How odd it feels to sit down in the heavy September, San Antonio heat and write an article for the end of the year! Anticipating 2008, I eagerly strategized by reviewing articles regarding financial trends and employment data. My goal for the article was to communicate useful insights that I normally use in my own planning. I was just starting earlier than usual. But things are up, and they are down. Inevitably, mortgage industry problems follow a building boom, but Dow Jones also closed at record levels this week. Housing starts and other economic indicators are down comparatively; some are crying “recession.’” Still, unemployment rates haven’t changed significantly, and there is talk of interest rates getting lowered again. Focusing a “snapshot” in order to formulate some kernels of wisdom about closing down one year and beginning in another proved elusive. As doomsayers on the evening news continue to scream, I am struck by my grandfather’s admonishment, “Only the end of the world is the end of the world.”
I hardly remember the teenage angst that resulted in my grandfather repeating this saying. Whether it was the result of some broken–hearted puppy love incident or some less than optimal audition, I have no clue. His words left more of an impression than whatever spurred the remarks. This saying has comforted me multiple times in my life that felt like the end of the world; many of these times were related to finances. It may have seemed like the end of the world, but I am still breathing. Fearing the possible event often turned out to be greater than the event itself (if it ever even came to pass). Even taking into account the fears of some theorists and experts (realizing that '08 is a heavy political year, for one) and formulating a cohesive approach given inherent economic contradictions underline the fear of the end of the world, but we’re not there yet.
Federal Reserve Board Chairman Alan Greenspan’s new book, “The Age of Turbulence: Adventures in a New World” (Allen Lane, Penguin Books 2007), begins with his account of the days immediately following Sept. 11, 2001. Like many, I remember with photographic accuracy the exact minute the news of the devastation broke in on the radio. Surely, this was the end of the world as we knew it.
The world did stop for a period of time. However, according to Greenspan, “The most remarkable thing that happened to the world economy after 9/11 was nothing.” Despite mixed reviews of 'The Age’ (which actually seem to critique Greenspan’s career more than his book), this statement surely seems valid. We were a nation of mourners, and our lives were forever changed. But despite our sorrow, the earth continued to spin.
The awe–inspiring first chapter of 'The Age’ includes the details of the redundancies, checks and balances that were built into our financial system by Greenspan and his cohorts. Designed to protect our system of financial exchange and information sharing, these measures rapidly shifted strategic centers and rerouted electronic processes such that our economy remained functional. Indeed, some of the older “manual” systems were more vulnerable than the electronic ones. Greenspan spent his career doing what Jim Collins and Jerry Porras termed “clock building” in “Built to Last” (Collins 2002). “Clock building” refers to structuring an organization based on potential needs rather than “telling time,” or deciding which visionary ideas are current. The focused leadership of the Federal Reserve Board ensured that the economic world would not end.
“Built to Last” resulted from Collins’ and Porras’ six–year research project at Stanford University Graduate School of Business. In their research, they compared 18 visionary, long–lived companies to 18 companies in the same field that, while successful, had not been as successful. Chief among the leaders’ similarities in the most successful companies was that they were “clock builders” like Greenspan. Rather than focusing on a single great idea, Bill Hewlett and Dave Packard (yep– HP) focused on the processes of company building and the establishment of “ticking” systems into place. As they began during the Great Depression, (another “end” of the world), they were not even sure what their product would be! Their “Biggest Hairy Audacious Goal” (BTL) was company creation itself; failed projects ruled until their perseverance was rewarded by war technology contracts. Structure, guidance and values based on organization building allowed for the company’s incredible flexibility and growth. Celebrating its 70th year, Hewlett Packard is on the cutting edge in all respects – and has weathered storms – thanks to commitment to the original founders’ vision.
Lessons from Hewlett Packard and the other highly successful companies of “Built to Last” are invaluable when planning for the New Year. First and foremost, structured processes will guard against the terror of ups and downs. They will rise and fall, but the sun will come up despite all doomsday predictions. When anticipating the unknown, the challenge is to be “clock builders rather than “time–tellers,” and to scrupulously develop mechanisms to manage our lives. After all, we are our own CEOs, which affords flexibility and adaptation no matter the challenge. Secure planning and subsequent execution facilitates pro–activity, whatever the circumstances. Many of our country’s great fortunes were made during huge adversities; even the San Antonio Riverwalk was the result of flooding and visionary willingness to invest $3,000 in order to leverage federal funds. A well–built life always provides the presence of mind that allows for opportunity in the midst of calamity.
Realize that the discussion of planning is the first step to building your own clock. Happy holidays and best wishes for a wellbuilt New Year!
