October 11, 2015

“You Didn’t Build That”

President Obama’s recent quote that “If you were successful, somebody along the line gave you some help” justifiably is getting a great deal of publicity and commentary. The statement is true, but incomplete in its understanding of what it takes to succeed. It is being used by many people to justify redistributing income and wealth from successful people who are simply more “fortunate” in having better support systems to those whom these individuals consider to have been “less fortunate.”

When I think of his remark, I remember the scene at the end of Superman II, in which Lex Luther, the master criminal played by Gene Hackman, attempts to curry favor with the evil General Zod, played by Terence Stamp, by directing him to put Superman in an enclosed chamber in which Superman will lose all his powers. Superman tricks Luther and Zod and ends up retaining his powers, whereas Zod and the two evil creatures with him lose theirs. After this happens, Luther approaches Superman and says: “Wasn’t it great how we fooled them? I was with you all the time, Superman.”

External resources can support, hinder, or be neutral in someone’s quest to achieve a goal. In most cases involving transformational change, the individual has to work smartly and hard to steer those resources toward helping him or her, rather than being hindrances. Essentially, there are five flaws with the implications of the President’s statement:

  • Great leaders and innovators “connect the dots” in ways that others do not. Malcolm Gladwell’s book Outliers uses the example of Bill Gates having access to a computer lab at his school when he was growing up to illustrate that Gates’ success was clearly attributable to that unique set of circumstances, and to the support the school provided. That’s true, but Gates was not the only student in that school. His family was not the wealthiest in the school, and he had no unique privileges that gave only him the ability to take advantage of the free resource that triggered his success. Gates was unique in taking the initiative and having the vision to understand and use the available asset. Great leaders find or create assets and support that others cannot imagine, much less use.
  • Most successful people have the passion and the tenacity to pursue their goals under circumstances and against obstacles that discourage other people. This is especially true of entrepreneurs who transform a marketplace. Years ago, I read the story of Intuit, a great company that brought innovative consumer-controlled financial management software to the marketplace. On many occasions, founder Scott Cook encountered obstacles that put him very close to going out of business, but he kept going. Most people would not attempt to start a new business, much less endure the multiple setbacks it takes to succeed. Great leaders and innovators have more tenacity and patience to realize the benefits of whatever support systems they can use.
  • Unfortunately, most leaders who make a difference have the moral courage to take unpopular positions, even to the extent of being ridiculed by others. Working hard is a virtue, but being willing to work hard often leads to a militant conformity with the status quo, not breakthrough successes. Great leaders and innovators are unusually good at being immune from the discouragement that comes from external resistance from the so-called “support resources.”
  • Great leaders and innovators find a way to win over neutral or even change-resistant people. They are unusually gifted at finding common ground to move people toward their point of view. Great leaders and innovators are accomplished at turning adversaries into supporters.
  • Transformational change is never a linear, standardized process. It requires a great deal of adaptation. Great leaders and innovators are comfortable with being adaptable, not adhering to rigid rules and processes.

As a result, many individual leaders, while they draw upon organizational resources to succeed, draw upon those resources differently from their predecessors to turn around failing organizations. My friend Ann Mulcahy inherited a Xerox organization that was near insolvency when she became CEO, but she applied unique leadership skills to turn that organization around. Lou Gerstner took an IBM that was in dire straits and turned it around.

Both would acknowledge that they had a lot of help from hard working people in their organizations, but both were the only people who could have done what they did. The hard working people in their respective organizations could not have succeeded without leadership that channeled their hard work in the right direction. Mulcahy and Gerstner deserved outsized rewards.

Steve Jobs had a lot of help along the way, as Walter Isaacson compellingly documents in his biography of the late great leader, but Jobs made a number of decisions that went against conventional wisdom at the time he made them, and he succeeded because of his unique talents. Every entrepreneurial success, in some way, reflects an individual who looked at the same set of conditions as many other people and saw opportunities when others did not, and, in many instances, that individual had to overcome resistance to change from those same “hard working people.” Great individuals make a difference and should be rewarded.

Government is not a good judge of how to make this redistribution work. It indiscriminately punishes both successful people who innovate and transform, and those who are successful through more luck. In doing this redistribution, government also creates a new class of people who suck up the wealth and income of society and divert that wealth and income to intermediaries who add little value.

Public sector labor unions that negotiate reward and compensation systems based solely on seniority and civil service rules and processes introduce another inflexible dimension to government decision making: they excessively reward conformity to standard, collectively bargained or administratively determined rules and processes, as opposed to rules that deliver the value which should come from a particular public service job. There are more flexible collective bargaining agreements in many industries and countries, especially to recognize the need for adaptability to work-life issues and diversity goals for organizations.

It is easy to blame labor unions or civil services professionals for conformity, but this same process of suppressing individual initiative exists in the management ranks of many large organizations. In my Dossia business, I solicit many large self-insured employers for business. I get frustrated, sometimes to the point of being depressed, when I experience well-educated, intelligent executives applying their education and intelligence to figuring out creative ways to delay decisions. They work hard throwing up roadblocks, and focus their God-given talents on trying to survive from quarter to quarter by avoiding any decision that smacks of even the smallest element of risk. I admire the individuals in these large companies who champion initiatives that overcome the relentless pressure for conformity they encounter from their colleagues.

In closing, I would summarize my reaction to President Obama’s statement as follows: collective action may be necessary for every successful outcome, but, in the most important ways, individuals mobilize those collective resources in the right direction. Absent individual leadership, collective resources can just as easily block necessary actions or, worse yet, be directed the wrong way.