Re:Balance -- Jim Peterson

Lessons in Risk Management: A Hierarchy of Learning from Ignorance

The seemingly indestructible baseball legend Satchel Paige asked, “How old would you be, if you didn’t know your age?” *

I’ve worked during this summer vacation to review and refresh the syllabus of my MBA-level course in risk management and decision-making, where the related question is, “How smart can you be, if you don’t know your own ignorance?”

At its core, the course seeks to identify potentials for success, from the lessons of failure. Recent weeks have provided an abundance of “teaching moments”:

• Tony Hayward’s long-postponed but inevitable defenestration as CEO of BP – another demonstration that public perception of a tone-deaf executive’s culpability will prevail – incidentally inflicting major collateral harm to what had been an advancing discussion on the benefits of splitting the roles of corporate chairman and chief executive.
• By contrast, Goldman Sach’s achievement of a speedy and affordable settlement of the SEC’s suit over a toxic subprime mortgage-based derivative product, for the relative pittance of $550 million. Love or despise the “vampire squid” – Goldman will survive and thrive in no little part for its ability to maintain both calm and quiet under pressure, keeping beneath the flame-throwing and appreciating the benefit of avoiding additional fueling of the short-lived news cycle.
  
• The release by WikiLeaks of a massive volume of raw documentation from the Afghanistan war. The trove will be well-combed by future historians, but even on a superficial reading of the official manipulations, naïveté and mendacity, the fundamental lessons remain unlearned -- from China, Algeria, Viet Nam and Afghanistan itself -- that short of annihilation, no level of mighty foreign military technology will prevail in a house-to-house conflict against forces able to blend seamlessly into a village-level local population.

Thinking with students about these scenarios, with special concern for the availability of awareness and action in time to actually affect an outcome – that is, before the inflection point at which a threat tips over to become a disaster – there emerges a kind of hierarchy of learning opportunities. Consider: 

• As the last of the helpless dinosaur population dwindled around the tar pits, while tiny furry mammals disported at their feet, the combination of climate change and evolution reduced their survival chances to zero.
• Innocent species lacking defensive measures were equally doomed – including those wiped out by humans, from carrier pigeons to the great whales.
  
• Human societies also innocent in their ignorance have doomed their viability – whether the Easter Islander destroying their only timber sources to replace their great canoes, or the Greenland settlers unwilling to adopt the diets and hunting techniques of the natives (see Jared Diamond’s “Collapse,” 2005).
• Further up the ladder of chargeable responsibility is the blinkered denial built into herd behavior – no better exemplified than by the last-gasp claim of Citigroup’s Chuck Prince in the summer of 2007, that, “As long as the music is playing, you’ve got to get up and dance.”
  
• And finally – or at least to stop just short of conduct warranting indictment – there is the evidently deliberate and self-interested exploitation of the credulous, wrought by Goldman and its now-isolated foot soldier, Fabrice Tourre, in designing a financial derivative with characteristics maximizing its likelihood of failure.

As I would like my students to learn from such an array, in daily life no less than in the classroom, the ability to avoid the next problem is measured by the capacity to take heed from the last. 

*My review last May of Larry Tye's delightful biography of Paige is here. 

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Book Review: Satchel Paige - Baseball's Philosopher on the Business of Life

Satchel: The Life and Times of An American Legend, by Larry Tye, Random House, 298 pages

“Don’t look back. Something might be gaining on you.”
    -- Leroy “Satchel” Paige

I lost a dear colleague -- eleven years ago and much too soon – who, in addition to his friendship, ranked with the finest business advisors I’ve known.

He operated brilliantly at the complex intersection of law, finance and business – with a unique skill in bridging their conflicting vocabularies and cultures. In large part it was his ear and instinct for the perfect quote, citation or maxim.

His invocations, to relax a tense conference room or break an impasse in negotiations, drew on sources that were inexhaustible and encyclopedic:

• The movies: “We don’t need no stinkin’ badges” and “We’ve been on double secret probation, whatever that is” and “It’s not personal, Sonny; it’s just business.”
• The military: “Victory has a thousand fathers; defeat is an orphan” and “Once more into the breach, dear friends” and “It’s good to kill the occasional admiral, pour encourager les autres.”  
• And American novels: “Never cop another man’s plea” and, especially, “There was only one catch, and that was Catch-22.”

He was really at his best with the wisdom of sports – Red Smith and Casey Stengel, and Yoga Berra’s incomparable advice, “When you come to a fork in the road, take it.”

So he’d have devoured with delight Larry Tye’s new book, which takes to a new level the basic, long-familiar tale of one of the game’s premier figures and doubtless one of its most quotable – Paige becoming widely known as a late-arriving darling of the national media, when at the venerable age of 42 he was finally able to pitch in the newly-integrated Major leagues.

It’s the strength of Tye’s examination to expose the dark poignancy behind the entertaining laugh lines. On Paige’s extraordinary control – “throw strikes – home plate don’t move” – the back story of his accuracy with a baseball lies in the poverty of his childhood in Mobile, Alabama, where his rock-throwing skill was both his defense against gangs of hostile white boys and the weapon to fell pheasants and squirrels for the family dinner table.

As for the famous “I ain’t never had a job – I just always played baseball”: The combined physical, financial and emotional pressures of barnstorming what Tye calls “hungryball,” around the rickety Negro leagues of depression-era America, would have drained Paige of any romance or sentimentality, long before his free-spending habits forced him to keep hustling -- well beyond the sell-by dates of either his talent or his dignity.

Paige’s saga is essential to the complex story of the integration of American professional sports – both the hesitating steps that belatedly opened the doors for Jackie Robinson, Paige’s much younger and perhaps less-deserving teammate on the Kansas City Monarchs, and the immediate shift of talent and fans that doomed the Negro leagues and their separate, unequal but influential place in black American culture.

Concentrating on Paige’s own perspective, author Tye tells an outsized character’s story, freely and refreshingly drawing on the vocabulary of the times – both the hyper-ventilated synonymy of the baseball press and the crude and racist language of a rigidly segregated society.

In so doing, he illuminates the evolutionary steps towards baseball’s integration – from Paige’s play in lily-white Bismarck, North Dakota, to the high level of competition between white and black teams in the California winter league.

And eventually, the national-level proof that integrated crowds would pay to see integrated baseball, under the entrepreneurship of the Iowa-bred and racially insensitive Clevelander Bob Feller, who faced off with Paige on a 1946 barnstorming tour, the year before Robinson moved up to the Dodgers.

All were part of the social fabric about to be so dramatically re-tailored by the court decisions, civil rights actions and legislative programs of the two decades to follow.

Living both as hard and as well as conditions would allow, Paige himself fulfilled the axioms of his philosophy only enough to sustain both his remarkably durable physical abilities and his celebrity.

This summary alone would underpin his approach to a lifetime of multi-layered competition -- and is freely adaptable to the management of a personal career, a team of employees or an entire company:

“Work like you don’t need the money."
“Love like you’ve never been hurt."
“Dance like nobody’s watching.”

To readers in the business book industry: While Tye takes note of the broad press attention Paige eventually achieved, late in his playing days, there is an untapped market for a little volume on management leadership, compiling the lessons of the hundred best quotations out of my late friend’s commonplace book.

On which subject, all readers are invited to send personal favorites from their own experiences.  

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