Dear Congress,

In addition to your well-reasoned (researched?) effort to define the limit the financial community can charge for managing the nation's payment system backbone, we think you should consider other overly-costly components of our economy. We have a few suggestions, along with what we believe are fair prices. Please see below.  

Gas. It's already way too expensive, and that little Gulf oil spill will likely have a negative impact on price, unjustly increasing our monthly expenses. We suggest a controlled price of $1.00/gallon, with an included car wash. 

Airfare. Outrageous. No fare should be more than $100 - and that should include baggage, a fleece blanket, a pillow, and those nice little eye masks.

Milk. The average price is $3.50/gallon? Come on!! How much can it cost to put a little pressure on a certain part of a cow's anatomy? We think $1.00/gallon is more than fair.

Internet Access. $30/month? Really? Is the Internet not the 21st century equivalent of the freeway system? Freeways are free - who do you think they call them "free?" So, we say Free Internet Access.

While you work on crafting the necessary legislation to move these prices in line with our personal budgets, why don't you also take a look at mobile phones, iPads, and the fee the firm's accountant charges to send you Glatt Consulting's tax returns. 

Um - there is one more thing. Once you get these prices under control we may not be able to meet the minimum purchase amounts you want to establish for debit card use. Not sure what to do about that. Maybe a tax credit for convenience store owners would work? You could rebate them them difference between the minimum charge they seek and the low costs of our price-controlled milk? Seems like the simplest solution.

Thanks for your consideration!

Go America!!

Glatt Consulting, LLC

I subscribe to a few different e-mail discussion lists, and usually ignore most of the comments and questions that zip into my inbox. I did, however, reply to one today on CEO performance appraisals. I have pasted my response at the end of this post mainly to provide some insight into our consulting philosophy in this arena. 

As an aside, what I find interesting is how complicated some try to make the process. Simple is always better. Why? The more complications, the bigger the loopholes. The more complicated, the greater the opportunity for failure. 

I know, I know. Some say that performance appraisals for the CEO position should be complicated because, well, it is the CEO position - I just don't happen to be one who believes that philosophy. At all.

Here is the list response:

Saw your post and thought I would respond. We encourage clients to do one or both of the following with regard to CEO performance appraisals:

• A 360 analysis comprised of board and direct report feedback on performance.
• A board-driven performance review process that evaluates the effects and quality of the CEO's leadership. 

With regard to a board-driven review process, we encourage boards to construct a process that looks into these three areas:

1. The CEO's management of the credit union's financial goals, objectives, and general stability;
2. The CEO's management of the credit union's business plan (usually with a focus on the performance of the top 5 strategic priorities as defined by the board and senior management in some kind of planning context);
3. The board/CEO relationship as defined by shared expectations (this usually involves the CEO meeting the board''s expectations with regard to communicating risk-specific issues, changes to the business plan, etc.) 

Within this process, we encourage:

• The board, CEO and senior team to work to identify financial goals/objectives and strategic goals and expectations.
• The board and CEO to work to identify the components of the desired board/CEO relationship (an outside facilitator helps here but is not critical).
• An informal quarterly review of CEO performance (related to the three process areas defined above) in a board executive session followed by an update on praises/concerns to the CEO so that the CEO can be informed of the board's thoughts and concerns on a timely basis. This is especially helpful when the CEO's bonus is tied to the appraisal process. 
• A formal, annual CEO review following the completion of year-end activities (incidentally the quarterly review process makes the annual review MUCH easier to complete).
• An annual review and updating (if necessary) of the evaluation/appraisal factors.

With regard to the review itself, we encourage boards to adopt a "yes/no" voting system to evaluate CEO performance in the three distinct appraisal areas, with a report back to the CEO showing the tally of yes/no votes and associated feedback/commentary. In all candor, some board/CEO's do not initially agree with or like the yes/no methodology, but there is a solid base of reason behind our recommendation to use such a voting practice.

If a bonus is attached to the appraisal process, we encourage the bonus to be divided between the three appraisal categories (as an aside, it doesn't have to be equally divided). This allows for the rewarding of solid leadership and performance in key areas without "unforeseen circumstances" impacting the entire bonus. 

I can draw an example from a current client to illustrate what I mean. Their old appraisal process was so heavily weighted on financial performance that the entire bonus was impacted by financial circumstances. As the economy declined, the CEO enacted strategies to limit the negative impact of delinquencies, chargeoffs, and slower lending demand. All strategies appropriate for the times. On top of that they had the corporate issue. Long story short, the financial picture was not "on goal," which because of the heavy weight placed on the finances meant that the CEO received no bonus per the appraisal process structure even though he worked particularly hard to keep the credit union profitable. The board opted to offer a bonus, but they had to violate their own process structure and adopted guidelines to do so. 

By dividing up the bonus pool along the three areas, the board is given the flexibility in the appraisal structure itself to award a bonus without deviating from established processes.

..."

Obviously there is more to our process than is spelled out here, but I believe it shows how uncomplicated this all can, and should, be. What we have found is that complicated processes tend to make people shy away from engagement. They do this in any numbers of ways. They don't fully commit to the process, or they put it off, and off, and off, or they mess it up (and then lose faith in the process all together).

Our advice is to keep it simple, make it all easy to understand, and in turn make the evaluation/appraisal process a useful experience for all.

We just posted a new webpage covering the three models of strategic planning we offer credit union clients. The webpage is available at http://www.glattconsulting.com/consulting/strategic-planning 

One of the three models, Strategic Positioning, is a relatively new development. I first spoke of it at the 2009 National Directors Convention in Las Vegas, and have since presented the process details at various other conferences. We are very excited about the new model, which will make basic planning sessions much for conversationally engaging. 

In an effort to build an understanding of the scope of Strategic Positioning, we recorded a Service Information audio program that walks through basic positioning concepts and and the major steps we take for engaged clients. The program is available for download at the bottom of this post, or you can listen to the program online by visiting the strategic planning information page and locating the Listen Now widget.

To whet your appetite, here is a segment from the program transcript:

In the 2003 book entitled Kmart's Ten Deadly Sins: How Incompetence Tainted an American Icon, author Marcia Layton Turner delved into the twists and turns of the battle for supremacy between KMart and Walmart. In a review of the book posted on Forbes.com, reviewer Kern Lewis says this: 

"Kmart hit on a successful vision, but came to believe in its own infallibility and lost track of where it really stood in the marketplace. Wal-Mart also hewed relentlessly to its vision, but also carefully adapted to marketplace shifts and opportunities and implemented like crazy to see the vision fulfilled." 

Lewis goes on to say this: Lots of companies fail because they do not adapt to changes in the marketplace. 

The markets on which we depend change. They always have and they always will. This is a fact all businesses have to deal with - and some have done it very well. Consider that Procter and Gamble used to be the nation’s largest provider of candles, or that NuCor steel used to be in the Nuclear business - when nuclear was becoming something to fear rather than a source of renewable energy. 

Identifying and addressing changing markets is a matter for strategic planning sessions. Understanding market changes, twists and turns and the impact on products, services and customers is, perhaps, the greatest activity in which to engage at a planning session. 

A key challenge, however, is that for many credit unions the planning process does not offer much in the way of shifting market discussions. Sure, we spend a bit of time talking about regulatory changes, the changing interest rate environment, and the like. Looking at the migration of member segments and interests is usually only a superficial exercise. 

This is the reason Glatt Consulting, LLC put together an engaging, market-focused planning process we call strategic positioning. Strategic positioning is all about looking at market segments, and debating (in an engaging strategic planning session) the most effective strategic position to take for market relevance and long-term success.

We will continue to fine-tune the message so people are clear on the process, but in the interim contact the office at (888) 217-5988 to discuss any unanswered questions you may have.

I'm listening to David Gergen, keynote speaker at CUNA's Governmental Affairs Conference. He suggests that the next generation is key to our future. Long-term that may be true, but is seems to me that we must consider the current generation's relationship to our future. Perhaps we all need to step up, take some risks, make some noise. We can't sit back and wait for "next year" to improve our lot. Gergen said it right. Our problems come from within. We can change that.