Ichak Kalderon Adizes's Blog: Insights Blog, page 39

Interview of Dan Maydan

Former President of Applied Materials

Silicon Valley, California.

Interviewed on Voice America Radio on July 28, 2012    

From a forthcoming book, “ADIZES IN PRACTICE”, to be published by AdizesInstitute in 2014

Dr. Ichak Adizes: We are interviewing today a very dear friend, a client of the past, Dan Maydan, who was a former president of Applied Materials, a very large and successful company. At the time that he retired, it was a company that brought in more than 10 billion dollars in revenue. Hello Dan, how are you?

Dan Maydan: I’m fine. How are you, Ichak?

Ichak Adizes:  I’m very good. I’m in Moscow and understand you are in Silicon Valley the recording is in Arizona and the audience world wide in real time.  Modern life.

Dan Maydan: Yes.

Ichak Adizes: When you joined Applied Materials, how large was the organization?

Dan Maydan: When I joined Applied Materials, which was in September 1980, the company was doing somewhere between 30 to 50 million dollars revenue, though at the time it was coming down. It had had some difficulties, and in 1976, James Morgan was called to the company to try to see what could be done. He solved most of the problems and then, in 1980, I and my group, which formed in New Jersey, joined the company.

Ichak Adizes:  You joined in 1980. I don’t know which year I joined.  All I know is that James Morgan who at the time was the CEO of the company; and also chairman of the board, heard my lectures in Japan, and came to me after the lecture and said, “Dr. Adizes, we are a 400 million dollars company, we aim to be a billion dollars company, can you help us?”

When was the company 400 million?  I have no recall of the time.

Dan Maydan: Just to talk about it brings back memories. J. Morgan came to me one time and told me, “Have you heard about this guy Adizes?” I said, “No.” Then I heard that you were consulting with a company in Israel. So, I went to Israel to ask about you, and then we hired you after I came back. And that was, I think, around 1984 or so, if I’m not mistaken.

Ichak Adizes: It was a 400 million dollar company then. When you left, I left with you; it was 12 billion dollars, 12 billion, right? …

Dan Maydan: No, it was between 10 to 11 billion dollars.

Ichack Adizes: Right; still a pretty big growth. The company invited me to help it grow to 1 billion and we ended up with 11 billion. I think the company who interviewed you and asked for references in Israel was Elbit. I’m interviewing Emmanuel Gill who was then the president of Elbit next week.

Dan Maydan: Oh yes. I had just spoken to him about you at that time.

Ichak Adizes: Dan, tell us what made Applied so successful, to go from 50 million dollars all the way to 11 billion dollars and become the world leader in semiconductor equipment.

Dan Maydan: Well, when we joined the company it was coming down fast. I mean, pretty fast. And that had to be reversed. So, we created a totally different environment and introduced innovation and commercialization. The company needed to continuously innovate, to come up with new products and a new methodology and organization, which could support different strategies of operation. We made sure that every two years or so we would introduce a new product. Every four years we would come up with a new market segment. So, we kept growing continuously for over 20 years on an average of somewhere between 20 to 25 percent a year.

Ichak Adizes: It was really innovation that was at the heart of the rise, the entrepreneurship, the (E) component, (the audience that is listening here knows about PAEI, so you’re welcome to use the PAEI code in your answers) But I think that it was not just individualized (E). Tell me if you agree with me or not. You are very much an (E) person and, there is no question you provided a lot of entrepreneurial ideas and leadership to the company but you also brought with you a capability that you had, which was to imprint this entrepreneurship in the whole company. (E) was not dependent only on you.

Dan Maydan: You are absolutely correct. As you say, your methodology of PAEI, and “E” always on top of each unit was central. To get that to work it is very important for a growing company to decentralize and to get people who are able to perform better than you, so you have sufficient time to talk to employees, to talk to customers, and understand the company even better. Then you concentrate on the strategy while understanding every detail that is occurring on a daily basis.

So, the innovation and commercialization are very important concepts, but innovation by itself is certainly insufficient. And I experienced that at Bell Labs where I was for many years. You also need commercialization, if you want to be in high-tech, which we were.

So, using the organizational structure, which you helped us establish we achieved that. It was important to understand that every organization has green units as you define it.  Green, as the source of the profits, led by an (E). And to recruit people who were better than me. And if you have these kinds of people in a correct organizational structure and you rely on them, you don’t micromanage them, then the company will usually do well.

Ichak Adizes: I want to tell the audience something about Dan. I lecture all over the world and in all my lectures I mention your name, Dan, and give you credit for what I’ve learned from you. In Adizes we do not only teach but also learn from our clients. I would like to share that with our audience.

When Dan retired, I was invited to come to the retirement party, and I noticed something very, very interesting. When he retired, a lot of the people that were under him were let go, or they left because a new President who came from the outside had his own ideas about who the top management should be. And all those managers who had reported to Dan left but became CEOs of their own companies.

And here is how it happened: Here is Dan, president of the 11 billion dollars company, and whenever I would call Dan, and I would ask “Dan, can I see you?” he would say: “Sure, come in.” Now, that’s very surprising, because any other company of that size, when I call the president he would say, “Well, we can see each other next week for half an hour.” And then they would have a hell of a tough time giving me the time, their all-precious time. But Dan said, “Sure, come in.”

Well, I thought maybe because I’m his consultant he gives me preference with time. Then I realized that any vice president, if they called him, he would say, “Come in.”

Where does a president of an 11 billion dollars company have time? How can it be? So, I asked him, “Can I look at your calendar?” I looked at the calendar. Most of it was empty. A meeting here and a meeting there, but most of it empty. How does he do that?

And Dan, at the retirement party told me where he learned how to do it: at Bell Lab. Your first boss at Bell Lab taught you this. It was very interesting how you made a science out of it.

When somebody would come to Dan, the president, with a problem, and would say, “Dan, here is my problem, what should I do?” Dan would get upset. He would say:”You are a manager. You are an executive. You should have a solution. Don’t just give me the problem. What’s your solution?” If the guy didn’t have a solution, Dan would send him out and say, “Come back with a solution.” When the guy came with a solution, if Dan did not like it, Dan would NOT tell him what to do. Rather he would ask:” Did you think about this or that? Go back and redo your solution.”

He constantly put all the work on his subordinates. They had to think it through until they came up with a solution he could accept. And then he would say, “Very good solution. Go ahead and do it.”

Now that is totally different from what executives usually do. Executives often get it wrong. A person comes with a problem, the executive gives the solution, and then the executive spends a lot of time supervising that the solution is just the way he wants it to be done. They work very hard.

In the case of Dan, he makes his subordinates work very hard. They have to come up with a solution that he can accept. And he always tells them what’s missing so that they can redo the solution. As a result, all his subordinates developed qualities that make for an excellent CEO. And not surprisingly, they all became CEO’s of their own companies.

And he himself had a lot of time available on his hands because he did not have to solve problems. They did and since he approved their decisions they felt obliged and committed to do the best they can do and needed much less supervision. Perfect time management…..

So Dan, how did you learn to do this? How did you learn to make the people come up with the solutions, rather than you providing it? How did you control your ego not to aim to be smarter than anybody else?

Dan Maydan: I don’t know how I controlled my ego, but I think a lot it came from the culture at Bell Telephone Laboratories, which was the center of innovation and created the wealth of the, I would say, of the 20th century. Not just in the United States but worldwide.

If you get bright people, you want to challenge them, and unless you challenge them, they will not be able to produce. And you don’t want them to just follow your orders. You have to manage the environment that they themself are part of. They are the creators of new things so they need to be supervised in a fashion that just suggests to them whether they are going in the right or the wrong direction.

So, this is methodology is all very natural, and I adopted it. Many of the people reported doing the same thing. So, we never micromanaged. We challenged employees continuously, not just vice presidents, but all levels.

I didn’t allow reviews that were technical (except financial). I didn’t allow people to come with, written out explanations, because I wanted to know exactly their thinking. I let them talk freely and openly, and then there was a discussion.

And, at the end, many times I had to make a decision one way or another. But it was the thought of the people around us that we wanted to hear.  I wanted them to offer suggestions, which the individual responsible either accepted or rejected.  And that really creates a totally different kind of environment.

We did it within the company and we also did it with the customer. Because, after all, what you sell to a customer is the dream which you need to deliver two or three years later. Because what you develop today will only be used by the customers two to four years from now, and therefore while listening to his needs you need to understand what he’ll really need two years from now, and you try to sell him that particular kind of a dream.

But you always need to deliver. And that kind of message needs to penetrate every single employee in the company, from the technical to the financial, operations, and sales organization and in fact at all levels, from top managers to the lowest-level employee. We all understood the charter and what our job was in the company.

Ichak Adizes: I would really like here to emphasize what Dan has just said. And that is, I call it, the terrorism of the PowerPoint. Companies are really becoming addicted to PowerPoint presentations. Meetings, lights are low, and then the Power Point presentations go one after the other. Very few people are watching. Some people are looking at their iPads or iPhones or BlackBerries. There is no discussion. One question here, one question there. Boring. No thinking. No discussion. Presentation is over. Meeting is over. Nothing happened.

Dan would never allow that to happen. Let me describe to you a meeting that Dan handled. At the beginning I was really surprised, because at the meeting—executive committee—here is Dan Maydan whom we are interviewing right now, he is the president of the 11 billion dollars company. An executive committee meeting is taking place that he chairs. I was a consultant and watching. And Dan is kind of sitting very quietly. Here he is the chairman, he is the president of the company, but doesn’t say a word. A discussion is taking place. Still doesn’t say a word. I started to wonder, is he tired of the job or what? Why is he so quiet? He doesn’t say a word.

Then I realized what he was doing: As long as the discussion is going in the right direction, he does not “push the river.”  He lets everyone discuss. And he will always encourage discussion and exchange. If the group is starting to go in the wrong direction for some reason, he will jump in and say, “Hey guys, have you looked at this, have you looked at that?” And let them continue the discussion.

He was creating a learning environment, an exchange of ideas and learning, rather than a presentation where people are glued to the screen and just ask a question here and a there.

I really want to applaud you Dan for establishing an incredible culture at Applied Materials that enabled the company to grow from 50 million dollars and going down, and reverse its direction to 11 billion and going up.

And then you retired. I want to ask you a question which was interesting to me how you managed that. When you retired the Board hired somebody who was with a production orientation which means they brought in a (P) while the company needed to hire somebody from a high-tech company. He kicked all the E’s out and put all the PA’s in, and the company went from 11 billion to I don’t know how far down, an incredible number down.

And I was watching you. You built that company. You gave your heart, and soul, and brain for 20 years, to build it from 50 million to 11 billion.  And now the company was going down. Other people would have collapsed. Given up. What happened? What went through your mind after you retired and watched the company going down? What went through your mind?

Dan Maydan: Of course it was saddening, because I saw very quickly that many of the top employees were leaving the company. People with capabilities were disappearing. It became more or less an empty shell. Only kept going by momentum and giving an opportunity to competitors, not just in the United States but elsewhere, to penetrate the market to which we were the leader. Of course, inertia kept the company going for some time. However, it didn’t stay the top-technology company. They lost the number one position in the industry to become number two. It’s still number two. It’s not what it used to be which is very sad.  But you know, life moves on and I’m sure that they are now in the process of recovery. And, hopefully they’ll come back to a leadership position.

Ichak Adizes: Doesn’t it hurt you Dan … I would expect somebody else would bitch and moan and complain, and really feel very depressed that they’re destroying the Taj Mahal that you built. You took it in stride and you simply say: life goes on. How could you do that? Where did you get the strength to continue and just to kind of separate, to let go of your dream, let go of whatever you built? How did you do that? Other executives, especially founders of companies do not usually act so casually when somebody new comes in and starts destroying their creation. They often wind up with a heart attack, they get cancer, and they die.  You didn’t fall into the trap. How come? What really made you not fall into the trap?

Dan Maydan: Well, I have a good friend, a Japanese man who told me, “Don’t look at it as retirement, look at it as a second harvest.” I really started my second harvest, when I began involving myself with many new companies. I’m involved with about eight different companies. One was already sold. One became public. And it is a great challenge. And in addition I’m involved with some non–profits, like the Technion, which I’m a graduate of. And that keeps me very busy and challenged.

On top of all that, it is a great pleasure for me to see all my associates becoming CEOs or very successful employees and executives, of other companies. I continuously meet them. At least 50 percent of my time, which is about three or four days a week, I have lunch or dinner with previous employees. And we talk, not necessarily about the past, but we talk about the present and the future, of what should be done, how can or should we do it. So I’m continuously challenged, and I feel very happy and satisfied about all that. I feel extremely satisfied that many previous employees, and it’s not just executives, it goes down to the direction of managers (I knew almost everybody at the company) when they start new careers they usually call me and we meet and discuss their new role. And if they listen to me, it makes me feel very satisfied and happy. So, life … You know, we only have one life, and life must go on.

Ichak Adizes: This is a help. Dan you seem to look at everything as if today is the first day of the rest of your life. So, you look at the present tense as a beginning of the future, rather than a continuation of the past. That gives you the capability to turn around and be with your face to the sun and move on, and look at the new challenges and lead a productive life, rather than lament the problems that happened in the past and mourn that what you built is being destroyed.

Dan, another question to you. I was very impressed with your acumen in identifying talent. What did you look for in people when you were bringing them to top positions? You promoted a lot of people from below to the top.

Dan Maydan: You know; we gave opportunities at Applied Materials to people based on their talent, not on their origins. That’s why we had people from many different countries. The only thing which I didn’t allow them was to speak their own language when they were at work. They all had to speak English so that everybody else could understand them. We had people from China, from Japan, from England, from Korea, from you name it, Spain, Brazil, any country that you could imagine; we had people working for us based only on their talent. That again, I learned at Bell Labs: Always take the best people you can find. And don’t ever hesitate to take people who are better than you. Just give them the opportunities to excel.

Ichak Adizes: How did you find good people? What does it mean when you say “good people?” How did you identify talent? When you were looking at a particular person, what were you looking for? What impressed you?

Dan Maydan: Well, that’s a very good question. And it’s very difficult to describe. First of all, if I look for a technical person, I am trying to find someone with a technical background. When it is human resources or finance or whatever, at least give them the opportunities to have experience in this area. Looking for technical people I took about 100 or more of the top students from the top 10 universities. We kept them at the expense of the corporation for six months. They went from one department, or from one division, to another, including manufacturing. And then the various divisions bid on them, and they, these people were very successful.

If a guy, for example, came and told us in an interview, after asking him the question: “What would you like to be five years from now or where would you like to be?”  If the guy told us, “Oh, I want to be in your position,” then he lost it. We’ll never take him. But if the guy said, “I want to be able to contribute to the best of my ability, and create new things or create better things for the company,” and if the background was proper, if he had a good grade and showed promise, a future, he is a guy we hired. So, we were very careful in hiring people based on their talent, not necessarily on their aspiration to become top general managers.

Ichak Adizes: Dan, apropos hiring talent, what was it that made you hire Adizes, when you interviewed Emmanuel Gill, why did you decide to hire Adizes? What triggered you, or what made you interested?

Dan Maydan: Well, if you recall, you came and gave a presentation, and I thought it was very, very impressive. I mean, the concept of PAEI, that you need all four of the roles  and E is most important in high tech, and you covered the concept of corporate lifecycle, the concept of green that everything must lead like river into green (profit center) at the end…..Those were very unusual concepts which I felt were very important.

I felt the company was growing. We were, as you say, a 400 million dollar company. We were growing very, very fast. And we didn’t have any experience in how to run a company. Even though Morgan started to hire good people, who had expertise—like Jerry Taylor at that time in finance, and Jim Bagley in operation—we still needed to create a culture that will enable us to grow to be a much larger corporation. My dream was to reach 20 or even 30 billion dollars in revenues, which I believe we could have done.

We needed to organize the whole thing together. After all, people make the organization, and the organization gives the opportunity to people. We needed to give these people this opportunity, and I felt that you were the right guy to create, or help us create, this kind of organization which will give us all both the opportunity and the capability to reach our dream.

Ichak Adizes: Is there any specific event that you think contributed something really important to know about or it was really more of a total flow?

Dan Maydan:  It was really a total flow, because I felt the company was limited unless we did something, and Morgan felt the same. And we really needed help, to build a strong organization and thank you for providing it.

Ichak Adizes: I would like to tell the audience what I really did with Dan and Dan’s leadership. We actually restructured the company practically every two years, or something like that. As the company was growing, it needed continuous restructuring. A division that was 50 million in revenues became a billion dollars division.  It’s like cells. When they grow big they have to split and start all over again.

Dan was never afraid to re-look at the structure, and then realign the structure, and change the structure as the company was growing … I look at organization structure like they are pants of a little baby. When a child puts the pants on the first time, they look oversize, but then after one year they become like underwear. You continuously have to restructure the company, which is growing very fast, or the structure will stymie organizational growth. And Dan always allowed restructuring, encouraged it.  There was no fear in the company about restructuring, and restructuring, and restructuring so that the company could grow and not get stymied.

Dan Maydan: Let me comment on that. You said one very important thing. You see, everything, if it’s alive, must change. The only thing which doesn’t change is in the graveyard, or everything that is dead.  So we were all open to change. And the change which we created, you explained very carefully to us, and I think that was a major issue, is what kind of organization we should have? Decentralized or a centralized organization? And we all felt, due to your guidance, decentralized would give us a much better opportunity to grow. We didn’t even worry about two divisions competing with each other, not on the same product, but on products aimed for the same market.

So, we allowed this kind of competition, and every division was responsible for its own profit and loss. They were autonomous and I think we had about seven of these divisions. And we were entirely open to this kind of structure, and I have recommended to every growing company to do the same because this is a very effective, and in my view even essential way for growth.

Ichak Adizes: I would like to emphasize something, and thank you, Dan for pointing this out to me because you remind me of one of the principles of the Adizes Methodology. Usually, companies start with centralization, and only if there is a need and pressure they will decentralize. I start with decentralization, and only if there is a need and pressure, I will centralize something. So, it is the starting point which is important. Start with decentralization, and only if and where needed, centralize.

Dan Maydan: One more thing.  We never hesitated taking some experienced people and some bright, even new people, to create something which was like a startup. And we gave them incentives which made them quite rich if they became successful, including a portion of the market success (which was capped of course), but gave them the opportunity to shine and demonstrate their capability to start something like a startup.

Ichak Adizes: Right. All these nurseries….

Dan Maydan: It was more than a nursery, because it included the business. Nursery is just the development, and we let them grow and become independent divisions.

Ichak Adizes: Right. Right.

Dan, did you ever fail, and if you did, what was it and why?

Dan Maydan: I like to force people to look in one direction, and each individual can only work on one project at a time. Because, succeeding is like a war: Either you live or you die. So, you don’t have several opportunities, you have only one opportunity and need to go in one direction.

However, going in one direction, sometimes you have to change it. Sometimes, you try sequentially and you find out that you are you heading into a dead end, and at that point you must make a very, very quick correction to divert  and start either from a new beginning or, based on the knowledge you had from before, continue. And then, at the end, if a good product comes out of it, you are successful, regardless of the difficulties of on the way to success.

Ichak Adizes: So, what you are really saying is, there is no such thing as failure, because failure can be a learning experience for you to take corrected action and eventually succeed. So, there is no such thing as failure.

Dan Maydan: And that depends on management more than anybody. If they get some budget and then they find out that you didn’t perform they should take everything away from you. Of course that has to be done from time to time, but many times, if you recognize the capabilities and you recognize that there is still light at the end of this tunnel, it’s up to top management to continue and instead of punishing, reward those individuals when they reach the light at the end of this tunnel and make it a success.

Ichak Adizes: I would like to tell the audience about an experience that I had with another client, which I think pinpoints this principle you are talking about.

I was having dinner with him, and he got a telephone call and went to the phone. When he came back his face was a little bit long, so I asked him, “Alan, what happened?” And he said, “Oh, I just learned I lost 20 million dollars.” And I asked him, “How does it feel to lose 20 million dollars?” And he told me something which I always repeat in my lectures, and it really highlights what Dan is talking about.

Alan said, “Ichak, I look at it this way: I’m just thinking, I’m a very lucky man.” I said, “What do mean lucky man? You lost 20 million dollars?” He says, “Well, I’m lucky because I know very few people can afford to take a course in life whose tuition is 20 million dollars. I could afford the 20 million dollars tuition and that is very, very unusual, so I’m lucky. Now the question is: did I pass the exam?  Did I pass the exam or did I fail the exam of this course? Did I learn anything from this course, so that I can be better in the future? I just wasted 20 million dollars tuition for a course I have taken if didn’t learn anything.”

Look at a failure as an opportunity for learning. What can you learn from it? What did God want you to learn from it so you can do better in the future and eventually actually succeed? If you learned it was not a failure. It was a “class” you took.

Dan, another question. I know that one of the things that people were struggling with at Applied Materials is—we were working together and I was your advisor— and many, many companies have this problem all over the world, and it is: Applied Materials was a multinational company that had markets in China, and in the Far East, in Japan, in Germany, and Europe, United States, and we needed to structure the organization to be globally product oriented, so it was global-thinking, but local-acting. And we always had to balance: If everything is structured around global-thinking and it’s too centralized, then we defocus the local market. But if we pay attention to the local market and ignore the central thinking, then the danger is that we lose control. What is the right balance between headquarters and markets? Can you recall how we solved it?

Dan Maydan: One important criterion is that for each region you have to maintain and do the business based on the culture of the local region. And that is what we did. We always put local people in as the general manager and employees of a particular region, and yet they worked for the global company. Yet, certain activities must be controlled, centralized. For example, the financial organization was common to all of them, even though it was distributed geographically. We had a controller, or financial person in Japan, or in China, or in Europe. The CFO’s job was to travel from one place to another and assure that all of these organizations conform to the laws as prescribed in the United States without violating, of course, any law in the other regions.  We had meeting of all these regions on a monthly basis, where we all met together and decided on the distribution of responsibilities and the direction we wanted to go. Of course, some regions were a lot more difficult to manage, some were easier. But we always made sure that we took the best advantage of each local country because after all they have a different culture, they served different kinds of people, and there are things for sure which they know better than us at headquarters.

Ichak Adizes: Dan, what would you recommend to a manager who is looking for advice? What would be the Ten Commandments you would tell him or her? What should he or she watch for? What would be the bottom line?

Dan Maydan: Well, you know the business is like a reverse pyramid. The bottom is the product. Without the product there is no company. However, the product by itself is not the whole thing. It’s not more than 30 percent. So, you really need to assure that there is innovation all across the board, in operations, in finance, in sales, in marketing, every place. Second thing, you need to remember that you must have satisfied employees, satisfied customers, and you need to think very carefully because there is more than one formula how to satisfy these stakeholders. And watch and give your organization the opportunities to succeed, because your job is basically just to orchestrate and assure that the strategy’s the proper one, and implementation is done by people that are better than you. And never hesitate to give the responsibilities to all those individuals who have a lot of capabilities. One plus one will then be equal to four rather than two.

Ichak Adizes: Dan, could you repeat this: “hire people that are better than you.” Many managers are scared to hire people that are superior, because they are afraid that they are going to be pushed out, that those people are going to make them look stupid, that they are going to make them look bad, so they don’t want people who are better or smarter working under them.

Dan Maydan: Most managers you find are trying to build an organization based on their own image. And when you do that you narrow yourself to a very large extent. You really need to build a diverse type of organization. You need to bring in people who are very different from you. You need to bring people who, you at least believe, are better than you, and rather than be afraid of them, to understand that we all contribute to the same goal and purpose: to make the company stronger and better. If you create this kind of an environment you will find that you create satisfied people, satisfied employees, and satisfied suppliers. You need to listen to your customer, but you need to know yourself what the customer will need a few years from now. All those kind of things you can not do if you try to build the company based on your image alone. It has to be very broad-thinking type of organization.

Ichak Adizes: Well, Dan, one more question because we are coming to an end. But I will appreciate, if it doesn’t apply, just tell me it doesn’t apply, that’s fine. You had a … very, very, what I call incredible relationship with your late wife, who died young, and a family which is unbelievable, I mean, an integrated, supporting, loving, and integrated family. You succeeded, in spite of the incredible growth of the company which brings with it a lot of stress. Company growing at 30 percent a year, from 50 million to 11 billion dollars, is very stressful. It is growing very fast, a lot of people being hired.  You nevertheless succeeded in maintaining an incredible relationship and balance with your family life. How did you do that?

Dan Maydan: Well maybe because I was very fortunate, or maybe because I also strongly believe in it, you should have a very, very good family life. It is an essential condition to succeed in your job. And indeed in my case it was certainly the case. My wife was a Ph.D; she worked, too, she also taught at college. But she always knew that the family was number-one.  I kept telling employees all along, in every speech, almost every speech I gave, I said, “When you start thinking about projects, think first about your family. And if you are relaxed, and you know that you get this kind of support, a lot of the tension that you mentioned will just disappear, or you will look at it totally differently. And I think that, for me, and even today its 12 years now since my wife died, and I miss her a lot, I see the results of what it means to have a good family. And if I look back at Applied and other activities in my life, I know that I could never, never possibly do it without having my wife and my children next to me.

 

Ichak Adizes: Dan, I really appreciate it, and for a closure I would appreciate it if you give a testimonial: Why should companies hire Adizes? Is there anything you will like to tell them so that we can close this conversation on that note?

Dan Maydan: I think that it’s, and it’s not just my opinion, it’s an opinion of other people you work for that I know, or people whom I send you to, that your contribution, Adizes contribution to our organization was so important, was so essential, that we probably could not have done what did, the way we did, unless Adizes was next to us, guiding us in every single step, which mostly had to do with organizational understanding the lifecycle of the corporation, and from that reaching the conclusion of what we should do next  for the future.

Ichak Adizes: Dan, I thank you very, very, very much.  Thank you, for this interview.

Dan Maydan: O.K., thank you.

 

Sincerely

Dr. Ichak Kalderon Adizes

Are Cigarette Warnings Good for You?

I am not a smoker. I mean, I do not smoke my cigarettes.  If someone is smoking next to me, I grab one or two and take a drag.

I noticed, though, that there is pattern when I do pick up a cigarette.

Yes, it goes with a cup of coffee, but mostly it is when I am tense, stressed or tired.

And I ignore the sign that says that cigarettes kill.

As a matter of fact, I think the warnings have the opposite effect:  they subconsciously encourage me to smoke. They enable the practice.

Strange, no?

How?

Why?

When I am tired and stressed I have this deep need to disappear, to stop the pain, to die. So, I over-eat, although I know it is not good for my health. And I smoke.

Aha. Maybe the warning reinforces this desire to die and confirms that I am doing the “right” thing.

If I am correct about this insight, then, the more stressed the society is the more smoking there will be. And if smoking is prohibited or too expensive, alcohol or marijuana become the substitutes. Or other drugs that make you forget who you are or what is happening to you.  And if you are continuously stressed and need this form of relief, it is no longer a relief. It becomes an addiction and our hidden, temporary need to destroy ourselves becomes an ongoing process of killing ourselves prematurely.

So what is the effective intervention that will stop us smoking and destroying our health?

It is not the warning signs.

Go for the cause, not the effect.

Stop the stress.

Meditate.

Do yoga.

And don’t take life too seriously.

Hang loose, as they say in Hawaii.

Wish you all well and may you all live a long life and stop all attempts to have a shortened life.

Best to you all

Sincerely

Dr. Ichak Kalderon Adizes

P.S.: I am going to read this blog myself at least twelve times. Daily.

The Dimension of Time – What is it?

Bjarni Snæbjörn Jónsson (bjarni@bsj.is), a doctoral candidate from Iceland at the Adizes Graduate School for the Study of Change and Leadership pointed out to me to an interesting finding.  Here it is in his own words, which I edited.

“During the writing of my dissertation I came to study the Norse mythology in relation to the concept of collective intelligence (wisdom) and especially the concept of FATE.

Fate was linked to the way the Vikings felt accountable for their actions.  In the mythology there were three witches of fate:  Urdur (past), Verdandi (present) and Skuld (Future).  

Verdandi (present) was always accompanied by either Urdur (past) or Skuld (future), which represents the view that what you did in the present was a result of something you did in the past, which you carried with you into the future.  (The meaning of the name of the future witch, SKULD means debt, representing the debt you carried into the future depending on your actions in the present.)

For the Vikings time was an endless continuum where the being in the present was more of a space or dimension rather than a sort of isolated time slot; you were living in a space of time which was all encompassing past/present/future.”

Makes you think.  Interesting. I have been saying the same in my lectures without realizing the Vikings said it thousand years ago:  the present is either the continuation of your past or the beginning of your future. It in itself does not exist. It is a fraction of a second: continuation of the past, or in a fraction of a second a beginning of the future.

Moreover. Do you realize that in the present you are thinking and debating with   “the voice in your” head something that happened in the past? You are de-facto re-living your past in the present.

And minutes or even seconds later you might switch to elaborate in your thoughts your future; you live your future in your present.

Imagine having an argument in your head with someone you are going to see.  When you arrive, you start arguing with that person in a manner you could say is the continuation of the argument you had with that person in your head in the past.

And often psychologist tells you; your present fight with your spouse is not really with your spouse. She represents some unresolved “fight” you had, say, with a parent in the past, which you are now reenacting in the present.

Have you ever experienced something that left you wonder: did I not have this experience before?

Past and future seem to be all mixed into our present. The time dimension is a space, which encompasses present past and future.

The eastern philosophies, picked up by new age gurus, tell us to live in the present, which means divorce our mind of “discussing” the past or “living in the future”.

According to this philosophy it is the only way for the present to emerge otherwise you really do not know what is it that is happening right now.

But that leaves me wondering. Could you “divorce” the present from the past? Could your present not be the beginning of the future?

You can freeze the past and the future and live only in the present, as the new age gurus tell us to do, but then present becomes a continuous of the past and of the future; there is no past and no future. The future through the present becomes the past: As time passes in the present time, in a mini second it becomes the past and also in a mini second, the future gets realized and becomes the present.

What are the repercussions for us today?

Some people when you ask them what is going on NOW, will tell you:” we are doing so and so. “But listen carefully and you will realize they are describing what they have BEEN doing so far, i.e. in the past.

Other people ask them the same question and they will describe what they are starting to do different for the future.

For those of the (A) style, my observation is that, they view present as continuation of the past and the (E) s see it as the beginning of the future. That explains to me why they do not necessarily agree or even like each other.

It reflects also on the political orientation of liberals (the present is the beginning of the future), versus conservatives (the present is the continuation of the past).

The understanding that past and future are all “molded” into our present should make us less judgmental of ourselves. What is happening in the present was not born in the present. It is the result of actions taken in the past, may be even past lives.  Much of what we do today is driven by our past and thus not strange we do not always understand our actions in the present.

And we should take responsibility for what we do in the present because the repercussions will face us in the future.

In my training with Zdenko Domancic in bioenergetic healing we learned how to manage the energies of other people from distance. (I observed how those trained could bend a person miles away by just closing their eyes and seeing the image of the person they were bending.)

Zdenko said, if distance, i.e. space does not exist, time does not exist.

Think about it. Crazy, huh?

Sincerely

Dr. Ichak Kalderon Adizes

Reflections on travels to Cuba, Ukraine, Serbia, Macedonia, Turkey, Montenegro and Kazakhstan

I have just returned from a visit to all the countries cited above for work, consulting and lecturing. One exception, Cuba. That was a present from my wife for my 76th birthday. But I came away from Cuba with observations and perceptions that I want to share with you. To say that the trip, all of it, was a learning experience for me would be an understatement.

Cuba

Incredible opportunities for investment. The island has a long coast- line (it’s an island, after all) and is sparsely populated. There is a great deal of land on which to build…new factories, high tech enterprises and resorts.  The Bahamas fear the time when US sanctions are lifted. They will then have to face enormous competition from Cuba.

The reasons that underlie the fantastic opportunities for investment are quite clear and self evident. The Cuban people are well educated, but poorly paid. They are industrious by nature. There is no corruption to speak of. And its geographic location, a one hour flight from Miami, is like a gift from God.

As we were driving along the coast of Havana I saw dilapidated looking buildings. It was startling given the magical views. How can this be, I exclaimed. It felt like I was driving along Copacabana in Brazil, where the real estate prices are in the millions.

Under Fidel Castro, the government nationalized all property. Rented it to families, yes, but only the rooms in the building. The actual building itself is still owned and supposedly managed by the government.

The result is that inside the building the apartments are well taken care of, while the facade, the entryway and the stairs are all in total disrepair. What an opportunity to buy the buildings and renovate them…Don’t say, “but…”  The reality is that it is possible to do just that now. The government is willing to sell.

I said earlier that the Cubans are industrious. You can see that at every street corner. They dress in local-color clothing just so tourists can take pictures with them, for a fee. They sell postcards. Paintings. Anything and everything.

It was forbidden in the past to engage in private enterprise, but the government has relaxed this limitation. Today anyone who wants can open a restaurant… in her home.

And what happened? Restaurants sprouted like mushrooms after the rain. Wherever you look there is a restaurant in the garden, in the living room…But you are not allowed to open a second restaurant. No chains. In other words it is just the beginning of capitalism.  But it is coming…

I believe the USA is making a major mistake in holding onto the economic blockade of Cuba.  Anyone with a foreign passport can invest in Cuba. Except those with American passports. Not that the Cubans forbid it. The US government forbids it.

So what is happening? Entrepreneurs from everywhere are rushing in. They see the great opportunity, the virgin territory in front of them. The Israeli are there with a major commercial real estate development plan.  Investors from their nations are buying up prime real estate and developing their own businesses in Cuba.  Only the USA is left behind, missing a great window of opportunity. And it’s all in plain view…just 90 miles away.

We visited the factory where the premier Cuban cigars are made. It was a typical sweat shop factory.  People sitting in rows of tables rolling cigars. There is a quota spelling out how many cigars they need to produce each day.  Very boring job. Repetitive. Manual.  How do they keep the workers interested?

Here I found a very original solution. The factory has a reader. He or she reads the workers novels, poems, stories as they roll those cigars.

Now these are not any kind of stories.  They are the classics. When we were there a woman was reading the Count of Monte Cristo.  I was told those workers knew most of the classical literature quite well, no matter how many years of school they had completed. Working in the factory for years, day in day out, someone reading them a wonderful book, there is a lot of education going on.

The factory is owned by the government, but it is run like any other for- profit enterprise.

Whoever has the opportunity to visit Cuba, I urge you, go NOW. The place is changing rapidly and you might miss the opportunity of your life. It is not every day that we can see a country bypassing many of the problems countries in transition from communism are suffering: corruption, economic stagnation and dissatisfaction on the part of the people. In general, not present here. In Cuba I do not see the apathetic look on people’s face that I encounter in most countries in transition.

In those other countries trying to manage change there is often a sense of despair. You can see it in the streets, in the shops. In the slope of shoulders that look beaten. Apathy. Loss of hope. You know that corruption is rampant. In Ukraine, Serbia, Bosnia, Russia, those that can leave, emigrate. The best minds. The result is that those nations face a shortage of managerial resources and the economy suffers. Not in Cuba.  I have not seen as many smiling faces in other countries as I saw in Cuba.  And people are pleasant; they try to please.  Not as many are desperate to leave anymore.

Don’t misunderstand. The population is very poor.  Poorer than the people in Serbia, for example. So why the smiles? Because in Serbia there is frustration with the government.  In Cuba the trust link has not been severed.  The Cuban government is not corrupt. The political leaders have a vision and an ideology.  In reality they have taken many wrong turns and created an economic disaster. However, on paper they look like their intentions are pure and in the people’s interest. So ironically, the populace suffers less.

As long as people feel safe from their government, even if they are poor, they still have energy and a willingness to smile. When the government abuses them, it is like losing trust in your own parents, the smiles quickly are wiped from people’s faces. Apathy, pain and surrendering to one’s economic condition prevails…. Unless of course one can escape the country.

Turkey

Turkey is blooming if not booming. You can feel it in the supermarkets, in the way the people rush to work, in the bumper to bumper car traffic, in the construction of new buildings everywhere.

You can feel it in the new, incredibly modern airport, in the business lounge that rivals the one in Dubai in its opulence, and in the generosity with which food is offered.  And Turkish Airlines justifiably was named the best European airline for the year 2012. Its business class rivals the service and comfort of first class on, say, Lufthansa.

The debate in the Turkish newspapers is all about the Prime Minister’s initiative to forbid co-habitation of males and females in the same building at universities. The press is agog:  will his demand be accepted or not?

The whole subject is bogus. There are no cohabited buildings at universities. So what is the debate all about? People believe he is testing the waters to prohibit coeducation all together.

The Prime Minister, Endrogan, is working diligently it seems to me to make Turkey a modern Islamic state. Not necessarily run by the Sharia, but following Islamic behavioral rules based on Islamic values of modesty; and maintaining the role of women as home-makers whose role is to stay at home and take care of the family, instead of becoming a career women.

Turkey is thus going through a transition: it is moving from being exclusively a secular state where religion is under the control of secular forces to one where religious values prevail within the state.

Ukraine

It hurts to listen to people describe what is going on here. In Ukraine.  Corruption is out in the open. The government does not even bother to hide its practices or outcomes.

Here is what some bankers told me.

An Italian bank bought a local bank for over a billion dollars. Invested another billion. Gave loans to corporations, but cannot collect those loans because the court system is corrupt.  Disgusted, the Italians are selling the bank at five cents on the dollar. Almost a two billion dollar loss.  And who is buying the bank? A member of the Ukraine President’s family.

Another story. Government deposits money in a bank. The bank gives loans to companies owned by government officials.  The companies refuse to pay back the loans. The bank goes bankrupt. Government money ends up in those companies free and clear.

How do you like that?

Anyone who can, is trying to get his or her assets out of the country. Whoever can leave, tries to find a way out.

Serbia

It is most unfortunate that the country of my birth is actually going bankrupt. I read in the newspapers that the government is planning to lease Vojvodina, a part of the country that has very productive agriculture, to the Arab Gulf states. The country needs money so leasing a whole region is one way to generate funds.  It would be equivalent to the US leasing Mississippi.

Obviously the people of Vojvodina are not too happy about this development. Add to it that Vojvodina is populated by people who also speak Hungarian because the region borders on Hungary and historically it was part of the Austro-Hungarian Empire. I would not be surprised if the people of Vojvodina start requesting a separation from Serbia, much like Kosovo in the 1990’s. If Serbia is not committed to Vojvodina, why should Vojvodina be committed to Serbia?

Another part of Serbia, the Sandjak, populated by Moslems, is making its own noises. It wants more autonomy. This could be a prelude to separation too. The end result is that Serbia might end up being mainly one large city-state called Belgrade.

If I am asked how did Serbia fall to its knees, what in short led to its downfall, my answer is that sadly beyond rampant corruption the cause dates back to KOSOVO. It takes an enormous amount of governmental energy to deal with this separation. Initially it required great financial resources to keep Kosovo as part of Serbia. But the government was insistent on supporting Kosovo…and of course holding onto it. In 1991 I called Kosovo the Serbian gangrene and urged Serbia’s Prime Minister to let it go its separate, ethnic way. The sooner Serbia cuts it off from the main body of the State, I argued, the quicker Serbia will be able to redirect its energies and solve its own problems.

Today Serbia seems ready to surrender a great deal, including many national heritage symbols. The government is in the process of negotiating to sell its sports team Crvena Zvezda (the Red Star) and Partisan to the Arabs. (Imagine USA selling the Giants or the Patriots to the Chinese.)

True it has been done before. Chelsea, the English soccer team, was sold to a Russian oligarch. The world is becoming multi-national in more ways than one…

Macedonia

What a surprise. I had not visited Macedonia in five years, after having a public disagreement with the Prime Minister over a dispute with Greece (I had been consulting with both countries) I decided to keep away from Macedonia. Until things cooled down, I told myself.

What a surprise awaited me.

Billions of dollars, taken as a loan, have been invested in renewing the city of Skopje, the capitol. That means art in the form of sculpture every few yards. Buildings in baroque style all over the center of the city. Large and wide boulevards criss-cross the main avenues. No traffic. And for a reason: taxis are abundant and for two euros one can actually go from one end of the city to another. No reason to drive on your own.

I was impressed with the fiscal policies. The taxes are low. Ten percent on dividends. If profits are reinvested, zero taxes. And personal taxes on salaries is 15 percent, but only on those with a certain upper income. Those with lower salaries, no taxes whatsoever.

Every store must take your money via a credit card. Or if you pay in cash, must provide a receipt. If caught not giving a receipt, the penalties are prohibitive: One month’s average salary for the first offense. Double or triple that for the second offense; and the store is closed for a period of time for a third offense.

No one dares to circumvent the tax system. The penalties are high whereas compliance is not too expensive. The result: no gray economy i.e., people do not avoid paying their taxes (which is not the case in Greece). Tax collection is not an issue.

But the results of this fiscal policy are much more profound than that. Since there is no corruption, and there is law and order, the population feels quite safe and content. The economy is growing. People are satisfied, voting predominantly for the ruling party.  In a safe environment, investments pour in from abroad. Macedonia is the most advanced country in the region.

The only complaint I heard is that freedom of speech is limited. The government is harsh and vindictive when it comes to criticism.

I felt that this perceived problem is not a problem at this point in time. To make a transition like this a country needs a strong hand, a hand which is not corrupt and which has a vision. And that is the government of Nikola Gruevski.

The problem is that “a strong hand” which is functional during the transition today, often resists giving up power tomorrow.  The result? It becomes dysfunctional. As to Macedonia, we will see.

The interesting point for me was the issue of an earlier name dispute with Greece.

In the years past when consulting for the Prime Minister, I pressed the government to compromise with Greece on the name Macedonia (which the Greeks resented, claiming the name was part of their history and heritage). If Macedonia would agree to a name change, Greece would remove its opposition and its veto of Macedonia to gain admission to NATO and to the European Union. I thought that it was imperative for Macedonia to join EU because of its Albanian minority.

This minority kept to itself. Had its educational institutions in the Albanian language from nursery to University level. And had its own enterprises which were not co-owned with Macedonians.  Moreover they were located in Western Macedonia, where most native Macedonians do not live or visit..It was like a state within a state.

My concern in the past was that if and when Albania joined EU or even started negotiations to join, the Macedonian Albanian minority might request separation from Macedonia and seek to affiliate itself with Albania to which they, by language and ethnic affiliation, belong. I thought they would prefer to be in the EU than be in an isolated Macedonia.

This is not the case anymore as I observed in this last visit.

It seems clear (and remarkable) that today Macedonia is doing well. Everywhere you look the big cranes are at work constructing high rise buildings. People look content. And the tax rules are not enforced on the Albanian population, which might have led to friction. Albanians living in Macedonia can still engage in commerce in cash and avoid paying taxes. Moreover, if they want to, they probably can get a second passport from Albania. Many Macedonians (about 40, 000 I was told) did just that by taking out a second citizenship in neighboring Bulgaria. By doing so these Macedonians are now members of the EU.

Thus, the Albanian minority population can have their cake and eat it: the benefits of Macedonia as well as the benefits of Albania and of the EU indirectly. The pressure on Macedonia to join the EU to resolve the nationalistic problem of an Albanian minority has evaporated.

Thus, the pressure to resolve the name issue is becoming a mute point.

Major change. Major release of pressure and stress.

I believe Macedonia will become the regional hub of the Balkans and beyond (A total market of 650 million people).

Such a hub is needed.  At one time it was Athens; and before that Beirut. Neither is functioning well today for separate reasons. So global corporations are looking for a city in which to base their regional head- quarters in the Balkans. Skopje is working on providing just that. The whole city is covered by wi fi. Local transportation is easy. Government bureaucracy minimal. Corruption non-existent.  Air communication is easy. Skopje airport received the award as the best European airport for a city with two million travelers a year. It is large, modern and very efficient. Because the government subsidizes air transport, many airlines are starting to fly to and from Skopje (One can fly for 50 dollars to London from Skopje).

The government has also invested large sums of money in the arts: there is a national theater and a symphonic hall.  In short, Skopje does not feel like a rustic village anymore. It has become a modern, developed European city.

I was impressed and remain so.

Kazakhstan

I was there for a lecture and did not spend much time in Kazakhstan What I saw impressed me though. A rich country. You can see it from the cars that speed across the roads. Modern, expensive cars. Lots of late model Mercedes. High rises with modern architecture wherever you look.

It is a rich country, rich in oil with a stable, although dictatorial, government.

If there is any correlation, my observation is that the countries that are doing well are countries where a strong leader (somewhat dictatorial) runs the government, but is not corrupt. Like Singapore. And Kazakhstan and Macedonia.

My assumption is derived from the way people behave, dress, and respond to my questions.

Where I noticed apathy, pollution, a frustrated and depressed population, was in the so called democratic, but corrupt, countries like Ukraine and Serbia.

I do not believe Democracy is the most desirable system for a country in the beginning of its life cycle. Benevolent leadership works better and is more desirable, as long as it is not corrupt and as long as it will eventually let go of power. This follows my theory that the best leadership for any system depends on the location of the system on the life cycle.

This has been a long report. But a very fruitful trip.

Be well

Sincerely

Dr. Ichak Kalderon Adizes

Test

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Speech at the 2013 PRME Summit

(under the auspices of the United Nations)

Delivered on September 25, 2013 in Bled, Slovenia

I have come to celebrate CEEMAN’s 20th Anniversary and applaud and acknowledge Danica Purg’s leadership. I have known Danica for 40 years. I met her in Dubrovnik, at a conference on self-management ,and I immediately realized that she was a live wire. She has developed something that is absolutely amazing. I am proud to be her friend, and I am always available if I can help as I think that she is doing a fantastic job.

CEEMAN’s celebration is tomorrow. Unfortunately, I cannot attend it as I have to leave for another event. But never the less, today, let me share my thoughts on developing future leaders, the topic of this gathering.

We have three words in our topic: “developing”, “future”, and “leaders.” Let me first talk about the future and then about what it means to be a leader in the future. Finally, I will address the issue of leadership development.

I have been in the field of change management for 40 years, and I have come to a very sad conclusion. You should not try to predict the future. Although there are 20 Nobel Prize winners in economics in the United States, none of them managed to predict the economic crisis from which we are emerging just now. Who would have believed that the Lehman Brothers would go broke? Who would have believed that if the US government had not helped the country’s banks they would have all gone bankrupt? This would have resulted in a total economic disaster across the world.

Remember how arrogant General Motors used to be, saying that what is good for General Motors is good for America. That company would have also gone down the drain without the support of the US government. Nobody predicted that.

Why are we unable to predict the future? Because the world has become extremely complex. It is not atomistic anymore. Its different parts are all interconnected and overlapping. Technology advances have sizable social repercussions, which in turn have political and economic repercussions. It is one big bouillabaisse.

Is it not strange that nobody went to prison for the financial crisis? Do you know why? Because nobody can find who is the culprit. Even the government did not know what to do. They were changing their policies every 24 hours.

“Let us do this!”, “No, wait; let us do that”, “No, no; that is not a good idea. Let us do something else.” Why was that? Because they did not know what to do.

Even the Federal Reserve admitted that the crisis was unpredictable. We are becoming increasingly confused. Do we really know what is going on? And because of accelerated change we are becoming older at a younger age. Some people are old at the age of 40. They are considered too old to be given a job. They are too old for the new technologies that are in vogue at that time.  I am ready to bet that the age at which people are considered old is going to fall even further. In some fields, like rock music, you are too old at 23. What are we supposed to do?

Two things to start with:

First, you cannot be educated in one particular field and assume that this will be enough for the future. You have to have a multidisciplinary education. That is why I told the International Academy of Management that our business education is wrong. We teach Marketing, Finance, Sales, Supply Chains, Human Resources, and Accounting, and we assume that we can manage the totality. But there is no course that teaches anything about the totality. How do you integrate all elements of the system? How do you think in a systemic, integrated way?

Business education should have a much wider scope. It should provide a background in political science and sociology among others. You have to know multiple disciplines so that you are not lost in one.

Training of future leaders has to be systemic. At the Adizes Graduate School, the most important courses for future leaders are not Finance, Strategic Planning, or Human Resources. It is Epistemology and Systemic Thinking. Epistemology has to do with knowing what you know.

Second, please, do not ever graduate. The diploma that you get from the Adizes Graduate School does not say that X, Y or Z completed his studies. A good diploma should say “Allowed to continue studying.” The day you stop learning, you stop changing, and unless you change fast, you die slowly. This happens to persons, companies, cities, and countries. The world is changing so fast that you should never assume that you know enough. As you study, you do not discover how much you know but how much you do not know.

Let me tell you a story, even though some of you know it because I like to tell it. I got my doctorate from Columbia University. I worked hard for it and made tough sacrifices. I was walking down the hallway with my diploma in my hands, very proud of myself. I had finally made it. I had the doctorate in my hand. I was very arrogant. At that point, a door opened and two students came out. They had just taken their Qualifying Examination for a doctorate degree. That is the exam that you take before writing your dissertation. I asked them if I could see the exam questions. I was shocked. I would have failed that exam if I had sat for it. The day that I got my doctorate, I was already obsolete.

To be leaders of the future do not be dogmatic – “I have a plan, I know which way I am going and that is it!” No! You have to be extremely flexible. You have to be extremely humble. You must admit to yourself that you do not know. This means that you are willing to learn from others all the time. And from whom do you have to learn the most? From the people down below. The workers. The people on the line. The rule of health is “Listen to your body.”

The day you stop listening to your body, you become sick. Managers, listen to your organization! Leaders, listen to the organization! The higher you climb up the company’s hierarchy, the smaller your mouth should be and the bigger your ears! Listen because you do not know. That will be your strength.

Good education should teach you how much you do not know rather than how much you know. The more you know, the more you should realize how much you do not know. That is good education. That means that good management education is not about teaching you to know but teaching you to be: Open-minded, humble, a good listener. Willing to admit mistakes. Willing to surround yourself with people that are better than you.

I am very disappointed with management education as practiced today. We have to change our education. I was a professor at UCLA, Columbia, and Stanford, as well as in Tel Aviv and Jerusalem. And I gave up. I gave up my professorship and my tenure because I was disgusted with management education. The reason is that the natural sciences have penetrated the social sciences in a dysfunctional way. The prevalent logic is that if you cannot measure something it does not exist. Therefore, everything must be measured. People get promoted on the basis of statistical analyses of answers to questionnaires. This is totally useless. After that, they will get a doctorate and ask “What do I do with this degree now?” I have no idea.

The quantitative approach has penetrated education so deeply that it has put an end to thinking. People are not thinking anymore. Developing questionnaires and doing statistical analyses is not thinking.

A quantitative analysis is fine but it can only be a tool, not a purpose. What we need is qualitative thinking although qualitative thinking is fuzzy. There is nothing precise about it. This is why management and leadership are not only a science. There is very little science in it by the way. It is mostly art. You have to spend sleepless nights and make judgments and evaluations. You have to suffer because there is no clear answer to your problems. You just have to bite the bullet.

I observe that the discipline of General Management has actually disappeared from management education. There is only one course called Strategic Planning. But that is only one little piece of what is known as General Management.

Many years ago, I came to the conclusion that the excellent manager of an organization does not exist. We are trying to produce something that does not exist. It is a fata morgana. Why is that so? To manage any organization, be it a city, a country, a company, or a family, you need to produce results. You have to do that efficiently so that you do not waste resources. At the same time, you must think about the future and prepare the organization for it. This means that you have to be entrepreneurial. But you should also surround yourself with competent people and make them work as a team so that they do not waste energy fighting with each other. You want a constructive culture in your organization.

This means that we want a leader who is task-oriented, efficient, active, organized, systematic, motivated, ambitious, detail-oriented, creative, innovative, inspirational, sensitive…

In the prevalent management education that today is called leadership development we try to produce that person. There are not many of us around that fit this description, right? Because it does not exist. And I have to tell you that the worst clients that I have had as a consultant are those that graduated from Harvard Business School. They are arrogant. They end up in private equity firms and consulting companies and start putting on airs.

What makes a good leader? Think of a family. It is very difficult to raise a child as a single parent, is it not? It takes a family; a man and a woman. It takes masculine and feminine energy. They have to complement each other.

Building a company is like building a family. You need a team whose members complement each other. You cannot do it on your own. That is why dictators destroy countries. That is why democracy is better. So who is a good leader? Somebody who is not afraid of working with people who are different. A leader must not be afraid of differences. A leader must not curse a rose because it has thorns. Try to learn something from the differences that you observe rather than being afraid of them. This takes mutual respect and trust. Team members should be like the fingers of a hand: different yet united. And they should not be united despite of being different but because of being different. When we are different, we learn from each other. Our differences make us stronger.

Can you command respect and trust? Are you a person who can work with different people? If you are, you can be a leader of the future. That leader is not one who has a degree and is knowledgeable. If you think you know everything and you can predict the future, you are in trouble.

There is another problem with education. What does it teach you?  How to maximize Profits. As a consequence, profit has become a religion in our education. That is what we teach in finance, strategic planning, marketing… It is all about how to measure and achieve profit. That is the ultimate goal.

Milton Friedman got a Nobel prize for turning profit into a religion. But do you know what this is doing to us? It is destroying our environment. By trying to obtain more and more profit, we produce more and more things that we do not need.  In California, where I live, people have enormous houses and three cars each in their garages, and they are still miserable because it is not enough. They want more. But more is not better. It is worse. By trying to have more we destroy the world that we live in.

I do not mean to say that profit should be ignored. I have been a consultant to several socially conscious organizations, like the Body Shop. They all got in serious trouble because they ignored profit. Do not ignore profit! But accept that there should be a limit to it. You need it so that you can survive and grow. The real goal must be different: make a better world. Make it a better place to be.

I just came from Montenegro where I was an advisor to the Central Bank. The bank’s executive director took me to his village where he was born, in the north of the country. He introduced me to his brother. I asked him how he felt in that small mountain village of 3,000 people. He said, “Great!” I wondered how one can feel great in such a small place. He answered, “I have a roof over my head. I have food. I have rakia to drink. What am I missing?”

I hear more laughter in a developing country in one day than in a whole year in a developed country. As the standard of living goes up, the quality of life goes down. Which of the two is more important?

The leaders of the future must have a different set of values. We need a new value system in which less is beautiful. Less is better. Small is wonderful.

Sincerely

Dr. Ichak Kalderon Adizes

The Impact of the Holocaust on Me

I have just finished writing my memoirs. And I have discovered things about me I was not aware of until I wrote what I wrote… and then read what I wrote.

The Holocaust, which I experienced from the age of 4 to the age of 8, has had a profound influence on my life. I know it seems self-evident, but it has come as a great surprise to me.

I wondered for years why am I so concerned with what is going to happen after I die.  Why was I so committed to the point of being fanatic about building the Institute, writing as many books as possible, training people in my methodologies to spread them worldwide… and being worried stiff about what might happen to it all after I say goodbye forever.

Why I persisted, almost obsessively…and still continue to do so…at tremendous cost to my health and to my relationship with my spouse and my children.

So, why?

Many people accused me of simply striving  for money. The truth is I do not even know how much money I have, and I do not even care. I am very modest in my expenses and tastes.

Some have charged me of acting  in the service of an over-heated ego. That does not feel right either. I do not care how many honorary doctorates I have. It is all for marketing purposes.  I am even somewhat embarrassed, rather than gratified, when anyone asks for my autograph.

So what is it that drives me. Blindly.

It became clear to me writing my memoirs.

It is the fear of death.

Death is final. There is nothing thereafter.  And when I die, I am not in control of what happens anymore.  I will be forgotten. And that to me is the meaning of death…to be forgotten.

And where did I get this fear of death? From the Holocaust. From the concentration camp. From trying to survive hiding in the mountains of Albania. I can not even allow myself to faint, I am so frightened of dying.

Maybe I won’t wake up…

And there are more repercussions from that terrible war. I can not bear to be hungry. I starved in the camp and for many years after, until we finally reached Israel.. I was eleven. To be hungry is a terrible experience for me, and my wife knows that if I am hungry she must  immediately feed me; otherwise, I become aggressive and very unpleasant to be around.

This difficulty with being hungry impacts my weight. I am told that to lose weight you need to experience some hunger. Each time, you are hungry your body is telling you that it needs to use the stored fat; and hunger is a signal that it does not like to reduce the reserves.

Since I cannot be hungry, I can not lose weight easily.

And there is more.  My memoirs  clarified  for me why I try to avoid going through Frankfurt airport to change planes in Europe. I  sweat passing the immigration booth.  It is situated a bit higher than the person asking admission. The immigration official in uniform sits above you and looks down on you.  I start sweating as he looks at my picture and then looks at my face. The uniform, the German accent, the stern look make me very, very uncomfortable. Is it memories of the camp?

For seventy  years, I  have been behaving a certain way, and I did not know why. Now I believe I have an answer.The war imprinted  certain experiences in me that control my behavior. Most of it is unconscious.

Who knows how much of my behavior is not me, but caused by my past.

Sincerely

Dr. Ichak Kalderon Adizes

Managerial Problems of Russia

(Accepted for publication by Harvard Business review in Russian)

This paper is based on two and a half years of experience being exposed to Russian management through lecturing, consulting or conversing. The paper does not claim to be scientifically proven; it could be biased; the data source is limited.

I have identified twelve characteristics of Russian managerial practices that impact the Russian managerial effectiveness.

1. Russian culture lacks systematization.  It starts with the amorphic language structure. There are multiple ways, all legitimate, how  to structure a sentence like: “I love you” You can say it four different ways:  I love you, you love I, you I love, love I you and love you I.  And they all mean the same.  There is no one-way to structure it right. If one watches how Russians drive, it is how they structure the sentence: Anything goes. No rules that are really adhered to.

In Adizes language, it is lack of (A) reflected in no discipline.

2. Lack of Discipline: Watch how people drive. How they park. How they handle their garbage. There is no discipline, no rules that get adhered to. As if people do not take rules seriously unless there is a serious repercussion to their deviation from the rule.

As a result, managers have to overuse power to get discipline. Serious punishments. Levying penalties. Heavy ones. Mild ones do not work. It seems as if the populations has been so heavily punished that they are immune to mild punishments. (The more power is used, even more has to be used to get the same results; on the margin, power has a declining effectiveness).

3. Autocratic management: The need to punish in order to get discipline is fed by another characteristic of Russian management which is not necessarily a remnant of communism but of the general history of Russia, and it is authoritarianism. A manager, leader, seeks and will fight whoever challenges their authority. There is an air of superiority that any leader in Russian organization has to demonstrate. Cannot admit to be fallible. A leader, by admitting to not knowing it all, fears he or she might lose authority because it is expected from them to know it all.

4. “Control Orientation”:  Autocracy leads to the need to control. The way one region is organized has to be the way all regions should be organized. The purpose is to get sameness as much as possible. That increases the capability to control what is going on. But this orientation impacts performance. For performance, one has to pay attention to the peculiarities of each geography, each market; Sameness impact performance adversely. It is another cause of ineffectiveness.

5. Moscow Centric: The autocratic style and the need to control are not only personalized. It is institutionalized in where decisions are being made.  Moscow is the center of the Russian universe. Moscow decides often without listening to what the rest of Russia needs or has to say.  And I am not referring just to government. It is also true for corporations.

6. Fear: Autocracy and control breed fear and one of the characteristics of the Russian managerial culture is fear:  People are afraid to challenge, to speak up. It is wiser to lie down and be compliant; not to get into trouble. In Russia when the top person shows in the meeting, there is fear that if one challenges the leader in pubic that is considered insubordination, which can be dangerous for the survivability of the person expressing himself.

7. Ineffective Efficiency: The Soviet Union was not market and profit oriented but efficiency oriented. The assumption was that sameness, control and autocracy increase efficiency. Thus, sameness. Thus, centralization of services and authority. The assumption apparently was that it creates economies of scale. With the fall of the Soviet Union, market forces were introduced and over control and the sameness impeded the flexibility needed in a market economy. The result is that the system produced ineffectiveness.

8. HOW rather than WHY:  This legacy of focusing on efficiency, had its ramifications in organizing a company or in the decision making process. Inordinate percentage of energy is dedicated to answer the question of HOW rather than WHY we do what we do. Again, the driving force is efficiency rather than effectiveness.

9. Waste:  Excessive efficiency orientation has its price. One of them is diseconomy of scale. On the margin more control costs more than it contributes value. On the margin excessive efficiency produces inefficiency.

10. Corruption: The overkill on efficiency creates bureaucracy which has its negative repercussions not reflected only in waste.  It gives corrupt people the possibility to be corrupt. They are either the one who know how to maneuver the system so that it can deliver what it exists for, or they are the ones that provide the permits. They can then require extra payment for their service or for abusing their power.

11. Organization organized around people: The Soviet Union not just discouraged economic entrepreneurship but also even jailed entrepreneurs. They were considered spekulants. It created a whole class of bureaucrats.  The end result is that people who are entrepreneurial and can lead are missing.   The shortage of people with business acumen is causing many organizations to get organized around the people they have or can find and not around the tasks the company needs to be performed

12. Searching for whom to blame: Ineffective bureaucracy, corruption, can yield wrong diagnosis of problems: it is interesting to note how problems get diagnosed. The discussion moves fast from why a problem exists to who is to blame for the problem.

Is there hope?

I would say yes.

Individually, Russian executives are bright, intelligent, even cunning, very creative when allowed to be; extremely capable individuals.

The problem is not with people but with the culture created by a history of autocracy. And culture can be changed. It only needs committed leadership on micro mezzo or macro level.

Sincerely

Dr. Ichak Kalderon Adizes

Love and Life

In my many previous blogs, I have debated what is LOVE, and my conclusion is that it is a total integration.

 

When you feel in love, you feel totally integrated with your object of love as if you are one and the same; there are no debates in your head: if and when and why and how. Nothing. You feel complete whether it is with a person of the other sex or whether you are in love with your car or home.

 

That is why some religions say that since God is everywhere and everything, since it is a total integration, God is LOVE.

 

That is why we are happy when we have love in our life and the more love the happier we are. We are “together” and no energy is wasted on doubts or questions.

 

Now what is LIFE?

 

Life is CHANGE.

 

Without change, there is no life. Look at anything that is alive and notice that it is changing right there in front of your eyes: Children, trees, flowers, horses and even snakes. You name it.  And since your organization, your business, and also your family is changing in its internal dynamics…Guess what? They are alive too.

 

And what happens in change?

 

Disintegration.

 

Why?

 

Because all living entities are SYSTEMS. And every system is composed of subsystems by definition. And, those subsystems have their own subsystems ad infinitum.

 

When there is change the subsystems do not change in synchronicity. Some change faster than others. You, for instance, you could be physically forty years old, intellectually seventy years old because of lots of wisdom generating experiences you have had in life, emotionally still a teenager and spiritually may be not born yet.

 

Since life is change and change causes disintegration, we can simply conclude that LIFE IS A DISINTEGRATING FORCE.

 

Let me repeat for emphasis:

LIFE causes disintegration while LOVE causes integration. They are opposite forces.

 

Oops. Interesting conclusion. At least for me.

 

It brings me to many insights.

 

Here is one: If you do not have love in your life, you are falling apart. To fight the difficulties of life is to seek and find and nourish LOVE. Through true, not just ritualistic, religion. By being truly spiritual.  By volunteering in your community, I mean loving your community.  Loving your country. By loving your job through loving your employment and your colleagues.

 

Love is the antidote to the pain that life brings by its nature.

 

Insight number 2: How does one find and nourish love?

 

By slowing down. Have you ever seen anyone falling in love by chasing a bus or working eighty hours a week. People fall in love on vacation, walking on the beach at sunset, having dinner with mellow music at candle light.

 

“The devil is in the haste”, says the Moslem religion.  To find love, God, happiness, YOU MUST SLOW DOWN.

 

I am working on it. Because I do just the opposite, working harder and harder, looking for “success” , hoping that it will bring love and happiness. How wrong and misguided. Time to change. And the sooner the better.

 Sincerely,

Dr. Ichak Kalderon Adizes

Not All Energies Are the Same

Yehoram, a reader and a friend, commented on last week’s blog, “Why being creative can be dangerous.”  In his criticism, he equated calories to energy.

 

His comment sent me back to the blog and led me to re-define what I say and gave birth to a new insight: I agree, calories have much to do with energy, but in that blog I was referring to human not caloric energy.  Aha, apparently there are different sources of energy, calories being only one of them. And perhaps the different sources of energy can be classified and understood through the concept of PAEI.

 

Calories, for example, are related to physical energy. That is the energy we need to operate our body. That is the (P) energy, so to say. Exercise also gives and uses (P) energy.  Whether the exercise leaves you with more net energy or less net energy depends on your physical condition and the degree of exhaustion from the exercise.

 

But there are other forms of energy, as well. When I create, and in my case it is when I write, I get a surge of energy. Thus, when I am extremely tired from travel or work with clients, and go to my room and start writing or editing,  I find myself recharged, overflowing with energy. (I even become inspired. The word inspired comes from IN SPIRIT.  As I connect to something greater  than myself, I am energized.)

 

Inspiration does not have to come from creativity only. I noticed that people who have a mission in life, a purpose, have high energy. And it does not come from calories.

On the other hand, people who lack purpose, are without goals, have what psychologists call “an identity crisis” and are low on energy .

 

But now there is a catch: I said in last week’s blog that creativity uses energy. Now I say creativity gives energy.  How to settle the apparent inconsistency?

 

Look at food. The (P) energy. It gives but it also consumes energy. The body has to process the food eaten and that consumes energy.

 

In my thinking, a similar process applies to creative, inspirational energy. Inspiration becomes a source of energy while the process of creating uses energy. How  you feel at the end varies.

 

In physical energy if you eat lots of meat , presumably you are filled with energy.  But you will consume much of it in order to process the meat. The result is that your net energy is low. All animals, and humans too, go to sleep after a heavy meal, particularly if it consists of meat.

 

Vegetables offer you the most in net energy. They provide little energy itself, but they consume even less. And so the net result is a positive  contribution of  energy.

 

Now let us look at inspirational energy.

 

I believe it is related to style. Our individual style. If someone’s style is not creative, low on (E),  his or her NET inspirational energy will be very small, if not negative.

 

Why?

 

Because their (E) is small, they get little energy from being creative but use lots of energy  to create. The net result is small if not negative energy. It is not strange, therefore, that non-creative people find themselves easily exhausted rather than invigorated when compelled to engage in the creative process .

 

On the other hand, if  a man or woman’s style can be characterized as entrepreneurial, or (E)  in a large way,  the net result of inspirational energy will most likely be positive.  I, for one, usually feel very energized at the end of my creative work. Cannot even sleep. Have difficulty “coming down.” Now ask me to do some bookkeeping and within minutes I will be exhausted.

 

What form of energy does bookkeeping by itself yield or consume?

That will be (A) energy. That is energy that comes from setting or being in control. Those with a personality that prefers in control (some are control “freaks” ) are energized when exercising control.

 

Now what about (I)  energy?

I think there are two different (I)s: external and internal.

 

The external (I)  is the energy that stems from  affiliation and relationships.

 

Community singing, for instance, fills me with energy. It is not energy from calories or inspiration or being in control.  It is from the feeling of unison that is at the heart of community singing. Or circle dancing. Or a wedding. Or a great socializing dinner.

There must be emotional energy too. That I think is internal (I).  When we fall apart  inside we become depressed. We are emotionally depleted. We feel no energy. And when we feel “together “ inside we feel energized.

 

A typical mistake I think we all do is to try to replenish the low energy in (E) or (A) or (I) with (P). We try to replenish lack of mission in life, falling emotionally apart or being exhausted from a creative process WITH FOOD. As if one form of energy, the physical, can replenish the other.

 

The result? We overeat and get fat.

 

Interesting however, that the reverse can work: one can replenish missing physical energy , not enough calories from food, with inspirational energy.

 

An example is Victor Frankl’s account in his famous book  “Man’s Search for Meaning,” where he describes  how people with a purpose in life survived German extermination camps  and starvation better than those who lacked one.

Conclusions:

 

There are different sources of energy. Jointly at a point in time they are fixed. Over time they vary in magnitude depending on amount of calorie intake, how well we exercise, how much control we need, our capability to be creative, on having a purpose in life and on degree of internal and external integration.

 

You can replenish one source of energy with another but not in all cases.

 

If you feel emotionally down, exercise. It will give you the energy you are missing.  Or go and redefine what your life is about and find something you are passionate about. And if you are the creative type, go and do something you love and create something. You will get the missing emotional energy back. But only for a while. For permanent solution, you have to get your life together…probably you need therapy.

 

But do not replenish missing inspirational energy, or even something as commonplace as being lonely (lack of affiliation) with physical energy from calories, i.e. food. It does not work.

 

 I wonder if  there is any research on the subject.  Also what do you think?

 Sincerely,

Dr. Ichak Kalderon Adizes