Management

American Express Scores an “Own Goal”

Looking for a cash-back rewards card? Enticed by the offerings of American Express? Think twice. I’ve had an American Express cash-back card for 15 years, but I’m no longer using it. Why? Because American Express owes me three months’ worth of rewards. American Express keeps promising to bring my account up to date, but the promises have been empty ones.

I’ve switched to two other cards that offer cash-back rewards, at a slightly lower rate than I used to earn at American Express. (You can find such cards by going to this page at Bankrate.com.) But the two cards offer generous bonuses ($150 and $100) for charging $500 to them in the first 90 days of use, so in the course of a year, that will more than make up for American Express’s slightly higher but unreliable cash-back rate.

Will I go back to American Express? Probably not. Even in the unlikely event that the issuers of both cards that I’m now using prove as unreliable as American Express, I’ll just try other cards with similar cash-back rates.

American Express has scored an “own goal“; that is, its own actions have prompted me to give my business to its competitors.

More Lessons from Baseball

Regular readers of this blog will know that I sometimes draw on the game of baseball and its statistics to make points about various subjects — longevity, probability, politics, management, and cosmology, for example. (See the links at the bottom of this post.)

Today’s sermon is about the proper relationship between owners and management. I will address two sets of graphs giving the won-lost (W-L) records of the “old 16” major-league franchises. The “old 16” refers to the 8 franchises in the National League (NL) and the 8 franchises in American League (AL) in 1901, the first year of the AL’s existence as a major league. Focusing on the “old 16” affords the long view that’s essential in thinking about success in an endeavor, whether it is baseball, business, or empire-building.

The first graph in each set gives the centered 11-year average W-L record for each of the old teams in each league, and for the league’s expansion teams taken as a group. The 11-year averages are based on annual W-L records for 1901-2013. The subsequent graphs in each set give, for each team and group of expansion teams, 11-year averages and annual W-L records. Franchise moves from one city to another are indicated by vertical black lines. The titles of each graph indicates the city or cities in which the team has been located and the team’s nickname or nicknames.

Here are the two sets of graphs:

W-L records of old-8 NL franchises

W-L records of old-8 AL franchises

What strikes me about the first graph in each set is the convergence of W-L records around 1990. My conjecture: The advent of free agency in the 1970s must have enabled convergence. Stability probably helped, too. The AL had been stable since 1977, when it expanded to 14 teams; the NL had been stable since 1969, when it expanded to 12 teams. As the expansion teams matured, some of them became more successful, at the expense of the older teams. This explanation is consistent with the divergence after 1993, with the next round of expansion (there was another in 1998). To be sure, all of this conjecture warrants further analysis. (Here’s an analysis from several years ago that I still like.)

Let’s now dispose of franchise shifts as an explanation for a better record. I observe the following:

The Braves were probably on the upswing when they moved from Boston to Milwaukee in 1953. They were on the downswing at the time of their second move, from Milwaukee to Atlanta in 1966. It took many years and the acquisition of astute front office and a good farm system to turn the Braves around.

The Dodgers’ move to LA in 1958 didn’t help the team, just the owners’ bank accounts. Ditto the Giants’ move to San Francisco in 1958.

Turning to the AL, the St. Louis Browns became the latter-day Baltimore Orioles in 1954. That move was accompanied by a change in ownership. The team’s later successes seem to have been triggered by the hiring of Paul Richards and Lee McPhail to guide the team and build its farm system. The Orioles thence became a good-to-great from the mid-1960 to early 1980s, with a resurgence in the late 1980s and early 1990s. The team’s subsequent decline seems due to the meddlesome Peter Angelos, who became CEO in 1993.

The Athletics, like the Braves, moved twice. First, in 1955 from Philadelphia to Kansas City, and again in 1968 from Kansas City to Oakland. The first move had no effect until Charles O. Finley took over the team. His ownership carried over to Oakland. Finley may have been the exceptional owner whose personal involvement in the team’s operations helped to make it successful. But the team’s post-Finely record (1981-present) under less-involved owners suggests otherwise. The team’s pre-Kansas City record reflects Connie Mack’s tight-fisted ways. Mack — owner-manager of the A’s from 1901 until 1950 — was evidently a good judge of talent and a skilled field manager, but as an owner he had a penchant for breaking up great teams to rid himself of high-priced talent — with disastrous consequences for the A’s W-L record from the latter 1910s to late 1920s, and from the early 1930s to the end of Mack’s reign.

The Washington Senators were already resurgent under owner Calvin Griffith when the franchise was moved to Minnesota for the 1961 season. The Twins simply won more consistently than they had under the tight-fisted ownership of Clark Griffith, Calvin’s father.

Bottom line: There’s no magic in a move. A team’s success depends on the willingness of owners to spend bucks and to hire good management — and then to get out of the way. (Yes, George Steinbrenner bankrolled a lot of pennant-winning teams during his ownership years, from 1973 to 2010, but the Yankees’ record improved as “The Boss” became a less-intrusive owner from the mid-1990s until his death.)

There are many other stories behind the graphs — just begging to be told, but I’ll leave it at that.

Except to say this: The “owners” of America aren’t “the people,” romantic political pronouncements to the contrary notwithstanding. As government has become more deeply entrenched in the personal and business affairs of Americans, there has emerged a ruling class which effectively “owns” America. It is composed of professional politicians and bureaucrats, who find ample aid and comfort in the arms of left-wing academicians and the media. The “owners’ grip on power is sustained by the votes of the constituencies to which they pander.

Yes, the constituencies include “crony capitalists,” who benefit from regulatory barriers to competition and tax breaks. Though it must be said that they produce things, and would probably do well without the benefits they reap from professional politicians and bureaucrats. Far more powerful are the non-producers, who are granted favors based on their color, gender, age, etc., in return for the tens of millions of votes that they cast to keep the “owners” in power.

Far too many Americans are whiners who grovel at the feet of their “owners,” begging for handouts. Far too few Americans are self-managed winners.

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Related posts:

Ten Commandments of Bad Management

Which of these “commandments” do you habitually obey? Tally your score and check it against the scale at the end of the list.

  • Flaunt the privileges of rank: Spend on frills and perks in the face of adversity.
  • Flout the rules you expect others to obey.
  • Put off hard decisions as long as possible so that rumors can grow wildly on the grapevine.
  • Pepper your staff with meaningless projects and pointless questions — hire consultants to give you the “straight scoop.”
  • Hire outsiders for senior management positions and create make-work jobs for your cronies.
  • Keep your door open to whiners and let them second-guess your managers’ decisions.
  • Promise vision but deliver pap.
  • Talk teamwork but don’t let anyone in on your game plan — keep ’em all guessing.
  • Talk empowerment but micromanage.
  • Keep your board in the dark, except when you turn on the rosy spotlights.

Score of 0: You lie to yourself all the time; see a psychiatrist.

Score of 1-3: You sleep a lot during the day; see a physician.

Score of 4-6: You’re a normal boss, which isn’t necessarily good news.

Score of 7-9: You could give “Chainsaw Al” Dunlap a run for his money.

Score of 10: So you’re the model for the pointy-haired boss!

Ethics and Everyday Leadership

What Is Leadership?

Leaders inspire groups — groups as small as a two persons or as large as nations — and guide them toward exalted aims. Such aims may be, for example, winning instead of losing, turning out excellent products instead of mediocre ones, or adopting a more effective form of government.

Leadership bestows a legacy of accomplishment or continued striving, or both.

We often inappropriately call a person a leader because he or she has leadership responsibilities (e.g., supervisor of a work group, manager of an enterprise, pastor of a church, elected official, coach or quarterback of a football team). But a formal title does not bestow leadership, just as the lack of a formal title does not deny it.

Leading is not managing, preaching, or speech-making, though such activities may play a part in leadership. Leading is not commanding, bullying or manipulating, though leaders sometimes resort to such actions, and risk of losing their followers. Leadership is not a perquisite of high position, celebrity, or wealth, though these may be useful springboards to leadership.

The Importance of Example

Enduring leadership requires respect, respect for the leader’s aims and respect for the leader. Thus the importance of leading by example.

It may be trite to say “lead by example,” but there is no better way to lead than by example, that is, to follow a code of conduct that is not only true to one’s stated aims but also worthy of respect.

Consider the Jesus of Matthew, Mark, and Luke, who preached that bliss was to be found in the hereafter, not on earth. He forswore possessions and gave his life rather than deny his beliefs. He practiced what he preached, as the saying goes. His ethics — demonstrated in his deeds — buttressed the message upon which the Christian church was built.

In sum, Jesus was believed not just because his message was compelling but because his behavior was compelling. His behavior compelled trust which carried over from his person to the message he preached.

The Ethical Elements of Everyday Leadership

In today’s world, a person who would lead for longer than a day or a week must lead by example. The essential traits of leadership by example in the everyday worlds of business and politics are these: personal integrity — first and foremost — followed by fair and consistent behavior toward others, the instillation of institutional ethics, and a candid respect for the rule of law. Let us consider these traits in reverse order.

Candid Respect for the Rule of Law

We confront the law at almost every turn in the everyday world of business and politics. An ethical leader will insist on obedience to the law while openly questioning particular laws that seem unjust.

Take, for example, the obligation of most businesses to practice affirmative action. A business-person may legitimately believe that the mandate to practice affirmative action is unjust to those it disfavors, demeaning to those it is intended to favor, and economically unwise. That person has a dual obligation: to state his reservations about affirmative action and to insist on strict adherence to it for as long as it is the law.

To flout the law invokes disrespect for the rule of law. To obey an unjust law without voicing reasoned objections to it is an act of moral negligence.

Institutional Ethics

Leadership usually takes place within or gives rise to an institution — a business, a volunteer organization, an elective body. The ethics of an institution must be consistent with its aims. A profit-seeking business, for example, might have an ethic of honesty and craftsmanship; a volunteer organization, an ethic of respect for persons of all abilities; an elective body, an ethic of adherence to the Constitution regardless of transitory opinion.

A leader will articulate and personnify the institution’s ethics. A leader will take every opportunity to inculcate in its members the institution’s ethics and will resist staunchly any efforts to subvert or pervert those ethics.

Giving lip service to ethics but not practicing them is not leadership. Giving lip service to ethics but subverting or perverting them is moral fraud.

Fair and Consistent Behavior Toward Others

There may be “different strokes for different folks” but “different rules are for fools.” Nothing — nothing — breeds deeper disrespect for a would-be leader than special treatment of individuals based on their status rather than their performance.

Consider, for example, a senior manager who lets subordinate managers break the rules while enforcing them against the rank-and-file, who fires the rank-and-file while overlooking the failures of managers, or who hires or promote on the basis of “political correctness” instead of merit. That manager can forget leadership because he will not command the respect of anyone whom he can trust as a follower.

Personal Integrity

American history is littered with the husks of would-be leaders who thought they were above the law and above common decency. Bill Clinton is but the current, notorious specimen of the ilk.

A person cannot command respect who habitually lies, dissembles, or cuts corners with the truth; who takes advantage of his position for personal gain beyond reasonable compensation; who insists on and flaunts the privileges of rank; or who flouts the rules that others must obey. Neither President nor preacher — no-one.

How to Manage

1. Do not read books, listen to audio presentations, watch videos, or attend lectures or seminars on the subject of management. The perpetrators of such material are “consultants,” not managers with decades of hands-on experience.

2. Do not hire “consultants,” unless you want someone you can blame for sweeping changes in your organization or its personnel structure. Don’t do it even then, because you will have wasted money to no avail; you employees won’t be fooled by the blame game.

3. Accept the traditional perks of your office, otherwise your employees might doubt your standing (and thus theirs) in the organization. But don’t grab new perks for yourself. If you do, your employees (rightly) will think that your perks may (in lean times) cost some of them their jobs. Of course, if you don’t mind envious, suspicious, and low-motivated employees, go right ahead and treat yourself to more perks. Better yet, pay lavish sums to have a “consultant” justify your new perks.

4. Do not agonize over decisions. It is better to make a few mistakes — and correct them as necessary — than to reveal yourself as an indecisive worrier. Gather the relevant facts, but don’t chase down every loose end. Rely on the counsel of persons with relevant experience whose independence of judgment and discretion you trust.

5. Do not befriend any of your employees. Boss-subordinate friendships cause suspicion and resentment among the excluded, and can lead to nothing but trouble when an employee-friend screws up or stops being a friend.

6. Be friendly toward all of your employees. If you have an effective employee whom you can’t stand, avoid him. If you can’t avoid him, find a (legal) way to fire him. But don’t put up with employees whose attitudes and behavior you dislike. Dislike breeds distrust. Distrust breeds bad decisions on your part.

7. Make it abundantly clear that you reward employees only for good performance. Make your standards of performance abundantly clear, through praise, perks, and pay. (See no. 11.)

8. Micro-manage, if that helps you sleep better at night. But accept the fact that your most effective employees will resent your micro-management, require extra compensation to put up with it, and curb their creativity and initiative in the face of it. In other words, try like the devil to avoid micro-managing, but do not go to the opposite extreme of complete hands-off management. Go to the middle ground: clearly stated expectations and prompt, regular feedback. If you are uncomfortable in the middle ground, you shouldn’t be a manager; find a job doing something instead of managing it. If you wait too long to drop out of the management game, you’ll be locked into it financially and to avoid the appearance of failure. The resulting stress will make you ill, and may kill you.

9. Do not undercut those you have placed in supervisory jobs by criticizing them openly or by implication (e.g., encouraging their subordinates to come through your “open door”). But do keep your ear to the ground; people love to gripe. If you hear of unacceptable behavior, dig into it (discreetly). If the story checks out, act on it, quickly. If a subordinate isn’t doing his job, or has done something egregious, talk to him about it and explain what you expect him to do (or not do). If that doesn’t fix the problem, find a job that he’s better suited for, or help him move on to greener pastures.

10. Be sure that your employees know the bounds of their authority and initiative. Lack of clarity in such matters leads to frustration and poor performance. Give your employees as much leeway as you can, but not so much that they are put in conflict with each other or “empowered” to sabotage your operations or relations with customers.

11. Most importantly, know what you want your organization to accomplish. Be sure that your employees know what it is. Be sure that every part of your organization is aimed toward the same objective. Tie praise, perks,and pay to it.

12. If you have a boss, you have an additional job, which is to be a boss-manager. Your challenge as a boss-manager is to get your boss to observe the eleven preceding rules. You must be subtle but firm in that effort. You cannot expect down-the-line success, but if you fail on too many points, you will be miserable in your job. When you are miserable in your job because of your boss, you have three options: find another job, retire, or put up with your boss if you cannot do either. Nobody promised you a rose garden.

13. There is a fourth option for dealing with a “bad” boss, if the boss is incompetent or has committed an improper act: try to have him fired. But, as the adage goes, “if you strike at the king, you must slay him, lest he rise and seek retribution.” If you are going to strike at your “king,” you must have your exit plan ready.

Good News Sometimes Comes in Small Packages

It’s not headline news, but it’s good news for employers and for employees — who benefit when their employers are allowed to operate their businesses for a profit. PointofLaw.com has the story:

Courts in [California] had been in the forefront of chipping away employers’ right to terminate employees at will, a process I documented in my book The Excuse Factory some years ago. But the trend has been in retreat in recent years, and earlier this month the state Supreme Court delighted employers with a ruling declaring that when a company tells a worker that employment is at will, it means just that. . . .

The California Supreme Court . . . threw out the appellate precedent which had creatively conjured a tenure promise out of the very effort to deny one. . . .

Being offered a job, with no guarantee of getting to keep it forever or of it never changing its character. Imagine that.

Yes, imagine that. It might be an incentive to do a good job, help your employer turn a profit, and earn more money as a result. The chipping away at the doctrine of at-will employment by the courts has enabled the “worst and the weakest” to keep jobs for which they are not qualified or that they do poorly, to the detriment of their fellow employees.

The Best Revenge

I have just learned of the recent death of a former colleague — a man who was my nemesis for most of the thirteen years of our association. That he was a nemesis is evident from his actions toward me; for example:

  • He tried, in vain, to block my promotion to the senior position that he sought for himself in order to justify his presence in the company. (He had been kicked out of what was then our parent organization and given the courtesy title of general counsel of the company that employed both of us.)
  • When I was trying to block a “sweetheart” real-estate deal — one that resulted in the relocation of our company to inferior quarters — he pretended to side with me and then informed the chairman of our board of the blocking effort, thus putting an end to it.
  • Years later, while I was working to relocate our company to more suitable quarters, he tried — clandestinely but unsuccessfully — to block my efforts.
  • He insisted on involving himself in legal matters affecting my operation, even though he was incompetent in those matters.
  • Although he was nominally our general counsel, that title was a “cover” for his role as our lobbyist on Capitol Hill. He failed spectacularly at that job except when he called, reluctantly, for the help of me and others who were knowledgeable, competent, and articulate.
  • He consistently sought compromise on issues where compromise would weaken the company’s reputation for integrity and management’s ability to manage. He and I were invariably opposed in such matters.

There is much more to our history, but you get the picture. He was an incompetent, inarticulate, lawyer who held what was essentially a “political” appointment in a hard-nosed, non-political research organization. When he ran up against a competent, articulate, organized, and tenacious non-lawyer whom he saw as a competitor for leadership, his envy and resentment got the better of him. Being unable to compete openly, he resorted to treachery, regardless of the cost to the company and its effects on those touched by his treachery.

I last saw him almost nine years ago, on the occasion of my retirement. He was true to form even then, trying to put a good face on our relationship, which had become openly hostile. Soon after my retirement, however, he tried to sully my name, which only earned him a rebuke from our mutual boss, the CEO.

What do I feel now that he is gone? Nothing more than a vague sense of closure. Because I had prevailed over him on the issues that mattered most to me, the news of his death did not come as a kind of vicarious victory for me. Rather, the news simply drained from me the last, faint traces of bitterness I had felt toward him. Those traces were faint because when I retired I simply walked away from my job and looked back only to keep an eye on my final project — relocating the company to a better place — which came to a successful conclusion within a few years. And then I moved away from the dank environs of the D.C. area to a warm, sunny clime, where I lead a relaxed and serene life.

The best revenge is doing a good job and then living well after the job is done. I have done both.

More than Enough of Armchair Critics

I wrote “Enough of Amateur Critics” in response to all the finger-pointing and blame-shifting that ensued the devastation caused by Hurricane Katrina. The principles therein apply to matters other than natural disasters. There’s war, for instance. In that regard, Jay Tea of WizBang! advances my theme in “Everyone makes missteaks.”

The Joys of Sole Proprietorship

Glen Whitman, in a post at Agoraphilia, says that

[l]oosely speaking, accounting profit considers only expenditures as costs, whereas economic profit counts both expenditures and forgone income as costs. The classic example is a sole proprietor who works 60 hours/week running his store. On paper, he might appear to be making a large (accounting) profit. But if you subtracted the income he could have received had he taken a job working the same number of hours for someone else, his (economic) profit would be smaller, maybe even negative.

I think Whitman omits an important aspect of economic income, which is sometimes called “psychic income.” The sole proprietor gains a non-pecuniary benefit by working for himself: being his own boss. That’s why many persons choose the long hours and greater risks of sole proprietorship to the generally shorter hours and more stable income of salaried employment.

Then, too, there’s always the possiblity that one’s sole proprietorship will be bought out by a larger company for millions of dollars. That’s a potential pecuniary benefit that usually isn’t available to a salaried employee. But I think that potential benefit is secondary to the psychic income derived from being one’s own boss.

Analysis Paralysis Is Universal

Spengler observes that “The West will attack Iran, but only when such an attack will do the least good and the most harm.”

I worked for a CEO who knew that he would have to fire a goodly number of employees because of a funding cut. And everyone in the company knew it, as well. By acting quickly in response to the funding cut, the CEO could have reduced the number of firings and relieved the minds of those who worried needlessly that they would be fired. But the CEO couldn’t bring himself to act quickly, and so he put off the firings for several months. The result: more employees fired, a prolonged period of reduced productivity during the months of delay, and a less functional company after the firings (because the firings disproportionately affected the support staff).

Delaying the inevitable usually makes matters worse.

Here’s why.

(Thanks to American Digest for the link to the Spengler piece.)

I Knew It All the Time

I always hated meetings convened for the purpose of “problem solving.” Here’s why:

So you need some fresh, innovative ideas. What do you do? Get a group of your best thinkers together to bounce ideas of each other…? No, wrong answer. Time and again research has shown that people think of more new ideas on their own than they do in a group. The false belief that people are more creative in groups has been dubbed by psychologists the ‘illusion of group of productivity”. But why does this illusion persist? . . .

[I]t’s because when we’re in a group, other people are talking, the pressure isn’t always on us and so we’re less aware of all the times that we fail to think of a new idea. By contrast, when we’re working alone and we can’t think of anything, there’s no avoiding the fact that we’re failing.

But if you’re constantly coming up with good ideas when you work alone, you know that a group endeavor will simply be a waste of your time. And sure enough — it is.

That’s an INTJ for you.

Workplace Whiners

I was thinking earlier today about the prevalance of whining in the workplace. Then I came across this, from Suits in the Workplace: An Employment Law Blog:

In this age of easily hurt feelings and heightened sensitivity to just about everything, it’s nice to see a common sense decision in an employment case. The Tenth Circuit just ruled – brace yourself – that a supervisor who “set goals and deadlines for an ongoing project, requested that [an employee] 1) keep track of her daily activities in fifteen-minute intervals for seven days, 2) work in her cubicle so [the supervisor] could more closely supervise her, and 3) inform [the supervisor] of dates she would be out of the office” did not constructively discharge the employee she was managing. Turnwall v. Trust Co. of America, No. 04-1303 (10th Cir. 2005). . . .

Thankfully, the Tenth Circuit held that the working conditions weren’t objectively intolerable, and that there was no outrageous conduct, so they got it right. But what does this lawsuit say about the average supervisor’s ability to manage an employee who admittedly had problems prioritizing her work? Goal setting and regular monitoring of progress are textbook management techniques, and were perfectly appropriate under these circumstances. Nevertheless, the employer here had to defend a federal lawsuit, and a subseqent appeal, at no small cost, essentially because somebody couldn’t handle criticism from a supervisor.

We are blessed with excellent Federal Judges here in the Eastern District of Virginia. . . .

Yes, you are blessed. I speak from experience. The experience of putting up with workplace whiners like Ms. Turnwall, and the experience of having been backed up by the Eastern District of Virigina whenever one of those whiners went to court.

Understanding Outsourcing

What U.S. consumers should (and do) care about is getting the most for their money. If more of their dollars happen to flow across international borders as American companies strive for efficiency, so what? If American companies “send jobs” to Juan in Nuevo Laredo, Mexico, and Pierre in St. Stephen, New Brunswick, Juan and Pierre wil use the extra dollars they earn to buy things of good value to them that are made in the U.S., things that they couldn’t afford before. That’s called job creation.

In sum, Juan and Pierre outsource to us because we outsource to them, just as you outsource auto repair to your local mechanic and he outsources, say, computer programming to you. And if Juan and Pierre don’t spend all of their dollars on consumer goods, they put some of their dollars (directly or indirectly) into U.S. stocks and bonds, which helps to finance economic growth in the U.S.

Outsourcing, which is really the same thing as international trade, creates jobs, creates wealth, and raises real incomes — for all. Economics is a positive-sum “game.”

If you’re not convinced, think of it this way: If product X is a good value, does it matter to you whether it was made in Poughkeepsie or Burbank? Well, then, there’s nothing wrong with Laredo, Texas, or Calais, Maine, is there?

Now imagine that the Rio Grande River shifts course and, poof, Nuevo Laredo, Mexico, becomes Nuevo Laredo, Texas. Or suppose that the Saint Croix River between Maine and New Brunswick shifts course and the former St. Stephen, New Brunswick, becomes St. Stephen, Maine. Juan and Pierre are now Americans. Feel better?

What’s in a border? A border is something to be defended against an enemy. But do you want a border to stand between you and lower prices, more jobs, and economic growth? I thought not.

The Economics of Corporate Fitness Programs

One of the many fads to sweep the corporate world in recent years is the fitness fad. The fad has two components: real costs and putative benefits. The real costs involve the installation of exercise facilities on company property, subsidies for off-site health-club memberships, a certain amount of paid time off for fitness programs, the hiring of nutritionists for company-subsidized cafeterias, and on and on. The putative benefits of the fitness fad are (1) more productive workers (healthy bodies, healthy minds, and all that); (2) workers who, in the longer run, will be less costly to insure; and (3) greater competitiveness in the labor market (i.e., being able to hire and keep employees who value fitness programs).

The fitness fad has five main proponents:

  • Executives who wish to be known as “progressive” and “interested in employee welfare”
  • Consultants who are hired by executives for the purpose of recommending the fitness programs that executives already favor
  • Vendors of fitness-related products and services
  • Those employees who already are physically fit, but who find it easier and cheaper to stay fit because of company programs
  • Other employees who want to be part of the “in” crowd or to curry favor with bosses who preach fitness.

As for the immediate benefits of company fitness programs, I have observed that the already-fit tend to stay fit, but at the company’s expense, while the less-fit give fitness a try, but it doesn’t last. If it did, Americans wouldn’t be getting fatter, would they?

What about the returns to the company in the form of lower health-insurance costs? Health-care costs rise with age. Assuming that fitness programs actually make employees more fit, which I doubt, a company is unlikely to reap long-run returns unless (a) its employees are exceptionally loyal or (b) it is able to hire equally fit replacements from other companies that have similarly effective (or ineffective) fitness programs.

And what about hiring and retention? Well, it’s like an arms race in which the objective isn’t to fight a war but to spend more than the other guy. If “everyone does it” in a certain industry, here’s what happens:

  • Workers who don’t participate in fitness programs (that is, most of them) lose because compensation has been shifted from wages and non-fitness benefits toward fitness benefits. Therefore, that industry finds it harder to hire and retain workers for whom fitness isn’t an important consideration; that is, productivity declines and costs rise.
  • If firms in the industry try to raise prices in order to cover the costs of fitness programs, consumers find substitute products or services, thus cutting into the industry’s sales and profits.
  • And so, one way or the other, shareholders take a hit in the form of lower stock prices.

Who benefits? Trendy executives and employees who’d rather work out than work.

That’s my hypothesis, and I’m sticking with it until I see hard numbers that prove it wrong.

Enough of Amateur Critics

UPDATED TWICE, BELOW

It’s ludicrous that hundreds of pundits, thousands of politicians, and millions of citizens with little or no experience in the planning and direction of complex operations are judging the performance of various governments in the preparation for and aftermath of Hurricane Katrina. All that these uninformed pundits, politicians, and citizens could know for a fact is that a major hurricane hit an area that hadn’t been hit by a stronger hurricane in 36 years. They could also know that Louisiana has been struck by lesser hurricanes about once every three years. And, finally, they could know (if they had been paying close attention to federal, state, and local machinations over many decades) that New Orleans was nevertheless ill-prepared for a major hurricane for many reasons that long predate the ascension of the current federal, state, and city administrations. Knowing only those facts (if they indeed know them), these “experts” nevertheless leap to the conclusion that “someone” must be to blame for this, that, and the other aspect of the disaster in New Orleans because, well, “someone” must be to blame.

I daresay that I know a lot more than most of the armchair critics about the planning and direction of complex operations. I have been immersed, at various times, in the planning and construction of a house, the planning and construction of major renovations and additions to a house, and — of most relevance — the design of and negotiation of a lease for a 200,000 square-foot office building. The office building was not just a partitioned shell, but one designed to incorporate state-of-the art modular furniture (not in cubicles, but in private offices), a variety of computing and telecommunications facilities, many special security features, conference facilities, food-preparation areas, libraries, and on and on. But that’s not all. At the company for which I planned the office building, I also had a broader portfolio of responsibilities, including the provision of physical and information security, financial and contractual management, the operation of central and distributed computing services, and the administration of personnel services in compliance with an array of federal, state, and local laws and regulations.

Now, one of the main lessons that I learned from my years of planning and directing complex operations is the following: Success has many parents; failures and setbacks have but one, the person on the spot. Yet, the person on the spot almost never starts with a clean slate or gets to run in a clear field. The person on the spot always operates within many constraints (e.g., budgets, traditions, and expectations). The person on the spot can never anticipate every contingency (especially the contingency that disrupts a plan). And, no matter the competence of the person on the spot, it takes time, effort, and (often) additional resources to regroup when a plan has been disrupted by reality.

There may be obvious instances of incompetent performance in the aftermath of Katrina; Mayor Nagin, Governor Blanco, and former FEMA director Mike Brown are obvious candidates for Bumbler of the Year. But the armchair critics on the sidelines are looking beyond the obvious bumblers and second-guessing the performance of various government entities from nothing more than pure, unadulterated ignorance: ignorance of the long and complex history of political and budgetary bargains that led to the state of New Orleans’s defenses against Katrina; ignorance of the political and budgetary bargains that led to the state of readiness on the part of various responders; ignorance of the difficulty of developing complex plans for events that will never unfold according to plan; ignorance of the hard fact that no plan survives “first contact with the enemy” (Katrina, in this case); ignorance of the amount of time, effort, and resources it takes to recover from the kinds of setbacks that are inevitable in a complex and chaotic operation; and, finally, ignorance of what was possible in the first place, given all of the foregoing complexities. Just to say that the preparations for and response to Katrina were inadequate — which is about all that most of the second-guessers really have to say — is, in a word, inadequate.

Well, I’ve had more than enough of second-guessers in my career. I got the job done in spite of them, but I long ago grew sick and tired of listening to them. So, I’ll not waste any more of my time reading what the second-guessers have to say about Katrina. And, as qualified as I might be to second-guess the second-guessers, there’ll be no more second-guessing from me, on this subject.

P.S. But, Columbo-like, I must add something on my way out. You’ve probably noticed that most of the armchair critics are animated by Bush-hate. That’s a fact which trumps their laughable “expertise,” which is on a par with William Jennings Bryan’s expertise in evolution.

As for Bush, he is now apologizing for failures on the part of the feds, which is fair enough to the extent that there were actual failures to do the right thing when confronted with actual events and armed with the proper tools with which to respond to those events. But what’s really going on, in my view, is that Bush is throwing his critics a crumb. He has nothing to lose by doing so (the haters will still hate him), and much to gain from those in the middle who will credit him for “taking responsibility” — whatever that Clintonesque term means when one cannot be fired, fined, or jailed for one’s actions.

P.P.S. Let me make it perfectly clear that I am not apologizing for the Bush administration, or any other government entity. I’m just explaining how it is that few — if any — of those who are bashing government’s response to Katrina have any basis for doing so, other than a desire to seem appropriately wise and/or indignant. Moreover, though it might be possible for government to have done better than it has done, it could not have done as well as private citizens and business owners, had they been allowed to keep their tax dollars and use them to prepare for and recover from Katrina. For more on that score, see these posts:

Katrina’s Aftermath: Who’s to Blame?
(09/01/05)
“The Private Sector Isn’t Perfect” (09/02/05)
A Modest Proposal for Disaster Preparedness (09/07/05)
No Mention of Opportunity Costs (09/08/05)
Whose Incompetence Do You Trust? (09/10/05)
An Open Letter to Michael Moore (09/13/05)

Guilty Until Proven Innocent

Excerpt of an e-mail from the law firm of McGuireWoods (“No Good Deed Goes Unpunished? Seventh Circuit Rules That No Adverse ‘Employment’ Action is Necessary to Sustain Title VII Retaliation Claims”):

Executive Secretary, Chrissy Washington worked for the Illinois Department of Revenue on a flexible schedule from 7 a.m. to 3 p.m., instead of the standard 9-5 schedule, allowing her to care for her son with Down Syndrome. When some of her duties were reassigned to others, she filed charges with state and federal agencies alleging race discrimination. Subsequently, a senior manager required that she work from 9 to 5, and when she refused, her position was abolished. Washington was assigned to another Executive Secretary post with a different supervisor and was required to apply anew for a flextime schedule, which was refused. Washington maintained that it was her prior discrimination charge that led supervisors to rescind the flextime schedule on which her son depended. . . .

. . . [The Seventh Circuit Court of Appeals] concluded (with a highly entertaining reference to the comic strip Dilbert) that where an employer retaliates for protected activity by exploiting an employee’s known vulnerability, such as Washington’s reliance on flextime to care for her disabled son, the action can be a material change sufficient to sustain a retaliation claim under Title VII [of the Civil Rights Act of 1964]. The standard for materiality, the court noted, is whether the employer’s action has the “potential” to dissuade an employee (and, by logical extension, other employees) from pursuing her rights under Title VII.

Although this opinion does not reflect a uniform view among the jurisdictions on the ultimate issue, it should serve to alert employers to some of the potential problems that can arise from the implementation of flextime schedules and other employee-friendly initiatives. The court clearly says that once these admittedly optional benefits are in place for an employee, their removal can serve as a basis for retaliation claims.

Lesson 1: A benefit, once bestowed, can become an entitlement.

Lesson 2: An employee who has filed an Equal Employment Opportunity (EEO) claim against an employer may became immune to otherwise defensible business decisions by that employer.

As my HR director used to say whenever a disgruntled employee or former employee filed an EEO claim: “We (the company) are guilty until proven innocent.” Because that’s how the EEO racket works.

"Giving Back to the Community"…

…rankles every time I read or hear it. Generally, a person whose income isn’t derived from tax dollars already has “given back” by providing goods and services that are valued by the persons who receive and pay for those goods and services.

It’s another story if a person works for a tax-supported institution, as did I for 30 years…

In the latter years of my employment at a defense think-tank, our CEO established a “community service” program so that we well-paid, mostly white, professionals could “give back to the community.” The “community” to which we gave “service” was not well-paid, mostly white, or professional, of course.

I am confident that the targets of our beneficence paid only a minuscule fraction of the taxes that funded our nicely appointed offices, high salaries, and generous benefits. “Giving back” to the “community” that actually supported us would have involved mowing lawns, tutoring, and babysitting for mostly white, middle- and upper-income Americans in other parts of the D.C. area than the one selected by our CEO as the “community” to which we would “give back.”

If the services we provided in exchange for our splendid offices, salaries, and benefits had been worth what taxpayers were paying for them, there would have been no need for us to “give back” to any community. Taxpayers would have received their money’s worth, and that would have been that.

Our CEO either felt guilty about his huge office, high salary, and princely benefits or he thought that our think-tank wasn’t giving taxpayers fair value for their money. As he would have been the last person in the United States to admit that we weren’t delivering fair value, I can only conclude that his yearning to “give back” to the community arose from feelings of guilt, which he projected onto his employees. For, even as he was pressing us to “give back,” he constantly sought to justify the spending of more tax dollars on better accommodations and higher compensation for himself and the rest of us.

Feelings of guilt aren’t confined to those who feed at the public trough, of course. CEOs and senior executives of large corporations have a good thing going for themselves — which they owe to their chummy relations with boards of directors — and they know it. Thus the impetus for private-sector “giving back.”

In summary, “giving back to the community” is either an unnecessary act — because “the community” already has received fair value for its money — or it is emblematic of guilt. In the first instance, “giving back” is really an act of charity. In the second instance, “giving back” is really a false act of contrition and an inadequate, misdirected form of compensation for executive avarice.

Can You Throw a Curveball?

Throwing a curveball is easy, just do as it says here. Well, try doing it until you really know how to do it, that is, until your brain and muscles work together in just the right way. Which may never happen, or happen very often, no matter how many articles you read or how much you practice.

The moral of the story is simple: Don’t presume to know how things work until you’ve actually done them yourself.

That’s why I don’t trust a politician who hasn’t put his own money at risk in a business on which his livelihood depends. Such a politician has no real idea of the debilitating effects of taxation and regulation on the entrepreneurial spirit, job creation, and employee compensation.

That’s why I don’t trust a politician who thinks that fallible human beings can magically solve problems when they become government employees.

That’s why I don’t trust a politician to do the right thing when it comes to dealing with a tragedy like the Schiavo case if that politician hasn’t faced the death of a loved one whose life might yet be saved.

Full disclosure:

  • In my days of playing catch, which I did seriously for many years, I seldom broke off a good curveball even though I could throw fast, far, and with good control.
  • I have owned and operated a business into which I poured a substantial portion of my savings and which was the sole source of income for my family and me.
  • I worked in and closely with the federal government for 32 years.
  • I have a child whose life was in mortal danger but was saved by a timely operation, from which he has long since recovered fully.