The system is broken. Admit that, and the solutions become clear.

Michael Lewis of Liars Poker fame has, with David Einhorn, written a very very worthwhile read in Sunday's NYT. A snip from The End of the Financial World as we know it:

...OUR financial catastrophe, like Bernard Madoff’s pyramid scheme, required all sorts of important, plugged-in people to sacrifice our collective long-term interests for short-term gain. The pressure to do this in today’s financial markets is immense. Obviously the greater the market pressure to excel in the short term, the greater the need for pressure from outside the market to consider the longer term. But that’s the problem: there is no longer any serious pressure from outside the market. The tyranny of the short term has extended itself with frightening ease into the entities that were meant to, one way or another, discipline Wall Street, and force it to consider its enlightened self-interest.

The credit-rating agencies, for instance...

[snip]

And here’s the most incredible thing of all: 18 months into the most spectacular man-made financial calamity in modern experience, nothing has been done to change that, or any of the other bad incentives that led us here in the first place.

Bad incentives lead to bad experiences. Yes, those guys responsible for evaluating risk engaged in some very risky behaviours. Because "there is no longer any serious pressure from outside the market."

Serious pressure. From outside. That doesn't mean outside of organizations--our organizations. Maybe yours. It means outside of the bubble of leadership, that once comfy home of Insulated Deciders.

It's probably little consolation to some at this time, but now is an important moment in crash psychology. As paradigms shift they paralyze the old guard. It is their familiar model and narrative, after all, that is crumbling before their disbelieving eyes. This is the time new leaders and new "cosmologies" (Karl Weick, Harvard Bus. Review) are either being formed, weighed, or given a podium. In other words, chance favors the bold. Are you stepping up? Do you have the balls?

If you do, form a group in your organization to talk out your ideas--off hours if necessary--because there's strength and feedback in numbers. Find people whose chief skill isn't only bitching about the company. They likely can't be trusted or relied upon, even in good times. Look for the lost idealists. They're most often the cynics with a decent track record nonetheless. Don't misperceive humility, it often masks courage. Be semi-sensible but find the real, emotional core of your company's business. The chances are 4-to-1 that leadership has lost sight of this in their efforts to appear, well, "leader"-like. Explore the idea that your product or service is the means to some other purpose--some more valued satisfaction or realization--beside its practical description. (Hint: If Starbucks sold "coffee" or Apple offered "MP3 players" or Anthropologie sold "unusual stuff" or Ukrop's sold "Groceries" or Frank Gehry "designed buildings" those companies wouldn't be the "risky-is-safe" outliers that they are.)

It's an emotional time, even with all the stiff upper lips. But you don't overpower emotion with pure logic. You find a better more useful, more compelling emotional benefit. And I don't mean fear--you're looking for antidotes to fear, enablers of optimism, energy and courage. Entertain this idea because, most likely, the practical use of your product and your means of providing it is already dangerously close to "blah", a commodity.

If so, it is at this point because somebody decided it be so; somebody preferred the safety of status quo that likely no longer offers much cover.

Lewis again, from part 2 of his NYT article, How to repair a broken financial world:

If we are going to spend trillions of dollars of taxpayer money, it makes more sense to focus less on the failed institutions at the top of the financial system and more on the individuals at the bottom. Instead of buying dodgy assets and guaranteeing deals that should never have been made in the first place, we should use our money to A) repair the social safety net, now badly rent in ways that cause perfectly rational people to be terrified; and B) transform the bailout of the banks into a rescue of homeowners.

Perfectly rational people are terrified. Let's face it, many are shell-shocked and in stand-by mode. Worry rules. The one thing they'd love is the return of certainty. Can't have it. Ain't gonna happen.

In this environment, the one thing people need is positive shock, constructive surprise, not tentative moves and soothing words. Well, this is the realm of product and system design--and what they can deliver--that gets overlooked during "fat" times. (Read Don Norman's wonderful "Being analog" for inspiration on where your opportunities can lay.) And those terms, positive shock, constructive surprise--the understanding of them--are only in the lexicon of people whose chief worry isn't what's "proper" or "seemly." As Lewis' article points out, all kinds of "polite" and "appropriate" behaviour--hedging of bets and words, abdication of conscience--is what got us here.

New ideas, latent offerings born from the resources and talents we all call our companies, are the ticket to renewal. And new ideas, never an easy executive sell in the best of times, will not come from the top floor. No money? Be brilliant in your poverty. (It's easier than you think: Necessity being the mother of invention and so forth, scarcity makes you savvier and if it doesn't you starve or freeze.) Be asymmetrical and befriend unusual allies; look for not-so-obvious common-cause relationships in your market that seemed unneccessary in times of busy and plenty. There's lots of useful surprise there, and burden-sharing opportunities, too. Recall that 30-minute pizza delivery and banks in grocery stores were once thought ridiculous or immature fantasies by responsible people "in the know." Yeah, they were. Genius is defined by rescuing the simple from the messy and convoluted, and from the "responsible." Again, remember Lewis' article: over-complication and officiousness are now impractical, even deadly.



As you can hopefully tell, we're not talking aimless anarchy or frivolity here. Nor pie in the sky. Asymmetrical or counter-intuitive thinking? You bet. The picture above is one such real-world example of constructive surprise and its power that I've mid-wifed or witnessed. But that dead desk was the just the beginning of one sustained (and successful) exploration to shake doldrums and evade a larger corporate death.

It's time to cut lots of desks in half. It's time to dust off the ambition and reacquaint with your inner MacGyver. Now. Because, believe it or not, 2009 will get worse in many sectors. Unless you make it better.