Emotional Leadership

“All we have to fear is fear itself.” We’ve heard President F.D. Roosevelt’s quote so often, it risks being trite. But I think this was an example of his effort to provide the nation with emotional leadership in a dour time.

All we really have to fear is blind refusal to understand how things work and to use that information to our benefit. Like attracts like. Fear pulls in fear, anger calls anger, joy invites joy: that’s how things in this universe work. In this economic downturn, it is the best time to feel secure and joyful because financial leadership alone is never enough to pull us out of economic melt-downs. We need emotional leadership as well.

If what I hear during this financial crisis is true, psychology and perception play large roles in market ups and downs. People take financial risks, based in part, on how they feel. If it’s true that emotion and perception are so critical, what’s keeping our business and political leaders from providing the emotional leadership necessary to help our financial worlds rebound? Emotion is contagious, positively and negatively. Who will get the ball rolling?

Here’s how it works: positive emotion draws to us more positive circumstances. All you have to do is keep your traps open, be thoughtful about business decisions and (here’s the key) feel the feelings you have when things are the way you want them to be, but feel the positive feelings before things actually become the way you want them. By “traps” I mean the channels you use to receive sustenance from the world around you. Some people call that work or job or sales. That’s fine. We each have ways to receive from the Universe what we need to survive: milk from mother, welfare or subsidies from a parental figure, wages from a job, dividends or profit from your own business(s), profits from sales. Keep your doors open and feel the feelings you want to have because you choose to feel that way. Results will follow.

The emotional leader in a human group such as a business, corporate team or family does not have to be the designated leader on the org chart. It can be anyone, secretary, truck driver or vice president who is willing to make a choice to whistle in the dark, walk on the sunny side of the street or smile when financial reports are turning crimson red. It is possible to be very aware of dire circumstances but be in charge of your emotional reactions.

You’re going to pass time one way or the other. Why not feel good as you go through time? In the meantime, you could be the one who provides critical emotional leadership for your group. All you have to do is allow yourself to experience positive, safe and secure emotions while time passes. In the end, what we really have to fear is letting circumstances determine how we feel. There’s the real fear: being out of control of ourselves. As a leader, you can control how you feel even when you’re tempted to feel out of control. Others around you will pick that up and multiply the effect.

Cheers.

Paul Anderson, Senior Coach

Banking (as we know it) and the Underserved

One of Longitude's longtime clients recently engaged yours truly to run their credit bureau business. It's a great company with a bright future and attracts a great deal of attention from all constituents and sectors of the market. The business primarily serves lenders who successfully provide access to credit for consumers who are underserved or otherwise disenfranchised by traditional financial institutions (read banks) who continue to fulcrum their credit decisioning on traditional 'cut-off' credit scores.

I offer this backdrop only as a broad, abstracted context to the following article on FT.com yesterday on the topic of the poor and their money: http://www.ft.com/cms/s/2/4304f838-f7dd-11dd-a284-000077b07658.html. The author, Tim Harford, also blogs at The Undercover Economist (http://blogs.ft.com/undercover/). I think you'll enjoy his perspective and observations.

Oh One Oh One Oh Nine -- Oh My!

Magical, isn't it? Or is it? This 'new years' morning, you're likely either nursing a hangover induced head ache, or wondering why you didn't get invited to an A-list party last night so you could get one. Ever notice how we seem to shun what we think we don't want, then end up worrying that maybe we should have wanted it in the first place?

I've been scouring the blogs this morning, interested in finding early signs of 'new years' optimism, a change in the direction of consumer confidence or any indication we, as a global community, are interested and willing to do the hard work to get ourselves out of this structural, media encouraged economic funk. As is my nature, I hit the usual payment related sites first, but found mostly retro analysis and review on what happened in 2008. Seems the most highly ranked payment related events last year ranged from the launch of the LL Bean Visa card via Barclay's (go figure!) to more significant happenings like the BofA - WFB payment processing joint venture. The complete list follows if you're interested:

Citi Introduces Extra Cash - New Rewards Program
Bank of America, Wells Fargo Form Payment Processing Joint Venture
Secure Vault Payments - A Bank-Centric Alternative Payment System
JPMorgan Chase, First Data To End Chase Paymentech Joint Venture
PULSE Releases 2008 US Debit Issuer Study
H.R. 5546 - The Credit Card Fair Fee Act of 2008
Finovate Startup - Best of Show Awards
L.L.Bean Chooses Barclays to Launch New L.L.Bean Visa Card
Citi to Raise Credit Card Interest Rates
PayPal Reports Online Consumer Shopping Trends
New Study Finds Declining Credit Card Use in US

For some reason, several really interesting stories didn't make the Top 10 list like the meteoric rise (and equally rapid death plunge) of Revolution Money, and the "against-all-odds and despite-the-mounting-efforts-of-uniformly-uninformed-lefty-so called-consumer-advocates" continued growth in demand for alternative (read non-bank) lending. I guess the incumbent institutional payment theories, myths and legends of what is, and isn't important prevail.

Frankly, I found little fundamental, genuine optimism filtering through the blogosphere on this newest of new year mornings. In my cynicism, I attribute it to the fact that we remain a nation of highly opinionated watcher/reactors -- we're real good at watching what happens, what someone else may have done and reacting to it, mostly by talking about it without examining the fundamental facts behind 'why' and 'what'. Are we increasingly losing the capacity to truly innovate, create, initiate, or god forbid, even commit to working harder in 2009 than we did last year until our 'fortunes' change? Are we taking an honest inventory of reality often enough? Perhaps our core assets and capabilities are more valuable than we believe them to be. Maybe a bit more intellectual self honesty would help us to SEE past 'the past'.

Cognitive dissonance exists abounds in our economic food chain. Will pouring more TARP funds into the system create sustainable growth? It's an EASY answer, but what of the belief that permanent tax cuts across the income spectrum are a better means to stimulate sustained growth in a free market system (http://online.wsj.com/article/SB122757149157954723.html)? Would that be a better use of Americas assets and resources? Is it that we lack the fortitude to do the hard work and make the difficult, but better choices?

Should GM, among other recent examples, get bailout money just because they have a union contract that requires them to pay a forklift driver $85,000 a year? Greg Knox, President of Knox Machinery in Ohio doesn't think so ( http://www.snopes.com/politics/soapbox/knox.asp).

At least Jason Hogg and his Revolution team took stock of the payment realities, stuck their neck out and raised the flag of the really only new payment innovation the landscape has seen since PayPal. That takes more than capital and guts; it takes a core belief, true optimism and confidence that the future not only can, but WILL be a better than the past -- if only through sheer personal determination and hard work.

The recurring evidence says the very keys to making the future condition of our country, and industry, a company or our individual selves better than a past, or present condition are typically right in front of us, things we already have at our disposal. Its the forward vision to SEE how to use those resources differently, and the WILL to change comfortable behavior that propels us forward to a better outcome tomorrow.

So, here's a suggestion: don't make any resolutions this new year; you'll just end up failing yourself before the Super Bowl kick off. Instead, take a quick inventory of the things you, or your company are really good at, your assets and strong points, the qualities people or your customers like most about you. Then, pretend you just read your name, or your company's name in the newspaper under 'Recent Bankruptcy's', and write out a single page on what went wrong. What assets got mismanaged? What opportunities were not pursued because they seemed too risky (but not to your competition)? Which key customers found an alternate source (built or bought) that delivered an equal or better value-to-price ratio? What structural market factor was there all along, but you just weren't willing to acknowledge how critically important it was? What resources or assets should/could have been used more creatively?

See if this little exercise doesn't help clarify your vision just a little. I think the results will be illuminating; if nothing else it will stimulate some good, constructive conversation -- with yourself (if you're honest about it), with your spouse or loved one, and with your professional peers and subordinates. Then, take a risk. Make an innovative move. Go execute a 'blue ocean' strategy. Who knows, it might just make 2009 a truly NEW year for you.

Here's my wish for only the best for you and yours, regardless of what strategy you chose.

Kim