Tag Archives: All The Devils Are Here

Great by Choice; The Shallows – two good books for the November First Friday Book Synopsis

The new Jim Collins  and Morten Hansen book, Great by Choice:   Uncertainty, Chaos, and Luck – Why Some Thrive Despite Them All, and the significant “how is the internet affecting our brains” book, The Shallows, will be our two selections of the November 4 First Friday Book Synopsis.

I will present the synopsis of the new Collins and Hansen book.  When Jim Collins comes out with a new book, it is a big deal.  And this new book, just out, is already generating interest and buzz.  And Karl Krayer will present the synopsis of The Shallows.  This was selected as the title for the Dallas Morning News reading focus this year.  It asks some very serious questions about the impact of the internet on our brains.

These will be valuable and useful presentations.  So, if your schedule is free, come join us on Friday, November 4.  You can reserve your spot through the link on our home page.

And, I will also present a “bonus program,” immediately following our usual event.  This will go from 8:30 to about 9:45.  Prompted by the ongoing financial crisis and uncertainty, I will provide key insights from an array of important and best-selling books:

Is This Time Really Different?
Based on a compilation of the key thoughts about the great financial crisis facing our country and the world,
from a number of best-selling books, including:
That Used to Be Us; Boomerang; This Time Is Different; 
The Great Stagnation; The Big Short; All the Devils are Here, and others

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• Note:  The November First Friday Book Synopsis is sponsored by

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Who Should You Hire – The Expert Or The Crony?

(personal note:  this is the longest I’ve gone without much blogging activity.  My apology — I had a little health set back {it seems ok now} — and I’ve been playing catch-up, not all that successfully, for a while.  Hopefully, by next week, I’ll be back to normal).

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cro·ny·ism noun \-nē-ˌi-zəm\: partiality to cronies…without regard to their qualifications (emphasis added)

The expert or the crony?

Here’s the thing.  We live in an interdependent, overly connected age.  What happens in one place, in one company, in one organization, has very far-reaching ripple effects.  So, whereas before, the hiring of a crony might hurt a few people, now, in this new world of so many intertwining connections. the hiring of a crony might hurt an avalanche of others.

So, here’s the story…  I have presented my synopsis of All the Devils are Here three times in the last couple of weeks.  I began each presentation with the story that opens the book.  It is about John Breit, the top risk manager at Merrill Lynch in the 00’s.  But Merrill Lynch was making too much money to pay attention to the risks – they just wanted to keep it going.   So, Breit was removed, and replaced with a friend of the CEO, Stan O’Neill.  A friend who did not have the right expertise, enough expertise – a friend who simply was not an expert at risk, he “didn’t seem to know anything about risk.”  And when some in the firm understood his value and begged him to come back, he came back, but was denied access, shunted aside, ignored… he was too much of a pain to those with money to make and warnings to ignore.

If only they had listened – earlier.

So, here is an excerpt of the account from the book, All the Devils are Here:  The Hidden History of the Financial Crisis by Bethany McLean and Joe Nocera:

It was September, 2007.
Slowly, over the years, John Breit had been stripped of his authority – and, more important, his ability to manage Merrill Lynch’s risk.  First (Stan) O’Neal had tapped one of his closest allies to head up risk management, but the man didn’t seem to know anything about risk.  Then many of the risk managers were removed from the trading floor.  Within the span of one year, Breit had lost his access to the directors and was told to report to a newly promoted risk chief, who, alone, would deal with O’Neal’s ally.  Breit quit in protest, but returned a few months later when Merrill’s head of trading pleaded with him to come back to manage risk for some of the trading desks.
In July, 2006, however, a core group of Merrill traders had been abruptly fired.  Most of the replacements refused to speak to Breit, or provide him the information he needed to do his job.  They got abusive when he asked about risky trades.  Eventually, he was exiled to a small office on a different floor, far away from the trading desks.
(After telling Stan O’Neal of the serious and massive exposure of Merrill Lynch) John Breit walked back to his office with the strange realization that he – a midlevel employee utterly out of the loop – had just informed one of the most powerful men on Wall Street that the party was over.
Merrill Lynch was in an awful lot of trouble—and the company was still in denial about it.

So, after one of these three presentations, a man  — a man who is used to paying attention to the fiscal health of large organizations — pulled me aside, and observed very simply that the opening story of the book is the most important part of the book.  The head of Merrill Lynch replaced the expert with a friend, and thus lost the voice, the wisdom, the clear thinking of the expert.  And when you replace the expert with a crony who is not an expert, the ball game is over.

And so, taken over by Bank of America because there were no other alternatives, the crony proved unequal to the task.  And the ripple effects are still being felt.

It seems like quite a choice, but it should be no choice at all.  The expert, or the crony?  There is only one answer that is right – but, sadly, it is an answer rejected time and time again.

Someone (In Our Company) Is Doing Something Wrong – I Really Don’t Want To Know About It!

I have read and presented synopses of This Time is Different and The Big Short and All the Devils are Here.  And I’ve had so many, many conversations about all that went wrong in the 2008 financial meltdown that was “thirty years in the making” (All the Devils are Here).

We are in such a politically charged and divided time, that it seems that everyone wants to point the biggest finger of blame at the “other side” (it’s the Democrats fault; it’s the fault of Wall Street; it’s Barney Frank’s fault).

But, here’s what I think:  whoever is to blame (and the blame really should be spread far and side), people do not want to read the vital signs and face up to the difficulties that confront them.  Not people; not CEOs; not industries; maybe not countries.

This insight is clearly stated by Bernie Madoff, of all people.   In an interview (you can read about the interview on the Huffington Post here), he stated:

“They (the banks) had to know,” Mr. Madoff said. “But the attitude was sort of, ‘If you’re doing something wrong, we don’t want to know.’ “

Now, the blame for Madoff’s crime is all on Madoff.  But that little tidbit of wisdom is, I’m afraid, right on.  “We don’t want to know.’

And because we don’t, the volcano erupts.

 

Maybe It’s Time For A Movement – A Movement That Moves Beyond Doing Good To Doing Right

There are times when I feel something close to a sense of despair.  It has to do with a simple question – should a business take seriously the call to do right? The despair comes from what I read — in a lot of places/books/articles, but especially in the book I have recently completed, All The Devils Are Here, on the financial meltdown.  The failure to do right is absolutely pervasive throughout the narrative.

Doing right is different from doing goodDoing good is a corporate initiative – you know, be involved in philanthropy, give back to the community.  These are very good things to do.  But doing good is not the same as doing rightDoing right has to do with doing the right thing, in spite of the consequences to the bottom line, the profit, the promotion.

I am in the midst of a personal quest regarding this call to do right.  I am talking to people, asking professors, and authors, and business people.  And in the course of this quest, I found this paragraph, which comes from the inaugural issue of Ethikos, July/August 1987, The Ethical Education of an MBA by Andrew Singer:

The task of “influencing ethical behavior” is made more difficult today—at least in the view of some faculty members—because students arrive at graduate school less well prepared—ethically speaking—than students in the past. “The training on ethical and moral issues is considerably less than was seen previously—in the church, the home and the school system,” says Horniman. “And since each has less influence, they don’t support each other. The schools are terrified to talk about moral issues such as promise-keeping, truth-telling, etc.” 

There seems to be a popular view that one has to be amoral to succeed in business. Each year NYU’s Lamb presents his class with a case study of a pharmaceutical company that discovers that one of its drugs has been killing 20 people a year. He tells the class to imagine they’re on the company’s board of directors. Do they pull the drug from the market? Or try to “contain” the crisis? 

“Invariably, they decide to fight the FDA and sell the drug abroad,” reports Lamb. 

Lamb then asks a second question: Would you want your own doctor prescribing the drug? 

“Invariably, they say no.” 

The case usually “sparks” a lively discussion about ethics and corporate responsibility.

This presents a great, short, to the point case of doing right vs. doing bad.

I think we need a movement – a  movement that takes us beyond doing good to doing right.

What about you?  Would you do right?

Here’s The New York Times Hardcover Business Best Sellers, published February 4, 2011

Here’s the New York Times Hardcover Business Best Sellers, published: February 4, 2011.  Two books that we presented quite a while back at the First Friday Book Synopsis (Outliers, presented two years ago, January, 2009 & The 4-Hour Workweek, presented nearly three years ago, March 2008) are still #s 2 & 3 (actually, tied for #2 – that’s the meaning of the asterisk.  An asterisk (*) indicates that a book’s sales are barely distinguishable from those of the book above. A dagger (†) indicates that some bookstores report receiving bulk orders.).

We have already scheduled Change the Culture Change the Game, and Flash Foresight for future months.  And we have presented Switch, Strengths-Based Leadership, Delivering Happiness, The Big Short, and Drive.  We would have presented All the Devils are Here at the February First Friday Book Synopsis, but a snowstorm caused us to cancel that event, so I will present this book in March.

We tend to stay away from personal finance and investment books at our event.  That leaves us with only two on the list for us to consider:  Getting More (on negotiation) and The Comeback.

We provide a four-six page handout with each of our presentations for each book, and we record our presentations at our live event.  If you don’t have time to read these books, or want a quick refresher, you can purchase our synopses of these, and many other business books, with audio + handout, at our companion web site, 15minutebusinessbooks.com.

Here’s the February 4 New York Times list.

1 THE INVESTMENT ANSWER, by Daniel C. Goldie and Gordon S. Murray. (Business Plus, $18.) Five questions every investor should ask. (†)
2 THE 4-HOUR WORKWEEK, by Timothy Ferriss. (Crown, $22.) Reconstructing your life so that it’s not all about work. (†)
3* OUTLIERS, by Malcolm Gladwell. (Little, Brown, $27.99.) Why some people succeed — it has to do with luck and opportunities as well as talent — from the author of “Blink” and “The Tipping Point.”
4 DEBT FREE FOR LIFE, by David Bach. (Crown Business, $19.99.) A financial coach advocates paying down personal debts. (†)
5* GETTING MORE, by Stuart Diamond. (Crown Business, $26.) Strategies for negotiation, whether at business or at home. (†)
6 SWITCH, by Chip Heath and Dan Heath. (Broadway Business, $26.) How everyday people can effect transformative change at work and in life. (†)
7 CHANGE THE CULTURE, CHANGE THE GAME, by Roger Connors and Tom Smith. (Portfolio/Penguin, $25.95.) Advice for managers on how to emphasize accountability in the workplace. (†)
8 THE TOTAL MONEY MAKEOVER, by Dave Ramsey (Thomas Nelson, $24.99.) Debt reduction and fiscal fitness for families, by the radio talk-show host. (†)
9 THE COMEBACK, by Gary Shapiro. (Beaufort Books, $24.95.) Innovation as the engine of American economic growth. (†)
10 FLASH FORESIGHT, by Daniel Burrus with John David Mann. (Harper Business, $27.99.) How to solve business problems before they arrive. (†)
11 STRENGTHS BASED LEADERSHIP, by Tom Rath and Barry Conchie. (Gallup, $24.95.) Three keys to being a more effective leader. (†)
12* DELIVERING HAPPINESS, by Tony Hsieh. (Grand Central, $23.99.) Lessons from business (pizza place, worm farm, Zappos) and life. (†)
13 THE BIG SHORT, by Michael Lewis. (Norton, $27.95.) The people who saw the real estate crash coming and made billions from their foresight.
14 DRIVE, by Daniel H. Pink. (Riverhead, $26.95.) What really motivates people is the quest for autonomy, mastery and purpose, not external rewards.
15 ALL THE DEVILS ARE HERE, by Bethany McLean and Joe Nocera. (Portfolio/ Penguin, $32.95.) Two business journalists ex­amine the financial crisis of 2008.

Not Much has Changed; Little Has Been Learned – Michael Lewis (The Big Short) speaks out

Michael Lewis

The Big Short is coming out in paperback today.  It is still #2 on the New York Times Hardcover Business Best Sellers list (just behind #1, with an asterisk, meaning that it is actually tied for #1 with the newer take on the financial meltdown, All The Devils Are Herenow my March selection for the First Friday Book Synopsis).

The Daily Beast has a short interview with the author, Michael Lewis.  Here are two brief excerpts:

After the success of Liar’s Poker you wrote that few readers picked up on the true message of your book and instead read it as a celebratory how-to or guide to the financial world. Do you think readers got the message of The Big Short? The sense that so few people truly understood what was going on.
Or the broader message that the incentives in the financial system were bizarre and in need of changing? Not really.

Your dispatches from around the world on the economic crisis have proved excellent guides to problem spots, so where is next? Is there another Iceland or Greece looming?
Ireland, obviously. I have a piece about it that comes this week in Vanity Fair. After that…New Jersey?

Read the full interview here

You can purchase my synopsis of The Big Short, with audio + handout, at our companion web site, 15minutebusinessbooks.com.