Predicting Trouble

Lance Forbes Leave a Comment

Originally posted at Forbes.com

It’s been just over three weeks since an oversized rodent named Phil was hoisted aloft by men in top hats and deemed to have predicted six more weeks of winter. Surprisingly, Phil’s not the only groundhog making a name for himself in the seasonal weather forecasting game. Ohioans have their own “Buckeye Chuck” … and he, too, predicted six more weeks of winter. (Evidently that’s the verdict when Chuck simply refuses to show his face to the camera-wielding world.)

So, how have their predictions fared? Halfway through that six-week period, and … well … take a look for yourself:

There are many things I would call days like last week in which the low temperature averaged about 10 degrees higher than the average high temperature, but “winter” isn’t one of them.

Whether you like 75 degree days in February or hate them (yes, people like us that exist), the month is about to end, and that means ushering in that time of the year when predicting the future takes over the American cultural landscape: March Madness is only two weeks away. Two weeks until office productivity nosedives as copy machines turn into bracket production machines and everyone thinks their bracket full of predictions will be the one that wins it all.

Of course, everyone knows that most will get their predictions wrong most of the time. Forget the perfect bracket — it’s nearly impossible just to get all of the Final Four teams right.

These failures of forecasting aren’t surprising. In fact, they are fully expected. Whether in weather or in sports, everyone understands that a divergence between the predicted outcome and the actual outcome points to a problem with the prediction, not the outcome.

Obvious as that is, there is one arena where things are often viewed quite differently: the world of corporate performance and financial analysis. There, the predictions of the professional analysts are couched as “expectations,” “ratings” and “outlooks.” When a company arrives at the quarterly earnings reporting period with results that are short of those predictions, the shortfall is viewed as a sign of a problem with the company rather than with the predictions themselves. The comparison of the two goes something like this: the professional analyst has studied the data inside and out, and by applying his expertise and the wizardry of math to the data, he charted where the company should have arrived at, performance-wise. On the other side of the ledger is the company, which simply failed to do what the data said should have been possible.

What seems laughable in nearly every other context — that the entity producing the outcome is at fault for failing to fulfill the prediction — is commonplace in the world of financial media. Imagine how different the modern corporate landscape would be if financial predictions were subject to the same expectations of failure as in other walks of life? Instead, the prediction tail wags the performance dog, and we end up with outcomes like this:

One recent survey of 400 corporate finance officers found that a full 80 percent reported they would cut expenses like marketing and product development to make their quarterly earnings targets, even if they knew the likely result was to hurt long-term corporate performance. – Lynn Stout’s The Shareholder Value Myth

Think about that: Four out of five finance executives would take actions they knew were destructive to the company’s health in order to arrive at a target that was, at the time it was set, a prediction of future performance. Astonishing, and yet not surprising all at the same time. When performance is judged by whether it aligned with the predictor’s forecasts (whether those predictions come from without, or within), then it is utterly predictable that measures will be taken to achieve that “success” … even unhealthy ones.

Even a lying groundhog can see the trouble with that.

Fake Arguments

Lance Communication Leave a Comment

I’m working on a couple of posts that are bit longer than usual. The topics I think are important and merit the extra effort in both writing and reading. Hopefully, when they’re done and posted, that will prove to be the case. 🙂

In the meantime, Seth Godin has words today worth reading about all the yelling at each other going on right now. And, as he notes, so too does this crew:

The One Question Nobody Is Asking About Education Secretary Betsy DeVos

Lance Forbes, Leadership, People Leave a Comment

Originally posted at Forbes.com

There have been few developments since the election of President Donald Trump that have generated as much heat as his nomination of Betsy DeVos to be Secretary of Education … and that’s saying something. Measured reactions about DeVos have been rare, as both Left and Right have cast her ascension to the top job at the Department of Education in the boldest of terms. Point your browser to the right, and you will read how DeVos will break the iron grip of teacher’s unions and transform the efficacy of America’s schools; aim your Twitter feed to the left, and DeVos will all but set actual fire to America’s schools by selling out poor children to greedy corporate titans who seek to run charter school like the sleaziest of slumlords. While the opinion page of Fox News labels DeVos “an inspired choice,” the New York Times editorial board headlined its opposition thusly: “Betsy DeVos Teaches the Value of Ignorance.”

Opposition to DeVos can be intensely fact-based, aimed squarely at the combination of a lack of any experience with an ideological commitment bordering (or maybe surpassing) incurious rigidity. So, too, can support, as cases can be made for the policy choices DeVos represents regarding school choice (whether via charter schools or voucher programs).

Mostly, though, it has been hysterics that have ruled the conversation, and it’s clear that isn’t going to be ending anytime soon, as today’s episode showed. What was a protest movement to prevent DeVos’ confirmation by the Senate has now evolved into a resistance force physically preventing America’s Secretary of Education from being able to enter a public school in America’s capital city. (Ideological opponents like prior Education Secretary Arne Duncan and Randi Weingarten, the president of the American Federation of Teachers, both tweeted opposition to this tactic.)

Throughout this entire drama, amidst the questions of policy preference and the influence of wealth, one question has been ignored by both the opposition and supporters alike: Can she lead?

It is easy to get caught up in the weeds of policy debate and the volleys of partisan tribal warring and forget this much more anodyne but no less important question. The Department of Education is a small cabinet-level agency by Federal Government standards, but it is still a large organization with over 4,000 employees. If Secretary DeVos is going to do anything to America’s schools — for good or for ill — it will be through the actions of those 4,000 people. Getting the people in that large organization to reverse course and move in a radically different direction will not be as simple as having different beliefs and priorities. Secretary DeVos will have to do several things as the new leader that will be monumentally harder than merely surviving a Senate confirmation hearing:

Establish Credibility

Secretary DeVos’ lack of personal experience with any public school, anywhere, for any reason, is well documented. The department employees she now leads all know this as well, and it is likely very different than their experiences. Working for the Department of Education at any level of government is not likely a career choice for anyone not experienced with and believing in the mission of America’s public schools. If Secretary DeVos hopes to get anything done, she will have to find ways to bridge the public school experience gap and earn the listening of her new employees to what she has to say.

Build Trust

While credibility is what opens ears, it is trust that opens minds. Set aside the public protests and partisan fights. If the department’s army of career education professionals don’t trust Secretary DeVos’ motives behind her contrary views about the current system of public education, they won’t follow her up the mountain of Change she is tasked with scaling. This challenge is not just limited to the federal employees working on public education. Any real change DeVos hopes to achieve will require the trust and cooperation of state and local public education professionals across the country. Building trust among that group, over whom she does not have the power over things like employment and pay, will be as hard as it will be crucial.

Persuade Skeptics

The real challenge in leading is not in motivating fellow believers in the cause to do the work necessary to bring it forth. “Preaching to the choir” is hardly a challenge, after all. The true test of a leader is in getting the cooperation and expenditure of effort of those who disagree with either the mission or the tactics … or even both. Making decisions is what leaders do, but decisions alone do not make following happen. Leading isn’t lobbying either, where resources and access are the name of the game. Even if she succeeds in gaining credibility and building trust, Secretary DeVos won’t make any impactful change unless she can convince the administrators, policy makers, and teachers serving America’s school children that they should not only listen to her, and trust her; she also needs them to agree with her, at least enough to participate and compromise in order to fulfill the challenge and promise she delivered to her new team on Wednesday:

My challenge to you is simple: Think big, be bold and act to serve students. And I will promise you this: Together, we will find new ways in which we can positively transform education.

What Betsy DeVos believes about the policy of “school choice” is known. Whether Secretary DeVos can actually do this leadership task remains to be seen. This is an important question to keep in mind. Leadership is an amplifier, after all, increasing the impact of both positive and negative actions taken. If Secretary DeVos isn’t up to harnessing the amplifying power of her new role as leader, then the scope of the change she can accomplish will be diminished. If she isn’t an effective leader, Betsy DeVos will neither save American public education, nor destroy it.

Can she lead? Until we know, perhaps some national calming down is in order.

The 1 Thing Every Organization Should Learn From The New England Patriots

Lance Excellence, Forbes Leave a Comment

Originally posted at Forbes.com

A full disclosure of partisan bias at the start: As a lifelong fan of the Denver Broncos, it goes against my mental grain to acknowledge anything positive about the New England Patriots beyond their obvious success. In the first post-9/11 Super Bowl, I rooted for their improbable upset as the appropriately-named patriotic underdogs of Super Bowl XXXVI. But, by the time of their remorseless steamroller of a march to 18-0 in 2007, I was pulling for their fall as the arrogant Goliath of the NFL. I enjoyed watching the New York Giants ruin the Patriots’ perfect season in Super Bowl XLII nearly as much as my Broncos’ championship wins a decade earlier.

The antipathy I felt towards the Patriots became much more focused after Josh McDaniels replaced Mike Shanahan as the Broncos head coach in 2009. By the time he was fired before the 2010 season was over, McDaniels had turned my beloved team into a dumpster fire: driving away several of the team’s best offensive players, losing 17 of his last 22 games, and dragging the Broncos into the shameful hole of the Patriots’ Spygate saga. That the Patriots hired McDaniels back as a consultant on the eve of the 2011 playoffs — one that ended for Denver in Foxboro — only made things worse. Then Peyton Manning arrived and Denver, and the epic Manning-Brady rivalry fueled a full-blown Broncos-Patriots rivalry.

I disclose all of this to reveal the lenses — some might say “blinders” — through which I view the Patriots, and why I am surprised myself to be saying this: the Patriots aren’t just a team enjoying the greatest run of sustained excellence in NFL history, who just pulled off the greatest comeback in Super Bowl history. They are also an ideal example of how organizations of any type should be approaching their operations in this 21st century of rapid and accelerating change. It is more than just the Patriots ridiculous consistency as one of the best the NFL has to offer each year over the last 16 seasons: 14 AFC East titles, seven AFC Championships and five Vince Lombardi Trophies. It is how they have gone about achieving this unparalleled string of success.

Resilience is THE competitive advantage.

Our world is now defined by the technological connectedness of everything, which both accelerates the pace of change and amplifies its impact. In this environment, organizations built to win by executing a plan more efficiently than the competition are at a severe disadvantage because of the inherent unpredictability of such a complex system. In his book Team of Teams: New Rules of Engagement for a Complex World, Gen. Stanley McChrystal describes in great detail the lessons learned fighting Al-Qaeda in Iraq (AQI) in 2003-04 — lessons about this new reality and the implications for organizations regardless of industry. In the fluid world of instant information and always connected cloud networks, it is resilience rather than efficient execution that wins. Says McChrsytal:

In a resilience paradigm, managers accept the reality that they will inevitably confront unpredicted threats; rather than erecting strong, specialized defenses, they create systems that aim to roll with the punches, or even benefit from them. … Robustness is achieved by strengthening parts of the system (the pyramid); resilience is the result of linking elements that allow them to reconfigure or adapt in response to change or damage (the coral reef). … The key lies in shifting our focus from predicting to reconfiguring.”

With resilience, flexibility is the name of the game, and is there a better description for how the Patriots have approached the challenges of roster building and winning year after year? The Patriots do not win by hoarding the most talented players; their average first pick in the draft during the Tom Brady era is near the bottom of the first round at pick #26. Besides hoodies and a minimalist approach to press conferences, perhaps nothing is more descriptive of Bill Belichick and his Patriots teams than their flexible approach to everything::

Belichick’s greatest gift as a coach is his adaptability. The Patriots are essentially a different team from week-to-week — on both sides of the ball. One week, you might see a run-heavy offense featuring multiple tight ends and backs with a defense playing complex zone defenses. The next week, they are spreading things out with three- and four-receiver sets on offense and just lining up and playing tight man-to-man defense with no frills.

This is the team that, in their third championship season of 2004, played their aging former top receiver, Troy Brown, as a defensive back when injuries struck the secondary. The result? Brown finished the year totaling three interceptions while playing spot duty as a nickel cornerback, tying him with the likes of Champ Bailey, Deion Sanders, and four other cornerbacks who were all 1st Round draft picks. The Patriots also flipped that script, employing linebacker Mike Vrabel as an occasional tight end on offense. Vrabel finished his career with 12 catches — all for touchdowns — including touchdowns in Super Bowl XXXVIII and Super Bowl XXXIX.

Over the years, the Patriots have won with excellent defenses, and terrible ones. They put up record breaking offensive numbers in 2007 with legendary deep threat Randy Moss, while returning to the Super Bowl four years later with an offense built around two tight-end sets featuring a pair of second-year players: Rob Gronkowski and Aaron Hernandez. Two years ago, the Patriots overcame an embarrassing early season loss and key injuries on the way to their 6th Super Bowl in 14 years. After being the first team in Super Bowl history to overcome two 10-pt deficits, the Patriots clinched their 4th championship on a goal-line interception by Malcom Butler … himself an undrafted rookie free agent from tiny Division II West Alabama. Tom Brady’s top two wide receivers this season are a smallish 7th Round pick who played quarterback in college (Julian Edelman), and an undrafted player cut by four prior teams and signed as a free agent just this year (Chris Hogan).

Thanks to the controversial Deflategate suspension of Tom Brady, the Patriots opened the season on the road with an offensive eleven that combined made less than the opposing quarterback alone, Arizona’s Carson Palmer. Even so, the Patriots finished Brady’s four-game suspension in first place with a 3-1 record. A team is not supposed to finish with the best record in the NFL at 14-2 when they have to play the first quarter of the season without the best quarterback to ever play, but that’s just what the Patriots did, because they had done it before. When Brady tore his knee up in the first game of 2008, the Patriots didn’t go into a tailspin. Although they missed the playoffs, they still did so with an 11-5 record with the 5th best offense, led by a backup quarterback who had not started a game of any kind since high school, nearly a decade prior.

And then there’s what just happened last night, which people will be writing about for a long time. I was rooting for the Atlanta Falcons, and laughing at the comparisons to Marsha Brady when the game was 28-3. I still can’t quite find the words to describe what we all saw the Patriots do over the last 20 minutes of Super Bowl LI except one: Resilient.