(00:00:00) Now you're going to have to get out a pencil and a piece of paper and you're going to write down about 10 things. The first thing you're going to write down is fewer people paid (00:00:10) more. (00:00:13) A fewer people paid more is the solution to most organizational problems that you're going to run into as a leader. I'll give you an example several of us owned a company that was putting out newsletters in Washington, DC. And it was losing its shirt and my partner's said Townsend, you're not doing anything go down there and find out what's wrong and fix it. So I went down and I observed it and it had a president and Secretary General Manager and a whole bunch of people who are putting the newsletters the daily newsletters on what was going to happen in Congress the next 10 days and these letters were full of errors and they were getting to the printer late. And what was happening was that people were putting them together putting them on the desk of the general manager. He was making some changes. Otherwise, what was he therefore he put them on the desk of the president and he'd make some changes. Otherwise, what was he therefore it would come back late to them. They knew they'd have to change whatever they submitted. So they submitted just anything to get it started. And so what I did was fire the president the secretary and the general manager and called in all the people who are putting the newsletters today and and say folks you're a partnership now, here's the budget which includes the salary of the president the general manager and the secretary. We don't have those activities anymore. Use up all the money hire whomever you need figure out who reports to me and see if you can get the newsletters to the printer without any errors on time. Well for two weeks all the wheels fell off. It was terrible. He didn't get the news letters to the printer at all because they were too busy arguing about who does what but then it all came together and they began getting it done by five o'clock. No errors. No problems. They rotated the job of reporting to me every six months. Somebody new would have to report to me and they drew straws in the loser got to report to me for six months fewer people paid (00:02:21) more. They each got a (00:02:24) 65 percent raise. They didn't need to hire anybody (00:02:27) else. (00:02:32) Second thing you're going to write down incentive compensation tied to (00:02:37) Performance. Very important (00:02:44) people need a goal and a scorecard in order to have (00:02:47) fun. (00:02:50) When you do your own incentive Compensation Plan do it yourself don't mean consult your tax man your lawyer, but don't hire an expert to do it for you. Don't hire a Consulting a compensation expert important thing about an incentive Compensation Plan is that it not change that it be simple and understandable and that it not change. If you change it. The people are will figure they're getting screwed and they probably are If you hire an expert to devise a plan, they will devise a plan that has to be changed every year to so they get called back in and get another fee. While we're on the subject of incentive compensation is a lot of talk in the papers about executive bonuses in big companies and they are pretty outrageous. When I was hired to run Avis Andre Meyer who is a senior partner of Lazard who hired me did one very smart thing. He found out what my net worth was which wasn't very much and he made me mortgage my house which was free and clear and put the proceeds of the mortgage into Avis stock, which he then leverage the result of this was that rather than being in a luxurious condition like a lot of these big Executives with their four hundred five hundred thousand dollar salaries in the $375,000 bonuses instead of feeling luxurious. And perquisite, 'add new I used to wake up wringing wet with fear in the middle of the night and I've got to tell you that something healthy about that and I had to run a company today. I would make sure that all my key people had enough of their Assets in invested in the stock of the company that I was running to make him. Wake up wringing wet with fear in the middle of the night. It's very healthy (00:04:57) attitude. (00:05:01) A recent example Brunswick had to give up their medical division in a takeover attempt to ward off a (00:05:11) takeover attempt. (00:05:15) They were left with something that Wall Street thought was very unattractive fishing tackle outboard motors and bowling equipment and the board in sheer boredom picked some guy from the middle of the company and said Jack you run it and the only only the really good thing about it was Jack had grown up in those businesses. He thought they were really exciting and listen to what he did stock was selling at 7:00. (00:05:46) He said (00:05:47) to himself profits are made at the divisions. Not at corporate (00:05:51) headquarters. (00:05:53) So he slashed corporate staff by two-thirds. Then he sent the division managers the management division Management's back to the field so they could be close to the operations. They were managing. He eliminated the group vice president level, which should be eliminated. Anyway in most cases there one another 400 people. He sold the company airplanes close the executive dining room. Tight froze executive salaries and tied them to profits. And leased out 2/3 of the space in the headquarters building so that nobody would ever get back in there again, and he didn't make any speeches. He didn't write any memos and the company turned around on a dime and it's now last time I looked at it going up fivefold in price which shows you how little Wall Street knows about what's exciting and what (00:06:52) isn't (00:06:52) one of the problems I have in this country with executive bonuses, which you might think about is that in Japan on told the ratio of the chief executive salary to the salary of the highest blue collar worker is 721 (00:07:11) in this country. It's 36 to 1. I think that's a little bit much. (00:07:19) It leads to the next thing you're going to write down them and (00:07:22) us. You've got to this is if you're going to be a leader, (00:07:28) you're going to have to fight those silly dividing lines in manufacturing its most obvious. It's the people that the people you trust the people you don't trust the people you don't trust have to park outside the gate they have to punch a Time clock and buy coffee from a coffee machine and the people you trust park inside don't punch a Time clock and get free coffee and executive (00:07:52) building (00:07:55) you get somebody slogging through the snow and rain, which you people know a lot about (00:08:01) here (00:08:03) and and when they walk a half a mile from where they had to park their car and passed the empty parking space of the managing director or the president of the company certain things go on internally that are not healthy for organizations. Chaparral Steel worked on the them in US Problem by putting everybody on salary. Well everybody in the steel industry. Laughs they said the production workers are going to take for our lunches. They'll kill you. Well, they were all so everybody was on profit-sharing from the janitor to the president and what happened was the people who took advantage of the of the no time clocks were run out of the organization by their (00:08:54) peers and their haven't had any problems with that. (00:09:00) We attack the problem in Avis, the them and US problem. We had a school for rental agents and O'Hare Airport and the faculty were the women and red uniforms who were very good at writing up those complicated forms (00:09:14) and I made the whole management go through that school. And including me and only (00:09:22) person who it was a tough school. It was five days. We had homework every night. We had an exam every night and we had to spend two or three hours renting cars with the trainee button. And the only person who failed was the PHD in charge of data processing who was responsible for the design of the rental agreement. And he couldn't he was a PhD. He just could not stand the thought of dealing directly face-to-face with a customer and he fled I we could never stand up at the counter. He never rented a (00:09:55) car. (00:09:57) One day I was renting a car at O'Hare with a trainee button on and this guy came up to the counter (00:10:04) customer and I was trying to fill the (00:10:08) report out right get the numbers in the in fill out the car control sheet which is different and smile at the next two people in line, which is what the manual said. So they wouldn't drift over to our competitors counter and the fellow watch this performance for a while. And then he said can't you hurry up. He said I'm on a real bummer of a trip and I want to get out of here and I said give me a break. I'm a trainee. I went back to filling out this thing and he said you sure are a miserable trainee. He said where did they dig you up front? And I said you want to hear something really sick. I said I'm the president of the (00:10:51) company. Where a (00:10:56) bunny immediately forgave me. He said at least you're out there trying to figure out what's going on. Alright, the next thing you should write down for your Baccalaureate is eliminate excuses eliminate your peoples excuses. Every organization develops a lot of excuses for doing shoddy mediocre work. Some of them they talk about some of them they don't talk about but if whether they're buried or on the surface, they're used and you've got to eliminate those example many years ago. I was at American Express. A company that was so rich from The Travelers check that they could and did make every mistake in the book. They just made another one out here IDs to of the important. No-nos are one do not bring an outsider in for a key job to fill a key job always promote from within and the second thing is don't hire management Consultants. Well, when they pick the head of IDs, they violated both of those they brought a Management Consultant in from the outside and make it made him chief executive officer. At any rate. I was glad to see that they're still doing the same silly things they were doing when I was there. (00:12:25) I was in I was a financial analyst and their investment Department was a miserable department. (00:12:31) They didn't pay us what we what we deserved everybody knew and Wall Street. What a junior analyst God what (00:12:37) a senior analyst got this common knowledge. (00:12:39) We were underpaid under titled under equipped with with Machinery didn't have the right mix of people and all we did was come in late bitch about it and leave early and we really did miserable work and all of a sudden our boss who is this charismatic handsome articulate humorous nice ambitious guy, who was Heir Apparent to the chief executive job and who was never there when we needed him blamed us for anything that went wrong and took the credit for everything we did that went right. (00:13:18) All of a sudden he (00:13:18) died and the cues of relatively young man and the company made me (00:13:23) manager of this investment Department. I called (00:13:26) everybody and I said, I don't know about managing, but I said we sure don't have to spend any time talking about what's wrong. That's all we've done since I've been here. I said why don't you people decide that you're going to become the best investment Department in Wall Street, and I will go fight this (00:13:44) company that we work for and see if I can get us what we (00:13:47) should have in the way of pay titles and equipment and they said that sounds like a good idea your allows the analyst anyway, and we won't even have to hire anybody to replace you. So they did and they started to work and I get them a little raised here little title here and finally their work got so good that I get started being noticed in the hall and I remember Bobby Clarkson who was the chairman one time said Downs are in that was a good Bond swap you made last (00:14:18) week and I said Bond Swap and said, I don't know anything about a bonsoir. (00:14:24) I said, I don't even get to read The Wall Street Journal anymore. I said I'm spending full time fighting your company here to get bowls of rice for my peons so they don't starve to death on Front steps and embarrass you so gradually I got more and more until we were all paid. Right and we had the right titles and by then their performance was outstanding and one day this the guy who invested The Travelers check float billions of dollars in short term Security Financial paper Finance paper (00:15:00) commercial paper treasury bills. (00:15:04) He came to me and he said Bobbie said if I had one of those new Japanese electronic calculators instead of this hand-crank machine. He said I could make us a ton of money comparing alternative Investments. And I said Charlie. You're absolutely right. I'll go get you one. Eliminating excuses also note that that's what a leader really does. I didn't know it at the time a manager would have called in a secretary and dictated a purchase requisition order which would have gotten into his outbox then into her out box then to the mailroom a week later would have gotten to the purchasing department just in time to miss the purchasing meeting it would become up at the next purchasing meeting be rejected. Go back into the mail stream gotten back by which time I would have forgotten what I'd done. That's what a manager does a leader says. I'll go get you one. I got in the elevator and went down to the purchasing department and said hi there I said, I'm Bob Townsend from the investment Department. I need a calculator. I told him make and (00:16:09) model (00:16:11) and the guy said was it in your budget. And I said no sir. It wasn't in my budget because I made my budget up last October when everybody else did and I only learned that I needed this this morning and he said if it if it wasn't in your budget, you can't have it. Well by this time my people were so hot that I was carrying around my resignation to deal with them. And so I hauled my resignation out of my pocket I said, would you please sign this sir? And he read it and he said what do I want to sign that for? He said you don't work for me. And I said, I want you to sign this because I when I leave here I'm going up into Ralph Reeves office who's the president to who my report and I'm going to resign and he may ask me why and if he does I'm going to tell him it's because I'm stupid son of a bitch in the purchasing department won't get me a machine that would pay for itself in the first two minutes. We owned it. And if he asked me which stupid son of a bitch in the purchasing department, I want to show him your name. Well, we got the Machinery but that's not the point of the story. The point of the story is that I was I didn't know what I was doing, but I was eliminating excuses of my people and there's another point I was using their performance not to get goodies for me. But to get goodies for them that would enable them to do the job even better. And that's the most profound thing. I'm going to say this morning. If you ever get your organization or your part of it cooking make sure that the people who are doing the work get the goodies or get their share of the goodies or they'll stop cooking and you'll never know what turned them off. So don't steal the goodies. More than your share anyway. (00:18:14) By the (00:18:15) way, our old friend fewer people paid more comes into that story too because when I had hair added that investment department, they were 21 people three years later when I got tab to go to run their International banking business. There were (00:18:30) 13 people in the (00:18:32) division, but they were paid one whole hell of a lot (00:18:34) more. (00:18:38) Next thing you're going to write down is protect your people. when I got called over to Avis by Andre Meyer to Discuss running it I said we're going to have to make some changes. This company's never made money in 13 years. We're going to have to do some things that are different than mr. Meyer. This old Frenchman said, what would you like to do miss delf towns? And that is different and I said, well, we can't afford to have 10 or 11 board meetings a year. I mean we can't I can't have my accounting people meeting themselves coming out of board meetings and preparing statements for outside directors. For meat for board meetings a year. He said this seems reasonable. Mr. Townsend. I said also, we're not going to pay our outside directors anything and he said, oh you can't do that. Mr. Townsend. I have General Sarnoff on your board and Anna Rosenberg John Cahill. These are all very important people and they must be paid to attend your meetings. And I said not by me. Mr. Meyer I said, we've already crossed that bridge. We're going to build a just organization where everybody gets what they deserve. And we never paid are outside directors anything he may have but I didn't or Avis didn't and at the last meeting. I had an item on the agenda to start charging the outside directors $250 for attending meetings, but that's not the point. The point point of the story is you want to protect your people from atrocities like 11 board meetings a year and everybody should go back to their office this afternoon. You don't have to cut the directors pay just increase their paper meeting. So they're still taking home the same amount but cut the number of meetings to for a year. You don't know how many stupid things you do just to get an item on that agenda to prove to the outside directors that you're doing something you make Acquisitions to show progress you buy things. You don't need and shouldn't buy just to prove to the output side directors that you're (00:20:56) doing something meeting a month is terribly bad. Or you (00:21:02) well at the first meeting General Sarnoff said mr. Townsend. He said I would like a computer run of all the vehicles we owned by location, make and model. We didn't have a computer run of that. It would have taken our people three months are operating people as well as our accounting people running around trying to get that statement and I thought to myself life is too short and I said to the general I said General sarna. If I don't need that statement to run the company, you don't need it to be an outside director of the company whereupon he began to look like an eggplant. I have never seen a man turned more purple than General Sarnoff. He was not accustomed to being talked to that way. But since I didn't have a contract I felt free to protect my people which is what I was doing when the word got out around the accounting department that I had protected them from that atrocity anything I wanted I could get from those people they'd work till midnight every night. Okay what to do when the wheels come off? I'm going to tell you what we what we did at Avis it'll sound like there's a lot of blood on the floor. But when we fired whole activities, we didn't create economic hardship. I told the people to go home and look for work and we would keep paying him as long as they won didn't come to the office to didn't call anybody at the office during office hours and three until General Sarnoff found out I was doing it. And everybody got worked before they were off the payroll. You're not trying to save money when you do what I'm doing here, which we call decluttering and if you get into an emergency a real a real problem and you run into the business cycle or you get blindsided by a competitor's product (00:23:01) use it as an opportunity to declutter your company is (00:23:04) what we did and try to do it all in 30 days or the organization will go into shock. We fired the corporate marketing department marketing is too important to be done at corporate headquarters. It should be done by the divisions. And if you do that, be sure and tell the divisions you fired the corporate marketing department and then they can fire the two people they hired to fight off the corporate marketing department. Same thing with corporate (00:23:30) planning to important to be done at corporate headquarters (00:23:35) corporate purchasing same thing. Dana Corporation said when they fired their corporate purchasing department ran McPherson said look our people understand about bulk purchasing if I got if six plant managers don't have enough brains to call each other up and get together and put a bulk order together without some daddy in purchasing a corporate headquarters. I got the wrong people running those plans. A woman came to me after one of these talks and she said I work in the purchasing department of a large company and she says the rules say that I got to get three bids and accept the lowest and I'm always buying the wrong equipment and I know I'm always buying the wrong equipment. She says isn't it amazing the expense that companies will go to to defeat and frustrate their own (00:24:28) people. Fire the corporate PR (00:24:35) department that's very easy. You don't have to we don't even have to discuss that PR people write the annual report and then they become a living embarrassment for the rest of the year. The line people don't talk to them because they don't know when to talk and when to keep their mouths shut so all the important things in the company are carefully hidden from them. We did that at Avis and then I called in the management and the telephone operators who are the most under respected people in any company and I said we are the PR (00:25:15) department (00:25:17) and you telephone operators, you know who's in the building and you know, who does what if anybody calls from the outside plug them into whoever should answer the (00:25:25) question (00:25:27) and us who are not PR experts just be honest. If you don't want to talk about it say I don't want to talk (00:25:34) about it (00:25:35) pretend you've got to your biggest competitor listening in on an extension which will prevent you from a pre announcing marketing plans or from knocking the competition and don't forecast earnings. If they say why don't you forecast earnings just say because we try not to do anything at Avis that we can't do consistently. Well, well the next week the Ford Motor Company announced they were going into the Rent-A-Car business through their dealers all over the country and the Wall Street. Colonel got very excited called got bud Morrow was president and (00:26:12) of the division and Bud said (00:26:15) big crock of (00:26:16) nothing. And they said how can you say that for it is the fourth largest company in the industry and you're just a little company and he said it's a big Croc of nothing. He said (00:26:27) rent a car is like most other business got to be run by full-time people who do nothing else and he said Ford is in the business of selling new car selling used cars and servicing cars and they're going to try to do in their spare time and they're all in the wrong locations and it wants a big (00:26:41) Croc and nothing (00:26:43) next day front page article full of quotes from morrow. And at the end of it was a spokesman for the hurts Corporation said, they're studying the matter. That's what comes surrounding a million-dollar PR outfit. Policy manuals you burn the policy manuals Dana Corporation has one page statement says we don't believe in company-wide procedures. If a manager feels he needs procedures. He should formulate them and explain them to his people. Monthly report. This is something you should look at in a crisis. These things can get after ITT bought Ava's people called me every frankly once a week for Mavis and said, you know this cockamamie monthly report from ITT takes four days of each month to prepare. Walter lists a friend of mine became manager of a TV station at the end of the first month his boss from Washington called said, where's your monthly report? And he said what monthly report he said, you've got nine department at you. They're supposed to write up a report to you. Whenever the figures come out and you're supposed to read them write your own put them on Top Male whole package up to me Walter says, I don't want the job if I have to do that that's take 20% of the month to do that. I can't compete with my competitors and do that, too. He said why don't I talk to my department heads have two figures come out and then call you and tell you what we're going to do about it, and you can take the call. And the fellow was very unhappy, but now all five (00:28:19) stations are reporting into in that way (00:28:23) and which brings up another point. You don't have to write this down. But if you get a new job in your company, you should try all the outrageous things in the first hundred days because during the first hundred days, you're Bulletproof the guy can't fire you without looking stupid because he just puts you into the job. I most people think wait'll I build up a performance record and then I'll try some of these things that nobody else does but that makes sense. You shouldn't don't wait do them right away. Well, obviously Walter listen still there use your lawyers right start using your lawyers right most companies a new statute a new regulation comes out. They immediately go to their lawyers outside or inside wringing their hands and saying what do we do? That's the wrong way to use it lawyer. You do is you meet with your operating people and say what is the ethical moral sensible economic approach to this thing? And then when you're in agreement what you should do about it, then you call your lawyers in and you say here's what we're going to do. What's the fine and who goes to jail? That's the kind of a question a lawyer should be asked not the other accountants. I always said to my controllers. I said look your first client are the operating divisions. That's where the money comes from. And what you have to do is make yourself. So useful to the operating divisions you and your people that they invite you to their secret meetings and if they say to you in a secret meeting, I don't want Townsend to hear about this unless there's fraud involved You observe that because that's your first client is them I'm your second client and that makes a lot of sense and it makes a lot more meaningful the work of (00:30:12) the accounting department if they proceed on that basis. (00:30:18) Fire all the management Consultants that are wandering around your company. Tell them you'll give them a bonus if they're out by 4:30 and don't submit a report. If you need a Management Consultant to tell you what to do. You're the problem. Let me give you an example. You've got three divisions. One of them is sick. It's run by old Joe. He keeps reorganizing setting targets missing him reorganizing setting targets. You got to face. The fact old Joe has had it in that job. So you tell old Joe to go to Key Largo with his family for three months mind you you're already on for board meetings a year and you tell your board. I'm going over and run old Jose Division and I'll see you in three months and then you go over there and you sit at Old Joe's desk you don't bring your secretary. You don't bring anybody you go over there and you call everybody in this is instead of of the hiring a Management Consultant. You sit at the desk you call everybody in and you say what are we going to do? I want to when we get through here. I'm going to call you in one at a time one on one. You're going to tell me what you think we ought to do to turn this division around and make it a credit to the company. And if we can't do that together in a reasonable length of time. I'm going to shut this whole mother down now that's motivation and they want to talk to you there. You're the big Jefe De Oro and they know who you are and you want to save the division. They want to save the division. So they'll level Woody and their level fast and you may have to call every one of them in three times one at a time but one morning you'll wake up wringing wet and they will have presented you with a plan for saving the division. So you call them all in together and say Here's your plan. And by the way Kurt is the next division manager and come up here and sit at this desk hurt and carry out that plan. If you have to change it tomorrow change it and in nine months those people will be 10 feet tall. Have saved their own Division and they will have forgotten you even were there. They will have programmed you out and that's as it should because they did the really important work. All you did was synthesized (00:32:34) a little. (00:32:36) That's why you clear those management Consultants out. (00:32:40) finally (00:32:44) you fire the whole Personnel Department. I've been saying this for 14 years fire the Personnel department and burn their files. You know, what they did. They change their name to Human Resources. What a bunch of sneaky people. Can I hit you? Well, first thing they did the first Personnel department. They invented the job application which turns off the best people who would otherwise come to work for the company because of this stupid question, then they invented the job interview, which is somebody who doesn't understand the hirer or the higher e making the decision who gets the job that's smart. Then they invented job descriptions. I remember first time I almost quit American Express. I was having a good time and all of a sudden Personnel Department sent me a job description of what I've never felt so demeaned and all my life I said is this all I do and I started looking for work elsewhere. They invented Matrix. You all remember Matrix muddled in the middle. That was it. That was an invention of the Personnel department. They invented mbos what six things am I going to be doing for the company in the next year and what percentage of my time am I going to spend on each and what's in it for the company if I succeed I agonize over this for three days turn it in and 48 hours later. I'm working on six different things but a year later it comes up to haunt me. I've got to justify that. My boss has to go over it with me. It's a big pack of nothing but it's typical they get on the salary and bonus committee means everybody gets the same increase. Everybody gets the same bonus the good people leave the bad people stay great service performed by your human resources department. They hire the company psychiatrist. Who's the 55 year old Bachelor living with his mother who's hired a tell him who's normal. So fire the hold human resources department. Burn their files and what we did was we had one people person and you need one people person for each 300 people at corporate headquarters. And what she did was go to the desk of anybody who is hiring and find out what kind of person you want how much you want to pay then she'd lineup applicants. And when he said that one she checked the references she'd explain the benefits to new hires and check outside to make sure we were paying top salary iron from the top of the barrel and not from the bottom of the barrel. If you've got a big corporate headquarters with 1,200 people, you'll need four people persons and put them in different corners or they'll get together and form a human resources department after you've done this that in essence is what we did to declutter what we did when the wheels came off for the wheels were off at Ava after you've done that just give your people a goal that they can understand that makes sense to them that they can identify with give them a score card in the form of an incentive Compensation Plan related to Performance and then get the hell out of the way there are they'll run you over getting to the goals. Now the final part of your Baccalaureate, I want you to be able to recognize a leader when you stumble over one and it's not easy. They come in all Sexes shapes sizes colors ages, except mainly not too young mbas do not make good leaders there too ambitious that too hungry and it's too obvious to the people who work for him. Charisma is not something that goes normally with a leader in my opinion. And these are just my opinions. Usually Charisma belongs to the corporate politician. Who is the guy you shouldn't have in the corner office. He's the Nelson Scheib early of of Nabisco Brands who claims. He's a vibrant chief executive yet. He sits on seven outside boards figure three days to attend a board meeting and get ready for it and recover from it. That's 21 days a month. He spends an outside boards are only twenty two business days in the month. He's governor of a college. He's on the Business Council. He's he's president of the financial Executives Club of New York. This is a vibrant chief executive officer. This is a guy who retired on the payroll. Charismatic. Yes leader know he's a corporate (00:37:31) politician. (00:37:34) I'm going to give you seven factors and I have to talk around it because you can't describe each of these factors in one word and you just pick the angle that you like or that make sense to you one. He's got to have his personal and I'm not going to say he she because it's too cumbersome, but I've no great women leaders. He's got to have his personal ambition under (00:37:56) control. (00:37:59) He gets his kicks from the organization's success from his people success. He's got a good measure of humility about his own performance and his own talents and skills. He never takes credit credits to important either pass it up or pass it (00:38:13) down. That's the first (00:38:17) second tough, but fair. Never hides bad news never shirks or delays on tough decisions honesty Under Pressure. That's another (00:38:29) way of Describing that (00:38:34) simplistic tends to be simplistic rather than (00:38:38) complex. tries to (00:38:44) provide goals simple understandable goals, not three-page statements of mission and values but a simple goal of people can understand and identify with always working on (00:38:54) rewards for his people focus. He's focused. He's concentrated, (00:39:02) you know, good old Peter Drucker said everything that I've said or Tom Peters is said or Warren Bennis has said only said it 20 years ago or 30 years ago. He said concentration is the key to economic success. All you got to do is the few right things and do them with Excellence. He said it's the most violated principle in American Business. Our motto seems to be let's do a little bit of everything. Well, that's the that's your politician a leader will focus the company on the few right things that have to be done right is the essential difference between a leader and a manager the manager gets his people to do things right a leader. (00:39:43) Just (00:39:44) people to do the right things the best way they can. persistence that belongs in that same (00:39:53) category (00:39:56) fourth characteristic. He's a coach a cheerleader expects the best of his (00:40:02) people works for his (00:40:04) people leads by (00:40:06) example (00:40:09) looks at his people as a resource instead of as a (00:40:12) cost (00:40:14) uses the what I call a rule of 50% you know, the corporate politician having no faith in himself has no faith in his people either top job opens up. He'll hire a management can mean a search firm and they'll bring in an electric blue suit at a high price. They'll raise salaries all around them and you're still teaching them the business two years later a leader. Uses the rule of 50% which is if you find anybody in your company who wants the job looks like 50% of what you're looking for and has the support of the people around him or her he promotes the person and goes home and sleeps like a baby because they'll grow the rest in 90 days. The last I mean the fifth one is visible chief executive has to be visible available Peters calls it management by wandering around. That's the only way I know he's a good listener. This is all part of the same and listening is why I think you need a new chief executive about every five or six years because if you listen right to people in pain and they're lots of people in pain and all organizations, they're trying to persuade you to do something different that affects them. You've got to listen until they get that look on their face that says by golly. He understands what I'm saying, which means you got to listen to him say it about four times and that's very painful and very boring. But if you do that, right and you can you wait for that expression, then you can say to a Marianne. I understand what you're saying now, will you go back and do it my way and she will go back and she will do it your way and should go home and tell her spouse that Evening the son of a bitch is still doing it wrong. But at least he listened to me and it takes all the anger and frustration out of the relationship and that's very draining for a chief executive to do but it's got to be done. He's decisive. This is the sixth item. This is why lawyers and accountants make lousy Chief Executives their risk adverse professions. They try to eliminate all the risk. They try to collect all the data by the time they do that the ball games over because the timing is (00:42:34) passed (00:42:37) you need a guy who can who can make a decision and have have make three decisions to a Morongo Holman sleep like a (00:42:45) baby. (00:42:49) Peters had a good phrase for the decisive executive it when it comes time to move even though you've only got 60 percent of the data. He says it's ready fire aim, and there's a lot of Merit to that because you can change course most of the time that once you get started you can identify the real Direction. Finally. The last thing is sense of humor. I've never met a good leader that didn't have a sense of humor that runs through (00:43:15) all the way rest of those things. (00:43:24) Only way really to know whether you're a chief executive or a leader or whether you have a leader or whether whether there's a leader in a section or a department or division at company is to observe the whole company if people enjoy coming to work. And if they'd rather do their work there, whatever it is, they do than any place else then you got to leader (00:43:47) there. That's the surest way of (00:43:50) finding out it can be you know, they can be chaotic. They can be articulate. They can be inarticulate. They can be type A they can be lazy. They can be fat they can be thin you can't tell but if people enjoy working and wherever they are then you're going (00:44:06) to leader. Thank you. No, it's all right. I'll (00:44:23) repeat it. He said what's the question was? What's this dress for success idea. This is this is a big Croc a nonsense also and you know anybody it's like it's like have a feeling that you need an important plush office in order to attract clients or to do (00:44:45) business (00:44:47) some of the most effective people. I know work in terrible little small cubby holes. If you ever become a chief executive or get promoted into a big job for heaven's sakes don't go out and buy a lot of three piece suits and get your hair styled. You're not going to fool anybody. You're still the same lovable lazy slob you were before you got the job and you might as well continue to act the way you did before after all it got you where you are. So, don't try to fool anybody. Please dress the way you're comfortable. (00:45:22) Now that you've reformed the private sector, how about the public sector? How do we reform the bureaucracy? (00:45:31) Well, I don't I don't think I don't think we're going to do that. I'm very much hopeful about the private sector. I think if we can if we can learn to promote leaders instead of managers and to identify leaders instead of managers the good old us of a may get another hundred years as an economic. Number one power, you know, most civilizations Peter out around 250 years Assyria did Persia the Arab Empire Spain Britain lasted two hundred thirty years. We've had to 10 and a lot of people say we're on the way out and we may be but if I think if we concentrate on on the difference between managers and leaders With the private sector leading the way and Academia and government trailing along bumbling along behind. We may make it for another hundred years in Surprise everybody. No more questions. Thank you very much.