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Hoocoodanode? (Who could have known?”). Just because I had a 4.0 GPA…

May 12, 2010

Once again, the juxtaposition gods are running full speed ahead.  David Brooks, the NY Times Op Ed columnist wrote an interesting piece yesterday focusing on ‘Organization Kids’, bright people who know how to play the meritocratic game to the hilt.  Perfect schools, great grades, 1 sport team and 1 club, self-confidence and a big smile.  Their ambition to personally succeed drives them to think ‘vanilla’, safe, in-the-box, hierarchical, to please teachers and bosses without taking risks or saying what they truly believe.  Its self reinforcing because teachers reward the students they like and bosses promote similarly.

It’s ingrained in Western culture, both civil and business.  Don’t tick off Caesar, or the King or you’ll face the dungeon.  Don’t question your senior leadership; bob your head even though you’re texting in secret. Privates and Sergeants with years of field and multi-deployment experience don’t openly question Lieutenants. West Point teaches cadets not to even think of questioning their superiors, to do a good job but within the boundaries of accepted thought and authority. Even David Petraeus, arguably Americas greatest current General played it safe before getting his first star. In business most of the major companies we as citizens recently purchased were/are run by grads from some of our Country’s best B-Schools where conformity and competitiveness are both rewarded and that brand name diploma assures starting at a higher level and being fast tracked.  In Finance, I get the point of brightest minds performing analysis and deal structure, but in operations and senior leadership, it’s a very different story.  Ever wonder why most prestigious law and consulting firms are less customer friendly and cost effective than a corner deli?

The Eastern US is particularly susceptible to hierarchy and safe thinking, being Eurocentric at its core.  We’ve all been in meetings where someone says something so idiotically political to the boss or at a meeting you have to suppress a shiver.  We call them “the company politicians”, but the real term is “company killers”. Silicon Valley started on the West Coast because the West is historically where Americans went to reinvent themselves, succeed by doing and not figure out how to get promoted from Hay’s Group job levelT18 to level E56. Proof was the Dot Com boom and Silicon Alley in NYC.  From personal experience turning around a bunch of them for the Funds, it looked like being President and all-night pre-funding partying was as or more important than producing breakthrough products and viable companies.

The juxtaposition comes from a remarkable but under cited book I’m reading, entitled Start-up Nation: The Story of Israel’s Economic Miracle.  Geopolitics aside, what’s relevant is their unique culture.  From an early age, Israeli’s are taught that survival requires fresh and innovative solutions and so they question everything.  In their military, Privates do question their Generals, taxi drivers command millionaire traders and failure, as long as the act was intelligently conceived and executed, is seen as a learning experience, not as a strike-out.  There is a meritocracy – business and society leaders are almost always military officers, pilots, Intelligence analysts and the like, but it’s based on personal accomplishments and not pedigree.  For example, Western officers typically go to an Academy and are therefore given a ‘license’ to lead.  In Israel, natural leaders are tagged early in Boot Camp and then trained.

The result is a fresh look at much about everything with often innovative solutions.  The business climate therefore is fast paced, open to new ideas and inherently group motivating (everyone feels they own the solution). No wonder Microsoft, Intel and other hi-tech companies have serious Breakthrough-R&D and production facilities there.  OK, to a Westerner, there’s a downside.  When I went over there to rescue a division of an American hi-tech manufacturer, the constant questioning at a core level was, at first, grating, tiring and a downright pain. It got to the point where I dreaded even going to a restaurant. Once I understood the culture, I saw its usefulness and appreciated the frankness.

This is similar to the recent past when Japan prided itself on giving everyone the authority to stop a production line if, in their opinion, it was producing defective products.  They also had a shift start-up meeting where everyone was clued in on achievement towards goals and had a chance to speak up.  Compare that to the recent insular culture at Toyota regarding those gas pedals and to the moribund Japanese economy as a whole.

Economists are saying the recovery is here, others are saying it will be rough in the second half of the year.  No one really knows, but one thing is certain.  We cannot continue managing the way we have been.  We need innovation, employee buy-in, fresh views of problems and opportunities.  Let’s all be frank. It’s time for fewer Organization Kids and more Startup Nation.

Rich Eichen is a Managing Principal of Return on Efficiency, LLC, who’s website ishttp://www.growroe.comand is one of their senior turnaround leaders/CROs, Program and Interim Executives with over 25 years experience reshaping companies, Operations, IT and key initiatives. He can be reached atrichard.eichen@growroe.com

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