those in need. The primary reason for this is that there is no well defined process that cuts through all of the irrelevant structures (walls between agencies, city, state and federal government, etc.) and the aid can’t climb over the bureaucratic walls. When I help companies with my whole-system design process we begin by designing the actual work process, then we address structure with the question “what structure will optimize the ability of people to perform within the process?” Just as in a corporation, the customers don’t care about your structure, bureaucratic procedures, levels of management, blah, blah, blah! They only care that the process delivers the goods!

Someone, please, design the ideal process of responding to a crisis and then put a structure in place to facilitate that process.

2. Competence matters. Sounds silly. But, lets face it - every well functioning corporation knows that the job of manufacturing manager requires certain skills and the job of marketing manager requires others. It is the primary job of an executive to to put the right people in the right job. That is half the battle. The American people are responsible for the competence of our government, for voting for those, who demonstrate little awareness or concern that our agencies are led by people of both technical and managerial competence. Next time I vote, I want to vote for an executive who has demonstrated his or her ability to manage a large organization and that means appointing and attracting competent managers, developing strategy and holding people accountable for executing.

Or, is Mark Kleiman right in his posting that… “One of the most charming characters in Huckleberry Finn is the con artist pretending to the the lost Dauphin. At one point, he remarks: ‘Hain’t we got all the fools in town on our side? And ain’t that a big enough majority in any town?’ I’ve always considered that remark a depressing but fundamentally accurate insight into practical politics. But it turns out that His Majesty Looey the Seventeen wasn’t infallible, after all.”

3. When you need to make a change, do it quickly! The good news - the President did remove Michael Brown from command once it became clear that he was the wrong man for the job. Maybe a good lawyer, maybe a nice guy, maybe loyal - but a commander in crisis - NOT! Thankfully, he replaced him with someone, a Coast Guard Vice Admiral, who knows how to command.

4. Division kills, united energy and effort saves lives! I have just finished writing another book (yes, one more book!) and the title (my third title change) is One Force - The Essential Law of Leadership that Cuts Across Differences to Create the Irresistable Force of United Energy and Effort. All organizations, teams, business and governments succeed to the degree that they are able to create unity of energy and effort. Without giving a sales pitch on my book (which isn’t available anyway!) this whole case study is a good one to examine how united energy and effort wins and how divisions, fragmentation of effort, is destructive.

5. How about preventive maintenance? Anyone who has worked in a good manufacturing operation knows that every dollar spent in preventive maintenance pays dividends in less downtime, fewer defects and less waste. Neither the Congress nor the President were interested in the obvious preventive maintenance that was required to prevent flooding in New Orleans. The bill presented to Congress for improving the levees and restoring the wetlands that act as a barrier, was fourteen billion. No interest. This week Congress approved the Presidents fifty-one billion dollar emergency reconstruction request. No problem. Let’s get with it folks. It is a sign of intelligence to anticipate, to foresee consequences and act accordingly. We need a bit more intelligence in our decision making process.

6. Government matters. I am a business guy. I am an investor. I don’t like paying taxes either and I would love to have a small, yet effective government. But, over the recent past there has been an almost child like abhorence of government, an almost anarchist desire to “starve the beast” to destroy our very own government. I am for leaving in the hands of private industry and private initiative everything that can reasonably be accomplished by private hands. However, we need a strong and effective government. Anyone who is still living in the fantasy of anarchy or minimalist government should be condemned to the hell of watching the scenes from New Orleans on last weeks cable news shows over and and over and over again. Lets accept a sane level of government, impose budgetary discipline, and make government effective! It will save money and lives in the long run.That is neither liberal nor conservative - it is just common sense.

7. Empathy Matters. If you want folks to follow you, you must be able to convey genuine empathy for those same folks. In other words, if you don’t care about me, why should I follow you. We have all seen the Saturday Night Live parodies of Bill Clinton saying “I can feel your pain.” It gets a laugh. But consider the alternative… “I can’t feel and don’t really care about your pain.” That’s not funny! Whatever President Clinton’s other failures, he did have empathy and that empathy was appreciated by the people. The key to George Bush’s problem at the moment is that people feel, rightly or wrongly, that he doesn’t feel empathy for them. A good dissertation topic - How Presidents Convey Empathy.

8. And finally… this is not a political commentary. The lessons from Katrina cut across both political parties, local, state and Federal governments. The problems exposed by Katrina are ones that all of our politicians have contributed to. Now, it is up to the people to be sure that they get their priorities right. Of the people, by the people, and for the people… remember that?

It has never been truer that a crisis brings out the best and worst in people. On the one hand we have seen bureaucratic bumbling, rage and lawlessness. On the other hand we have seen absolute heroism, sacrifice and the massive outpouring of help in the true spirit of service. Calamities like Katrina strip us naked and reveal our true selves.

For those of us watching the events play out on television the most frustrating and heart wrenching time was when we had to watch as the ten thousand stranded at the Civic Center pleaded for help and we all knew, from Washington to Beijing to South Africa, that those victims of this tragedy were receiving no help, day after day, and babies and old women were dying on the spot. We watched as the head of FEMA halted relief efforts because of reports of gunshots - we watched as he was told by reporters of the conditions at the Civic Center and replied that “That’s not been reported to me, so I’m not going to comment. Until I actually get a report from my teams that say, “We have bodies located here or there,” I’m just not going to speculate.” The entire world knew what was going on, but he didn’t and didn’t have the capacity, for whatever reason, to react to the reports and send in help. How is it that a dozen reports and camera crews were able to get to the Civic Center to cover the story, but FEMA and the entire apparatus of the United States Government could not drop bottled water and MREs to the victims? This must be explained.

Those of us who have managed organizations for some period of time have all made mistakes when appointing managers to tasks. We do our best and then discover that they have the right or wrong capabilities for the job. And, we make changes when our mistakes are demonstrated by performance. We should also assess how it was that we made the mistake that we made so we don’t do it in the future.

Bloggers from the left and right are calling for Michael Brown to be fired, now! Michelle Malkin, normally supportive of this Administration said “He proved himself utterly clueless about the disaster unfolding in New Orleans. He claimed that the federal relief effort was “going relatively well” and that the security situation in New Orleans was “pretty darn good.” Andrew Sullivan, again, normally supportive, along with others have voiced agreement.

This is a clear case in which someone who is probably a good man was appointed to the wrong job. Michael Brown is a lawyer. He is not only a lawyer, he served as a bar examiner on ethics and professional responsibilities. There is no mention of him leading or managing any organization in his bio. Lawyers are trained and conditioned to be cautious, to be sure that every decision, piece of paper and procedure is “right” according to law and protocol. Avoiding errors, law suits or acting outside the law is to be avoided at all cost. That’s what lawyers are paid for.

Generals are trained in almost the opposite set of competencies. The United States military does a superb job of training its officers to be action oriented, to attack the source of fire, to not retreat or freeze in fear, to improvise on the spot and make use of whatever resources are available. Generals know how to take quick action under fire, to mobilize resources, to command order and respect. Even at lower levels, tank commanders, seargents leading platoons, are taught to improvise, to make decisions on the spot to react to an instantly changing battle scene and to save their men and destroy the enemy. In combat life and death are measured in split seconds.

It is obvious that the competencies needed at the time of crisis are those of a commanding general, and not those of cautious rule abiding lawyer. Michael Brown was appointed because he was a good and supportive friend of a powerful Republican lobbyist. I am not going to rant about political appointments. Go ahead, make political appointments! But, for heavens sake and for the sake of the victims of the next tragedy, at the same time appoint leaders who have the skill set, the capabilities, to do that job!

In his book Blink, Malcolm Gladwell used the term thin slicing to describe a focused intuitive knowledge that allowed an apparent unthinking judgment. There is another kind of judgment, another intuitive mental faculty that is even more important quality of leaders in today’s world. I will simply call it broad slicing, the ability to slice across an organization and see the connections, the need for solutions that deal, not with a very narrow area of knowledge, but with knowledge of the whole, knowledge that unifies effort. The behavior of great leaders is rarely that of thin slicing, it is much more commonly that of creating broad unifying effect, the ability to create broad slices that serve as mechanisms around which diverse groups and individuals can form unified effort. It is the unity of effort, as every great coach or general has understood, that wins in the competitive field.

It is broad slicing that is the glue that holds companies and societies together in a unified whole. The failure to recognize or create broad slices is one reason both companies and societies fall apart. Corporate strategy went through a period during which portfolio management was the preferred corporate strategy. This was the logical (or illogical) basis for conglomerates such as ITT under Harold Geneen who believed that there didn’t need to be any link between business units owned by a corporation other than financial. These corporations were, essentially, diversified mutual funds. It is generally accepted that this approach depleted shareholder value. The absence of broad slices resulted in division and disintegration. The added value of a conglomerate today, a multi-business unit corporation, is precisely in the sharing of core competencies or capabilities - some core technology or market that can add value across business units. Devotion to common markets or technologies are broad slices that give a reason for unified effort.

In the political world it is the difference between the liberation of Poland and the liberation of Yugoslovia, and possibly Iraq. The people of Poland were keenly aware of the broad slices that linked them as a people - language, religion, common history and culture. In Yugoslovia these unifying mechanisms operated in reverse and we know the result. Today we are witnessing the struggle to create broad slices across Iraq that can hold the three primary populations together in some form of unified whole. Any country must be held together by either authoritarian force (former Iraq, Soviet Union, etc.) or by the existence or creation of broad slices, common desires, interests, needs, philosophy or religion, that create an internal desire for affiliation.

Great leaders, from Alexander to George Washington, have had an intuitive, if not intellectual, understanding of the need to define and reinforce broad slices. George Washington, in his Farewell Address, as well as other Founding Fathers, spoke eloquently about the need to focus on unifying themes, rather than focusing on the divisive force of parties - “Let me now take a more comprehensive view, and warn you in the most solemn manner against the baneful effect of the Spirit of Party, generally.” “This spirit, unfortunately, is inseparable from our nature, having its root in the strongest passions of the human Mind. It exists under different shapes in all Governments, more or less stifled, controlled, or repressed; but, in those of the popular form it is seen in its greatest rankness and is truly their worst enemy.”

What Washington recognized is that political parties tend to focus on narrow interests that have strong appeal to the emotions (gun control, abortion, etc.) and by that very process they will divide themselves from others whom they then demonize. This process is the process of division and disintegration, the root cause of the decline of all great cultures and the very process Washington feared enough to make the central theme in his closing remarks.

What are the broad slices that might serve as mechanisms of united effort in our country?

If the country were a business it would be focused on developing its core competencies as its primary source of competitive advantage and its productivity or efficiency.

What are the core competencies of our nation? This should be the subject of a healthy debate, just as it is in companies. One option is the following: we have succeeded in global competition because of our ability to develop new technologies and the entrepreneurial application of those technologies. That is our core competence and it is based on the quality of our education system and government support of research. (Yes… semi-conductors, the Internet, bio-technology and other key technologies are the result of government supported efforts!) This is not a “left” or “right” issue, it is an issue of the health and wealth of our nation. Which leader is focusing on the positive process of developing the mechanisms of wealth creation in this country, versus the defensive mindset of repelling enemies, some real and some imagined?

Alan Greenspan is rightly focused on productivity as a key sign of the health of our economy. However, he is focused primarily on labor productivity rather than the productivity of energy or capital. Making energy utilization more efficient is an obvious need, if not a crisis, that again is neither liberal nor conservative. General Electric has made the business of alternative energy and energy efficiency a primary corporate strategy. This is a broad slice through GE and the same unifying strategy can apply to the nation. We should be judging our leaders based on their ability to develop workable and thorough strategy for the productivity of all energy resources in our country.

Both the development of our core competencies and promotion of efficient use of resources could be broad slices upon which national leaders could unite energy and effort. Just as corporate leaders do well by focusing on the linking, unifying broad slices that result in competitive success, our political leaders would do well to focus less on the sources of division and more on the sources of common interest and affiliation. But, for this to happen the press and the American public need to be less obsessed by the distinctions between left and right, much of which is imaginary, and focus more on the very real nature of leadership that creates unity of energy and effort across a diverse culture.

Creating high performing cultures requires a new way of thinking that in many ways is very different from how we have pursued quality management or continuous improvement.

Most management problem-solving and improvement has focused on problems and the root-causes of those problems, analyzing the causes, and developing highly specific solutions. It is a view that begins with big things and narrows the focus to smaller and more specific things. This is the well established Newtonian thought process of reducing problems to ever more narrow explanations, the “atomization” of the problem to its root cause. We have learned to derive satisfaction from this reductionism, finding specific causes, measuring them, making specific changes, and watching the data improve. This has served us well. As a result we drive more reliable cars and every other manufactured product is delivered at both lower cost and greater reliability.

But, this approach, as essential as it is, has significant limits when it comes to changing the culture of an organization. Some solutions will not be found by atomizing the problem, but rather by looking upward and outward to the larger laws of the corporate comsos.

Whole-system thinking looks up and out to understand the macro-system and to dream about major system breakthroughs. It asks questions about the big systems and their nature. It looks at all the interrelationships of a complex system and seeks strategic changes in that system. Focused problem-solving can never address the complexity of a whole system. It requires a complete paradigm shift from traditional problem solving. In short, if you engaged in quality improvement problem-solving within a dictatorship, you might improve the efficiency of the police, administration, etc. However, you would still have a dictatorship because the transformation to democracy cannot be found in the detailed causes of specific problems. That transformation requires looking upward and outward to primary principles and the nature of the system. This upward and outward view is whole-system thinking and it is required to put the slices of bread back together. You can’t create a whole loaf by dissecting each slice.

Many corporations are examining the role of the corporate center - why are functions centralized or decentralized? The answer to this has a dramatic impact on the culture of an organization and the answer will not be found in the details of specific problems. Rather, it requires examining core principles and assumptions. It requires evaluating the strategic ideas behind the role of corporate or central staff groups. In short, it requires deep thinking about the nature of the system, the interrelationship of the parts of the corporation.

Learning this skill is one of the new frontiers of managing the culture.

I know of no one who is arguing that the U.N. does not need reform or that we should not be a strong (tough) catalyst demanding reform at the U.N. Of course there is corruption and insanity in the membership on human rights and other commissions. No Democrat or Republican has said “leave the place alone, its fine!” The question is, or should be, what skills and style will facilitate the needed change.

Let’s be clear about one thing. The toughest managers at General Electric do not get away with abuse of their people. If you are going to be promoted in the most competitive (tough) corporation in this country, you MUST have good people skills, motivate your people, and treat them with dignity.

There seems to be complete confusion over being tough on competition, tough in getting a job done, and tough (read abusive) on the people around you. If you are going to succeed as a manager in the corporate world you have to build alliances, coalitions and create the unity of a strong team. You don’t get there by berating and humiliating subordinates or colleagues.

American’s are largely suffering under some delusion that an American U.N. Ambassador can go to New York and bully everyone into submission by being “tough.” Nonsense. Just as likely that the Ambassador from Kenya or Argentina will tell our Ambassador to kiss off. We have little or no “power” in the tough guy sense to command any other country to do our will. The way we will get reform or anything else done is by listening, creating good will, creating credibility that has largely been lost in the last few years, and by the power of intelligent persuasion. We seem to forget that the U.N. is a democracy. Representatives vote. And they have largely been voting against the U.S. because of our failure to persuade and because of our arrogant assumptions about our own power.

We need someone who is a good salesman, who can negotiate and create the bonds of unity. We will learn that sooner or later. If Mr. Bolton goes to New York, we may learn it quickly. And, perhaps this is the way we must learn.

“A human being is part of a whole, called by us the Universe, a part limited in time and space. He experiences himself, his thoughts and feelings, as something separated from the rest a kind of optical delusion of his consciousness. This delusion is a kind of prison for us, restricting us to our personal desires and to affection for a few persons nearest us. Our task must be to free ourselves from this prison by widening our circles of compassion to embrace all living creatures and the whole of nature in its beauty.” Albert Einstein

“All the ills of mankind, all the tragic misfortunes that fill the history books, all the political blunders, all the failures of the great leaders have arisen merely from a lack of skill at dancing.” Moliere

“The leaders who work most effectively, it seems to me, never say ‘I’. And that’s not because they have trained themselves not to say ‘I’. They don’t think ‘I’. They think ‘we’; they think ‘team’. They understand their job to be to make the team function. They accept responsibility and don’t sidestep it, but ‘we’ gets the credit…. This is what creates trust, what enables you to get the task done.” Peter F. Drucker

“Sometimes I wonder whether the world is being run by smart people who are putting us on or by imbeciles who really mean it.” Mark Twain