Recently I have been posting information about the The American Dream in an effort to promote my book, GOLD! Applying Level Six Performance to Capture the Runaway American Dream (http://www.amazon.com/exec/obidos/search-handle-url?_encoding=UTF8&search-type=ss&index=digital-text&field-author=PhD%20Stephen%20Long) and responses have been surprising to say the least. Responses have ranged from dismissive of facts to being unpatriotic. Like a boiling frog that’s not aware that it’s dyeing, The American Dream is fading. In this post, my intention is to show how psychology and economic research are intertwined. I offer no suggestions for fixing the economy. What I do offer, however, may be more important—a belief system that enables people to maximize their opportunities regardless of the economy. As individuals, we have very little leverage on the economy, but we do have the power to determine how we approach and respond to the challenges this recession economy presents.

Let’s consider the facts:

·          In 1995, a Business Week/Harris poll found that 66% of the respondents believed the American Dream had become harder to achieve since 1985, and three-fourths believed that achieving the dream would be more difficult in the next 10 years

·          A CNN poll taken in 2006 found that 54% of Americans considered the American Dream unachievable

·          According to the GINI Index, America has increased the ratio between the rich and poor while Japan, France, Germany and the United Kingdom have held steady

·          The Tax Foundation reported that median income actually fell 2.24% from 2000-2006

·          According to the Bureau of Economic Analysis:

o         Personal savings rates have decreased by at least 50% since 1970 and as much as 75%

o         America became the largest debtor nation in the world since 1986 after being the largest creditor

o         Per capita income has doubled since 1948, but it has leveled, and then decreased steadily since 1967

·          A study conducted by the World Economic Forum in 2009 showed that London dethroned New York as the financial capital of the world

·          The U.S. fell from No. 1 in 2008 to No. 3 this year, behind the UK and Australia

Clearly in the past 40 years things are getting worse than better. Trends are dynamic and if nothing changes, the trend will continue. Avoidance and false optimism will only continue the current trend.

The validity of the American Dream isn’t in question, however and it doesn’t need to be readjusted, redefined or recalibrated for the times. The one thing America doesn’t need is another pep talk filled with empty platitudes and irrelevant anecdotes. What it requires, though, is a process. The Olympians featured in GOLD! illustrate how they achieved their American Dream. The Olympians are role models for us all, for they competed, and then succeeded in a global market long before the term became a part of our national lexicon. And their collective system was instrumental to their success.

There are concerns, however. If nothing changes and the trends continue there are three primary issues that may have a long and significant effects on America—upward mobility, political opportunists and capitalism today. Brookings fellows Isabel Sawhill and Ron Haskins point out in their new book, Creating an Opportunity Society, intergenerational social mobility in the U.S. has been falling since the 1970s, and is lower than in countries such as Britain, Sweden, and Denmark. It has real-world economic implications. Psychologically, when people believe they have no control whether they have the opportunity to advance themselves and improve their lives, they develop what’s called external locus of control. People rely on systems, luck and other external events to provide the path to success rather than themselves. As Paola Giuliano, a professor at UCLA’s Anderson School of Management, notes, “People who buy into the idea of luck over effort tend to work less hard, and that lowers productivity, which of course can lower economic growth.” People will give up without being aware of their own behavior.

Politicians are skilled at leveraging current climates to enhance their ambitions, whether it’s to the benefit or detriment to the society they aspire to serve. Noted economists such as Robert Reich, George Soros and Robert Putnam are fearful that vulnerable people will become more easy prey for ugly class politics, being drawn, as Reich puts it, to “populist demagogues on either side of the political spectrum.”

The way capitalism has been applied has changed over the years. “We are in a very unique period, in which we’re seeing the biggest disconnection between financial capitalism and the real economy since modern economies began in the 19th century,” says Nobel laureate and Columbia economics professor Edmund Phelps, who runs the university’s Center on Capitalism and Society. “That’s not to say that banks don’t fund some useful projects like wind farms or whatever, but increasingly they’re existing in a virtual sphere in which they are more interested in funding each other, and developing complex securities, than in funding real businesses.” America needs to rediscover real value.

While America is still by far the world’s wealthiest, financial instability and a noticeably weakened banking sector has helped decrease the strength of this economy. Emerging economies (Brazil, Russia, India, China, Malaysia) have a way to go before they catch up with more developed rivals like the U.S., Britain and Japan. Some suffer from underdeveloped infrastructure, murky legal and regulatory regimes, or weak corporate governance.

This is no time for complacency, however. “The drop in scores for both the U.K. and the U.S. indicate that their leadership is potentially in jeopardy,” says James Bilodeau of the World Economic Forum, who co-authored the WEF study. “The potentially worrisome finding is the degree to which scores have dropped and their lead relative to other countries has diminished.”

I invite you to examine these articles that help define the problems of The American Dream.

http://www.msnbc.msn.com/id/34162540/ns/politics-white_house/

http://www.msnbc.msn.com/id/33592580/ns/business-businessweekcom/

http://www.newsweek.com/id/229959/page/2

Executives face many demands, but some are self-imposed. Today, it was announced that the most successful college football coach during the past five years has decided to take a leave of absence. Urban Meyer, the head football coach at the University of Florida, The New York Times reported that Meyer is resigning due to health concerns (http://www.nytimes.com/2009/12/27/sports/ncaafootball/27florida.html?partner=rss&emc=rss). Meyer, 45, led Florida to the National Championship twice in the past three years. Meyer just announced that he is taking a leave-of-absence instead of retiring.

College football attracts a unique person to the coaching profession. They are bright and goal oriented like every other executive, but they are extremely competitive and hard-working. The job consumes every coach, working seven days a week for most of the year and six days a week during the down part of the year. Summer is the only time of the year where football coaches resemble the rest of the America, working only five days of the week. The profession’s mantra is, “win or get fired.”

With this level of fear, an executive’s mindset and actions become distorted and excessive. Urban Meyer is at the helm of a multi-million dollar business that includes a diverse set of constituencies. Indirectly, he is responsible for billions of dollars of revenue throughout the state of Florida. Control is an illusion with this many interdependent relationships involved. Focusing on things one can’t control leads to a sense of powerlessness and helplessness. “I have ignored my health for years, but recent developments have forced me to re-evaluate my priorities of faith and family,” Urban Meyer said in a statement.

Whether it’s a college football coach, a Wall Street executive ore the CEO of a multi-national corporation, the key to long-term success is found in balance. The question is, “Can I be completely committed without burning out or experiencing life-threatening health problems?”

Meyer is now going to re-evaluate his priorities. Certainly not by his choice, though. What’s important gets done and health is now the number one priority in Meyer’s life. Smart executives, though, make these choices early in their career. Meyer experienced an epiphany and only now he realizes his health, family and spirituality are as important as his career. His 16 year-old daughter felt like she hasn’t spoken with her Dad in over two years! Meyer’s father stated “he doesn’t take losing very well.” What executive takes failure well? Meyer believes God is trying to tell him something. Well, God may have been trying to tell him something in church, but he was too busy to listen because he was texting recruits. Besides chest pains and a loss of consciousness that Meyer experienced after the SEC title game, he had lost 20 pounds leading up to the December 5^th game against Alabama. The fact is there are always signs that something is out of balance.

Another sign of being out of balance is the degree of perfectionism an executive exhibits. In America, perfectionism is a highly valued trait and therefore lies the problem. Perfectionism is rewarded and reinforced, leading many executives down the path to burnout. In Meyers’ case, he has led his program to the point where Florida is the most successful and most respected football program in the country. However, the loss to Alabama created the health problems causing Meyer to consider retirement. Even if Florida beat Alabama, Meyer would have had to change due to his ineffective attitudes toward perfectionism at some point.

Perfectionism is actually a sign of a lack of confidence, when it’s extreme in nature. It creates intense anxiety not only in the leader but more importantly, in the followers. Watching the Alabama-Florida game, it was evident that it was Alabama who was loose and relaxed, enabling them to play to win whereas Florida played not to lose. But if a job or an industry that has such a narrow margin of error where one setback causes an industry leader to consider retirement, is the industry worth being apart of?

The commitment to excellence is a hallmark of any effective leader, but perfection is God’s job. Leaders set the pace and preparation is vital to success in any business. Once the preparation phase is complete, the leader then has the responsibility to not only trust the preparation, but more importantly, trust the people who carry out and execute the strategy. Martyrdom is not cracked up to what it is supposed to be. Meyer leaves a program, administrators, employees and his players in a state of uncertainty. He ignored his responsibilities by being selfish and indulgent. Leaders must take care of themselves. Only then, are they are able to take care of their people. I wish everyone a prosperous and healthy 2010. Get your priorities straight before something or someone forces you to.

There is no question Emotional Intelligence (EI) is valuable to leaders individually and organizationally. EI has been in the global consciousness of leaders since 1995 when Daniel Goleman wrote his seminal book. A recent article written by Shaun Killian of the Australian Leadership Development Centre addresses a six-part process for leaders to develop EI (http://www.isnare.com/?aid=378089&ca=Leadership) in an article titled In Hard Financial Times the Soft Skills of Emotionally Intelligent Leadership Matter Even More. Killian does an excellent job by providing a basic framework, but there are some wholes that need to be filled. The key is learning how to use EI to enhance organizational performance and strengthen relationships with all the interdependencies that exist within a leader’s network.

The first step in Killian’s model is for leaders to “Accept the Role of Emotions in the Workplace.” We want people to be passionate about their work, to be excited about how their individual contributions help the organization achieve its goals. Harry Truman said, “The successful man has enthusiasm. Good work is never done in cold blood; heat is needed to forge anything. Every great achievement is the story of a flaming heart.” It’s vital to understand how emotions affect our not only our actions, but more importantly our worldview.

“Understand How Emotions Work” is Killian’s second step. Emotions, for the most part, are reactive. An event occurs and people will attach an emotion to it—either a positive or a negative emotion. Killian lists the eight primary emotions ranging from positive to negative (happiness, belonging, interest, surprise, sadness, disgust, fear, and anger). EI leaders anticipate how their actions and decisions affect their people emotionally before they act or render their decision. Accurately predicting how people will perceive your actions or decisions sets your next step as a leader.

Killian’s third step is “Become More Aware of How You Feel.” He suggests leaders be able to label their emotions in a precise manner. The key is to recognize whether your emotions are dictating your decisions or are your decisions dictating your emotions. To perform at a high level, leaders need to learn how to use their decisions to dictate their emotions. Emotions are not a negative aspect of judgment, but each person holds the right to exercise power to use their emotions in a way that helps rather than hinders performance. Emotional decisions rarely lead to profitable actions, but you can bank on rational decisions.

The fourth step, “Develop Your Ability to Master Your Own Feelings”, is a critical step. Leaders are able to learn how to change the way they feel. One method is to use a technique called Reframing. Leaders who are able to think in any way they have to in order to perform as well as they can master reframing. Reframing empowers leaders to perceive any situation in a way that helps them rather then hurts them. For example, where most leaders would see a threat, EI leaders are able to recognize an opportunity that exists within a difficult situation because they perceive situations in not only unconventional ways, but rational and creative manners.

“Become Better at Reading How Other People Feel” is the fifth step. This step is about developing empathy. The biggest misunderstanding about empathy is most people believe empathy is strictly emotional. Empathy is less about emotions and more about rational logic. Being able to read between the lines and see a situation through multiple lenses is a cognitive function. The practical use of empathy is to help people to reframe their experience to change their emotions in order to create positive energy. Empathy is at the heart of influence.

The final step, “Start Using the Universal Language of Emotions to Talk to Those You Lead”, illustrates how EI leaders are multi-dimensional. EI leaders are more equipped to manage themselves, their people and all the situations that are faced in these turbulent times. EI leaders use their heart and head to make the best possible decisions under the most stressful, complex situations…and they are more able to get their people to execute the decision they come to.

The Power Leaders article was recently published by Business Leadership Review, out of London…let me know what you think!

Sorry there haven’t been any new posts lately…just came off from vacation and the office work has piled up…however the Executive Presence article has just been published in Australia from Smart Manager in Melbourne…so for all the Aussies, let me know what you think.

I woke up early on beautiful Sunday morning here in Colorado only to read an annoying article titled Factors that Sustain Successful Women Leaders. The article details research conducted by a McKinsey consultant who interviewed 85 female leaders and found five factors that help women to be more effective leaders. I found the article—and the research—not only annoying, but also dangerous.

In the 90’s while serving on the faculty and the internal consultant to the athletic department for performance enhancement and cadet leadership at the U.S. Air Force Academy, I helped two female cadets break the ceiling. One cadet was the first female athlete to be named as first team all-conference as a division I level student-athlete in a team sport. The other cadet was the first female cadet to win a conference championship on the division I level in an individual sport. These women were trailblazers, but there was nothing that distinguished them from their male counterparts who accomplished similar goals. They were tough-minded, strong, independent, committed, competitive and delivered high performance under pressure. To insinuate they were trained differently would have diminished their accomplishments as compared to the guys, but this is exactly what the McKinsey consultant advises.

I understand marketing efforts by directing information to a specific population, but this research methodology is flawed. The researcher claims five factors are required for effective leadership by women, but the researcher failed to interview any men. So how can we know that these five factors only help women? Skills such as Purpose, Framing, Energy, Engagement and Connecting have been found vital for effective leadership, regardless of gender specification. Both men and women have the same opportunity to master these skills. Aren’t we limiting the ROI on all human capital by focusing on one specific gender? What about the other half of the sky? Maximizing human capital must include a process where men and women are not perceived differently.

The opening paragraph in the article states that intrinsically motivated women are more effective than materially oriented men—basically women seek meaning where men seek power and greater compensation. Isn’t it true that any leader, regardless of gender, who is intrinsically oriented is more effective than someone who is externally controlled? Not only is this misleading, but it’s dangerous. Women are diminished by insinuating they should NOT be materially oriented or goal driven. I have two young daughters, and is this a message we want our daughters to internalize? What kind of socialistic crap is that? If a democratic and capitalistic society is truly going to adopt the principle of human capital then writers, consultants and researchers must stop trying to find the differences that exist between us. Rather, human capitalists focus on what distinguishes high performers and effective leaders from everyone else regardless of gender, race or age.

Diversity is more about including people who hold different strengths, viewpoints and belief systems and less about including people from different demographic categories. It’s insulting and reduces the ROI on human capital. We can do more for race, age and gender relations by focusing on what unites us rather than what makes us different.

At 17, I took my driving test at the Rahway State Prison in New Jersey in my parents Chevy Vega to get my drivers license. My biggest concern was not if I was going to pass the test and gain my passage to teenage freedom, but rather was the car going to break down that day. I kept on thinking, “With my luck, this damn car will break down on the day I’m supposed to take the driving test.”

I’m reminded of my teenage angst from an article I recently read (http://www.msnbc.msn.com/id/31688479/ns/business-autos/?pg=1#Biz_Detroit_killers_0907) about the ten cars that brought Detroit down—including the Chevy Vega. The article briefly discussed who’s to blame—management, unions, government policies—or the personality within the U.S. car industry.—arrogance, stupidity, poor judgment, laziness. Whoever or whatever is to blame, one thing is for certain—the fall of the American car companies can be attributed to a lack of leadership more than any other single factor.

Once the pride of American business, and therefore of American society, American car companies have been playing catch up to the Japanese and Europeans for over a quarter century. Is it really that surprising these companies went down? A better question is why hasn’t it happened sooner? Ford, GM and Chrysler (and American Motors before they went down) never caught up to the quality standards established by foreign automakers.

Physical products such as automobiles are a direct product of the social architecture that exists within an organization. The last significant organizational transformation occurred between 1890 and 1910 when the modern company was created. Managerial hierarchies and multiple operating units were formed—and most, if not all organizations still employ the same model. Tom Peters explains in Thriving on Chaos, among other things, that improved quality requires less hierarchy within the organization and greater autonomy for the people who work within it.

The hierarchical model is no longer appropriate—it’s an outdated paradigm. Leaders require a new set of skills based on new set of principles. What used to be secondary is now primary. Principles such as empowerment, communication and decentralization are essential to growth, innovation and continuous improvement. Top-down organizations are obsolete, whether their managers are aware of it or not, and they need a global perspective with an entirely new structure where leaders are at the center of vital relationships. Managers can afford to have information filtered to them, but leaders require primary information. The Apple Tree organization discussed in the Power Leaders article shows leaders at the center of relationships by adopting a new belief system.

It’s a crazy world right now. Traditional top-down managers are unable to explain what’s going on because they’re basing their assumptions on an outdated belief system. American car companies haven’t changed because the top-down structure prevented people from becoming leaders their companies required. Hierarchical organizations foster a homogenous culture where diversity is underrated and undervalued. Therefore, the same type of leader keeps emerging. It’s like the movie Groundhog Day where the same solutions to the same problems are offered, but nothing ever changes—and nothing ever improves! New leaders are outdated before they ever take office.

It may be impossible to change the top-down structure in a manufacturing environment—the interaction between person and machine. Leaders, however, are able to change their belief systems, global perspectives, and therefore how they act. It may too late to save the American car companies, but it’s not too late for leaders of other industries to adapt—it must start with leadership.

Gaining the trust of followers is an essential component of leadership. The level and intensity of trust followers have in a leader may determine how effectively one is able to accomplish their agenda.

An interesting article appeared in FastCompany recently (http://www.fastcompany.com/magazine/137/made-to-stick-in-defense-of-feelings.html) The article discusses the role of rational thinking and it’s effect on ethical decision-making. The author cited a study conducted by Chen-Bo Zhong at the University of Toronto. Zhong explored the impact of short-term gains by using rationalizations. Simply, participants were asked to make a decision whether to lie to their partners and profit or treat their partner fairly.

Predictably, 69% decided to lie to their partners and profit in the short-term. These respondents applied primarily a rational decision-making model to conclude the best thing to do is lie to their partner. Only 27% used emotions to guide their decisions and decided to treat partners fairly. This is truly a negative indictment of our current society, to be sure. To compound the problem of trust, 75% of people actually choose to trust people who apply rational thinking to defend and support their positions. Not only do we use rational thinking to create trust, we actually buy into the idea. Think Dick Cheney and Bill Clinton. Yes, people on both sides of the political spectrum manipulate the trust issue and have mastered techniques to gain trust from the masses by using sophisticated rational explanations.

Whether it’s the mortgage crisis or steroid abuse, many people make decisions based on short-term gains and support those decisions by using rationalizations. The MBA mantra of “In the long run, we’re all dead” has consumed our society at the expense of trust. What occurred to me, though, was the duality of trust and productivity, as if they’re polar opposites. Level Six Leaders fuse the performance and the trust issues because they realize people recognize patterns of behavior—you can’t fool all the people all the time. High performance and trust go hand-in-hand, but leaders must establish a set of freedoms and barriers for themselves. The barriers establish guidelines of ethical behavior. By adhering to those guidelines, then many freedoms present themselves to the leader. Only unimaginative executives are unable to generate solutions to complex problems. Mediocre leaders see only limited options that include unethical and illegal acts, and then justify those judgments by using creative rationalizations.

Rationalizations are primary to our existence. As the Jeff Goldblum character stated in the classic film, The Big Chill, “Rationalizations are more important than sex. Have you ever gone a week without a rationalization? Be careful how you use them. The trust of your people is at stake.

I read an article today on MSN about how important empathy is to leadership (http://www.msnbc.msn.com/id/31450185/ns/business-management_101/). Afterwards, I realized how misunderstood this topic is to the general public. The author discussed how showing some emotion in the workplace can help employees cope with challenging situations. The author provided an example of how an executive needed to cut his staff, but he decided to wait until after the Christmas holidays. Well, good for him! The fact remained 25 people still lost their jobs. If this executive truly understood empathy, those people may not have lost their jobs, the board may not have needed to mandate job cuts and this executive may have a better chance at saving his job down the line.

In my article, Executive Presence: What is It and How to Get It (http://www.levelsixleadership.com/images/Int_l_Jnl_of_Ldrship_May_09.pdf), I briefly discuss empathy. David Cardenas, a partner at Olympus Partners, a venture capital firm based in Greenwich, CT who sits on numerous boards, was quoted as saying, “empathy is a highly under-recognized and under-valued leadership skill.” I followed with, “Empathy is more than seeing a perspective from another’s viewpoint. It also includes the ability to recognize the strengths and weaknesses of a particular person or group and foresee the roadblocks they’ll face. In essence, empathy is vital to seeing the reality of the entirety of a situation.”

Empathy is not sympathy, nor is it reflection. Effective leaders come to understand that empathy is a cognitive skill rather than an emotional skill. Cognitively, Empathic Leaders become aware of the possible reactions to successes and roadblocks that their employees face during the pursuit of achievement. Are they filled with fear or are they trying to bulldoze their way through a situation? Either approach is not conducive to high performance.

Executives who lack empathy tend to facilitate an emotion where it spreads like a contagion. GroupEmotion occurs when one when a single employee experiences an emotion like fear and then they transmit their fear throughout the workplace. Similar to GroupThink, GroupEmotion can catch like wildfire where other people who are either directly or indirectly involved begin to perceive a situation in the same irrational manner. Empathic Leaders help to direct perceptions that reduce fear and then provide a pathway to success. Empathic Leaders are aware of the emotional states that their employees are experiencing and then respond appropriately to their needs.

Executives need to understand that the goal of an Empathic Leader is not to make people feel better—the goal is to provide a roadway toward success. There has to be a larger purpose to showing empathy. Empathy is part of a skill set that enables executives to reach organizational goals—not to just maintain relationships.

The primary objective in Empathic Leadership is to acknowledge the emotion the employee(s) is experiencing. From there the executive can help direct energy toward achievement. Most likely, the executive has experienced something similar and realizes that getting caught up in the emotion won’t help. The Empathic Leader then helps the employee self-correct and set a new course for achievement. It’s here that the employee sees the new reality of the situation. It’s a matter of changing the perspective by using the undervalued, misunderstood skill of empathy.

Recently, the European Financial Review published my article on Power Leaders. Click on the link to read more:

How Power Leaders Achieve the Impossible