Warnings to the President
Back when the Big Three auto executives were getting beaten up in Congress for using corporate jets to come begging for public money, I remember wondering if there wasn't at least one person in Detroit with enough media savvy to say, "Hey boss, fly commercial because the jet-service-for-one won't play well on the unemployment line in Peoria." Apparently, there is a similar dearth of PR common sense on Wall Street. I mean, did John Thain, the newly unemployed former head of Merrill Lynch, think that taxpayers who forked over billions to save his company would take kindly to the extravagant year-end bonuses he shoveled out to the executives who sank the firm? The high jinks of Thain and the other Wall Streeters might look like a rash of smart people suddenly becoming stupid, but it's more likely that we're seeing what happens when intelligent people allow themselves to be managed.
A few weeks before the inauguration, Barack Obama attended a White House luncheon hosted by then-President Bush; other guests were former presidents Bush, Clinton and Carter. When asked what he learned from his predecessors, Obama said all the men told him it is very difficult to get unfiltered information, and that even the most experienced and best-meaning staff members will, to some extent, tell you what they think you want to hear.
Busy people, whether it's the President of the United States or the leadership of a large company, face tremendous demands on their time. We build organizations around these folks to filter and present relevant information; we surround them with gatekeepers and media experts and people to take care of the small stuff. But the cost can be the kind of isolation that led Harry Truman to call the White House the "crown jewel of the America prison system." Assistants and deputies may be afraid to be the bearers of bad tidings, or they may be incapable of seeing things from a perspective that differs from the boss'.
In the case of Wall Street, even the best-intentioned leaders who don't frighten anyone can become dangerously isolated because their advisers have the same world view, share work environments and values, and are similarly trained and acculturated. The advisers walk and talk alike, and so are woefully unprepared to see things from a different perspective.
This trend toward isolation and delusion is nothing new. The reason court jesters had license to joke about the emperor's nakedness is because the emperor knew that everyone else was afraid to tell him. The Roman Catholic Church took steps to counter this organizational vulnerability when canonizing a saint. Among the priests reviewing the case was a devil's advocate whose job was to poke holes in the stories, to question the evidence, to be an agent provocateur.
The United States Army, whose officers are part of a culture that is even stronger than that of bankers, also recognizes this Achilles heel. The Army's top leaders know that its officers share strong values and beliefs and are the products of a remarkably coherent professional education system, and thus have a hard time questioning assumptions and received wisdom even when they want to. To counter this built-in flaw, the Army trains its own devil's advocates.
In an education program whose unofficial name is "Red Team University," mid-career officers learn to bring different cultural perspectives and modes of thinking to bear in the planning of military operations. Their job is to help planning staffs avoid "getting sucked into groupthink," according to Greg Fontenot, the program director, quoted in an article in US News and World Report. "This is having someone inside that says, 'Wait a minute, not so fast.'"
Of course it takes special skills to play the gadfly in a hierarchical organization of Type A personalities, which describes both banking and the military. Someone who is going to challenge conventional wisdom has to build relationships and check his or her ego at the door. The best Red Teamers aren't trying to be right or setting themselves up to deliver the never-helpful "I told you so." And it takes both intellectual and moral courage to swim against mainstream thinking.
Smart leaders in any organization can and probably should cultivate their own Red Teamers. President Franklin Roosevelt had two confidantes, campaign manager Louis Howe and private secretary Missy LeHand, who were close enough to the President to tell him when he was being foolish. If that approach was good enough for the nation's chief executive during the Depression (1.0) and World War Two, it ought to be good enough for Wall Street, Detroit. As for the current occupant of the White House, so far the best we can say is that he admits he's been warned.
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