Obama Pink Slips GM CEO

By Mike Myatt, Chief Strategy Officer, N2growth

Obama cans GM CEO
Rumor has it that President Obama fired GM CEO Rick Wagoner. Actually, the truth of the matter is that the Obama administration “asked” Mr. Wagoner to step down, and he agreed to do so. This was all part of President Obama’s auto industry plan announced today, which was largely based upon the recommendations from the Presidential Task Force on the Auto Industry, headed by guess who…the Treasury Department. My question is this…what the h*ll does the Treasury Department know about the automobile industry, and why is our President firing (or coercing to resign) a private sector CEO? In today’s post I’ll share my thoughts on this disturbing turn of events…

I’m in no way arguing that Mr. Wagoner shouldn’t have been fired…he should have been. However it should have been his board of directors that called for his termination, and not the Federal Government. If the Federal Government would have kept its nose out of the private sector to begin with, and not bailed them out in the first place, we wouldn’t be having this debate today. The sad part is that because President Obama has invested such a significant amount of political capital in the auto industry you can mark my words that he will continue to fund subsequent bailouts with our dollars. The snowball is just beginning its downhill roll…

Let’s do a bit of a deeper dive on the disturbing trend of government intervention into the private sector…Not only is this just flat-out wrong, but it sets a very scary precedent…When the Federal Government can acquire privately held companies, force the sale of privately held companies to foreign entities, fire CEOs of privately held companies, pass legislation that has not even been read, and use the tax code in targeted punitive fashion, then why even have a private sector? Oops…I guess that’s the change that Mr. Obama promised.

It has gotten so bad that on the heels of yet another press conference by our President, Morgan Stanley recommended the immediate sale of US stocks, and the Dow closed down more than 250 points today. Is this really the change you’re looking for? Not me…

The Hierarchy of Knowledge

By Mike Myatt, Chief Strategy Officer, N2growth

Knowledge Matters...Today’s Myatt on Monday’s question comes from a CEO who asks: “what is the best way for me to synthesize the overwhelming amount incoming information I receive while making the best decisions possible in a timely fashion?” While I have written often on the subject of decision making, today’s question is a bit more narrow in scope asking for advice surrounding the filtering of various inputs. In today’s post I’ll address what I refer to as the hierarchy of knowledge which will provide an answer to today’s question…

Understanding that a hierarchy of knowledge exists is critically important when attempting to make prudent decisions. Put simply…not all inputs should weigh equally in one’s decisioning process. By developing a qualitative and quantitative filtering mechanism for your decisioning process you can make better decisions in a shorter period of time. The hierarchy of knowledge is as follows:

  • Data: Raw data is comprised of disparate facts, statistics, or random pieces of information that in-and-of-themselves hold little value. Making conclusions based on data in its raw form will lead to flawed decisions based on incomplete data sets.
  • Information: Information is simply an evolved, or more complete data set. Information is therefore derived from a collection of processed data where context and meaning have been added to disparate facts which allow for a more thorough analysis. 
  • Knowledge: Knowledge is information that has been refined by analysis such that it has been assimilated, tested and/or validated. Most importantly, knowledge is actionable with a high degree of accuracy because proof of concept exists.

Even though people often treat theory as knowledge, and opinion as fact, they are not one in the same. Making executive decisions in today’s world has never been more complex, and when under extreme pressure I have seen many a savvy executive blur the lines between fact and fiction resulting in an ill advised decision. Decisions made at the data level can be made quickly, but offer a higher level of risk. Decisioning at the information level affords a higher degree of risk management, but are still not as safe as those decisions based upon actionable knowledge.

Another aspect that needs to be factored into the decisioning process is the source of the input. I believe it was Cyrus the Great who said “diversity in counsel, unity in command” meaning that good leaders seek the counsel of others, but maintain command control over the final decision. While most successful leaders subscribe to this theory, the real question in not whether you should seek counsel, but in fact where, and how much counsel you should seek. You see more input, or the wrong input, doesn’t necessarily add value to a decisioning process. Volume for the sake of volume will only tend to confuse matters, and seeking input from sources that can’t offer significant contributions is likely a waste of time. Two other issues that should be considered in your decisioning process as they relate to the source of input are as follows:

  1. Credibility: What is the track record of your source? Is the source reliable and credible? Are they delivering data, information or knowledge? Will the source tell you what you want to hear, what they want you to hear, or will they provide the unedited version of cold hard truth?
  2. Bias: Are there any hidden and/or competing agendas that are coloring the input being received? Is the input being provided for the benefit of the source or the benefit of the enterprise? 

Good luck and good decisioning…

Attorney-Client Privilege

By Mike Myatt, Chief Strategy Officer, N2growth

Is it or isn't it?Attorney-client privilege is an often discussed and mostly misunderstood legal enigma. It has been my experience that many business people don’t have a clear understanding of when this privilege exists and when it doesn’t. This possibility for confusion can sometimes lead to a consumer of legal services thinking that their legal matters are protected when they are not…In fact, I had an interesting conversation with a client last week who asked me if a non-disclosure agreement (NDA) was necessary when dealing with a new law firm. What he was really attempting to ask was whether the attorney had a professional legal obligation to preserve the confidentiality of his information, or if he needed additional protection. In today’s post I’ll explain the rules and restrictions that govern attorney-client privilege…

Attempting to define attorney-client privilege is not a simple task because there are several items that need to be considered in determining whether or not it exists. There are differences between the legal parameters and restrictions governing privilege, and an attorney’s ethical obligations dealing with confidentiality, which may be broader in scope. This matter is further complicated by the fact that interpretations of legal privilege may vary based upon legal jurisdictions…an example might be that the New York State Bar Association may interpret privilege differently than the Florida State Bar Association and so on…

In general, the first thing that must occur for attorney-client privilege to exist is the formation of an attorney-client relationship. While this does not automatically happen just because information is shared, or a conversation takes place, in some cases (which can vary by jurisdiction) disclosure which takes place “in anticipation of” a forthcoming legal relationship may qualify.

As mentioned above, privilege and confidentiality are two separate issues. Everything covered by legal privilege is confidential, but confidentiality extends to broader areas beyond just those things covered by legal privilege. Confidentiality refers to an obligation of the lawyer not to voluntarily disclose information to a third party. Privilege refers to a right of the client that allows the attorney to withhold information even under compulsion (discovery, subpoena, etc.) unless statutory exceptions state otherwise.

Another item to keep in mind is that attorney-client privilege normally only covers matters pertaining to the practice of law. In other words, if you disclose a particular business/personal matter to an attorney which has no valid legal ramification, the attorney cannot rely on privilege to protect such a disclosure. This means that you cannot simply dump information and documents on your attorney without valid legal reason and then claim the defensive argument of privilege. Furthermore it should go without saying that you cannot use attorney-client privilege in anticipation of a crime.

The best thing to do when attempting to discern whether or not attorney-client privilege exists is to evidence the existence of a formal attorney-client relationship. This is best accomplished by the execution of an engagement letter with your attorney which defines the scope of the relationship. If you can get your law firm to sign an NDA this will only broaden the scope of your protection with regard to confidentiality. Lastly, when in doubt simply ask your attorney if your impending disclosure can be treated as privileged information.

Character Matters

By Mike Myatt, Chief Strategy Officer, N2growth 

Character Matters...Character Matters…if our society can take anything away from watching the ridiculous nature of the public debacles that seem to occur on a daily basis, it should be that Character Matters. Character; that oft discussed leadership trait that seems to be inexorably tied to sustainable success…while much has been written about the importance of character, there is surprisingly little information in circulation which actually defines it. The word “character” surfaces in most every article, blog post, speech, book, or even casual reference to the topic of leadership so surely it must be easy to define…In today’s post I’ll take a crack at defining a word which is often used, and in my opinion often misunderstood…

Some would say that character needs no formal definition and is a principle that should be universally understood by all, with anyone lacking understanding of the concept to be a person of bad character. Wouldn’t it be nice if that was so? While this line of thinking makes for a good sound bite, it hints at a rather myopic and naive view of the world. You see, much of how one defines character (good or bad) begins with their view of the world as guided by their moral compass.

One of my favorite sayings is that “you measure a person’s character by how they act when no one is watching, and by the choices they make when they believe no one will ever know.” Regrettably, many people choose to live in two worlds…their public world, and their private world. The people who walk this fine line between the ever increasing conflicts posed by the duality of their principles are destined to suffer as a result.

The class of  people mentioned above also tend to subscribe to the theory of moral relativism. They believe anything that can be justified or rationalized by the need at hand, or worse yet, manipulated for a desired outcome, constitutes right thinking (some would call this subjective reasoning). These subjective thinkers are the masters of spin, who while often appearing to do things right, often fail to do the right thing. People that fall into this camp frequently exhibit an inconsistency in their reasoning and/or positioning. While they would describe themselves as flexible, fluid, and open-minded, my take is that their character lacks integrity and can be easily influenced. When a person allows popular opinion, or situational characteristics to either define or supersede their principles, then I suggest their character is flawed. Simply put, my contention would be that if you subscribe to subjective reasoning and you serve as your own moral compass, your character will only be as good or bad as your thinking at that time.   

In contrast, others utilize a form of objective reasoning that is guided by a higher authority (law, religion, or some other third party code) which provides a consistent set of governing principals or ideas. My belief is that objective reasoning will lead to a consistency of character and a predictable pattern of behavior (also reflected in both good and bad character, as well as the higher authority being subscribed to). People who subscribe to this line of reasoning may often choose to ignore doing things right in favor of doing the right thing. While they may be labeled as hard-headed, inflexible, extreme or even as zealots, you know where you stand with objective thinkers. My belief is that an unyielding commitment to principled behavior will serve you better than a subjective, ad-hoc approach eleven times out of ten.

It was Ralph Waldo Emerson who said, “Character is higher than intellect.” I could not agree more with Emerson as virtually anyone can develop their intellect, but it is the rare person who can retain their character. Emerson clearly understood the law of scarcity in placing more value on character. The most successful business leaders of our time have built their personal brand by consistently exhibiting strong character regardless of the situation at hand. They let right thinking, right decisioning and right acting serve as their guide. If you have to manipulate the truth or compromise your values to gain an advantage, the advantage is not worth the perceived gain for any advantage gained in deceit will surely come at a very high cost the sacrifice of your character.