Producing for Results

Reprint of a post that I was ask to write for the American Conservatory Theater blog:

American Conservatory Theater Blog - http://blog.act-sf.org/

My wife, Patti, and I have produced or executive produced six A.C.T. productions (A Mother, A Number, The Voysey Inheritance, The Imaginary Invalid, The Rainmaker, and the upcoming Boleros for the Disenchanted). When we were first invited to participate at this level I was not sure what to expect. In the film world, lots of people invest to have their name associated with a movie as a producer or executive producer with no expectations of ever being included in the making the movie. And yes, in most cases, it’s wise not to have people who are neither skilled nor experienced messing around with the creative process. That being said and recognized, the experience of producing at A.C.T. has far exceeded our expectations. Regardless of the medium—whether it be visual or performing arts—for Patti and me, our “thing” is to see the creative process unfold and come to life. What I have learned over the years is that what happens throughout the process—from the first reading of a play by the cast and director (and sometimes in the presence of the playwright, like when we were in the room with David Mamet the first time he heard the reading of his adaptation for A.C.T. of Harley Granville-Barker’s The Voysey Inheritance), to the technical rehearsals, through studio rehearsals, into previews and opening night, and sitting in the booth to hear the stage manager “call the show”—is the creation of magic. What starts as something so rough and raw that it seems unimaginable that it will ever make it successfully to “the big stage” ultimately comes alive and pulls together on opening night, and real magic is created. And as producers we can bask in being a part of that process.

At the annual A.C.T. gala last week someone asked me, “What do you get out of executive producing?” The answer came easy. What we get out of producing is that we receive the intrinsic reward of being “noncreatives” who can, through our contribution to A.C.T., be a part of bringing to life, through the creative process, a production that is unique and special for the audience and the actors. The pride I feel when “it all comes together” is many times overwhelming. But just as important has been the gratification that two people (who are products of the corporate world) feel when we see tangible results from our contributions. When we see the highest level of quality and excellence on the stage, perfection in the acting, and passion in the audience response—from tears to laughter—then we know that we have produced real results. And in this time, when the contribution dollars don’t come as easily and we each are having to evaluate with greater scrutiny where we direct our donations, with A.C.T. we rest assured that real results can be produced.

It's Lonely At The Top!

This is a blog I wrote that was posted on Glassdoor.com, where I regularly contribute:

It’s Lonely At The Top: What Can We Do About Executive Bonuses?
Posted on April 1st, 2009 by Guest Contributor

Bashing the compensation and bonuses of executives has become a household conversation. Seems like everyone has an opinion on the AIG bonuses that were paid last week and the debate over “who and what was right” will rage on for a few more news cycles.

But from it all, there are some lessons in those payments - and the contracts that allowed them — that would be good for all executives to learn about and carry forward:

Everyone is watching. Sumner Redstone of Viacom is well-quoted saying that, “the further the gorilla climbs up the tree the more you can see of his a**“. Welcome to the life of being a senior executive. With the title and perks, there comes a responsibility to act and respond like a leader. That means that everyone is watching what you do and what you receive. Becoming finely tuned to what the rest of the company, including what your shareholders, think has always been part of the business, but it’s more important now than ever. If the rewards don’t match the performance, then you should question whether or not the payments are the right payments and the bonus plan is the right bonus plan.

Delayed gratification. Sometimes it’s better to have a bonus deferred and just wait for “better timing.” Part of the issue with the bonus payments at AIG was that no matter how legal or rationale at this time when the nerves of taxpayers who funded those bonuses are raw, no matter what they paid was going to be scrutinized. The same happens in other corporations where one division of the company may succeed but the overall company is failing. That would be the time to look at deferring payments to some other time. You can’t tell me that in hindsight if AIG had it all over to do again that every one of those executives who are being hounded and hunted in Connecticut wouldn’t have taken a deferred payment versus go through what they have gone through.

One size fits one may be wrong. For too long we have come up with bonus programs that sweep across a job category or group of people by level and title and then we apply a multiplier to a salary and that is the cash bonus payment - paid out on a schedule that everyone follows. It may be time to rethink those one size fits all programs and instead go back to the days of the personalized bonuses that don’t always have to be cash. For example, additional vacation time might be many multiples of value more than cash for some while for others offering equity might be a great incentive. A myriad of things could replace cash compensation that could still recognize performance while not as onerous as large cash payouts in this market.

100% top to bottom buy-in required. Whatever you do, now is the time to ensure that there is true buy-in with the payments and the plan to be delivered. That means the Board, all of Senior Management, the HR team, the external compensation consultants and — in this day and age — your corporate communications/PR team. You need 100% consensus in the program to make sure the right thing is being done. If there are any questions or concerns among your internal stakeholders about the plan, payments or, people then it may be time to totally rethink what you are doing.
Don’t lower the bar - ever! Remember the genesis of bonuses - rewards for performance and work that is “above and beyond.” Too many companies allowed for their bonus payments — or portions of it — to be considered as secure in being paid from year to year, regardless of the results. When bonuses start to become thought of as delayed annual income for people, they become more relied on and people begin to feel entitled to the payment each year. Management - and the Compensation Committee - need to avoid temptation, in the tougher times, to lower the performance bar to make some payments. While good for short term morale, the underlying credibility of the bonus plan is corrupted.

It’s a new era and it requires new thinking - and likely new programs. And, Boards, management and employees at all levels should work to keep the bonus programs open and transparent to ensure the incentives accomplish their objectives.

Supply vs. Demand -The AIG misnomer

Why isn't anyone asking the relevant and pertinent question about the AIG bonuses? Why isn't someone asking what the turnover rate is inside of AIG and what the supply of talent there is to fill the open positions if someone was to leave AIG? The answers would likely tell us that there is no reason to provide these bonus payments right now. If you work in the financial industry and you have a job, you are not giving it up easily. As Mayo said in Officer and a Gentlemen: "I got no where else to go!" Our representatives in government show how much they don't know about business when these types of decisions are made. In that backroom with Senator Dodd cutting the deal for one of his largest contributors (excuse me, don't I remember campaign promises saying that the backroom decisions wouldn't happen anymore?) someone should have piped up and said, "What does it matter if someone threatens to leave, there aren't other jobs for them to go to, and if they do, there is so much financial industry talent available that we could pay for the recruiting fees 50X times and still not scratch the surface on the amount of payments for the bonuses". The other thing that I just don't understand is why if these payments were really about retention that they didn't create deferred income bonuses that each of these people would have had to stick around to a defined time in the future to receive. Those are real retention bonuses. Paying someone $1MM now to stay, makes no sense. Even if they created these 6 months ago, it still doesn't make any sense in that the CEO of AIG is talking about the need to keep people long-term. It is times like these that I cringe at the credentials of the people who are our representatives and I am astounded by the lack of their reaching out to those who could help them understand the issues so they can ask the right questions to get the right answers.

Staying Competitive

This blog of mine was posted today on Glassdoor.com where I regularly contribute:

Staying Competitive: Tips for Interviewing in Today’s Market
Posted on March 19th, 2009 by Guest Contributor

It doesn’t take a PhD economist to know that supply and demand create all kinds of different outcomes. The job market is no different. We are now in the stage of what I call an “arrogance of supply” - meaning companies are more often looking for “the perfect fit” rather than hiring “the best athlete” who can be trained to become the right fit. When unemployment is low, companies embrace the “best athlete” model of hiring where they will take a chance on a person who is smart, ambitious, accomplished and shares the values of the corporation. Best athletes are people who employers would say, “have all the right stuff, now let’s train them to do what we need them to do.” In times like these with oversupply, companies often lose their progressive thinking and adopt an attitude that each and every person must be “the perfect fit.” This means it is more important than ever to stand out and be unique in a job interviews because if you aren’t a “perfect fit” you aren’t going to get the job.

Here are five ideas for you, beyond the standard advice, that can make you stand out from the rest:

* Come prepared with a solution to a problem. You are a smart person, you can use your functional area of expertise and evaluate the problems of a company and come ready with a plan to help them solve the issues. Example, if you are in marketing and you read from the news or the company website that their customer base is eroding, then you should come with a one page PowerPoint that provides the five ideas you have to stop the erosion. Even if you are wrong, or you misread the problem, you will have done something others won’t.
* Offer to start on a probationary period. Let’s face it; if you are already on the inside, then you have a better chance than someone else on the outside. So offer to work on a temporary/probationary period and allow your confidence in your own abilities and your belief in performance-based rewards to be seen. Offer to start on Monday and sign whatever they would like to be signed that you will leave voluntarily and positively at any time during the “try-out” period for any reason that they ask. This approach might be just what the hiring manager and the HR person needs to get the job filled quickly at a lower risk.
* Use the language of the company. Every company has a lexicon of buzzwords and acronyms that are unique to them. Before the interview, read the company website thoroughly, use sites like Glassdoor to read what employees talk about and how they say it, talk to someone/anyone who has worked at the company before or now and ask them for some of the buzzwords and “language” of the company. We all like people who we think know us and act and sound like us. Knowing and using those buzzwords can create confidence in the interviewer that you are a perfect fit for the culture.
* Know something that the interviewer cares about and then apply yourself to that interest. Most everyone you interview with these days has a LinkedIn profile or some type of web presence. Find just one thing about the interviewer that you can apply your skills/talents to. It could be that you are talking in the interview about how to adapt the company’s offering to Gen Y. You could say, well, imagine if we were to go back to your alma mater, (insert University name here) and do focus groups. These focus groups….” You get the point. It might be that you find that the person coaches AYSO soccer, is involved in their church, reads books like crazy, and does Tai-Chi. It doesn’t matter; just get one conversation thread going that connects you to them in some way.
* Give examples of how you make other people better. In an interview we get plenty of time to talk about ourselves and detail our accomplishments but rarely is there enough time for the interviewer to ask about how well you play in the sandbox. Come prepared with a story to tell her/him on how you have made others better on your team, on other teams, for the company as a whole, whatever it is, but something that leaves them with the impression that you will be a great teammate.

Keep at it. Just because you don’t get one job, doesn’t mean that there isn’t another right one out there for you. And always remember, you are talented!

A Sad Third Place...Perfect For Staring

Back in the day, Howard Shultz founded Starbucks and created what he called the "the third place". Starbucks was not to be work or home. It was to be the place in between. For a very long time that worked perfectly, although a lot of people made it their work place like salespeople and free-agents. But, yesterday, I would say that Starbucks has returned to the third place, but it's not the place it once was. In the heyday Starbucks hustled and bustled. It was full of vibrant conversations, business meetings, rendezvous, small groups, etc. It was a great place. No one cared that the coffee was too expensive or the smell of roasted beans was replaced and gone. The place was about the place to hang out. A few days ago I was in a Starbucks in downtown San Francisco, in the financial district. I was between meetings and had about 90 minutes to kill so I went into Starbucks, grabbed one of their pre-made lunch assortments and a Berry-Chai and sat down with my laptop and did some work. After a few minutes, I noticed that something was different. First of all, the store was not as crowded as it would have been a year or a few months ago (or any Starbucks would have been). That is to be expected. The price of a cup of coffee is more discretionary now than ever so less people are paying up. Understandable. But that was not the change. The change was in the spirit and feel of the people who were there. Those who were there together were not the usual "up talkers" where you could normally overhear about "this deal" or that "opportunity" or "the next new thing". Instead, conversations seemed muted and softly spoken. But the real difference I saw were the, and I counted them, five "starers" who were there. They were four men and one woman, all who looked to be in their late 40's to late 50's. These five people, all dressed nicely, each had a cup of coffee or drink in their hand, a briefcase or knapsack with them placed on the floor or in the other seat. Nothing was out of the their packs on the tables, only their drinks were on the the table or in their hands. Each was alone not waiting on anyone else. All five of them sat at their table, with their drinks and just stared into space. This had been going on since before I got there and continued for the 90 minutes I was there. For a moment, as I observed this, I thought maybe this was some sort of psychology experiment that was going on, but after a while, it was clear to me that this was not a test, this was the real thing. What I was watching were people who didn't have anything else to do. These were people who didn't have work to do and didn't have any work that they could find to do. As I projected their stories, I saw men and women who had spent their day trying to network into a new job, had done all they could do for the day, didn't want to go home and instead headed back to the place that they could be most comfortable, their third place. We all migrate back to where we think is comfortable when we feel lost. The third place may not be the hustle and bustle of before, but for some, it looks to have become a refuge. It is a sign of our times.

Start Putting Our Mouth Where Our Money Is...

Anyone who makes an investment, whether personally or professionally, will usually, at least at the onset of the investment, be very positive about the company receiving the investment and the prospects for the future. Now that the U.S. Government has become an investor in the financial, automobile and insurance industries it is time to start hearing that these are good investments and build some confidence that those of us who have paid for those investments will see a return. It seems totally nonsensical to me that we will on one day send taxpayer dollars into an institution and the next day publicly slam those who are receiving the investment. What is going on? If Washington wants to make a difference then they need to go into these investments wholeheartedly and with the same excitement and vigor that any one of who writes a check would do. Let's put our best minds and people to help the banks, the car companies and the insurance companies to not just survive but to grow and prosper. Let's start publicizing the good things that these institutions do and can do and celebrate wins and successes, no matter how small those would be. Let's have the CEO's of bailed out companies post a monthly report on Rescue.gov detailing the successes that they are seeing. Let's start putting our mouth where we put our money and talk the same talk out of both sides of our mouths. President Obama is a great motivator and could bring about the confidence change we need. But, he won't do that if he thinks that it is better to bring Congress to their feet by continually beating down the companies and people where he just invested our dollars. I want to hear that we are with them win, lose or tie...not just win or tie. If we aren't then we are wasting precious taxpayer money and our projection of failure will become a reality.

Labor Confidence First

I have listened and read with great interest the debate on the Economic Recovery Act. It seems to me that we have missed the point once again. The Act started as a job stimulus plan and then morphed into lots of other things and now it has so much in it that no one feels good about supporting it. Seems that pragmatism gets lost in bill writing doesn't it? If we would stop for a moment and recognize that consumer confidence actually lags Labor Confidence (the confidence that I will have a secure job over the next 12 months with a wage that meets my expectations) then we would be spending our time and money on creating Labor Confidence first and consumer confidence second. Creating jobs is like motherhood and apple pie. It can't be argued against. We all would support, without a blink of an eye, a plan that for every dollar spent a dollar of wages was created. We might even support that for every three dollars spent a dollar of wage was created. What we have done is lost the line of sight to the issues at hand and then nothing gets done. I am more convinced than ever that we have to solve the labor and jobs issue first and the rest can follow. We can still get infrastructure built, etc. but only through the filter of jobs created. BTW, 4MM jobs created isn't enough. That only brings us up to parity with what we have lost. Our economy demands that we create an additional 1MM plus jobs a year on top of what we had before. We need a serious refocus on the issues. Let TARP monies clean up the bad assets and bad debt. Let's pass a true Job program that creates real jobs. There was a reason that FDR called it the "Works Progress Administration". It started with work that created works. That is how we create Labor confidence....giving us Consumer Confidence as the outcome.

The Smell Test

I worked for a CEO who didn't always know exactly what the right thing to always do was, but when in that situation he would ask of himself and all of us on his team, to conduct the "Smell Test". The "Smell Test" was the test that if someone who didn't know why we had made a decision would hear of or see that decision, that person wouldn't say, "I smell something funny going on there". The "Smell Test" was 100% right, every time. This is what President Obama needs to do right now with the decisions he is making with the "exceptions" he is making with his cabinet appointments and the rules that he laid forth for himself and his team. I am disappointed that he feels, in these early, early days that he has to go back on the strictness of the rules he set for himself in the campaign and in his first week. to go back on those now, unfortunately, impedes his credibility as one who "wants to change Washington". These are tough Chief Executive decisions that he has to make. I have been there when I wanted to hire someone who I thought was just great, but in their reference check, there was a "catch" or something that was not right. Faced with the decision of "go forward and I am sure it will all work out" or "make the tough call now and cut bait", the right thing to do is to not go forward. If you do, the others on the team question your credibility and values. If you make the tough call and decline a person's candidacy, then you have raised the bar and set a new standard for everyone else going forward. I am afraid that President Obama is setting himself up for hurting his credibility as a leader. If the Senate has to make the call, then he gets doubly whacked as not being able to get one of his people through the Senate. President Obama, please use the "Smell Test"! From out here, it doesn't smell good on what you are getting ready to do. Of course Tom Daschle is a good guy, but he didn't pay his taxes on something that he should have known better. I can actually give a pass to TG as his tax issues were because of a funky overseas assignment, but for Daschle, these are things that every person who has services performed for them knows. And the people who were lobbyists, don't bend the rules. We are 300 million Americans strong, I suspect that there is someone else out there if you look a little harder to fill these positions who meet your high standards. Please President Obama, stand tall, make the tough call and don't add a new smell to your Presidency.

United We Stand, Divided We...

Can we really be this divided? The stimulus bill passed the House this afternoon nearly split right down the aisle. Does this sound familiar? Has nothing changed? I watched yesterday as President Obama went to Capitol Hill to rally support for the bill and take time to meet with Republican leaders. Each Republican praised him for making the effort and trying to help bring the bill around to something they may not like, but that they could support. And then today they voted in a block and 100% of them voted "Nay". Let's see, tell me why the next time the President should leave the Oval Office to meet and discuss something before a vote? He did it because he told us in the campaign he would. He did it because maybe he is as tired as we are of the rest of the world seeing us divided on such critical issues. There is an argument that says, "well, there were some Democrats who also voted no, so it wasn't a pure partisan vote". That would be true, but the answer doesn't stop the real question in my mind; "why all the partisan posturing?" This division is far too ingrained in our politics. Even the visible fact that we split the seating in the House and Senate to have sides across an aisle bothers me. Why not seat them alphabetically, or by state so states can work together, or by tenure, or by age so they oldest (and hardest of hearing) can all sit up front? All of this posturing reminds me of that Gilligan's Island episode where the Skipper is trying to get Gilligan to do something and he crosses his arms in front of him and says three times, "You can't make me, you can't make me!, you can't make me!!!" I think I heard that same phrase today on C-Span coming from one side of the aisle. Elected officials, please, please, please remember the words of Aesop, "United we stand, divided we fall"!

Less Is More...Is It?

It is official; not spending has become the hip thing to do. I knew it before, but last week I heard the best one so far. A friend of mine and his wife have a New Year’s Resolution; “No New Clothes in 2009”. I laughed at first when I heard it but as he explained it, it started to make sense. Enough sense that I have been thinking the same. He said that when he looked at his closet and did an inventory of what he had he had enough shirts to not wear the same one twice in 30 days. Enough pants, enough socks, enough tee-shirts, and more than enough shoes. Enough of everything to make it through a year, maybe even more. Unless your wardrobe is all Old Navy (that I swear is manufactured to wear out in one season) most of us could probably say we also have enough current clothes to make it through a year without anything new. Sure, the fashion magazines and runways will tell us that we are out of style but unless you are really vain about it, 12 months is not that far out of style to start with. And if you are me; I have flared jeans, straight leg jeans, and skinny leg jeans in my closet. I have striped shirts, plain shirts and patterned shirts. I have wide belts, thin belts and in between. Net, I have enough of everything. And the question is just how much all of us have already that lots of people will be doing the same and not buying in 2009. Retail has suffered already but I can see more hurt coming. It is clearly becoming harder and harder to find an attitude of spending to just help out. The more we look around at ourselves (in our house) the more we can see that discretionary consumption got ahead of need. And now when the economy needs just the opposite we are feeling that less is more.