The Gryphon Groupe


Dare To Be Great

Dare to be Great

In the wake of every financial collapse, an often understated benefit of the bust phase of the business cycle is recognized: the exposure of fraud and corruption (see Austrian business cycle theory).

There are economic, as well as psychological, reasons to explain this occurrence. During the boom years, investors are more easily suckered into plausible stories of exceptional gains in light of market increases. Rising valuations can enable a pyramid scheme to stay afloat in the short term, which was the case in the Madoff Ponzi scheme. While the occurrence of fraudulent operators is nothing new, the size and scope of these schemes have caused many to point to the age-old red herring of “greed” as the responsible culprit. If markets are driven by fear and greed, why is greed only evident during time periods of fear? While trust is an important aspect of well-functioning markets, others have pointed to the decline in “business ethics” as at least partially to blame. If CEOs were focused on shareholder value as opposed to compensation packages, short-term stock manipulations, etc., things would be different. Or so they claim.

Whether these arguments contain merit is beyond the scope of this discussion. The existence of some golden age of business ethics can be debated another time. That being said, there is something missing in the business world today. Clearly trust has been eroded in recent years, but at the core is something more pervasive than the need for a fuzzy notion of business ethics. Selecting and acting upon the ethically valid choice is not the problem. Selecting and acting on any choice is the problem due to a lack of principles to guide consistent behavior. Convenience has replaced commitment. Compromise has supplanted conviction. While the impact to financial markets and business confidence has been on display in the news, a second, less obvious effect is at work. The demise in principles has directly attributed to the scarcity of exceptional men and women.

To hold oneself to a set of principles is extremely challenging. Organizations make it exceedingly difficult for principled individuals to operate with consistency. To act with a set of principles is to sign up for an inevitable conflict. With rare exception, organizations do not care for conflict, even if it is constructive in nature. If you are an individual who has tired of this construct, you know that the pressure to conform, compromise and keep one’s head down is steady and relentless. With your “best interests” in mind, your superiors, peers, friends and family will plead for you to submit and compromise. “Do not be so inflexible. Everyone has to give a little,” they will tell you. “Sure, the heroes of the past may have operated by a set of principles,” you will be told, “but all of the heroes are dead and would not be welcome here.”

In any examination of the truly exceptional – the upper limit of performance – you will find a commitment to a set of principles. Whether these principles are implicit or explicit is irrelevant. History books are filled with stories of great men and women who would rather die than sacrifice their convictions. Human progress is defined by innovators who refused to compromise on their ideals. They refused to be content with the world as it is, and aimed for what it ought to be. But why do we struggle with principles? Why is it difficult to find men and women who live and act with conviction? What has caused this seemingly widening gap between words and actions, the core of our “ethics” problem described above? Principles are hard because they require consistency. Consistency results in conflict. Conflict results in pressure to submit.

As those who aspire to be extraordinary must define their own principles to abide by, it would be inappropriate to advance or suggest a set of universal principles. However, in as much as the thinking or action of another can be aided by the sharing of a few principles of my own, I am happy to do so.

Play to win the game, not to avoid losing the game.

The idea that a person (or an organization) may not be working to succeed is a counterintuitive one. When given a choice between success and failure, you would be hard pressed to find a person who would pick failure. Additionally, the statement above seems to fall apart on a purely logical basis. When faced with two options, isn’t the rejection of one option a selection of the other? Unfortunately, in many organizations, this is not the case. There is a third option, and it happens to be the most commonly selected choice: to not play at all. If you never play the game, you will never lose. You will never win either, but what of it? If the penalty for a loss greatly exceeds the benefits of a win, the rational choice is to never play the game. Game theorists refer to this scenario as the prisoner’s dilemma. The culture and practices of many large organizations create an asymmetrical payoff: tremendous consequences in the case of a loss and the proverbial pat on the back for a win. Longevity is assured through the aversion of choice.

Although the words used in the paragraph above may be unfamiliar, the phenomenon is recognizable to anyone who has spent time working in a large organization or “transformation” program. To commit, to take a stand, to set a direction, or to aim for the exceptional is to invite criticism. Individuals who have never offered up an original idea of their own will be only too willing to try to poke holes in yours. This is not in an attempt to sway or influence action in a positive manner, but simply to go “on record” in the case of a failure. Making and defending a choice requires commitment. Their insecurity and inaction is their protection, for when an innovator fails, they will be ready with an “I told him/her that it would never work.” Others will pile on, and managers will be quick to require “lessons learned” sessions to explain what went wrong. However, hindsight is 20/20 and talk is cheap. Commitment, action and integrity come at a real cost. The bird that sticks its neck out is often the one who has its head cut off. Never mind the fact that no one else had a viable solution or opinion at the time, or that others cowered when one stepped up to take charge. They will not share in the blame and may even be rewarded for their ability to spot “risks.” As organizations have yet to nip this behavior in the bud, the challenge of the innovator in a large organization can only be described as herculean.

With the odds, and path described above, why would any sane person choose to play the game? It is clearly rigged. If you are reading these words and they resonate with you, then you already know the answer. You will not be satisfied until you have broken free – until you have played the game, defied the odds and won. If you play to win and attack problems with reckless abandon, you will become a giant among men. To the truly exceptional, the point is to defy convention and prove that it can be done. To not live in fear is its own reward. Winning is important, but a life without fear is the ultimate goal.

Do As You Say

In an age of blogs, microblogs, social media, 24-hour news and a stream of talking heads, it is fair to say that the “information revolution” has detonated an atomic bomb of talk into the social sphere. While there are benefits from the advances in electronic communication and information sharing, the decreased cost of communication is psychological, as well as financial. If the back and forth commentary on is to be taken literally, then at least half of the world is currently on the receiving or delivering end of a physical beating as we speak. Talk has always been cheap, and it has gotten a whole lot cheaper. While there has always been an imbalance in the ratio of talk to action, the information age has only tipped the scales further. An individual who is willing to act as they speak and speak only if they are willing to act is a rare, valuable commodity indeed. Once again, this is a principle that many would agree with, but few are willing to commit to the notion in action.

In Civilian Warriors, former Navy SEAL and founder of Blackwater, Erik Prince, tells of a simple, but effective classification system used by then-Blackwater president, Gary Jackson. Also a former Navy SEAL, Jackson maintained a list of people in the company. Next to each name was a letter “D” or a letter “T.” The letters signified whether the person was a “doer” or a “talker,” respectively. This simple system hits the nail on the head. There is something powerfully attractive in a person who does as he/she says. These people listen more than they speak as they understand the value of their words. Their business partners, clients and peers will recognize the inherent value of their words because they can “take them to the bank.” In an age of lawyers, contracts, verbal commitments, written commitments, etc., it is easy to forget that for thousands of years, business was performed with a handshake. The gesture is not important, but rather the trust and credibility built through the actions of both parties.

In the 1980s, Michael Milken reached the pinnacle of success in the investment banking industry, quite literally revolutionizing the field of corporate finance. What is often lost in this tale of greed, corruption and folly, commonly tied to the downfall of Milken, is the powerful trust that was the backbone of Milken’s empire. In The Predator’s Ball, Connie Bruck provides insights into the relentless work ethic and commitment that fueled his rise. If Milken committed to doing something, it was as good as done, regardless of the personal cost. So strong was the currency of Milken’s commitments that he eventually was able to initiate and finance the takeover of a company through words alone, the introduction of the “highly confident letter.” While competitors scrambled to find financing for a hypothetical deal, Milken would simply issue a statement that he was “highly confident” that he could raise the desired sum, at one point over $1 billion, and that was good enough. Quite literally, Milken’s word was as good as gold.

As is the case with each of the principles above, the pressure to break one’s commitments will be great. Organizations have many institutional factors that unwittingly work against alignment of words and actions. When faced with these temptations, it may be helpful to ask oneself the worst that can happen in a given scenario. Then come to terms with it. Fear is what paralyzes most of us into inaction. Fear of failure, fear of embarrassment and fear of financial insecurity prevent the exceptional from achieving their potential. In the corporate world, the worst case scenario for the vast majority of failures is the possibility of being fired. That’s it. No physical harm. No life or death battle. The sad truth is that the great motivator of our inability to commit and act is the possibility of being politely asked to pack our things and being gently escorted off the premises. In a country founded on revolution and a willingness to die for one’s convictions, the fall has been steep and rapid.

Dare To Be Great

There is an interesting dichotomy in the corporate world related to the notion of youth (note: throughout this section, “inexperience” can be substituted for youth). At one extreme, there is the image of a bumbling intern, seemingly incapable of getting the coffee right. The lack of “experience” is the young person’s principle fault and can only be remedied with the passage of time and perhaps a few grey hairs. At the other extreme is the image of the child prodigy, who seems to effortlessly attain the pinnacle achievement. These are the Bobby Fishers, the Lebron Jameses, and the Mark Zuckerbergs of the world. They are the revolutionaries, the whiz kids and the übermensches that transcend the limits of society and drag the rest of us forward kicking and screaming.

In our obsession with the most superficial (age, lack of experience, etc.), we miss the underlying point. The “naturals” are often relentless workers, not winners of the biological lottery. They may lack experience as defined by years, but not expertise developed through repetition. Nor is there a monopoly on innovation by the young (see Outliers by Malcom Gladwell and Drive by Daniel Pink). If there is a common advantage that the exceptional have over the average, it is the belief in the possibility that they will defy the odds. That they are the exception to the rule. That they will succeed where others have failed. Simply put, they dare to be great.

To believe in the possibility of greatness is to invite laughter. To believe in the possibility of one’s own greatness is to invite scorn. There is a certain type of hatred towards exceptionalism, which is pervasive in the world today. The team that wins too often, the child who is a bit too bright, or the hero who is too brave are both loved and hated by humanity. They are loved for what they have done for us. They are hated for daring to do so. We falsely set up success as zero-sum; their win is our loss. Their every act of courage serves in stark contrast to our own cowardice. Legendary M&A dealmaker, Bruce Wasserstein, had a simple speech that he would deliver to parties involved in a potential deal. The core message was simple: dare to be great. Even in a world of corporate titans, men and women of tremendous achievement, his words represented a bold challenge (see Barbarians at the Gate by Bryan Burrough and John Helyar).

It is exceedingly rare to come across an individual who operates with true passion and conviction. Most will be beaten into submission by the organizations they serve. There is some irony in our discussion on the dichotomy of youth above. Given the stories of increasingly young entrepreneurs, some have questioned whether innovation is a young persons’ game. Could it be possible that age reduces an individual’s ability to identify improvement? There is a fierce irony in this belief as many of the greatest inventions of the 20th century were not of individuals in their 20s and 30s, but those in their 40s, 50s and 60s. Experience is supposed to make us more likely to identify a better way to do things, not less. Is it possible that the organization beats minds into submission? Those who choose to act and move forward in defiance of convention will stand out as giants among men. To borrow from Howard Roark, stop asking who will let you do something amazing, and start asking who will stop you (see The Fountainhead by Ayn Rand)? Focus on creating value, building expertise and attacking challenges with the convictions of one who has never tasted defeat. Luck favors the bold. Don’t be concerned if you look the part; be the part and you’ll redefine the standard.

Despite your best efforts, there may be times when you fall short. While a full discussion on the topic of failure is beyond the scope of this writing (see In Defense of Failure), there are a few concepts that are worth considering at this time. As is the case with any action, there is a certain amount of randomness in the world. Many things are beyond your control. Channel your inner stoic, your prayer of serenity, or whatever allows you to differentiate between that which you can control and that which you cannot. When given two choices, one of 90% odds and the other of 10% odds, the rational choice is to pick the option with a 90% success rate 100% of the time. You will still fail 10% of the time, and it may be on your first, and perhaps only, attempt. You still made the right choice, so ensure that “results” are considered in context. Detractors will attempt to use your “failure” as an opportunity to question your judgment, and this concept will be ignored through willful or ignorant means. Do not be deterred. Move forward with reckless abandon. Be exceptional.

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