A simple rumor about Steve Job’s health sent Apple Stock lower today by 32 cents, December 30, 2008, reported many newspapers including the L.A. Times
. No objective facts, just conjecture about his health status suggested to enough investors that there was a human capital threat to shareholder value at Apple to sell shares.
It’s a high-profile example of the importance of one facet of Human Capital, that of “presenteeism” and poor health. Presenteeism is the presence of sick employees on the job, who are unable to perform at their normal peak because of health problems. It’s a serious threat to the livelihood of a firm who, in Apple’s case, depend heavily on the leadership of their founder and current CEO, Jobs. If Jobs is unable to perform fully – or horrifyingly – if he’s unable to work at all, it would have a material effect on Apple’s ability to continue to produce iPhones, iPods, iTunes and the plethora of profitable innovations released recently under his watch.
It’s also a special case example of why leadership due diligence is a necessary part of Enterprise Risk Management. Jobs ability to work at full performance is a material risk to the longevity of the firm.
Posted in Evidence-based Management, Leadership, Leadership Due Diligence
Tagged Absenteeism, Apple, ERM, Health, Human Capital, iPhone, iPod, iTunes, Jobs, Leadership, Presenteeism, Risk, Stock
In a previous post, I noted the presence of cargo cults who actually worship an World War II American as their religion. I’m very grateful to a friend, Gilbert Kporku, for sending me these two videos that go into greater detail on the cargo cult phenomenon, and especially the current John Frum example.
As someone born in the US, and well traveled, I’ve often wondered about the variation in sentiments about leaders from America. I often felt treated as a prototypical American. People assume I fully support every action the politicians from the US government make, frequently false. The feelings of people in Saudi Arabia, Palestine, Pakistan, and Iraq about US Government Leaders are well known to be fairly negative. I recall as a 16 year old living in Norway, that Europeans would often deride me because of their dislike of US government policy – though I wasn’t old enough to vote. With the US Government meddling in others domestic affiars, and breaking its’ own rules frequently, I don’t like but understand the term “Great Satan” used in parts of the middle east to describe the USA.
But I’ve also experienced a sort of American “halo bias“. In my frequent trips to India, I’ve found Indians extremely happy to meet an American. I have had random strangers want to shake my hand, have me hold their baby for a picture, or buy me a free soda. Yes, I often am offered free Coca-Cola at shops in India.
What I didn’t know until this article, is that there is actually a religion that worships the US. The BBC reports that every February, the people of Vanuatu celebrate John Frum day with US army uniforms, wooden weapons and the Star Spangled Banner. They paint “USA” on their chests. Village Chief Isaac Wa, says “John is our god”, and believes that an American from World War II will be returning to Vanuatu’s 30,000 Frum worshipers. This group of people in the small micronesian country are part of a “cargo cult“.
A cargo cult appears sometimes in tribal groups upon their first interaction with technologically advanced alien groups of people. These cults are focused on obtaining material wealth of the advanced culture through magical thinking, and religious rituals. In Vanuatu’s case, they believe an American GI named John Frum helped them rebel against the aggressive teachings of British and French missionaries and colonial masters. They believe the American helped them retain their culture by throwing off the oppression of a foreign state, not unlike the original patriots who founded the US. Vanuatu people celebrate annually, hoping and praying for the return of the man they call their “Jesus”.
David Calderwood’s article about these Cargo Cults reminded me of Richard Feynman’s critique of 1960’s-era psychology. But Calderwood makes a compelling case for the current lack of understanding of US natives optimistic about government intervention turning around the US economic crisis. He notes that Americans have naive, and unsophisticated views of how wealth is created, and so they, like those from Vanuatu, have a sort of Cargo Cult worship of government-intervention in economics.
Business leaders would do well to consider how we’re perceived when we do business in other countries. Most globe trotting leaders with whom I’ve worked with are already concerned with security. But they often are relatively insulated from the root cause of the sentiment about the US – positive or negative. Even though business leaders are not responsible for foreign policy decisions, they often take the brunt of it, with some being kidnapped or killed for their iconic status as an American. As we are seen as prototypes of our entire homeland, we must be ambassadors for goodwill with other free people to do our best to change inaccurately positive or negative views of us and similar others.
Posted in Leadership
Tagged Cargo Cult, Cuba, India, Iraq, Jesus, John Frum, Leadership, Pakistan, Palestine, Patriot, Satan, Saudi Arabia, Savior, USA, Vanuatu, Venezuela
With the Bernie Madoff being the latest in a series of massive financial frauds caused by leaders who misrepresented themselves, the time may have come to broaden the financial world’s definition of “transparency”. I’d like to offer a broader view to include publicly reported reports on leadership knowledge, skills, abilities, traits, values and interests. Would you have invested in Madoff’s Ponzie scheme if you had previously reviewed a report from a trusted authority on leadership assessment that noted he is low on conscientiousness and prudence? How would a board view this same report on a founder-CEO?
How well do you know your leaders?
Poor leadership is common, but leaders rarely fail in such a public way. In one study of nearly 400 Fortunte 1000 companies, 47% of executives and managers rated their company’s overall leadership as fair or poor; and only 8% rated it as excellent (Csoka, 1998). Personality traits predict both performance and ineffective leadership. For example, conscientiousness is one of the “Big 5” factors of normal personality that has been shown to consistently predict both job performance and dishonest behavior in the worklpace. Former professors of mine, Robert and Joyce Hogan have written extensively about this area, and have authored some of the better classical test theory instruments for normal personality, the “dark side” or disfunctional leadership, and leader motives, values and preferences. None of these sorts of assesments are typically used systematically to plan CEO development in private by the board. And it is entirely unheard of for these reports to be shared publicly with prospective customers, partners and shareholders. Perhaps we should reconsider making these transparent, systematically, given the risk and lack of confidence in markets of late? The free paper I drafted, “The Three Stooges of Operational Risk: Advances in Leadership Due Diligence and Rasch Measurement” proposes a way of improving our leadership assessments. If desired, they could be used for this transparency purpose. I welcome your feedback.
Special thanks to Alexei M for inspiring this idea.
Csoka, L. S. (1998). Bridging the Leadership Gap. New York: Conference Board.
Hogan, R., Curphy, G., & Hogan, J. (1994). What We Know About Leadership: Effectiveness & Personality. American Psychologist 49(6), 493-504.
Robie, C., Brown, D., & Bly, P. (2008, March). Relationship Between Major Personality Traits and Managerial Performance: Moderating Effects of Derailing Traits. International Journal of Management, 25(1), 131-139.
Posted in Assessment, Enterprise Risk Management, Evidence-based Management, Human Capital, Industrial/Organizational Psychology, Item Response Theory, Leadership, Psychometrics, Rasch Measurement
Tagged Computer Adaptive Testing, Fraud, Industrial Psychology, IRT, Item Response Theory, Leadership, Organisational Psychology, Organizational Psychology, Personality, Psychometrics, Rasch Measurement, Reporting, Transparency
Since the British government started allowing private medicine in the UK in 2006, the numbers of citizens choosing private hospitals has risen 10-fold, to over 3,500 per month, according to the BBC
. While this still represents less than 1% of overall non-emergency treatment, the trend shows that people in the UK want the free market quality and service and are choosing something other than government health care. The catch is that the private hospitals must agree to NHS pricess, but thus far 147 have agreed to these terms. It does beg the question – how much better would UK healthcare be if this were completely liberated?
While the British concern is that NHS will loose government money, the real concern is the health and well being of people. The reality is that medical tourism is already on the rise globally, and smart British shoppers are already getting treatments in India, Mexico, Thailand, and other lower-cost, high quality locations. Having worked for 3 years in US quasi-socialized healthcare, and seen the horrors of government control of healthcare on everything from micromanaging physician relationships to attorneys being involved in nearly everything; the UK trend away from government is a good thing for Scientific Leaders in English healthcare. Will the US learn from this lesson?
Posted in Leadership
Tagged Britain, England, Freedom, Healthcare, Laissez Faire, Leadership, Liberty, Market, National Health Service, NHS, UK
Nine schools in Utah have found the benefits of Computer-Adaptive Testing to trump older methods. Adaptive tests change to match a student’s skill level, avoiding wasted time and effort on questions that are far below or above their proficiency level. They’re also at least 20% shorter. This allows for periodic reassessment, and personalized focus on the specific curricular areas a learner needs to work on. Each student is treated as a special, unique person.
But the US Federal Government’s Department of Education is behind the times, and making it difficult for Utah to use the modern psychometric methods, according to Utah’s Daily Herald. The “No Child Left Behind Act” requires outdated, non-adaptive methods to be used in addition to the modern approaches. While on the surface, the DoE’s request for peer review is something that is good, in applied settings, it’s rarely used. The instruments I’ve developed would certainly pass the scrutiny of my peers, and the feedback they give is useful. But these extra steps are typically unnecessary to ensure that instrumentation is useful, as long as professionals develop the Computer-Adaptive Tests. It’s downright destructive to children for the federal government to force Utah to use outdated, longer, and less precise measures of learning. While I presume those favored by Washington are “peer reviewed”, I suspect that the review committee is selected by those who are friends of politicians, and are likely unskilled in the recent developments in computer-adaptive measurement.
Fortunately, Utah appears to have visionary, contemporary leadership about steadfastly supporting good measurement to help children learn. The Utah Legislature, the State School Board and Governor all approved the plan to continue to use it – and the Feds require the outdated assessments to be used as well. This is both a hassle, unnecessary cost, and an opportunity cost – the children could have been spending the time they’ll take on the DoE tests on learning something new. Are you a visionary leader like the folks in Utah? More by The Scientific Leader on Computer-Adaptive Measurement, applied to organizations and business is free here.
Posted in Assessment, Computer Adaptive Measurement, Computer Adaptive Testing, Item Response Theory, Leadership, Psychometrics, Rasch Measurement
Tagged Bureaucrat, CAT, Child, Computer Adaptive Testing, Education, Government, IRT, Leadership, Learning, No Child Left Behind, Psychometrics, Rasch Measurement, Training