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An “inch too smart” and why this economy isn’t going to improve any time soon

March 23, 2009

I have an expression for people who are so brilliant, they don’t live on our planet – “they’re an inch too smart”. Alan Greenspan, saying he had a flaw in his world view model of banks show’s he’s an “inch too smart”. The Treasury, Fed and the Administration saying they need to restore confidence and then proposing the same old tired unsuccessful policies, are all an “inch too smart”. What this expression means, is that these brilliant and pampered people don’t understand how regular folks (you know, the remaining 300 million of us) think and work. The dis-join is not about trusting the ‘system’, or the ‘Banks’. No one with half a functioning brain will believe in the Financial System in this country until you can trust the products and salesrep sitting directly across you.

Every year or so, there’s a news item about a pilot being removed from the cockpit because the welcoming message over the PA system is incoherent, like someone had one too may at the airport bar. Why is this an item on the news? First, because passengers had immediately recognized these pilots control their personal safety and if the pilots are drunk, it’s doomsday for everyone on board. Secondly, it has to be put on the news to reassure everyone pilots are competent to fly and are punished if they endanger us. Why? Because the pilot is the one you MUST believe in or it’s going to be a pretty nerve wracking flight, no matter how smooth the weather. Now, if the CEO of the airline gets pinched for a DUI after a Saturday golf game, while being bad, it does not affect your personal safety and so it’s interesting and scornful, but not crucial to each of us at a personal level – ie, we would still fly the airline. My wife and I had a recent experience along these lines. She has a long-term relationship with a CFP currently working with Morgan Stanley. During the previous toxic asset problem, the Auction Rate Securities lock-up of last year, this guy was trying to explain why it happened and of course, we understood but were still pretty angry. We also were pretty annoyed that Morgan Stanley didn’t do anything for us, but in the end it worked out and we still believe in him (but not Morgan Stanley).

The whole issue of the AIG bonuses are being seen by the “inch too smart” crowd as a diversion from the real issues. These geniuses need to understand the real issue is a complete lack of faith in the financial services sales rep we work with everyday, be it the personal or business side of the institution. Having run large sales forces over my career, you quickly learn the obvious – people become sales reps not because they wish to cure world hunger, but to make as fast a buck and lots of bucks, as easily, legally and quickly as possible. Nothing wrong with that and in fact there’s no saving a company without a solid sales function. These people have the personality of cats – predators who allow you to lead them on their own terms. How do you manage sales reps? By writing what you want them to do in their compensation/commission plan since, as they themselves say, “we sell to the plan”.

So, if you want to have the financial system in this country clean up its act, the toxic assets, infectious as they are, have to be quarantined, ex the average person has to know the airplane they are trusting their lives too is properly maintained and fit to fly. Fortunately the “inch too smart” crowd can most likely handle this since only they are smart enough to understand “the markets”. As for the rest of us, we’re not going to trust a financial services or big-ticket sales rep until we know they will be both rewarded and punished. We put our financial safety in the hands of these ‘pilots’ and so at a personal level, what they do matters. And we need to know they are both rewarded and punished, ex we can trust them.

What is the underlying issue fueling the current anger leading to AIG employees returning ill gotten bonuses? Like any parent, we know that sometimes you reward children for good behavior and give them a sanction, say a time-out, if you want to show them certain behaviors are unacceptable. How do you think a child would turn out if they knew they would only be rewarded? So why does the “inch too smart” crowd think we would like to deal with someone who gets less constructive discipline than we give our own children? How will we trust them, and most importantly, why would be buy until we can trust them?

It’s not the HQ building that we think of when we fly – our personal survival makes us hope and assume the plane and pilots are Ok. We trust them and therefore we fly.

Rich Eichen is a Managing Principal of Return on Efficiency, LLC, who’s website is and is one of their senior turnaround leaders/CROs, Program and Interim Executives with over 25 years experience reshaping companies and key initiatives as well as operating units of Global organizations. He can be reached at

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