Archive for the "Productivity" Category

How Warren Buffett Plans to Profit from the U.S. Oil Boom

Oil and GasThe United States produced more crude oil than it imported in October for the first time in almost 20 years, the federal Energy Information Administration announced last week.

The U.S. also produced more oil in September than it has in any one-month period over the last 24 years, partially as a result of the rise of hydraulic fracturing, and the country is importing less than it has in 17 years.

It’s no surprise then that Warren Buffett just reported his third quarter portfolio update and he, or one of his recently hired fund managers Todd Combs or Ted Weschler, reported holding a single new stock in the third quarter:  Exxon Mobil Corporation.

The size of the Exxon holding suggests that it was a Buffett purchase.

There are collectively 43 stocks in Berkshire Hathaway’s portfolio, which is valued at $92.04 billion. Exxon joins a group of other oil and gas stocks in Buffett’s portfolio: National Oilwell Varco Inc. (NOV), Phillips 66 (PSX), Suncor Energy Inc. (SU) and ConocoPhillips (COP).  In total, energy stocks comprise 7.9% of its total.

Exxon Mobil Corporation (XOM)

Berkshire reported owning Exxon Mobil in the third quarter in an amended filing, but actually first bought the stock in the second quarter, without filing, and hid the fact until now. In the second quarter he bought 31,244,110 shares. In the third, it added 8,845,261. The average share prices for the two quarters were both $90.

The Exxon Mobil stake has a 3.7% portfolio weight and represents 0.91% of the $407 billion market cap company’s shares outstanding.

The most noteworthy change Warren Buffett made to Berkshire’s portfolio is the addition of a sizable new position – 40.1 million shares valued at $3.4 billion — in energy super major ExxonMobil (NYSE: XOM).  In fact, Buffett constituted roughly three-quarters of the position in the second quarter and obtained confidential treatment from the SEC in his previous filing as he continued to build the position.

In many ways, ExxonMobil is an obvious choice for Berkshire’s portfolio; here are three reasons Buffett selected it:

It’s just plain cheap

At 11.8 times estimated earnings per share for the next 12 months, ExxonMobil shares trade at a 23% discount to the S&P 500’s forward earnings multiple; meanwhile, it pays a 2.7% dividend yield against just 2% for the index. Furthermore, the valuation was lower when Buffett was building his position — the stock’s average forward earnings multiple was 11.3 in the second quarter and just 10.8 in the third quarter — the sort of multiples that ought to generate some interest when they are associated with one of the best managed, most profitable companies in the world.

ExxonMobil is the second-largest company in the world by market value

The reported value of Berkshire’s stock holdings per today’s filing is a staggering $92 billion. In addition, Berkshire generates a flood of cash on a permanent basis that Buffett must attempt to allocate profitably. (Berkshire’s operating cash flow for the first nine months of 2013 was $20.7 billion.)

As such, when it comes to publicly traded stocks, Buffett can’t waste his time on minnows; he needs to focus exclusively on hooking the largest groupers in the corporate ocean. With a market value of $407 billion, ExxonMobil — the world’s second most valuable company — is just such a catch. ExxonMobil’s size and liquidity enabled Buffett to make it his largest new position since he put more than $10 billion to work in another mega cap issue, IBM, in 2011.

ExxonMobil has longevity

Warren Buffett will only invest in businesses that have genuine staying power; for a long-term investor with a multigenerational time horizon, permanence is a very attractive quality.

Buffett’s confident that ExxonMobil shares that characteristic. We know this because in his 2011 shareholder letter, he argued against buying gold by comparing the far-in-the-future value of all the world’s existing gold stock in the world and a hypothetical portfolio of productive assets with the same current value made up of “all U.S. cropland…, plus 16 ExxonMobils.” In the conclusion of his argument, he writes:

A century from now… ExxonMobil will probably have delivered trillions of dollars in dividends to its owners and will also hold assets worth many more trillions…

A century is a long time, but there is every reason to believe ExxonMobil will be churning out gobs of cash — and returning it to shareholders — for the next several decades. That’s not a bad start for a buy-and-hold investor, particularly when it is bought at the right price.

One of My Favorite Books

Think-and-Grow-RichNovember 8th was the anniversary of the death of  Napoleon Hill who has inspired more people to become successful than any other person in history, including me.

His classic book Think and Grow Rich is considered the greatest self-improvement book of all time, with more than 70 million copies sold worldwide.  It’s helped millions of people to become successful, and you too can benefit from its lessons by listening to the free audio version or by reading it here.

Lionel Sosa was chosen by the Napoleon Hill Foundation to write Think and Grow Rich:  A Latino Choice.   Lionel chose 13 Latino stories to illustrate the 13 principles that Napoleon Hill synthesized from twenty years of interviews and study of the success philosophy of the richest men at the turn of the 20th century:  Alexander Graham Bell, Andrew Carnegie, Thomas Edison, Harvey Firestone, Henry Ford, King Gillette, John D. Rockefeller, Charles M. Schwab, William Wrigley Jr., F.W. Woolworth, and many others.

Lionel chose me to illustrate the first principle, which is to “Develop a Definite Major Purpose”.  Hill’s research showed that “there is one quality which one must possess to win, and that is definiteness of purpose, the knowledge of what one wants, and a burning desire to possess it.”  Success towards achieving your goals in life begins with knowing where you are going.  Hill knew that “without a definite major purpose, you are as helpless as a ship without a compass.”

As the first person to illustrate and write about the “law of attraction” which was copied and made famous recently by the book and movie The Secret, Napoleon Hill stated that:

Any dominating idea, plan, or purpose held in your conscious mind through repeated effort and emotionalized by a burning desire for its realization is taken over by the subconscious and acted upon through whatever natural and logical means may be available.  

 The Life of Napoleon Hill

Oliver Napoleon Hill was born in Wise County, Va., on Oct. 26, 1883. For young Napoleon, the wealthy industrialists he came to admire in later years were far removed from this primitive land where poverty, illiteracy and superstition reigned.

Nap, as he was called, was 10 when his mother passed away, leaving his father to care for him and his brother. James Hill was ill-equipped as a single parent and had difficulty in taming his son’s increasingly wild nature.  Napoleon was enamored with the outlaw Jesse James, carried a six-shooter on his hip and went about the county terrorizing its citizens.

But James Hill soon remarried, and his new wife Martha quickly established herself as a force in the two-room log cabin.  Napoleon, still pained from the loss of his mother, found a guiding light.  Martha saw the boy’s potential and encouraged him.  She told him he wasn’t a bad boy, and that he just needed to direct his energy toward accomplishing something worthwhile.  She suggested he use his overactive imagination to become a writer.

When he welcomed the idea, the well-educated Martha spent the next year tutoring him. She promised to buy him a typewriter if he gave up his six-shooter. “If you become as good with a typewriter as you are with that gun,” she said, “you may become rich and famous and known throughout the world.” Napoleon agreed to the deal.

At fifteen, he landed a position as a freelance reporter for a group of rural newspapers, followed a few years later by a job with Bob Taylor’s Magazine, a popular periodical that offered advice on achieving power and wealth.

How Andrew Carnegie Inspired Him

His first major interview was with the then richest man in America—73-year-old Pittsburgh steel magnate Andrew Carnegie—and that interview changed his life.  Hill intently listened as Carnegie recounted his extraordinary accomplishments and proffered his theories on personal achievement in the book The Wisdom of Andrew Carnegie as Told to Napoleon Hill.

“It’s a shame that each new generation must find the way to success by trial and error when the principles are really clear-cut,” Carnegie told him.  What the world needed, Carnegie suggested, was a philosophy of achievement, a compilation of success principles from the country’s greatest businessmen and leaders to show the commonality of their stories, and serve as inspiration and enlightenment to those wanting more in life.

He issued a challenge to Hill:  Commit the next 20 years, without compensation, to documenting and recording such a philosophy of success, and he would introduce him to the wealthiest and most successful men of the time. Hill jumped at the opportunity.

And so, for the next two decades, between numerous business ventures and starting a family, Hill went about fulfilling the pledge.  He met with Theodore Roosevelt, Thomas Edison, John D. Rockefeller, Henry Ford, Alexander Graham Bell, King Gillette and other contemporary giants. Carnegie believed that “definiteness of purpose” was the starting point for all success—that “the man who knows exactly what he wants… has no difficulty in believing in his own ability to succeed.”  The concept became the foundation for Hill’s later writing and professional focus.

Think and Grow Rich

After numerous rejections, Connecticut publisher Andrew Pelton agreed to print the book.

Hill’s eight-volume Law of Success debuted on March 26, 1928, offering the collective wisdom of the greatest achievers of the previous fifty years.  His work became a sensation.

The sheer size of Law of Success is daunting, running to 800 to 1000 pages depending on the edition.  Originally designed and produced in a 16 part series, each volume or chapter was substantial yet accessible.

In March 1937, he significantly reduced the book to about 200 pages, and changed the named to Think and Grow Rich – the first three print runs, increasing each time in numbers, came in rapid succession and all sold out, and it continues to sell today.

Here is an original two hour video of Napoleon Hill produced in 1937 going over the concepts of the book.

 

Ford CEO Alan Mulally

Ford Motor Company CEO Alan Mulally

Automaker Ford was losing billions of dollars when Alan Mulally took the wheel in 2006.

Here, in an interview conducted by New York based Rik Kirkland, senior managing editor of McKinsey Publishing, Mulally reflects on his leadership style and his efforts to turn around the organization.

When Alan Mulally was named president and CEO of Ford, in 2006, the famous American automaker was on the brink of bankruptcy. The company was preparing to post the biggest annual loss in its 103-year history—$12.7 billion.

Seven years later, Mulally is widely seen as the man behind one of the most impressive corporate turnarounds in history. Ford has posted an annual profit every year since 2009, its stock price has rebounded, and a new corporate culture has transformed the way the organization works. In an interview with McKinsey’s Rik Kirkland, Mulally reflects on his approach to leading a large global organization, the process by which Ford seeks to understand the global business context, the importance of managing your energy (and not just your time), and why he thinks “One Ford” is more than just a catchphrase.

McKinsey: How would you describe your leadership style?

Alan Mulally: At the most fundamental level, it is an honor to serve—at whatever type or size of organization you are privileged to lead, whether it is a for-profit or nonprofit. It is an honor to serve. Starting from that foundation, it is important to have a compelling vision and a comprehensive plan. Positiveleadership—conveying the idea that there is always a way forward—is so important, because that is what you are here for—to figure out how to move the organization forward. Critical to doing that is reinforcing the idea that everyone is included. Everyone is part of the team and everyone’s contribution is respected, so everyone should participate. When people feel accountable and included, it is more fun. It is just more rewarding to do things in a supportive environment.

Say, for example, an employee decides to stop production on a vehicle for some reason. In the past at Ford, someone would have jumped all over them: “What are you doing? How did this happen?” It is actually much more productive to say, “What can we do to help you out?” Because if you have consistency of purpose across your entire organization and you have nurtured an environment in which people want to help each other succeed, the problem will be fixed quickly. So it is important to create a safe environment for people to have an honest dialogue, especially when things go wrong.

A big part of leadership is being authentic to who you are, thinking about what you really believe in and behaving accordingly. At Ford, we have a card with our business plan on one side and the behaviors we expect listed on the other. It is the result of 43 years of doing this.

McKinsey: There have been major changes in the external environment during your long career. How have those affected the way you lead?

Alan Mulally: People often say that the world is becoming more volatile and more complex, that there are exponentially more “moving parts.” The world has always been a complicated and volatile place—it is just that we now have the tools to recognize it, to try to make sense of it, and to respond to it. That can make the process of understanding the broader environment in which we operate feel more complicated. Understanding what is happening in the world has always been a critical part of doing business at Ford. It should be a critical part of doing business anywhere.

McKinsey: How do you make sure Ford understands the larger context?

Alan Mulally: Every week we have a Business Plan Review meeting, or BPR. Our entire global leadership team, every business leader, every functional leader, attends either remotely or in person. We talk about the worldwide business environment at that moment—things like the economy, the energy and technology sectors, global labor, government relations, demographic trends, what our competitors are doing, what is going on with our customers. Of course, we are all out there all the time as part of our jobs, going around the world. The BPR process is the foundation. It provides a fantastic window on the world—the whole team knows everything that is going on.

Then we take it a step further and discuss how those trends are likely to evolve. Looking ahead is critical. We talk about more than what our customers value right now. We talk about the forces in the world that are going to shape what they will value in the future.

Take energy, for example. While we believe petroleum is going to be around for a long time, it is going to cost more and take more time to bring to the market. So we are going to pay more for energy. Beyond that, we believe there is a social consciousness that is developing where people really want to consider alternative energy sources that are more sustainable and good for the planet. So, for every market in the world, we are pushing harder to develop vehicles that range from gasoline versions to diesel, natural gas, hybrid-electric and all-electric ones. We also see a future for hydrogen. That technology roadmap is informed by our clear point of view about where the world is going.

McKinsey: Tell me more about how this process translates into everyday decisions.

Alan Mulally: As part of the BPR, we look closely at our plan in the context of the risks and opportunities presented by the current and future business environment. The BPR meeting is a kind of status check. It is both a strategic plan and a relentless implementation plan. So we look at every element of the income statement and the balance sheet. As new information emerges, we incorporate it right into the plan.

So, for example, discretionary income in the Asia-Pacific region is increasing, and many economies are reaching the takeoff stage for our industry, as new car buyers enter the market. We have used extensive data and research to determine the factors that will influence their purchasing decisions, and we have a specific plan in place to capture those consumers by providing a complete family of best-in-class vehicles. We regularly go over that data to see if anything has changed. If the facts underpinning the plan have changed, our plan has to change as well. The data tell us how we are doing, and in that sense, the data set you free, which is pretty cool.

McKinsey: And how does the leadership style you described translate into your day-to-day work?

Alan Mulally: The first thing a leader does is facilitate connections between the organization and the outside world. You can only grow value and profits by 10 to 12 percent a year, which is what great companies do, if you satisfy customers better than the competition. Second, leaders hold themselves and their teams accountable for deciding, “What business are we in? What is the deep consumer need we are uniquely positioned to satisfy?” And finally, leaders are responsible for trying to articulate and model a set of behaviors.

One of the biggest parts of the leader’s job is reinforcing the processes we are using to meet our goals. Again, that is where the BPR comes in. It is more than a way of asking, “How are we doing?” It is asking, “How are we doing against the plan? What are the areas that need special attention? And then all through the year, what is our plan to improve our performance in the following year?”

McKinsey: You’re widely credited with reshaping the culture at Ford. What’s different now?

Alan Mulally: At the heart of our culture is the One Ford plan, which is essentially our vision for the organization and its mission. And at the heart of the One Ford plan is the phrase “One Team.” Those are more than just words. We really expect our colleagues to model certain behaviors. People here really are committed to the enterprise and to each other. They are working for more than themselves. We are a global company, so we really have to stay focused on the work. There are so many people around the world involved in our daily operations that it has to be about more than a single person—it truly has to be about the business. Some prefer to work in a different way. Ultimately, they will either adopt the Ford culture, or they will leave.

McKinsey: Running large companies is demanding, and you’ve been at this game a long time. How do you maintain your mental and physical stamina?

Alan Mulally: Everybody always talks about how you need to manage your time. You need to manage your energy as well. You first have to ask, “What gives me energy?” There can be lots of sources: your family, exercise, your spiritual well-being. Try to combine those, along with your work demands, into one integrated calendar so that everything is built into your lifestyle. You can get beyond having to tell yourself, “OK, I’m going to have my family life next year in August, on vacation.” Instead, jot down what is really important to you, see if you have allocated time for it, and adjust the calendar if necessary. In our house, we had a family meeting every week—the family BPR—where we reviewed what we needed to do and the support required to get us through the week. It is another kind of process step, and a really important one.

McKinsey: One last question: Henry Ford had a vision. But the world, and the transportation industry, is dramatically different now. Has the Ford vision changed?

Alan Mulally: Henry Ford understood that the desire to move—to have freedom of mobility—is enduring and universal. As economies grow, and even as human beings grow, the first thing they want to do is move. It is a powerful vision—opening up the world’s highways so that everyone can have freedom of mobility, and can access the opportunities for growth that those experiences can offer.

The vision will remain constant, while our role in realizing that vision might evolve. There are tremendous opportunities for safe and efficient transportation in the future— in rapid and public transportation, for example. So we might be part of connecting different modes of transportation—bicycles and waterways and cars and buses and subways—all as part of the vision of enabling movement and bringing people together. Ford can use technology and innovation to deliver products and services that enable that experience at the most fundamental level. That is what we do.

About the authors

Alan Mulally is president and CEO of Ford Motor Company. This interview was conducted by Rik Kirkland, senior managing editor of McKinsey Publishing, who is based in McKinsey’s New York office.

5 Catalysts Can Create Jobs and Substantially Boost GDP

U.S. EconomyToday, labor-force participation is at a 34-year low, and the United States has two million fewer jobs than it did when the recession began. Weak investment, demographic shifts, and a slowdown in productivity growth are dampening the economy’s trajectory.

But the United States does not have to resign itself to sluggish growth.  Game changers: Five opportunities for US growth and renewal, a new report from the McKinsey Global Institute (MGI), identifies specific catalysts that can add hundreds of billions of dollars to annual GDP and create millions of new jobs by 2020.

Game changers zeroes in on five mutually reinforcing opportunities:

  • Shale-gas and -oil production. Powered by advances in horizontal drilling and hydraulic fracturing, the production of domestic shale gas and oil has grown more than 50 percent annually since 2007. The shale boom could add as much as $690 billion a year to GDP and create up to 1.7 million jobs across the economy by 2020. The impact will extend to energy-intensive manufacturing industries and beyond. The United States now has the potential to reduce net energy imports to zero—but only if it can successfully address the associated environmental risks.
  • US trade competitiveness in knowledge-intensive goods. The United States is one of the few advanced economies running a trade deficit in knowledge-intensive industries. But changing factor costs, a rebound in demand, and currency shifts are creating an opening to increase US production and exports of knowledge-intensive goods, such as automobiles, commercial airliners, medical devices, and petrochemicals. By implementing five strategies to boost competitiveness in these sectors, we believe the United States could reduce the trade deficit in knowledge-intensive industries to its 2000 level or close it—which would add up to $590 billion in annual GDP by 2020 and create up to 1.8 million new jobs.
  • Big-data analytics as a productivity tool. Sectors across the economy can harness the deluge of data generated by transactions, medical and legal records, videos, and social technologies—not to mention the sensors, cameras, bar codes, and transmitters embedded in the world around us. Advances in computing and analytics can transform this sea of data into insights that create operational efficiencies. By 2020, the wider adoption of big-data analytics could increase annual GDP in retailing and manufacturing by up to $325 billion and save as much as $285 billion in the cost of health care and government services.
  • Increased investment in infrastructure, with a new emphasis on productivity. The backlog of maintenance and upgrades for US roads, highways, bridges, and transit and water systems is reaching critical levels. The United States must increase its annual infrastructure investment by one percentage point of GDP to erase this competitive disadvantage. By 2020, that could create up to 1.8 million jobs and boost annual GDP by up to $320 billion. The impact could grow to $600 billion annually by 2030 if the selection, delivery, and operation of infrastructure investments improve.
  • A more effective US system of talent development. The nation’s long-standing advantage in education and skills has been eroding, but today real improvements are within reach. At the postsecondary level, expanding industry-specific training and increasing the number of graduates in the fields of science, technology, engineering, and math could build a more competitive workforce. At the K–12 level, enhancing classroom instruction, turning around underperforming high schools, and introducing digital learning tools can boost student achievement. These initiatives could raise GDP by as much as $265 billion by 2020—and achieve a dramatic “liftoff” effect by 2030, adding as much as $1.7 trillion to annual GDP.

These opportunities can have immediate demand-stimulus effects that would get the economy moving again in the short term and also have longer-term effects that would build US competitiveness and productivity well beyond 2020. Taking action now could mark a turning point for the US economy and drive growth and prosperity for decades to come.

 

YPO (Young President Organization) and Vistage are global peer-to-peer groups that help chief executives become better leaders, solve their business challenges, and get better results. Both groups were started in the 1950s and combined have nearly 40,000 members in hundreds of countries.

I’ve been a long time member of both organizations, and always made better business decisions when I shared sensitive information with this group of trusted advisers who gave me invaluable feedback.

What I like about peer-to-peer groups is that it reinforces the fact that you can’t do it alone.

We often try to, imagining that we can see and know the things we need to know without the discerning eye of an outside point of view. I think it’s easy to get off track. Most of us know what our purpose is or what we would like our legacy to be, but we are constantly pressured from external sources to deviate from it. Or we are seduced by extrinsic rewards like money, power, and recognition that cause us to detour from being our authentic selves.

It’s much easier to just keep on doing what we are doing, and say to ourselves that — obviously — we are doing what we are doing because it makes us happy.

And that’s what drew me to “The Investment Group for Enhanced Results in the 21st Century”, better known as TIGER 21 — the premier peer-to-peer network for ultra-high-net-worth investors. TIGER 21’s over 220 members collectively manage more than $20 billion in investable assets.

TIGER 21 members, who have risen to exceptional heights within corporations or are entrepreneurs and have built and sold successful businesses, join TIGER 21 because they recognize these same business skills rarely translate into successfully managing one’s personal assets.

Founded in 1999, TIGER 21 has groups in New York City, Los Angeles, San Francisco, San Diego, Miami, Washington D.C., Dallas, Calgary, Vancouver, Toronto, and Montreal. It plans to launch a group in Palm Beach on December 5, 2013, and in Chicago and Atlanta by March 2014.

Members, who are carefully vetted with background and other checks, must have at least $10 million in investable net worth, and the average member has a $75 million net worth.

The members focus not only on improving their investment acumen, but also on leveraging the power of their wealth and networks for philanthropy, business opportunities, estate planning, and raising socially responsible children.

TIGER 21’s success is built upon the willingness of members to share their best thinking, experience, curiosity, and vast networks with their fellow group members, as well as the entire TIGER 21 community.

The core of the TIGER 21 experience is what occurs in group meetings, which are completely confidential and chaired by highly successful business leaders who facilitate the meetings. TIGER 21 meetings provide a unique forum for candid discussions and peer-to-peer learning among individuals facing the challenges and opportunities of managing their wealth and their daily lives. Members sharpen their investment acumen through critique and coaching, as well as exploring common issues of wealth preservation, estate planning and family dynamics.

The range of expertise and investment styles shared in a confidential and intimate environment of trust and transparency, offers members unique insights and immeasurable value not found anywhere else.

Members’ ages vary significantly. From young professionals in their early thirties to active and retired business owners in their eighties, the diversity of age ranges contributes significantly to the TIGER 21 learning environment.

Members also enjoy a very exclusive concierge service to help them with their travel, lodging, and entertainment, as well as purchases of cars, jewelry, art, insurance and other products and services.

When individuals join TIGER 21, they are encouraged to attend meetings in other cities to expand their relationships, as well as to attend the annual three day conference with their families where they can meet the other TIGER 21 members and a host of top rated resources oriented towards investments and the issues and opportunities facing ultra-high net worth families.

In this short video a longtime TIGER 21 member who rose to become Chairman of Fleet Securities, Inc. after Fleet Bank acquired Quick and Reilly Group, and that has relied on his group members to make key decision in his life.

And then there is the retired Vice Chairman of CIBC World Markets, who is also been a longtime TIGER 21 member and who describes why this peer-to-peer experience is such an important part of his life.

What’s clear is that aside from sharpening their investment acumen, they also meet as peers to discuss the important questions of their lives and to support each other during difficult times. They encourage each other to make the necessary course corrections to avoid the avoidable problems we all can get ourselves into.

Save us from ourselves so to speak.

Jessica Landeros and her husband, Casey, live outside Milwaukee with their two young children.   She is currently writing her memoir, UNIDENTIFIED FIGHTING OBJECT: How One Woman Changed Combat, and How Combat Changed Her

Jessica Landeros and her husband, Casey, live outside Milwaukee with their two young children. She is currently writing her memoir, UNIDENTIFIED FIGHTING OBJECT: How One Woman Changed Combat, and How Combat Changed Her

When Jessica Landeros raised her right hand and joined the Navy at age nineteen  following the 9/11 terrorist attacks, she had no idea she would become a three-tour combat veteran, a wounded warrior, and a pioneer for equality. The first American woman to serve in combat during the Second Battle of Fallujah, Iraq, in 2004, Landeros helped pave the way for the recent decision to officially allow women on the front lines in all wars beginning in 2016.

As part of a construction battalion tasked with building bases and other infrastructure in a military theater, five-foot-two, 100-pound Landeros was tapped for two stereotypical unfeminine jobs:  plumber and convoy machine gunner. Embedded for months at a time in places most people only read about – often as the only Western woman among hundreds of men – she witnessed countless acts of heroism and leadership. But one day during her final deployment, Landeros herself had to step up and lead in the line of fire.

Part of Landeros’ team’s job was providing nighttime security escorts for supply vehicles and personnel throughout the perilous Al Anbar Province. But one summer day in 2006, the team was assigned daytime security detail for a crew repairing a critical road damaged by bombs. Three hours into the mission, a loud explosion and a plume of black smoke erupted less than twenty- five meters from Landeros’ vehicle, where she was manning her turret gun.

“I jerked my head around in time to see a Hum-V tire reach its apex at fifteen feet skyward,” she recalls. “Then I saw bodies writhing in the sand like fish out of water; two teammates had been hit.  One of them was pulling a knee to his chin; the other was flailing as though his whole body was suffering at once.  Even today I can’t drown out their screams.  I felt my chest tighten as I flashed back to an earlier deployment when one of my teammates, my friend, lost his life to a mortar round.  But I quickly snapped back to reality and forced myself to look away from my fallen colleagues and remember my mission: provide security for the road workers and now for the wounded and the medics who were moving them to safety.  I grabbed my radio and shouted to the gunners to keep their sector of fire.”

Having successfully conducted her life “Mission First” during her previous two combat tours, Landeros understood the weight of her demeanor at this critical moment. She had recently transferred to this battalion of 625 personnel – none of whom had experience in the region.  As potshots from AK-47s came in from the field, Landeros suddenly realized that the guys inside her truck had not moved since the commotion started.  She looked down to find three frozen, wide-eyed men just beginning to thaw. She knew they needed to be engaged to stay safe and sane.

Landeros shook one by the shoulder and asked him to man the gun. He nodded resolutely and moved into position. Then she suggested that the second teammate help move equipment from the downed truck to their vehicle for safekeeping. He took off eagerly.  She turned to the third.

“Ryan, were the guys still moving when they were hauled off?” she asked, already knowing the answer.

“Yeah.”

“That’s good,” Landeros replied. “A moving person is a living person. They’ll be okay. Hurry, make room for their equipment.”

It didn’t take long for the men to complete Landeros’ petty assignments, and she soon noticed that the distractions were quickly wearing off; they were slipping into the dangerous territory of their own dark thoughts. She knew from experience that it was too soon for them to let their emotions take hold. If they were going to fulfill their mission, she needed them to stay in the moment and not become numbed by grief or fear.

“So I did what any smart woman would do:  I appealed to their machismo,” Landeros said.  “I reminded them how scared the poor road workers were, and how we were able to handle it because we were used to this stuff.  I convinced them it was our responsibility to remain calm and in control, because the workers were terrified.  And it worked.  You could literally see their chests swell and their focus return. That was all it took to occupy them until we made it safely back to Camp Fallujah a few hours later.”

Anyone who has been in the military will tell you that one of the first things you learn in boot camp is that the mission is everything.  Without it, people are left to flounder – and ultimately to fail.  However, as Landeros’ experience demonstrates, missions are more than just a set of objectives.  A mission cannot be accomplished without people, and people cannot work to full capacity if they are not tasked in a way that challenges them and channels their strengths.

As a woman on the front line, Jessica is the embodiment of an extraordinarily powerful leadership trait:  the ability, despite societal and historical barriers, to articulate the mission and instill in others the passion to get the job done. It is that ability to issue the challenge and set the stage for its successful completion that is the mark of a true leader – a leader like Jessica Landeros.

Believe In Yourself and Stand By Your Convictions

To believe in yourself you have to develop your own convictions and stand firmly by them. Though it may sometimes be very difficult and painful, you must find your own path and follow it.

One of the reasons I went to the U.S. Air Force Academy was because I wanted to be independent of my father.  By getting into the Air Force Academy, which I was able to do through a full academic scholarship, I didn’t have to rely on my father to help pay my tuition.

If my father paid my tuition, I would have had to answer to my dad, “El Tigre,” about my grades, and everything else and I did not want that.  My desire to attend the Air Force Academy was also fueled by the challenge of succeeding at a school that is one of the toughest in the United States.

Obtaining recommendations for my application to the Air Force Academy was an important part of the process.  I asked my high school principal for one, and he told me that he couldn’t recommend me because I wasn’t involved in my high school’s Junior ROTC program; I’d be taking away a spot at a service academy from someone who was more deserving.

To get that recommendation, I went from shooting spitballs at the Junior ROTC cadets to being one of those guys parading around in boots and uniform, having spitballs shot at me, and being mocked by my own friends.  Much to my surprise however, not only did I like Junior ROTC, but I also discovered that I was good at it.

I ended up joining the elite Rangers program.  The challenge of doing well in that program excited me and pushed me forward. After two years of Junior ROTC, I achieved the highest rank possible. I finally earned the recommendation that I had originally sought from my principal.

Although my father wasn’t happy with me being in the military, he put a lot of weight and credence in the character traits such as discipline, honor and integrity.  There was no better place than the Air Force Academy to build those traits.

Years later, my father came to respect my decision to join the military.  Family members were invited to a ceremony at the White House for White House Fellows and got to meet President Reagan.  Because of my father’s keen interest in American government and history, he was as excited as I was to be there.  My father knew I would never have been a White House Fellow if I hadn’t gone to the Air Force Academy and joined the military.

Through all of my successes and setbacks, I believed in myself.  Could I have taken an easier path?  Yes.

Did I have to fight my father and work incredibly hard to gain admission to the U.S. Air Force Academy?  Yes.

Did I have total faith in my ability to achieve this goal? Absolutely.

Would I have gone as far without believing in myself and without a burning desire to succeed?  Absolutely not.

STANDING BY YOUR CONVICTIONS PAYS OFF

Actress and screenwriter Nia Vardalos isn’t the prettiest woman in Hollywood, but certainly is someone who believes in herself.  She wrote the screenplay for the hit movie My Big Fat Greek Wedding.  She also stars in the movie, but that wasn’t necessarily going to be the case if Vardalos had left her fate in others hands. Vardalos refused to sell her screenplay to those interested in making it unless she was allowed to star in it.  She believed in herself as an actress and was willing to risk losing a short-term windfall so she could achieve her long-term goal.

Success is about pursuing your passions, not someone else’s dreams. Although your parents may want you to pursue a safe and traditional path to their version of success, it may not be the one that’s right for you.

And if you’re a parent, remember that if you have done your job well, the best you can hope for is that your children are happy with whatever it is they do in life, regardless of their job or who they marry.

Success is not necessarily measured by someone’s bank account, but by the depth of their soul and the contribution they make to others.

Believe in yourself and stand by your convictions!

Teamwork is the Difference Between Success and Failure

Although teamwork usually isn’t a life-or-death situation, it often spells the difference between success and failure in business.

A company with many talented employees working separately isn’t nearly as successful as one where talented workers work together and believe in the mission.

Colin Powell tells a story about Napoleon Bonaparte. The French general would occasionally mingle with his troops. Bonaparte would ask the lowest-ranking soldier to state the overall mission of the army. Bonaparte believed that if the mission were clear, the soldier would be able to understand and explain it.

A successful team knows its mission, whether it’s to rescue nine trapped miners or to be the best data mining company in the business. The team leaders must keep the group focused on the mission.

Leaders can also bring out the desire and passion in the members of a team. The leader arouses passion and helps put fire in the members’ bellies. As Price Pritchett said, “Once you’ve pointed people in the right direction, and triggered a powerful internal drive, you need to get the hell out of the way.”

Joe Gibbs, the former football coach who now oversees a Winston Cup racing team, knows a great deal about team building. In his book, Racing to Win, Gibbs discussed the difficulties of building a team when you’re motivating people with very different personalities. Some are motivated by praise, while others need to be scolded from time to time.

Most of us work harder when we’re working as a team. We know others are depending on us and we don’t want to let them down. You should feel that same sense of obligation, whether it’s a coworker or the members of your family who are depending on you. If you don’t feel that sense of obligation to your employer, you need to find another place to work.

LEADERSHIP LESSONS FROM NATURE

Have you ever looked up to watch a flock of honking geese flying overhead and wondering why they always fly in a ‘V’ formation? Have you every thought of these geese as role models?

Milton Olson, author of Lessons from Geese, makes a compelling case that five behaviors of geese during migration can be translated into leadership lessons for our lives.

1. First behavior: “As each goose flaps its wings, it creates an ‘uplift’ for the bird following. By flying in a ‘V’ formation, the whole flocks adds 71% greater flying range than if the bird flew alone.”

First lesson: “People who share a common direction and sense of community can get where they are going quicker and easier because they are traveling on the thrust of one another.”

2. Second Behavior: “Whenever a goose falls out of formation, it suddenly feels the drag and resistance of trying to fly alone and quickly gets back into formation to take advantage of the ‘lifting power’ of the bird immediately in front.”

Second Lesson: “If we have as much sense as a goose, we will stay in formation with those who are headed where we want to go (and be willing to accept their help as well as give ours to the others).”

3. Third Behavior: “When the lead goose gets tired, it rotates back into the formation and another goose flies at the point position.”

Third Lesson: “It pays to take turns doing the hard tasks and sharing leadership—with people, as with geese, we are interdependent on each other.

4. Fourth Behavior: “The geese in formation honk from behind to encourage those up front to keep up their speed.”

Fourth Lesson: “We need to make sure our honking from behind is encouraging—and not something else.”

5. Fifth Behavior: “When a goose gets sick or wounded or shot down, two geese drop out of formation and follow it down to help and protect it. They stay with it until it is able to fly again or dies. Then they launch out on their own, with another formation, or catch up with the flock.”

Fifth Lesson: “If we have as much sense as geese, we too will stand by each other in difficult times as well as when we are strong.”

Successful people have great team-building skills. They know they’ll go twice as far with a good team surrounding them. The best team players are positive, creative and have good interpersonal skills.

To remind you of the power of team unity, the next time your hear that all-too-familiar honking and look up at the sky to see geese heading south for the winter while flying in the striking ‘V’ formation, you should remember why they fly that way and the valuable lessons we can learn from them about leadership and teamwork.

Become part of a team and then build your own!

Sharing a Bourbon and Branch Water with LBJ

President Lyndon Johnson with Soviet Ambassador in the Oval Office (1966)

President Lyndon Johnson in the Oval Office with Soviet Ambassador (1966).

For a young man, Air Force Major John Pustay had already accomplished a lot. The New Jersey native had served as a military officer in South Korea and Japan, earned a doctorate and taught at the U.S. Air Force Academy. Although only one military officer had made it into the first class of fifteen White House Fellows in 1965, he decided to apply to the prestigious program anyway. After a grueling selection process, he was chosen in 1966. He was assigned to work for Secretary of State Dean Rusk.

President Johnson opened a window for Pustay to witness firsthand how our nation’s top leaders personally cope with the burdens of immense responsibility, impossible expectations and often-brutal public criticism

In his first month as a Fellow, Secretary Rusk sent him to the Oval Office to take notes for him at an impromptu meeting between President Lyndon Johnson and some of his most trusted foreign policy advisors. The Vietnam War was in full swing and the meeting was to discuss our response to an insurrection within South Vietnam’s leadership, and to select bombing targets in North Vietnam. Pustay recalled the small group huddled around LBJ: Secretary of Defense Robert McNamara, National Security Advisor McGeorge Bundy, Director of Central Intelligence Richard Helms, and General Earle Wheeler, the Chairman of the Joint Chiefs of Staff.

The young major listened intently and took notes so he could give Secretary Rusk a proper briefing on the important meeting. “So everybody leaves, and I am the junior guy so I am going to be the last guy out,” Pustay recalled “And as I’m leaving the president taps me on the shoulder and he says, ‘Would you like to have a bourbon and branch water?’ I didn’t know what the heck branch water was, but if the Commander in Chief asks you to have bourbon and branch water, you probably ought to do it.”

The president summoned a steward who produced a bottle of bourbon and a pitcher of clear liquid. Pustay discovered – much to his relief – that “branch water” is just a Southern term for fresh water. The two men settled onto the sofa in the Oval Office, Pustay sipping his bourbon, the president his scotch and soda, while engaging in small talk for almost an hour. During a lull in the conversation, Pustay swirled the amber liquid in his glass and marveled at the fact that he was actually sitting in the Oval Office sharing a drink with the president. He smiled to himself and took another sip, enjoying the whiskey’s rich flavor and smoky aroma, and he was about to congratulate the president on his fine taste in bourbon when he looked up to see Johnson’s eyes welling with tears. “Mr. President,” Pustay said. “I didn’t realize, perhaps, the gravity of the situation we discussed in that meeting, and the decisions that you had to make there.”

“No, that’s not it,” Johnson said in his soft drawl. “I am very sad right now because this is still Jack Kennedy’s house. Jack had charm — he was witty, and handsome. And here I am, just a poor Texas school teacher, a dirt farmer. Since we got back from Dallas, the only one who has ever accepted me here at the White House is Lady Bird.”

Pustay sat with President Johnson, reflecting on the private thoughts of the man who dominated public life with the historic passage of sweeping Great Society legislation aimed at eliminating poverty and racial injustice. President Johnson continued to talk about some of the burdens of this great office. Starting to feel self-conscious that he was taking up too much of the president’s valuable time, Pustay said, “Sir, I think it’s probably time for me to leave.”

“Yeah, young man,” Johnson said. “You know, thanks for listening.”

Whether or not he intended it, President Johnson had opened a window for Pustay to witness firsthand how our nation’s top leaders personally cope with the burdens of immense responsibility, impossible expectations and often-brutal public criticism – a side of their essential humanity the general public rarely gets to see.

That experience showed Pustay early on that even the most powerful leaders are human, and at the core, it’s emotion that drives human behavior. It taught him that if you want to be a great leader you must have a laser-like focus on your people — so simple, yet easy to overlook. He recalled that lesson often throughout his distinguished military career. It undoubtedly helped guide him as he rose to the rank of three-star general, served as the lead advisor to the Chairman of the Joint Chiefs of Staff and led the National Defense University as its president.

Far too many managers identify their organization by the product or service it provides. The fact is that we are in the people business — hiring, training and managing people to deliver the product or service we provide. If people are the engine of our success, then to be great leaders we have to put our people first.

Separate the Real Role Models from the Fakes

Jaime EscalanteYou can pursue your passion in life by finding a good mentor. You can pursue your goals by finding a good role model, and in turn, being a good role model yourself.

Although some athletes are excellent role models, I look for qualities beyond the ability to dribble a basketball or throw a football. I admire athletes who finish their college degree instead of taking the cash that comes with a pro contract.

I’d be much more inclined to view the athlete who drops out as a role model if he or she went back to school during the off-season. Either way, if they set the example of getting an education, I can live with them being paid 100 times more than what a public school teacher makes in a year. After all, they’re pursuing their passion, they give children who look up to them some sense of responsibility and they are making a good living at what they do.

Mike Haynes is an athlete I believe we all can admire. Haynes, a member of the Pro Football Hall of Fame and one of the best defensive backs to ever play the game, was drafted in the first round by the New England Patriots in 1976.

He dropped out of college, but finished his degree in 1980. Haynes worked every off-season for fourteen years to prepare for life after football. Both on the field and off, Haynes set goals and objectives for himself. Haynes is now an executive with the Callaway Golf Company.

Regardless of our ethnicity or racial background, there are role models for all of us.

Role Models in Our Schools

More often than not, the real role models are in our schools, not on the football field, up on the movie screen, or singing at concerts.

In my mind, schoolteachers are the true stars of our society. The late Jaime Escalante is a magnificent role model and has been called the best teacher in America.

I admired Escalante long before I met him. When Escalante taught at Garfield High School, drug dealers were the role models for some of his students.

The people selling drugs had money and power, and this was what the students respected. Escalante sent the message that education is the far better route to success.

Thousands of people have fond memories of Marva Collins, whose passion is educating children. She believes strongly in staying true to the Latin meaning of “teacher,” which is to lead and draw out. Collins is determined to never lose one child. She has trained over 30,000 teachers and touched the lives of millions of children.

Teachers like Marva Collins help children to find new direction. A kind word of encouragement can motivate children to do more than they might have ever dreamed was possible. Teachers can open up a world of possibilities for a child.

David M. Shribman interviewed people from all walks of life. Everyone he talked with had an anecdote about a teacher who played an important role in his or her life. Whether the person was a good student or a bad one, and no matter what occupation they were in, all of them had a teacher who made a big difference in who they are today.

In the preface to his book I Remember My Teacher, Shribman said, “Those who can, do. Those who teach, do more.”

The best role models aren’t usually athletes, TV icons, rock stars or supermodels. The best role models are around us and in front of us every day. They are parents and teachers.

Role models should also be individuals who demonstrate qualities that contribute to good character development, who have a sense of ethics and morals, and who believe that success is more than just what is in your bank account, that what matters is what is inside you as a person.

Find your role models and become one yourself!