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No Rockettes at Radio City This Week

October 7, 2009

No Rockettes at Radio City This Week

My first job out of the Air Force was as an economist for an independent oil company. We were based in New York City at 50 Rockefeller Plaza, which is the building that backs up onto Radio City Music Hall. I spent a little over a year in a shared office on the fourteenth floor at 50 Rock, before being promoted and transferred to Houston. Our office had a great view over the roof of Radio City, and we became a prime destination for lunchtime meetings and get-togethers during spring and summer, because on clear days we could usually spot several of the Rockettes out on the roof, tanning their legs. WBF.JPG

For the last two days I've been sitting inside Radio City, observing and recording my impressions of HSM's World Business Forum as a member of the IBM-sponsored "Bloggers Hub." Radio City's atmosphere is electric, its setting majestic, and its historical pedigree authenticated by rows of now pointless public phone booths in the washrooms. But no sunning Rockettes were spotted. Instead, for the last two days we have been shining the light on business ethics, strategies, corporate culture, innovation, and employment practices.

If I had to put my finger on the central themes dominating most of our sessions, I would say they included the need for more trust and transparency, the hazards of short-termism, and the requirement for more effective employee engagement. These happen to be three of the most important issues Martha and I write and blog about. In fact, our current book is entitled Rules to Break & Laws to Follow: How Your Business Can Beat the Crisis of Short-Termism, and five of its fourteen chapters are concerned with either trust or employee engagement.

Of course, the current financial crisis (or any other sudden economic shift) could not have been foreseen, and all those pundits who claim to know what caused it are just spouting hot air. Explaining an event in retrospect is not the same as predicting it in advance. If they really could have seen the crisis coming, they would already have made billions. The simple truth is that our economy is inherently, absolutely, and irrevocably unpredictable. It is a logical contradiction - a mathematical impossibility - to predict economic cycles with any real accuracy, for the simple reason that if someone were to devise a sure-fire way to predict economic cycles, then this very fact would create arbitrage opportunities that would immediately discount and confound those same predictions.

That doesn't mean, however, that we shouldn't pay attention to the fuel that fed the fire, in the form of a grandiosely inflated financial services category, and rampant short-term thinking on the part of most publicly held companies, the destructive effects of which were compounded by exorbitant and unustified CEO pay. It's clear to everyone that the business environment has changed radically in the last year or two. The recession has robbed banks and businesses of the trust of their customers, and the old industrial management models no longer seem to provide the kind of flexibility and resilience needed for an economic system now operating at Blackberry speed.

Our speakers this week all keyed in on these problems, from Pat Lencioni and Gary Hamel to Jeffrey Sachs, Bill Conraty, and Bill George. Their recommendations were all remarkably similar: do the right thing, pay attention to the long term, follow your passion rather than your avarice, be honest with employees, and be transparent with shareholders. Gosh, makes me wish I had said those things myself. Oh, wait. Martha and I did say these things. Last year, in our book chronicling these problems (but no, we didn't predict the crisis, either).



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