Friday, November 25, 2011

Peak performance

I have been reading Arie Kiev’s book, The Psychology of Risk: Mastering Market Uncertainty.  He was a psychiatrist who died in 2009 at the age of 75. He was a prominent researcher in the fields of suicide prevention and depression. Later in his life he studied athletic peak performance, and in the last part of his life, the peak performance of traders and investors on Wall Street. He was an advisor to the famed hedge fund trader, Steve Cohen, of SAC capital. The book has many vignettes of how traders experience fear and anxiety and how that shapes their trading positions; for example, not building up positions in potentially profitable trades, selling winners too early or holding on to losers too long. His edited transcripts of his interviews with traders have the ring of authenticity.

His overall advice to traders might at first seem conventional. They should not fret over their previous failures, they should overcome perfectionism, they should observe their feelings without succumbing to them, and they should keep a diary of their trades and the feelings that accompanied them. Most importantly, he suggests that traders should subordinate themselves to a goal, for example a certain level of profit per-week or month, rather than to some imagined conception of either their prowess, if they are grandiose, or their shameful inadequacy, if they are fearful. The goal is everything. In psychodynamic terms, you could say that the goal should displace the ego. Just as theorists of “flow” might suggest, the trader should concentrate entire entirely on his performance in the here and now. There is the situation, the goal, and his skill. Nothing else.

A person attuned to psychodynamics might argue that this formula presumes the solution --the egoless trader -- rather than addressing the problem of how to achieve such a state of being. Would that we all could act as if we had no past, that we never succumbed to fixed ideas, “old tapes,” and grandiose fantasies? But Kiev has an answer to this objection. It is based on the idea of action. In the presence of risk, the trader has to “burn his bridges behind him,” for example, by making a commitment to a sizeable position in a particular stock, and in the face of the risk taken and the stakes accepted, draw on his best performance to make good on his decision. You can’t think your way to action. You have to act your way into new thinking. The prerequisite for change is danger not safety.

To the psychodynamically attuned this is a discomfiting idea. People develop in therapy or analysis, it is imagined, because the therapist or analyst provides safety and reliability. Indeed, in the days when ego psychology reigned in the United States, say in the 1950s, a patient was instructed to make no important life-decisions during her psychoanalysis. The patient was seen as fragile and vulnerable.

But perhaps there are two kinds of vulnerabilities. There is the sense of vulnerability prior to action, where our greatest fear is that we will disappoint ourselves or disapprove of our own conduct. But there is vulnerability within action, where we give it “our all,” knowing, that while we must be as prepared as possible, there are no guarantees.

Kiev’s book makes me think that I have something to learn about performance from performance coaches.

Wednesday, November 16, 2011

The Refusal of Leadership

The Occupy Wall Street protestors were expelled from Wall Street. In this blog post I want to focus less on the political meaning of this event, and more on the nature of the group dynamics the protestors created. It is readily apparent that the protestors organized themselves on the basis of a principle that we might call, “the refusal of leadership.” A YouTube of the protestors in Atlanta is striking here. ( John Lewis, a civil rights icon, came to address the protestors. The group, using a process in which  all participants repeated, sentence for sentence, what any speaker said, decided to keep to their agenda and refuse Lewis a chance to speak. Any viewer of the YouTube can hardly doubt that the protestors were serious and sincere, but the result of their group process feels extreme, if not outlandish. Why show such disrespect to someone whose moral and physical courage is beyond dispute, and whose place in the history of democratic movements is unquestioned? 

This “refusal of leadership” hobbled the protestors in many other cities as well. Their decision process was laborious and slow, and no one from the group could be authorized to speak on its behalf. This made it difficult for them to negotiate with city authorities, build alliances and produce a coherent message through which they could amplify their influence. It is more likely that while the group’s overt task was to protest, its latent or un-verbalized task, was to be a perfect group, where perfection meant that there was nary a sign of difference, since difference meant inequality.  Acknowledging Lewis threatened this task, since it meant acknowledging his unique leadership qualities.

One question is where does this principle of the “refusal of leadership” come from? The German philosopher, Hermann Keyserling, expanded the contrary principle, which he called “the leadership principle” (Führerprinzip), or the principle that some select few were born to rule and should therefore be followed. The Nazis embraced this principal as part of their ideology of governance. If “the refusal of leadership” counters this idea, then it is surely welcomed. But is that its full meaning?

I am drawn to psychodynamic thinking here. Psychoanalysts thinks of the classic battle of the generations as one in which the father is “overthrown.” This concept can be used, sometime profitably and sometimes not, as a way of understanding revolutionary moments in history. But one interpretation of OWS is that the protesters did not wish to overthrow any particular father; instead they wished to eliminate the role of the father altogether. As my colleague Howard Schwartz as argued, a society without fathers, psychologically speaking, is a society with mothers only. In such a society the primary task is to ensure that everyone feels loved for just who they are, which means of course, that everyone is equal.

If this interpretation has merit, it leads one to worry that the protestors are expressing a cultural cul-de-sac. There is little doubt that authority today must be re-worked.  The new technologies are changing the equation between individuals and institutions.  But if authority is abolished then so is agency; that is, the capacity to formulate plans, amass resources, and achieve results.  It is this lack of agency that lends a certain pathos to the video of the Atlanta protestors.

One can’t help but think about the dilemmas facing Obama as a leader. It is likely that some of the same people who occupied Wall Street and its analogues in other cities, had great expectations for Obama. They projected into him great ideas, hopes and ambitions and, had he accepted these projections, he would have been a new leader-father. Instead he recoiled, and fell back on his intellectuality, cutting himself off emotionally from his supporters. It is almost as if there is a dance between Obama and his followers. They propose that he lead them, and when he refuses, they turn inwards to create societies without fathers, effectively abandoning him. Is it too great a stretch to think that in rejecting Lewis, an African American hero, they were also rejecting Obama?

Friday, November 11, 2011

Penn State and organizational myths

People are aghast that Joe Paterno, the head coach of Penn State University’s football program, and Graham Spanier, the University’s President, did not stop a football coach, Jerry Sandusky, from abusing young boys in the Penn State gym over the course of 15 years. Their behavior has raised questions about leaders’ ethical conduct and compass.  

I suggest that this horrific story also reveals something about the role of organizational mythology in shaping leadership behavior. An organization mythology is a story people inherit and then retell about what makes the organization special and distinctive, what has allowed the organization and its members to be members of an elite. When the mythology is widely held; for example, “Penn state’s football program and prowess is without parallel,” or, “What is good for General motors is good for the country,” as its CEO once said, then people who belong to the institution feel the glow of the myth and are elevated by their membership.

Yet in a classic study, Abraham Zaleznik studied the stress levels of workers and managers in a Canadian organization. To his surprise, he found that the lower down a person was in the hierarchy, the more job stress he or she experienced. This contradicted the common sense notion that executives bear more risk and therefore more stress. Zaleznik suggested that the people at the top of the organization were more likely to find succor and support in the organization’s mythology. Since they were at the top they could feel closer to the institution’s special sauce, and could imagine having a hand in sustaining its magical qualities. The normal stresses of work, as well as the uncertainties associated with the organization’s relationship to its setting, were therefore less troublesome to them. They were part of the mythology. 

On the other side, it is people in the trenches who often experience the underside of an organization’s functioning; for example, managers’ carelessness with petty cash, quality problems on the production line that are covered up, a male managers’ predatory behavior toward women, and dishonesty with expenses accounts. People down below often keep the seamy side hidden from people above, because they sense the danger in puncturing the organizational mythology. Why risk attacking the fantasies of the people on top? They may retaliate. Consequently, the executives on the top wind up having a “Potemkin village” view of their own organization.  

This framework may shed some light on two of the puzzling features of the Penn State case. Not only did the President and head coach fail to act on information available to them -- Spanier learned of police investigations into the reported abuse as early as 1998 -- but they failed to develop any crisis management plan in response to the scandal’s certain revelation as a result of the grand jury investigation. On the other side, people have been puzzled about a janitor's failure to report his seeing Sandusky having oral sex with a young boy in a gymnasium shower. They have also wondered why a young graduate assistant, upon witnessing Sandusky raping a 10-year-old boy, had to first seek his father’s advice before reporting the incident to Paterno (not to mention the police).

Perhaps the concept of organizational mythology is useful here. The mythology is protective for people at the top, while the contradiction between the mythology and facts on the ground make it dangerous for people at the bottom. That is why the leaders ignored the reports of abuse and were so unprepared for the certain crisis, and people in the trenches were frightened by the prospect of reporting what they had seen.

It is probably true that organizational mythologies are harder to sustain today. Competition and market forces humble great companies quickly. Perhaps today, leaders at the top are losing mythology’s protective power. One question is, what is their response? Do they turn to the hard work and the stress of ensuring that the company continues to produce value for stakeholders?  Or do they look for escape clauses, like golden parachutes, to reduce their dependence on an organization that can no longer provide myths.

Monday, November 7, 2011

Disney, YouTube and Identity

The New York Times reported today that Disney and YouTube have sealed a partnership in which Disney will produce video shorts to be distributed through a co-branded YouTube and Disney web site.  The Times goes on to note that Disney hopes this deal will enable it to stem the loss of visitors to its website, This decline in visits has led to lead to $300 million financial loss over the last year for its online division, Disney Interactive. The deal represents a turnabout for Disney, which has up to now pursued a “go it alone” web strategy.

One could look at this as a simple business deal, a tactic in pursuit of higher profits. But it is useful to consider what is it that Disney represents as a cultural institution. Disney’s film franchise is rooted in fairy tales.  Fairy tales are morality plays that help children differentiate between good and evil and assure the child, that despite the dangers of childhood, there are beneficent adults who will protect them as long as they are good and dutiful. So Little Red Riding Hood should be wary of dangers in the forest, but should she be attacked, a good woodsman will come to her rescue. Cinderella will find her prince despite the evil machinations of her stepsisters and stepmother, if she remains uncomplaining and cheery.  It is also helpful to note that the Grimm brothers published their fairy tales as one venue for creating a shared German language and culture, for linking families to a wider world.

What this suggests to me is that fairy tales are one avenue through which children can take up an identity offered to them by the adult world. They learn what it means to be good within a cultural landscape adults have fashioned, and they can identify their own aspirations for a good life with the fairy tale heroes who live “happily ever after.” We can think of this process as one through which adults confer an identity on children by first scaring them, and then offering them a formula for living in plentitude.

YouTube presents an entirely different proposition; it provides no master narrative of good and evil. By enabling visitors to sample, scan and search, it asks them, “What kind of person are you?” “What motivates you?” “What in this wooly combination of funny, fictional, instructional, professional and amateur videos that gives you the greatest pleasure and the most meaning?” Instead of conferring identity, it helps children explore identities. The web, as Sherry Turkle reminds us in several of her books, is a marketplace of identities.  Looked at from this perspective, one can see why might be failing, why the number of visitors to its site is falling, and why it is losing money. It is approaching its future through the rear view mirror of the master narrative.

Lacan, the psychoanalyst, argued that a child is not a person until he takes on “the name of the father.” This play on the words of the Catholic Catechism, suggests that that a child becomes a person only when he internalizes the cultural meanings of the adult world, represented by the father, or more generally the “paternal function,” which is the parents’ representation of the human world beyond the family. It is a world of cruelty as well as kindness, a world of indifference as well as care. It is the world of grown-ups.  But what happens when fathers or more generally adults no longer believe that they can be effective guides. Is their role then to facilitate the child’s naming of himself, while the social media becomes a tool for finding names?

This raises another practical business question. In positioning the new website can the partners, Disney and YouTube really carve out an intermediate space between receiving an identity and exploring an identity? Can you co-brand master narratives with a process of searching, hyperlinking and free-associating? The logic of this augment would suggest no. This does not auger well for the partnership’s success.

Sunday, November 6, 2011

Managing disappointment

Jon Corzine’s failure at MF Global brings to mind the classic article written by Abraham Zaleznik entitled, “The Management of Disappointment,” (Harvard Business Review, Nov-Dec, 1967).  Zaleznik argues that people who strive for power will most often face significant disappointment and defeat. Think for example of Steve Jobs' firing form Apple, at the age of 30, after his conflict with the president John Scully. His company NEXT, which he founded after his "exile," failed as well.

The question becomes, not how to avoid defeat, but how to work through the experience of defeat. How can a leader gain insight and courage by deriving meaning from the failure itself? For example, Zaleznik describes briefly how Winston Churchill recovered from his personal defeat when the Britain’s military operation at Gallipoli in World War I failed, a campaign he had strenuously argued for. He was forced to resign his position as First Lord of the Admiralty, and it appeared that his political career was over. Yet he became one of the greatest war leaders in modern times, inspiring the people of his island nation to resist Hitler, after the British army was nearly defeated at Dunkirk. Zaleznik suggests that he recovered his conviction and passion by writing history and by relying on his trusting and loving relationship with his wife. 

Jon Corzine, suffered two significant defeats, his ouster as head of Goldman Sachs, and his subsequent defeat in the gubernatorial election (for his second term), in New Jersey. One question is, what meaning he made of these defeats? From a psychodynamic perspective we could say that a person works through the experience of defeat by overcoming the fantasy of omnipotence that leads so often to over-reaching in the first place. The defeat becomes a lesson in how to bear up under, yet use, one’s limitations. One result is that the leader becomes more connected psychologically to reality and less invested in fantasy. This new and strengthened relationship to reality becomes the basis for the leader’s “second coming.” He or she is then “twice born.” 

While I can only speculate here, newspaper reports suggest that Corzine approached his leadership role at MF Global as a reprise of his glory days at Goldman Sachs. He was going to transform a somewhat sleepy broker/dealer into a new Goldman Sachs. Was he in this sense repeating his past rather than trying to learn from it?

Let me draw attention to one detail that I think is significant. Corzine was injured severely in an automobile accident. His driver was speeding down the New Jersey Turnpike at 90 miles an hour while he sat in the front passenger seat without wearing a seat belt. His limousine collided with another car and Corzine experienced significant injuries to his chest, lungs and legs, and cuts to his face requiring plastic surgery. There is reason to believe that his subsequent electoral defeat was shaped in part by his debilitated physician condition. He experienced diminished physical stamina and reduced powers of concentration for a considerable period of time.

Let me speculate that the accident typified the same denial of risk and danger – no seat belt at 90 miles per hour—that characterized his leadership at MF Global. After all several months prior to its collapse, regulators were concerned by the level of risk MF Global was taking by using borrowed funds to buy European sovereign debt. If these two examples of risk taking are connected, it suggests that Corzine was repeating history rather than learning from it. One possibility is that he failed to consider how his own choices, not wearing a seat belt and prompting his driver to speed at 90 miles per hour, played a role in his subsequent injury. He saw it as an accident rather than as an example of his over-reaching.

If this speculation has merit, it suggests that Corzine is the kind of person who does not entertain readily, what psychologists call the “work of mourning,” the process though which people become reconciled to their disappointments. In the work of mourning one grieves for the loss of one’s imagined omnipotence. Perhaps Corzine could never reconcile himself to the role he had played in his own defeats. 

Thursday, November 3, 2011

MF Global and productive antagonism

MF Global’s collapse is sad and disturbing; sad because it represents an ambitious man’s failure, disturbing because it highlights the fragility of financial institutions. But I want to draw attention to one only lightly remarked upon feature of the story. It was noted that when Jon Corzine, the CEO of MF Global was at the investment bank Goldman Sachs, traders were held in check by a vigorous risk management division which assessed the overall riskiness of the firm’s book of business. The two groups, risk managers and traders, were antagonists but deliberately so.

There is an underlying principle of organization here. It is common today to praise organizations and groups whose members “bust silos” and break down barriers, all in the service of creating one great team. But as the Goldman Sachs case suggests, checks and balances and the resulting antagonism these create, are important to the success of the firm. Indeed, such productive antagonism can result in overall better performance. The trader who is constrained by the risk manager must be all the more creative as a trader to generate profits for the firm. The risk manager who checks creative traders must be all the more creative in developing controls and measures for monitoring traders. It is not unlike the way in which one person’s tennis game improves when he plays against a better player. The antagonism raises the level of his game.

One question is; what is the nature of the setting that can develop and contain this productive antagonism? The description of MF Global suggests that Jon Corzine was an oversized presence in the firm, that as an ex-Goldman Sachs partner he was given great latitude to develop and implement the firm’s trading strategy. In other words, he “was the firm.”  It is likely that his power diminished how psychologically authorized his subordinates felt. They were willing dependents on his judgment and had less reason to exercise their own. This suggests that the antagonism that facilitated Goldman Sach’s success was weakly expressed. The tension between risk and speculation was held and managed-- or not-- in Corzine’s mind. This tension was in turn held hostage to Corzine’s personal fantasies, for example to return to the power game after his election defeat in the New Jersey gubernatorial race.

If true, this suggests that owner or founder-dominated firms are less able to create the productive antagonism required for success. This may be one reason why a start-up firm’s venture-capital investors frequently replace its founder as the enterprise grows. The firm must “grow up” and become an institution. The firm cannot afford to be the projective outlet for the founder’s fantasies. You need an institutional framework to sustain productive antagonism and the resulting checks and balances.

Tuesday, November 1, 2011

Mad Men and Women CEOs

Virginia Rometty has been appointed as the first ever women-CEO of IBM. It is striking how women now sit atop three storied technology companies; HP, Xerox and IBM. The news of Rometty’s appointment contrasts with the picture of men and women at work as depicted in the television series Mad Men. I have been watching the series on DVD starting with the first year of episodes. For those of you who are not familiar with the series, it portrays the members of an advertising firm in the U.S.  at the cultural turning point, when the 1950s become the 1960s. The underlying theme is women’s experiences at home and at work, and how these experiences paved the way for their coming into consciousness and power in the succeeding decades.

What strikes viewers is the amount of drinking and sexual exchange that takes place in the fictional advertising office. Men have no compunctions commenting on the sexual qualities of the secretaries who work for them, and there are sexual affairs between the advertising professionals, all men but for one, and the secretaries. Also, the men drink a great deal of liquor over the course of the workday and smoking is ubiquitous.  The picture is one in which men’s impulses are gratified, through sex, alcohol and tobacco. We might call the setting “de-sublimated.”

Now working in advertising may itself stimulate sexual fantasies. After all, companies use sexual innuendo to sell products. But informants who lived through that time tell me that, in the main, the picture is not exaggerated. We have of course come a long way from these arrangements. Women are much less likely to be treated as sex objects, and they have been welcomed into top teams. Hence the appointments of women to the CEO positions of technology companies, a typically male bastion.

One argument is that the pendulum has swung to far, that a climate of sexual puritanism now pervades the work world, and that political correctness, with its rigid behavioral norms and prescriptions, stifles pleasure and camaraderie at work. It may be dangerous for a man to hug a women colleague in an expression of gratitude and affection, as he might readily do with a male colleague.  I think there is some truth to this argument, but I want to point to a different issue.

If impulses are controlled and sexuality suppressed, it suggests that people are working harder. After all, the decline in overt sexual exchange at work has been accompanied by the disappearance of the "three martini lunch," a lunch that could last 2-3 hours with men returning inebriated and hardly fit for work. One wonders if the puritanism of the work world is one outcome of an increasingly competitive marketplace; one in which companies in other parts of the world take market-share from US companies. After all, the U.S. no longer has enviable living standards, as it did upon emerging as the only economy not devastated by World War Two. Indeed, wealth may no longer be associated with leisure. A study reported in the Wall Street Journal showed that since 1965, upper income professionals have increased the number of hours they work annually, “while total annual working time for low-skill, low-income workers has decreased.” (

I am led to ask the following. If puritanism suppresses pleasure, does it also suppress creativity?  Freud argued that creativity was sexuality sublimated, in the sense that the passion and urge to create, to be led by one’s fantasies, draws on the internal working model we have of sexual relatedness. We link our skills to our capacity for anticipation, and the excitement it generates, to “give birth” to something new. Or to put it in modern terms, creativity and sexual relatedness draw on the same pleasure circuits in the brain.  It is not uncommon for example, for men and women who work together intensely on projects through evenings and weekends, to have affairs. The intensity of the work and the collaboration stimulate sexual feelings.

One hopes for a climate of what we could call “adult sexuality,” in which sexual feelings are acknowledged but not acted upon. Men and women would take notice and pride in the sexuality of the other, but there would be no affairs and no sexual exploitation. Instead, as Freud suggests, these feelings would fuel the creative process. But this may be a bridge too far, We may be confined to a new puritanism, and if so, one has to ask, what costs does this culture impose?