Passing Of A True Genius: Norman Borlaug.

Agricultural scientist Norman Borlaug, who won the Nobel Peace Prize for his role in combating world hunger and saving hundreds of millions of lives, died Saturday in Texas, a Texas A&M University spokeswoman said. He was 95. By Matt Curry & Betsy Blaney at The Huffington Post

Borlaug died Saturday night at his home in Dallas from complications of cancer, school spokeswoman Kathleen Phillips said. Phillips said Borlaug's granddaughter told her about his death. Borlaug was a distinguished professor at the university in College Station.

The Nobel committee honored Borlaug in 1970 for his contributions to high-yield crop varieties and bringing other agricultural innovations to the developing world. Many experts credit Borlaug with averting global famine during the second half of the 20th century and saving perhaps 1 billion lives.

Thanks to Borlaug, world food production more than doubled between 1960 and 1990. In Pakistan and India, two of the nations that benefited most from the new crop varieties, grain yields more than quadrupled over the period.

"Norman E. Borlaug saved more lives than any man in human history," said Josette Sheeran, executive director of the U.N. World Food Program. "His heart was as big as his brilliant mind, but it was his passion and compassion that moved the world."

Equal parts scientist and humanitarian, the Iowa-born Borlaug realized improved crop varieties were just part of the answer, and pressed governments for farmer-friendly economic policies and improved infrastructure to make markets accessible. A 2006 book about Borlaug is titled "The Man Who Fed the World."

"He has probably done more and is known by fewer people than anybody that has done that much," said Dr. Ed Runge, retired head of Texas A&M University's Department of Soil and Crop Sciences and a close friend who persuaded Borlaug teach at the school. "He made the world a better place – a much better place. He had people helping him, but he was the driving force."

Borlaug began the work that led to his Nobel in Mexico at the end of World War II. There he used innovative breeding techniques to produce disease-resistant varieties of wheat that produced much more grain than traditional strains.

Harvey McKay: How To Negotiate!

I love Harvey McKay. From one of his first books, Swim with the Sharks, I saw a real professional who was not shy about revealing his tried and true business secrets. He is a one-of-a-kind leader! By Harvey McKay

I got a phone call from a Fortune 500 CEO one week whom I had never met. After decades of begging the government to relax their regulatory grip and let his industry experience the joys of competition, his wish had been granted—and his bottom line had plummeted. He wanted me to talk to his top executives for two hours and zero in on negotiating strategies.

A bit overwhelmed, I said, "I'm very flattered but, frankly, I don't know if I can talk for two hours on negotiating." Then I realized I was actually negotiating with myself. As my brain finally reconnected, I cut myself off. "Well, let me sleep on it and I'll get back to you."

Later that evening, I began to write down some of my negotiating experiences and saw that my problem was going to be holding the speech down to two hours. I'd already brushed up against the first and second laws of negotiating that morning in my conversation with the CEO:

1. Never accept any proposal immediately, no matter how good it sounds.
2. Never negotiate with yourself. You'll furnish the other side with ammunition they might never have gotten themselves. Don't raise a bid or lower an offer without first getting a response.

Here are some more negotiating rules and insights:

• Never cut a deal with someone who has to "go back and get the boss's approval." That gives the other side two bites of the apple to your one. They can take any deal you are willing to make and renegotiate it.
• If you can't say yes, it's no. Just because a deal can be done, doesn't mean it should be done. no one ever went broke saying "no" too often.
• Just because it may look nonnegotiable, doesn't mean it is. Take that beautifully printed "standard contract" you've just been handed. Many a smart negotiator has been able to name a term and gets away with it by making it appear to be chiseled in granite, when they will deal if their bluff is called.
• Do your homework before you deal. Learn as much as you can about the other side. Instincts are no match for information.
• Rehearse. Practice. Get someone to play the other side. Then switch roles. Instincts are no match for preparation.
• Beware the late dealer. Feigning indifference or casually disregarding timetables is often just a negotiator's way of trying to make you believe he/she doesn't care if you make the deal or not.
• Be nice, but if you can't be nice, go away and let someone else do the deal. You'll blow it.
• A deal can always be made when both parties see their own benefit in making it.
• A dream is a bargain no matter what you pay for it. Set the scene. Tell the tale. Generate excitement. Help the other side visualize the benefits, and they'll sell themselves.
• Don't discuss your business where it can be overheard by others. Almost as many deals have gone down in elevators as elevators have gone down.
• Watch the game films. Top players in any game, including negotiating, debrief themselves immediately after every major session. They always keep a book on themselves and the other side.
• No one is going to show you their hole card. You have to figure out what they really want. Clue: Since the given reason is never the real reason, you can eliminate the given reason.
• Always let the other side talk first. Their first offer could surprise you and be better than you ever expected.
• You must be fully prepared to lose a great deal in order to make a great deal!
• "Make every bargain clear and plain, that none may afterwards complain." - Greek Proverb

Successful Startups: The Method Company.

A series highlighting successful startups - big and small. Enjoy! By Margaret Heffernan at Reader's Digest.

Eric Ryan and Adam Lowry were having dinner with their new investors. The 27-year-old entrepreneurs had finally gotten a million dollars in venture capital to kick-start their company, but it came with stiff financial targets. It turned out this was the least of their problems that night. "We were passing our credit cards under the table to each other," Ryan recalls, "but none of them worked, because we had maxed them out. Eventually, we persuaded the restaurant owner we were good for the money."

In the eight years since that embarrassing moment, Ryan and Lowry have built Method into the world's largest eco-friendly cleaning brand. Their green products use natural ingredients like corn, coconut oil, and palm oil and are packed in attractive, recyclable containers. In the process, the two changed the perception of green home-care products—and the industry too.

Ryan and Lowry had been friends since high school, but it wasn't until after college that they hit on the idea of a home-care-products company. "We were shocked to learn how toxic cleaning products were," says Ryan. Why couldn't they create green products that would be just as stylish, fragrant, and environmentally pure as Aveda's skin- and hair-care lines?

When Ryan's mom heard about the plan, she stared at him blankly: "I've never even seen you clean your room!" Undeterred, Lowry, the chemical engineer, experimented with nontoxic ways to clean, while Ryan, the ad guy, focused on marketing. In February 2001, they mixed their first four cleaning sprays and convinced the managers of 20 independent grocers to try them. Once they had their approval, they tapped friends and family and pooled their savings to come up with $90,000 in seed money.

From the start, "Go big or go home" was their mantra. Their first financing—that $1 million—was due to be signed on September 11, 2001. By the time they got it, two months later, says Ryan, "we had $16 in the bank and personally owed $300,000."

Snagging a national retailer proved just as tricky. The friends set their sights on Target, known for its trendy, affordable merchandise. "But Target didn't like the product or the brand," recalls Ryan. "We thought the deal was dead, but then a new senior buyer saw that even though we weren't selling big volumes, we were profitable, just on a smaller scale." They won over Target, but their first bottles of dish soap, shaped like bowling pins, leaked all over the shelves (intrigued shoppers removed the caps for a whiff and left them off). The partners got the mess cleaned up and redesigned the containers.

When they launched their triple-concentrated detergent, they ditched the huge boxes that were the industry norm. "We made it easier to handle, less cumbersome, and better for the environment," says Ryan. "Now almost all detergents are concentrated."

Consumers were hooked on the natural ingredients and exotic scents like ginger, yuzu, lychee, and ylang-ylang. Today, the partners sell 130 products in more than 8,000 stores, and revenues are "north of $100 million." Such hyper-growth has at times stressed the men's friendship. "Eric and I agree on 'what' but never on 'how,'" says Lowry. "Because we are willing to challenge each other, we come up with interesting and smarter solutions. There's a little bit of fire and ice between us."

Q. You launched in the middle of the 2001 recession. How did you pull that off? A. Eric Ryan: To be successful, you have to reinvent some thing, or a process, or have a point of differentiation. A recession forces you to sharpen that differ- entiation. Our customers instantly understood our products. They got the whole style and substance thing.

Q. What do you say to someone starting a business? A. Adam Lowry: Understand with great clarity what creates value for your consumer, and don't be afraid to deliver.

Q. Do you worry when companies copy you? A. ER: No, because part of our mission is to make competitors follow us. We get copied all the time, so we've created an organization that is good at changing.

Q. What's your favorite product? A. ER and AL: Whichever one we've just launched!

Q. Are you pro-clean or anti-chemical? A. ER: We're both sailors, so we are very sensitive to changes in the environment. Green has always been core to our beliefs.

Q. Could anyone do what you two have done? A. AL: Entrepreneurship is one third luck, one third effort, and one third willingness—or naïveté—to take a risk. Not everyone would put in the effort or take the risks we've taken.

Q. Do you clean your own homes? A. ER: I have a cleaning service, but the simplest way to a cleaner home is just not to bring so much crap into it. Take your shoes off! AL: I do most of the cleaning, but my wife helps too. I don't freak out about every speck of dirt. I care more about keeping things uncluttered.

Q. Is money important? A. AL: I have a three-month-old daughter I want to put through college. I live in a 1,200-square-foot apartment, and I have a mortgage, so money isn't unimportant. But it is lower on my list of priorities. What I get from Method is a great sense of fulfillment, and that's far more important.

How to Go on the Offensive with Facebook.

I love Guy Kawasaki — his thinking is light years ahead of his contemporaries. I hope you enjoy his latest piece on Facebook - read, absorb, and act!

By Guy Kawasaki at Alltop

A friend of mine conducted this informal poll about what a person should do if she were asked to show a male interviewer her Facebook page. Only 12% said they would agree. Thirty-three percent said they would walk out of the interview or refuse. Fifty-five percent said they would ask why and then decide.

It’s time to “face” two facts: First, most organizations are either already looking at candidates’ Facebook profiles, or they are going to start soon. Second, people who are worth hiring either have a social-networking profile on some service or will soon—indeed, recruiters may already think that a candidate who doesn’t have a profile is hiding something, disconnected, or clueless.

Given these two developments, the defensive advice that experts are pedaling to “be careful what you put on your Facebook profile because recruiters may look at it” is ass-backwards. Instead, you should assume that organizations are checking you out (in fact, I blogged about a more efficient way to do this here) and use this to your advantage.

That is, rather than cleanse profiles in order to escape rejection, enlightened candidates will use Facebook profiles to market themselves—perhaps even asking to show their Facebook profiles in interviews. Think about what companies are looking for: bright, diligent, honest, well-rounded, socially-responsible, green, and connected people. Now imagine that you were giving a tour of your Facebook profile to a recruiter. Would you be able to make these kinds of statements?

“This is my graduation picture. I completed a four-year program on time while working full time." “This is one of my favorite professors. I took ABC from him (where ABC is a subject area relevant to the job).” “This is a photo essay of when I traveled throughout China. I was totally blown away by the entrepreneurial spirit of the Chinese, and I made many friendships that will help me in your position.” “Here’s when my hockey/soccer/basketball/whatever team won the championship. I learned so much about hard work, discipline, and team play because of sports.” “Here’s a bunch of my friends hanging out with me (this picture should contain people of multiple genders, ethnicities, religions, and sexual orientations) right before we went on a mission to build schools in Guatemala.” “This is the day that I got my iPhone/iTablet/iWhatever—I have to admit that I’m an early-adopter of technology.” Even better: “This is a picture of how I use what this company makes.” “Here’s when I went to Demo/TechCrunch50/World Economic Forum/G8/whatever in order to learn about what’s happening in the industry.” “This is the tweetup/meetup/faceup/whatever that I coordinated to help people network better.” "Here’s where I volunteered to work at SXSW so that I could attend all the sessions for free. This is the most amazing conference—have you ever been to it?" “Here’s when I met Robert Scoble/Mike Arrington/Charlene Li/Jeremiah Owyang/Chris Anderson/Steve Rubel/Ariana Huffington/Steve Ballmer/Steve Jobs/GRAMEEMBANK/David Pogue/Walt Mossberg/whoever.”

You don’t need to get all Forest Gump, but you get the point. Some folks might make the case that I’m missing the point of Facebook: It’s supposed to be one’s personal, “let my hair down,” silly world. Yes, you will lose some cred with your friends for selling out. Welcome to the real world—here you have to make tradeoffs all the time.

For a while, people who work Facebook like this will stand out from the crowd. Then recruiters will figure out that you’re playing them. Still, I would look at it this way: “At least this candidate is clever enough to work the system.”

The irony is that if enough people start doing this, recruiters may tire of looking at Facebook profiles, and then you can go back to showing pictures of when you barfed your brains out at a party while wearing no clothes.

09 • 09 • 09

The Beatles are the defining group of my generation and I might daresay — many generations. Today marks a date where they will release all of their music in a remastered state AND expand their presence into younger generations via a RockBand video game offering (there are also hints of their catalogue appearing on iTunes - so stay tuned!). If you don't know it already - when it comes to marketing - The Beatles are the BEST.

I remember the first time I heard them - I was five years old in my brother's room. On the turntable was Meet The Beatles and "It Won't Be Long" was blasting out of one single speaker on the floor (that's 60's high fidelity for you - Heathkit by the way!).

I instantly fell in love. My older brothers allowed me to stay in their room and listen to the whole album before I was again banished back to my room forever.

The funny thing is that as time goes on, other bands that I LOVED just fade away - U2, REM, Jethro Tull, The Partridge Family, etc. Their music still has meaning to me — unfortunately I just don't listen to their albums anymore.

But I still have the entire Beatles catalogue on my iPhone. There is something compelling, enjoyable, and fun about their music. I listen to it ALL the time.

Go figure.

So I will be asking for the entire remastered Beatles catalog for Christmas. And Santa, I've been a good boy.

P.S. What's your favorite Beatles' song and album?

Losing Your Compass? Try Simple Philosophy.

Part Four of a series on Ethical Leadership — many more to come. "The higher the buildings, the lower the morals." - Noel Coward

In the past three parts of this series, I've endeavored to lay out ways for leaders to strengthen their ethics and how to apply it to their leadership style. Some are hard and some are easy. This is an easy one:

Get Philosophy into your life.

It could take many forms - religion, classes, books, people, etc. But a strong dose of philosphical study in your life will allow you to become more grounded and keep you thinking about past, present, and future ethical positions. Some suggestions:

1. Religion - If you are at all religious, hit a church, synagogue, or organization to reacquaint yourself with the ethical and moral teachings of that religion. It's not taxing, doesn't cost a lot of money, and you surround yourself with a lot of people who believe the same way you do. And when you hit an ethical pothole in the road, you can lean on them to send you on the straight and narrow once again.
2. Books - Read! There are thousands of philosophers out there. If you like the classics, dive into them. If you like the moderns, there are many to choose from. I especially love the ethical textbooks from college - they present differing points of view of an ethical choice - and they really make you think (email me for a list of great texts - richgee@richgee.com).
3. Speakers - Go to one of their meetings. Listen and see how you can begin to incorporate some of their teachings into your life. The worse that can happen is that you don't agree with their position - you can then walk out.

By taking this first step, it allows you to always have an 'ethical rudder' on your life - it will guide you in your business and personal life.

Book Review: The Management Myth: Why the "Experts" Keep Getting it Wrong - By Matthew Stewart

"How can so many who know so little make so much by telling other people how to do the jobs they are paid to know how to do?" The answer to this question, posed by a professor of author Matthew Stewart, is basically the entire volume of The Management Myth, itself. This darkly funny, brutally detailed look at the management consultant class manages to unveil nonsense and presumptions of everyone involved in corporate life in America, from current gurus like Tom Peters (In Search of Excellence) to modern-day Fortune 500 company heads to the worshipped founders of business schools and management theory.

By SusanG at DailyKos. The Management Myth: Why the "Experts" Keep Getting it Wrong - By Matthew Stewart - Hardcover, 352 pages - W.W. Norton & Co., New York - $27.95

Along with the money has come a whole lot of admiration for the great leaders of the corporate world. University leaders, philanthropists, hospital administrators, and politicians promise to manage their fiefdoms like CEOs manage their companies .... When Jesus is compared with a CEO, it is Jesus who is thought to gain by the comparison. Whether the problem is a soul in search of salvation, a relationship on the rocks, or a superpower in trouble, according to the received wisdom the answer is to turn it into a private corporation and then manage it like a CEO.

Stewart's personal story exemplifies the ludicrousness of the consultant trade in a nutshell. Armed with no business experience or even a record of academic business classes--but a Ph.D. in Philosophy from Oxford!--he interviewed on a lark for a consultant position, urged on by a friend with about as much business experience as Stewart who'd struck gold with a firm with a top-tier firm.

Luckily for readers, Stewart was hired ... and spent years on the front lines taking notes like an embed in the consultant industry, rising from a low-level (but highly compensated) hire to founding partner of a spin-off firm, a company that (ironically) ended badly in a tangle of lawsuits and textbook examples of bad management practices.

Alternating tales of his own personal rise and disillusionment with the industry with historical background on how business education and business management became its own field in the first place, Stewart's keen eye and biting insight provide a work that is both entertaining and informative. And the book's timing couldn't be better; as outsiders look in on Wall Street and wonder how so many supposedly brilliant financiers could have been so wrong, Stewart's look at the underbelly of CEO's and their parasitic class of consultants provides several clues as to how the current economic crisis came about.

If any political party funded political science departments in the way that corporations fund the business schools, we would naturally consider their research to be little more than propaganda.

Let's begin, then, at the beginning, as Stewart does: with the origins of the business schools and the business of advising business itself. For many years, capitalists like Andrew Carnegie and J.P. Morgan managed somehow to create empires without paying theorists or obtaining MBA's, but that all changed when the first efficiency expert, Charles Frederick Taylor, did some very unscientific scientific studies and became if not the first, at least the most renowned (and pompous), advisor to businesses. "With this time-wasting stopwatch rituals and other grossly inefficient sacraments to the god of production," Stewart writes, "Taylor embodied the subtle madness of a new and profoundly unbalanced religion of practicality." But Taylor gave the "profession" a genesis and a scientific aura, despite the fact that later examinations of his "studies" proved them to be inaccurate and ... well, fudged. No matter. A "profession" of management and business consultancy was born, taken up and promulgated by Taylor's successors.

Medicine is a profession not on account of research in molecular biology but because it has licensing requirements, standards commissions, and policing mechanisms for controlling malpractice. The "profession" of business management as Donham and Mayo conceived it has none of these features. It merely exhorts good behavior on the basis of putatively "scientific" findings.

It's not that Stewart objects to quantification and analysis in a knee-jerk humanities/philosopher fashion. In its place, he acknowledges, statistics and projections can help chart a course and can turn up problem areas in need of attention. He also understands the place and role of leadership in organizations, even as he despairs of the "professionalization" of it.

But the modern idea of management is right enough to be dangerously wrong and it has led us seriously astray. It has sent us on a mistaken quest to seek scientific answers to unscientific questions. It offers pretended technological solutions to what are, at bottom, moral and political problems. It conjures an illusion--easily explained--about the nature and value of management expertise. It induces us to devote formative years to training in subjects that do not exist. It favors a naive view of the sources of mismanagement. Above all, it contributes to a misunderstanding about the sources of our prosperity, leading us to neglect the social, moral, and political infrastructure on which our well-being depends.

Not only does fetishization of ill-founded management theory threaten that non-corporate infrastructure to which he refers, it also often doesn't even make sense in a business context. "'Pure' analysis," he claims, "in most business situations tends to be conservative rather than creative. It implicitly favors optimizing the existing business rather than building a new one."

Still, there is a certain constructive role that outsiders can play in the modern corporation, if they keep the scope of their mission in mind. Often consultants can serve as hatchet men (or women, but usually men), for example. Or they can become the conduit of communication from one department to another in a poorly structured organization. Or ... they can just pull strategy out of the air sometimes, just to get things moving.

But overall, the business of advising business is a charade, one Stewart likens at one point to the introduction of a virus into an imperfect but moderately functioning organism. Sure, every corporation could probably use a wee bit of objective analysis, but the road to succumbing to a fatal parasitical malady usually begins with picking up an advisor on one project and then four years down the line having an entire staff of consultants in every department, sucking the life out of organizations, mandating lay-offs of employees even as the ranks of the contracted consultants swells.

And some of the modern strains of hyped business practice can be downright alarming on close examination. "Strategic planning," for example, uses projection and top-command control tactics that look an awful lot like Soviet Russia-era five-year plans, and can wind up creating the same kind of sullen, drag-footed compliance and stifling of innovation in the modern multinational corporation.

And most of the best business practices come down to common sense, anyway, Stewart maintains. After living the advising life and bailing on it, he's embarked now on a new writing career that's refreshing, bold and valuable. In The Management Myth, Stewart not only bites the hand that fed him--he cuts it off, chews it up, spits it out and examines its anatomy so that those unfamiliar with the practices of that invisible hand can benefit from knowledge of its previously invisible ways. Out of these shadows emerges the credo of the consultant--and the corporate--class:

Hire the smartest people in the room, the theory goes, and they'll figure out on their own how to extract money from the other people unlucky enough to be caught in the same room.

Try Kindle for iPhone. It Will Change Your Life.

I have been reading books for over 42 years. I LOVE them. Biographies, business, novels, mysteries, scifi, horror, comedy . . . anything. I scare people with the amount of books (and the associated bookcases) that I own.

A number of months ago, I downloaded the iPhone version of the Amazon Kindle just to see how it works and if I would actually read a book on a small screen. Well, after a few months, I have 10 books on my iPhone and there is no end in sight.

The best feature of the iPhone Kindle (IMHO) is the ability to download a single chapter of the book to see if you like it or if it is actually lives up to its hype. Be wary — this is an addictive way to get you to try the book. I've bought all of my books this way.

Readability is not an issue. I know . . . I know — you're afraid of the small form factor. But don't worry. Remember when you went from Hardcover to Paperback? You lost 1/2 the size. The Kindle's form factor is 1/2 the size again - but you get to enlarge or decrease the size of the type, have a black, white or sepia background and read horizontally or vertically. Oh — did I add that it is back-lit? You can read in bed or in low light conditions.

The verdict? I read faster, can bookmark pages/ideas quicker, and carry my current library of books wherever I go. Not in my briefcase, backpack or purse — on my PHONE.

And it's free - you only pay (on average) $9.99 for the book (where the same physical book on Amazon might run you $20-$30).

Try it - you might like love it.

Staying in the Game With Help on the Sidelines.

A great WSJ article by Sarah Needleman, who has interviewed me a number of times — Enjoy! Executive coaches report steady demand for their services despite the recession. Individual and corporate clients say the one-on-one counseling is critical for career success, especially during tough economic times.

Coaches typically are hired by companies, at $300 an hour or more, to hone the management or communication skills of senior leaders and rising stars. Even with the recession, many coaches say some companies are retaining their services to help them get lean and efficient. Coaches also said they are seeing an increase in individuals hiring coaches on their own.

Eric Chaffin, a 38-year-old partner at law firm Bernstein Liebhard LLP in New York, has paid coach Dee Soder out of his own pocket on a retainer since 2003, and has no plans to stop. "In a down economy, it's particularly important to have someone on your side," he said. "Instead of 10 client opportunities this year, there might be five. You have to make each one count."

Mr. Chaffin said Dr. Soder, founder of the CEO Perspective Group, an assessment and advisory firm in New York, helps him with tough career and practice decisions. For example, in 2003, she helped him weigh job offers from private firms after his four-year stint as a federal prosecutor. He chose a law firm that represents plaintiffs in consumer and shareholder cases because he and Dr. Soder thought it fit well with his blue-collar family background. Last year, he shifted to another plaintiffs' firm, Bernstein Liebhard. Recently Dr. Soder advised him on how to work with clients who are hurting because of the recession. Mr. Chaffin said Dr. Soder gives him a different perspective than business associates. "Most lawyers think alike," he said. "She's helped me understand some of the characteristics of my clients and their motivations."

Executive coaches say they're being hired by more individuals like Mr. Chaffin, a trend that has helped offset tighter budgets at some corporate clients. Dr. Soder says the number of her clients who are individuals paying on their own has nearly doubled since November. Wendy Alfus-Rothman, founder of Wenroth Consulting Inc., a New York executive-coaching firm, said more individuals are scheduling monthly, rather than quarterly, sessions.

A 2007 study commissioned by the International Coach Federation pegged annual revenue world-wide for the industry, which includes life, career and executive coaches, at $1.5 billion, with about half the study's 5,415 respondents in the U.S. Of the respondents, 58% reported executive coaching as their specialty.

Coaches say many companies still use their services to retain top talent and support senior leaders while coping with smaller staffs and recession-starved budgets. Amber Romine, director in global human capital at consultancy PricewaterhouseCoopers LLC's Washington, D.C., office, said she fields a steady stream of requests from clients looking for referrals to executive coaches. Gene Morrissy, a management psychologist at RHR International, said demand in the executive-coaching practice of the Wood Dale, Ill., organizational-development firm is up 10% from a year ago.

Denver telecommunications provider Wide Open West Inc. in January canceled merit raises for this year and suspended company matching contributions to employee 401(k) plans. But this year the company will spend $25,000, about what it spends every year, on coaching for three managers. "Our fundamental belief is you have to develop your greatest assets, which are your people," said Colleen Abdoulah, chief executive.

Humana Inc., a Louisville, Ky., health insurer, also is protecting its coaching program. Humana this year will spend between $17,000 and $30,000 for six months of sessions for each of about 50 senior employees, said Jeff Nally, who heads the firm's executive-coaching initiative. The meetings cover areas such as how to build an executive presence, communicate ideas and influence others. "Even in a recession, developing talent in key roles is still important," said Mr. Nally.

Still, Humana is trying to trim coaching costs, which totaled about $25,000 to $50,000 in past years. The company now encourages participants to conduct more counseling sessions by phone, which saves money on coaches' travel fees. And rather than hire outsiders to assess coaching needs, senior executives and human-resources leaders conduct assessments of more junior employees, which cuts the length of engagements by an average of three months.

Some small-business owners use coaches as sounding boards. Nancy A. May, president and chief executive of BoardBench Cos. LLC, a four-employee advisory firm in Norwalk, Conn., pays her own way to meet periodically with Dr. Soder. Ms. May says she relies on Dr. Soder for honest advice."You wouldn't go to somebody junior and say, 'I've screwed up, what do I do?' she says.

Ms. May, 50, began working with Dr. Soder about a year ago on ways to improve her interactions with clients, among other issues. Sessions are held over the phone, and occasionally in person, twice a month for up to an hour. "At times I have a big personality and the enthusiasm can sometimes be off-putting to somebody who's more of an introvert," says Ms. May. "My coach is working with me to manage that based on the personalities of other CEOs or board people I might be working with."

Ms. May says she has noticed changes, particularly "how people are stopping and listening, and being drawn into a conversation with me a little differently."

Paula M. Zwiren, president of Allied Title LLC, a small title-insurance firm in Flanders, N.J., said she was inspired to seek coaching after attending a seminar led by a group of women business leaders. Ms. Zwiren, 33, meets quarterly with Dr. Alfus-Rothman for about two hours. "An executive coach helps you identify things that help you be in control of your destiny," she said.

Ms. Zwiren said Dr. Alfus-Rothman, whom she pays about $3,000 a year, has improved her communications skills. "You have to be very direct at the executive level, very concrete," she says. "She helps me with my power of persuasion."

Executives and senior professionals interested in executive coaching should research prospective coaches carefully because the industry isn't regulated, said Kay Cannon, a past president of the coaching federation and an executive coach in Lexington, Ky. "You want to make sure the individual has some kind of coach-specific training," she says. For example, many ICF members are certified as master, professional or associate coaches, which means they've undergone between 60 and 200 hours of training.

Ms. Cannon also recommends asking for referrals to past clients and getting a sense of whether you have chemistry with a coach before agreeing to a long-term commitment.

CEOs - Attract The Best Board Candidates.

It is becoming increasingly difficult for boards to attract outstanding board candidates. Candidates are reluctant to consider opportunities because of the increased time demands of board membership as well as the increased time demands of the candidate's own positions. This is especially problematic because the need for board members, and especially outstanding ones, has never been greater. By Peter G. Spanberger at Directors and Boards. When companies become an "employer of choice" they are in an enviable position of much more easily attracting the best and the brightest. Boards can work in the same direction to become a "board of choice" and reap the benefits of more easily attracting outstanding board candidates. What steps can a board take to accomplish this?

If a candidate is outstanding he or she will have done a thorough analysis of the caliber of the board under consideration. A board needs to have already done such an analysis and understand what makes it a board of choice. This self-knowledge forms the basis for selling an outstanding candidate on the desirability of the board.

Boards often underestimate their positive attributes and find self-analysis difficult to do. Once done, however, this self-analysis can provide each current board member with a deeper understanding of the board's strengths and positive attributes. This has obvious benefits for the current board members and makes it easier for a candidate to discover these attributes. It also gives the board ammunition with which to "sell" outstanding candidates. The analysis will also reveal shortcomings that can then be addressed.

When boards do such an analysis they typically find that the positive attributes run the gamut from obvious to more subtle. Some of the obvious board attributes involve compensation and reasonable time demands. An analysis can reveal the degree to which the board makes it easy for members to do their jobs. Are board members provided with the needed information in a timely manner? Another obvious component involves the right amount of support in terms of travel, accommodations, etc. These are necessary, but not sufficient, attributes for attracting outstanding candidates.

More sophisticated boards take their analysis to a deeper level and focus on some of the more subtle components that would make a board attractive. They recognize that outstanding candidates will assume that the obvious components are present. Outstanding candidates will focus on some of the more subtle dimensions. Strong candidates will consider the prestige and competency of the current board members. They will ask themselves how much pride they will have in being a member of this particular board.

Are the other board members people from whom this outstanding candidate can learn? Is the process of the board characterized by acrimony rather than harmonious and constructive discussion? Does diplomacy and respect permeate the boardroom? Is the board a place where challenging issues and intellectual stimulation occur? These are some of the more subtle attributes that outstanding candidates require and "boards of choice" must manifest.

Such a self-analysis can be enriched by understanding the reasons why strong candidates are or are not interested in the board. It is essential that the recruiter or a nominating committee member go deeper in their discussions with candidates. Going deeper means not allowing the individual just to give it an obvious reason for turning down the opportunity but to get to some of these more subtle factors that influence their decision. Fundamentally the individual has to read between the lines of what the candidate is saying. This additional step can provide significant insights about perceptions of board functioning.

Similarly, if board members leave or when board members' tenure expires some type of exit interview can be revealing about the presence or absence of these subtle factors. It might also be revealing to interview board members who have been off the board for a few years in order to gain further understanding of the presence or absence of these factors that would be attractive to particularly strong board candidates.

Sophisticated boards take these types of steps in order to be a compelling board opportunity for outstanding candidates.

Just as companies work diligently to become an employer of choice, boards can do the same. For a board to become a board of choice it is necessary to engage in self-analysis and what makes it a compelling board opportunity. This analysis will deepen the understanding of current board members as well as be a selling point to prospective board members. When completed, the board will have positioned itself so that it can attract candidates of the caliber necessary in today's complex business environment.

Task Ninja: Form the Action Habit.

A lot of us get stuck in inaction — procrastinating, doing a lot of unimportant tasks to avoid the important stuff, worrying about failing or about being perfect, having a hard time starting, getting distracted, and so on. It’s time to start forming the Action Habit instead. Get all Ninja on your actions. By Leo Babauta at Zen Habits.

And it’s really not that hard if you focus on it for a little while. Like any other habit, start in small doses, little tasks, just short bursts, and then build on that momentum.

Some quick steps for forming the Action Habit:

1. Figure out your key actions. Focusing on the right actions is just as important as the doing. Don’t spend a lot of time in this step — just quickly decide your Top 3 actions for today.

2. Pick one key action, and visualize the outcome. How will it look when you’re done? Again, don’t spend a lot of time here — just form a quick picture in your mind.

3. Just start. Tell yourself, “Do it now!” Make it a mantra. Don’t mess around with tools, with distractions, with anything that will get in the way of doing this task. Strip away everything but the task, and get going!

4. Focus on the moment. Just be in this task, don’t worry about the future or what mistakes you might make or might have made before. Just focus on doing this task, as best you can. Immerse yourself in it.

5. Get to done. Complete the task. Feel good about it! Pat yourself on the back!

Now repeat with the next task. The more you practice this habit, the better you get. Do it in small doses, and keep practicing. You’ll fail sometimes. See the next section for how to deal with that. But don’t let failure stop you — just practice some more.

Barriers to the Action Habit: But what if you’re having trouble actually taking action? Some quick thoughts:

Don’t worry about perfect. Too often we want to create the perfect plan, but while it’s important to know where you’re going, it’s more important not to get stuck in the planning mode. And while it’s important to do your best, perfection isn’t necessary.

Stop fiddling. Are you messing around with your software or other tools? Are you playing with fonts and colors and other non-essential things? Stop! Get back to the task.

Remove distractions. Turn off the phone, email, IM, Twitter, etc. Shut off the world around you, and just focus on the doing.

Improve it later. Just do it now. You can make it better later. Writers call this the sh*tty first draft — and while it sounds bad, it’s actually a good thing. You’re getting it done, even if it’s sloppy.

Break it into smaller chunks. Sometimes the task is too intimidating. If the task takes more than an hour, start with a 30-minute chunk. If that’s too big, do just 10 minutes. If that’s too hard, do 5. If you have to, just do 1 minute, just to get going.

Stop thinking so much. Thinking is a good thing. Overthinking isn’t, and it gets in the way. Put aside all the thinking (analysis paralysis) and just do.

If you can’t do something … figure out why. Maybe you don’t have the tools. Maybe you don’t have the authority. Maybe you need something from someone else. Maybe you’re missing some key info.

Maybe you don’t know how to do something and need to read up on it, or be taught how. Maybe you just don’t want to do it, and you should drop it altogether. Figure out what the barrier is, and solve it.

Powerful Quotes I Love.

"Sometimes the questions are complicated and the answers are simple." - Dr. Seuss

The Shredding Of YOUR Workplace Is Happening NOW.

There's striking disagreement on the shape of the economic upturn – being touted are 'J', 'L', 'V', 'U', 'W' or even a 'saxophone shaped upturn', however what's sure is it's coming. With the upturn – welcome or not – is a complete shredding of the workplace rulebook!

By John Blackwell at Management Issues.

Today's workplace consists of finely balanced interdependencies between people, space, technologies, culture, and management practices. It demands HR professionals talk fluent real estate, real estate professionals talk fluent talent and collaboration, technologists talk fluent culture, and managers be fluent in trust, agility, and social connection.

Get it right and the workplace is a vibrant, inspiring place that motivates creativity, innovation, and untold performance levels. Get it wrong and it's dull and disenfranchising, with staff bored by the tedium.

This isn't some abstract theory – everyone reading this article will, at some point, have experienced a dull workplace and equally will have experienced a vibrant one.

The current economic turmoil has brought about a unique combination of factors that's not merely overturning workplace rules, it's completely shredding the rule book!

Prominent factors in this upheaval are:

1. Unemployment: In OECD countries, unemployment has risen from 6.8% in 2008 to today's 7.8%, and is projected to top 10% by 2010. While any unemployment is distressing, the impact on remaining staff is possibly more dramatic.

How drastic? Research suggests that half of staff have lost trust in their employer and almost as many - 46% - would leave at the earliest opportunity if they had the chance.

This distrust is rooted in staff eyeing ranks of empty desks and an assumption that they'll voluntarily "pick up the slack". Staff are also disenfranchised over the lottery approach to downsizing and the lack of visionary thinking about alternatives. When cost avoidance is today's corporate mantra, this discontent and churn could prove financially crippling.

2. A Shrinking Talent Pool: It's a myth that restructuring is creating a labour market awash with talent2. A shrinking talent pool: It's a myth that restructuring has created a labour market awash with talent. More than 60% of white-collar unemployed are turning their back on corporate life and investing redundancy monies in starting entrepreneurial businesses. Having walked away, this talent won't be returning corporate life.

Clearly, these far-reaching changes to the traditional workplace demand precision metrics and a structured, scientific approach. Everyone involved must be 'on-board', and have a clear view of the 4 P's of change;

Purpose – why change, what's in it for me? Picture – what will it look like after the change? Plan – what's the timeline and what should I expect? Part – what's my part and what's expected of me?

Factor in a 17% decline in 'prime-age' labour (due to decreasing birth rate, increasing adult education, etc), this represents a notable shrinkage of an already rarefied talent market – something that the UK's Department for Work and Pensions is projecting won't return to 'normal' until 2020!

3. Virtual working: Staff are juggling a three-fold increase in project volumes since 2004, compounded by increased matrix working and the outsourcing of non-core activities, which is leading to an explosion in virtual working.

We've projected that, by 2010 staff will be spending just 5% of their day in the same place, on the project, at the same time as their colleagues. 95% of time will be spent working alone, at a different time, place, or on a different schedule.

Consequently, managers have a far looser understanding of their teams, and must rapidly learn how to migrate from command-control to mentoring, motivating, and coaching.

4. Unsustainable office utilisation: Prior to the economic downturn, office utilisation was typically hovering around 50%. One of the first casualties of the recession was corporate real estate values, which has dropped by more than 44%. At the same time, almost every organisation is being forced to – or taking the opportunity to – optimise headcount.

This has created the perennial conflict between dwindling occupancy and the inability to shift surplus real estate – a direct outcome being plummeting office utilisation of 20% or lower, and dispersed staff finding themselves forced into 'intra-office virtual working'.

This commonly leads to reduced business 'fluency'. Just consider, if you're more than four metres apart, the chance is you'll not know the other person in the office.

Shredding the workplace rulebook presents both formidable challenges and great opportunities. We're entering the 'era of interdependence'. A time when all business dimensions – HR, physical space, technologies, culture, and management practices – must work in harmony to deliver effective performance.

The recent Workplace of the Future report shed considerable insight to how organisations are responding to changing work practices. Of the 1,100 business leaders interviewed, 83% perceive significant change, however only 61% have successfully changed in the past, a gap that has trebled since 2006.

The report found that organisations financially out-performing their comparators are investing in radical interventions, broadly grouped into two areas – trust-based, and socially connected workplaces.

Trust-based workplaces allow staff complete temporal and spatial autonomy. Socially connected workplaces actively encourage staff to engage and collaborate with likeminded people far beyond traditional work boundaries. This significantly improves the response to weak signals – competitive and creative developments that might otherwise have been overlooked.

However, change needs to be tempered with caution – it mustn't be dismissed as merely 'engineering' processes or tasks, it's a complex problem of co-evolution at multiple levels (individuals, the community, the environment etc).

A mechanical approach is by its nature dehumanising, and you must remember you get out what you measure. If you set targets, staff will attempt to realise the targets at all costs, ignoring context or the unstated goals that the change was hoping to realise. An awful amount of resource can be wasted managing a measurement system rather than letting the workplace flourish. We all have a stake in addressing the current situation - organisation and individual alike – in creating a brighter, smarter, and more vibrant "workplace of the future". And all of us can take immediate steps to embracing this new order.

Facebook Postings Close Doors For Job Candidates.

More employers than ever are researching job candidates on sites like Facebook, MySpace, and Twitter in order to find out more about their activities and character. And, it turns out, many candidates are doing a great job of showing their potential bosses poor communication skills, inappropriate pictures, and even how many workplace secrets they can leak. By Jacqui Cheng at arsTechnica.

Some of us had the luck of doing stupid things online before most employers knew what social networking was. (I'll admit it: in my early working days, I said some not-nice things online about some of the people I worked with.) These days, however, those looking for jobs have had many years to build up an unsavory history across the Internet, and employers now know how to do their homework. In fact, nearly half of the employers in the US now search for job candidates on social networking sites like Facebook and MySpace, according to survey results from CareerBuilder. The job-finding firm said that the numbers reflect a twofold increase over those who reported doing so in last year—45 percent in 2009 versus 22 percent in 2008—and cautioned that many employers choose not to hire based on information they find online.

Facebook was the most popular site for researching job candidates this year — no surprise there, since Facebook has exploded in popularity as of late. "Professional" networking site LinkedIn came in second at 26 percent, MySpace came in third at 21 percent, 11 percent read blogs, and seven percent followed candidates' updates on Twitter. Paranoid yet about any of your recent tweets?

If you're looking for a job, you probably should be. More than a third of survey respondents said that they found info that caused them not to hire the person applying for the job, including "provocative or inappropriate photographs," content related to drinking or using drugs, and finding postings that badmouthed previous employers, coworkers, or clients. Other candidates showed poor communication skills on their social networking profiles, made discriminatory comments, lied about their qualifications, or shared confidential information from a previous employer. The one that made us cringe? "16 percent dismissed a candidate for using text language such as GR8 (great) in an e-mail or job application."

On the other hand, some candidates are doing a good job of presenting their professional side when posting online. Half of those who screened candidates via their social networking profiles said that they got a good feel for the person's personality and fit within the organization. Other employers said that they found the profiles supported the candidates' professional qualifications or that they discovered how creative the candidate was. Solid communication skills, evidence of well-roundedness, and other people's good references (we assume this one came from LinkedIn) helped boost people's credentials, too.

For most of us, it seems like common sense not to talk trash on your Facebook wall or post drunk pictures where potential employers can see them, but people are still catching up to the idea that their future bosses are on the same sites as they are. Anecdotally, I have worked at many an office that has casually looked up interns and new employees online, only to find sides of them that were less than flattering (one intern publicly declared that our company's parent company could "f-ing suck it!" immediately after we offered her the job).

Some may argue that employers shouldn't use information they found through a little bit of online stalking (something we've heard in our forums)—after all, what someone does after hours is his or her own business. At the same time, it's hard to deny that discovering truly alarming information—such as leaked workplace secrets—would be good cause for choosing another candidate. These days, everyone hunting for a job needs to exercise some judgment on what to post online and who they let access it if they want to stay in future employers' good graces.

CMO to CEO: Insights & Advice From CEOs Who Have Made The Transition.

Little is written about the options available to CMOs to progress beyond their role as marketers and become key players at the executive committee level. At the Rich Gee Group, we frequently run into many C-Level executives who want to progress to the top rung and help them develop a strategy on what they should be doing to make themselves credible contenders for the CEO berth.

Spencer Stuart has a great report (click here for the PDF) that outlines each of the 10 ways to prepare for a role as a CEO:

1. Take on a general management role in an emerging market
2. Broaden your skill set at every opportunity
3. Gain experience in at least one non-marketing role
4. Get involved in as many mission-critical, non-marketing projects as you can
5. Demonstrate your credibility and track record as a commercial leader
6. Develop close working relationships with other functions
7. Work with the CFO to value the company’s brand assets
8. Hone your communication skills
9. Learn to make the tough decisions
10. Find a mentor who is already a CEO or in a general management position

It's a great read. Enjoy! - Rich

Do You Need An "Executive-Level" Health Program?

How well are you? How well will you be on the job? One overlooked benefit that many companies forget (yeah right) to offer is an executive health program for their top people. What is an executive health program? Well, one offered by The Mayo Clinic states:

The Mayo Clinic's Executive Health Program has combined medical expertise with efficiency to meet the needs of busy executives. The program offers a comprehensive examination with access to the full resources of Mayo's medical, surgical and laboratory facilities in a convenient one- to two-day period. (More days may be required if the executive requires additional subspecialty tests or examinations.)

A company's top executives must be healthy to be effective. An executive health program offers an efficient, cost-effective way to maximize a leader's health and reduce the chance of long-term leave related to disability, illness or health concerns. You usually meet with a battery of physicians who specialize in all areas of the human body.

Once they complete their analysis, the team meets together to discuss your overall health condition. They report, debate and diagnose any issues — at the end, your main physician provides a complete analysis for you with any treatments required.

Not surprisingly, many patients have been diagnosed with a previously unreported condition following a typical executive health exam.

These programs blend traditional diagnostic expertise with the latest in preventive medicine. Your evaluation is individualized according to your personal health needs and is strictly confidential. One physician, a specialist in internal and preventive medicine, will coordinate your care. Program centers are usually distributed across the nation for easy access.

Bottom line, these specialists have significant experience in interpreting test results and consulting with busy executives to ensure a thorough, comprehensive and efficient examination.

5 Stages of Grief When Looking For A Job.

Here's a fun list that I saw on Madatoms: Denial I've got plenty of money! I'll start looking next week!

Anger Craigslist and Monster sucks! I've got a college degree! Jobs should be looking for me!

Bargaining I'll just drive around looking for help wanted signs. I hear that Starbucks has health insurance!

Depression Why did I major in Communications? I have no useful skills.

Acceptance I didn't know I qualified for unemployment! I love this country!

Keeping Unscheduled Time.

I love the The Practice of Leadership blog - and George Ambler hits it out of the park with this topic on buffering time:

“Every leader should routinely keep a substantial portion of his or her time—I would say as much as 50 percent—unscheduled. … Only when you have substantial ’slop’ in your schedule—unscheduled time—will you have the space to reflect on what you are doing, learn from experience, and recover from your inevitable mistakes. Leaders without such free time end up tackling issues only when there is an immediate or visible problem. Managers’ typical response to my argument about free time is, ‘That’s all well and good, but there are things I have to do.’ Yet we waste so much time in unproductive activity—it takes an enormous effort on the part of the leader to keep free time for the truly important things.” – Dov Frohman

Making time to reflect and think is a critical leadership practice. In its simplest form, reflecting is just thinking about what happened. It’s the process of thinking about and examining what we’ve experienced, how we reacted and what changes we need to make to become more effective.

There are few people who make a conscious effort to learn from their experiences and fewer still learn from their mistakes. This is because reflection is not an automatic process for most people. Most of use make our way through life simply reacting to circumstances. To be effective leaders must make reflection a regular practice.

“Leaders like everyone else, are the sum of all their experiences, but, unlike others, they amount to more than the sum, because they make more of their experiences.” – Warren Bennis, Why Leaders Can’t Lead

A simple way to start the practice of reflection is by asking questions, questions about how we feel, about the results we are getting in our life, and what we can do differently to get different results. For example, find a quite place where you are not going to be disturbed then, take an issue that’s important to you, and ask yourself the following questions:

What happened? What was I trying to achieve? What went well and why? What didn’t go so well and why? How did it affect me? How did it affect others? What were the consequences (positive or negative) for myself and others? What could be done differently next time? Would this change improve the consequences?

“Reflection is asking the questions that provoke self-awareness” – Warren Bennis, On Becoming a Leader

As leaders much of our success is dependent on the way we think. Given this, it’s important that we schedule regular time-out to reflect on how we are behaving, how we are thinking about a situation and what adjustments we might need to make to improve our effectiveness. When was the last time you spent reflecting on an issue that is important to you?

Ethical Leadership — You Need A Mentor.

Part Two of a series on Ethical Leadership — many more to come.

"Mentor: Someone whose hindsight can become your foresight.”
- Unknown

Ethics is a balance. Simply put, a balance between good and evil and your relationship with each.

Leadership is a balance. Guiding and letting go is a balance in itself.

In every endeavor in life, balance comes to play and it helps to have something or someone to help you maintain (or regain) your balance when times are tough. This is where mentors come in.

Of course you can ask someone for temporary guidance — we all do that from time to time. Unfortunately, 'temporary mentors' usually don't know the full score, they are fishing in the shallow waters and cannot fully understand the depths of your dilemma, opportunity, or situation.

A long-term mentor can help you not only solve present issues, but keep your eye on your long-term goals. Talking with them on a regular basis can help you regain your balance, fly straight, and keep your head clear.

Pick a mentor - choose a past boss, one that is not steeped in company intrigue. One that seems to fly above the corporate radar and get things done without playing politics. They can either come from a past company or your current one — but be careful with current company mentors - choose wisely.

State frankly that you would like to have them be your mentor. That you'll take them out to lunch to bounce ideas off of them. Let them understand that your talks will be highly confidential in nature and that you appreciate their guidance.

Schedule regular meetings - usually monthly or quarterly, off-site. Come with a good idea of the topics that you would like to cover. In addition, always add the question: "What do you think my next step should be?" It will allow you both to move from tactical to strategic thinking.

Keep them informed of the results - this will help the mentor/mentee relationship stay healthy and focused.

A mentor can help you focus on what is REALLY important and see things you might have missed. They will keep you on the right track.

P.S. By the way, if you cannot find anyone who can be a good mentor for you, call me.

Wall Street’s Gambling Soul.

Of all the insulting labels lobbed at Wall Street over the past two years, you wouldn't expect "overconfident" to be the one that hurt. But it has. This week's New Yorker article by Malcolm Gladwell on Wall Street's "psychology of overconfidence" struck a nerve. By Malcolm Gladwell in the New Yorker Magazine.

In 1996, an investor named Henry de Kwiatkowski sued Bear Stearns for negligence and breach of fiduciary duty. De Kwiatkowski had made—and then lost—hundreds of millions of dollars by betting on the direction of the dollar, and he blamed his bankers for his reversals.

The district court ruled in de Kwiatkowski’s favor, ultimately awarding him $164.5 million in damages. But Bear Stearns appealed—successfully—and in William D. Cohan’s engrossing account of the fall of Bear Stearns, “House of Cards,” the firm’s former chairman and C.E.O. Jimmy Cayne tells the story of what happened on the day of the hearing:

"Their lead lawyer turned out to be about a 300-pound goon from Long Island . . . a really irritating guy who had cross-examined me and tried to knock me around in the lower court trial. Now when we walk into the courtroom for the appeal, they’re arguing another case and we have to wait until they’re finished. Then I see my blood enemy stand up and he’s going to the bathroom. So I wait till he passes and then I follow him in and it’s just he and I in the bathroom. And I said to him, “Today you’re going to get your ass kicked, big.” He ran out of the room. He thought I might have wanted to start it right there and then."

At the time Cayne said this, Bear Stearns had spectacularly collapsed. The eighty-five-year-old investment bank, with its shiny new billion-dollar headquarters and its storied history, was swallowed whole by J. P. Morgan Chase. Cayne himself had lost close to a billion dollars. His reputation—forty years in the making—was in ruins, especially when it came out that, during Bear’s final, critical months, he’d spent an inordinate amount of time on the golf course.

Did Cayne think long and hard about how he wanted to make his case to Cohan? He must have. Cayne understood selling; he started out as a photocopier salesman, working the nine-hundred-mile stretch between Boise and Salt Lake City, and ended up among the highest-paid executives in banking. He was known as one of the savviest men on the Street, a master tactician, a brilliant gamesman. “Jimmy had it all,” Bill Bamber, a former Bear senior managing director, writes in “Bear Trap: The Fall of Bear Stearns and the Panic of 2008” (a book co-written by Andrew Spencer). “The ability to read an opponent. The ability to objectively analyze his own strengths and weaknesses. . . . He knew how to exploit others’ weaknesses—and their strengths, for that matter—as a way to further his own gain. He knew when to take his losses and live to fight another day.”

Cohan asked Cayne about the last days of Bear Stearns, in the spring of 2008. Wall Street had become so spooked by rumors about the firm’s financial status that investors withdrew their capital, and no one would lend Bear the money required for its day-to-day operations. The bank received some government money, via J. P. Morgan. But Timothy Geithner, then the head of the New York Federal Reserve Bank, didn’t open the Fed’s so-called “discount window” to investment banks until J. P. Morgan’s acquisition of Bear was under way. What did Cayne think of Geithner? Picture the scene. The journalist in one chair, Cayne in another. Between them, a tape recorder. And the savviest man on Wall Street sets out to salvage his good name:

"The audacity of that jerk in front of the American people announcing he was deciding whether or not a firm of this stature and this whatever was good enough to get a loan. Like he was the determining factor, and it’s like a flea on his back, floating down underneath the Golden Gate Bridge, saying, “Raise the bridge.” This guy thinks he’s got everything. He’s got nothing."

Since the beginning of the financial crisis, there have been two principal explanations for why so many banks made such disastrous decisions. The first is structural. Regulators did not regulate. Institutions failed to function as they should. Rules and guidelines were either inadequate or ignored. The second explanation is that Wall Street was incompetent, that the traders and investors didn’t know enough, that they made extravagant bets without understanding the consequences. But the first wave of postmortems on the crash suggests a third possibility: that the roots of Wall Street’s crisis were not structural or cognitive so much as they were psychological.

In “Military Misfortunes,” the historians Eliot Cohen and John Gooch offer, as a textbook example of this kind of failure, the British-led invasion of Gallipoli, in 1915. Gallipoli is a peninsula in southern Turkey, jutting out into the Aegean. The British hoped that by landing an army there they could make an end run around the stalemate on the Western Front, and give themselves a clear shot at the soft underbelly of Germany. It was a brilliant and daring strategy. “In my judgment, it would have produced a far greater effect upon the whole conduct of the war than anything [else],” the British Prime Minister H. H. Asquith later concluded. But the invasion ended in disaster, and Cohen and Gooch find the roots of that disaster in the curious complacency displayed by the British.

The invasion required a large-scale amphibious landing, something the British had little experience with. It then required combat against a foe dug into ravines and rocky outcroppings and hills and thickly vegetated landscapes that Cohen and Gooch call “one of the finest natural fortresses in the world.” Yet the British never bothered to draw up a formal plan of operations. The British military leadership had originally estimated that the Allies would need a hundred and fifty thousand troops to take Gallipoli. Only seventy thousand were sent. The British troops should have had artillery—more than three hundred guns.

They took a hundred and eighteen, and, for the most part, neglected to bring howitzers, trench mortars, or grenades. Command of the landing at Sulva Bay—the most critical element of the attack—was given to Frederick Stopford, a retired officer whose experience was largely administrative. Stopford had two days during which he had a ten-to-one advantage over the Turks and could easily have seized the highlands overlooking the bay. Instead, his troops lingered on the beach, while Stopford lounged offshore, aboard a command ship. Winston Churchill later described the scene as “the placid, prudent, elderly English gentleman with his 20,000 men spread around the beaches, the front lines sitting on the tops of shallow trenches, smoking and cooking, with here and there an occasional rifle shot, others bathing by hundreds in the bright blue bay where, disturbed hardly by a single shell, floated the great ships of war.”

When word of Stopford’s ineptitude reached the British commander, Sir Ian Hamilton, he rushed to Sulva Bay to intercede—although “rushed” may not be quite the right word here, since Hamilton had chosen to set up his command post on an island an hour away and it took him a good while to find a boat to take him to the scene.

Cohen and Gooch ascribe the disaster at Gallipoli to a failure to adapt—a failure to take into account how reality did not conform to their expectations. And behind that failure to adapt was a deeply psychological problem: the British simply couldn’t wrap their heads around the fact that they might have to adapt. “Let me bring my lads face to face with Turks in the open field,” Hamilton wrote in his diary before the attack. “We must beat them every time because British volunteer soldiers are superior individuals to Anatolians, Syrians or Arabs and are animated with a superior ideal and an equal joy in battle.”

Hamilton was not a fool. Cohen and Gooch call him an experienced and “brilliant commander who was also a firstrate trainer of men and a good organizer.” Nor was he entirely wrong in his assessments. The British probably were a superior fighting force. Certainly they were more numerous, especially when they held that ten-to-one advantage at Sulva Bay. Hamilton, it seems clear, was simply overconfident—and one of the things that happen to us when we become overconfident is that we start to blur the line between the kinds of things that we can control and the kinds of things that we can’t. The psychologist Ellen Langer once had subjects engage in a betting game against either a self-assured, well-dressed opponent or a shy and badly dressed opponent (in Langer’s delightful phrasing, the “dapper” or the “schnook” condition), and she found that her subjects bet far more aggressively when they played against the schnook. They looked at their awkward opponent and thought, I’m better than he is. Yet the game was pure chance: all the players did was draw cards at random from a deck, and see who had the high hand. This is called the “illusion of control”: confidence spills over from areas where it may be warranted (“I’m savvier than that schnook”) to areas where it isn’t warranted at all (“and that means I’m going to draw higher cards”).

At Gallipoli, the British acted as if their avowed superiority over the Turks gave them superiority over all aspects of the contest. They neglected to take into account the fact that the morning sun would be directly in the eyes of the troops as they stormed ashore. They didn’t bring enough water. They didn’t factor in the harsh terrain. “The attack was based on two assumptions,” Cohen and Gooch write, “both of which turned out to be unwise: that the only really difficult part of the operation would be getting ashore, after which the Turks could easily be pushed off the peninsula; and that the main obstacles to a happy landing would be provided by the enemy.”

Most people are inclined to use moral terms to describe overconfidence—terms like “arrogance” or “hubris.” But psychologists tend to regard overconfidence as a state as much as a trait. The British at Gallipoli were victims of a situation that promoted overconfidence. Langer didn’t say that it was only arrogant gamblers who upped their bets in the presence of the schnook. She argues that this is what competition does to all of us; because ability makes a difference in competitions of skill, we make the mistake of thinking that it must also make a difference in competitions of pure chance. Other studies have reached similar conclusions. As novices, we don’t trust our judgment. Then we have some success, and begin to feel a little surer of ourselves. Finally, we get to the top of our game and succumb to the trap of thinking that there’s nothing we can’t master. As we get older and more experienced, we overestimate the accuracy of our judgments, especially when the task before us is difficult and when we’re involved with something of great personal importance. The British were overconfident at Gallipoli not because Gallipoli didn’t matter but, paradoxically, because it did; it was a high-stakes contest, of daunting complexity, and it is often in those circumstances that overconfidence takes root.

Several years ago, a team headed by the psychologist Mark Fenton-O’Creevy created a computer program that mimicked the ups and downs of an index like the Dow, and recruited, as subjects, members of a highly paid profession. As the line moved across the screen, Fenton-O’Creevy asked his subjects to press a series of buttons, which, they were told, might or might not affect the course of the line. At the end of the session, they were asked to rate their effectiveness in moving the line upward. The buttons had no effect at all on the line. But many of the players were convinced that their manipulation of the buttons made the index go up and up. The world these people inhabited was competitive and stressful and complex. They had been given every reason to be confident in their own judgments. If they sat down next to you, with a tape recorder, it wouldn’t take much for them to believe that they had you in the palm of their hand. They were traders at an investment bank.

The high-water mark for Bear Stearns was 2003. The dollar was falling. A wave of scandals had just swept through the financial industry. The stock market was in a swoon. But Bear Stearns was an exception. In the first quarter of that year, its earnings jumped fifty-five per cent. Its return on equity was the highest on Wall Street. The firm’s mortgage business was booming. Since Bear Stearns’s founding, in 1923, it had always been a kind of also-ran to its more blue-chip counterparts, like Goldman Sachs and Morgan Stanley. But that year Fortune named it the best financial company to work for. “We are hitting on all 99 cylinders,’’ Jimmy Cayne told a reporter for the Times, in the spring of that year, “so you have to ask yourself, What can we do better? And I just can’t decide what that might be.’’ He went on, “Everyone says that when the markets turn around, we will suffer. But let me tell you, we are going to surprise some people this time around. Bear Stearns is a great place to be.’’

With the benefit of hindsight, Cayne’s words read like the purest hubris. But in 2003 they would have seemed banal. These are the kinds of things that bankers say. More precisely—and here is where psychological failure becomes more problematic still—these are the kinds of things that bankers are expected to say. Investment banks are able to borrow billions of dollars and make huge trades because, at the end of the day, their counterparties believe they are capable of making good on their promises. Wall Street is a confidence game, in the strictest sense of that phrase.

This is what social scientists mean when they say that human overconfidence can be an adaptive trait. “In conflicts involving mutual assessment, an exaggerated assessment of the probability of winning increases the probability of winning,” Richard Wrangham, a biological anthropologist at Harvard, writes. “Selection therefore favors this form of overconfidence.” Winners know how to bluff. And who bluffs the best? The person who, instead of pretending to be stronger than he is, actually believes himself to be stronger than he is. According to Wrangham, self-deception reduces the chances of “behavioral leakage”; that is, of “inadvertently revealing the truth through an inappropriate behavior.” This much is in keeping with what some psychologists have been telling us for years—that it can be useful to be especially optimistic about how attractive our spouse is, or how marketable our new idea is. In the words of the social psychologist Roy Baumeister, humans have an “optimal margin of illusion.”

If you were a Wall Street C.E.O., there were two potential lessons to be drawn from the collapse of Bear Stearns. The first was that Jimmy Cayne was overconfident. The second was that Jimmy Cayne wasn’t overconfident enough. Bear Stearns did not collapse, after all, simply because it had made bad bets. Until very close to the end, the firm had a capital cushion of more than seventeen billion dollars. The problem was that when, in early 2008, Cayne and his colleagues stood up and said that Bear was a great place to be, the rest of Wall Street no longer believed them. Clients withdrew their money, and lenders withheld funding. As the run on Bear Stearns worsened, J. P. Morgan and the Fed threw the bank a lifeline—a multibillion-dollar line of credit. But confidence matters so much on Wall Street that the lifeline had the opposite of its intended effect. As Bamber writes:

This line-of-credit, the stop-gap measure that was supposed to solve the problem that hadn’t really existed in the first place had done nothing but worsen it. When we started the week, we had no liquidity issues. But because people had said that we did have problems with our capital, it became true, even though it wasn’t true when people started saying it. . . . So we were forced to find capital to offset the losses we’d sustained because somebody decided we didn’t have capital when we really did. So when we finally got more capital to replace the capital we’d lost, people took that as a bad sign and pointed to the fact that we’d had no capital and had to get a loan to cover it, even when we did have the capital they said we didn’t have.

Of course, one reason that over-confidence is so difficult to eradicate from expert fields like finance is that, at least some of the time, it’s useful to be overconfident—or, more precisely, sometimes the only way to get out of the problems caused by overconfidence is to be even more overconfident.

From an individual perspective, it is hard to distinguish between the times when excessive optimism is good and the times when it isn’t. All that we can say unequivocally is that overconfidence is, as Wrangham puts it, “globally maladaptive.” When one opponent bluffs, he can score an easy victory. But when everyone bluffs, Wrangham writes, rivals end up “escalating conflicts that only one can win and suffering higher costs than they should if assessment were accurate.” The British didn’t just think the Turks would lose in Gallipoli; they thought that Belgium would prove to be an obstacle to Germany’s advance, and that the Russians would crush the Germans in the east. The French, for their part, planned to be at the Rhine within six weeks of the start of the war, while the Germans predicted that by that point they would be on the outskirts of Paris. Every side in the First World War was bluffing, with the resolve and skill that only the deluded are capable of, and the results, of course, were catastrophic.

Jimmy Cayne grew up in Chicago, the son of a patent lawyer. He wanted to be a bookie, but he realized that it wasn’t quite respectable enough. He went to Purdue University to study mechanical engineering—and became hooked on bridge. His grades suffered, and he never graduated. He got married in 1956 and was divorced within four years. “At this time, he was one of the best bridge players in Chicago,” his ex-brother-in-law told Cohan. “In fact, that’s the reason for the divorce. There was no other woman or anything like that. The co-respondent in their divorce was bridge. He spent all of his time playing bridge—every night. He wasn’t home.” He was selling scrap metal in those days, and, Cohan says, he would fall asleep on the job, exhausted from playing cards. In 1964, he moved to New York to become a professional bridge player. It was bridge that led him to his second wife, and to a job interview with Alan (Ace) Greenberg, then a senior executive at Bear Stearns. When Cayne told Greenberg that he was a bridge player, Cayne tells Cohan, “you could see the electric light bulb.” Cayne goes on:

[Greenberg] says, “How well do you play?” I said, “I play well.” He said, “Like how well?” I said, “I play quite well.” He says, “You don’t understand.” I said, “Yeah, I do. I understand. Mr. Greenberg, if you study bridge the rest of your life, if you play with the best partners and you achieve your potential, you will never play bridge like I play bridge.”

Right then and there, Cayne says, Greenberg offered him a job.

Twenty years later, the scene was repeated with Warren Spector, who went on to become a co-president of the firm. Spector had been a bridge champion as a student, and Cayne somehow heard about it. “Suddenly, out of nowhere there’s a bridge player at Bear Stearns on the bond desk,” Cayne recalls. Spector tells Cohan, “He called me up and said, ‘Are you a bridge player?’ I said, ‘I used to be.’ So bridge was something that he, Ace, and I all shared and talked about.” As reports circulated that two of Bear Stearns’s hedge funds were going under—a failure that started the bank on its long, downward spiral into collapse—Spector and Cayne were attending the Spingold K.O. bridge tournament, in Nashville. The Wall Street Journal reported that, of the twenty-one workdays that month, Cayne was out of the office for nearly half of them.

It makes sense that there should be an affinity between bridge and the business of Wall Street. Bridge is a contest between teams, each of which competes over a “contract”—how many tricks they think they can win in a given hand. Winning requires knowledge of the cards, an accurate sense of probabilities, steely nerves, and the ability to assess an opponent’s psychology. Bridge is Wall Street in miniature, and the reason the light bulb went on when Greenberg looked at Cayne, and Cayne looked at Spector, is surely that they assumed that bridge skills could be transferred to the trading floor—that being good at the game version of Wall Street was a reasonable proxy for being good at the real-life version of Wall Street.

It isn’t, however. In bridge, there is such a thing as expertise unencumbered by bias. That’s because, as the psychologist Gideon Keren points out, bridge involves “related items with continuous feedback.” It has rules and boundaries and situations that repeat themselves and clear patterns that develop—and when a player makes a mistake of overconfidence he or she learns of the consequences of that mistake almost immediately. In other words, it’s a game. But running an investment bank is not, in this sense, a game: it is not a closed world with a limited set of possibilities. It is an open world where one day a calamity can happen that no one had dreamed could happen, and where you can make a mistake of overconfidence and not personally feel the consequences for years and years—if at all. Perhaps this is part of why we play games: there is something intoxicating about pure expertise, and the real mastery we can attain around a card table or behind the wheel of a race car emboldens us when we move into the more complex realms. “I’m good at that. I must be good at this, too,” we tell ourselves, forgetting that in wars and on Wall Street there is no such thing as absolute expertise, that every step taken toward mastery brings with it an increased risk of mastery’s curse. Cayne must have come back from the Spingold bridge tournament fortified in his belief in his own infallibility. And the striking thing about his conversations with Cohan is that nothing that had happened since seemed to have shaken that belief.

“When I left,” Cayne told Cohan, speaking of his final day at Bear Stearns, “I had three different meetings. The first was with the president’s advisory group, which was about eighty people. There wasn’t a dry eye. Standing ovation. I was crying.” Until the very end, he evidently saw the world that he wanted to see. “The second meeting was with the retail sales force on the Web,” he goes on. “Standing ovation. And the third was a partners’ meeting that night for me to tell them that I was stepping down. Standing ovation, of the whole auditorium.”