… Because, in our opinion, one of the fundamental tenets of management is that you have to eat while you dream, meaning, you have to make money in the short term while you invest for the long. Any dope can do one or the other. To keep the cash flowing, simply squeeze everyone and everything you’ve got. The same goes for strategy. Just tell everyone to buzz off — you’re busy envisioning the future. The challenge of leadership is balancing today’s needs with tomorrow’s opportunities.

Tomorrow’s opportunities need to be balanced with today’s needs. There’s no formula here, and notice where he says that opportunity lies: in the future. Many use the word “enough” to describe this relationship favoring the present over the future, but “balance” is more appropriate as it doesn’t favor either the present or the future. It’s situational as it should be, and overly favoring the present sacrifices opportunity. Who can afford that? Finally, it’s the essence of good leadership. Here’s the article: “While Coporate Europe Fiddles…“

It finally happened.  It was only a matter of time before the day of reckoning would strike.  Leading up to the crisis, you’d never have known there were clouds forming in the real-estate and credit markets.  Since the stock market crash in 2000, there have been a minority of industry professionals writing about the building crisis.  My favorite has been Doug Noland at the http://prudentbear.com/ .  He has some great presentations on their web site with data to support his case.   It’s unsurprising how when professionals use metrics, they seem to be ahead of the crowd and more confident in their views.  But that’s a topic for another article.

It’s funny how people behave.  Conventional wisdom is that real-estate never falls in value, but for anyone who bothered to look at the historical record knew it wasn’t true.  I knew firsthand how false it was in 1990 when I suffered the first consequences of a real-estate bust, as with many others who suffered through the same fall.

For some reason the pain of the 1990 bust wasn’t enough to make most people careful.  It astonishes me how reckless people were in this up cycle when the end of the last down cycle was less than five years old as this one began to accelerate.  A friend of mine would often say that pain has a short memory.  I guess it’s true, and it probably serves survival.  I recall my wife saying after she delivered our first child, “I’m never going to do this again,” with tears in her eyes as she said it.   We didn’t even leave the hospital, and she was talking about having another child already.  Talk about pain having a short memory – sheesh!

I can understand a woman deciding on enduring the pain of pregnancy and child birth because it’s the only way to bring a child into the world.   When it comes to investing or other life decisions, what is it that causes man to throw caution to the wind?   It wasn’t just individuals acting on their own behalf that were caught up in the frenzy.  The nation’s biggest homebuilders and the Wall Street financiers were also over committed to risk.  You would think that the Wall Street professionals would have the savvy and the knowledge to understand that the game always ends and it ends worse for the guys who aren’t concerned with risk, but most act as if the party will last forever.

In reading a Washington Post article on the market implosion titled, “Analysts Late to the Alarm,”   I noticed parallels to behaviors in corporations delivering software products to market.   It seems as though some insiders saw what was developing in the credit markets and acted smartly and sold their investments of subprime mortgages.  While others, such as stock analyst Richard X. Bove, knew the credit crisis “was impossible to miss. He did not start downgrading shares of banks and Wall Street brokerages to ‘sell’ until July when some already began to fall … Asked why he did not downgrade them sooner, Bove spoke of the pressure to always be right, the difficulty of going against the tide and the need to hang on to clients, which include mutual funds and other money managers.”   It’s startling that you hold on to clients by giving them improvident advice.

Don’t those reasons sound awfully familiar to the dynamics pressuring software teams delivering software products to market?  Often the committed release date is impossibly aggressive, yet the leaders agree to deliver the requirements on the committed date while quietly keeping to themselves their belief that it is impossible.   Expressing any doubt or concern labels you a pessimist, uncooperative, and not a team player.  It seems the rules that we grew up with like following is no excuse for doing wrong, no longer apply.

Or how about when the defect arrival rates continue to be incredibly high while the closure rates aren’t keeping up and the release date is nearing, the leaders of the team report on their regular status meeting that all is fine:  green.  Isn’t it strange how suddenly many critical defects are irreproducible and the rest are reassigned to deferred?  When this happens, I’m reminded of the line in a Few Good Men when Jack Nicholson is on the stand and he bitterly exclaims, “You want the truth?   You can’t handle the truth.” as he proceeds to confess his guilt.  It seems many software projects and apparently other professions live in a constant state of delusion and denial.

Surprisingly, as a leader, it takes courage to recognize the obvious and act appropriately on it.  It’s a paradox of human nature:  doing wrong is easier than doing right.  For some reason unproductive attitudes and behaviors hold eminence in many corporate settings making it challenging to do the right thing.  To me this behavior is a failure of leadership.  It’s about having the wrong leaders with the wrong values, the wrong goals, and the wrong skills.   When the storm finally arrives rarely is leadership identified as the root cause.   Instead of replacing the ineffective leaders, the executive leadership will often embark on an ill fated process initiative to correct the organization’s failings.  However, process can never correct flawed leadership. Flawed leadership only supports process in words rather than deeds, and consequently, nothing important ever changes.