WHAT IS THE SOURCE OF WISDOM?

WHAT IS THE SOURCE OF WISDOM?
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There are not many people who have a lot of experience AND the fairly rare human capability to crystallize that experience into practical ideas which anybody can put to use.

Two of the most interesting major corporate executives of the second half of the 20th Century were Ralph Cordiner, Chairman of General Electric for quite a spell in the 1960s and 70s, and Harold Geenen, Chair of ITT from 1960 to 1977.

I had interesting encounters with both these men, from which I took away wisdoms that have stuck tight ever since. I have never seen the points made by these men to me made public and I think that they warrant being shared.

Geneen was raised in England and became an accountant there before finding his way into ITT on the accounting side. I met him quite early in his tenure as CEO at ITT on a flight from London to New York.

I was seated in an aisle seat and in the aisle seat across from me was a woman. The man next to me by the window spoke a couple of times to her. I then asked if there had been a mistake in the assigned seats, and assured them I would be quite happy to exchange seats with the woman. The gentleman said curtly: "No, she is my wife. I do not want to talk to her and I do not want to talk to you either."

I said "Fine," and noticed that he had three bulging briefcases under his feet.

I proceeded to read stuff in my briefcase, had a drink and a meal and a nap AND a few peaks at his papers and learned that he was Harold Geneen, who already had a well-known reputation as a prodigious and very tough manager and financial engineer.

While I was awake, he endlessly ploughed through file after file of thick financial statements with an absorption and eagerness that seemed to me exceptional.

Finally, as the plane began to prepare to land in NY, my curiosity got the better of me, and I thought perhaps I could speak to him without creating an incident and pitched him a softball: "Mr. Geneen, what do you find so fascinating about all those financial statements?"

He looked at me a bit puzzled--perhaps wondering how I learned his name--and said: "Young man (which I still was at the time), you have to realize that financial reports are nothing more or less than a notational system for recording economic/business activity, in much the same way that musical scores and ballet scores record sounds and movements. I am not just reading numbers. I am seeing machines in factories, trucks and warehouses, piles of goods rising and falling and people moving around in offices and stores. I am fascinated by the vivid insights I get through the numbers into all corners of the lives of my businesses!"

I was blown away with how clear and simple his point was, and began that same day (and continued through to the present) to see financial statements in a very different and helpful light.

I followed up with how he used budgets. His answer was also powerful. He said: "Budgets are not things; they are a continuing process, simply to benchmark and judge unfolding reality versus plans and expectations." While that idea is, of course, not original, his way of explaining it was powerfully clear to me in a new way.

He then added that many of his colleagues accused him of being a tyrant. He said that he told them repeatedly that HE was NOT the tyrant but the FACTS were the tyrant, and they were not entitled to their own facts. He was not tough; the facts were.

With that, we landed and I never saw or spoke to him again. Still, the encounter was memorable, inspiring and continuously very helpful.

Quite a number of years later I met Ralph Cordiner, a few months after he had retired in connection with a matter having nothing to with GE. He was a gentle man who exuded wisdom from every pore, shrewd and smart at the same time. He too was probably a tough boss.

In a break in our discussions, I asked him a question intended to get him talking about his management style. I asked which method worked best with large companies like GE--centralized or decentralized. He answered in a flash: "Neither!" I said "OK, I give up. How then?" He said the only method that worked for him was not to get stuck for too long in either method but to constantly move from one method to the other. He said the basic point is that: "Change is the greatest agent of growth in life. If you leave things static, they get boring and are ignored fast. Life is like a kaleidoscope; if you look at one image only, you cannot be inspired; when you move the scope, the changing scenes excite you into action."

Having hit his start button, he came on with another interesting idea. He said he would never have to leave his office to see or learn anything about GE. Everything could be brought to him in photos, reports, models etc. However, he spent well over half his time on the road because he knew that the anticipation of his arrival would cause everyone to prepare gigantic briefing books about everything, causing them to ask themselves all the questions he might ask, and that was good, by itself, for the performance of all those people involved. They simply sharpened up a lot. He likened it to the Admiral's white glove inspections in the Navy. He said that he hated to travel but he could never figure out a way to accomplish the stimulation his presence brought to the process.

I do not know if Geneen and Cordiner ever met, but I suspect that they would have had a grand time together and even learned a lot from each other's wisdom. I was privileged to have learned from them both.

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