tMichaelB is the web site for Tom Bengtson, who writes about business, religion, family and politics.

Thursday, December 29, 2005

Bird By Bird is a book about life as much as it is about writing

One of the nicest things I did in 2005 was read a book by Anne Lamott called “Bird By Bird: Some Instructions on Writing and Life.” This is a book about writing but I would encourage anyone to read it because it is filled with wisdom applicable to everyone, regardless of their vocation.

Lamott offers a lot of very good advice for writing, such as “good dialogue encompasses both what is said and what is not said,” and “plot grows out of character… Characters should not serve as pawns for some plot you’ve dreamed up,” and “Novels ought to have hope…there’s no point in writing hopeless novels. We all know we’re going to die; what’s important is the kind of men and women we are in the face of this.”

Her advice gives us writers a lot to think about. She emphasizes the importance of the process of writing. She notes that so many people like the idea of getting published and don’t think much of actually writing. Most people like the idea of having written more than the idea of writing. But the fact is, a person doesn’t have a lot of control over whether they get published, only over whether they write. Lamott notes that getting published brings only a small measure of satisfaction that wears off relatively quickly, while writing brings a great sense of satisfaction that cannot be taken away from you.

But even more enjoyable than Lamott’s advice about writing are her observations that apply to life in general. Consider these little gems:

“My deepest belief is that to live as if we’re dying can set us free. Dying people teach you to pay attention and to forgive and not to sweat the small things.”

“To be a great writer [and I would say, a great person], you not only have to write a great deal but you have to care… A writer always tries to be a part of the solution, to understand a little about life and to pass this on.”

“If you don’t believe what you are saying, there is no point in saying it.”

“To be engrossed by something outside ourselves is a powerful antidote for the rational mind, the mind that so frequently has its head up its own ass –- seeing things in such a narrow and darkly narcissistic way that it presents a colo-rectal theology, offering hope to no one.”

Lamott quotes Annie Dillard, another great writing instructor with something to say about life: “Day by day you have to give the work before you all the best stuff you have, not saving up for later projects. If you give freely, there will always be more.” That’s a philosophy that requires a certain amount of faith. Lamott takes the idea further and says: “You are going to have to give and give and give, or there’s no reason for you to be writing…There is no cosmic importance to your getting something published but there is in learning to be a giver.”

Real love is something you give without expecting anything back, and that is why writing is a good metaphor for love. Writing does require you to give and give, and it is rare that you get much back for it. People who write for years don’t do it because they get something for it, but because they are happy to give something to it. That’s a lot like love.

In paperback, Lamott’s book is 227 pages; it’s an easy read, partly because she writes with a sense of humor that I haven’t found in a lot of other serious books. I consider Bird By Bird to be a real treasure and I will keep a copy close to me and re-read it every now and then for affirmation about my love for writing and my love for life.

Monday, December 26, 2005

Merry Christmas

Now that December 25th has passed, I finally have a little time to think about Christmas. The Incarnation is such a great blessing, God made man, in the flesh. It brings a sort of sanctity to materialism –- not in the sense of what we see at the shopping malls in the weeks leading up to Christmas, but in the sense of our earthly life, the here and now, that those people and things around us are important…really, really important.

We got a DVD player in our house recently and I discovered that movies for home viewing often include “additional material” –- things like deleted scenes and an interview with the director. Wouldn’t it be cool if it worked this way for writers? If I should ever publish another book, I will be certain to include in the back all the material that I initially decided to cut out.

But wouldn’t it be even cooler if it worked this way in life? I would love to be able to delete some scenes from my life, or include extra scenes, or add an interview to explain what I was trying to do. If we were making a DVD about the Bengtson family in 2005, it might include these scenes:

* The entire Bengtson clan, all 29 of us, meeting in the Wisconsin Dells for a family reunion in July
* A Kjos family reunion, featuring barbecue in our back yard
* Paula, our 10-year-old fifth-grader, playing in her first piano recital
* John, our 9-year-old third-grader, playing in two guitar recitals
* Catherine, our 6-year-old first-grader, learning to ride a bike without training wheels
* Michael, our 3-year-old, entering pre-school
* Susan, the gracious matriarch, helping too many people to count
* And Tom, learning for a week at Georgetown University on a fellowship for business reporters.

Deleted scenes: I would edit out frustrations at work related to our facilities; Hurricane Katrina which permanently damaged New Orleans, one of my favorite cities; and the Gopher football season, featuring a team that at times showed so much promise but ultimately lost too many games to earn even an end-of-season ranking. (Good luck at the Music City Bowl, Dec. 30!)

Bonus interview: I would explain how much I love my wife and kids, how much I value friendship and family, how grateful I am to my colleagues at work, and how much hope I have for all of us living in the early 21st Century despite debilitating distractions and damning temptations.

Christmas Day was a great blessing at our home, and if anyone had filmed it, they would have seen a gift exchange that delighted the children and adults alike, sledding in the afternoon, and our first-ever fancy family dinner in the dining room. Christmas Mass the evening before grounded us in the meaning of the day, which we celebrate only because God gave us something to celebrate.

We wish you a blessed season during the remaining 12 Days of Christmas, and a bountiful new year.

Monday, December 12, 2005

Growing Up (a short story)

On the second day of January, two weeks before Paula was to turn seven years old, I told her there was no Santa Claus.

“Is there a Santa Claus?” she asked me as she lay in bed during our normal bedtime routine.

“Oh, yes,” I said.

“But is Santa Claus real?” she persisted.

“Saint Nicholas was a real person and Santa Claus is another name for Saint Nicholas. Santa means saint and Claus is short for Nicholas,” I explained.

A few minutes of silence passed. Then she asked again: “Is Santa Claus real?”

“Santa Claus is the spirit of Christmas and that is very real,” I said. “But as you know Christmas isn’t really about Santa Claus, it’s about the birth of Jesus.”

Paula sat up and began to cry. I hate it when she does that. Her crying will wake Catherine, asleep in a crib in a room only a few feet away. It will disrupt John, in another room where Susan is trying to get him to go to sleep.

“Paula,” I asked. “Why are you crying?”

“Because you won’t tell me the truth about Santa Claus,” she said.

“I’m telling you the truth,” I protested. “Santa Claus is the spirit of Christmas.”

She continued to cry. I couldn’t tell her there’s no Santa Claus. It would be like taking away a little of her childhood. I love the innocence of my little girl. How could I bear to see any of that disappear?

When I was a kid, I never asked my parents if Santa Claus was real. Oh, I knew there was no Santa; I didn’t need my parents to confirm it, although maybe I didn’t know as early as first grade. When I did figure it out, I did what anyone in my family would have done -– I didn’t talk about it.

That blasted Natasha! She’s the first-grade schoolmate who told all the kids in Paula’s class that Santa’s a fake. Paula came home and told us all about it the day it happened. In damage control mode, we told Paula some kids don’t believe, but we knew Santa was real. Susan called Natasha’s mom to inform her of her daughter’s destructive truthfulness.

“Paula, please stop crying,” I pleaded.

“No, not until you tell me the truth,” she said.

“Okay, Paula, you are right. There is no Santa Claus.”

Long, silent pause. I can’t believe I just said it. (Paula blackmailed it out of me.) Paula can’t believe what she just heard.

“Really?” she responded timidly, a smile creeping across her face. She stopped crying and lay back down in bed.

“We put those presents under the tree,” I said.

“And you put the candy in the stockings?” Paula clarified.


“And you eat the cookies and drink the milk we leave out for Santa Claus?”

“I do.”

“I thought I saw cookie crumbs on your lip on Christmas!” she said. “Hey, did you give yourself a present last Christmas and say it was from Santa?”


There was a long silence. Paula continued to wear a smile.

“Daddy,” she said.

“Yes, Paula.”

“Is the Easter Bunny real?” she asked.

“No, the East Bunny’s not real,” I conceded, the truth unraveling out of my control.

“How about Saint Nicholas?” she asked.

“There was a real Saint Nicholas,” I said.

“Yes, but one who puts the candy in my shoes?” she persisted.

“We do that, mom and me,” I said.

There was another long, silent pause. The interrogation apparently was over.

“Now Paula, you listen to me,” I said, grabbing her chin to turn her face toward mine. “You are not to tell anyone what I just told you. You cannot tell John. You cannot tell Catherine. You cannot tell anyone at school.”

“How about my teacher?” she wanted to know.

“No, don’t talk to her about this,” I said.

“Dad, are you going to tell mom about this?” Paula asked.

“Yes. But Paula, it is very important that you keep this to yourself,” I said. “You can’t spoil it for the kids who believe.”

“I won’t tell anyone, Daddy,” Paula assured.

She didn’t say anything else. Within a few minutes she fell asleep. She looked a lot older to me than she had 15 minutes ago. I told my wife and she sighed.

“She’s growing up,” Susan observed.

Monday, November 07, 2005

Take the time to write your story

I like reading books about other people; it is not so important to me whether they are famous, just that they have a story to tell. And everybody does.

For a long time, I have been encouraging people to write their stories down. Everyone who has any inclination to write should take the time to consider their own life and write about it. The reaction I typically get when I suggest that someone record their life’s story is that their life is uninteresting. They say things like, “Who would want to read about my life?”

This question misses the point. It is true that when we read an autobiography or a memoir that we learn something about the person who wrote the book, and there is value in that. But the real reason to read such a book is for the reader to learn something about himself. If there is something in the book that the reader can identify with, can relate to, then the reader will learn something about himself. This is why books by ordinary people are so important. Books written by rock stars, actors, politicians or big time CEOs offer little that is relative to my life. A book written by an ordinary person, who has common struggles with a spouse and a boss and his kids – now that’s a book I will be able to relate to.

There are at least three very important audiences that can benefit from a story written by an ordinary person. The first audience is your immediate family and friends. Your closest circle of acquaintances will be interested in your story and they will read your work. Most will probably be grateful to learn a little more about you.

Several years ago, I had an opportunity to listen to a speech delivered by an astronaut, Jerry Linenger. He had spent five months aboard a Soviet space station. He nearly died several times. There were fires on board, and the oxygen went bad, and he had several very difficult experiences. He said he thought he was going to die at least a half dozen times. In the middle of his first emergency, he thought about his wife and children on earth, and lamented the fact that he had never shared with them his dreams for their future. He promised himself that if he ever made it back to earth, he would write down his hopes and dreams for his children and family. And he would attempt to articulate his deep love for his wife and children. He did return to earth and he did write those things down. They were compiled into a book, called “Off The Planet.”

It shouldn’t take a life-threatening incident for us to realize the importance of recording our thoughts about our love for family. Wouldn’t it be sad if you died and your kids actually weren’t quite sure what you thought of them? So I say, don’t risk that. Write down what your kids mean to you so there is never any question, even after you are gone.

The second important audience for your story is future historians. At some point in the future, people will look back to life in the early 21st century and they are going to try to figure out what life was like then. How will they do that? Typically, they will go to the newspapers and magazines of the time. But do you think that will give them an accurate portrayal of life today? I know when I read the newspapers, I generally think there is nothing in them that has anything to do with my life. Stories about terrorists and criminals and popular trends that seems strange to me, don’t say anything about the life I’m living. If historians are going to get a glimpse of life as I know it, I am going to have to tell them what it was like. I cannot leave that task up to the media.

My daughter loves to read the “Little House of the Prairie” books by Laura Ingalls Wilder. Those are good books because they are written from the perspective of an ordinary person dealing with the ordinary struggles of her day – getting food, settling in a home, Pa earning a living, going to school, dealing with illness. These are universal, timeless struggles that are common to nearly all people. It was interesting when Ingalls Wilder wrote about it and it will be interesting if you write about it.

But who cares what historians think? Why is that important?

Historians don’t just look at the past for fun. The reason you look into the past is so you can see into the future. Someone once said that the farther you can see into the past, the farther you can see into the future. I believe that is exactly correct. The more we can understand about our past, the more we will be able to understand the things that are yet to come. And as a corollary, I would postulate that the more accurately we can see into the past, the more accurately we can see into the future. And if historians are going to get an accurate picture about life in the early 21st century, then you need to write your story.

The final audience that really needs to read the story of your life is you. Yes, you need to read your own story. You may think you know your story, but I guarantee you will know yourself even better if you take the time to think about your life, define your story, and write it down.

You might ask, “How do I start? Writing a book seems like a big challenge; where do I begin?”

When I wrote “Emerging Son,” I started by journaling. I didn’t worry so much about what I was writing, I just wrote. I bought a notebook at a drugstore and every day I would write a page or two. I ended up filling three notebooks. I would think back to my childhood and write down everything I could remember. I described the neighborhood I grew up in, I wrote about the friends I had back then, and I wrote about our life in our little house in South Minneapolis. I didn’t worry about whether I wrote the stories in chronological order, or whether I spelled everyone’s name correctly. I just wanted to get a rough sketch of my various memories written down.

Then I wrote down the things I remembered from being a teenager, and the things I remembered from being in college. I wrote with the idea that nobody was ever going to see my notebook, so I just wrote whatever came to mind, without worrying about whether I was being mean or uncharitable. As I wrote about the more recent years in my life, there seemed to be more to write down. Perhaps that was simply because it was easier to remember. After about a year, I had a lot of information, more than I’d ever be able to use. It was jumbled and sloppy, but it was a starting point.

Then I started another journaling exercise. Instead of writing about the things I did, I wrote about the things I thought. For example, I would consider my relationship with various family members and friends, and write about them. I asked myself questions, such as “How do I distinguish good from evil?” “What do I think will happen to me after I die?” and “What does God mean in my life?”

These questions are important because I believe that intuitively everyone deals with these questions at some point in their life. Some people deal with them by choosing not to answer. But these questions are inescapable and I think any meaningful story about a person’s life needs to touch on these areas to some extent. If I read a whole autobiography and the author never once mentions God or anything spiritual or something to do with his mortality, then I consider the book to be rather shallow. I am not looking for a sermon, but I do want to know how the person dealt with these questions, the same way I want to know how they dealt with love, disappointment, sorrow and all the other things that are common to the human experience.

Once all this is written down, then it is a matter of going back and reading the material and seeing what is there. At this point, you are looking for trends. You are looking to find a common thread through these journal entries.

At this point, the writer has the advantage of hindsight. There are a lot of things a person can see looking back that were not obvious at the time. By looking back on history, by looking back at seemingly unrelated anecdotes, you may find the real story. You may find that incidents are related in powerful ways – ways that could only be apparent from the perspective of several years later.

Let me offer an example of what I mean. In the early 1930s, a young British politician came to New York to deliver a speech. In the evening, he was getting out of a taxicab. He got out on the street side instead of the sidewalk side. As he stepped out of the cab, another car came barreling along and knocked him over, taking the door off the cab. The politician was hospitalized and very seriously injured.

Months later, the president of the United States was riding in an open car during a parade in Miami. At one point during the parade, a woman in the crowd raised her arm. She was holding a handgun. She shot at the president from point blank range, but just as she was pulling the trigger, someone else in the crowd bumped her hand and her aim was disrupted. She missed the president and hit instead another passenger in the car.

These two incidents seem entirely unrelated, until you know that the British politician was Winston Churchill and the U.S. President was Franklin Roosevelt, two men who would form a unique friendship and lead the Western World through the Second World War. What would have happened if that car had killed Churchill in New York? How would the world be different today if the assassin had succeeded in Miami? These are big questions to ponder, but we only know to ponder them by looking back at history.

In your own life, certain incidents may take on entire new meaning when you look back on them and pair them up with other incidents in your life.

Ultimately, what you want to do is look at the different things in your life and order them in a story format, with a beginning, middle and end. There should be a certain build-up to a crucial question that gets resolved near the end of the story. A book is not just a collection of unrelated anecdotes. There should be an overall story. There should be a narrative that walks a reader through the story of your life.

Writers often talk about “finding the narrative.” That means defining the story. This can be the most difficult part of the whole project. But if you have written down stories from your memory and your answers to life’s common questions, you will have the building blocks of your story. It is now a matter of you building the story. How do you see the blocks coming together?

I wrote “Emerging Son” at age 40, and sometimes people ask me about writing a memoir at mid life. What does a 40-year-old know? That’s a fair question, and I am not claiming any special knowledge, especially at a relatively young age. But I do think mid-life work is very important, especially for the writer. At 40, I am still young enough so that if I look at my story and decide I don’t like it, I can still change it. I am still young enough that I will likely have some time to change my story to what I want it to be.

I think of that movie, “About Schmidt,” in which Jack Nicholson plays a retired insurance man who tries to patch up some troubled spots in his life. He waits until his retirement, until after his wife dies, to try to make things better. What he discovers is that it is too late. So it is important for us to consider our stories, to look at our life, at a point in time when we still have the opportunity to make some changes if we need to.

Taking time to examine your own story to the point where you are willing to make changes in your life, requires a certain amount of humility. Humility is accepting the fact that you don’t know everything; you admit you are not perfect, and you attempt to make improvements in your life. I think it is very interesting that in Jim Collins’ book, “Good to Great,” he talks about the importance of humility. Collins looks at companies that perform exceptionally over a long period of time. He looks at those companies and compares them to everyone else and tries to identify the keys to their success.

When Collins looked at the CEO of the really successful companies, he found several things. One of the things he found was that those CEOs, universally, were humble. They were not big-ego blowhards. He says they “display a compelling modesty, are self-effacing and understated. In contrast, two-thirds of the comparison companies had leaders with gargantuan personal egos that contributed to the demise or continued mediocrity of the company.”

Humility is a characteristic anyone can cultivate within themselves. Sure, some people are born with it more than others, but I believe most people can develop a strong sense of humility. It starts with self-awareness.

Self-awareness is at the heart of something called “emotional intelligence.” This is a concept that has found a lot of favor in the business community in the last decade. It is basically a way of measuring a person’s ability to relate to others. Great leaders generally have very high emotional intelligence. The good news is, emotional intelligence – unlike an intelligence quotient -- can be improved with study and practice.

Leadership and good business management is a matter of connecting with people. In order to connect with others, you have to first be able to connect with yourself.

Writing down your story is a way to define your life, articulate the things in your life that are important to you, and highlight the path that your life is taking. Others will benefit from your willingness to share your story. And you will benefit enormously from seriously considering your own story.

Friday, November 04, 2005

General offers insight into terrorist situation, leadership and more

Retired General Barry R. McCaffrey was in Minneapolis Oct. 28 speaking to a business group. McCaffrey was Commander-in-Chief of the U.S. Armed Forces Southern Command coordinating national security operations in Latin America. During a military career, he served overseas for 13 years and completed four combat tours. He commanded the 24th Infantry Division during Operation Desert Storm. At retirement, he was the most highly decorated four-star general in the U.S. Army.

From 1996 to 2001, McCaffrey served as Director of White House Office of National Drug Control Policy. Today, he is an adjunct professor at the U.S. Military Academy in West Point, N.Y., and is president of his own consulting firm.

I had an opportunity to interview him. Following is a transcript.

Is the United States doing a good job reducing the chances of suffering another terrorist attack?

It seems to me that we were grossly ill prepared to defend ourselves prior to 9-11. We had a decade of increasing violence against our armed forces and embassies. Yet we took no definitive action. We viewed it as a law enforcement challenge; so we would investigate, gather evidence and go to a grand jury when, in fact, we were dealing with international terrorism. We didn’t respond to it. So we ended up with 3,000 people murdered.

We are immeasurably better prepared today to defend ourselves then we were prior to 9-11. We have started to organize our borders and our ports of entry. We have a much more robust counter-intelligence program. We have taken into account the threat to our critical infrastructure. We have gained new allies in the law enforcement intelligence communities abroad. We have arrested thousands of suspects overseas and domestically. Many of them have talked, so we have a much clearer picture of who these people are. And, finally, I think the fairly robust muscular response to the initial attack on 9-11 made an impression on the seven states the State Department has accused of supporting terrorism: Afghanistan, Cuba, Syria, Libya, North Korea, Iran, and Iraq. And I think they are well aware that if their fingerprints are on an operation that results in a dramatic blow to the American people, the repercussions will be direct. And so I think many of them have backed off and that they are certainly trying to act in a much more distant fashion from these threats to the American people. So I think in a macro sense, that’s were we are.

However, we are still at huge peril. There are attacks against us on a constant basis…us and our allies. Many of them have been successful. Although we have made some dramatic changes and progress in the aviation system and in our efforts to protect our nuclear power plants, we still have almost done nothing to confront some of our vulnerabilities, such as ferries, subways, train systems, and many of our bridges and tunnels. We still have to rethink some fundamental political issues. For example, we don’t have an immigration policy right now. We never had one. Until we face up to that, I think we’re to some extent involved in a charade in terms of preventing terrorists and their weapons from entering the country.

What about in the Midwest, are we safe here? We kind of think that the rest of the world doesn’t know where the Midwest is.

It’s hard is come to a beautiful city like Minneapolis and not understand that it’s also a crucial part of the economic and political fabric of the United States. So yeah, sure, the Midwest must be a target. I think we should argue that there should be priorities. The places that are most at risk are New York and Washington D.C., period. They are going to be the target of attacks multiple times in the coming twenty years -- hopefully not successful. So the extraordinary security situation that might be appropriate for the financial district on Wall Street would be inappropriate for a bank in the Midwest.
I don’t think this is target number one but I also don’t think there should be any room for complacency.

You were responsible for our efforts to protect against drug abuse. In the Midwest, in a lot the rural areas we have a big problem with meth, people manufacturing it, and so forth. Can you comment on that? What is the extent of the problem? Are there things regular folks should be doing to try to mitigate this problem?

Drug use in America peaked in 1979; it was about 14 percent of the population. Now it’s well under 7 percent. Casual cocaine use in America has gone down dramatically. Drunk driving deaths are down dramatically. Teen pregnancies, crime in America, everything that is clustered around substance abuse is immeasurably better today then in 1979. So the first thing a lot of folks will say is, we fought a war against drugs and we lost and why don’t we try something new. I don’t think it’s a war. I think it’s a cancer threatening American communities. But we clearly have changed the nature of the problem dramatically.

Of the new chemically manufactured psychoactive substances, absolutely the worst we have seen is meth. It is a blowtorch that destroys human flesh, brain function, causes enormous psychoses and turns you into a threat to your own children and to law enforcement officers. And it can happen pretty quickly. If you are a single mom, working two jobs, and taking care of three children, and you start taking meth because you like the feeling of confidence and energy it gives you, watch out. If you start off using it because you thought it would help you lose weight, and come back a year later, it is very likely you will encounter someone who is emaciated, has rotted teeth, has huge open soars on their arms and legs, has permanent irreversible organic damage to brain function and is completely psychotic.

In terms of actual addiction rate, it’s still less prevalent, by far, than other substance abuse problems. Probably just under a million Americans abuse heroin. There are probably 6 or 7 million people in the country who could be considered chronic drug abusers. A growing number are involved in meth and it’s all over the country now. It is no longer just a West Coast phenomenon or a biker gang drug.

What can ordinary people do to help? Anything?

Absolutely! I tell people if you want to fight a war on drugs, sit down at your own kitchen table and talk to your own children. There is an education function to it. We gotta make sure our children know about new drug threats as they come up. There was a widespread belief that ecstasy was harmless. Now we are reasonably confident that a significant dosage of ecstasy over time will end up causing damage to brain function. So we’ve got to educate our kids. We’ve got to tell them what meth is. We’ve got to explain to them its impact on their bodies. We have to make sure the people passing that message are the business community, the educators, coaches, and pediatricians. I think that is the most important function.

And then I think the other thing is we gotta make sure we back aggressive law enforcement action against those making meth. Half the meth made in the United States is in illegal operations all over the Midwest, all over California. We have taken a lot of measures to try to restrict the easy availability of mass quantities of the drugs that are used to manufacture it. The main thing the business community can do is to stand up behind law enforcement and make sure there’s an active drug education program in the school system. That isn’t to say we want to unload it just on the teachers. It has to be a message that is consistent from all of us.

You obviously worked around leaders; you were a leader yourself. You have seen good leaders, and bad leaders. What leadership tactics have you observed in the military that would translate into the business world?

Leadership is everything or nearly everything. It is more important than the technology you have; it’s more important than the competitive advantage that you think you have. And leadership and management go together but they are not the same thing. One of the great companies I worked with is Sikorsky Helicopters. They have a beautiful factory in Stamford, Connecticut. It’s a mile and half long production of these beautiful Blackhawk helicopters. The CEO there told me he has 6,000 employees. He said, “Look, I tell my people, if you had an option of either keeping this incredibly sophisticated, billion dollar factory and losing the workforce, or keeping the workforce and losing the entire factory -- under which of those two options would you be soonest back producing helicopters? And the answer is, a year later you would be producing Blackhawk helicopters again with those 6,000 employees. It would not be a problem. If you lost the employees and had the factory, it would be 15 years before you had another Blackhawk flying. So these are team skills. These are people skills, experience skills.

There are three aspects of leadership. One is obvious and gets talked about way too much and that’s authority. So if you are the CEO and you have 80 employees, you have hiring and firing authority, you can set compensation levels, you can send people to schooling as a reward, you can draw attention to their good work. That’s a pretty powerful tool. But it is the least important, bar none, of the levers you have on human behavior.

The second area, and one I think is important for all of us to remind ourselves in crisis situations, we know that people follow a leader’s directions because they are perceived as experts at what they do. Employees watch and they say the manager’s judgment is exquisite; if we do what he told us to do, it’s going to come out good for all of us. Then they are likely to follow your instructions. Expert power is something you can work at. You can become more credentialed, you can study, you can demonstrate to your team that you really know what you are talking about.

The final one doesn’t get talked about enough at all and that’s referent power. To what extent do I look at you, my CEO, my branch manager, and do I want to be more like you? Do I admire your character and trust you?

These are all values-based. They have nothing to do whether you can up my pay or give me a Christmas bonus. It has everything to do with character. And so if I look at you and I’m 22 and just came out of the University of Minnesota, and after about a year of watching the CEO, this woman is a servant of her employees, is a person of absolute integrity and her personal behavior matches what we have on the vision statement of the company, then my loyalty in not only to the leader but to the institution because I am glad to be part of that team.

You have been involved with the military both at a time when people were drafted and at a time when it was entirely volunteer. I am interested in your observations on the difference between the two scenarios.

I graduated from West Point in 1964. We had the draft. It was a peacetime army. And then suddenly, bang, we were in seven years of war. And so, I served in an Army that was largely 18-year-old boys who had been drafted. And I commanded a company in Vietnam in the First Calvary Division during some very intense fighting. Essentially, it was 100 percent draftees. The First Sergeant and I were the only ones in the company who were regular Army. Both of us were on our third combat tours, both wounded three times. The rest of them were 19-year-old draftees.

But if you didn’t volunteer, if you didn’t go to Canada, you ended up with what you feared most. You were in the Amy, in the infantry, and in Vietnam. And it was 100 percent draftees. They were terrific soldiers! They were just terrific!! They had a sense of dedication; they particularly didn’t believe in the war, their dad told them that they had to do the right thing. They came in and served with great skill and they served for two years.

But now you go forward to this era and our soldiers and servicemen in general come in, they will enlist for four years for college money. They are high school graduates. They have no arrest record. They see skill development. They see huge enlistment bonuses. They see Veterans’ benefits coming out the other end. They are patriotic, and huge numbers of them stay with us. So the competence, the maturity, of the Army today is unbelievably better than any time in our history. That’s not a comment on the draftees; it’s a comment on a different era. The army is better off in a volunteer status. More stability, longer service, and we will never go back to the draft. It’s just not going to happen.

Monday, October 31, 2005

Community banks are distinct from the attention-grabbing big guys

When I tell people I am a journalist who covers the banking industry, often they respond with a story about bad service they received at one of the big banks in town. Or they may ask me if I know a friend who works at Wells Fargo or U.S. Bank. (Usually I don’t.)

I cover a part of the industry that few people –- especially residents of large cities -- think much about. I cover community banking. I understand why people typically think of the big banks; they dominate the industry. Banking is an industry in which there are a few big players and everyone else. I cover the banks in that “everyone else” category.

You may think that every bank is huge, but in fact, only three banks have more than $1 trillion in assets: Citicorp, Morgan Chase and Bank of America. There are about 500 banks, or about 7 percent of the industry, that have $1 billion or more in assets. Those banks, however, control 86 percent of all the assets of the industry. There are 7,549 banks in the country, which means about 7,000 banks have less than $1 billion in assets. And 3,996 of those banks have assets of less than $100 million. That’s more than half of the banks in the industry, and they control just 1.9 percent of all the industry’s assets.

In Minnesota, when you mention banking people think of Wells Fargo, U.S. Bank and TCF Bank. Funny thing is, only TCF is actually based in Minnesota. Wells Fargo is based in San Francisco and the U.S. Bank charter is in Cincinnati. Minnesota has 449 banks, with 305 of them having less than $100 million in assets.

What does a $100 million bank look like? Typically, it would have about 30 employees and perhaps two or three offices. It would have a board of directors, meeting monthly, with outside board members earning compensation of about $500 per meeting. The owners of the bank likely would have about $8 million invested in the business and if the bank performs about average for banks of that size, they would earn about $1.2 million in a good year to divide among them. The president of the bank would make an annual salary of about $125,000, plus a bonus if the bank performs particularly well.

But the best stories I write about the banking industry usually don’t have a lot to do with the numbers; they are focused mostly on the people. In 20 years of covering community banking, I have had the opportunity to write about people who have done extraordinary things for their communities and neighbors. There are bankers who take big risks lending to start-up businesses, and others who work evenings and weekends to attract new businesses to town. I have written about bankers who have renovated and restored historic buildings, bankers who have funded theaters and special schools, bankers who have hosted visitors from all over the world including third world countries and Russia. I have written about bankers who have devoted a lot of energy to educational efforts designed to combat financial illiteracy. And I have written about bankers who have donated millions of dollars to students, hospitals, community projects, art organizations and many other endeavors.

Oh, I’ve also written about crooks who have ended up in jail or about ventures that failed or never worked out as intended. But my point is, there are thousands of interesting stories in the community sector of the banking industry which go almost completely ignored by the big time media.

Thursday, October 27, 2005

Ethicist offers life principles for doing the right thing

One of the latest fads for newspapers and other organizations seems to be to hire an “ethicist.” The New York Times has an ethicist who writes a column in its Sunday magazine. The Minneapolis Star Tribune just added an ethicist to its business section. CNN has a news analyst, Bruce Weinstein, who calls himself “The Ethics Guy.” These guys have a tough job; usually they comment on situations without treading into any moral judgments but I am not sure that you can ever really separate morals from ethics.

I had an opportunity to hear Weinstein address a business group recently and he offered five “life principles,” as he called them, “for doing the right thing.”

First, do no harm. He said this applies to everyone, not just physicians. It means things like we don’t let others drive while intoxicated, and that we immunize our children. If we couldn’t trust that people were not out to harm us, we would never leave our homes, Weinstein said.

Second, make things better. It is not enough to simply try to avoid doing harm, we actually need to make a positive impact on our world. If our sole goal were to avoid doing harm, we’d never get out of bed. Making things better is a positive call to action, and motivates us to get out in the world and do things.

Third, respect others. We do this, Weinstein said, by observing three principles: confidentiality, telling the truth and keeping promises. When people share things with us in private, they expect you to keep it to yourself. If they discover that you shared their secret with the neighborhood, they will no longer respect you. Telling the truth is a fundamental obligation, although in some cases it is okay to lie if telling the truth threatens a greater obligation. For example, the obligation to protect life is greater than the obligation to tell the truth, so if you were hiding Jews in your house during World War II and the Gestapo knocked on your door inquiring about who was in your home, you could lie to protect the innocent. And keeping promises is essential to maintaining relationships. The bigger the relationship, the more important it is to keep the promise. Marriages break up when spouses break promises they make to one another on their wedding day.

Fourth, be fair. Many of us try on this point, but get steered in the wrong direction. Weinstein said, “one size does not fit all.” He said too often we try to treat everyone the same and consider that fair. But, in fact, sameness and fairness are not equal. He gave an example where it was fair for a mother to give a thin child a big piece of cake while giving a fat child only a small piece of cake.

Fifth, be loving. Weinstein offer three simple ways to show your love for others – not just your family members, but your neighbors and co-workers as well. First, smile. “When you smile, others smile back. Smiling is contagious,” he said. “Moods rub off on one another.” Second, take a genuine interest in others. “Ask others questions about them,” Weinstein said. And third, show sincere appreciation. “How often do you take the time to tell those around you that you appreciate them?” Weinstein asked. Note peoples’ contribution to the company or the neighborhood and you will make a big impact on those people.

Friday, October 14, 2005

Old-timer from Central Minnesota shares stories

John Owen Bohmer is an 84-year-old gentleman living in the central Minnesota community of Brooten. He is chairman of the Bonanza Valley State Bank there; he was president of the modest bank from 1954 to 2000.

I had a chance to meet Bohmer last spring when he presented me with a copy of a book he had written to commemorate the bank’s centennial anniversary in 1994. The book is called: “Your Friendly Hometown Banker.”

“I wrote it in 19 days in our motor home in Arizona while it rained outside,” he said. Bohmer is the author of six books, including a book he wrote for the bank’s 60th anniversary.

The book is a collection of 83 short stories or reflections. Bohmer writes about growing up during the Great Depression, about farming in the early 20th century, about being a banker in a small town and about a number of other things that I found interesting. I am an advocate of ordinary people writing down their personal stories for the benefit of peers and future generations. This is what Bohmer has done.

I want to share a few of the gems I discovered in “Your Friendly Hometown Banker.”


For many years, we cooperated with the school in training a senior boy or girl in the bank, and then when the training period was over and after graduation, we would help them find a job in another bank.

The first thing we did to get them acquainted was to introduce them to the staff, show them where they would be working, and what they would be doing, and then sit down and have a talk.

The talk consisted of being polite to customers, about correcting mistakes, about being careful with names, among other things, and about confidentiality.

If there is anything people want confidential more than their personal life, or their church or school problems, it is their financial matters.

I always told the employees that when they leave the bank premises, they must leave their “bank knowledge” behind them. I have a permanent sign in the back bookkeeping room that says: “Warning: When you leave this bank, leave your knowledge here. Failure to do so will result in your immediate dismissal.”

People are inquisitive, and if one of the employees is out for the evening, he or she may be questioned about one of our customers. It may be hard to say “no” in certain cases, so I give them a good excuse. I say: “Just tell them if they want to know the answer, they should ask John Bohmer.” That is the end of that, as nobody has ever asked me.

We hired a brilliant young girl from school, a local girl who started in the fall when school started, and worked faithfully every afternoon for an hour and a half like we required. This went on all during the fall and winter, and sometime during spring a local businessman came to me and said: “How come so and so knows how much money I have in the bank?”

I was taken by surprise, as this had never happened before. After discussing it further, and looking into it, I determined that the leak came from the girl.

That afternoon when the girl came to work, I called her into my office to discuss it with her. She immediately began crying and told me her mother made her tell how much money was in that account.

How low can a mother get? To sabotage her own daughter is unthinkable. I had no choice but to let her go. I’m quite sure that if I could have kept her she would have been an excellent employee after she had learned her lesson.

She was so ashamed of herself that she never again came into the bank, and went out of her way to avoid meeting me on the street. After graduation she left town, and I haven’t seen her since. What a pity.

Counter Checks

Why carry a book of check blanks along with you? Not necessary. Every filling station, and store had a supply of “counter check” laying around which you could use to pay your bills or get some cash.

Counter checks are just a piece of paper printed with the necessary blanks just like regular checks. They were originally intended to be used on the check counter at the bank, and that’s where they got their name. A handy way for you to withdraw a little cash while in the bank if you forgot your checkbook at home.

Because of lax rules, the counter checks spread in popularity to the point that our counter checks were in other business places and in other towns, and we had checks in our bank from other banks in other towns. In fact, we had counter checks on hand from all the surrounding banks.

You can imagine how tempting this situation would be for someone who was broke but had no account anywhere to just write out a check on any bank and get some cash.
As the morals of people have changed of the years, it has become necessary to eliminate the counter check.

Another drawback of the counter check was that the amount of the check probably did not get marked down in the stub of the regular checkbook, and soon there would be an overdraft of their account.

In this day and age, you must use your own check blanks, which have magnetic numbers of your bank, and of your personal account. Unless he gets one of your check blanks, the unscrupulous person cannot write a check on your account.

We had a flamboyant character that usually came to our auction sales years ago. He would buy some things and when it came time to pay for the items, he could say “fill out a counter check for the amount.” When the clerk asked on which bank, he would say “It doesn’t make any difference,” and he would be quite loud about this to be sure his friends would hear.

The clerk had all the local counter checks, so she would fill out a check on some out-of-the-way bank and he would sign it. The check was always good however, and we felt that he was trying to impress his friends to make them think he had lots of money in many banks.

What really happened is that he would drive to that town the next day, go to the bank and leave enough money to cover the check. What a character.

Growing old is not for sissies

Do you remember when you were five years old? There was that kid in first grade who was so much older and smarter than you were. Oh boy.

Then when you were a freshman in high school, how inferior you felt to the juniors and seniors. They hardly wanted to associate with you.

How about asking a girl out for a date that was a senior when you were only a junior? Fat chance!

Then when you get into your working life, you start all over again. You enter an arena where everyone is an expert except you. By this time however, most of your associates try to help you get going. You hope they are doing it so you will take on part of their workload.

Throughout your lifetime there is competition of one form or other. There is competition in sports, competition in business and competition for your favorite girl. There is competition between ages. The older person readily and easily competes with you when you are young, but later in life, you are that older person.

Competition is good for the soul. It keeps you on your toes, and it keeps you healthy in body and in mind. Everybody needs it.

As you grow older you become more confident in yourself, in your own values, and at the same time more tolerant of differences.

Young adulthood and middle age doesn’t leave much time to explore the heart and spirit; we’re too busy making a living, but as confidence grows, competition becomes less important, and it’s in the latter years of life that spiritual development becomes a reality. The older you get the more wisdom you acquire, but it’s hard to share that wisdom with a young man who doesn’t want to listen, but instead chooses to acquire it by experiencing his own hard knocks.

For people who keep an open mind to change and growth throughout their lives, the mature years are unexpectedly rewarding.

You can use every experience you have ever had, everything you have ever done or known, and use it better than you ever have used it before.

You were given two ends: One to sit on and
one to think with. Your future depends on which one you use the most.

Spit & Whittlers

The rate of unemployment in the 1930s during the Great Depression was up around 25 percent. It was no fun to sit around home all day, so [the unemployed] would come downtown and find a bench on Main Street where they could visit with their friends, and where they may be noticed by someone needing some help, where there was a possibility of getting a job.

To pass the time of day, they took up whittling. Everyone had a pocket knife that was kept razor sharp, and it was used to carve something out of wood. Usually it was used just to take a twig and carve off the bark, and then chop it into tiny pieces only to start on another one when that was finished.

When they were whittling, they were also smoking that pipe or chewing tobacco, and naturally they had to spit out the juice every once in a while. Brown juice it was. The aim was for across the sidewalk into the gutter in the street but it didn’t always make it that far. The bulk of it perhaps did, but the overspray colored the sidewalk.

It’s no wonder the merchants didn’t like them sitting in front of their establishment.
My grandfather heard a rumor at one time that our bank was going to be robbed. He immediately went to the lumber yard, had two benches built and put one on either side of the front door of the bank. He then invited the spit and whittlers over to the bank so they could be witnesses in the event the bank robbers did show up.

The robbers never came, or if they did, they probably didn’t like the looks of all those witnesses. In that respect, the spit and whittlers served the community well. We wonder if it was hard to get them to move away once the threat was past.

The Survivors

I did a little research recently and discovered some interesting information about survival and live expectancy of a new business.

For every 100 new businesses established in the United States, only 10 of them remain in business after one year, and only one will be in business at the end of 10 years.

This gives you some idea of how really tough it is to reach the age of 100. Some people say the race is to the swift, the risk-taker; but the ancient Greeks knew that steadiness of purpose over the long term is a surer path to success.

As bankers we’ve learned this lesson. Through the many periods of depression and bank failures over the years -- and there have been quite a few -- it’s the conservative banker that has survived the onslaughts, and the periods of roller-coaster economics that have occurred.

To roll with the punches and do what has to be done while at the same time serving your community in the best way possible is the ultimate goal for survival.

Thursday, October 13, 2005

Expert offers insight into growing local economy

Living in the Twin Cities of Minneapolis and Saint Paul, I don't hear a lot of talk about economic development. We have many large companies here, and a fairly diversified economy. But economic development is important in other parts of the state. Minnesotans are better off if all communities across the state are economically strong, not just the metro area. For many small communities, economic development is a matter of attracting new businesses. And the competition is fierce. Small communities all over the country vie for a small number of major businesses which relocate every year.

I had an opportunity to hear William Fruth address this issue recently. Fruth is president of an economics research firm in Palm City, Fla., called POLICOM, Corp.

Communities that want to attract new businesses need to have developed land to offer. “The most important issue relative to the site selection process is having an actual site,” Fruth said. “Economic development is ultimately a real estate transaction,” said the former mayor of Tiffin, Ohio.

Fruth explained that communities grow when they import more money than they consume. Money comes into communities through primary or contributory businesses, which generate revenue by selling products or services outside the community. In most cases, Fruth said, primary businesses are manufacturers.

Dependent businesses spring up because of those primary businesses, and they ultimately consume the wealthy the primary businesses import into the community.

“Typically, 75 percent of all the jobs in a community are dependent upon the 25 percent of jobs provided by your primary business,” Fruth said. “ Roughly 95 percent of all businesses are there because of the presence of some 5 percent of the businesses that are primary in nature. So improving a local economy is about creating more primary industry jobs which pay a wage higher than the average area wage.” Fruth noted the wages paid by primary businesses set the standard for the rest of the jobs in the community.

Many primary businesses are mobile in the sense that they can operate anywhere in the country, if not the world. When they decide to move, they look at three factors, Fruth said: cost, timing and community attitude.

“Cost relates to the cost of set up, land, building, permitting, moving employees to the area and long-term operating costs such as labor, insurance and utilities,” Fruth explained. “Time refers to how long it takes to get set up in a community. Companies might have five or six months notice that they need to move, so communities that are ready have an advantage.” Communities that have existing buildings have an important advantage, Fruth said.

The actions of local governments reflect community attitude, Fruth explained. A large employer is not going to move to an area that has a history of shifting the cost of government onto the non-voting commercial sector away from the voting residential sector.

Communities that are growing take economic development seriously, Fruth said. “The 25 best local economies have had well-financed, active, economic development organizations for some time,” he said. “They have multiple primary industries, and that did not happen by accident.”

Companies also want access to reliable pools of labor, so communities that have money to spend on training have a significant advantage. Fruth said access to state training money is nice, but if it takes a year or more to get it, those funds won’t be of much use to a company that needs to get up and running in a matter of months.

Other advantages, Fruth noted: access to the interstate highway system, good roads that keep typical commutes to less than 30 minutes, and sophisticated bandwidth and telecommunications.

The presence of a four-year university in eight out of 10 cases is a neutral factor. In one case out of 10 it actually retards economic growth because of the anti-business attitude of faculty and administrators; in one case out of 10, a university declares that part of its mission is to encourage local economic growth and it is successful.

Monday, October 10, 2005

Preparation and focus on people key in crisis management

A month after Hurricane Katrina devastated the Gulf Coast and flooded New Orleans, elected officials, pundits and others continue to second-guess nearly every decision made during the crisis. Mayor C. Ray Nagin, Louisiana Gov. Kathleen Babineaux Blanco, former FEMA Director Michael Brown and President George W. Bush all made decisions which affected the well-being of thousands of people and their property.

Most Americans could only sit and watch the events unfold on television. Many responded with money and other forms of relief. But could we learn something from this event about decision-making –- something that might help them make good decisions in a crisis?

I asked three business professors about the process of decision-making. Can a person learn how to make good decisions? The consensus from these experts is “yes.”

“A key part of leadership is decision-making,” said Pierre Meyer, a consultant living in University Park, Fla. “Strategic thinking always has an element of worst-case analysis. Predicting the worst case prepares an executive team.

“In New Orleans, they knew the worst case but pretended it wouldn’t happen. They did a lot of simulations but said that it may not happen. That was their mistake. [Businesses] have to go forward as if the worst case scenario will happen.”

“The thing is, the worst case scenario projected is never worse enough because you haven’t experienced it,” said Lyle Sussman, a professor at the University of Louisville. “Chaos by definition is unpredictable.”

John Hamilton, a business consultant in St. Paul, Minn., said potential problem analysis is particularly challenging. “This is where people fall asleep at the switch,” he said. “A good analysis will identify pivotal points where something can go wrong. It will ask what is the likelihood of something going wrong, what are the effects if they do go wrong, and how could they be prevented. What is the immediate plan of action if something goes wrong, what triggers the plan, and who is accountable for the response?”

Sussman said that in a crisis, it is important to have a team that is willing to “break the rules” to get the job done. “In many situations, particularly a crisis, the normal rules and bureaucracy will slow you down, and prevent you from solving the problem quick enough,” Sussman said.

He cited an example that Captain Michael Abrashaff wrote about in his popular management book “It’s Your Ship.” Abrashaff turned one of the least efficient ships in the Navy into a top performer.

“He needed to get some stuff for his ship,” recounted Sussman. “The normal procurement channels for the Navy would have taken forever, further demoralizing his crew. So he just used his personal credit card to buy the stuff himself at a local Wal-Mart. It was against policy, but something got done.”

Sussman also said it is important for leaders to get as close to the problem situation as possible. “If the police call you in the middle of the night and tell you the [business] has blown up, go to the site,” he said. “Get as much first-hand knowledge of the situation as possible. If the police call you and tell you [you have] been robbed and people have been shot, get to the police station, or to the hospital right away. Go where the suffering people are.”

Sussman said leaders need to be able to put themselves in the shoes of the victims. Sometimes leaders “have a hard time seeing the world through the eyes of people who will be affected by most problems,” Sussman said. “You need to try to see the world as those in trouble see it.”

Wednesday, September 28, 2005

How to approach retirement in the context of selflessness

Replacing our natural born selfishness with selflessness is perhaps the greatest on-going challenge of growing in a relationship with God. This is why marriage and family are so important: they help most people turn from a self-centered existence to a life focused on others.

The secular culture, of course, does not help us in the quest for selflessness. Most of the culture is about getting as much as you can for yourself; think of yourself first, the culture says, and worry about others later, if at all. The New York Times offered a striking example on the front page of its business section Sept. 24 in a column where the author advised people to save for their own retirement instead of putting away money to finance their kids’ college tuition.

The article got me to thinking about retirement in the context of the battle between selfishness and selflessness. Is it selfish to retire, especially at an age when you likely have many productive years of life remaining?

Retirement is largely a post-World War II phenomenon. Prior to the mid-20th century, when life expectancies were shorter than they are today, most people assumed they would work their entire life. In 1935, President Roosevelt’s Committee on Economic Security determined 65 would be the retirement age when it launched the nation’s Social Security system. The idea came from Germany, which already had a social security system in place based on a retirement age of 65. The Committee selected a retirement criteria based arbitrarily on the calendar, not based on anyone’s ability or capacity to work. This approach was attractive politically because Social Security was seen as a way to raise the rate of employment among young people in the United States during the Great Depression. If older people retire from their jobs, the thinking went, more jobs would open up for younger people.

The employment demographics today are the exact opposite from what they were in the 1930s. The debate over Social Security is in the news because the number of retired persons is going to swell in the coming decades relative to the number of working people.

That is, if they retire at 65. If most people decided to continue to work, the solvency of the Social Security trust fund would not be an issue.

Growing old is not what it once was. Look through the magazine for the American Association of Retired Persons and you will find features on seniors who climb mountains, ride bikes, play tennis, and dozens of other physically demanding activities. This is a magazine that recently declared: Age “60 is the new 30.” That statement is consistent with a survey of the nation’s 65,000 people older than 100 years old. They were asked to reveal the age to which they would like to return, if they could live any year of their life over again. The consensus was 70.

It is easy to think of people who did their greatest work long after most people are considering retirement: Victor Hugo wrote Les Miserables when he was 61; Gutzen Borglum began carving Mount Rushmore when he was in his 60s; Ronald Reagan was president in his 70s; Karol Wojtyla did his best work as Pope during his 70s and 80s; Noah was at least 100 when the flood came and Moses was at least 80 when he led the Israelites out of Egypt.

“What, give up my retirement?!” you are probably asking yourself about now. “Is this guy nuts?!” Maybe, but I think the question of when and whether to retire is a serious one. Is it right for able-bodied people to set aside the last third of their life for leisure?

The reason most people are repulsed by the idea of working long past the traditional retirement age is they don’t like their work. So many people see their work as drudgery. People who are eager to stop working may benefit by seriously reconsidering their line of work now, rather than using an automatic retirement date as a way out of a bad situation. For those of us who like our work, the concept of retirement should be considered in the context of the over-all life goal of living selflessly in an effort to serve God.

Wednesday, September 21, 2005

Community group is focusing on wrong culprit

I can appreciate ACORN’s zeal, but I question its sincerity. Let me explain.

The Association of Community Organizations for Reform Now published a report earlier this month based on 2004 Home Mortgage Disclosure Act data that concludes African-Americans and Latinos pay more for mortgages than whites.

“Wells Fargo has been preying on communities of color and charging us higher rates and fees,” said ACORN’s national president, Maude Hurd, in a Sept. 9 press release. Jordan Ash, an attorney with ACORN, was quoted in a newspaper saying Wells Fargo “is concentrating its high-rate loans on low- to moderate-income neighborhoods and communities of color.”

Banks that make mortgage loans in certain urban areas are required by the Home Mortgage Disclosure Act to file information with the government. In the industry, the law is known by its acronym, “HMDA.” Such data now includes the annual percentage rate charged on each loan. A change in the law became effective earlier this year that requires banks to report this information, and the data has just been made public for the first time. The data, however, do not include information about income or credit history, which are key determinants in most loan pricing decisions.

ACORN’s criticism of Wells Fargo, therefore, is based on a woefully incomplete picture. It is claiming the bank is making loan pricing decisions based on race even though it doesn’t have sufficient information to fairly draw that conclusion. Anyone who looks at this knows ACORN is off base. The thing is, I am sure ACORN knows it too. This is why I question its sincerity.

Race-baiting is an effective publicity strategy. ACORN can almost always get a headline by accusing a big lender of racism. I cover banking as a journalist, but let me clarify that I am not writing this in order to defend the banking industry or Wells Fargo. I am simply pointing out the misappropriation of a lot of energy on the part of a well-known community group.

Now let me explain why I am sad about this. Racism is a real problem in this country. There are educational disparities between people of different races, which lead to income differences and differences in credit availability. ACORN has a lot of resources, energy and grass-roots support to put into real social justice efforts. But it is squandering them.

Does ACORN really think Wells Fargo lenders – or any lenders for that matter – deliberately charge blacks more than whites for the same loan? Do they really think lenders consider skin color when they price a loan? That is not going on in any widespread fashion among regulated lenders. There are very explicit laws against racial bias in lending. Do they really think regulators, who look pretty closely at loan files, are missing this?

No, Wells Fargo is not the problem. The problems are much bigger, and a lot harder to fight, than a mortgage company. The enemies are broken families and an over-burdened educational system. These are the things that keep people from getting jobs that pay good wages so they can buy a home at the best rate. The fact that people of color statistically find themselves so often the victims of broken families and poor schooling is a national scandal.

That is a real problem. Take that on, ACORN, and you will really be doing some good.

Saturday, September 17, 2005

Orchestra brings heaven to earth

Count me among Osmo’s fans. Last night, Susan and I enjoyed a fabulous concert by the Minnesota Orchestra, conducted by Osmo Vanska, the Finish conductor who became the group’s music director two years ago. It was the season-opening concert that included two Beethoven works and Ravel’s Bolero. The orchestra opened the evening by playing the Star Spangled Banner, the first time I’ve ever heard that song played like it was music.

Vanska, tall and distinguished in his formal black tails, conducted the orchestra with wild animation. He punched the air, pointed at musicians, crouched and jumped. He moved in a manner that brought to mind the best of Muhammad Ali and John Travolta. His face strained with emotion, and he dabbed the sweat from his brow after each selection.

An evening at Orchestra Hall in downtown Minneapolis is always a treat, but Vanska has elevated the experience to a new level, at least as far as I am concerned. I remember previous conductors, like Neville Marriner and Leonard Slatkin from my younger days, but they did not move like Vanska.

I am convinced that everyone is born with a natural longing for beauty, and I think orchestral music is about as close to pure beauty as one can find on earth. I admire the musicians, one hundred or so people on stage, executing their specific role with perfection, combining in a complex harmony that fills the concert hall and the soul. As I sat there Friday in my second-row seat, I wanted to be a part of the music. I felt like I could get up and touch one of the musicians – maybe the base player who was directly in front of me. Maybe that connection would somehow integrate me into this heavenly creation. But, of course, I didn’t. My role is to listen and clap at the end of each piece. So on Friday, I stood and clapped, for a long time. I am convinced I need this beautiful music in my life, and I suspect those musicians need appreciative patrons in their lives.

I played the trumpet as a child, advancing from sixth-grade band to a college-level concert band at the University of Minnesota. But I was never a musician. Through a lot of repetition and grunt-work, I learned how to move air through a horn well enough, fingering the individual notes as prescribed. But I was, at best, only a practitioner. I never felt the music in my heart the way real musicians do. I never felt what you need to feel in order to make real music, to win a seat in a major symphony orchestra, to move like Vanska moves.

So when it comes to musical performances, I am in the audience. That’s where I belong. And when you get a chance to hear a top notch orchestra directed by a world class conductor, that’s a good place to be.

Friday, September 16, 2005

Gergen on Leadership

I got an interesting lesson in leadership this summer during a seminar I attended at Georgetown University in Washington, D.C. About 350 people from across the country gathered in the church-like Gaston Hall of the Healy Building at the center of the Georgetown campus in mid-June to listen to David Gergen, an advisor to presidents Nixon, Ford, Reagan and Clinton.

“Leadership is about mobilizing people in the pursuit of joint goals,” he said, commenting that too many organizations are over-managed and under-led. “That means you are going to have to have a relationship with those people… There’s the leader, the followers and the goal. You’ve got to get those three in alignment.”

Gergen, an editor at large for U.S. News & World Report and director of the Center for Public Leadership at the John F. Kennedy School of Government at Harvard University, spoke extemporaneously about the three qualities he said leaders need: ambition, capacity and character.

“All the presidents and great leaders I know share one attribute: they are all ambitious,” Gergen said. “Ambition is important in a leader; you have got to want to leave your mark, leave your imprint. The question, of course, is ambition for what?” The great leaders, he said, start out ambitious for themselves, but as they obtain important positions, they shift that ambition to others. Their ambition is no longer for their own greatness, but for the greatness of those they are leading, Gergen said.

Great leaders have a large capacity for knowledge, Gergen continued. Leaders are genuinely curious and want to learn. Nixon learned by traveling; Clinton was a voracious reader. Drawing on examples from history, Gergen said Winston Churchill and Franklin Roosevelt also were big readers. Gergen quoted Harry Truman, who said: “Not every reader is a leader, but ever leader is a reader.”

Although Presidents Nixon and Clinton were ambitious and had great capacity, they suffered for lack of character. Nixon’s dark side prevented him from achieving the greatness he was capable of; Clinton’s character flaws held him back as well.

“The one president who surprised everyone, including me, with his ability as a leader, who brought these three abilities together in a nice balance was Ronald Reagan,” Gergen said. “He was the best leader we’ve had since Roosevelt… You can disagree with his policies, but his capacity to mobilize others in pursuit of shared goals, you have to say Reagan was a very good leader.

“Reagan was ambitious but not overly ambitious… He was not as bright as Nixon or Clinton, but he was good enough,” Gergen explained. “Reagan was a well-anchored person, who was comfortable with himself. He had his gyroscope. He had a sense of direction about his life, a sense of purpose. He had the character that made him a really great leader.

“To be a leader, you have to know who you are. You have to be ambitious and you have to master your emotional side, master the difficult things. You can’t be a leader of others until you can lead yourself.”

Monday, September 12, 2005

Campaign for Minnesota Governor unofficially underway

Minnesota Republicans met for their annual state convention on Saturday; attendees were addressed by Gov. Tim Pawlenty. I didn’t attend the convention, but I talked to people who did. Pawlenty is already campaigning for the election, which is 14 months away. He undoubtedly will face Mike Hatch, the state’s attorney general. Hatch is an experienced political bulldog, who has had his eye on the governorship as far back as the mid-1980s when he was the state’s Commerce Commissioner. This political contest will be very interesting to watch.

I had an opportunity to hear Pawlenty address a business group in mid-August in Duluth. Following is a summary of that speech, which also sounded a lot like a campaign speech.

Pawlenty called Minnesota one of the best states in the country, but described challenges in the areas of education, health care and taxes.

“We live in the greatest state in the nation. Pick your measure and I can show you a credible third-party measure that proves it. We lead the nation in just about everything,” Pawlenty said. He offered the following examples:

* Minnesota students lead the nation in ACT test scores.

* Minnesota has the highest rate of high school graduation in the country.

* Minnesota has one of the lowest rates of unemployment in the nation, now 3.7 percent, compared to a national average of 5 percent.

* Minnesota has the highest rate of worker productivity in the nation.

* Minnesota has the highest rate of women in the workforce in the country.

* “Governing” magazine just named Minnesota the third-best governed state in the nation.

* “Entrepreneur” magazine rated Minnesota last fall to be the best place in the nation to be an entrepreneur.

* Minnesota has the healthiest people in the nation.

* Minnesota has the lowest number of uninsured folks in the nation.

* Minnesota has the second-longest living people in the country, behind Hawaii.

* Minnesota has the highest rate of home ownership in the country.

“We have beautiful outdoor amenities such as lakes and prairies, streams and rivers. We have culture, and the arts, and the list goes on and on and on,” Pawlenty said. “We live in a remarkable state. We should be proud of that and grateful for that.”

“But the world is changing very rapidly,” he said. “It is changing at a rate and scope the likes of which we have not seen before, having profound implications on our economy, on the way we do business, on job growth, on investment, on culture, and even on language.”

Pawlenty quoted Peter Drucker, saying: “The things that got us here, will not get us there.” Pawlenty says that in a rapidly changing world, any organization that wants to say relevant, including a state, has to do things in new ways. “There is a call for change,” Pawlenty said, at the same time admitting how uncomfortable change makes most people feel. “But change is exciting and it is challenging,” he reassured.

“One of the main things that is driving all this is globalization, Pawlenty said. Referring to a book written by Minnesota native Thomas Friedman, ‘The World Is Flat,’ Pawlenty said: “The things that used to protect us and separate us from the rest of the world, in terms of geography and time and distance and cost, in communication, in culture and language, have essentially melted away.”

Pawlenty used the example of telecommunications, noting that calling long distance to a place such as Kansas City used to be a big deal, but today we can call India and Europe for almost nothing. Because of advances in shipping, Pawlenty noted that items can be shipped to places as far away as China for $25 to $50 per ton. And whereas it used to take months to get the word out about something, anyone with access to the Internet can communicate with the entire world in seconds.

“The point is, the world is on our doorstep, and we are on their doorstep in a way we have not seen before,” Pawlenty said.

So what does that mean for Minnesotans?

Pawlenty’s answer: “It means Minnesota and America are no longer the world’s cheapest screw turners. If our proposition to the marketplace is we are going to take a repetitive, fungible, labor-intensive, low-skill task, and we are going to do that more economically than the Chinese or the Mexicans, or some other place like that, we are not going to do so well…We are not the world’s cheapest screw turners.

“So what are we going to be? We better be the smartest. We better be really good at invention and innovation. We better be really good at attracting research and development. We better be really good at productivity enhancement and applications that are going to give us efficiency advantages. We better make sure we have infrastructure like broadband, and traditional infrastructure like roads that give us an efficiency component as we try to move goods and services and people around. We better make sure we have our share of innovators, and designers, and dreamers, and entrepreneurs, and risk-takers, who are going to give us that next increment of growth. That speaks to a lot of things.

“It speaks to the fact that we better have a focused and effective educational system. On average, we are the best in Minnesota, but I think we can make it even better. We have an average that is really good but we have some districts and some students who aren’t doing too well. For example, you go to the urban school districts now and even though we spend a good chunk of money there, if you are a disadvantaged student or a student of color, the statistical probability of you graduating from high school is less than 50 percent. One generation ago, if you grew up in South Saint Paul where I grew up, if you missed the educational wrung, there was a big safety net. I don’t mean social services safety net; I mean you could go get a strong-back job. You could go to the meat-packing plants or related industry, and cut meat, throw freight, load and unload trucks, drive a fork lift, you could do stuff like that. And you could make a decent wage with benefits, and support you and your family. Those jobs are gone. Or at least gone at that wage and benefit level. So the safety net of the strong-back job has shrunk and now you have to have a strong mind skill or education that applies to the economy of the future. We are not ready for that in this country.

“It doesn’t always have to be college, but if you don’t have a relevant skill or education post-high school that applies to the economy of tomorrow, today, you are in big trouble. You are marginalized in a hurry. We are not preparing enough of our students for that reality. On a good day, in a good school district, we have about 30 percent of our kids in rigorous, relevant path roads, like international baccalaureate, advanced placement, post secondary enrolment options; but that means 70 percent aren’t. That is not nearly enough for the economy of the future. Minnesota does well compared to the rest of the nation, but that is not our comparison anymore. We have to bring more rigorous and relevant educational opportunities to our high schools.”

Pawlenty said one of the big problems with the state’s public education system is the pay system for teachers. “I want them to get paid in a modern and professional manner. The way they get paid now is based solely on seniority and college credits. That is not the worst system, but it is not a modern and professional system. So we are offering financial incentives for school districts and unions to voluntarily move toward a performance pay system, aligning those resources with things that are more relevant to student performance.”

Pawlenty then turned his attention to the cost of health care. “Eighty-five percent of all health care money goes into five chronic conditions: cancer, diabetes, obesity, end of life issues, and heart disease,” Pawlenty said. “So if you have one of those five chronic conditions, we know the likelihood of your healthcare outcome varies wildly depending on what provider you go to. The provider you select could affect your outcome by 5 to 40 percent in those chronic conditions. And guess what, so does the price. But the good news is there is a correlation between quality and price, and it’s a good correlation. The most efficient providers often tend to be high quality. They do it all day, every day, and they are really good at what they do. Consumers don’t know that. Even purchasers of health care don’t know that. We buy health care stupidly. Most people don’t have any idea what kind of quality they are buying in their health care.

“If you start to empower consumers and purchasers with this kind of information, they make pretty good decisions, and utilization and cost and quality start to look a little more reasonable. And you don’t have to sacrifice the health of the folks you are trying to serve.”

Pawlenty noted that health care premiums for state employees did not go up this year, in an environment when health care premiums for government employees around the country increased an average of 9 percent and premiums for private sector employees increased even more than that. He said Minnesota was able to hold the line on its costs by giving employees the tools to buy smarter.

Pawlenty closed on the subject of taxes. “Some people say, just raise taxes, we can government our way to prosperity,” Pawlenty said. “That’s not true. I am in discussions every week with businesses that talk about expanding or growing in Minnesota or somewhere else. And, taxes, regulation and insurance matter. That doesn’t mean it is the only thing, but it is a thing. And we are on the high end of that stuff.

“I get accused of being unreasonable for trying to keep a lid on it. We are the fourth-highest taxed state in the nation according to the U.S. Census bureau. Our revenues coming into the state are growing without a tax increase at 8 to 10 percent in the upcoming budget cycle. Most Minnesotans would say you should be able to fund your priorities and do it pretty well with that kind of bump in revenue. We are in a highly-taxed state; we should live within our means, live within that kind of growth.”

These are themes Minnesotans will hear repeated numerous times in the upcoming year, particularly as we head into the 2006 election.

Thursday, September 08, 2005

Real leaders don’t point fingers, they take responsibility

I saw in the newspaper that Aaron Beam was recently sentenced to three months in prison. Beam is one of the guys who helped Richard Scrushy found the HealthSouth Corporation in 1984, which has been the subject of a big financial scandal over the last few years.

This little news bite caught my attention because I remember where I was the day a jury found Scrushy innocent of the fraud charges shareholders filed against him. It was June 28, and I was returning home from a business meeting in Duluth, Minnesota, where I heard a speech by a former Navy commander named Scott Waddle. Scrushy and Waddle could not be more different. Waddle took responsibility for his actions. Scrushy pointed the finger at others.

Waddle was a rising star in the Navy when his submarine collided with a Japanese fishing vessel, resulting in the death of nine civilians. The accident occurred on February 9, 2001 and after an inquiry, Waddle was honorably discharged. Although the story of the accident is dramatic, the pinnacle of Waddle’s presentation -- which he calls “Failure is not Final” -- is his description of apologizing to the victims’ families. Against the advice of the Navy and his legal counsel, Waddle took full responsibility for the accident and ultimately traveled to Japan so he could personally apologize to the families of each of the nine victims. (The Right Thing is the name of a book Waddle wrote about his experience.)

Listening to the news on the radio on my way home from Duluth that day, I got a little better sense of the magnitude of what Waddle had done. Earlier that day, a jury had acquitted Scrushy of fraud charges related to his leadership of HealthSouth. Scrushy was the former CEO of this company that at one time employed 50,000 people and ran health care facilities in all 50 states. Over several years, the company had inflated its earnings by $2.7 billion. When shareholders and government auditors began asking questions, Scrushy denied knowledge of any financial shenanigans and blamed his financial officers, including Beam. Amazingly, a jury bought it.

I don’t know any more about this case than what I have read in the newspapers, but it is hard for me to believe that the CEO of the company didn’t know how the books were being kept. Scrushy is a man who refused to take responsibility; he blamed subordinates. Waddle, it occurred to me, could have done the same thing. But he didn’t. He took full responsibility. It is not too difficult to figure out which of these two men is really a leader.

Monday, September 05, 2005

Katrina exposes meaning of poverty

The last few days have had a kind of 9-11 feel to them. Like the rest of the nation, I am digesting the destruction of a major national treasure and a massive loss of life. There is the chaos that follows, along with the obligatory finger-pointing. And there is a rise in gas prices. Just like in the days that followed the terrorist attacks on the World Trade Center and the Pentagon, there is an uncertainty in the air. We are still trying to figure out the extent of the disaster, what it means for our future, and what it means specifically to me.

I had some time to think about all this on Thursday and Friday, the first and second of September. Katrina, the hurricane that caused all the trouble, hit Florida one week earlier. The weekend of August 27 and 28 the hurricane grew in strength while hovering over the Gulf of Mexico. August 29, it hit Louisiana and Alabama. By late Monday, however, many people were breathing a sigh of relief. The hit wasn’t as bad as people expected. New Orleans seemed to escape the worst.

But the worst was yet to come. On Tuesday the city filled with water that spilled through a breach in one of the levees that protects it from the sea, which is actually a few feet higher than most of New Orleans. On Wednesday, 80 percent of the city was under water and we saw images on television of the devastation. People said there were dead bodies floating everywhere. People were still trapped in their homes. There was looting in the streets.

I had a meeting in Lake Delton, Wisconsin, which is 220 miles from Minneapolis. The drive gave me three-and-a-half hours to think about what was going on. I thought about Jackson Square, the famous gathering place in the French Quarter where I had visited several times on business trips. What a magnificent place, with the old Cathedral, the CafĂ© Du Monde, the lace shops, and the street musicians. I have always wanted to bring my wife and kids there. Now I don’t know if I will ever get the chance.

All those European-style buildings, and Preservation Hall, -- what would happen to them? The convention center, where I had been to so many trade shows, looked like a war zone. In recent years, they had actually done quite a bit to make the city more attractive. For example, they added a light rail system that could take visitors from the downtown, convention center area to within walking distance of the French Quarter, a trip I took the last time I was there.

I stopped in Menomonie, Wis., to fill my car with gas, and groaned when I saw the price at the two gas stations along the interstate: $3.25 a gallon. In Minneapolis, gas had jumped the day before to the $3 mark after spending most of the last month between $2.50 and $2.65 per gallon. When I got to Lake Delton, around noon, I noticed the gas stations near my hotel were selling gas for $2.99 per gallon. Darn, I should have waited until I got here to fill up. But four hours later, when I returned to my car after the meeting around dinner time, the price was $3.29 per gallon. The gas situation always seems to go crazy when there is a national disaster. The night the Twin Towers came down, I remember driving around my neighborhood and seeing lines that extended 10 cars or more at gas stations.

That night in my hotel room, I got a good opportunity to watch the news. I saw the desperate faces of the victims. I saw video of a dead person in a wheel chair at the convention center; another video showed a dead person floating in the water. There were angry people begging for help. The mayor of New Orleans was desperate and the governor of Louisiana looked like she had been through a war.

Although I am the lucky one – I haven’t lost my home or worse – I still end up thinking about myself. Could this happen to me? I wonder. Is Minneapolis prepared to handle a disaster on this scale? Would we fare any better in a similar situation? It is not like the hurricane came out of nowhere. Everyone knew it was coming. People had two days to evacuate. If the people of Minneapolis knew a disaster was coming in two days, would everyone leave? Would the city or the state have the means to transport all the people who couldn’t evacuate on their own? I don’t know but I hope our local officials are watching and taking notes.

And will they rebuild? That is a big question. Does it make sense to put houses on land that is lower than the nearby water? In St. Paul, they used to build houses on the river flats; that is where the immigrants and other poor folks lived. Every spring those houses would get flooded out. In the 1960s, they stopped building houses there. Today, the entire area is cleared out and there are no houses. I am not sure where the immigrants and poor folks are living now.

As I watched on television all the sick and bedridden people who were brought to the terminal at Louis Armstrong Airport, I wondered about their families. Are their families in safe places? Did some people evacuate, only to leave grandma in the nursing home? You get the sense that some people must have done that. Of course, there are people who literally have no one. They could do nothing but rely on the government. But what about these families that actually let grandpa fend for himself while they took off to higher ground? This is a disaster that CNN didn’t cover, the breakdown in the family.

All these victims, all these people in the Superdome and at the convention center, these are the city’s poor. These weren’t wealthy or even middle class people left behind. These were the folks who have nothing. That means they don’t have much money, and more importantly it means they don’t have family who care about them. You really need both in this world. You need a little money so you can get out of town on two-day’s notice if you have to, and you need family – either so they can save you if you can’t save yourself, or so you can save them.

The people who could have left but chose not to -- it isn’t as easy to feel sorry for them, although I do. The people who could not leave, those are the folks I feel bad for. I wonder where their kids were, or their siblings. Even if they didn’t have any, how does someone go through life with no one? How does someone get through life without anyone to care for, and for them to care back?

So what Katrina is showing us is the plight of poverty. We can blame the government for not acting quicker, for not doing more, but I suspect the various government agencies probably did as well as they could. The fact of the matter is, government is not family. It can only do so much. Government treated these folks the way it always does, the only way it can – it crosses its fingers and hopes everyone will be okay. That is what happened during previous hurricanes. Every day, the government hopes it won’t hear from its poor; it hopes the poor won’t demand too much. But it was different in New Orleans this time. Katrina made it clear that the poor are not okay. This time, the government had to intervene. Although it was a little late for some, the government response to Katrina was about what it is in any situation – a little less than what desperate people want.

It sucks to be poor; that becomes really obvious during a disaster. Education, training and jobs are the antidote to a lack of money, but the lack of a family network is something the government really can’t do anything about. Nobody can force people to love one another. But that is what we have to do. We especially have to love our own blood and heritage. We cannot alienate our family members, not even one, not even the one who is the biggest pain in the neck. Society cannot function without strong families; it cannot function when the only level of social cohesion is government. We are seeing that it New Orleans.

I just read that the French Quarter is probably going to be okay. Apparently, it is built on higher ground than much of the rest of the city. Maybe I will get to go back to Jackson Square. Maybe I will hear the music there again. And maybe I will get to share this special place with my wife and kids.

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