It’s the end of the year and the decade and I’m facinated with all of the “top ten” lists coming at me. I now know the top ten medical stories, the top ten vacation spots, the top ten movies, the top ten songs, and on and on and on.

I’d like to compile a list of the top ten individual or collective lapses in good thinking from the past decade. Here are a couple of my nominees.

• What were the mortgage companies thinking when they gave NINJA (no income, no job, no asset) loans for mega-houses?
• What was Merck thinking when it kept Vioxx on the market after it’s own studies showed it to increase risk of heart failure?
• What was management at Pontiac thinking when they introduced the Aztek? (See if that doesn’t bring a smile to your face?)

Please add to the list. What were they thinking?

Yes, I was MIA for while (but you probably didn’t notice). Time really is a scare commodity.

Anyway, I’ve been thinking about all the men and women who “get it done” in most businesses – the “middle” managers.

Picture this, it’s a holiday party and you and all the guests are eagerly awaiting the dinner bell. You strike up a conversation with your cousin TJ, the Director of Operations for a large firm. TJ has enjoyed a fairly successful 20+ year career with this employer since starting in the management training program. TJ is smart and hard-working and has moved up the ranks, gaining greater responsibility and recognition, surviving the “right sizing” of the early 21^st century and currently holds a very visible, high-pressure role. It has always been interesting to hear about TJ’s career journey because it sounds so exciting and rewarding.

But this year things are a bit different. TJ seems less enthusiastic, distracted, and even appears exhausted. You notice that TJ’s career adventure has become simply a job. “It’s just not like it used to be,” TJ explained. “Business is changing so much and it seems to me as if the rules of the game are changing. The pressures are mounting and my job is harder than ever before.”

The Rules are Changing

TJ’s situation is not that unusual for many middle managers. The rules of the game are changing and those changes come from all around us: expanded responsibilities because of globalization and a virtual workforce, advancements in technology and the use of the internet resulting in a 24×7 reality, mobility of the workforce, changing employee expectations as Boomers exit and Gen Y enters the workforce, expanding consumer power because of excess global capacity, and the constant pressure to maintain costs and improve profitability for our shareholders.

Each of these changes or trends has resulted in a marketplace that looks very different from what the previous generation of middle managers saw. The situation is further complicated by the reality that these changes are all happening concurrently.

What are your TJ’s experiencing and what can you do about it? I have some ideas and will comment later.

The healthcare system is fascinating because it will touch EVERYONE at one time or another. You may work in the system, or supply the system, or use the system – but it will touch you, one way or another, over the course of your life. I have friends who never fly and, therefore, don’t care about the airline industry. I have friends without cars who don’t care about the car industry. But I don’t have any friends who have never been sick or never needed medical help.  Healthcare is one of a few systems that touch all of us. So we had better think about its future.

Many people have written about healthcare as a “broken system.” I think of it as a rapidly evolving system that that is affected by a lot of strong forces, from technology to demographics to political posturing. In other words, the future of our healthcare system is uncertain.

How did we get here?  Well, the system that serves us today is the result of the predominant targets of the healthcare system in the past. Consider the role of doctors, nurses, and other healthcare professionals as they responded to the following:

• 1850 to 1900: Epidemics are prevalent. Food, water, sanitation and other aspects of city life cause health problems for masses of people.
• 1900 to World War I: Individual trauma (wounds) and infections are the focus
• World War I to World War II: tuberculosis, malaria, pneumonia, venereal disease and industrial hygiene are big issues to be resolved in the United States.
• World War II to 1980: We are living the “good life” and heart disease, cancer, and strokes are on the rise.
• 1980 to Present: Chronic diseases, emotional and behavioral conditions, terror, war, and genetic inheritances come to the fore.

Now think about the next age of healthcare and consider the forces that will hit the system in the coming years: more and more people are uninsured or underinsured at exactly the same time as families have become smaller and more dispersed. The massive Boomer generation is aging. There are fewer people moving into healthcare. More and more healthcare has become a “for profit” business. The bottom line is that the system and its participants will be stressed in ways we have never precisely encountered before.

That said, this system has evolved in the past and is not a stranger to new ways.

The overriding challenge is for people affected by the system to think about its future and take appropriate actions. Doctor, administrator, nurse, patient, taxpayer – ALL have a stake in the future of this sytem.

The future of the healthcare system

Esteemed doctors, academics, economists, and consultants have written a great deal about their view of and prescription for healthcare and healthcare providers. However, much of it is built on a particular point of view and, when taken in total, a contradictory picture arises. Some see the future of healthcare providers operating in the context of a “consumer- driven” system. Some see the future of providers in the context of information-empowered “personalized medicine.” And others see the entire industry changing as we move (in their view) to a single-payer system. GE Healthcare sees a fundamental shift in the nature of the healthcare provider as the system moves from “late disease” to “early health.” Because all of these points view are about the future, all we know for sure is that no one is right and no one is wrong – yet. We are uncertain.

Healthcare is filled with smart and well-educated people. And that single fact is a cause for hope and concern as we face the future of this vital industry. Because we have so many smart people, we hope that we will be able to “figure it out” as the system changes. However, because we have so many well-educated people, we may be trapped into the viewing the evolving system through mental models that may no longer be appropriate.

As you reflect on the position you want to take in the current “debate” about the future of a system that affects all of us, I suggest that you might want to consider one or more of five ways of thinking.

• Think about the speed of industry evolution. Our hospitals and providers have to keep up with the speed of evolution (on a global basis) or risk becoming irrelevant.
• Think about the larger system. Our hospitals are part of a larger system and the answer to the question “Why is my hospital changing?” is always found in the larger systems of healthcare and economy.  
• If you work in healthcare, think about your business model. Whether you are a solo practitioner or a team leader or the CEO of a hospital you have customers and they will the ultimate arbiters of your value.
• Think critically. The world is loaded with people who have opinions. Are your opinions well founded on accepted principals of good thinking? Or, heaven forbid, are you simply repeating someone else’s opinions as “fact.”
• Think across time. The past can inform actions we take in the present. All present day decisions have a “futurity,” both good and bad. And thinking about the future forms the visions we create for our organizations today.

When you think about OUR healthcare system do you throw your hands up in the air and say it’s too confusing? Don’t – your health depends on it.

You may not have noticed, but I took a week off. OK, maybe more. Went to the UK, rewrote my portion of a forthcoming book (I think you’ll like it). And I was just too tired to think. Been there? But I’m back.

I was browsing the books at my local Border’s shop and came across an interesting title, so I took my coffee and treated Border’s like a library. Anyway, the book (Inside the Mind of the Turtles) was written by Curtis Faith a former stock trader and he was writing about the mind of those people who make big bets every day. Interesting stuff.

I came across a section about managing risk and uncertainty – NOW he got my attention. His list of seven actions was nice advice and one of them (“take reasoned risks”) really caught my attention. How do you reason about uncertainty? I mean, it’s uncertain. Right? But the more I thought about it, the more I realized that instead of throwing our hands up in despair, we really do need to reason about risk during uncertain times. In fact, we need to do this more than ever.

Here are a few ways I think we might go about taking reasoned risks. I’d appreciate it if you would add to the list.

• Think in terms of ranges instead of point estimates. (I’m a small business owner, revenue for 2010 won’t be as high as 2008, but it won’t be zero. I think it’s reasonable to assume a budget built on falling into a 60 -80% of 2008 revenue. Now I can go by some equipment rather than wait for “the recovery.”)
• Learn from others. How are my competitors handling this uncertainty? What about companies in other industries? What about historical analogs?
• Focus on the future, not the past. My sales in 2008 are an interesting, but historical, data point. Who will need my services in 2010? What changes will my clients be dealing with? What trends will continue and what trends cannot continue? (Side Note: It seems to me that in 2007 and 2008 the entire building and mortgage industry assumed that housing values would escalate FOREVER. Didn’t you just know that trend had to abate?)
• Study the pressures for change affecting your industry and your customers’ industry. Which pressures might bring gentle change? Which pressures might trigger breakpoints?

By the way, I’ll tell you the other six actions if someone asks me. That way I’ll know that at least one person read this post.

Bye for now. Don’t forget to add to my list. How do you go about taking “reasoned” risks?

ATTENTION! ATTENTION PLEASE!

Please excuse me while I get up on my metaphorical soapbox and have a short rant.

We are becoming intellectually lazy and losing our ability to reason!! 50% of American households buy a newspaper today while over 100% bought a newspaper in 1950! (Over 100% because we had morning and evening editions then.)

OK, I’m down from the soapbox and I have a question for you. Is the above conclusion a good conclusion? Or am I simply A CRABBY OLD MAN ranting about the “younger generation?”

Not sure? Here, try this one instead. “People who drink green tea show a lower incidence of heart disease. Therefore, drinking green tea reduces the risk of heart disease.”

OK, maybe I am a crabby old man, but both examples show bad reasoning.

In the first instance I used emotion (bold type and double exclamation points) and then gave you an unrelated fact to “back up” my statement. Hmmm, do you ever see that kind of “reasoning” coming from our politicians, or talk-show hosts? Maybe in the current healthcare “debate?” In the second example I gave you a conclusion based on a related fact – but a fact that only showed correlation, not a cause.

If you want to be prepared for the future you have to reason well and good reasoning requires that we challenge the “facts” and assumptions that underlie our thinking. Good reasoning is informed through ongoing learning; and new data comes through the skill of observing. Finally, we test our reasoning and the results of our decisions when we reflect.

But let’s get back to the rant of intellectual laziness. (I like ranting, it comes with age.) Good thinking requires that we use evidence to support our conclusions. So here is my Prepared Mind question of the day: Where do you get your evidence for the decisions and actions that guide you and your daily life? Do you take the time to educate your thinking process? Are you willing to plow though a fifteen page article in Atlantic Monthly magazine or do you pick-up your “factoids” from USA Today? By the way, newspaper readership is down significantly, so where are we getting “the news.” And, for that matter, how much of the news on TV or the web or radio is really important news?

Reasoning is hard work and it takes time; so, sometimes, we get a bit lazy and let others do our reasoning for us. Or, we let opinions substitute for reasoning. And, more often than not, we form our opinions based on “received knowledge.” That is, we let others tell us what to think. We see this all the time in people who are devoted to a political or religious ideology. (Does Rush Limbaugh or (now Senator) Al Franken do your thinking for you?) When this happens we fall into the traps of never looking for disconfirming information or not considering other points of view.

Going back to my opening rant, I really do believe that we are becoming intellectually lazy. And I mean ALL of us, not just the younger generation. That’s my opinion and I’m sticking to it. Now it’s your job to prove me wrong. You can give me your opinion (which I’ll ignore because it does not support my opinion.) Or you can reason with me. It’s your choice.

Come on – REASON with me!!!!!

More about the eight skills of the Prepared Mind.

In the past two weeks I’ve touched on the skills of Challenging and Observing. Here’s another skill you need to consider – the skill of deciding

Why do you get paid? Let me be blunt – if it’s not because you have responsibility for making or influencing decisions at your organization, then your job is in big trouble.

It’s easy to outsource “transaction stuff” (“Why yes, I’ll be happy to take your order for …”) and it’s even easy to outsource important “knowledge stuff” (Was your recent x-ray read by a radiologist in your hospital or in another country?) However, decisions and decision making stays close to home – this act of management is too important to outsource (that said, has your organization outsourced key decisions to your local band of consultants? But that’s another story.).

Get it? You want to be in a position that accepts the risk (and rewards) of decision making.

So where does the concept of having a Prepared Mind come into play? Well, there are plenty of books that delve into the mechanics and processes of good decision making. They are important, but not enough. If you are going to be prepared for your future, and make good decisions that will bring your organization into the future, you need to consider (as Peter Drucker put it many years ago) the “futurity of present decisions.” In other words, you need to think about the intended and unintended consequences of today’s decisions. Want a couple of examples? Try these:

• DDT (easier to say than dichlorodiphenyltrichloroethane) was the very first modern pesticide and was widely used in crop protection and for the eradication of malaria-bearing mosquitoes in the 1940s and 1950s. The Swiss inventor was even awarded the Nobel Prize “for his discovery of the high efficiency of DDT as a contact poison against several arthropods.” Unfortunately DDT has toxic side effects and caused the death of fish and birds, so it was banned in many countries in the 1970s. Unfortunately, the banning lead to a resurgence of malaria in many tropical countries by the end of the 20th century. Was the widespread use of DDT a good decision? Was the wholesale banning of DDT a good decision? There may have been a better middle ground if scientists and politicians had looked into the future.
• Let’s look at today’s dire circumstances with “new” General Motors and consider just one of the many sets of decisions that brought the old GM to today’s condition. The relationships between management and the UAW have been rocky for a long time and both parties “bought peace” through contract language that provided unsustainable benefits for laid-off and retired workers. Unlike the DDT story, where the decision-makers may not have fully understood the science and biology involved, the long term impact of the contract language with GM and the UAW could have been seen by any good actuary and could have predicted the conditions facing both parties today. (Hmmm, did they?) Maybe the executives thirty  years ago knew fully well that they were laying the groundwork for a future problem. They just knew it wouldn’t happen on their watch.

So what do these simple stories have to do with you and your ability to make decisions? First, be careful when you’re dealing with situations that are novel and have yet-to-be-understood consequences. Go back to the skill of Observing and put a system in place to actively watch for early warning signs and be prepared to alter your decision.  Second, “run the numbers” well into the future for decisions that have quantifiable consequences and then use the skill of Challenging to test all assumptions. (Who knows, maybe GM execs in years past thought they made good decisions? It may be that their assumptions were overly optimistic.)  

Where have you seen organizations neglect to consider “the futurity of present decisions” and what have been the (unintended) consequences.

Last week I posted a comment about the Prepared Mind skill of Challenging. This week it’s about the need to improve our skill of Observing.

We admire those who are prepared for their future and wonder about those who plead “surprise” or try the tabloid defense of “I didn’t know.” Ignorance may be a defense in court – but what does that say about the person? Isn’t it the job of leaders to pay attention? Isn’t that something that’s required of all of us who are trying to get ahead in the era of accelerating change?

In the old days of the Soviet/American Cold War, the military recognized that getting surprised by Soviet bombers was not a good thing (to put it mildly) so we constructed the DEW (distant early warning) Line of radar sites along the northern horizon. The intent was to see danger as early as possible. Likewise, no one, not the CEO or the new data entry clerk, should be in the position of being surprised.

However, we don’t have the time or the bandwidth to notice everything. You can’t pay attention to everything!

So, one question you should ponder is that of “What worries you?”

We built the DEW Line because we were worried about the Soviets. We watch our cholesterol because we’re worried about heart disease. We watch “leading indicators” because we worry about the economy. So what should trigger your attention if it hits the edge of your mental radar screen?

What else should be on your “to be observed” checklist?

Well, think about all of the assumptions that are the foundation of our personal and business plans. Assumptions are great mental shortcuts; but they tend to degrade without warning. What assumptions did GM use until they found themselves in bankruptcy court?

You may assume that you and your department are valuable and necessary to the running of the organization in which you work. And, therefore, you maintain the status quo; just doing your job day-in and day-out. However, the current trend of outsourcing, sending knowledge jobs to China or India, should awaken you to observe specific trends in your industry. The bottom line is that you need to consider which of your assumptions are most important to your longevity and future success. Bring them into the open and watch them.

OK, so we need to observe those things that might put us at risk. How about the proverbial “flip side” of the coin? Where does opportunity lie? What was it that Toyota saw in 1993 that caused them to start the process that created the Prius hybrid? Why design, engineer and build a hybrid car when there was absolutely NO mass market? Simply put, Toyota saw the convergence of rising oil prices, and a rising world middle-class economy, and a citizenry concern for ecology. There was no market data to prove them right – only thinking driven by edge-of-the-screen observation.

Where are the opportunities waiting for your observations? And how do you prepare yourself to take advantage of them?

Ask yourself this question: “What can’t be done today that, if it could, would change your career or your company for the better?”

Can you see people in other disciplines, or companies, or industries that have already addressed your “impossibility?” You won’t know until you look and you won’t look until you decide to really observe the world around you.

You see, it all starts with intention. You won’t see the edge of your mental radar screen until you take the time to look.

Tell me what you see.

I have been fascinated with the quote attributed to the French biologist, Louis Pasteur, that “chance favors a prepared mind.” Consequently I wrote a book in 2006 with Jeanie Egmon from Northwestern University that focused on the skills (eight in all) we saw in leaders who were prepared for the future. (Go to www.PreparedLeader.com for an overview of the book and our thoughts behind it.) Anyway, given the level of uncertainty I see across the economy, I decided to return t that theme for a number of posts about getting ready for the future.

Here’s the challenge: Are you ready for the challenges and opportunities in your path from today to tomorrow?

Let me start with comments about the prepared mind skill of challenge.

We are pretty comfortable at challenging others’ thoughts and decisions. We’re sure that many authority figures (bosses, coaches, legislators, generals, etc.) are intellectual wimps and that we could do their job better than they. Sometimes we’re right. However, we’re often judging based on our biases, not our own ability to think well.

Everyone has opinions; are your opinions build on a solid foundation?How can you assess your ability to think and, consequently, challenge yourself to improve?

Try using Benjamin Bloom’s levels of cognitive ability. (Bloom was a U of C professor who studied thought processes that are used in learning. Google him to learn more.)

Bloom concluded that there are six levels of thought. Moving from the lowest to the highest they are: knowledge, comprehension, application, analysis, synthesis, and evaluation. At what level is your thinking? What underpins your opinions? Try the following example and then create some of your own.

Most of us know that General Motors is in a world of hurt, so let’s use their problem to understand the levels of thinking and to test our thinking.

• Knowledge – can you recall specific information? What are the products and services provided by GM? What nameplates have been eliminated? Which remain?
• Comprehension – can you state a problem in your own words? What is the major problem faced by GM and its unions as it emerges from bankruptcy?  
• Application – can you apply concepts to the “real world?” How has the labor contract trapped both parties? How does this apply to your workplace?
• Analysis – can you distinguish between facts and inferences? How is the  situation at Ford different from the situation at GM?
• Synthesis – can you put the parts together to form a whole, with emphasis on proposing alternative solutions? Can you design an organizational structure and new “social contract” that is agreeable to both management and unions at the new GM?
• Evaluation – can you judge and evaluate actions and outcomes based on a defined set of criteria? Maybe you love the government’s approach? Maybe you hate it. Here’s the tough question: What would you do to “fix” GM?

Maybe it was unfair to test your thinking about GM? What if I asked a similar set of questions about the war in Afghanistan? (Many of us hate it; but do we understand it?) What about your company’s strategy? (Why think about it? I’m sure “they” have everything under control.)  And then there are your views of our health care system. (“I’m sure it’s broken, but they need to fix it without raising taxes. It’s not my problem”) Hmmmm.

I now challenge all of us to move up the scale of Bloom’s levels of thought. We have plenty of knowledge and most of us are pretty good at comprehension. However, if my view of the world is representative of reality, we are sorely lacking in the widespread capability of the higher levels of this taxonomy.

The world of sound bites and “factoids” is a sterile world when it comes to good examples of the skills needed to synthesize and evaluate. What do you see? Are you worried?

When I decided to add a blog to my website I tried to be real about how often I could enter a new post. I decided that a good weekly post should suffice to keep me active with clients and others. As you can see by my recent posts, they have slipped beyond the once-per-week schedule I set for myself.

Thinking, reading and writing are fun, but since I need to pay my bills I also conduct workshops on Critical and Strategic Thinking. And in the course of conducting each workshop I always talk about the need to actually schedule time to think and reflect. My pitch is that “If you don’t schedule it, time will slip away and you will miss the opportunity.”

Hmmm, it seems that I need to actually schedule writing a weekly post. Otherwise the opportunity will slip away. (As it has.)

That’s my confession and my resolution.

What’s important in your life that you say you’ll accomplish “one of these days?” Will it happen if you don’t schedule it? Think about it.

The July-August issue of The Futurist has a nice article entitled “Ten Things to Know about Tomorrow’s Businesses.” (see www.wfs.org) All of the items are individually familiar; yet when they are brought together they give you the opportunity to ponder combinations. For example, “The emergence of China as the World’s Largest Economic Power” is not surprising. Nor is “Energy and Water Shortages.” However, together they can create scenarios ranging from “water wars” to phenomenal new infrastructure innovations.

I was intrigued by the article and tried to write a list of ten forces driving my future. First of all, it was very hard. Second, it was sobering when I thought of some of the combinations. (It’s a good thing that I live within walking distance of essential stores and the library.) Third, it was exciting. (I wonder what it will be like to deliver workshops from my home studio? I hate getting on airplanes.)

Try to create a list of ten things you know about the forces driving your future. Now consider the combinations. Now get ready.