The War at Home

Watching Dr. Condoleezza Rice give her testimony reminded this former long-suffering "employee" of everything he hates about the modern MBA-polluted swamp that is today’s corporate life. She’s a bureaucrat’s bureaucrat. And that’s no compliment.

Rather than get into whether her dissembling, "managing the bottom line" (in this case spin control and running out the clock) was right or wrong, let’s just focus on the worldview shown by her language.

I have watched the best minds of my generation driven to distraction by bean counters like Dr. Rice. The essence of what she said was slathered in the biz-speak that has infected every workplace. She talked about "institutional change," and described how she delegated duties to subordinates…and then did not follow Ronald Reagan’s wise advice to "trust and verify" that, in fact, the little people had followed through. Instead she took the absence of feedback as the absence of problems…the sort of "don’t ask, don’t tell" management that has caused so many of the troubles in our business and government workplaces.

Half way through listening to her talk of "process" and "structural problems" I was struck with how truly academic and bureaucratic she is. It’s not surprising. She knows only what she has experienced…academe and bureaucracy. To top off this analysis just remember how her boss was proudly proclaimed, by his supporters no less, to be a "hands off" manager, a modern CEO-like figure, who would run the government the way a savvy CEO ran a business. Not in the chaotic way the informal "kids" working for Clinton did things.

Rice’s testimony shows how frighteningly true this depiction of the Bush Administrative has proven to be. Maybe Clinton’s hyperactive walk-around informal style drove the more structured and corporate in the country nuts, but at least he put Dick Clarke in the principal’s meetings…that is, at the very top of the corporate chart. Anyone who ever worked in a big, bloated organization knows that this is the only place that things actually can get dealt with.

Here’s the point. Dissembling and corporate double talk about "institutional change" and "structural change" in the bureaucracy and all that is fine…during peacetime. ( As Rice said, "I'm a student of institutional change. I know that you get few chances to make really transformative institutional change." )

The fact is that the MBA language and worldview of Bush (and Rice) has led to a reality well known to anyone who works in a company (rather than for himself). You paper your ass with memos; you dissemble and avoid making decisions. You play kiss up to the boss and office politics.

Whatever you do, you do not do anything real…you just organize retreats, do studies and hold meetings…that’s how you keep your job and get ahead in the company.
(" When I was a lad I served a term/ As office boy to an Attorney's firm./ I cleaned the windows and I swept the floor,/ And I polished up the handle of the big front door./ I polished up that handle so carefullee/ That now I am the Ruler of the Queen's Navee!")

But that’s not how you fight a war, especially a fluid, non-state one against global terrorism. You don’t go into battle with a PowerPoint presentation and a flip chart.

Interestingly, the only bureaucrat in the present Administration to show reluctance to rush into Iraq was Colin Powell. Need I repeat the well-known history of how Powell’s opinions about being cautious about going into Iraq were treated by the Administration’s inner circle, led by Rice?

He is also the only one who ever pulled a trigger in combat. The only one who understood that War is reality, not a theoretical exercise on a big display in the War Room. Now we reap the whirlwind that is the consequence of armchair (non)warriors outmaneuvering battle-hardened veterans (Powell is just one of them) who warned them that their plans were misguided and naïve.

Whether these same amateurs, with their PowerPoint theories, also misunderstood the importance of moving their counter-terrorism chief to the second tier of the bureaucracy, and whether they missed all the warnings given them by their intelligence community that would, or would not, have lead to the prevention of the disaster of 9/11, is painfully irrelevant now. To that extent, those whiners and spinners who complain that the "partisan" commission should talk about the future are right.

OK, here’s the future. The buck stopped on the desk of Condoleezza Rice and she muffed it. She doesn’t "remember" if she told the President about cells in the U.S. OK, now he knows, so the buck is sitting on his desk now.

Let me be clear Mr. President: The terrorists are planning to attack America before the next election. We need our assets here, now. All 100 percent of them, if we are to have a chance of thwarting another disastrous attack.

Is that a straightforward enough warning? Is that actionable? As for Iraq. Let them sort it out themselves. You want the rest of the world to help? Then start packing up and leave it to the Iraqis to ask for help.

From today on we need our troops, all of them, patrolling our power plants, trains, bus stations, natural gas lines, power grid, telephone system and bridges and tunnels. Let me repeat that, so you get it right Mr. President: We need them to be doing that right now.

There. You’ve got your warning and your "actionable plan." Mr. President tear up your Middle Eastern fantasy. Just say yes. Tell your people "Let’s roll!"

And begin to really protect America. ¶ 7:35 AM

  Shaving the Economic Truth

There go those vaunted productivity gains. People who don’t punch a clock are working at home and on weekends to keep up, and none of that time is recorded as worked by the Bureau of Labor Statistics. Now the other shoe has dropped.

According to a straight news report in the New York Times (Altering of Worker Time Cards Spurs Growing Number of Suits), a rising tide of lawsuits against such mega-employers as Wal-Mart concern an apparently common practice called time shaving. This is what managers do to keep on budget. They go into their little computer programs and cut peoples’ hours, after the people have punched the clock. The companies claim these cases are the exception.

I bring this up because Alan Greenspan, who should know better and probably does, has repeatedly claimed that it is just these productivity gains that have been the major cause for the slowness of the rebound in hiring. If the courts determine that shaving is as widespread as it now appears, it’ll punch a hole in the whole notion of productivity gains.

Productivity is measured by asking businesses how many hours workers work and they respond voluntarily. In the past, the “experts” have been able to claim that these reported hours works (productivity is output divided by hours worked, Technical note), were backed up, in many cases, by clocked hours…that is records.

The very records that are now the focus of lawsuits all across the country as workers are going to court over being rooked out of they pay the deserve by management’s practice of shaving time.

Ironically, McDonald’s, where workers apparently deserve a break, too, had long ago solved this problem. Unlike Wal-Mart and many other large employers, the home of the Big Mac uses software/clocks that print out a hard copy of the hours worked each day by workers. And the workers are given this receipt by management, so any discrepancy would and does show up right there…and can be corrected.

Corrected because it is viewed as a mistake, not as a way to cheat workers and make the bottom line look better for companies. And cheating the workers, making this productivity gain fantasy look real, means that the number that is so crucial for the economic planners who rely on it is off.

It also means that investors who look at this number as a key to the efficiency and success of management of these public companies are being misled, badly. Add the shaved percent of time, which is labor cost, back into the P&L of these companies and you see a very different picture emerge. One in which, if the lawsuits now beginning grow and turn into class action suits, could result in large judgments against some of these companies. Such a liability would hurt their bottom lines, their earnings. That throws off the price-to-earnings ratio…and will negatively impact their stock price…

The New York Times article was straight reportage and, typically and disappointingly, failed to connect these dots. But the paper and reporter Steven Greenhouse deserve kudos for the story.

Without knowing it, perhaps, Greenhouse has broken the most important business story of the year. Sure, it will be off the radar in another day. In fact it already is. But when the judgments start coming down and the companies have to pay labor costs and huge one-time charges and their stocks crack up, maybe folks will remember it again.

If the folks have read this column and figured it into their investment strategy, they may even have avoided getting crushed in the Market, when, suddenly, the myth of productivity gains vaporizes.

On a non-investment note: I don’t know if it is illegal to shave time. I don’t know if it is an SEC violation to report such shaved hours and distort your profit picture as a result. I do know it is immoral not to pay a worker what you agreed to pay. And I know that managing a company that way is unethical and morally wrong. ¶ 3:45 PM