Design Thinking As A Means of Staying Relevant

Some people, when they read a recent post that “design” would be a prominent competency, even for CEOs, for community marketing organizations of the future mistook my comment to mean “graphic” design.

Maybe this is some of my former peers have still not developed in-house capacity for that aspect, even though leading-edge DMOs did  three or four decades ago, not only to be more efficient but to keep better control of the graphical representation of their community’s brand.

But I was actually referring to process design or the capacity to design things like systems, project management, processes, new product launches as well as mothballing those that are obsolete.

This way of viewing design includes the ability to morph or scale organization design, business models and even things such as strategy and especially customer service.

Going forward what is called “design thinking” will be more and more essential to preserving and leveraging a community’s unique sense of place, the primary role of a DMO.

My forecast really wasn’t a reach for anyone keeping up with best practices or readers of excellent books such as Change By Design: How Design Thinking Transforms Organizations and Inspires Innovation.

It was penned just as I retired nearly six years ago by former Rotman Dean Tim Brown, the founder of IDEO who blogs at Design Thinking.

But Brown reinforces my belief that you “see into the future by looking back” when he reminds us that design thinking dates at least to the early 1800s when Isambard Kingdom Brunel applied design thinking to transportation systems.

Community marketing is about differentiation at its strategic core and according to Brown, design thinking is essentially about developing divergent approaches to solving problems.

Many organizations often fail because of poor leadership, especially when run by volunteers where leadership positions are passed from one member to another without regard for engagement or leadership ability.

But instead of addressing the lack of engaged leadership, as they lose steam these organizations often but futilely try to fuse with an earlier but obsolete organization.

Rather than closely examine intrinsic factors such as leadership strength or morphing design to address obvious changes in the ecosystem in which they operate, they superficially restructure hoping that fusing two organizations will restoke one while bringing the other back to life.

This doesn’t solve the problem, it instead merely leads to a bigger organization lacking leadership and usually the obsolete organization sinks the still relevant one too and a new organization is formed.

It is how we end up with scores of organizations on life support and draining resources away from those that are relevant.

Examination of this extrinsic vs. intrinsic approach suggests this approach is inevitably doomed to failure.  It definitely not “change by design.”

Organizations, especially when volunteer-driven, just aren’t very good at introspection or design thinking, and nowhere is that truer than when it comes to governing boards, leaving them vulnerable to regressive but well meaning “humpty-dumpty” thinkers.

The annual Stanford survey of nonprofit boards of directors shows that many are in desperate need of redesign, even when executive led.

Too often members are appointed without ensuring they have or are willing to learn critical skills such as leadership.  Even leading an organization of their own is no guarantee that an appointee will be able to lead a volunteer board.

In the current survey, over a quarter say their fellow board members lacked a strong understanding of the organization’s mission and strategy.

A third of the respondents were not satisfied with the board’s ability to evaluate the organization’s performance and over a third said the boards to which they belong never evaluate the board’s effectiveness.

Nearly 7-in-10 organizations have no leadership succession plan let alone require qualifications for leaders and nearly 60% had no benchmarks to measure performance to a peer group of similar organizations.

Only 15% believe their boards stay on top of strategy more than once annually and 41% only do this most essential board role every two years or less.

Half do not believe their fellow board members are very engaged making those that have a “you’re next” form of rotating leadership especially vulnerable to decline.

Nearly 7-in-10 say their boards have faced one or more serious governance-related problems in the past 10 years and 16% say they have extreme difficulty attracting qualified new board members.

The results are worse for those that are volunteer-driven and even more dismal when budgets are around $500,000 give or take.

Attributes For Serving On Governing Boards

I became a CEO in my mid-20s, at a very young age, albeit for an organization still in start-up.

Friends have always kidded me that it must have been nice not having a boss for all but a handful of years during my long ago concluded four-decade career.

But I always had bosses.  They were governing boards of rotating directors to whom I was accountable that always included a member or two who didn’t understand or accept that a board only gives direction as a whole, not as individuals.

Even a chair person couldn’t give direction without direction provided by the board as a whole.  Often the most difficult transition for some board members is from the managerial or owner role in their own organizations to one of oversight as part of a group.

Unfortunately, few of us are vetted for even minimal attributes and skills, such as critical and strategic thinking or how to run a meeting before being appointed or elected to governing boards.

An article in the current issue of Harvard Business Review about where boards in general fall short, made me think back to how fortunate I was to have so many great board members given the agendas of some individuals and how and why they were appointed.

Only 16% of the directors surveyed thought the boards they served on understood the dynamics of the industries in which their organizations were involved and only 22% believed their boards knew how their organizations created value.

The community destination marketing organizations (DMOs) that I served were especially complex because they function as intermediaries between external stakeholders and internal stakeholders including a whole sector of different industries.

That a board member comes from one of the front line stakeholder industries is no guarantee they will understand the overall sector, let alone the transcendent purpose of visitor-centric economic and cultural development: to broaden the local tax base while guarding unique sense of place inherent to the communities they serve.

This is why being teachable is an important attribute for potential governing board members.

As the authors note, the two codified core aspects of fiduciary responsibilities of board members include loyalty to the organization, “placing the organization’s interest ahead of one’s own,” which includes outside special interests.

The other is prudence, ensuring that “the proper care, skill and diligence is applied to business decisions.”  The authors note that there is nothing to suggest that the “role of loyal and prudent directors” is to pressure management to maximize” short term interests.

Yet, in my experience, this is what special interests relentlessly seek.   Examples of this in community destination marketing organizations are when elected officials or facility managers try to pressure a DMO to substitute short term objectives such as subsidizing groups to use certain facilities or to fill hotel rooms or and seats near term.

The far more valuable strategic purpose of a DMO is to safeguard a communities indigenous sense of place and to fuel the overall local business climate so as to broaden the tax base.

This generates far greater overall revenues than if used instead to merely close the short term operating deficits of a few public or private facilities.

Organizations with self-appointed boards, unless the nomination process is truly democratic, as in the first two organizations I led, can still be rife with directors there to serve their own interests or those of cronies or cabals.

But publicly appointed boards, such as those I worked under the last half of my career, have their own set of challenges, especially as happened to several of the boards to which I answered, when an elected official or two deliberately pushed the appointment of a board member they hoped would undermine the organization from within.

What would lead a public official to do this?  Avarice.

Unfortunately, very little attention is paid in government to generating revenue, which many officials believe comes only by raising the rate of taxation.  Instead, they spend nearly all of their time focused on spending, or dividing up the pie or even worse shell games.

This is how elected officials or administrators can come to see the short term, such as eliminating the operating deficit on a facility that was always expected to run a deficit as more important than spending that amount on marketing the overall destination which would generate a return of six times that amount.

But short term thinking is not unique to elected governing boards.  It is the same strategic failure that forces many publicly traded companies to sacrifice long term value for short term payouts.

The authors of “Where Boards Fall Short” contend that board members must focus on long term strategy.  They further state that “what matters most is the quality and depth of the strategic conversations that take place.”

Unfortunately, being strategically inclined is rarely, if ever, given consideration when appointing members to governing boards probably because fewer than 14% of Americans are strategically inclined.

The word inclined is used because this is a talent, a propensity, more than a skill, making it difficult to learn or teach.  I suspect, when they are strategically inclined, CEOs spend far more than the 1% to 3% of the time most CEOs do on average with strategy.

Unfortunately, the same is probably true of many governing boards, where members arrive late, leave early and complain about prep time to read materials and reports prior to the meetings, let along delve into strategic conversations.

Appointing or electing governing board members is as great a responsibility as serving on one.  Here are a handful of important attributes to keep in mind:

• 30% of the entire workforce in America is truly engaged.  Half just show up and go through the motions.  Nearly 20% are troublemakers.

Rarely is someone who is disengaged in other areas of their life going to suddenly become engaged as a member of a governing board.  Make being engaged a pre-requisite to appointment.

Beware of organizations who seek benchwarmers.  Appoint board members who are strategically inclined and who will be eager students of the organization’s mission and environment.

• Recalibrate the size of governing boards.  Experts now believe the size of a non-profit board functions best with five members.  Poor governance increases with board size.
• Appoint board members who reflect the values of the organizations.  If that is fund-raising, appoint fund-raisers.  If that is volunteerism, appoint activists.  If that is being information driven, appoint members who understand and appreciate analytics.
• Appoint members who understand and embrace ethics and compliance not people who see ethics only as a boundary to be skirted.  There is a reason compliance is no longer housed in legal departments in corporations.

Most importantly, appoint people to governing boards who are or can be in synch with an organization’s culture, values and mission, who want to move it forward, not pull it back, and who know how to resist special interests including their own individual interests.

The Hardest Workplace Challenge

Hiring the right people is the hardest part of management.

Many people who are disengaged or actively disengaged at work are great at crafting a resume and interviewing.  Many are even able to get past case studies and batteries of tests.

It is crucial to remember that 30% or less of the entire workforce is engaged.  So a hiring process must determine if a candidate is:

• Among the 50-60% of the workforce overall that is not engaged.
• Among the 18-20% of the workforce that is actively disengaged, or
• A high performer that is “grow and go” or trying to escape an organization that has become a haven for disengaged workers.

Studies over more than 15 years now have shown that breakdowns of engagement in the workforce have varied very little, even among management.

Cities face this challenge as well when they seek to develop or attract “talent,” now well proven to be the best way to grow economically.

It is interesting that 150 years after the Civil War effectively ended here in Durham, and more than 60 years since officials from Durham began to lay the groundwork for its evolution as a center for the creative class, the state of North Carolina has only now closed the workforce gap created by that conflict.

But the talent that drives organizations of any size as well as entire local economies is entrepreneurial and studies by Gallup show that about 5 in every 1000 working age adults possess the talents that underlie entrepreneurship.

Of those Americans who do not already own a business, only 2.5% have very high-level entrepreneurial talent.

Gallup researchers estimate that among the 30 million U.S. students now in middle and high schools, there are 150,000 future “blue-chip” entrepreneurs.

Training, support such as hubs and venture capital funding, as well as educational development are important, but experts find that they won’t create talents such as these where it doesn’t exist, merely foster them where they exist.

Talents and skillsets shouldn’t be confused.

Key to attracting and retaining talent at any level or size of organization is also about understanding and managing turnover.

I finally learned during the last part of my career to break turnover down into preventable and unpreventable, voluntary and involuntary and by tenure and performance level.

Turnover alone is far too broad a metric.  Having a low turnover rate can be indicative of even greater problems than a high turnover rate.  It is important to zero in on positive turnover, e.g.

• “Grow and go” policies for talented high performers when there aren’t positions to move up
• “Firing Fast” when new hires turn out not to be as self-advertised
• Making quick changes when any employee disengages or is found to be “actively disengaged” such as working to undermine others

That’s why it is important to hire slow and then fire fast.  Rarely is an employee going to become truly engaged if this hasn’t occurred in the first six months.

One of the hardest lessons to learn is that failing to discharge low performers in a very timely manner is a sure fire way to dishearten, burn out and lose high performers, who on average are 400% more productive.

There are studies that show what high performers want from a workplace, but at the very nitty-gritty, they want to be rewarded, which includes with a workplace free of those who would undermine or hold them back.

This is the element most workplace consultants never plumb but something anyone who reads between the lines of in-depth exit interviews is bound to uncover.  Remediation attempts are fine but nothing works as well as hiring the right people.

This is also true of CEOs and governing board members.  I worked under some incredible boards of directors but it was always clear when individual members were engaged or just putting in the time.  And there was always one it seemed who was actively disengaged or trying to undermine the organization and me.

But one weakness of governing boards as it is for elected bodies is the reluctance to “fire,” discharge or call out unproductive and actively disengaged members.  Most governing boards are reluctant to internally self-govern.

This is also at the heart of why it is so hard to get good candidates to run and when they are elected to keep them.

Look at any elected body and I guarantee you will find the same breakdown of engaged, disengaged and actively disengaged - or worse -that is found in the American workforce.

Of course, just as smaller organizations have a higher level of engagement, so do elected bodies as they come down to the local level.

Unfortunately, the way we finance and conduct elections in America makes it almost impossible for voters to make decisions based on the performance and levels of engagement among candidates for office.

But when it comes to society at large, we have yet to come to grips with engagement in the population.  Officials and the news media seem eager to assign responsibility to school systems and workplaces but engagement begins at the personal level and with parenting.

Dating to records when settlers first immigrated to this continent, including legends and stories passed down by Native Americans; there has always been a concern over the part of society that seems disengaged, or worse, actively disengaged.

Our nature as human beings is to try to “breathe fire” into these individuals.  You can see a denial about this reality today among those who fear that safety nets are an excuse to land rather than bounce back leading some to try to to restore work requirements and volunteerism as a qualification.

A lot of what we call gridlock is a refusal to deal with the same realities in society that are found in the workplace and have inhabited our population from our first settlements.

There is simply a portion of society that is or chooses to be disengaged or worse, actively disengaged.

And believe me; they are certainly far from all being poor.

A business approach would be to carefully distinguish those who just need a hand up from those who refuse lifelines and those who are mentally or physically disabled.

Like businesses do with leakage of goods to theft, maybe for the sake of those who are engaged, we need as a society to come to grips with the fact that a portion of society never will be and simply incorporate it as the cost of doing business, as the cost of society.

If this sounds un-empathetic, those of us who believe they are empathetic need to be aware of research finding that the more empathetic managers are, the more egocentric they tend to become.

The problem with this is that instead of paying attention to scientific, generalizable data, they begin projecting their own values on those they are trying to help.  I stand guilty as charged.

As much as cities and states talk about attracting talent, they focus too much on granting incentives or “big game hunting” that would be better invested in fostering talent at home and becoming places talented people want to live and put down roots.

This begins with placing a premium on:

• tree canopy, technology and other infrastructure,
• scenic preservation and elimination of blight,
• clean air and water,
• distinctive communities with ample natural space,
• well-resourced secondary schools,
• continuous workforce training collaborations including competency-based learning as well as
• universal day care.

Distinguishing Complainers From Whiners

Dove-tailing on yesterday’s essay, I have always found it puzzling how many people who are unfriendly to data and analytics or resistant, at best, are found working in organizations whose very mission is formed around analytics as a core asset.

This includes organizations at the forefront of today’s economy such as healthcare, pharmaceutical, biotech and educational concerns.

One of the board members who recruited me to Durham, North Carolina credited me recently in a retrospective for teaching board members about destination marketing in general and specifically, the value of using data to forecast direction.

That may be, but only the governing board as a unit as it evolves through time can make sustainable the embedding of analytics and strategic mindset as core values in the culture of an organization.

If other members aren’t continually vigilant, however, this culture can be so easily undermined by pressure from special interests for whom being strategic is an obstacle to self-serving agendas.

It can be as simple as forgetting to measure performance of analytics which is now considered equal in importance for executives to creativity, falling right after strategic mindset.

Even boards who persevere over many years are vulnerable to regression during periodic CEO successions, a time when charisma often overwhelms substance.

Crucial is selecting someone who grasps both the organization’s story, and in the case of destination marketing organizations, (DMOs) that of the community it serves.

This is best detected by how well they grasp the analytics central to the collective culture and narrative of both.

We shouldn’t make the mistake of always lumping together data and analytic tools such as metrics.  Those same authors I mentioned yesterday distinguished them in an earlier article this year in Harvard Business Review.

Data is data, but it isn’t something over which we have control.  Analytic expertise, particularly at the executive level, is the ability to convert data into metrics that can be consistently tracked and utilized over many years.

Then it can be woven into a strategic narrative.

An organization such as a DMO should be able to track several hundred metrics which are then collapsed into a dozen or so that not only represent what a DMO and its community care about, but more importantly, what they should care about.

This requires measuring against comparable sets of community destinations not for purposes of emulation but to identify outcomes that can truly differentiate a destination while still achieving market share.

In other words, metrics aren’t always about exceeding the norm, some metrics are maintained to measure a community’s divergence away from the norm.

In the words of Dr. Michael Porter, strategy is “about deliberately choosing to be different.”

At the deepest root of why DMO’s exist is the notion of protecting and fostering sense of place, that unique character that makes them worthy of affection.

Visitation, demand-based economic development, and tax revenue generation, are all merely a means to that end.

If residents of a community predominantly value sense of place, they will see its DMO as relevant.  If it is relevant to people who truly love the community, then the DMO will be relevant to local officials.

But it is also a DMO’s responsibility to sound warnings about things that erode sense of place.  Using data-analytics-metrics to strategically evaluate and choose among trade offs greatly improves the odds of doing that.

This is also why being a DMO exec is so precarious.  This part of the job will cause the DMO to occasionally step on the toes of some very powerful special interests, and it should.

Left unchecked, appeasing powerful but mainstream interests sets in motion forces that rapidly hollow out the very essence of place and “what makes our physical surroundings worth caring about or visiting.”

Fostering a community’s unique character is more than just protecting its past.  In the words of development expert Ed McMahon, it means helping communities adapt to change while maintaining and valuing the things that make it distinct.

There were occasions in all three communities in which I served when special interests attempted to blackmail governing boards.  They were rescued by sound analytics-driven decisions along with copious amounts of moral courage.

The management and boards of effective DMOs will be labeled complainers from time to time, ironically by those who themselves are whiners.

But pity the poor DMOs without data and analytics to back up their concerns or inability to discern the difference in those descriptions.

Many who serve on boards, including elected boards, fail to distinguish complaining from whining.

A complainant is one who has the best interests of others and the community at heart.

Whiners are those who seek special treatment or simply resent paying their share.

Oh, there is one more difference.  Whiners are often cheap, mean and vindictive.  Complainers are just frustrated and puzzled but willing to shoulder their full share and more of any cost.

Both deserve to be heard and provided more information but the former deserves more attentiveness, especially if the concerns are data-driven and contrary to prevailing opinion.

Training on how to triage complaints, including pressure from whining special or self-interests, should be de rigueur for all who serve on governing boards, especially elected officials.

Resistors to Information-Driven Decision-Making

People, not all of whom are friends, tell me that I was an innovative community destination marketing (DMO) executive during my four-decade career in .

That’s sad, because two characteristics with which I am credited are still so rarely found: what we now call integrated marketing and the use of analytics for decision and strategy making.

Any credit due is because I worked under innovation-friendly governing boards in each of the three innovation-friendly communities I served.

Even today, still only 12% or 1-in-8 organizations globally qualify as “analytical innovators” according to a new survey by the MIT Sloan Management Review and North Carolina-based SAS Institute.

This means they thrive in an analytics-driven culture, mandated by senior management, which means endorsed by board policy. These organizations have groomed higher levels of analytic skills and here’s the kicker, they are deploying analytics for strategic advantage.

Strategic mindset and analytic skills are now more important for marketing executives than creativity according to executive search giant Spencer Stuart.

This is because, in the words of Tony Parker who heads up marketing for a company whose brands now touch 1-in-4 people globally every day, analytics enables and enhances creativity.

A strategic mindset from the board through its chief executive to every corner of an organization is a huge competitive advantage because deciding what to do as well as forecasting the best direction is all about evaluating tradeoffs.

Being driven by data-analytics-metrics is simply the best way to choose among tradeoffs.

So where do the vast majority of other organizations fall?  According to the study, nearly 6-in-10 are analytics wannabes.  They have an attitude of “oh yeah, that too” but they fail to deploy analytics as a “core asset.”

Fully a third of all organizations are “analytically challenged.” This means they rely more on just anecdotal experience and personal opinion and suffer from poor data and analytic management skills.

Half of the 78% that believe they need to be more innovative are held back by “analytically challenged” executives and governing boards.

Ironically, many data skeptics and resisters are also usually top performers personally, according to an analysis last month in Harvard Business Review dissecting the psychological resistance of those afraid of data-driven management.

This is why a friend of mine who consults with community destination marketing organizations like those I led got so much grief from sources he didn’t expect when he chastised DMO execs for being data-resistors.

Data enemies have high perceived but low actual performance.  Data friendlies are perceived low but are actually high performers.  Data skeptics fall in the quadrant of high perceived and high actual performance.

The authors found that those who resist data are what I would call “control freaks.”  They hold their organizations hostage because they fear data will show a better way than their experience alone and they will look bad or their organization and community will look backward.

Because of rotations and term limits, I probably worked with around 120 different board members during my career.  I say “with” because an executive only works “for” the board as a unit.

While the boards as a whole were data and innovation-friendly, there were at least ten members appointed who weren’t and many of those were high performers in their day job.

They were easy to spot.  While they endorsed board policies such as being data-driven, they usually worked in meetings to undermine, restrict or pooh-pooh data.

A couple were data cynics who made cheap shots by purporting that anything can be proved by data, perhaps saying more about how they use it than me as the target of their dispersion.

A few others were data-skeptics, some because neither their personal experience nor that of their employer valued analytics as a core asset.  Some just never grasped the difference between data, analytics, and metrics and how to weave them into a guiding organizational narrative.

A few even tried to pull the organization backward from best practices to outmoded regressive practices only because those were familiar and often because they had been siloed from best practices.

It worked a time or two until other board members realized the ramifications and we got back on track.

I’m less forgiving of executives who remain stuck in their heuristic ruts.  Studies find them even more common in marketing and media organizations where until four decades ago standard metrics were difficult to come by.

But many want to be data-driven, they just work for boards that don’t, ironically populated by the 3-out-4 of non-marketing execs who still struggle with believing that marketing can drive demand and revenue.

According to the study by MIT and SAS, there is a high correlation between an organization being an “analytic innovator” and being growth-oriented.

Maybe being growth oriented and “analytic friendly” should also become pre-qualifications for serving on boards.

Obviously they should already be for any executive.

It’s Healthy to be Skeptical, Just Not Cynical

Whenever I come across global warming/climate change deniers, I try to carefully listen or read what they have to say.

Some don’t really deny it’s happening.

They believe we’ll just overcome it somehow as we have major crises in the past without seeing that those were ultimately overcome by action, after being made worse by waiting.

I used warming/change in my opening because a new Yale University study shows that Americans feel a sense of urgency when the term global warming is used.

Which, in part, is why more than a decade ago savvy Republican researchers suggested the substitution of “climate change” to make it seem less threatening.

That warm and fuzzy approach to global warming turned out as predicted to not only divide Americans but cause 1-in-5 to be not at all worried (p. 16.)

As an Independent I may have been cynical about the motives of “professional confusers” behind today’s gridlock but now having read this memo I’m not even skeptical.

Ironically, the 2002 Republican research called for a flip-flop.

A decade earlier conservatives had teamed in a bipartisan effort under the first Republican President Bush to break a 13-year logjam by deploying market-based “cap and trade” to successfully curb another harmful emission.

In 2002 there wasn’t the overwhelming scientific consensus there is today that climate change/global warming is a real and present danger or that it is due to human actions above and beyond natural causes over the last 250 years, especially the last 60.

If you are a skeptic who happened to read this far, you may want to read the research by scientists at Berkley Earth who until recently were also skeptical.

It is summarized their new report entitled, Know The Facts: A Skeptic’s Guide to Climate Change.

Then again, studies of “motivated reasoning” find that in many people skepticism is really a cognitive cover used to deflect unwelcome information.

This is especially true when it is sincerely held that what ordinary people believe will not make a policy difference.

Showing irrationality is often rarely enough to “induce individuals to process information in a different way.”

There is a difference between being skeptical and being cynical.

Skeptics have reservations.  Cynics believe others are motivated by selfish concerns and don’t believe in altruism or even honesty.

If you’ve never been into reading and understanding various philosophical outlooks, a new book illustrates each one instead, entitled Philographics.

Deniers often fall into both categories though it seems more often the latter while global warming believers sometimes can get caught up in being cynical about deniers.

New science shows that cynics on both sides run a much higher risk of dementia, especially perhaps those cynical about scientific studies.  The study also shows that cynics won’t die any earlier, perhaps they just won’t remember.

That 2002 Republican research memo predicted more than a decade ago what a new Yale study confirms: use of the terms global warming and climate change are synonymous to Republicans and Conservatives (or as we Independents often joke, is that now redundant?)

But the term climate change “actually reduces engagement” among Independents, Democrats, moderates and liberals.  Fortunately, groups that will soon dominate elections such as minorities and young adults light up when global warming is used instead.

And that might be why global warming is still the most used by Americans personally, as well as in the news media, and in conversation according to the Yale study.

The Berkley Earth report meant for climate change/global warming skeptics includes a breakdown of what events are unrelated, e.g. tornados and earthquakes.

Hurricanes, droughts, forest fires and floods may change due to global warming/climate change but the amount hasn’t been established.

There is a link established to increased heat waves and coastal flooding.

New research also shows that global warming is not only reducing snow pack where water has historically been stored until released into rivers and reservoirs each spring, the means by which 1-in-6 people worldwide receive fresh drinking water.

But paradoxically, the resulting switchover to rainfall also means these water ways are less full in part because it is held in place by soil instead.

Sitting idle, we are likely to see much more rainfall but much less available for human use for drinking water.  This also mean less available for electrical power and agriculture.

Of course the use of climate science has been outlawed for the time being by the legislature in North Carolina because it was inconvenient for a few coastal land developers.

And some members of Congress are trying to do the same regarding military research which over the last 60 years has been the foundation of nearly all of the technological changes driving American innovation.

Fortunately, corporations are paying no heed and building the price of reversing global warming into strategic plans. Nor are many states.

Nine northeast states which banded together to cap emissions in 2009 have seen their economies grow faster than the other states while reducing greenhouse gas emissions nearly five times quicker.

A similar combine of five western states and two Canadian provinces fell apart after conservatives seized control in 2010.  But British Columbia in 2010 and California last year moved ahead.

Regressives such as those banning the use of studies on global warming and other research are easy to spot.

Even those who make it onto the governing boards of much smaller organizations where research is a core value are obvious by using every opportunity to demean it and to starve it of resources and focus.

All conservatives are not regressives, nor are all regressives conservatives. What they have in common is a disdain for research and resistance to progress.

In the words of the famous Brooklyn Dodgers then Yankees announcer Red Barber, “back, back, back, back (smile.)”

Regressives in the North Carolina General Assembly today are failing to head the warnings in that landmark 2002 research for Republicans, because that would, uh, be using scientific research.

It warns that while conservative attempts to negatively brand environmentalists had been successful by 2002, Americans as a whole remain overwhelmingly sensitive about the environment.

They just prefer instead labels such as pro-environment and conservationist.

The memo warns that “when we [Republicans] talk about ‘rolling back regulations’ involving the environment, we [Republicans] are sending a message Americans don’t support” and when it comes to regulations, Americans are “most comfortable with local oversight.”

The last part is lost on North Carolina regressives seeking every means possible to strip local governments of any oversight while demonizing science and regulations meant in the publics interest.

Not all narcissists in high office (found in greater proportion and much further up the spectrum than the general populace) are regressives, but uber narcissism among regressives may explain their claim “we don’t give a damn how many people this hurts.”

Oops, I hear someone banging on my door but keep the faith.  Whoever it is that thinks I’m part of a conspiracy probably won’t remember long.

Seems Like Yesterday

My first visit to Durham, North Carolina was twenty-five years ago this month for my final interview before being selected to head the formation of the community’s first community destination marketing agency as a means of fueling visitor-centric economic and cultural development.

I retired going on five years ago, but Durham is still my home.

This month is also the 25th anniversary of the launch of the Internet for general use, something that a new Pew study, released a week ago, shows is considered a good thing personally by 90% of Americans and by 76%, a good thing for society.

Eighty-seven percent of American adults now use the Internet.  Sixty-eight percent connect to it with mobile devices such as smartphones and tablets.  But a stubborn 17% of Americans still insist that old fashioned, tethered land lines will be very hard or impossible to give up.

More telling is that only a third of Americans now say the same thing about television.

The timing of my arrival in Durham and the availability of the Internet for commercial use was fortuitous.  As a co-worker once said, “we hit fast-forward without saying goodbye to yesterday.”

I took that to refer to the fact that we adopted the latest office productivity technology including a local area network of desktops and inter-office emails.  Yes, that was in 1989 when less than 4-in-10 Americans used computers.

Within a few years, we began using the Internet for marketing Durham, when more than two-thirds of the population had still never heard of the Internet or were only vaguely aware (21%.)

Back then, with only 14% of Americans using the Internet, it was considered a strategic risk, as any good strategy-making is.

At the same time, we made Durham’s unique sense of place and what we would later call place-based assets, including Durham’s inherent nature of “genuine, authentic and diverse,” our keystone strategy.

By the time our more established competitors caught on to the former we had leapfrogged nearly all of them but what really made that edge sustainable for Durham was that only one other would ever seize on the latter.

Of course, there were other decisions that proved fortuitous as well, such as spearheading a grass-roots effort to reclaim Durham’s story and reverse a negative image stubbornly embedded among residents of nearby communities.

Marketing a community is 1/3rd hurdling barriers and 2/3rds lowering barriers, reversing image was part of the latter.  No amount of investment in the promotional third (hurdling barriers,) can overcome the other two-thirds (lowering barriers) alone.

I often get asked how we made those decisions.  The easy answer is that I had already cut my teeth on various aspects in a previous communities including one that was data driven.

There are several other more complicated variables, but one important one is that I answered to an unusually diverse governing board made up of movers and shakers not only in business but in community and neighborhood-making.

They enabled and entrusted us to take those approaches that then seemed novel and now seem so safe.

Of course, I continued to evolve and even with nearly two decades of management experience by then, including a decade and a half as CEO, I still had a lot of evolving to do.

A lot of it was timing, much of it was luck and a good deal of it was a forgiving community that allowed me to make and recover from mistakes.  A place that believed in me, stood up for me and taught me the importance of place.

Anything we accomplished has been greatly transcended by those still spearheading the marketing of Durham because they grasp Durham’s story and because they benefit from that uniquely balanced governing board.

Twenty-five years ago seems like yesterday, hell, 60 years ago seems like yesterday.

Negative Link Between Campaign Donations & Shareholder Value

The reason many in business and government are skeptical of research is that many of them use “pimped opinion” as a substitute, and so they find it hard not to assume everyone else does.  Especially lobbyists.

Part of content curation such as I do with this blog and that I practiced during my now-concluded 40-year career as a community-destination marketing (DM) exec is to look carefully behind a study to make certain it was produced and vetted by experts and if possible peer reviewed.

Of particular concern are so-called white papers often promoted by partisan think-tanks where even more careful scrutiny is always warranted.

The DMO in my adopted home of Durham, North Carolinas has earned a reputation for objective analysis based on sound data.  This should never be taken for granted.  It can be lost in heartbeat if not deeply entrenched in organizational culture and governance and insulated from anecdotal whimsy.

Last November, purposely held I assume until after the election, an excellent peer-reviewed study was published by Harvard law professor John C. Coates who specializes in corporate law and governance (shown in this blog.)

His study found “in most industries, political activity correlates negatively with measures of shareholder power, positively with signs of agency costs, and negatively with shareholder value.”

The exceptions are businesses such as outdoor billboard companies, where any value is wholly reliant on governmental decisions and regulations regarding tax payer-funded roadways and other government-dependent industries such as defense or those heavily regulated in the public interest such as utilities.

If the failure of massive injections of anonymous corporate donations into the election process wasn’t enough to confirm that these dollars were an unwise wise investment, Coates’ data added an emphatic exclamation point.

Highly threatened, the U.S. Chamber of Commerce (not to be confused in any way with local chambers of commerce) immediately dusted off a long-discredited white paper that had never been peer-reviewed and was produced by non other than a lobbyist.

Unfortunately for too many casual observers, this meant “touché, all over again” and a “tie goes to the runner,” right?  Fortunately, Professor Coates opened up with both barrels in a letter this month to the Securities and Exchange Commission.

Coates’ findings undermine a pivotal assumption by the Supreme Court in Citizens United.  Hopefully, SCOTUS justices have time to read and not just write.  Regardless, the Coates study should be required reading for corporate shareholders and all C-suite executives.

The Optimum Size for Governance

When I was recruited to Durham, North Carolina twenty-three years ago to jumpstart the community’s first official marketing organization, I was impressed that the governing board numbered only seven directors, a best practice at the time.

Until recently, two other economic development-related non-profit organizations in Durham had boards of directors that numbered more than thirty and forty respectively, which was common in the 1960s.

In their book Race for Relevance, Harrison Coerver and Mary Byers peg the optimum number of members now for non-profit boards of directors at five.  A corollary among profit and non-profit organizations has always been, “the larger the board, the poorer the governance.”

Large boards are typically less effective at governing because they are inefficient, divert a lot of organizational resources and don’t optimize the potential of individual directors, in part because the larger the board, the more many members are simply disengaged.

One of many other gems in this 152-page book is that in addition to limiting the size of governing boards to five members, organizations are well-advised to hire a search consultant to identify and qualify potential board members based on competency.

Just a few of the criteria the authors suggest are:

• Do candidates have basic leadership skills? (not to manage but to lead)
• Do they have at least a three-to-five-year horizon in their thinking? (strategic and visionary vs. tactical)
• Do they know what it means to govern? (which is different and much more difficult than managing or executing)
• Do they grasp the concepts of conflict of interest and resisting special interests?

In other words, a good board of directors is comprised of members with specific board-level competencies.

The larger the board, the more likely members will show up late or leave early, get up to take calls, spend time texting or emailing and fail to read preparation materials or hold information and context approved in policies and plans.

In my experience and as noted in the book, there are several reasons beyond inertia or out-dated thinking that many organizations still retain huge boards of directors:

• Large boards are often used to create an audience for management to pontificate or as a means to preach to potential converts.
• Some organizations are adverse to debate or candor or conflict resolution.  The larger the board, the more issues go unquestioned.
• Some organizations eschew data-based decision-making and attempt instead to insinuate credibility or support for actions by parlaying the reputations of those on the board.
• Large boards are often used to mask a superiority complex on the part of some individuals or even organization-wide which is manifest in a type of attention-deficit or mission-creep.

Al Parrish, a friend and retired hospitality and healthcare executive in Anchorage, Alaska smilingly advised me once after an individual had carbon copied forty people on a memo meant to corner me, that “the merit of an idea is always inversely related to the number of people one feels compelled to carbon copy.”

His advice became even more cogent when business communication moved to external email in the early 1990s, shortly after I arrived in Durham.  People who “cc” scores of people are often adept at lobbying, and they utilize their large boards and public officials as a form of coercion.

In a somewhat related topic, the book The (Honest) Truth About Dishonesty uses humor and plain language to overview a number of experiments and studies that reveal why and how people rationalize crossing the line when it comes to ethics.  Written by Dr. Dan Ariely, a behavioral economics researcher at Duke University and a Durham resident, the book was released in mid-2012.

In this book, Airely discusses how people use the human propensity for reciprocity “trying to engender a feeling of obligation in others.”  An executive from another organization with whom I worked during my career was a master at this both with his board and with elected officials.

He often chided me when frequently reminded that use of funds in my organization was restricted both by state legislation and governance policy, noting once that “no one will check.”  He viewed himself as very honorable but I guess to him violations of code were based only whether or not you were caught.

Large boards make malpractice such as this much easier.  They are also susceptible to the pressure of reciprocity.

Both of these books are well worth a read for anyone who is an executive or serving on a board of directors.

Blackballing Is A Form Of Organizational Incest

“Politics isn’t logical, it’s personal” was the ominous warning an elected official gave me many years ago when he told me I could either look the other way with my organization’s legal restrictions on use of funds or pay with the loss of my job.

I didn’t look the other way and instead kept seeking a win/win solution, but that didn’t stop those bent on violating those restrictions. For them it was purely win/lose. It was personal and all about power.

Given that official’s revelation though, you’d think elected officials would be better at discerning controversies in other realms that only appear to be about money but are usually about something more personal such as the practice of blackballing or cabals.

One of the things that can give any governing board, but especially non-profit boards, a deadly reputation is when, or if, the practice of “blackballing” potential board recruits is permitted or enabled or practiced in any form.

Blackballing doesn’t have to be by secret ballot anymore, it can be done informally through a whisper campaign or a side-comment, but it is almost always deployed to keep people off a board either as retribution for a past position or out of fear of diverse opinions or losing control of a hidden agenda.

Many boards and executives form strong opinions and then look for information and sycophants to support them and blackball those who don’t.

They flunk “real-world 101” according to the award-winning book What Intelligence Tests Miss; The Psychology of Rational Thought by Keith E. Stanovich a professor at the University of Toronto. He identifies key attributes for successful “real-world” judgment and decision making that go beyond IQ, the first two being the “tendency to collect information before making up one’s mind and to seek various points of view before coming to a conclusion.”

The practice brings to mind the immortal words of Phil Everly, “I’ve been cheated, been mistreated” in a song later made even more famous by Linda Ronstadt. Two organizations that I know of blackballed me during the time I’ve lived in Durham. But thankfully I never had to worry about “when will I be loved” during my time here.

The first instance occurred a month or so after I was recruited here to jump-start Durham’s community/destination marketing organization. An organization to which I had belonged in other communities for nearly 15 years didn’t have a Durham chapter because some folks in Raleigh had blackballed Durham by claiming their chapter was “regional,” hoping to perpetuate the myth that these two very separate and distinct communities were just one big place.

Understandably, having me as a member, with my express mission to protect and foster Durham’s identity, would have upset their agenda or been awkward to say the least. Anyway, I didn’t really have the time or desire to commute all over an area twice the size Rhode Island just to attend meetings as they rotated from community to community.

I was also blackballed by a Durham organization that could have used my expertise given their tendency to use tourism as a rationale. But apparently, as sources eventually volunteered, I just had “too much information” at my fingertips and besides powerbrokers, often non-residents, knew from past experience that when facts didn’t support a proposal, I just wasn’t a “go along to get along” kind of guy.

It may have been their loss but I definitely never needed “more meetings” to attend during my now-concluded four-decade career as a community marketing executive. While friends and family know I’m a bit of a hermit, I never went so far as the Groucho Marx quote that “he didn’t care to belong to a club that would have him as a member,” later made famous again by Woody Allen in one of my favorite movies, Annie Hall.

But the temptation to blackball is also why non-profits with self-appointed governing boards should beware of any members with that tendency or even those who might tolerate it. Any credible organization should also be very careful to insulate all qualifications, procedures, practices and policies from this schoolyardesque behavior.

In fact the whole idea of an entirely self-appointed board, either by policy or practice or maybe just from laziness is never a good idea. Like any form of incest, inbreeding always has serious consequences.

Public bodies in particular should avoid funding any organization that tolerates blackballing; and should there ever be a need to identify underlying reasons for any controversies surrounding a funded organization, the composition of its board and how it is appointed along with any evidence of blackballing might be the first place to investigate.

Remember, politics is personal, not logical.

Educating Governing Board Members About Cabals

Cabals are very small groups, typically three or four people, who conspire to control, co-opt or undermine organizations outside the normal channels of influence, decision making and policy, usually for pecuniary gain but sometimes out of boredom.

Many people who fall into cabals by association with a ring leader not by intent or conspiracy but the result unfortunately is the same, a pain in the butt and a tremendous waste of productivity to the organization.

During a nearly four-decade long career as a CEO for organizations in three different communities, I gained experience dealing directly with five or six cabals that I know of and several others while serving on other boards. Some were entirely internal to the governing boards, others fronted for outside special interests.

Hey, as Joseph Heller wrote in Catch 22, “just because you’re paranoid doesn’t mean they aren’t after you.”

Here are ten clues that may help CEOs and, more importantly, governing board members for organizations learn to recognize, avoid and disarm cabals:

• Cabals try to avoid processing concerns directly to or through chief executives, preferring end-runs instead that will paint the executive into a corner or in extreme cases behead the organization.

• Cabals prefer opinions, especially their own, to information-based decision making and firmly believe they are smarter.

• Cabals form around a consistent ring leader but members may change over time and even be innocent to the primary motive or ulterior motive.

• Cabals prefer the push and shove of politics to logic or best practices and appear to disrespect organizational codes of ethics and governing board job descriptions.

• Cabals rarely read or don’t read to digest content or for understanding, sometimes for plausible deniability, so they can continue to resurrect the same concern to new faces.

• Cabals disrespect normal channels for giving input or resolving concerns and dismiss any answer, no matter how well grounded, that doesn’t go their way.

• Cabals disrespect and seek to undermine governing boards, sometimes blackballing others or using internal factions and rump sessions or by fronting for outside special interests.

• Cabals can be persistent, trying again and again, often over a number of years, probing for new or unsuspecting board members misrepresenting that governing responsibilities must include content expertise.

• Cabals are equally prevalent among public, private or non-profit sector individuals and sometimes involve a combination.

• Cabals are best disarmed when board members respond by arranging a face to face meeting with the chief executive and then helping the executive report the results to the full board including naming the individuals involved.

Cabals have little fear of being revealed or of participants “paying a price” because, by nature, organizations want to avoid controversy and embarrassment. They are often governed by business people immediately focused on keeping the “boat from rocking,” bored adrenalin junkies stirred by any excitement or controversy and elected officials who are glad to have company given the state of partisan politics.

Cabals are protected most by sound-bite-understaffed-he said-she said-conflict-fueled news coverage that given limitations just won’t be able to distill or pinpoint the reality.

The best way to avoid or quickly disarm cabals quickly is to thoroughly orient board members on how to immediately identify them and redirect their concerns through proper channels.

One Last Characteristic – Where They Hatch!

A couple of weeks ago I summarized various studies identifying the characteristics of a good CEO.

One I didn’t include is “homegrown.”  A 20-year study of non-financial organizations from 1988 through 2007 by the Kelley School of Business at Indiana University and A.T. Kearney was released this month.

It confirms that one key to superior long-term performance is managing leadership succession because organizations that grow talent from within outperformed those who hired CEOs from outside the organization.

But only about half of public and private organizations have formal succession plans and only 16% of directors on governing boards believe their board is effective at succession planning.

Disturbingly, the tenure of CEOs has shrunk from 10+ years in the mid 1990s to less than 5 years now.   The study finds it even more disturbing that nearly half of all governing board members think succession planning is the CEO’s job and more than half don’t know when their CEO plans to step down.

In conclusion the report’s authors note:

“CEO succession is too often seen as an event rather than a process. Research and experience confirm that companies savvy enough to foster internal leadership succession achieve superior long-term results, and that effective succession management is absolutely vital to a company's sustainability. High risk, significant disruption and burgeoning costs await boards that are not fully engaged in these processes—superior results and high returns await those boards that are.”

I was fortunate that when I retired at the end of 2009, the organization I led had a succession plan which had been adopted half way through my two-decade tenure. To my credit I had taken my responsibilities in the plan seriously without overstepping and to the governing board’s credit at the time, it showed great discipline in following the plan.

I had alerted the governing board five years in advance of when I planned to retire from a nearly four-decade career in destination marketing management and the board executed the succession plan a year and a half in advance of my leaving to provide time for a smooth transition.

As I was departing I was asked to publish a description of the plan for Destination Marketing Association International as a best practice.  Even though organizations of four or five staff members may be too small to groom a homegrown successor, it remains that having a good succession plan is good policy.

By the way, a succession plan is not about the current incumbent selecting or lobbying for a successor.  That rarely if ever works.  The CEO’s role is grooming internal talent to be ready when the time to execute the plan arises and to advise the governing board as it goes through the steps in the plan.

A leadership succession plan covers more than replacing the CEO.

For anyone wishing to build a succession plan or for those who want to improve the one their organization has, the report linked here provides some essential ingredients.

A 2035 Trace!

I’ve traced a reminder on my 2035 Google calendar!

Yup, that’s a quarter of a century away, a few days after my daughter will have turned my current age and a few days before my youngest grandson will be on the “backside of 30,” With any luck I’ll be a week from my 87th birthday then and hopefully as spry as my Mom is at 82 today.

But I’ve traced my calendar for 8 am the morning of Thursday, July 1st that year out of curiosity to check back and see if the DCVB governing board, my employer until I retired back in 2009, will launch a tourism match grants program in 2035, the first year that funds eligible for that purpose will be available!

Community/Destination Marketing Organizations (DMO’s) are typically not grant agencies but in North Carolina, if the DMO receives 100% of the special tourism development tax, state policy permits up to 1/3rd to be use for tourism-related projects, other than community marketing, which is the stipulated use for no less than 2/3rds of the funds.

But not in Durham for two reasons:

• Because only 33%, not 100% of Durham’s special tourism tax is used for the purposes for which the tax was pioneered in 1982, those funds that do make their way to DCVB are restricted to “only” marketing Durham. Marketing activities are specifically defined in the legislation and do not include grants.

• Because to accommodate City and County officials and some Downtown interests, DCVB asked the General Assembly to waive the requirement to conform use of the special tourism development tax under state policy so that up to $1.4 million a year could be diverted to pay for the Durham Performing Arts Center. So the General Assembly further hardwired DCVB’s portion to only be used for marketing until 2035 when the theater is paid for and those funds revert to DCVB for their primary purpose (click on the image above to see detail.)

Of course, when the theater is paid for and those funds go to DCVB, there is no guarantee they will go to tourism matching grants. The Tourism Development Authority will have the discretion to use them to bring Durham marketing up to par other communities and/or for other tourism-related purposes (which could be tourism matching grants) including capital projects.

But if some of the funds are devoted to grants, DCVB is all set to go. Several years ago, Durham’s destination marketing organization took a tourism matching grants process developed by another community and updated it to best practice standards including both day-trip and overnight visitors.

The grants-centered “Durham Tourism-Project Development Fund” was adopted by DCVB’s Tourism Development Authority to be shelved but kept up-to-date in anticipation of the day eligible funds come to the Bureau in 2035.

In the meantime, currently 50% of the tourism development tax is retained in the City and County general funds with more than 30% of that portion technically eligible to be used for tourism matching grants. It isn’t identified as such but it may be that’s what is currently used by those local governments for grants to festivals and/or to close gaps for tourism-related facilities like the Convention Center, Museum of Life & Science, Durham Bulls Athletic Park and DPAC.

I hope so anyway.

Techno-Curmudgeons!

I jokingly refer to people as “techno-curmudgeons,” who use the Internet but complain, it seems incessantly that they “feel overloaded” with information. In my definition, these are people who ostensibly use the Internet but complain about having to use it or keep up with it.

In the workplace, you’d think these folks make up a significant share of the population, both because they complain a lot and because they are typically the people who also don’t read.

But an updated snapshot by the United States Travel Associations of Internet users and those who travel at least 50 miles one way on trips includes some secondary research. It sheds some light on how large this group really is.

Approximately 168 million adults use the Internet now or about 74% as of November 2009. Of these, 72% or 122 million also take trips of 50 miles or more one way from home for purposes other than school or work. Clicking on the image above to enlarge it reveals that 16% of these people (1 and 1/2 people out of every 10) who both travel and go online, complain about feeling overloaded with information.

That’s not many for the fuss they make and the cost they run up in lost productivity because others must continually circle back to make sure they took in something that was circulated or to get them up to speed. In particular they slow the work of governing boards to a crawl.

And then if one of them happens to be a politician, well, all I can say is, oh boy!

Of course, who is to say the 46 million people who are online but don’t travel might not also be techno-curmudgeons or that the quarter of all adults who don’t access the Internet at all might not be techno-curmudgeons.

My guess though based on the size of this sample is that the 16% holds true for those groups as well. My philosophy is we need to stop coddling these people. Life is full of challenges and the least of our problems is “too” much information.

In today’s world, eagerness to access information should be a “must have” requirement to be elected to office or serve on governing boards of any type.