Risk Taking
February 14, 2012
The June 22, 2009 cover story of Business Week which I just reread was titled “The Risk Takers.” It featured businesses which during difficult times, instead of playing it safe, placed bets on some gutsy new strategies.
To make a point, the author used an illustration that we can relate to here in Michigan. I paraphrase:
Imagine a driver on a snowy night. If the car starts to slip, the driver’s natural instinct is to slam on the brakes and jerk the steering wheel in the opposite direction. But the laws of physics advise the opposite: laying off the brakes and steering into the turn.
The author reports that from 1985 to 2000, the average merger in an economic downturn created an 8.5 percent rise in shareholder value after two years; while the average deal in good times resulted in a 6.2 percent drop in the buyer’s share value. In other words, mergers – one of the biggest, boldest moves in business – do better in bad times than good. Much better, in fact.
It wasn’t recklessness this article was celebrating; it was risk taking – daring to be aggressive, rather than just defensive, amid a weak economy. Steering into the turn, so to speak.
Just like the winter driving analogy in the article, we who are involved in school sports in Michigan can relate to the big idea of the article because we too made some of our biggest moves at our bleakest times. The MHSAA retrenched in some ways, but the greater theme as we climbed out of our bad times of 2008 was that we made unprecedented investments in new technology.
Today MHSAA.com is the website of highest traffic and MHSAA.tv is the website with the most productions of any comparable organization in the U.S. And all of these investments in technology during those bad times have allowed us to undertake the ArbiterGame project now that will provide all member high schools the electronic tools necessary to make their tough tasks of school administration more streamlined than ever before.
Values Trump Rules
November 19, 2013
The last two postings, which were about rules and rule-making, have quoted from how: Why HOW We Do Anything Means Everything by Dov Seidman. The book deserves at least this additional commentary.
Mr. Seidman posits that in the modern world of hyperconnectivity and transparency (which he describes in detail), there is no such thing as “private” behavior. It’s all public and, therefore, how we do things is more important than what we do.
He states that to stand out in a positive way, an enterprise must “outbehave” the competition. And he says, such behaviors do not follow rules, they flow from values.
This means, according to Seidman, that effective leadership in this environment will be less about coercion (rules) and more about inspiration (values). Leaders will spend less time talking about the carrots and sticks of managing people, and more time focusing on “values and missions worthy of their commitment.”
It’s a shift from “task-based jobs” to “values-based missions;” a transformation from “command and control” to “connect and collaborate” leadership. “It’s a move from exerting power over people to generating waves through them.”
Instead of talking about organizations that are too big to fail, Seidman says we will have organizations “that are too sustainable to fail, too principled to fail, and too good to fail.”