In the question and answer period that followed Ben Bernanke’s speech today to the Economic Club of New York, the Federal Reserve chairman answered questions on why Lehman Brothers was allowed to fail, whether home prices are the root of the current problems and more. (Read the full transcript here.) Here are some highlights:

Bernanke speaks to the Economic Club. (Associated Press)

Lehman Failure

Lehman was not allowed to fail that in the sense there was some choice being made. There was no mechanism, there was no option, there was no set of rules, there was no funding to allow us to address that situation. The Federal Reserve’s ability to lend which was used in the Bear Stearns case, for example, requires that adequate collateral be posted so that we are not taking credit risk, we are lending against collateral. In this case that was impossible. There simply wasn’t enough collateral to support the lending. From the Treasury’s perspective, unlike the FDIC, deposit insurance fund, there were no funds, there was no option. We worked very hard over one of those famous weekends, with not only some potential acquirers of Lehman but we called together many of the leading CEOs of the private sector in New York to try to come to a solution. We didn’t find one, and therefore we were unable to do what we wanted very much to do, which was to prevent the failure of the company. Read more »

One of Shanghai’s luxury fairs with the most god-awful names is getting a makeover. And a name change. From now on, the Millionaire Fair will be known quite simply as — The Fair.

The name change, however, still doesn’t mean we’re going to be able to afford anything at the fair. The over-the-top luxury sports cars are still going to be there. The mobile phones on display will still continue to be dripping with diamonds. And wonderful members-only clubs such as the, er, Asian Elite Club, will still continue to be exhibiting.

Read more »

In February I wrote about scapegoating at work after noticing that the issue was coming up more and more with my coaching clients. It struck me that scapegoating had become a widespread and growing problem which was posing significant career implications for the victim.

What I hadn’t realised was just how endemic the phenomenon appears to be - as the comments the post attracted - and continues to attract over a month later - from people around the world. It appears to be happening every day, to a whole range of people, at all levels and in all sorts of companies, from India to Africa, Asia, the U.S., and Europe.

Here are some of the comments from people who have either been made scapegoats themselves or who have observed others suffering the same fate at the hands of their managers. I have grouped them under themes in order to try to make more sense of the phenomenon, plus a couple of questions at the end that remain unanswered for our commentators. My sincere thanks to everyone who sent in their comments and suggestions - from personal experiences to practical ways of dealing with scapegoating and suggestions for reading material. (I recognize this is very long, but that demonstrates how important many of you found this topic.)

Prevalence of scapegoating
This is one of the facts in professional life.(Anon)
One can find this vice practised all over the world. (Audrene Loke )
Scapegoating is becoming the ‘norm’ in the corporate world (Anon)
It is very common in small start-ups when it is all about the interests and directions of the CEO (L)
I don’t believe there are managers out there who haven’t been targeted as scapecoat one time or another throughout their professional career. ( A Wong)
Scapgoating is well known in the healthcare industry (Dinesh Patel)
This is schoolyard bullying in a corporate suit. (T.L. Scott)
I know of endless number of cases wherein managers have damaged the self-esteem of their subordinates. (Uma Arora)

Who is scapegoated?
Successful senior executives (Angela Blackburn/Kate)
Whole teams ( Anon)
Foreign-born engineers in Silicon Valley (Miai)
Junior staff (Amitava Mukherjee)
Quiet people who get on with their jobs (Anonymous)
All levels and in all functions of any organization. (Farooq Ahmed)
A new senior manager dismissing a reportee manager: “I don’t like her; it’s chemical”. (Out Loud)
Inter-departmental in large corporates (Virender Vaira)
Generally to a ‘nobody’. (Vijay)
People with as much as 30-40 years of experience. (pm)
People who do not have a voice.(pm)
Green employees with little or no experience (Oluwafemi Abioye)

By whom?
The boss (Anon)
The CEO (Anonymous)
Brilliant, well educated and successful young executives who grossly abuse their power and authority with no negative consequences (Angela Blackburn)
Those who are more visible to senior management and have more say (Vijay)
Above-board staff who have played politics - seeming them as a sincere, trustworthy and ever performing staff… (Oluwafemi Abioye)

When?
When an unfavourable result occurs and performance is poor (Mike Sewell)
When a new person has taken over as boss.( Anisur Rahman )
Whenever there’s a change - a new person is hired, a merger, a change in existing responsibilities or some other performance based initiatives. (LH Wong)

Why?
[This is] an old and very human tendency. Scapegoating exists in families, among friends, partners and as described above at the work place. Always has. (Mahadevan Sundarraj)
Globally we have lots of wrong pegs in wrong holes in terms of leadership - until leadership qualities are addressed the ugly incidence will continue to spread like cancer in our work environment. (Oluwafemi Abioye)
Less focus on hard work, more focus on quick progression and higher rewards leads to the short cuts. More focus/pressures on results and less focus on the route adopted to attain the results. (Farooq Ahmed)
All the actions are driven by the fear of what the result will be & how the boss will take the meaning. (Anon)
Scapegoating is often resorted by people with a herd mentality (Anonymous)
To create confusion and chaos, to blame rather than fix the problem itself. (Gyan Chand)
Pressures and desires to survive & compete, leading to manupulative tendencies (Virender Vaira)
So an individual may remain in good books of their superiors. (Pm)
Because of the inability or inefficiency of the boss to lead from the front and take onus of his / team resposibilities. (Arun)
Management playing a polical game, pitching one race group against the other. (miai)

Effects of scapegoating
Once scapegoating is observed and condoned, it will spread like fire, demotivate hard working employees who play by the rules and morale will spiral downwards. (Lena Lim )
Solid organisations stand to lose excellent staff thru this unethical practise. (Audrene Loke)
In many cases it takes people months and sometimes years to recover and reconstruct themselves from the damage. (Uma Arora)
10 years on I have not recovered - even today I am suffering because of this and unable to come out of this in my professional life. (Prasanna Kumar)
“Skin saving” attitudes [prevail rather than] than a real work (Jayant)
I was scapegoated by my CEO. I was the star performer now I am in therapy. This is a truly detrimental practice but its sadly the truth in business. (Anonymous)
Many workplace psychological crimes go unreported - the victims and oppressors stay quiet because they don’t want to risk their jobs. (Uma Arora)

What should managers do?
The same techniques we teach our children to use when dealing with bullying apply here. Regardless of whether we are the bullied or the bystander, staying clear, staying silent only supports the behavior. (T.L. Scott)
“Each manager or leader should at least communicate with two levels below him” or may be three levels. (Farooq Ahmed)
There should be something called organizational journalism - people should have a free voice to express their views at all levels so that before someone tries to make a scapegoat, it gets viewed in a very negative light by all concerned.(Uma Arora)
This would be typical issue for internal audit as shareholder’s value being destroyed by either team, CEO, who ever. (Martin Skakala)
Build trust and exercise ethical behavior at all times. It starts from the top. Remove the scapegoater if identified and proven, this person is neither a team player, nor does he or she has interests of the organisation as a whole, but only that of himself (Lena Lim)
Blame-placing should be discoraged - fixing problems is more important than finger pointing. (Jim Wile)
Regular 360 degrees feedback will go a long way in ensuring that such instances, if any are not left under the cover before the annual review / appraisal cycle. (arun)
Management has a role to play in being explicit about accountabiltiies and managing both the team and individuals. It is management’s responsibility to have a real, objective understanding of the performance and people issues behind unsatisfactory results. (Mike Sewell)
Managers should have an insight of the situation and try to investigate causes that lead to an individual be scapegoated. (Anonymous)
A cross-functional team should be put in place to examine such incidents to identify the scapegoater and he/she should either be eliminated or kept on strong vigil to avoid further damage. (Amitava Mukherjee)
Being specific and demonstrating visible and ‘public’ attempts to rectify the situation are advisable. (TL Scott)
Incorporate ethics and leadership courses more effectively into our schools, beginning in high school all the way through grad school. (Angela Blackburn)
Managers need to be more skilled and committed to spotting and stopping bad behaviors at the onset. (LH Wong)

What should victims do?
Keep good records of everything, and I mean everything, that you’ve done during the course of your work day…. from telephone conversation to e-mails to any other written documents. (A Wong)
Quiet, consistant, firm, ethical behavior has rewards greater the the price paid. Have a plan not to be a victim and hold to your standards! (Rick Lorenz)
Sometimes the best thing is to get out of Dodge. Some organizations are toxic. (Rick Maurer)
Don’t allow yourself to become a victim.Trust your instincts and never, never stop networking so that you do not feel trapped in a position that may negatively impact your self confidence and long term success. (Angela Blackburn)
Remaining can eat away at the employee’s sense of self-worth. When the only feedback you get is negative, it’s hard to keep remembering that it isn’t you. (Rick Maurer)

Purushotham Kumar V has this great outline of steps to take:
One should not only be good, but also be smart enough to prevent being scapegoating target. In my view, the following can be the steps to deal with scapegoating:
1. Build trust and confidence with peers, superiors, manager and manger’s manager.
2. Keep eyes wide open: observe who have the attitude to blame others when things fall apart, can be very minor situations. Those who take personal responsibility for failures are trust worthy folks.
3. Build protective fence from blamers, because these will be the potential candidates for scapegoaters. The protective fence includes building visibility, trust and confidence with the potential scapegoater’s manager, peers and other infulential folks in the upward hierarchy.
4. Maintain all documentation and evidence for all good work, communication, interactions with potential scapegoater. Maintain memo / document minutes by asking directed questions.
5. Communicate and attempt build positive relationship with the potential scapegoater. Try understand his/her perspective and analyze what you can do to bridge the gap.
6. When scapegoating seems peaking beyond acceptable threshold, raise the alarm, expose the scapegoater, use some of the documentation and evidence (still save some for later use, just anticipating counter moves by the scapegoater’s supporting party), invoke witness and support from the scapegoaters superiors and peers. Do some social service by doing your best to ensure the scapegoater does not continue in the environment.
7. If the upward hierarchy environment is hopeless, remove yourself from the environment before situation lands you as a scapegoat.

Last but not least, sympathy will only bury the victim into the problem. Let each target ask him/herself “what in me allowed scapegoating”.

I’d like to open up the debate again by building on these questions:
* Why is scapegoating happening so much now?
* Who are the targets and why?
* What are managers’ responsibilities?
* What can the victims do?
* What can the rest of us do about it?

Three respondents also have further questions:
* Diana: How does the scapegoater choose his or her victim? What is the profile of the victim? Male or female?
* Mayra Coppin: When this occurs in a direct reporting relationship, what are the most effective responses?
* Jim Wile: What about management’s involvement in and encouragement of scapegoating?

Let’s get to the bottom of this issue and see if we can construct some more useful, pracical approaches to ensure it doesn’t affect too many more individuals, teams and companies. I look forward to hearing from you.

Read all of Gill Corkindale’s Letter from London posts.

This is the second installment of a two-party entry on personal branding. Read the first part, The Return of the Personal Brand.

If, as I argued last time, personal branding is now a prerequisite for career success, what does your brand need to offer? I was happy to read your responses. Now I’ll weigh in.

Your personal brand needs to be:
• Compelling to your audience
• Authentic
• Consistent
• Well-known

So what do you need to do to make it happen? Here are some ideas, based on my own thoughts, together with Tom Peters’ work and those who have developed his ideas over the last decade:

• Rethink the way you view your career. Don’t think of yourself as an employee but as an asset to that you own. Forget your job title. Ask yourself: What do I do that brings value? What I am most proud of?
• Reassess your loyalties. Put loyalty to yourself first. Then be loyal to your team, your project, your customers, and your company.
• Be authentic. Be honest about who you are — your attributes and qualities. If you know yourself, you can promote an honest brand.
• Learn from the big brands. Identify what makes you distinctive from the competition. What have you done recently to make yourself stand out? What would your colleagues or your customers say is your greatest strength?
• Make yourself visible. Build your profile internally and externally. Ways to do this include networking, signing up for high-profile projects, showcasing your skills in presentations or workshops, writing for internal or external publications, volunteering for committees or panel discussions at a conference.
• Be consistent. Ensure that your message is consistent. If it is erratic, it will undermine your efforts. Everything you do — and choose not to do — contributes to your personal brand, from the way you talk on the phone to the way you behave at meetings or write emails.
• Balance substance with style. Don’t forget that the way you do things is often as important as what you do. Do you speak succinctly? Do you command attention? Do you look the part?
• Build and manage your marketing network. Your friends, colleagues, clients, and customers are an important marketing vehicle for your brand. What is said about you will determine the value of your brand.
• Learn to influence. Use your personal power, your role and your network. But use them sensitively and intelligently, or else you will not be regarded as a credible or trustworthy leader.
• Seek feedback. It’s critical to keep checking the value of your brand. This can be done by formal methods such as 360 feedback or informally, by asking people around you for honest and constructive feedback on your performance. Another good way to check is to go for job interviews, regardless of whether you wish to change jobs, which will help you test your market value.
• Reassess. Keep checking what motivates you. What’s your personal definition of success? Write yourself a personal statement about why you work and check it regularly.

What do you think? Is personal branding vital for success at work? Is the concept relevant only to Western executives or is it also important for managers in emerging markets? Are there any drawbacks to marketing yourself in this way? If so, what should you do about it?

Read all of Gill Corkindale’s “Letter from London” posts.

MORE ON PERSONAL LEADERSHIP:
Five Steps to Building Your Personal Leadership Brand (HMU Article)
Anchor Yourself: Keeping a Sense of One’s Essential Personal Identity Is Key to Weathering the Storms of Leadership (Chapter)
Becoming a Resonant Leader: Develop Your Emotional Intelligence, Renew Your Relationships, Sustain Your Effectiveness

“The Bottom Line: People are important, no matter their stratum”: Of all the thought-provoking comments I have received this year in response to Letter from London, it is this comment, posted by Daniel Sirois in August, that has influenced me most.

In The Fundamental Religion of the Bottom Line, I asked whether the relentless pressure to drive growth and efficiency could drive humanity from the workplace. I was worried that the absolute focus on the financial bottom line was too brutal, an approach that would turn business into an emotional wasteland. Companies would become places of darkness, humiliation and intimidation, where, as anthropologist Howard Stern observed in Nothing Personal, Just Business, workers could become “collateral damage — resources to be used, exploited and discarded.”

Perhaps I was in a dark place when I wrote this post. In my work as a coach and organisational consultant, I hear so many stories of dysfunctional workplaces, bullying bosses, and corporate greed that it is sometimes difficult to remember that there is something so much more important and elevating than business: people. Every company, big or small, new or established, successful or failing, is nothing more or less than its people. How people are led and managed — how they are made to feel about their work — is usually the difference between a great company and a bad company.

Daniel’s comment resonated with me because it was a timely reminder for me that all people matter, regardless of their level in the organisation. Senior executives like to show that they are important through their offices, dining suites and reserved car-parking places, but, in truth, their absence rarely affects the smooth running of a company. The same cannot be said about office administrators, facilities management staff, receptionists, canteen workers and cleaners. Without these people, companies soon start to fall apart — yet these are often the very the people who are afforded the least recognition.

People skills will be more important than ever as we head into the uncertainties of 2008. The threat of recession, global credit squeezes, and political uncertainty will magnify the challenges all businesses will face in the coming. But without emotional intelligence, clear communication, delegation, feedback, giving recognition and celebrating success, companies will fail their employees, their customers, their shareholders and all their other stakeholders. Ultimately, they will probably fail completely.

As this comment shows, it’s time to put people first. Eli Zander, a fellow commentator, echoes this: “Staff who feel involved will always perform better. They will be healthier, work harder and stay longer”. And Lewis Alexander: “It is not only right to do so, but good for business.” But perhaps the last words should go to to Ramesh, who believes that by remembering we are all in this together, we avoid ‘successful meaninglessness’, so that, in the words of In-Odu: “We can all work and live in peace.”

Read all of Gill Corkindale’s “Letter from London” posts.

Even as the economy continues to show signsof softening in many sectors, competition for top talent remains intense. And, as I’ve discussed before, just as in consumer marketing, one of the keys to attracting talent is to offer elements of the employee experience that match the values and priorities of the individual being recruited.

What are you promising – or if you’re in the job market, hearing – today?

Here are some of the themes that I’ve heard recently. What would you add?

Some organizations are reassuring key influencers (a.k.a., parents) that they will be a good experience for the loved one. The U.S. Army says: “You made them strong. We’ll make them Army strong.”

Other organizations are providing key influencers out and out incentives to steer loved ones in their direction! SkyWest Airlines says: “. . . our employees and their parents have access to worldwide travel discounts on airfare, rental cars, hotels, all inclusive resorts and cruises. So, go ahead, tell your kids to apply . . . And have them give you the world for a change.”

Some firms offer special amenities, most designed to make the new employees’ life more productive by making key tasks more convenient and/or enhancing personal health and fitness. Abbott Laboratories offers on-site fitness centers and a “sports and activities” program. Google provides free gourmet lunches and on-site massages.

The degree of opportunity, challenge and responsibility offered continue to be important determinants for many applicants. Enterprise Rent-A-Car is known for offering new hires some of the most independent and entrepreneurial opportunities available. After a management training program that is like an “MBA crash course,” new hires get to run their own business. Deloitte & Touche, PricewaterhouseCoopers, and Ernst & Young are popular employers because, ironically, of the visibility and importance the accounting profession has assumed in the wake of the Enron era. Enron taught us that accountants are vital to the fortunes of a company – and that accounting provides employees with an opportunity to be in a position that’s responsible.

In some cases, offering young employees a unique opportunity can have special appeal. DHL, which used to hire only experienced salespeople, offered nine recent college grads a shot at sales last year (and a comprehensive training program to support the move). The company, which is expanding the program this year, says the program not only attracted nine top candidates, but the new hires generated more revenue and more shipments per sale.

Time-related policies – whether the job has flexible hours and locations – are big elements of most recruiting pitches. Even more importantly, some discretion around the use of one’s time can be a powerful incentive. Google has a policy of letting all employees devote one day a week to developing new ideas.

The career path offered, including the speed of movement and, particularly, the degree of senior coaching and support available, can make a big impression on candidates weighing multiple offers. Abbott Laboratories offers an extended orientation that includes goals for the first, second, and third months on the job, as well as the promise of consistent dialogue with managers. PricewaterhouseCoopers lets employees decide when during their first 90 days they would sit down with their boss for a performance review.

Opportunities for community service or other forms of giving back are increasingly popular. Some of my personal favorite recruiting promises are those that allow greater – more frequent and more intimate – access to senior executives. This latter theme is consistent with one of the findings from our research on collaborative cultures – the importance of executives who create a “gift culture” – a norm of informal mentoring, feedback, career advice, and frequent coaching. One major insurance company is offering new recruits the promise that, after 18 months, they will have an opportunity to spend a week in Nicaragua building houses with the CEO – a very clever way to combine two important themes in one great offer.

What are you doing or hearing on the recruiting front today?

What is Lean?< ?xml:namespace prefix = o ns = 'urn:schemas-microsoft-com:office:office' />

Lean is a methodology that is used to accelerate the velocity and reduce the cost of any process (be it service or manufacturing) by removing waste. Lean is founded on a mathematical result known as Little’s Law:

Lead Time of Any Process equals the Quantity of Things In Process divided by the Average Completion Rate over the Unit of Time

Lead-time is the amount of time taken between the entries of work into a process (which may consist of many activities) to the time the work exits the process. In procurement the Things in Process are the number of requisitions, in product development the number of Projects-In-Process, and in manufacturing the amount of Work In Process. Lean contains a well-defined set of tools that are used to control and then reduce the number of Things in Process, thus eliminating the non-value add cost driven by those Things in Process.

The Pull or Kanban system puts a cap on the number of things in process, thus putting a cap on the lead-time. Lean also contains tools to reduce the quantity of things in process including setup reduction, total productive maintenance, 5S, etc. For example, setup reduction allows the reduction of the time spent on producing a quantity of any given offering or product, reducing lead-time without reducing the completion rate. The Lean methodology has a bias for action, leveraging Kaizen to rapidly improve processes and drive results.

Why should Lean be important to Six Sigma professionals?

Whereas Six Sigma is most closely associated with defects and quality, Lean is linked to speed, efficiency, and waste. Lean provides tools to reduce lead-time of any process and eliminate non-value add cost. Six Sigma does not contain any tools to control lead time (e.g., Pull systems), or tools specific to the reduction of lead time (e.g., setup reduction). Since companies must become more responsive to changing customer needs, faster lead times are essential in all endeavors. Lean is an important complement to Six Sigma and fits well within the Six Sigma DMAIC process. Additionally, the Lean Kaizen approach is a great method that can be used to accelerate the rate of improvements.

You need to improve quality so you can achieve maximum speed, and you need to do the things that allow maximum speed in order to reach the highest sigma levels of quality.

In other words, you need both Lean (speed) and Six Sigma (quality) principles and tools to drive improvements in Return on Invested Capital or ROIC and achieve the best competitive position.

Can you provide an example of how Lean coupled with Six Sigma would help address a transactional process issue?

The processes of all companies and organizations must:

Become faster and more responsive to customers

Achieve Six Sigma capability

Operate at world class cost

Only the combination of Six Sigma and Lean can fulfill all three goals. In any process, Lean Six Sigma creates a value stream map of the process identifying value add and non-value add costs, and captures the Voice of the customer to define the customer Critical To Quality issues. Projects within the process are then prioritized based on the delay time they inject. This prioritization process inevitably pinpoints activities with high defect rates (Six Sigma tools) or long setups, downtime (Lean tools).

A manufacturing process issue?

In manufacturing, a further benefit results from a reduction in working capital and capital expenditure. We have found over the last 15 years that these methods apply in virtually every kind of process from healthcare to financial services to energy to manufacturing.

What role can Lean play in a company that has already started implementing Six Sigma?

Lean will add another dimension of improvement in process speed and reduction of non-value add cost. Further, by accelerating process speed, Lean provides faster feedback and more cycles of learning enhancing the power of Six Sigma tools. For example, an L18 Design of Experiment might require about 100 separate runs to optimize parameters and minimize variation. Reducing the lead time by 80% will allow the fractional factorial design to be completed five times faster. In addition, the Lean Kaizen approach allows Black Belts to implement rapid improvements whenever possible.

Steven Bonacorsi is a Senior Master Black Belt instructor and coach. Steven Bonacorsi has trained hundreds of Master Black Belts, Black Belts, Green Belts, and Project Sponsors and Executive Leaders in Lean Six Sigma DMAIC and Design for Lean Six Sigma process improvement methodologies.

Bonacorsi Consulting, LLC.
Steven Bonacorsi, President
Lean Six Sigma Master Black Belt
14 Clinton Street
Salem NH 03079
sbonacorsi@comcast.net
603-401-7047