Oh Boy, Does the U.S. Need Infrastructure!

Oh Boy, Does the U.S. Need Infrastructure!

What I have noticed

When I arrived in the U.S., the first thing I noticed was all the wires that hung from poles along every road and provided squirrels with their spaghetti freeways. Other than these wires’ unsightliness, I could not understand why they weren’t buried like they were in other countries where I had lived.

Other areas of infrastructure that those of us who have traveled through Europe and Asia notice are:

  • The poor state of the roads, airports, and trains.
  • The lack of wireless coverage and high-speed internet.

Why are things this way in the U.S.? Well, as far as I can ascertain, the reasons are:

  • It is cheaper for the power companies to repair fallen lines than bury them;
  • No one wants to invest in the roads because it will raise government debt;
  • No one cares about trains because they are expensive, and cars are better;
  • There is no pressure to roll out fiber and make it available; and
  • The cell companies will get to it when it makes a return.

 

Why Does It Matter?

Now I know many of you are already up in arms, saying that the U.S. doesn’t need to follow anyone else’s example, and the U.S. cannot learn anything from anyone else.

 

Power Lines

However, I live in Atlanta, probably 5 miles from the State Capital, as the crow flies. On Wednesday, Hurricane Zeta passed through. As a result, we lost power for 36 hours, so no computers, phones, or the internet. We were not alone. According to the Georgia Power website, there were hundreds of thousands like us.

In our new world of working from home, we have two fundamental issues. For employees to be productive, they need power and internet access, as everything is now in the “cloud.” As someone recently remarked, Maslow’s hierarchy of needs has added a new bottom layer: battery storage and high-speed internet access. With COVID, there is a migration of people from cities to small towns across America. Blue Ridge to the north of Atlanta is experiencing a boom and a recent article referred to the numbers of people moving West. However, work in these small towns requires reliable power and high-speed internet, neither of which are readily available. Zeta tore through northern Georgia, and over 1,000,000 homes lost power. Twenty-four hours later, that number is still around 250,000.

In Georgia, Georgia Power and others are constructing Plant Vogtle, Units 3 and 4. Plant Vogtle is a nuclear power plant, and the original estimated cost of Units 3 and 4 was $14 billion when construction began in 2013. Currently, the estimate for these is $25 billion and rising as neither is on schedule. In 2013, it was apparent that nuclear power was far more expensive to generate at operating levels than natural gas (nearly 3x). The cost of the plant was unsustainable without enormous subsidies. If Georgia Power had built natural gas generation and spent the difference on burying power lines, the plants would be open, and we would have a more stable electrical supply.

 

Planes, Trains, and Automobiles

Peter Zeihan said, “The balance of transport determines wealth and security.” According to Zeihan, the Mississippi-Ohio river system is the most important globally and a vital driver of the U.S. power and wealth. The Mississippi and Intracoastal system accounts for 90 percent of the United States’ 17,600 miles of internal waterways. This length alone is greater than the size of all the inner waterways of the rest planet combined. Furthermore, America’s rivers transform cities in the interior such as Pittsburgh, St. Paul, Sioux City, and Tulsa into ocean ports. Finally, the U.S. has more “port potential” along its coast than the rest of the world combined. According to Zeihan, “The Chesapeake Bay alone boasts longer stretches of prime port property than the entire continental coast of Asia from Vladivostok to Lahore.” The United States has more port possibilities than it has ever needed. However, it has been the world’s largest producer, importer, and exporter of agricultural and manufactured goods for most of its history.

These geographical advantages did several things.

  1. They generated enormous amounts of capital. Any culture based upon waterways like the U.S. will be ridiculously capital-rich.
  2. They knit the country together culturally. Rivers promote unity, and an integrated maritime network promotes unity over a far broader swath of territory. As a result, the U.S. has one of the most robust national identities of the major powers.
  3. The U.S. didn’t have to invest in expensive infrastructure and military investments in its early history that other countries made. For example, Germany had to develop a road system in the 1830s and 1840s to provide what the U.S.’s rivers gave and then update it further in the 1930s.

With all the benefits of rivers, today, the U.S. is also reliant on planes, trains, and automobiles for transportation.

Planes
U.S. airport infrastructure is not what it should be. From their three largest funding sources, U.S. airports collectively received, on average, $14 billion annually for infrastructure projects between fiscal years 2013-2017. However, airport officials said that these combined funds might not be enough to cover the costs of their planned infrastructure projects. Estimates are that projects will cost an average of $22 billion annually between fiscal years 2019-2023.

Air transportation services support 1.4 million U.S. jobs, and international tourism brings in hundreds of billions of dollars of tax revenue. But some studies have found that delays and avoided trips due to the poor state of the nation’s airports cost the economy over $35 billion per year.

Trains
To be clear, I like rail and enjoy using it, so I must be biased. However, in looking at the U.S. while I think high-speed rail would be excellent, that is not what I think is needed. I doubt many would take a train across the country anymore since planes do it more efficiently. However, building better rail connections between cities would be a business generating. Again, not looking at high-speed rails like Japan’s Bullet trains or France’s TGV, but rather what is considered express trains in Europe, which travel at 130 mph on upgraded conventional train lines.

The problem in the U.S. is that the automobile industry pushed to get rid of passenger rail from 1930 and succeeded in nearly doing so. While the U.S. freight train services are the most effective globally, passenger rail is the Ugly Stepchild. Amtrak uses freight lines for its many of its passenger trains; however, the freight lines are not suitable for passenger traffic, keeping the average speeds below 60 mph. Besides, Amtrack has more than a $30 billion backlog of infrastructure investments.

If I could take a train from Atlanta to Charlestown, Savannah, Jacksonville, Chattanooga, Nashville, or Charlotte that did 130 mph and provided me with high-speed internet, I would never drive again. Combine that with a car rental in the destination city, e.g., ZipCar, and I wouldn’t give it a second thought.

Finally, I expect many smaller U.S. towns to find that they are no longer serviced by airlines as the U.S. airlines retract services with the downturn in business travel. Thus, they will only be serviced by road, making them less appealing to business.

Many complain about the high cost of rail, but analysis has shown that rail is cheaper overall than roads. This analysis uses the cost of rail construction in the U.S., which is higher than in other industrial countries. The cost of infrastructure construction in the U.S. is higher than in other industrial countries.

Automobiles
The U.S. benefited from The Interstate Highway Program started by President Eisenhower in 1956. Currently, about twenty-five percent of all miles driven in the U.S. is on the Interstate System. These road and river systems helped the U.S. continue its growth through the post-war period.

However, our road system is no longer the envy of the world. According to estimates, the delays caused by traffic congestion alone cost the economy over $120 billion per year. It needs investment and improvements. Congress’s failure to increase the fuel tax is an embarrassment, and failure to keep our infrastructure current will pose significant barriers to growth in the long term as transportation costs and delays increase.

Besides, COVID has decimated state budgets everywhere. Now the states have to fix many of these highways but don’t have the funds to do so, and Congress’s reluctance to help is just kicking the can down the road and increasing the ultimate bill.

Finally, with automobiles, Elon Musk and Tesla are changing the landscape. However, with the Administration’s opposition to electric vehicles, the U.S. is falling behind. Today the U.S. has about half a million charging stations in the country, of which 100,00 are public charging stations. In China, there are 808,000 charging stations, of which 330,000 are public. As of 2019, Europe had 170,000 public charging stations.

Furthermore, expectations are that European distribution will grow faster than the U.S.’s over the coming years. As other countries increase their rollout of charging stations, electric vehicle adoption will grow more quickly in those countries, making it harder for the U.S. to maintain its leadership in the development of electric vehicles. That trend has started with many car manufacturers launching E.V. models in Europe and China and Tesla opening production facilities in Shanghai and Germany.

 

High-Speed Internet

With high-speed internet, there is both wired and wireless. As we all work from home, reliable high-speed internet is a requirement, not a luxury. Those without it will not be able to get or maintain higher-level jobs.

Wired
Currently, fiber broadband is now available to more than 30% of households across the U.S. Distribution increased from 12.2 million households in 2008; however, much of the increase was due to AT&T deploying fiber to 12.5 million customers under an agreement with the government for approval to buy DirecTV. That buildout is finished. As a result, it appears that Google Fiber has effectively stopped its rollout with only one new location in the last four years.

While only 30% of homes have potential fiber access, only 18.6 million households in the U.S. have a fiber subscription. While the many rural U.S. areas with low housing density explain some of the shortage, city deployment is not significant. Millions of Americans have cable as their only choice for high-speed broadband. Another study found that Comcast is the only choice for 30 million Americans. Charter is the only choice for an additional 38 million Americans regarding broadband speeds of at least 25Mbps downstream and 3Mbps upstream. Americans have no choice in areas that don’t have cable and have to rely on DSL for wired access.

As a result of COVID, many are looking to move to smaller towns where they grew up or sought a better lifestyle. However, most of these towns have little high-speed internet or options for homeowners. Furthermore, with COVID, sales and tourism tax revenues have fallen, which will result in cuts in many essential services.

U.S. fiber access is far behind numerous other countries, according to a report. Spain, Portugal, Japan, and others are above 90%, while countries such as Norway and South Korea are above 80%.

 

Wireless
The U.S. leads the development of 4G mobile speeds and wants to ensure it retains its leadership with the development of 5G. The current Administration’s fight with China and Huawei Technologies are part of this desire for industry dominance. Also, U.S. policies will require coordination with other competitors who make up the global 5G supply chain. Otherwise, the strategy could split the development of standards, essentially setting up incompatible technology paths for 5G, e.g., 3G.

While these policies are slowing China’s development, it will take more. Huawei remains the top filer of standard-essential 5G patents, with the telecommunications giant set to remain a leading global supplier of 5G equipment. If Huawei can establish itself as a low-cost provider as it did with 4G, carriers using its gear will be able to deliver low-cost 5G service driving broader adoption. Furthermore, experience with large rollouts of 5G will make Huawei a key provider.

Through COVID, China has continued to invest heavily in its 5G rollout for the supposed purpose of monitoring the spread of the disease. Regardless, it now has a significant lead with 480,000 5G base stations nationwide and more than 100 million 5G connections. According to Frank Meng, Chairman Qualcomm China, some 15,000 5G base stations are being installed weekly in China, and the nation is likely to have more than 600,000 5G base stations by the end of 2020.

Today, entry-level 5G plans in China cost $10, done from $18 when launched in November 2019. U.S., operators, like Verizon, are charging $10 a month — on top of its lower end plans — to customers for 5G service. This pricing difference will slow down U.S. adoption vs. Chinese.

Overall, the West has fallen behind in the competition for leadership of the 5G transition, a reality that has enormous economic implications and risks the West facing a 5G supply chain provided by Chinese companies.

In the U.S., the leading wireless providers are rolling out 5G. However, in testing, a 5G phone does nothing more than 4G. 5G download speeds are roughly the same as on 4G LTE ones, and in some places, 5G phones are slower.

The 5G is expected to:

  • Enable more excellent IoT connectivity;
  • Remote robotic surgery in healthcare;
  • Safter transportation;
  • Self-driving cars; and
  • Improved manufacturing

Thus, 5G will be the new roads and rivers of the twenty-first century, and the U.S. needs to invest in 5G infrastructure to ensure it realizes its benefits and retain its leadership position.

 

So, What Needs to be Done

Congress needs to address infrastructure and provide funds for it. The returns from improvements in the above will far in excess anything that tax cuts have ever offered. Such projects are not “shovel ready,” and choosing how to will not be easy. But it is up to all sides to work for a solution which allows improved results and less waste. We need to realize there are no easy bumper sticker slogans solutions. But we need to educate ourselves about the situation.

 

Copyright (c) Marc A. Borrelli, 2020

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I’m So Tired

I’m So Tired

As I talk to my CEO clients and others across the work spectrum, the common refrain that I hear is, “I am so tired.” Somehow, I feel I have Lili von Shtupp’s lyrics stuck in my head on repeat.

“I’m so tired
Goddammit, I’m exhausted
Tired, tired of playing the game
Ain’t it a crying shame
I’m so tired.”

So why is everyone tired? I put it down to three things: Zoom Fatigue, Long Hours, and our environment.

 

Zoom Fatigue

Zoom Fatigue is real! Before COVID hit, roughly two-thirds of all social interactions were face-to-face. No more. Most of us still talk in person with the people we live with and maybe with a friend or two who we have allowed into our pods. There may be the occasional chat with the cashier at the grocery store, restaurant, or the UPS delivery person. However, almost all other interactions, work conversation, book clubs, dinner parties, joking around at the gym have either disappeared or moved online. Thus, nearly all of us are yearning for more social connections.

With the onset of COVID, Zoom, Teams, Skype, other video calling systems calls took off. Not only that, but telephone calls, which had been declining in favor of text, were like Mark Twain: the report of their death was an exaggeration.

  • AT&T reported that from mid-March to May 1, wireless voice calls peaked at 44% above typical levels, and Wi-Fi calling more than doubled.
  • In March, Verizon was reporting an average of 800 million wireless calls each weekday. That’s nearly double the number of calls made on Mother’s Day, typically the busiest call day of the year.
  • According to an RBC analyst, Zoom average 148.4 million monthly active users in Q2 2020, up 4,700% year over year.

So while we are communicating through new and old channels, it is different. According to  Jeffrey Hall, a professor of communication studies at the University of Kansas, “Compared to face to face, texting and using social media, energy use during a Zoom call is higher. It was more intense than these other [modes].” Besides, Hall’s research shows that video calls also seemed to heighten not lessen loneliness. “People said, after the fact, that they felt lonely, less connected [on video chat].”

Hall argues Zoom fatigue is real. “Zoom is exhausting and lonely because you have to be so much more attentive and so much more aware of what’s going on than you do on phone calls.” We are also asking everyone on the call to have their cameras on see how people are doing, but then you are also watching yourself speak. Research shows that when we’re on video, we tend to spend the most time gazing at our own faces. So, hide from view. Also, when on video, we also focus on other’s backgrounds as well. We can see their furniture, plants, and artwork. We start straining to see what books they have on their shelves. Processing all these stimuli takes a lot of very energy, increasing mental fatigue. Also, bandwidth issues causing blips, delays, and cut off sentences create confusion.

Not only that, but video calls make it easier than ever to lose focus. We all believe we absolutely can listen intently, check our email, text a friend, and post a smiley face on Slack within the same thirty seconds. Except, of course, we don’t end up doing much listening at all when we’re distracted. Not only that, but it quickly becomes obvious to the others that you are not focused and mentally checked out, which is a distraction to the entire group.

Finally, there are issues of co-workers being invited into your private living spaces and all the issues that bring with it. People are questioning coworkers’ tastes in art and home décor and being exposed to more of their online chat participants than expected. The latest to fall foul of that was New Yorker writer Jeffrey Toobin, but there are cases of mothers being caught nude on their children’s school zoom calls, and much worse.

According to Hall, phone calls, by comparison, are less demanding. “You can be in your own space. You can take a walk, make dinner.” 

How to combat Zoom fatigue

I believe there are a few steps we can take to reduce Zoom fatigue, and they are:

  • Basic teamwork blocking and tackling. Start meetings asking about the team and how they are doing personally. Recognize contributions. At this time, we are all suffering, and recognition helps lift our spirits. Celebrate victories. There aren’t many, and we need to celebrate more.
  • Have an agenda. No Zoom call should occur without a clear agenda on what is to be covered in the call. Also, whoever called the meeting has to ensure that everyone sticks to the agenda and needs to quieten those that continue talking. I have noticed that it is hard to get a word in on a Zoom call if others keep talking, so the meeting head needs to use the mute button generously at times.
  • Fewer meetings. Since Zoom meetings are exhausting, we need to limit them. Since we are all craving connection, it has become like cc emails. We include everyone, but not everyone needs to be on all calls. If there is an agenda, those that don’t need to attend can say so. Remember Jeff Bezos’s 2-pizza rule. No more than 6 to 8 people. The more people, the more unproductive the meeting becomes.
  • Shorten meetings. When meetings are too long, attendees tend to switch to offline mode and focus on emails or messages. Meetings have reverted to a 1-hour standard, but why? Push your team to do better and make it a company priority to set a new meeting standard of 30 minutes maximum. Make it short and sweet, and keep the focus on the issues at hand.
  • Avoid multitasking. Researchers have found that people who multitask can’t remember things and their more singularly focused peers. So, during your next video chat, close any tabs or programs that might distract you (e.g., your inbox or Slack), put your phone away, and stay present.
  • Build-in breaks. Take mini-breaks from video during longer calls by minimizing the window or just looking away from your computer completely for a few seconds every so often. Your colleagues probably understand more than you think — it is possible to listen without staring at the screen for a full thirty minutes. This is a time just to let your eyes rest for a moment. If you are stuck in a day of back to back Zoom meetings, building a 10-minute buffer between calls to stretch and walk.
  • Reduce onscreen stimuli. Encourage people to use virtual backgrounds, preferably ones that don’t move, or agree as a group to have everyone who is not talking turn off their video.

Also, Hall suggests three more rules:

  1. Tighten the circle of people you communicate with. In technology, as in life, we have layers of intimacy. According to Hall, “It’s not the case that more is better. We can only maintain so many relationships at a time.
  2. Build communication into your routines. “Have something on the calendar that you repeatedly do, make it a part of what’s on your daily or weekly or monthly to-do list,” Hall says. I have a monthly Zoom call with some high school friends, which has been a great way to reconnect and chat through all we are going through.
  3. Strengthen the signal. Use communication methods that make you feel the most connected and think about the content of your interactions. As Hall says, “We’re still human beings who need each other. We’re going to use technology to recreate the things that we need.”

Long hours

With COVID, our workspace has invaded our homes. The separation of relaxation and work is lost as so we work longer. Also, many of us are dealing with our children’s challenges at home learning virtually, which is a huge distraction and prevents many from doing their jobs. As a result, work gets moved to when the children are done or asleep, lengthening the workday. Effectively we are all working continual overtime.

However, research shows employees who work overtime hours experience numerous mental, physical, and social effects. Significant effects include stress, lack of free time, poor work-life balance, and health risks. Besides, employee performance levels fall, and there is an increase in tiredness, fatigue, and lack of attentiveness. Here is a list of things you and your employees can do to reduce stress.

From what I see and hear, everyone is experiencing this. The initial increase in productivity with the onset of COVID has gone, and overall productivity has fallen. There is overall euphoria for those whose children have returned to school as they are regaining time to work and then be engaged with their children at the end of the day.

How to combat long hours

Combatting long hours is more difficult than Zoom fatigue. But realistically, COVID will affect us for another year, so you need to adjust your planning to that reality. During the winter months, it will get worse as outside activities become more limited. However, here are some suggestions.

  • Be disciplined with your calendar. Don’t allow it to fill up with meetings. If you are in the C-Suite, ensure that your people limit their meetings, both in time and number. As mentioned above, move meetings to 30 minutes and limit the number of back to back meetings.
  • Build-in breaks. Every two hours, take a 30-minute break. Walk around the neighborhood, meditate, or do yoga. The break in the routine will be mentally stimulating.
  • Take time off. Encourage people in your organization to take time off. From the data out there, the amount of unused PTO is at record levels. However, estimates are that unused vacations cost the U.S. $224 billion a year. Allow for a day off for the organization. Be clear about your annual leave and other paid time off guidance, especially if they have changed during COVID. Not only that, but encourage people to go something different other than sit at home. Currently, I am sitting in San Francisco with some friends. The change in scenery and environment is incredibly refreshing and mentally revitalizing. Read more at Managers, Encourage Your Team to Take Time Off.
  • Find a hobby. We are trapped in our homes. So we need to find something outside of work that is mentally refreshing and brings us happiness and excitement. It is a great time to find a new hobby, read some of the classics, or finish those DIY projects that have been on our to-do list forever. I found archery that way as I would go into a zone for the entire time, and it provided a break. A CEO I know has joined her husband doing woodwork, and it is something they both look forward to at the end of the day.

 

Our Environment

We are heading into the holiday season, and this year it is going to be very different. For those with college children, they will be home much longer. There will be no parties and few opportunities to socialize. There will be little shopping at malls for gifts, but UPS, FedEx, and Amazon trucks will fill the road. Those with extended families are likely to travel to see them. After nine months of COVID, this is what we have to look forward to. Not only that, but we can expect COVID to be disrupting our lives for another nine to twelve months. All of which is mentally draining.

How to deal with this. The best way, in my opinion, is the Stockdale Paradox. James Stockdale was held captive during the Vietnam War as a prisoner of war for over seven years. Stockdale was repeatedly tortured during his captivity and had no reason to believe he’d make it out alive. To stay alive in this hell reality, Stockdale embraced both the harshness of his situation with a balance of healthy optimism. The paradox, as he put it, “You must never confuse faith that you will prevail in the end — which you can never afford to lose — with the discipline to confront the most brutal facts of your current reality, whatever they might be.” In its simplest form, the paradox is the idea of hoping for the best but acknowledging and preparing for the worst.

Of course, as a follower of the ancient Greek Stoic philosophers, Stockdale may have had an advantage, but we can all learn from the paradox. The paradox holds a great lesson for how to achieve success and overcome difficult obstacles. It also challenges unbridled optimists and those positivity peddlers whose advice we are encouraged to follow. In discussion with Jim Collins for his book Good to Great, Stockdale spoke about how the optimists fared in the prison camp. The dialogue goes:

JC: “Who didn’t make it out?”

JS: “Oh, that’s easy, the optimists.”

JC: “The optimists? I don’t understand,” I said, now completely confused, given what he’d said a hundred meters earlier.

JS: “The optimists. Oh, they were the ones who said, ‘We’re going to be out by Christmas.’ And Christmas would come, and Christmas would go. Then they’d say, ‘We’re going to be out by Easter.’ And Easter would come, and Easter would go. And then Thanksgiving, and then it would be Christmas again. And they died of a broken heart. … This is a very important lesson. You must never confuse faith that you will prevail in the end—which you can never afford to lose—with the discipline to confront the most brutal facts of your current reality, whatever they might be.”

Your organization—or unconscious mind—may be hoping on some other event or date after which some version of “rescue” will come: a vaccine, a cure, a reliable and cheap test, the acquisition of herd immunity.

However, to review the brutal facts, none of these developments are likely in the foreseeable short term. There is a possibility that there may never be a fully effective vaccine or cure; this virus may be something that we live with and manage for years to come. If that is the case, we will have to change elements of our social interaction in unprecedented ways that may well lead to irrevocable social changes.

Besides, the effects of the virus today ensure there will be no normal to return to, as this incomplete list indicates:

What to do?

With regard to business leadership and management, this duality helps to guard against the onslaught of disappointments that COVID delivers in the business world. Optimism drives innovation; however, we need to maintain realism and not over-optimistically chase something that can’t happen.

The COVID crisis is affecting your employees in very different ways depending on where they live, what they do, their family situation, and their understanding of and expectations about the pandemic, among other factors. As a result, your team members are probably in different phases of reaction to the crisis. Keep this in mind and here are some additional suggestions.

  • Start meetings by having each person introduce themselves by their name, job title, mission, and their immediate tasks. Doing so brings people back to themselves and helping them begin to focus again on their roles, relationships, and tasks which is of utmost importance. The important role of a leader during a crisis is to consistently articulate the organization’s purpose and connect each day’s tasks to it. Without this, people drift. While the need for planning is crystal clear in acute, short-term crises. Planning in a long-term situation where the threat to survival rolls on monotonously day after day is not always so clear. This is because planning automatically implies a future, and this future is frequently in doubt. All leaders, not only those in the C-suite, must understand the organization’s purpose, values, and how those connect to each day’s work. Managers have at least as much impact on team morale and performance as the overall organization itself does. In crises, people tend to rely on the authority figures they already know and trust even more than usual. And remote work means that a direct manager may be an employee’s only real point of contact with the organization.
  • Regularly ask at meetings: “What is something that doesn’t fit in, that doesn’t make sense?” As we face a rapidly changing set of circumstances knowing what data points matter is difficult. Ensure there is time to discuss facts that don’t seem to fit the narrative. During a crisis, we automatically discount our experience and lean towards denial. To fight these cognitive biases, we must be made aware of them. As you and your team move through this time, you will sometimes lose focus, make mistakes, and have errors in judgment. The key is to normalize admitting these mistakes and analyzing them. Make discussing weak spots, harm reduction, and damage control part of the weekly meetings. This will lead to better decision making going forward.
  • Enable ways for your team to surface both their deep faith and their real fears. Engaging in “As if” exercises, roleplay, and assigned mental exercises can help teams articulate thoughts and feelings that may be too threatening to acknowledge otherwise. “Having a value system, a sense of identity, a purpose for one’s existence increases the odds of survival and resiliency.” When deciding on a course of action, have team members engage in mental contrasting. Mental contrasting requires a person or team to (i) visualizes a goal and its rewards, and (ii) visualizes what obstacles, including their own behavior, stand between them and their goal. It is necessary to envision both the positive and the negative. According to W. Von Bergen and Martin S. Bressler, when people focus on only positive thoughts about the future, “they literally trick their minds into thinking they have already succeeded and, so, do not need actual efforts to attain something perceived as already acquired. However, completely disregarding positive thinking is also not effective. With purely negative thoughts, people convince themselves that they have already lost the goal, so, again, there is no need to make the efforts necessary to achieve it.”
  • Have faith. Ask yourself: What were your highest values in January 2020? For you as an individual or for your company? Those values still matter, and those ideals did not change because of COVID. So, ask:
    • What are your brutal facts? What is your deepest faith?
    • What would your version of the Stockdale Paradox be?
    • What does your organization exist for?
    • What is your organizational purpose? How engaging is it?

I hope some of this helps. Hang in there and have faith. The road may be rough, but as John Lennon said, “Everything will be okay in the end. If it’s not okay, it’s not the end.”

Copyright (c) Marc A. Borrelli, 2020

Your organization—or unconscious mind—may be hoping on some other event or date after which some version of “rescue” will come: a vaccine, a cure, a reliable and cheap test, the acquisition of herd immunity.

However, to review the brutal facts, none of these developments are likely in the foreseeable short term. There is a possibility that there may never be a fully effective vaccine or cure; this virus may be something that we live with and manage for years to come. If that is the case, we will have to change elements of our social interaction in unprecedented ways that may well lead to irrevocable social changes.

Besides, the effects of the virus today ensure there will be no normal to return to, as this incomplete list indicates:

What to do?

With regard to business leadership and management, this duality helps to guard against the onslaught of disappointments that COVID delivers in the business world. Optimism drives innovation; however, we need to maintain realism and not over-optimistically chase something that can’t happen.

The COVID crisis is affecting your employees in very different ways depending on where they live, what they do, their family situation, and their understanding of and expectations about the pandemic, among other factors. As a result, your team members are probably in different phases of reaction to the crisis. Keep this in mind and here are some additional suggestions.

  • Start meetings by having each person introduce themselves by their name, job title, mission, and their immediate tasks. Doing so brings people back to themselves and helping them begin to focus again on their roles, relationships, and tasks which is of utmost importance. The important role of a leader during a crisis is to consistently articulate the organization’s purpose and connect each day’s tasks to it. Without this, people drift. While the need for planning is crystal clear in acute, short-term crises. Planning in a long-term situation where the threat to survival rolls on monotonously day after day is not always so clear. This is because planning automatically implies a future, and this future is frequently in doubt. All leaders, not only those in the C-suite, must understand the organization’s purpose, values, and how those connect to each day’s work. Managers have at least as much impact on team morale and performance as the overall organization itself does. In crises, people tend to rely on the authority figures they already know and trust even more than usual. And remote work means that a direct manager may be an employee’s only real point of contact with the organization.
  • Regularly ask at meetings: “What is something that doesn’t fit in, that doesn’t make sense?” As we face a rapidly changing set of circumstances knowing what data points matter is difficult. Ensure there is time to discuss facts that don’t seem to fit the narrative. During a crisis, we automatically discount our experience and lean towards denial. To fight these cognitive biases, we must be made aware of them. As you and your team move through this time, you will sometimes lose focus, make mistakes, and have errors in judgment. The key is to normalize admitting these mistakes and analyzing them. Make discussing weak spots, harm reduction, and damage control part of the weekly meetings. This will lead to better decision making going forward.
  • Enable ways for your team to surface both their deep faith and their real fears. Engaging in “As if” exercises, roleplay, and assigned mental exercises can help teams articulate thoughts and feelings that may be too threatening to acknowledge otherwise. “Having a value system, a sense of identity, a purpose for one’s existence increases the odds of survival and resiliency.” When deciding on a course of action, have team members engage in mental contrasting. Mental contrasting requires a person or team to (i) visualizes a goal and its rewards, and (ii) visualizes what obstacles, including their own behavior, stand between them and their goal. It is necessary to envision both the positive and the negative. According to W. Von Bergen and Martin S. Bressler, when people focus on only positive thoughts about the future, “they literally trick their minds into thinking they have already succeeded and, so, do not need actual efforts to attain something perceived as already acquired. However, completely disregarding positive thinking is also not effective. With purely negative thoughts, people convince themselves that they have already lost the goal, so, again, there is no need to make the efforts necessary to achieve it.”
  • Have faith. Ask yourself: What were your highest values in January 2020? For you as an individual or for your company? Those values still matter, and those ideals did not change because of COVID. So, ask:
    • What are your brutal facts? What is your deepest faith?
    • What would your version of the Stockdale Paradox be?
    • What does your organization exist for?
    • What is your organizational purpose? How engaging is it?

I hope some of this helps. Hang in there and have faith. The road may be rough, but as John Lennon said, “Everything will be okay in the end. If it’s not okay, it’s not the end.”

Copyright (c) Marc A. Borrelli, 2020

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Want to be a great athlete, I mean business leader?

Want to be a great athlete, I mean business leader?

We all admire world-class athletes. I have had the fortune to meet a few and what I have learned is that to be a world-class athlete requires two things, natural ability, and work. I remember the first time I watched a water skier ski a course at 38’ off while riding in the boat, that no matter how hard I worked, I would not reach that level. The second thing is that they work at it relentlessly. What does that mean?

Train – usually six days a week and a day off
Food – what they need for the demands on their body
Sleep well – they recognize deep sleep is required for their bodies to recover.

For more, here is Roger Federer’s workout; however, if we look behind this, what else.

 

Skills

As part of the training, they work on their skills by practicing, Malcolm Gladwell’s 10,000 hours. But it is not just practicing; it is practicing the right thing. How do they know if what they are practicing is correct? They have a coach. Besides, they review their past events and practices with videos or discussions with coaches. Even Maria Konnikova, who decided to become a competitive poker player, used to review every hand of her last tournament with her coach to analyze why she made the decisions. However, that practice also involves practicing interacting with teammates. Joe Montana’s great passes to Jerry Rice didn’t happen because both practiced in isolation. Instead, they practiced while the defensive team tried to stop them.

 

Play against an opponent

If you compete against opponents in your sport, e.g., poker, squash, tennis, rather than yourself, e.g., golf, you need to practice against opponents, mostly better ones. While you can hit perfect tennis balls against a practice wall all day to improve your swing, it won’t help you when you have an opponent who does something unexpected. An opponent changes the entire dynamic of the game. They make their own decisions, which affect the tempo, your positioning, and your mental game. Just ask Garry Kasparov. In his 1997 rematch Game 1 against Big Blue, Big Blue made a move due to a programming error. However, Kasparov didn’t realize it and “concluded that the counterintuitive play must be a sign of superior intelligence.” This caused Kasparov to lose the second game.

 

Learn from others

The great thing about competitive sports is that we can see what our opponents are doing to win and emulate them. As Oscar Wilde said, “Imitation is the sincerest form of flattery that mediocrity can pay to greatness.” I remember John Battleday telling me how all the best water skiers at one time were battling to do a forward flip on a trick ski. However, once one person figured it out, the rest could quickly do it. That happens everywhere. It takes a long time for someone to figure out how to do something new and improved, and it is adapted in now time by the entire community, e.g., the Fosbury Flop.

 

Coaches

Finally, they have coaches and teammates that push them outside their comfort zone so that real development takes place. No matter who we are, it is easy to justify to ourselves why we are not pushing ourselves, but coaches and teammates call B.S. and force us to get and keep going. They help us improve our skills by pointing out our mistakes, asking us questions to understand why we did what we did, and role-playing with us. When Maria Konnikova decided to become a champion poker player, she didn’t know how many cards there were in the deck, but she did know she needed a coach, so she got one. In Roger Federer’s team, he has two tennis coaches, a fitness coach, and his wife, an ex-top tennis player.

A couple of years ago, Vistage speaker Jack Daly said, “Top athletes practice constantly; why don’t businessmen?” That statement hit me then and has stayed with me since.

It appears that for the majority of CEOs and business leaders, once the white smoke rises and they are chosen, there is an assumption, they should have all the answers and not need any more learning or insight from anyone. I have heard this from Private Equity Groups of all people who say, “We hire great people, so they don’t need to spend more on personal development.” Really! I reach peak physical fitness and then stop working out because hey, I am here!

 

As a Vistage Chair, I meet lots of CEOs who I talk to about joining Vistage or a peer group with coaching. The reasons I get for not joining are:

 

Time

Time is the one thing that we cannot buy more of. Not only that, but as we move up the corporate ladder, there are more demands on our time from our company, and then there are demands on our time from family and friends. Since time is fixed, we turn to the adage, “Work on the business, not in the business.” Easier said than done. You start your day, and the emails and calls come in disrupting your plans to do X. Typically, what happens is we deal with “the urgent,” both important and unimportant. But what we struggle to deal with is “the important but not urgent.” How does a peer group help? Well, one day a week, you get away from emails, interruptions, and phone calls. You get time to reflect, present ideas to your peers, and get feedback. That is feedback is not the “right solution,” but rather may be:

  • Asking questions you have not considered.
  • It is offering alternative solutions that achieve the same results.
  • Telling of their experiences at doing the same thing, which either worked or didn’t.

Since the group has no incentive behind helping you other than you will help them, they are often the ones who help you, as Jim Collins says, “Confront the brutal facts.” However, their questions, suggestions, and insight can save you time and money far above what you would have spent otherwise.

 

Cost

Yes, groups and coaches cost money, but they provide a real ROI. If they didn’t, why would so many world-class athletes use them? Although I am a Vistage Chair, I remained a member. Why? Because I need:

  • People who hold me accountable and ensure that I did what I said I would. It is too easy to be the cobbler’s children, providing coaching and not having anyone coach you.
  • A group that I could bounce ideas off because working for myself, I don’t have anyone else on my team.
  • A group that I can bring issues to, without fear or concern, and know they will help me work out a solution and then hold me accountable for doing the work to resolve them.

A response I hear from many CEOs is, “I have a board/friends who do that.”

If you have a board, you probably meet quarterly. While the board gives you input and hold you accountable, it is not a place where you can quickly bring up issues and challenges. Also, a lot happens in three months, and you need someone far more regularly to ensure you keep to your commitments and even help you process the feedback you are receiving.

Your friends are precisely that, friends. They will support you. They are not going to challenge you, tell you your ideas don’t work. If they did, you wouldn’t be friends.

I have had members present their websites, sales pitches, investor pitches, and marketing materials to the group, which is a group of CEOs who are the types of people who purchase their products and services. Everyone who has done it has found the feedback to be incredibly valuable. We get so caught up in our mind and decision process that we need unbiased outside voices to point out what we are missing.

Finally, as the CEO or President of an organization, your daily decisions are usually involving something that costs more than $50,000. The final decision on hiring someone, a new production plan, a new marketing plan, new product development, etc. If the group helps you make just one better decision a year, the return is over 200%.

 

I don’t need a group or coach.

Now, this response, I understand. it was my response when I was initially asked to join Vistage. I was overconfident and sure of my abilities. However, a few years later, I realized I did need the group, coaching, and education that Vistage provided. On reflection, I realized my arrogance and attitude had cost me so much.

Atul Gawande, professor of surgery at Harvard Medical School, has studied the question, “How do we improve in the face of complexity?” His solution: having a good coach to provide a more accurate picture of reality, to instill positive habits of thinking, and to break your actions down and then help build them back up again. Gawande says, “It’s not how good you are now; it’s how good you’re going to be that really matters.” See his TED talk below.

I still need a venue to practice, learn, and be held accountable. Even today, I have a coach outside of Vistage to force me to work on those things that I don’t want to do. It is easy to put off the things we don’t want to do, but again to follow Jim Collins’ advice, those companies that succeed do the 20-mile march.

Finally, today we are in a rapidly changing environment. What worked before may not work again. We need to rethink many products and services, develop new ones, enter new markets, or find new supply sources. Also, it is hard; we are all struggling, even you, the CEO. Where can you go and share that experience? Not with your employees, your investors, your spouse. But you can with a group of peers. That is why today, according to McKinsey, more and more CEOs are turning to Peer Groups for help and support.

If you want to be a much better leader, get a coach, a group, and access learning, to help you do the “hard” work. You will be grateful.

 

Copyright (c) Marc A. Borrelli, 2020

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2021 Ahead! Are you ready?

2021 Ahead! Are you ready?

Thank god, but 2020 is nearly over. While it has been a crazy year, it has, in many ways, flown by. It seems only yesterday that we were all locked down and adjusting to a new world. However, the year is nearly over, and the world has not changed. However, we are experiencing a “K” shaped recovery. Effectively, the economy is bifurcating, and many industries and companies will end up on the downward slope.

As I have said before, I expect COVID to be with us until Q3/Q4 2021, but call me a pessimist. Even so, we should expect to be here till the end of Q2 2021. So how are you planning for 2021? What got you here won’t get you there!

This Year It Is the Accelerant Stupid

As you begin the planning cycle, consider that COVID is an accelerant. Whatever were the major trends were in your industry at the end of 2019, take them forward ten years, that is where the industry is now! So where are you and where should you be?
Concerning where you are and where you need to be when COVID is over, you need to take a realistic look at your organization and do a gap analysis on:

  • strengths and weaknesses,
  • culture and core values,
  • human and capital resources,
  • processes and systems,
  • customers and buying habits,
  • product and service delivery,
  • suppliers, and
  • competition.

With that gap analysis, you can determine where to focus your attention, so that you can emerge from COVID in a leadership position. I am not going to go through all these today, but here are few things to consider.

Culture

Culture has never been more critical. If employees adhere to the company’s core values and live its culture, then provided they know the organizational goals, they can make the right decisions. Moving decision making down to the front lines is critical during the next twelve months as the environment changes quickly. Having the decision process moving up and down the organization is a luxury few can afford.

For a great reminder, look at Turn the Ship Around by Capt. below.

Further, reading “Adaptation under Fire: How Militaries Change in Wartime,” by Lt. General David Barno and Nora Bensahel, there are several crucial lessons for management.

  • Everyone Knew the Mission, not just the task. Post World War I, decentralized, independent battlefield actions, a tradition in German military thinking, returned and became a central tenet of German army doctrine. Mission orders were regularly emphasized and practiced during peacetime training exercises.
  • Continuous Improvement. The German army established the culture of relentlessly critiquing its leaders and units’ performance in exercises and war games. Commanders and staff officers at all levels were expected to do so candidly and objectively, without regard to personal embarrassment or potential career damage. This candor extended to critiquing the performance of senior officers and higher headquarters as well. These principles made German doctrine inherently adaptable in the face of battle.
  • Changing the rules of the Game. The French army believed the next war would be the same as WWI. French interwar thinking focused primarily on leveraging defensive operations to prevail in any future conflict. Thus, they undertook no “no large-scale examination of the lessons of the last war by a significant portion of the Officers Corps.” In contrast, the Germans examined how to use new technologies to change the “Rules of the Game” and win using offensive operations. They improved their Blitzkrieg tactics that had great success in World War II.

I would bring these lessons into your organization as part of any new model to succeed. Regarding business Blitzkrieg offensives, I would look to John Boyd and his OODA Loop as a better model.

Process and Systems

As you examine your processes and systems, I would recommend asking, “If we didn’t do it this way, would we?” and “Will these systems get us to where we need to be?” In many cases, with the acceleration that has been experienced, the answer may be no. Thus, put together multifunctional teams together to examine these and use different problem-solving models, as I mentioned in “Want the Best Results, Get out of your Comfort Zone.” Some I would look to are:

  • Get out of your comfort zone. Change the environment or put limitations on the team. Use Brian Eno’s Oblique Strategies, where each card puts a constraint on the team to help too when teams are struggling to break through a problem. They are available on Amazon.
  • Break your business process down to its most simplified version, e.g., ship a product to a customer and then work on new solutions. The more you define the process in the question, the more you are tied to that system in the solution. By being most simple, you can expand the range of solutions.
  • New ideas, enforce the rule that you cannot challenge any idea until 100 are developed. This rule stops the thought process from being shut down early by those that oppose change, and often the craziest ideas come at the end, but a gem of something great.
  • Also, in examining systems, take a look at Tom Wujec’s TED Talk, “Got a Wicked Problem, First Tell Me How You Make Toast,” below.

Using these problem-solving methods, if done correctly, could provide an additional benefit, reinforcing your culture and camaraderie among your employees, which has been challenging to do during our COVID work from home.

Contact me if you need help facilitating any of these processes as you look ahead as I wish you all the best succeeding in 2022 and beyond.

Copyright (c) 2020, Marc A. Borrelli

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Are We Driving (the best) Half of Our Workforce Away?

Last week was the Vice Presidential debate, and I didn’t watch it. Honestly, I am on a diet, forbidding alcohol, so it was not an option. However, looking at Social Media, my understanding of the debate’s outcome was:

  • It was a traditional debate; both sides avoided questions, had their talking points, and remained calm.
  • The Fly Won
  • Senator Kamala Harris made all sorts of unpleasant faces and was a “b****.”
  • Vice President Mike Pence talked over Kamela and the female moderator, demonstrating male sexism.

As I didn’t watch it, I have no idea who won; however, many women saw Vice President Pence’s interruptions of Senator Harris sexist norms. Simultaneously, various news outlets reported that Vice President Pence did a great job among many of the President’s supporters. This data ties in with a fascinating paper just released, “Status threat, not economic hardship, explains the 2016 presidential vote,” by Diana C. Mutz, at the University of Pennsylvania. According to Professor Mutz, “Candidate preferences in 2016 reflected increasing anxiety among high-status groups rather than complaints about past treatment among low-status groups.” Thus white males continue to be threatened by other groups diminishing their privilege and claiming to suffer discrimination. 

To those who are up in arms so far claiming there is no sexism in the U.S., I would recommend looking at the “Am I the Asshole?” forum on Reddit. The AITA forum provides a thorough look at gender inequality and the degree of sexism in our society. Once you have read this, reflect on what it means for your wife, daughter, and mother. We need to face it and remove it. Adopting the Administration’s stance with its executive order’s stated goal is “to combat offensive, and anti-American race and sex stereotyping and scapegoating,” is just doing more damage and denying reality.

However, being sexist in business and creating an unwelcoming environment for women will not attract more women into the business world. As I discussed in a prior blog post, we need them in business, and we need women more at higher levels of the organization. The data shows that:

  • Companies with female CFOs improved their earnings;
  • Companies with female CIOs improved their investment returns; and 
  • Companies with women on their boards performed better.

Furthermore, some claim that countries with women leaders have performed better during COVID, but there is more to that discussion. While this may be a correlation and not causality, it is worth noting. Women also are better at today’s’ leadership requirements, e.g., working in groups and showing empathy. As I said last week, most of our graduates from undergraduate, law, and medical schools are women; to drive them away is just putting us at a global disadvantage.

So, given the above, having more high performing women should put you at a competitive advantage. It is time for what I call the “Moneyball” approach. There is a market of high performing employees who are not valued as highly by your competition. The key is to provide an attractive work environment for them, design compensation to meet their needs, e.g., flexible time, and seek out to recruit them. Building an organization that attracts and retains high performing women at all levels will also attract other women and will provide you with a competitive advantage. We all need one of those in these times.

Copyright (c) 2020, Marc A. Borrelli

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