Hartford Business Journal

www.HartfordBusiness.com • August 19, 2019 • Hartford Business Journal 21 COMMUNITY CONNECTIONS The leadership paradox By Jason Jakubowski I n June, I was able to join a delegation from Leadership Greater Hartford to the Association of Leadership Programs' biennial conference in Tulsa, Oklahoma. One of my many takeaways from this experience was a stronger resolve to think less about leaders themselves and more about those who are being led. Therein lies the problem, though, as lead- ers (whether in politics, sports, pop culture or business) are almost always faced with paradoxical — and at times even dia- metrically opposed — expectations established by the very people they are charged with leading. Consider the following: • People claim they want and need seasoned, experienced leaders; yet they are often dazzled by flashier new faces whose unorthodox ideas challenge tradition. (See the cast of presidential candidates in 2016 and 2020.) • People often say they want their leaders to be "real human beings"; yet they project utter resentment when those very same leaders display real human flaws. (See the personal transgressions of William Jefferson Clinton.) • People insist that their leaders "do what is right" and what is "best for the team"; yet those very same people can (and will) rake those very same leaders over the coals if they make an unpopular deci- sion. (See the social media assault on New York Giants coach Ben McAdoo after he benched beloved quarterback Eli Manning.) • And people want their leaders to use their pulpits to advocate for that in which they passionately believe; yet those same people will criticize those same leaders for attempting to impose their per- sonal beliefs upon others. (See the recent political activism of Grammy award-winning singer Taylor Swift.) The simplest explanation, of course, is that people are — by their very nature — both fickle and irrational, easily swayed by the whims and winds of the day. As Aaron Sorkin so poignantly wrote in his screenplay "The American Presi- dent,": The masses "don't drink the sand because they're thirsty; they drink the sand because they don't know the dif- ference." It is certainly the easiest way to justify the paradox of leadership … but it is not necessarily correct. The real reason for this paradox is much more complicated and rooted in the structural tenets of sociology, po- litical science and even biology. People unquestionably have an innate drive to survive and to succeed; but when coupled with the norms of our societal culture, that drive often manifests itself in the desire for both communal excellence and personal happiness. Put simply: People aren't fickle; they naturally articulate judgements that reinforce their own interests at any given time, some of which are consis- tent with the common good and some of which are not. So we ask the question: Where does that leave those of us in positions of leadership? Are we forever condemned to oscillate among the paradoxical extremes expressed by the masses? Like all things in life, there is clearly a balance that must exist between what we say and how we subsequently behave. But if you were to ask me — a leader myself — where that balance exists, the best I can do is quote Su- preme Court Justice Potter Stewart's legal definition of obscenity: "I know it when I see it." The leadership paradox is most certainly real, and acknowledging its existence is the first step toward helping navigate it. As long as we stay true to ourselves and remain focused on the needs of those whom we serve, the masses should be appeased … or so I hope. Jason Jakubowski , president & CEO of Foodshare and chair of Leadership Greater Hartford's board of directors, was awarded the Distinguished Leader Award by the Association of Leadership Programs in June 2019. EXPERTS CORNER How to better control, manage business unknowns By Roy Filkoff F ormer Secretary of Defense Don Rumsfeld was famous for posing this supposition at a Defense Department briefing: "There are known knowns. There are things we know that we know. There are known unknowns. That is to say, there are things that we now know we don't know. But there are also unknown un- knowns. There are things we do not know we don't know." He was trying to make the point that many of the largest challenges our country has experienced have come from events that could not have been forecast. Many business owners have dealt with this same fact pattern. Rums- feld's advice, however, was not to stop planning, but to create flexibility and readiness for the unpredictable nature of the world. The same holds true for business. While we cannot know what the future holds, we can still plan for the future. Forecasts and budgets are the tools business's use to plan for the future and allow them to deal with the un- known unknowns. The forecast is the financial representation of manage- ment's best guess as to what results will look like. There are three key reasons the budget is so important. 1. Creating the budget forces man- agement to think about the business. While we may not be able to predict the future, managers will certainly have opinions on what is likely to happen and how to maximize profit- ability. The creation of the budget gets the creative juices flowing to figure out how you will handle the known knowns and unknowns. Questions related to revenues and costs will need to be answered. What will sales be and can we pro- duce this with our current capacity? What will be the head count for next year, and how will the increase in ben- efit costs impact your bottom line? There are many questions that need to be answered, and each answer is a commitment from management. They are agreeing to operate within the framework they create. 2. The budget becomes a powerful management tool. The budget is the culmination of management's assumptions and com- mitments and provides insight into what will happen if all these agree- ments come true. Does it work? That is the big ques- tion everyone wants to know when the information is plugged in. If it doesn't "work" as in not enough profit or cash flow, then management understands what the goal is to make it work. This forecast tool can be used throughout the year as new ideas and opportunities come across manage- ment's doorstep. They just need to create the assumptions, plug them in and see if it "works." Also, should a big unknown un- known like losing a major customer come to pass, the forecast will quickly help you to understand the impact this unwanted change will have on your business. 3. Increased communication and ac- countability throughout the business. The budget is a very clear way to communicate what is expected of everyone in the company. What is the sales goal and labor-cost target? How much can be spent on overhead? All these questions are answered by the forecast. The forecast provides limited freedom to lower-level man- agement on what they can spend, thereby freeing up senior manage- ment from making routine decisions. "It's not in the budget" is a legiti- mate answer to a spending request but not the final word. The budget allows for flexibility in that it provides guidelines of total spending. If savings can be found, then new spending may be made. I often hear management complain that they do not have the money to make a desired investment. How can this be? It's because management has chosen to spend that money on other things. The forecast makes managers take responsibility for their choices. Many companies choose to forgo the budget believing it is only produced to be thrown in the drawer. They are missing out on what is one of the most important management tools. Roy Filkoff is a CPA and partner with Altman and Company LLC, a turnaround, restructuring and crisis- management services business. Roy Filkoff Jason Jakubowski

• Cover