The murder of seven students at Oikos University in Oakland by a disgruntled former student triggered pontificating that masked the value of some responses that saved lives and kept the body count from multiplying.
A good representation of the pontificating appeared in the Christian Science Monitor’s article of April 3, 2012, “Oakland school shooting: Is there a lesson to be learned from the tragedy?”
(Available at
http://www.csmonitor.com/USA/2012/0403/Oakland-school-shooting-Is-there-a-lesson-to-be-learned-from-the-tragedy ).
Mention of the useful responses made a cameo appearance in earlier news, as in the Associated Press’s straight reporting on the preceding day, April 2, 2012, in “Cops: 7 dead, 3 hurt in Christian school shooting”
(Available at
http://news.yahoo.com/cops-7-dead-3-hurt-christian-school-shooting-214742437.html ).
Afterwards, however, when the media made its usual calls to self-styled experts on workplace violence to hold forth on the Oakland shootings, the focus shifted to more speculative waxing on themes like school bullying and pre-termination counseling for malcontents, on the unvalidated theory that counselors would (a) soften any harsh blow of bad news that would otherwise send the recipient to his sidearm and thoughts of carnage or (b) magically detect the nefarious intent of such shooters in time to prevent rampage killings. Sadly, there is no proof that the average school or workplace counselor can consistently deliver on either (a) or (b). So, if the speculations of experts appear suspiciously like sales pitches promoting expert wares, it should come as no surprise. What is a little surprising – and disappointing – is the myopic focus on expert offerings and comfort zones at the expense of some timely, life-saving actions that deserve to be celebrated instead of ignored.
These actions epitomize what has become a reflexive response in emergency management: In times of danger, saving lives often comes down to a decision to either evacuate or shelter-in-place. And sometimes, the same event requires opposite decisions, depending on immediate circumstances. So it was with the Oakland school shooting. This was captured vividly in the earlier, AP story, before the expert, Monday morning quarterbacks had their chance to weigh in the next day.
As the AP story revealed, one teacher saved lives by locking her classroom door and having her students shelter in place. The gunman shot out some classroom windows but did not injure any of those students. Another student reported that her English teacher, on hearing the commotion, told students to run, and they did, escaping a chance to expand the casualty count.
What the speculating experts missed in the subsequent article was that some people in the school itself did indeed react well under fire, saving lives by resorting to traditional options to hunker down (shelter-in-place) or flee (evacuate). The old lessons still apply. Extra counseling, while potentially useful, is not nearly so important to saving lives when bullets are flying and the situation calls for action rather than reflection. Before finding fault with school administrators for not instituting a major counseling initiative to observe and mollify dysfunctional students or to overtrain victims about when to rush the shooter instead of standing still while he shoots them one at a time (as the Christian Science Monitor’s article had one expert saying), school leadership would be wise to acknowledge the foregoing life-saving responses that kept the body count from rivaling that of Virginia Tech only a few years ago. There is always room for improvement, but we should not diminish the positive responses in a theoretical search for perfect solutions.
– Nick Catrantzos
Thursday, April 5, 2012
Wednesday, March 14, 2012
Who Pays for Top Boss’s Thrills?
If you are a thriving chief executive, it falls to shareholders, employees, and customers to pick up this tab. The Wall Street Journal may view this matter primarily through the lens of what happens when CEOs who are natural risk takers endanger not only themselves but their entire organization by continuing to indulge in flying, racing, or other high-adrenaline, higher-insurance premium activities that carry over from more prodigal habits before the given executive rose to the top. (For details, see http://online.wsj.com/article/SB10001424052702303717304577277931099185536.html )
The real questions, from the view of protecting the organization’s equities, are these:
• Is there a point where executive freedom to do as one damn well pleases crosses the line to qualify as a legitimate concern for the organization? Can this penchant for unnecessary, physical risk taking become the proper business of the board of directors and of the whole institution instead of staying a private matter that is only the executive’s business and no one else’s?
• If so, what are the organization’s and CEO’s options for reconciling personal freedom with thrill seeking that puts more than just the chief executive at risk?
• What, if anything, should CEOs and governing boards not do about this matter?
First of all, there is a line that the top executive crosses when his or her sudden loss would be catastrophic to the organization. A startup whose strategy, financing, and advancement rely on an irreplaceable leader puts all the employees and investors at the mercy of the leader who is cavalier about pursuing needless thrills. This leader may find it exhilarating to cheat death, but the workers who face layoffs or shuttering of the business if the leader is incapacitated have their livelihoods right there, in the cockpit of experimental airplane, race car, or deep sea diving apparatus – only they don’t get to experience the adrenaline rush. For them, as for investors, the risk only comes with penalties, not rewards. So, if the chief executive has any sense of obligation to employees or others who are important enough to keep the organization working and thriving, then he or she owes them some consideration before blithely signing up for the next thrill ride.
What of the negative effect that such restraint or thrill reduction imposes on the adventure-seeking executive for whom taking risks is a personal imperative that is indelibly tied to business creativity or performance? In this case, there are alternatives. Both of the main alternatives involve syndicating the risk, which is what insurance companies do when no single entity is able to reimburse the total loss that would occur in any worst-case scenario. Thus, when Lloyd’s of London started insuring ocean-going ships on their passage across the Atlantic from the Old World to the New World and back again, it would rely on a number of different syndicates to pick up some of the expense that, in the aggregate, would represent the total cost of making good on a claim. Naturally, these syndicates also shared in the profits, splitting up premiums accordingly when the same ocean trips took place without incident. How do executive and governing body arrive at a syndication of the risk arising out of thrill-seeking that the executive refuses to give up? One way is through insurance for key officers of the organization. Executives quickly find that the more elective risks they take and the more indispensable they are to the enterprise, the higher their premiums will be. The board of directors can disincentivize such executives from overdoing risk taking by refusing to pay the difference in premiums between what it costs for a thrill seeker and what the insurance company charges for a more prudent executive officer. Money alone seldom compensates fully for loss of an irreplaceable leader, however. What, then, is the other form of risk syndication that needs to happen?
Take strategic measures to make the thrill chaser less indispensable. Such measures include succession planning and active diffusion of responsibilities so that the organization can and does function regularly without the star leader. Properly instituted, such measures offer the leader in question a means to ease the burden of carrying the organization around the neck as a millstone. Encourage the chief executive to take frequent vacations and to grow the next generation of leaders by leaving others in charge. Eventually, the organization will develop the capacity to function without the one single executive, to the relief of investors, employees, customers, and the executive as well.
What not to do? Turning the debate on thrill-seeking executives into an epic battle between board and CEO and waging war in the media constitute a recipe for disaster. This is a business challenge, like any other issue that keeps the operation running. Accordingly, it deserves sober, analytical discussion and weighing of options. The executive’s value to the organization is an asset which the organization has a right to protect. Similarly, the executive’s personal freedom and idiosyncratic attachment to risk-taking behaviors may well be so ingrained as to be an inseparable component of that executive’s secret of success. Failing to acknowledge each other’s views and letting emotions lead to a clash of the titans represents institutional malpractice on the part of all concerned. Instead, the best approach is to enter into a business discussion about how to safeguard everyone’s business assets. This turns needless risk into calculated risk.
– Nick Catrantzos
The real questions, from the view of protecting the organization’s equities, are these:
• Is there a point where executive freedom to do as one damn well pleases crosses the line to qualify as a legitimate concern for the organization? Can this penchant for unnecessary, physical risk taking become the proper business of the board of directors and of the whole institution instead of staying a private matter that is only the executive’s business and no one else’s?
• If so, what are the organization’s and CEO’s options for reconciling personal freedom with thrill seeking that puts more than just the chief executive at risk?
• What, if anything, should CEOs and governing boards not do about this matter?
First of all, there is a line that the top executive crosses when his or her sudden loss would be catastrophic to the organization. A startup whose strategy, financing, and advancement rely on an irreplaceable leader puts all the employees and investors at the mercy of the leader who is cavalier about pursuing needless thrills. This leader may find it exhilarating to cheat death, but the workers who face layoffs or shuttering of the business if the leader is incapacitated have their livelihoods right there, in the cockpit of experimental airplane, race car, or deep sea diving apparatus – only they don’t get to experience the adrenaline rush. For them, as for investors, the risk only comes with penalties, not rewards. So, if the chief executive has any sense of obligation to employees or others who are important enough to keep the organization working and thriving, then he or she owes them some consideration before blithely signing up for the next thrill ride.
What of the negative effect that such restraint or thrill reduction imposes on the adventure-seeking executive for whom taking risks is a personal imperative that is indelibly tied to business creativity or performance? In this case, there are alternatives. Both of the main alternatives involve syndicating the risk, which is what insurance companies do when no single entity is able to reimburse the total loss that would occur in any worst-case scenario. Thus, when Lloyd’s of London started insuring ocean-going ships on their passage across the Atlantic from the Old World to the New World and back again, it would rely on a number of different syndicates to pick up some of the expense that, in the aggregate, would represent the total cost of making good on a claim. Naturally, these syndicates also shared in the profits, splitting up premiums accordingly when the same ocean trips took place without incident. How do executive and governing body arrive at a syndication of the risk arising out of thrill-seeking that the executive refuses to give up? One way is through insurance for key officers of the organization. Executives quickly find that the more elective risks they take and the more indispensable they are to the enterprise, the higher their premiums will be. The board of directors can disincentivize such executives from overdoing risk taking by refusing to pay the difference in premiums between what it costs for a thrill seeker and what the insurance company charges for a more prudent executive officer. Money alone seldom compensates fully for loss of an irreplaceable leader, however. What, then, is the other form of risk syndication that needs to happen?
Take strategic measures to make the thrill chaser less indispensable. Such measures include succession planning and active diffusion of responsibilities so that the organization can and does function regularly without the star leader. Properly instituted, such measures offer the leader in question a means to ease the burden of carrying the organization around the neck as a millstone. Encourage the chief executive to take frequent vacations and to grow the next generation of leaders by leaving others in charge. Eventually, the organization will develop the capacity to function without the one single executive, to the relief of investors, employees, customers, and the executive as well.
What not to do? Turning the debate on thrill-seeking executives into an epic battle between board and CEO and waging war in the media constitute a recipe for disaster. This is a business challenge, like any other issue that keeps the operation running. Accordingly, it deserves sober, analytical discussion and weighing of options. The executive’s value to the organization is an asset which the organization has a right to protect. Similarly, the executive’s personal freedom and idiosyncratic attachment to risk-taking behaviors may well be so ingrained as to be an inseparable component of that executive’s secret of success. Failing to acknowledge each other’s views and letting emotions lead to a clash of the titans represents institutional malpractice on the part of all concerned. Instead, the best approach is to enter into a business discussion about how to safeguard everyone’s business assets. This turns needless risk into calculated risk.
– Nick Catrantzos
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