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Management Side
The dangers of modern esprit de corps


Week of 15 Dec 08

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The Random House Dictionary defines our subject as "a sense of unity and of common interests and responsibilities, as developed among a group of persons closely associated in a task, cause, enterprise, etc." In modern thinking, and for our purposes here, I find that a bit old fashioned, suggesting that today "esprit de corps" suggests not only what Random House says, but includes the following, if inelegant, statement: "...and we are right and know everything."

Such a complete description accurately depicts many individuals these days. I have watched with amusement, an amusement enhanced with the experience of having lived through the paper industry of the 1990's, as the bankers and automakers have come up short this fall. The leaders of all these organizations suffer from too much of my modern definition of "esprit de corps."

For a long time, I wondered what I was missing, for a goodly portion of my career has been spent wandering up and down Wall Street. I saw the venerable investment banking firms up close and personal, and found little remarkable, certainly nothing exceptional, about them. I bought GM cars, new ones, in the 1970's and 1980's, trying to be patriotic, until I got tired of their off the showroom floor flaws (one delivered with a broken shock absorber, two with fuel filters plugged with metal filings within days, and one, my favorite, delivered with no transmission fluid).

Now, the business news shows are suggesting that Rick Wagoner, the current head of GM, should stay, essentially because "he is a good guy and has an MBA from Harvard." And this is where the problem lies.

US News and World Report has done academics no favor with their annual university ranking exercise. This publicity, and the common belief that a school must be ranked highly on this measuring stick, has turned higher education in the United States into a delusional, believe-your-own-press organism of the highest order. Memo to all you recent graduates of what are considered prestigious schools with a high (modern) esprit de corps: they still have a ceremony at graduation known as "commencement exercises." Commencement does not mean you have finished something--it means you are ready to start something. Your education did not give you the answers to all about your chosen field--it gave you the ability to ask halfway intelligent questions. And, your education did not give you answers to all other fields or even questions for all other fields: you did not, by osmosis or other mysterious means, absorb the answers to many diverse fields--you, again, only obtained the ability to ask questions in a narrow field.

I often listen in on or attend meetings that public companies in our industry hold for the analysts. These are amazing dialogues. I am essentially listening to MBA's ask questions about how numbers are arranged on pieces of paper. They can ask these questions very well; they learned their lessons and know, expertly, what questions to ask about aforementioned arrangements. However, it is only the most senior amongst them, and I'll pick out Mark Wilde from Deutsche Bank, to name a great one, which have any idea what is behind those numbers. Most of them have no clue what constitutes the numbers, what the interlinking relationships between actual operations, sales, and logistics might possibly be. Yet, because they have graduated from a highly ranked school and have a modern sense of esprit de corps, they confidently make foolish pronouncements about what businesses should do.

Several years ago, a friend of mine decided to move from CEO to COO voluntarily. One of his reasons was he was tired of answering foolish questions from clueless human calculators--he wanted to go back to having fun at work.

Now, I fear my example of analysts will cause you to miss the true point of this column, which is this: a modern esprit de corps attitude is dangerous no matter where you are or where you came from. Your education did not give you all the answers, most likely it did not even give you all the questions. Your current work environment is not the center of the universe, you have many competitors, some whose operations look nothing like yours (ask the newsprint manufacturers if they saw the Internet coming) and operate in ways completely foreign to yours.

It is probably safer to be paranoid than to have a modern sense of esprit de corps. At least that is what the financial environment of second half 2008 is telling us loud and clear.

And, of course, with safety, we always talk about being paranoid. For safe operations are about being ever watchful, ever concerned about what might happen that is unexpected.

Be safe and we will talk next week.


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