Tag Archives: Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System — and Themselves

“Opportunity Cost” and Botched Priorities – a Never-Ending Challenge

Here’s a brief slice of dialogue from The West Wing, Take This Sabbath:

LEO:
I gotta tell you, Sam, this was bungled. We were totally unprepared for this.

SAM:
What the hell are you…?

LEO
We were caught in the headlights…

—-

AND…

Opportunity Cost:
“Any time you are doing something, you could be doing something else.”
(This definition comes from the Real John Green, from his VLOG brothers video, I Hate Pennies).

Let’s start here.  You really cannot do two things at once.  And that is ok, except that sometimes the thing that you are doing is keeping you from the thing it would have been better to do.

That was the situation in the West Wing episode, quoted above.  And this is the problem described by “opportunity cost:” – when you are doing something, you could be doing something else.

Now, we see this all the time.  While I am reading The Big Short by Michael Lewis, I cannot be reading the book Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System — and Themselves by Andrew Ross Sorkin. Which is the more important book to read?  I do not know.  I’ve only read The Big Short, and not the other book.  When I could have read the other book, I was doing other things, like writing blog posts about not having time to read the Sorkin book.

Do you see the problem?

I thought of all this as I was reminded again of a real world problem in business.  Take the classic dilemma:  “the average American company is over-managed and under-led.”  Let’s say that this is, in fact, true (by the way, I’ve argued that the average company is actually both under-managed and under-led.  Read that post here).

Consider this problem.  A person who is really good at a job is then promoted to supervise/manage/lead/oversee others doing that job.  The person is really good at doing the job, but really, really bad at providing the kind of leadership to help others do their job better.  Picture a good sales person promoted to sales manager, and failing, because he/she is good at sales, but bad at managing — or, a good engineer, promoted to managing engineers, is good at engineering, but bad at managing.  This kind of situation happens in all areas of business, over and over and over again.  The list can get long in a hurry.

In fact, I recently spoke to an audience where an engineer said to me:  “my boss said that he knows he is not any good at leading people.  He was just an engineer promoted to management, and he never should have been promoted.  And he knows that.”

It is a bad, discouraging, energy draining thing to work for such a boss.

I have a proposed solution.  When a person is bad at managing people, that person should spend the next six months working on developing much better managing people skills.  Really.

You don’t get better by accident.  At anything!

Now, I would suggest that the place to start on this project is to read a good book on how to manage better.  And I would recommend this book to start with:  Encouraging the Heart: A Leader’s Guide to Rewarding and Recognizing Others by Kouzes and Posner.  (You can purchase my synopsis of this book here, with handout + audio, on our companion web site, 15minutebusinessbooks.com).

I’m going to write more about this problem in coming days/weeks.  But let me simply begin with this:  if your job is leading/managing/supervising/encouraging people, and you are not very good at it, then spend time getting better at it.  You can only do one thing at once.  Let your next thing be to get better at leading/managing/building people.  Your people need you to do this – starting now.

So start.