The Difference Between Great and Near Great

Two lawyers are sitting at a bar at Spark’s Steakhouse in New York City. (Don’t worry; this isn’t a lawyer joke.) One of them is my friend Tom, and the other is his law partner, Dave. They’re having drinks as they wait for a table to open. They’re in no rush, as Spark’s -- where New York’s rich, powerful and glamorous can be spotted on any given night -- is the kind of place you don’t mind hanging around.

On this particular night, one of the elites in attendance is superstar attorney David Boies, who the U.S. government hired to argue its antitrust case against Microsoft and the person Al Gore turned to in 2000 to argue his presidential-election challenge in front of the U.S. Supreme Court.

Boies comes over to say hello to Dave and join the pair for a drink. A few minutes later, Dave gets up to make a phone call outside. It turns out to be a very long call: Boies stays at the bar and talks to my friend Tom for 45 minutes. What they discussed is not relevant to this column. What is relevant is Tom’s recollection of the encounter.

“I’ve never met Boies before,” he said. “He didn’t have to hang around the bar talking to me. And I have to tell you, I wasn’t bowled over by his intelligence or his piercing questions or his anecdotes. What impressed me was when he asked a question, he waited for the answer. He not only listened, he made me feel like I was the only person in the room.”

I’m not sure why all of us don’t present ourselves the way Boies did all the time. We’re certainly capable of doing so when it really matters to us.

If we’re on a first date with a guy or girl we really want to impress, we will be paragons of attentiveness and interest. We will ask all the right questions and will focus on the answers with the concentration of a brain surgeon operating inside a patient’s skull. If we’re really smart, we’ll calibrate the conversation to make sure we don’t talk too much.

If we’re in an important meeting with our bosses, we will listen without distraction to every word they say. We’ll mark their vocal inflections, seeing nuance and meaning that may or may not be intended. We’ll lock on their eyes and mouth, looking for cues and clues in their facial expressions. Basically, we’ll be treating them as if they’re the most important person in the world.

Likewise, if we’re on sales calls with prospects that could make or break our year, we prepare by knowing something personal about them. We ask questions designed to reveal their inclinations. We scan their faces to figure out how badly they need what we’re selling. We’re at Defcon Five in terms of attentiveness: full alert.

The only difference between the great and near great in business, politics, entertainment and any other field is the great ones do this all the time. It’s automatic. For them, there’s no on-off switch for caring, empathy and showing respect. They don’t rank personal encounters as A, B or C in importance. They treat everyone well -- and everyone notices.

Going back to my friend Tom’s experience, Boies stuck around the bar and made a lasting impression on him. There was no discernible reason for him to treat Tom as his new best friend. The two attorneys have different practices, and the chances their paths would cross in court or that they could do each other any professional favors were practically nil.

In other words, Boies wasn’t thinking there was some future benefit to be derived from being nice to Tom. Yet, he still made Tom feel like the most important person in the room. In showing interest, asking questions and really listening to his answers, Boies was simply being himself, demonstrating the one skill that has made him a great success.

The ability to make people feel like they’re the most important person in the room when you’re with them is the skill that separates the great from the near great. In my next column, I’ll write more about how you can achieve this state of focused listening.

Life is good.

Marshall

My newest book, MOJO, is a New York Times (advice), Wall Street Journal (business), USAToday (money) and Publisher's Weekly (non-fiction) best seller. It is now available online and at major bookstores.

http://www.MarshallGoldsmithLibrary.com

#MOJOtweet

http://www.LeadingNews.org

http://www.MarshallGoldsmithFeedForward.com

Marshall's Upcoming Schedule

Stuck on Suck-Ups

t major corporations.

These documents typically feature boilerplate language to describe the leadership behaviors each company desires. Such chestnuts include “communicates a clear vision,” “helps people develop to their maximum potential” and “avoids playing favorites.”

I’ve never seen a profile that offered “effectively sucks up to management” as a preferred leadership characteristic. Yet, given the dedication to fawning and sucking up that goes on in most corporations, and how often this behavior is awarded, it probably should be included.

Almost every company will say it wants people who “challenge the system,” “are empowered to express their opinions” and “say what they really think.” But there are plenty of employees who go along to get along, and there’s certainly no shortage of outright derriere smoochers.

Most of the leaders I meet say they don’t encourage this kind of conduct in their organizations, and I don’t doubt their sincerity. Most of us are easily irritated, if not disgusted, by shameless suck-ups. This raises an important question: If leaders say they discourage sucking up, then why is it so prevalent in the workplace?

Keep in mind these leaders are generally shrewd judges of character. They’ve spent their careers sizing up people, taking in first impressions and recalibrating them against later impressions. And yet, they still fall for the super-skilled suck-ups way too often.
So why does this happen? The simple answer is we can’t see in ourselves what we see so clearly in others.

You might be thinking, “It’s amazing how leaders send out subtle signals that encourage subordinates to mute their criticism and exaggerate praise of the powers that be. And it is surprising that they can’t see this in themselves. Of course, this doesn’t apply to me. I view interactions with my direct reports entirely without bias.”

Maybe you’re right. But how can you be sure you aren’t in denial? I use a simple test with my clients to show how we all unknowingly encourage sucking up. I ask a group of leaders, “How many of you own a dog that you love?” Big smiles spread across the executives’ faces as they wave their hands in the air, and they beam as they tell me the names of their always faithful hounds.

Then, I ask them, “At home, who gets most of your unabashed affection? Is it (a) your spouse or partner, (b) your kids or (c) your dog?” More than 80 percent of the time, they choose (c.) After that, I ask them if they love their dogs more than their family members. The answer is always a resounding “no.” My follow-up question: “Then why does the dog get more of your affection?”

Their replies are usually some variation of, “The dog is always happy to see me” “The dog never talks back” or “The dog loves me no matter what I do.” In other words, the dog is a suck-up.

If we aren’t careful, we can wind up treating people at work like dogs: rewarding those who heap unthinking, unconditional admiration on us. And what do we get in return? A virulent case of the suck-ups.

The net result is obvious. You get behavior that serves you, but not necessarily the best interests of the company. Worse, it tilts the field against honest, principled employees who won’t play along. You’re not only playing favorites – you’re favoring the wrong people!

We can counter this by categorizing our direct reports in three ways:

1. How much do they like me? (I know you can’t be sure. What matters is how much you think they like you.)
2. What is their contribution to the company and its customers? (In other words, are they A, B or C players or worse?)
3. How much positive recognition do I give them?

What we’re looking for is whether the correlation is stronger between the first and the third, or the second and the third. If we’re honest with ourselves, our recognition may be linked to how much they seem to like us rather than how well they perform.

We’re encouraging the kind of behavior we despise in others. Without meaning to, we are basking in hollow praise, which makes us hollow leaders.

This quick analysis won’t solve the problem. But it does identify it, and that’s where change begins.

Life is good.

Marshall

My newest book, MOJO, is a New York Times (advice), Wall Street Journal (business), USAToday (money) and Publisher's Weekly (non-fiction) best seller. It is now available online and at major bookstores.

http://www.MarshallGoldsmithLibrary.com

#MOJOtweet

http://www.LeadingNews.org

http://www.MarshallGoldsmithFeedForward.com

Marshall's Upcoming Schedule

Natural Law as a Change Agent

Barry Diller, the chairman of IAC/ InterActiveCorp, was at Harvard Business School explaining the rationale behind the mosaic of Web-commerce entities he has assembled at his company, including Hotels.com, Match.com and LendingTree.com. One of the students pointed out these various businesses didn’t seem to come together in a coordinated, synergistic way.

Diller erupted in mock anger. He replied, “Don’t ever use that word, “synergy”. It’s a hideous word. The only thing that works is natural law. Given enough time, natural relationships will develop between our businesses.”

I agree. You can’t mandate synergy. You can’t manufacture harmony, whether it’s between two people or two divisions. You can’t order people to change their thinking or behavior.

In my last column, I explained the “natural law” of human behavior. I’ll say it again:

People will do something, including changing their behavior, only if it can be demonstrated that doing so is in their best interests as defined by their own values.

Dwight D. Eisenhower, the commander of Allied forces in Europe during World War II and 34th president of the United States, once said, “Leadership is the art of getting someone else to do something you want done because he wants to do it.”

To get you to do what I want, I have to prove that doing so will benefit you in some way, immediately or somewhere down the road. Every choice, big or small, is a risk-reward decision in which your bottom-line thinking is, “What’s in it for me?”

None of us has to apologize for this. It’s the way of the world, and it isn’t as black and white as selfishness vs. selflessness.

It’s the force that gets squabbling rivals to stop fighting and begin cooperating. If you look deep enough in these situations, you’ll find they’re not doing it out of altruism or newfound saintliness. It’s the only way they can get what they want. You see this all the time in politics.

It’s the force at work when people swallow their pride and admit they were wrong. As hard as it is for many folks to do, they will if it’s the only way to put trouble behind them and move on.

It’s the reason people will turn down better-paying jobs because they sense the new situation will not make them happier. They’re asking what’s in it for them and concluding they’d rather be happier than richer.

I’ve said many times before, successful people have very few reasons to change their behavior and lots of reasons to stick with the status quo -- or as they might say in my native Kentucky, to “dance with what brung ‘em.”

Their success has showered them with positive reinforcement, so they feel it’s smart to continue doing what they’ve always done. Their past behavior confirms that their futures are equally bright: “I did it this way before, and look how far it’s gotten me.
Then there’s the protective shell successful people develop over time that whispers to them, “You are right. Everyone else is wrong.” Then there’s the arrogance, the feeling they can do anything, that develops and bulges like a well-exercised muscle in successful people, especially after a string of successes.

These are all heady defense mechanisms to overcome. But most people’s resistance to change can be overcome by natural law. Everyone, even the biggest ego in the room, has a hot button that can be pushed, and that button is self-interest. All we have to do is find it.

Fortunately, it’s not hard to find the button for successful people. The motive behind their self-interest usually boils down to one of four things: money, power, status or popularity. These are the standard payoffs for success. The hot button is different for each person, and it might change over time, but it’s always guided by self-interest.

Take a look at yourself. Why are you at work? What keeps you coming back day after day? Is it any of the big four, or is it something deeper and more subtle that has developed over time? If you know what matters to you, it’s easier to commit to change. If you can’t identify it, you won’t know when it’s being threatened and will probably be either too erratic or languid in response.

In my experience, people only change when what they truly value is threatened. It’s our nature. It’s the law.

Life is good.

Marshall

My newest book, MOJO, is a New York Times (advice), Wall Street Journal (business), USAToday (money) and Publisher's Weekly (non-fiction) best seller. It is now available online and at major bookstores.

http://www.MarshallGoldsmithLibrary.com

#MOJOtweet

http://www.LeadingNews.org

http://www.MarshallGoldsmithFeedForward.com

Marshall's Upcoming Schedule

Letting Go

When you consider how many hours of organizational time and productivity are lost in the endless retelling of our co-workers’ blunders or the internal stress we generate reliving real or imagined slights, you can appreciate the value of letting go of all of these negative feelings and focusing on the future.

Carrying grudges, harboring doubts about a colleague because of perceived missteps in the past, or maintaining a cynical outlook about the selfishness or shortsightedness of everybody around you -- but not yourself, of course -- are all things that pull you out of the present moment. These feelings not only break your concentration, they lead to pointless conflicts in the workplace.

Instead, you need to be attuned to things happening right now, as well as in the future, where the results of your efforts reside. The past is a useful guide, but if you dwell on it too much, particularly the negative aspects, you may find yourself trapped there. That’s the deeper meaning of the phrase “stuck in the past.”

Successful people constantly look to the future. Why?

That’s where the action is. We can change the future, but not the past. Leaders in business, government, nonprofits and just about any kind of organization spend their time shaping a better future by asking for and listening to the ideas of others.
An old Buddhist parable illustrates the challenge and the value of letting go of past animosities: Two monks were strolling by a stream on their way home to the monastery. As they walked, they were startled by the sound of a young woman in a bridal gown sitting by the stream, crying softly. Tears rolled down her cheeks as she gazed across the water.

When they asked her what was wrong, she told them she needed to cross the stream to get to her wedding, but she was fearful that doing so might ruin her beautiful handmade gown.

In this particular Buddhist sect, monks were prohibited from touching women. However, one of the monks was filled with compassion for the bride. Ignoring the restriction, he hoisted the woman on his shoulders and carried her across the stream, assisting her with the journey and preserving her gown. She smiled and bowed graciously in thanks; then the monk splashed across the stream to rejoin his companion.

The second monk was livid. “How could you do that? You know we are forbidden to touch a woman, much less pick one up and carry her around!” he scolded.

The offending monk listened in silence to a stern lecture that lasted all the way back to the monastery. His mind wandered as he felt the warm sunshine and listened to the birds sing from their branches.

Even after returning to the monastery, he was jostled awake in the middle of the night by his fellow monk, who was still deeply troubled by his actions.

“How could you carry that woman?” his agitated friend cried out. “Someone else could have helped her across the stream. You were a bad monk.”

“What woman?” the sleepy monk inquired.

“You don’t even remember? That woman you carried across the stream today,” his colleague snapped.

“Oh, her,” he said as he laughed. “I only carried her across the stream. You carried her all the way back to the monastery, and you still haven’t put her down.”

The point is simple: When it comes to someone’s flawed past, leave it at the stream.

Now, I am not suggesting we always should let go of the past. You need feedback to scour previous actions and identify where improvements are needed. But you can’t change the past. To change, you need to share ideas for the future.

Race car drivers are taught to look at the road, not the wall. After all, they need to be focused on where they’re going to be. And when they’re taking a curve at more than 100 miles per hour, the wall is definitely a place they don’t want to be.

That’s what being oriented toward the future does. It not only helps you win the race, it helps you have a better trip around the track.

Life is good.

Marshall

My newest book, MOJO, is a New York Times (advice), Wall Street Journal (business), USAToday (money) and Publisher's Weekly (non-fiction) best seller. It is now available online and at major bookstores.

http://www.MarshallGoldsmithLibrary.com

#MOJOtweet

http://www.LeadingNews.org

http://www.MarshallGoldsmithFeedForward.com

Marshall's Upcoming Schedule

Excuses, Excuses

When Bill Clinton published his best-selling memoir in 2004, he knew he would have to deal with the Monica Lewinsky scandal during his second term. He did so by explaining it as a personal failure, a yielding to private demons.

“Once people reach the age of accountability, no matter what people do to them, that is not an excuse for any mistakes they make. I was involved in two great struggles at the same time: a great public struggle over the future of America with the Republican Congress and a private struggle with my old demons. I won the public one and lost the private one,” Clinton said.

“I don’t think it’s much more complicated than that. That’s not an excuse. But it is an explanation, and that’s the best I can do.”

Clinton understood the distinction -- and not just because his behavior was inexcusable. There is simply no excuse for making excuses.

When you’re late to an appointment and you hear yourself saying, “I’m sorry I’m late but the traffic was murder,” stop at the word “sorry.” Blaming traffic doesn’t excuse the fact that you kept people waiting. You should have started earlier. You certainly won’t have to apologize for: “I’m sorry I’m early, but I left too soon and the traffic was moving along just fine.”

If the world worked like that, there would be no excuses.

I like to divide excuses into two categories: blunt and subtle. The blunt, “dog ate my homework” excuse sounds something like this: “I’m very sorry I missed our lunch date. My assistant had it marked down for the wrong day on my calendar.”

Translation: “You see, it’s not that I forgot the lunch date. It’s not that I don’t regard you as so important that lunch with you is the unchangeable, non-negotiable highlight of my day. It’s just that my assistant is inept. Blame my assistant, not me.”

The problem with this type of excuse is that we rarely get away with it -- and it’s hardly an effective leadership strategy. After reviewing thousands of 360-degree feedback summaries, I have a feel for what qualities direct reports respect and don’t respect in their leaders. I have never seen feedback that said, “I think you are a great leader because I love the quality of your excuses,” or, “I thought you screwed up, but you really changed my mind after you made that excuse.”

The more subtle excuses appear when we attribute our failings to some genetic characteristic that’s apparently lodged in our brains. We talk about ourselves as if we have permanent genetic flaws that can never be altered.

You’ve surely heard these excuses. Maybe you’ve even used a few of them: “I’m impatient.” “I always put things off until the last minute.” “I’ve always had a quick temper.”

Habitually, these expositional statements are followed by saying, “I’m sorry, but that’s just the way I am.”

It’s amazing how often I hear otherwise brilliant, successful people make willfully self-deprecating comments about themselves. It’s a subtle art because, in effect, they’re stereotyping themselves and using that to excuse otherwise inexcusable behavior.

Our personal stereotyping frequently comes from stories or preconceived notions about ourselves that have been preserved and repeated for years, sometimes going back as far as childhood. These stories may have little or no basis in fact. But they imprint themselves in our minds and establish low expectations that become self-fulfilling prophecies.

The next time you hear yourself saying, “I’m just no good at ...” ask yourself, “Why not?”

This doesn’t just refer to our aptitudes at mathematics or mechanics. It also applies to our behavior. We excuse our tardiness because we’ve been running late all our lives, and our family, friends and colleagues let us get away with it. These aren’t genetic flaws. We weren’t born this way, and we don’t have to be this way.

If we can stop excusing ourselves, we can get better at almost anything we choose.

Life is good.

Marshall

My newest book, MOJO, is a New York Times (advice), Wall Street Journal (business), USAToday (money) and Publisher's Weekly (non-fiction) best seller. It is now available online and at major bookstores.

http://www.MarshallGoldsmithLibrary.com

#MOJOtweet

http://www.LeadingNews.org

http://www.MarshallGoldsmithFeedForward.com

Marshall's Upcoming Schedule

The Madness of Crowds, Past and Present

Some time ago I was interviewing a very successful CEO. Despite dismal economic news around the world, his business was experiencing record profits. I thought, "It will be nice for me to talk to one executive this week who is in a great mood."

Although this gentleman was very grateful for the success of his privately owned corporation, he was sad about the economic devastation faced by many of its employees. His face showed concern as he noted, "We have five different investment plans for our employees, ranging from conservative to aggressive. Although the risks were made clear, many of our good people have, unfortunately, chosen to invest in the more aggressive stock plans. For several years this option worked out well for them. Now many are hurt. Some have lost over half of their net worth. Some used their 'gains' to rationalize overinvesting in homes. As a CEO, I had no choice but to give them a range of investment options. Now many of my employees, who had counted on this 'boom' money for their retirement, will have to change their life plans."

He went on to comment on the fact that "even as things change, they stay the same." He loves reading and asked me to share some of my favorite books. I asked him to return the favor. He was kind enough to send me a copy of Extraordinary Popular Delusions and the Madness of Crowds by Charles Mackay, a book originally published in 1841 (a greatly expanded version was published in 1852).

 

Remarkable Parallels

I highly recommend the 1841 version of this book. Mackay was a journalist. His writing is descriptive without being analytical. His reporting on what happened then is almost frightening when read in the context of what is happening now. He describes three different "bubbles" from their inceptions to their peaks to their demise: 1) the "Mississippi Scheme," which swept France in 1720; 2) the "South Sea Bubble," which swept England in 1720; and 3) "Tulip Mania," which swept Holland in the 1630s.

While Mackay doesn't go into detail about the common elements that caused these popular delusions, I will share some reflections on what I learned from this book that apply to what has happened in the past couple of years.

 

You may be in a bubble when:

- Everyone starts talking about their investments. In the manias described by Mackay, the popular press and day-to-day dialogue began to revolve around investment opportunities. In a similar manner, during the high-tech bubble, many nonexperts were quoting the price of Cisco (CSCO) or Sun Microsystems (JAVA), and during the real estate bubble, many home owners were quoting how much houses down the street were selling for.

- Investment decisions are made solely on "how much this has gone up in the past," not "what is this worth?" In historic bubbles, popular dialogue was reinforced by charts that were dramatically moving up. Unfortunately, investors extrapolate from the past to the future. The South Sea charts in early England looked a lot like the stock charts we saw in early 2007.

- Some people do make a fortune. One high-tech "genius" I know made hundreds of millions of dollars selling a faddish concept in the peak of the bubble that (today) is worth next to nothing. While he did make a fortune, the investors that bought his company lost a fortune. In the same way, some tulip investors in Holland were smart enough to get out on top and made a mint. Plenty didn't.

- Greed overcomes fear. When investors focus exclusively on the upside and begin to ignore the downside, prudent risk assessment stops. Bundles of tulips in Holland made millions for dealers, until investors learned of their true risk. Bundles of "safe" home mortgages made millions for banks, until investors learned of their true risk.

- Salespeople are disconnected from the true value of what they are selling. In old England, "stock jobbers" were peddling shares in companies that were about to disappear. Their commissions were completely disconnected from the long-term return on what they were selling. In modern America, "mortgage specialists" were peddling mortgages on houses that were about to dive in value. Their commissions were completely disconnected from the long-term return on what they were selling.

- Investors are overleveraged. In the same way that frenzied citizens of Paris borrowed whatever they could to invest in the Mississippi Scheme, frenzied investment bankers in New York borrowed whatever they could to invest in bundles of home mortgages.

- The investment is seen as a once-in-a-lifetime opportunity. When anything is given once-in-a-lifetime status, historical comparisons are discarded, because this is a different time. After reading Mackay, I am convinced that investors should spend more time reading thoughtful history books and less time listening to frantic stockpickers on TV.

 

Some of the connections I made between these historical manias and today's bubbles are:

- If your neighbors are all talking about how much something is going up, it probably won't go up much longer.

- Never make linear projections from the past to the future. No one in the "hip" late 1960s would have projected that Ronald Reagan would become President in the 1980s.

- Someone will get in on the ground floor and make a fortune. That someone will probably not be you.

 

Don't get too greedy. If it looks too good to be true, it probably is too good to be true.

Before buying anything from a salesperson, understand how their commission is structured.

When we become overleveraged, it is only a matter of time before our fantastic returns turn into dramatic declines.

While the world changes, people don't. The same craziness that occurred more than 100 years ago in France, England, and Holland has occurred this year in America. Don't ever believe that we humans have become too sophisticated to fall into the same old traps.

Life is good.

Marshall

My newest book, MOJO, is a New York Times (advice), Wall Street Journal (business), USAToday (money) and Publisher's Weekly (non-fiction) best seller. It is now available online and at major bookstores.

http://www.MarshallGoldsmithLibrary.com

#MOJOtweet

http://www.LeadingNews.org

http://www.MarshallGoldsmithFeedForward.com

Marshall's Upcoming Schedule

Why CEOs Can't Let Go

Being next in line for the big job, you may understand in a few years what makes it so hard for any leader, including the CEO, to move on. If you have personally been through a departure, you may laugh as you relate to the examples I'm about to give. You may remember how difficult it was to let go.

Nearly all of the leaders I have talked to over the years have assured me that they will be different when it's time to move -- that they will have no problem letting go of their jobs. When it comes down to it, however, it's smarter to accept and make peace with the fact that it will be difficult to let go.


Though as a CEO or leader, one may have faced an incredible amount of stress and pressure, the job naturally also came with many great benefits. Recognize that a leader who is moving on will have to give up some or all of the following:

Wealth

Company leaders make a great salary. They may not be interested in showing off their riches; they may choose to give much of their money away to their favorite charity; they may want for absolutely nothing; and yet it is still hard to let go of the "personal scorecard" that money easily becomes. Money can become a way to count how valuable we are and when we make less of it, we may feel we are less valuable -- this is not the case, of course, but just knowing that has never stopped a feeling!

Perquisites

Some company leaders are lucky enough to go to sports games and sit in the special "company box;" they may fly around in the company jet; they may have a great personal assistant. It can be very difficult to face long airport security lines, bad seats at the game, and scheduling calls and meetings yourself after so many years with these great perks. My suggestion to retiring executives? Hire a personal assistant. You can afford it and you will free up your time to do the things that are personally rewarding to you and that make a contribution to others.

Status

Being a leader or company executive, you learn to live with an incredible amount of status. You have been introduced for years as "So-and-so, the head of the company." Now you are introduced as "So-and-so, the person who used to be..." The people you meet may be less admiring or pass by you to talk to more significant people in the room. Make peace with this loss of status. Learn to enjoy others' success.

Power

Studies indicate that most leaders have a higher need for power than most people ... although they often don't realize it. Power is very hard to let go of. For instance, one little suggestion from the CEO quickly becomes an order. Even if the CEO didn't mean it to be an order, her word is law. Over time as you move into higher and higher levels of authority, you have gained more and more power...gradually. But when you decide to leave your position, you will lose all this power ... suddenly! This can be hard to take.

Now, stop and review what the CEO gives up when she transits out of her job: money, status, perks, and power. This is to say nothing of the immaterial benefits of being a leader, such as relationships, happiness, meaning, and contribution.

My advice is be gentle on the transitioning leader. If any transitioning leaders are reading this, then be gentle on yourself. Make peace with letting go, and look forward to creating a great rest of your life!

Life is good.

Marshall

My newest book, MOJO, is a New York Times (advice), Wall Street Journal (business), USAToday (money) and Publisher's Weekly (non-fiction) best seller. It is now available online and at major bookstores.

http://www.MarshallGoldsmithLibrary.com

#MOJOtweet

http://www.LeadingNews.org

http://www.MarshallGoldsmithFeedForward.com

Marshall's Upcoming Schedule

Moving On? How to Tell Your Successor (And Your Team)

This can be difficult. At some point in the succession process, you will have to let your successor know that he is next in line. Though the person you are grooming to replace you must be told, there is not tried-and-true formula for choosing the perfect time.

I've seen this done many ways. In one instance, the successor was chosen years in advance. Everyone knew he was next in line and had years to adjust to the process. This case worked well, but this type of succession does not always work.

In another instance, the successor was part of a three-person competition for the job. He was notified just before he was to take the position. This case worked in this instance, but I would not recommend it every time.

Each succession is unique; however, there are common factors to consider when making your choice. First, how many possible, qualified candidates are available? If there is more than one potential candidate, then waiting ... and getting more information ... will help you make the right decision. If there is clearly a "best choice," there are no other close-running candidates, and the person is likely to leave the company if not being assured of the position, then waiting to tell him or her may be a mistake.

Once you have determined when to tell your successor he is next in line for the position, you will have to figure out how to let his colleagues know of your decision. Many of these executives may well have thought that they had a chance at the job! You may have thought you were being clear about these other executives' chances at the position, but you cannot assume they got the message. Here are two important steps to take:

1. Coach your successor on how to handle each of his key stakeholders ... individually. Some of them will be thrilled with the news, some of them will be angry, some disappointed, and some hopeful. This is to be expected. Role-play with your successor how he will handle these different reactions, before he talks with each stakeholder.

2. Talk with each stakeholder one-on-one before your successor does. Be sensitive to their responses, which may be quite emotional if they had hopes for the job. Let them know that the final decision has been made and do whatever you can to encourage their support of your successor. Be prepared that they may be disappointed, angry, or even leave the company. This is part of it.

Finally, you will probably have second thoughts after the announcement is made. Let them go! Once you have made your final commitment, do not verbalize any doubt. Do whatever you can to minimize your ego and maximize your successor's chances for a successful transition.

My advice is to realize that each succession is different and for each, though there is no magic formula for success, following a few simple steps will ensure the process is a much smoother one.

Life is good.

Marshall

My newest book, MOJO, is a New York Times (advice), Wall Street Journal (business), USAToday (money) and Publisher's Weekly (non-fiction) best seller. It is now available online and at major bookstores.

http://www.MarshallGoldsmithLibrary.com

#MOJOtweet

http://www.LeadingNews.org

http://www.MarshallGoldsmithFeedForward.com

Marshall's Upcoming Schedule

Preparing Your Successor for Success

In most cases, I believe that hiring an executive coach to assist with this process can be very useful. However, you as the leader need to be responsible for the entire process. You know what it takes to be the next leader of your company (or division, or unit, or team) even more than the very best behavioral coach.

I'll share a few ideas with you here about the coaching process. Review them, do what works for you, and if you think it will help, hire an outside coach to do the rest.

Assuming that your successor has some work to do to improve her stakeholder relationships, that she is motivated to change, and that she will be given a fair chance to do so, let's get started. (If these three things are not in place, reconsider your choice of successor!)

First, your incoming leader needs to know that her behavior will matter a lot to the people she is leading. They will be listening to her, watching her, and they will care deeply what she does. Her best chance of success is to learn how to act like a leader before she gets the job, not after.

To help her learn the role of the leader, involve key stakeholders to determine the strengths and challenges she faces. There are a few reasons to do this:

• She will need the support of these key stakeholders if the "succession" is going to be a success. Your perceptions may completely miss the important input of stakeholders who may be better positioned to point out things that are not in your area of expertise.





• Your successor will learn much more if she gets input from you and her key stakeholders. Learning from multiple sources is often far more effective than learning from one person.





• Stakeholders who help your successor become psychologically involved in her success and thus are more likely to want to see her succeed.

You can also use these meetings to encourage key stakeholders to support your successor by:

• Being open-minded.





• Focusing on the future, not the past.





• Being helpful and supportive, not critical or judgmental.





• Telling the truth!





• Picking a behavior of their own to improve.

Which key stakeholders should be involved in this process? Your successor will need different types of feedback from quite different, yet equally important, stakeholder perspectives. To that end, the following groups would be well advised to participate: board members, peers, direct reports, and in some cases customers and suppliers. Now that you have the stakeholder list, ask yourself: "What key stakeholder relationships are most critical for me to ensure that I do a great job of leading the company?" Make a list of names. Make sure that each of these names are on the "feedback" list for your successor.


My personal approach to this type of developmental coaching involves asking each stakeholder three simple questions:

1. What are this person's existing strengths that will help her be a great leader in the future?





2. What are this person's challenges that may need to be overcome if she wants to lead?





3. If you were her coach, what specific suggestions would you give her -- either strategic or tactical -- that, if she followed them, would help her become a great leader?

Now that feedback has been gathered, it is time to figure out what your succession candidate needs to change, wants to change, and is willing to change, and then it is time to begin the coaching process.

Life is good.

Marshall

My newest book, MOJO, is a New York Times (advice), Wall Street Journal (business), USAToday (money) and Publisher's Weekly (non-fiction) best seller. It is now available online and at major bookstores.

http://www.MarshallGoldsmithLibrary.com

#MOJOtweet

http://www.LeadingNews.org

http://www.MarshallGoldsmithFeedForward.com

Marshall's Upcoming Schedule

What to Know About Coaching Your Successor

Preparing your successor can be a leader's greatest challenge. If you handle it the right way while you are still at an organization, it can mean that your successor enters to applause while you bow out gracefully. So what do you need to know about coaching so you can ensure a smooth transition?

First, let's assume you've done your due diligence on the process with your successor. That means you've decided whether or not you will coach your successor; you have hired an executive coach for those areas in which you are not an expert; and you've involved key stakeholders in determining your successor's strengths and challenges. You've also reviewed all the feedback ... keeping in mind to look for trends, consider the organizational environment, and highlight key patterns; and you've had organizational surveys taken so you understand how you as a leader have influenced your organization.

Finally, you have gathered many interesting, provocative ideas for leadership success by asking each preselected stakeholder three simple questions:

1. What are the person's strengths that will help him or her be a great leader?

2. What are the developmental challenges that he or she may need to overcome in order to be a great leader?

3. If you were this person's coach, what specific suggestions would you give him or her ... either strategic or tactical ... that would help the successor become a great leader?

Now that you've done all of these things, it is time to establish what you need to know about coaching. First and foremost, stop and look at yourself. It is good to be aware of common problems leaders have that can limit their effectiveness as coaches. Following are a few for you to review. Who knows? You may have one or two of these problems yourself.

Why doesn't he/she act like me?

It is natural for successful human beings to place great weight upon their own strengths and undervalue their own weaknesses, especially when evaluating others. Add to this the fact that the more successful we become, the more we likely we are to fall into the superstition trap, which simply put is, "I behave this way. I am successful. I must be successful because I behave this way." And you have the recipe for thinking that your way to success is the only way to success.

Yes, you certainly are successful because you behave in certain ways. It is also true that you are successful in spite of some of your behavior patterns.

If you take a good look at your strengths and weaknesses, you may come to realize that you tend to forgive the weaknesses in others whose weaknesses mirror your own. You may also come to realize that you punish those whose flaws ... even though they may be very minor ... fall in your area of strength. Let me explain.

Years ago I worked with a CEO who was a great communicator. He had the best verbal communication skills of anyone I have known. When it came time to pass the baton, he could not accept the fact that his successor, whose strengths were strategy and marketing, was not as great a communicator. He was so dogged about this point that the board had to intervene and the CEO was forced to leave. This could have been a positive succession, but it turned out to be an unfortunate event for the previous CEO. You don't want this to happen to you.

Why doesn't he/she think like me?

It is easy for good leaders to believe that their strategic thinking is "right,;" that the way they approach situations is the correct one. This is one of those beliefs that you are going to have to let go of if you're going to have a positive process. While it can be hard to watch your successor make different decisions than you would make, try not to reverse them unless it is a decision that will hurt the company.

Your successor, not you, is going to lead the organization in the future. Let him or her begin to make a difference while you're still at the company. Put your ego aside.

Why doesn't he/she love my friends?

If you respect and admire someone, you may overvalue their input, and the converse is true as well. It can be hard to face that your successor may respect and admire someone you don't. Their personal preferences will be different from yours. Respect this and let them choose their own trusted advisers.

You may notice after the transition that the status and power of some of your good friends is actually lessened. They may not be "in the circle" at the top. As a result of this loss, they may leave the company. Both you and they may find this tough. If you know your friends will not support the new leader, especially for personal reasons, take them aside. Try to convince them that this is the best leader for the future of the company. Explain that the leader needs support and a clean slate. Set your successor up to win.

Life is good.

Marshall

My newest book, MOJO, is a New York Times (advice), Wall Street Journal (business), USAToday (money) and Publisher's Weekly (non-fiction) best seller. It is now available online and at major bookstores.

http://www.MarshallGoldsmithLibrary.com

#MOJOtweet

http://www.LeadingNews.org

http://www.MarshallGoldsmithFeedForward.com

Marshall's Upcoming Schedule

CEOs: Don't Sabotage Your Successors

A few years ago, I learned a very important lesson about leadership succession during a coaching assignment. In my work, I get paid only if my clients achieve positive, lasting change in behavior. I did get paid for this assignment, but I found that I would rather not have taken it.

A CEO asked me to coach his potential successor, the CFO. It didn't take long before I just felt that the CEO just didn't like the CFO. I had the distinct feeling that he really didn't want this guy to get the job.

I brought it to his attention: "I just don't think you like the CFO." I said.

"He's not my favorite person. But, I guess I like him O.K.," the CEO told me.

I wasn't convinced. "Look, it's just you and me talking here. There is no reason to play games with me," I said. "If you don't want him to get this job, why are we even having this conversation? I don't even know this guy. I don't care if he becomes the CEO or not. Why would you want me to coach him ... or to work on developing him as your successor, if you really don't want him to have the job?"

"You're right!" he grunted. "I think he's kind of a jerk. I've never liked him very much ... even though I've tried."

"Then why are we having this conversation?" I asked again.

GUT CHECK

He replied, "I have to admit, he has made a tremendous contribution in helping our company. We have done a fantastic turnaround ... without him it would have been impossible. If your coaching process can really help him improve his interpersonal skills, he deserves to be the CEO of the company."

I was still skeptical. "Are you sure?" I asked.

"I think so ... no, I am positive," he replied.

When I heard, "I think so," my gut said, "Leave now!" Unfortunately, I didn't listen to my gut.

"If he makes great improvement in the interpersonal areas that we discussed, are you going to recommend him to be your successor?" I asked. "Are there any other reasons he may not get the job, such as a lack of technical or functional skills?"

"No, along with being great in finance, he is strong enough in all of the other functions to do a fine job as the chief executive," the CEO concluded. "His only issues revolve around interpersonal behavior."

A SINGLE DETRACTOR

I worked with the CFO for more than a year, and all but one of his raters said they saw him as making great improvements in interpersonal relationships. Can you guess who was the only person to see "no change?" That's right: It was the CEO.

The CFO confronted the CEO and pointed out that everyone else gave him high marks for having improved his interpersonal relationships. Still, the CEO did not recommend him for the big job. The CEO finally ... and very reluctantly ... admitted that the CFO had in fact made great improvements where he was supposed to, which was of course clearly documented and hard to dispute. However, the CEO now concluded that the CFO lacked the "adequate marketing skills." This was odd, as it was the CEO who had told me a year earlier that the CFO's marketing skills were just fine.

The CFO was understandably upset. He had been promised the big job if he improved his interpersonal skills, which he had. He pointed out this fact, as well as the fact that he had turned down other, lucrative offers in anticipation of getting the CEO job. He went to the board and let the members in on what had happened. Basically, he told the board, "Either make me the new CEO ... or write me an extremely large check."

The board knew the CFO had been made a promise that was unfairly reneged on, and the directors opted to write an extremely large check. Because the CFO had improved, I was paid for my coaching, but I still regretted taking the assignment. Looking back, I feel I was used as a pawn in a political chess match. The CEO had given the green light to my being hired while believing that the CFO wouldn't improve. When he did, the CEO pulled the "lacks marketing skills" card out from up his sleeve. All of our hard work ... the CFO's, his team's, mine ... cost the company lots of money and wasted time. (Well, actually, the time wasn't wasted: The CFO did improve interpersonally, and he felt he could use in the future what he had learned during our work together.)

DON'T FOOL YOURSELF

Since that coaching opportunity, I have had many other experiences that reinforce my belief that, if you, the leader, don't want a potential successor to have your job, you are likely to sabotage or at least be less than helpful in the succession process.

The most famous quotation illustrating this point came from Henry Ford II. When asked why he didn't promote Lee Iacocca to the top job, he replied, "Sometimes you just don't like somebody."

What can you, the leader, learn from this story? If you really don't want a potential successor to get the job, don't fool yourself or your potential successor. You will look for problems until you find a reason to cut him or her out of the running.

PREFERENCES AND REQUIREMENTS

Before you write off a potential successor, look in the mirror. Maybe the problem is you. My friend Roosevelt Thomas is an expert in diversity. He addresses the favoritism issue by encouraging executives to differentiate between preferences, which are personal and relate to you as an individual, and requirements, which are organizational and relate to the job. If your dislike for a potential successor is just a matter of personal preference and the candidate is the most qualified person to help the company, get over yourself. Be open-minded about succession planning and try to help this person succeed.

It's better not to jerk around potential successors. It's not fair to them or to the company and shareholders. After careful analysis, if you don't want this person to be your successor, don't fake it. Don't pretend you are interested in developing him or her for the job. Work with someone you can support. If you cannot find someone you can sincerely support, either stay in your job or look externally and start recruiting some new talent.

Readers: I would greatly appreciate hearing about any examples of how personal preferences can stop promotions and sabotage coaching.

Life is good.

Marshall

My newest book, MOJO, is a New York Times (advice), Wall Street Journal (business), USAToday (money) and Publisher's Weekly (non-fiction) best seller. It is now available online and at major bookstores.

http://www.MarshallGoldsmithLibrary.com

#MOJOtweet

http://www.LeadingNews.org

http://www.MarshallGoldsmithFeedForward.com

Marshall's Upcoming Schedule

Advice for Outgoing CEOs

Leaders who are getting ready to slow down and pass the baton often have a common fear: that they will become lame ducks if they announce their successors in advance. No one wants that to happen.

Almost every leader goes through this inner dialogue as part of the challenge of "slowing down." This fear, which often results in postponing the announcement about succession until the last minute, inhibits what could have been a much smoother transition.

Face it: When you are nearing the time to exit, you will become a lame duck! That is O.K. Eyes will immediately turn to your successor as his or her vision for the company will mean more than yours. Executive team members who have encountered your disapproval for their pet ideas will just "wait it out" and resell their ideas to your successor. People will start sucking up to him or her - just the way they used to suck up to you.

What is the solution?

Make peace with being a lame duck - before it happens - and your life, your successor's life, and the lives of members of your executive team will be a lot better.

In anticipation of his retirement, a CEO client of mine - one of my favorites - actually bought a stuffed duck and wrapped up one leg. He brought this "lame duck" with him to a few meetings. His direct reports and his successor thought this was hilarious. Beyond providing humor, this lame duck helped to break the ice about the potentially awkward topic of his upcoming departure. It put it on the table in a humorous way.

The moral of this story? Be a happy and productive lame duck.

Prepare Your Successor

Bear in mind that it's not all that bad to be a lame duck. Use this time to coach your successor behind the scenes. Transfer power before it is necessary. Support your successor in whatever way you can. Build his or her confidence.

Involve your successor in important decisions and ensure as best you can that he or she agrees with your long-term strategies before they are announced. After all, this is the person who is going to have to live with these strategies for the next few years and is going to have to make them work.

The key to being a really great lame duck is to make tough, unpopular decisions that you know will be good for the company. Don't get caught up on "finishing on a great note" or making sure that you look good. Focus on putting your successor into a spot where he or she will succeed. Make decisions for the long-term success of the organization, rather than the short-term performance of the company.

This type of class and self-sacrifice is rare, but in the long run it is best for the company, for investors, for the successor, and even for the outgoing leader. This is your last chance to do the right thing for the long-term benefit of the company. Don't waste it!

Get Ready for the Next Phase

Now, let's take a look at the personal side of slowing down. Letting go can have its advantages. Go home a little earlier. Spend more time with your family. Go to your grandkids' soccer games every once in a while. Get to know your spouse again.

Most importantly, start getting ready for the rest of your life. Spend time exploring a new team (or teams) to lead. Get ready to pick up the leadership baton in a new race.

This is how you might want your transition to look.

At the beginning of the process you will be running at full speed, just like you always do. Your focus is still on leading the company, not so much on developing your success and creating a great rest of your life. This is normal.

In the middle of the transition process, you will begin to slow down. You are still leading the company, but you are deeply involved in developing your successor and now you are beginning to focus on creating the rest of your life.

Enjoy Yourself!

Near the end of the process, you will stop leading the company. Start being available only when asked to work on developing your successor, as much of this work has been done. It is now time to put your primary focus on creating the rest of your life.

This is what you want to happen. However, all too often this isn't what happens. Often what does happen is the leader becomes so focused on leading the company until the very end that little time is spent developing the successor and practically no effort is made on creating a great rest of life. The result is a bumpy transition, a potential dropping of the baton of leadership, and a rough, unpleasant foray into the next stage of life.

If you want to do a great job in creating a great transition, look more like the leader in the first example, less like the leader in second example.

Be a happy lame duck!

Life is good.

Marshall

My newest book, MOJO, is a New York Times (advice), Wall Street Journal (business), USAToday (money) and Publisher's Weekly (non-fiction) best seller. It is now available online and at major bookstores.

http://www.MarshallGoldsmithLibrary.com

#MOJOtweet

http://www.LeadingNews.org

http://www.MarshallGoldsmithFeedForward.com

Marshall's Upcoming Schedule

Talent on Demand

Finding, retaining, and developing talent is one of the toughest business challenges executives face. It's made even tougher because many of the practices executives use don't work in today's uncertain environment. With the absence of job security and the likelihood of lifetime employment with one company a thing of the past, the open labor market means you may be investing in talented people who will leave your firm for a competitor. I invited my friend Peter Cappelli, a Wharton professor, author of Talent on Demand: Managing Talent in an Age of Uncertainty, and a recognized world authority on human capital, to discuss his new approach to talent management. Edited excerpts of our conversation follow:

MG: First, what is talent management?

PC: A simple definition is anticipating the needs for talent and setting out a plan to meet those needs. While most observers think of "talent" as referring to managerial jobs, actually, any positions that are hard to fill or crucial to the organization count as "talent."

What's wrong with the way we do talent management now?

Survey evidence suggests that most companies no longer do any talent management. A generation ago, 96% of large employers in the U.S. had dedicated departments to do workforce planning, according to a Conference Board study done in 1966. Now, less than a third even attempt to forecast demand for talent. Some estimates suggest that less than one in five companies attempt to plan for internal succession.

The companies that attempt to do talent management in a sophisticated way use old-fashioned models from the 1950s that assume we know with great certainty what the demands will be in the future.

These models require the ability to plan accurately well into the future. The estimates of demand fall apart because the business environment is so uncertain. Our internal "pipelines" of talent also prove misleading because of unpredictable attrition. The talent plans then turn out to be wrong, in that employers end up with more managers or other kinds of talent than they need, leading to layoffs; in other cases they end up with not enough of the skills they need, causing work to be turned away.

So, what do we do instead?

The problem for talent management is to deal with and manage that uncertainty. We do this by adapting techniques that are already well known from supply-chain management. To begin, we ask, what happens when our forecasts for demand turn out to be wrong, as they almost always will? What does it cost us? We can be wrong in two ways: Actual demand is greater than our forecast, and we have a shortage of talent; or actual demand is less than we thought, and we have a surplus of talent. What will it cost us in each case?

The idea of having a "deep bench" of talent costs us money. A deep bench is inventory. And human capital is the most expensive form of inventory ... we have to keep paying while people are "sitting on the bench," and the most ambitious ones are likely to leave, taking our investments in them.

Falling short on talent, on the other hand, can be offset in most cases by outside hiring, contracting, or temp workers. Once we know which cost is greater, then we plan accordingly. If our best guess is that we will need 100 additional middle managers, and we think the costs of going long are greater than the costs of going short, then we should try to develop fewer than 100 middle managers ... say, 90. And if it turns out that we fall short, then we use outside hiring to make up the gap. This allows us to respond to the uncertainty in ways that don't break the bank.

The biggest concern with development seems to be attrition ... that we invest in employees and they leave.

The problem from the employer side is that they advance the investment and then hope for a return. But employees can take this investment and look for jobs elsewhere at higher wages. So the employers end up paying for this twice ... first the investments, then higher wages. There are many ways to adapt to this problem, but perhaps the most creative is to find ways to get employees to share the costs of development.

Many companies have started doing this by asking for workers to volunteer for additional developmental assignments. But they have to keep doing their regular job in the process. So the development is essentially done on the employee's dime.

What do the employees get out of this new approach?

The ability to quit and find a job elsewhere gives employees options that they didn't have during the lifetime employment period. In order to keep employees from leaving, most employers give them more say about managing their careers.

Virtually every company now has electronic job boards that create something like an internal marketplace for talent. We're moving toward [a system] where employees and their employers shop for talent. Balancing the interests of employees and their employers is the key, and a number of companies have arrangements to negotiate compromises.

This has been fascinating, Peter. Thank you! I love to point my readers to new approaches to the significant challenges they face today, such as talent management.

Readers, as always, I would love comments from you. Peter can be reached at Cappelli@Wharton.UPenn.edu

Life is good.

Marshall

My newest book, MOJO, is a New York Times (advice), Wall Street Journal (business), USAToday (money) and Publisher's Weekly (non-fiction) best seller. It is now available online and at major bookstores.

http://www.MarshallGoldsmithLibrary.com

#MOJOtweet

http://www.LeadingNews.org

http://www.MarshallGoldsmithFeedForward.com

Marshall's Upcoming Schedule

Human Nature: The X Factor in Economic Theory

According to Dan Ariely, author of the recently released book Predictably Irrational and the James B. Duke Professor of Behavioral Economics at Duke University, behavioral economics is an important and useful tool for society because it takes into account the irrationality of human nature. I loved this book ... and highly recommend it. I've asked Dan to give us his take from a behavioral economics perspective on the current economic situation. Edited excerpts of our conversation follow:

How is behavioral economics different from standard economics?

Standard and behavioral economics are interested in similar topics, i.e., the choices people make; the effects of incentives; the role of information; etc. However, the starting point for behavioral economists is how people behave, often in a controlled lab environment, which often leads to different conclusions about the logic and efficacy of many things, including mortgages, savings, and health care in both business and personal realms.

Won't the market fix consumer mistakes?

Why would the market fix mistakes instead of aggravating them? Behavioral economics argues that many people will make the same mistake and these will aggregate in the market. Take the subprime mortgage crisis, for example. In this case, many people made the same mistakes, and the market has worked to make the aggregation of mistakes worse.

How would behavioral economists and rational economists view the sub-prime crisis differently?

Behavioral economists view the crisis based on the assumption that human behavior is irrational: For example, when the housing market was hot, bankers assumed that their customers didn't want their house to go into foreclosure, and that they would act accordingly. The first assumption was correct ... no one wanted their house to go into foreclosure. But the second assumption, that consumers knew what to do in order to make sure they didn't lose their house, was wrong.

Then, smart bankers introduced interest-only mortgages. From a standard economics perspective these mortgages allow for extra flexibility. People could pay only the interest and use the rest of the money to pay other expenses such as credit card debt, or health-related expenses. These loans would be ideal if people were purely rational. But we're not.

Borrowers were told by the banks the maximum amount they could borrow, not the optimal amount they should borrow. Given a regular mortgage borrowing maximum of $400,000 and an interest-only borrowing maximum of $650,000, would the average consumer borrow $400,000 with the interest-only mortgage and this way gain flexibility, or would they borrow to the new max? Unfortunately, people often borrow to the max, gaining no flexibility and in the process exposing themselves to a much higher risk in the real-estate market.

So, we're irrational and make risky decisions based on greed?

We are fallible, easily confused, not that smart, and often irrational, but there is a silver lining. We are innovative, creative, and adaptable. For instance, we've designed chairs, shoes, and cars to complement and enhance our physical capabilities. If we take some of the same lessons we've learned from working with our physical limitations and apply them to things that are affected by our cognitive limitations ... insurance policies, retirement plans, and health care ... we'll be able to design more effective policies and tools that are more useful in the world. This is the promise of behavioral economics ... once we understand where we are weak or wrong we can try to fix it and build a better world.

Imagine that we took into account how difficult it is for people to calculate the correct amount of mortgage that they should take. Instead of creating a calculator that told us the maximum that we can borrow, it helped us figure out what we should borrow. If we had this type of calculator (and used it), I believe much of the sub-prime mortgage catastrophe could have been avoided.

Say for instance someone has a choice between leasing a Ford (F) Focus and leasing a Lexus ... most people would go for the Lexus! It may not be what they should borrow, but it is the maximum and so they go for it and hope for the best.

This is one idea; there are many ways to think about how to improve our lives. And, this is why behavioral economics is so optimistic, useful, and important for our personal life and for society.

Thank you Dan! Readers if you would like to learn more about behavioral economics go to www.predictablyirrational.com. Please share your views on the irrational nature of economics.

Life is good.

Marshall

My newest book, MOJO, is a New York Times (advice), Wall Street Journal (business), USAToday (money) and Publisher's Weekly (non-fiction) best seller. It is now available online and at major bookstores.

http://www.MarshallGoldsmithLibrary.com

#MOJOtweet

http://www.LeadingNews.org

http://www.MarshallGoldsmithFeedForward.com

Marshall's Upcoming Schedule