All posts by George Hiller Jr.

Notes on Abraham Lincoln

Abraham Lincoln, our 16th President, is one of the most admired and studied leaders in history. His gift for storytelling, his humor, his spiritual depth, and extraordinary wisdom continue to inspire and amaze. How did this unknown, modest country lawyer from Illinois, who grew up poor, lacking college training or formal education achieve such remarkable feats of leadership? Sixteen thousand books and even entire libraries have been devoted to an effort to understand his greatness.

Lincoln is perhaps best known for the leadership he provided during the Civil War. He freed the slaves and saved the Union. I believe that one of the most remarkable qualities he possessed was a primary management practice learning theme: effective team management. A key to Lincoln’s successful leadership was his ability and skill to bring people together under one mission.

Doris Kearns Goodwin, in her book Team of Rivals, makes the insightful and compelling case that a vital factor of Lincoln’s leadership was his willingness to assemble his cabinet from the men who had opposed him for the 1860 Republican Presidential nomination – notably William Seward, the governor of New York who would become Lincoln’s secretary of State, Salmon Chase, Ohio’s Governor who was appointed as Treasury Secretary and later Supreme Court Justice, and Edward Bates from Missouri as Attorney General.
Lincoln had an amazing ability to recognize the unique strengths that each of his rivals would offer and that they all possessed invaluable talents that the country needed if it was going to survive the Civil War.

It has been said that a nation can be known and judged by its heroes, by whom it honors above all others. We pay ourselves the highest compliment, when we say that Abraham Lincoln is that hero for us.

Sources:

Goodwin, Doris Kearns. Team of Rivals: The Political Genius of Abraham Lincoln. Simon and Schuster, New York. 2005

McDonald, Alonzo L., Abraham Lincoln: The Spiritual Growth of a Public Man. Trinity Forum 1993

Koehn, Nancy F. Abraham Lincoln and the Civil War. Harvard Business School Case 9-805-115. Rev. May 21, 2007

My Challenges with Excel

C.S. Lewis (1898-1963), Fellow and Tutor in English Literature at Oxford University, and Chair of Medieval and Renaissance English at Cambridge, was an intellectual giant of the 20th century. In later life, reflecting on challenges he faced in his younger days, Lewis remarked:

I could never have gone very far in any science, because in the path of every science the lion mathematics lies in wait for you. Even in mathematics whatever could be done by mere reasoning as in simple geometry I did with delight. But the moment calculation came in I was helpless. I grasped the principles but my answers were always wrong. Yet though I never could have been a scientist, I had scientific as well as imaginative impulses and I loved ratiocination*.”

To be candid, I have some apprehension when it comes to Excel . . . made all the more pressing because of how central excel skills are to the practice of finance. So when I consider my excel challenges I draw much encouragement from these thoughts of C.S. Lewis.

Although I have a deep passion for finance, and have worked in investment management for 10 years, my position at work has been more about interpreting and leveraging excel generated data, rather than performing the actual work of creating spreadsheet models myself.

The result is that up till now, my excel skills have languished.  Thus I’m grateful that our MBA program has forced me to improve. In this spirit, (and acting on the advice of professor Noonan) I’ve set out to build my own personal top 10 excel skillset, that will be useful to my financial career.  Some of these may seem rather obvious, but excel is my self-selected focus area and I figured that I could subject my list to public opinion and scrutiny, in the hope that collaborative discussion might occur. I also thought that some of this material might be useful for those considering a financial career.

Rough draft of “Top 10” excel skills for investment management and financial planning for high net worth individuals, families, trusts, and charitable foundations:

  1. Precision tree
  2. Sensitivity analysis, useful for evaluating insurance policies
  3. Goal Seek
  4. Historical market and financial instrument analysis
  5. Excel integration with Word and PowerPoint
  6. Configuring excel for pleasant appearance and functionality
  7. Mortgage / Bond / Annuity amortization schedules
  8. Learning to manipulate and efficiently sort data – this is hugely important for many areas within our business such as ranking client positions, asset allocation decisions, analysis of individual positions, and assessing performance in order to prioritize investment decisions
  9. Graphing portfolio performance vs. relevant market benchmarks
  10. Leveraging excel with proprietary finance software used by major financial enterprises. (our firm uses Advent)

When I reflect on the challenges of the first year of MBA school, I am glad that I have improved in several of theses areas and incorporated them into different assignments and projects. Our cohort has aided much of my improvement.

For example, during first semester, I was fortunate to be on a team with Shehzad Shabuddin, who was quite generous with his time and patient with helping me make progress on excel. Shehzad’s blog post, The Excel trap, reminds us of the dangers of reducing life to data and mathematics. Excel-ing in Real Estate by Bob Caperton and the article by Barry Slaymaker on MBA level excel skills were both particularly helpful. I’m also hopeful that I can persuade Joe Song to give me some Excel lessons between now and graduation.

One of the most powerful lessons I have learned in life (and a “key content” area of MP) is the importance of surrounding yourself with others whose complementary strengths have the capacity to offset your personal areas of weakness.  My next blog post will examine a leader who intimately understood just how powerful this principal is, and became a great, and most unexpected, actor in history.

*Ratiocination, noun. – the process of logical reasoning. [1520-30]

What we can learn from the Declaration of Independence

What we can learn from The Declaration of Independence about the art and craft of structured problem solving.

This past weekend, as our nation celebrated the 4th of July, I took time to reread the Declaration of Independence. The document contains the most famous and precious words in American history, and arguably the finest articulation of the idea of natural rights ever written: “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain inalienable Rights, that among these are Life, Liberty, and the pursuit of Happiness.”

I have long marveled at the beauty and power of the Declaration, and been fascinated by Thomas Jefferson, its principal author. This document provides a good example of 3 key management practice learning objectives: 1. Persuasive communication 2. Successful, real-world, problem solving and 3. An incitement to action.

1.  Making the Case Through Persuasive Communication

In the spring of 1776 Jefferson devoted much effort surveying the opinions of his countrymen to get their thoughts on American independence. He told one correspondent that he, “took great pains to enquire into the sentiments of the people on that head. In the upper counties I think I may safely say that nine out of ten are for it.” In terms of American political history, Jefferson was among the first to generate data from a survey of public opinion.

The ideas of freedom and liberty, which define the central themes of the emerging American republic, were commonplace in conversations, sermons, letters, and printed essays of the times. In drafting the declaration Thomas Jefferson said that his purpose was, “not aiming at originality of principle or sentiment.” Rather his intent was to, “place before mankind the common sense of the subject,” and to offer, “an expression of the American mind, and to give to that expression the proper tone and spirit called for by the occasion.”

Drawing upon the philosophers of the Scottish Enlightenment, Jefferson built his case on a contract between government and the governed that was founded on the consent of the people. Both poetic and practical, his arguments are grounded in the context of a story. The effect is a compelling narrative, even a romantic version of reality, which helped create an American identity.

Perhaps the most striking aspect of the document is the logical force and rational power of the arguments it presents, the most notable of which is the notion of self-evident Truths − Truths that are self evident by reason and definition and based upon assertions of reality. (The angles of a triangle equal 180 degrees)

Great writing commands respect. The Declaration is an excellent example of persuasive, evidenced based logic that shaped the course of history. Thomas Jefferson took the current American political ideas and put them into a form that the Colonists could read, appreciate, and understand. With the power of the pen, he articulated a new principle for the government of humanity: all men are created equal. He also ensured that from the beginning, the United States of America would be a nation based on the principles of rational thought.

2.  Creating Value through Real World Problem Solving

While Jefferson’s skill and abilities as a thinker and a writer were remarkable, he also possessed another important quality: the power to analyze a historical situation in depth, to propose a course of action, and shape the minds of the decision makers and legislative assemblies. The bulk of the declaration contains a list of charges condemning the actions of King George III, while creating sympathy for the American cause.

The main problems were subjecting the colonies to laws without representation and the increasing tyrannical abuses from the English system of monarchy. Jefferson provided a solution by focusing his structure on two important themes. The first was the concept of individual rights: ‘The God who gave us life, gave us liberty at the same time: the hand of force may destroy, but cannot enjoin them.’ Second, and equally important, was placing these rights within the context of popularly sovereignty, or the right of a nation to govern itself.

It was Jefferson’s ability to link the right to self government with liberty, both rooted in a Divine plan, and further legitimized by ancient practice and English tradition, which gave the colonists such a strong , clear, and compelling case for action. All of this led to a momentous decision. The struggle they faced was a daunting one.

3.  The Call to Effective Action

With forceful logic, evidence, and a sense of urgency, the declaration details the reasons the American colonists had to declare themselves independent, given their mistreatment at the hands of the British. Implementing these ideals would prove to be enormously challenging.  And, of course, England did not recognize or grant authority to the Declaration of Independence, and it would take a war of seven years to give validity and meaning to our founding document, but Jefferson’s efforts were essential for defining and legitimizing the new nation. With persuasive written communication, a logical framework for understanding the problem, and by proposing a  justifiable course of action, he won the hearts and the minds of the American people.

Great events in history are determined from all kinds of varied and complex factors, but the single most important one is always the quality of the people in charge. It all comes down to leadership. Two hundred and thirty-eight years ago our founding fathers made the sacrifices necessary to create the freedoms that we enjoy today. With the English language they gave voice to the unspoken hopes and aspirations of people everywhere. In the words of Benjamin Franklin, it was “the miracle of human affairs,” one that would result in “the greatest revolution the world ever saw.”

Full text of the document: http://avalon.law.yale.edu/18th_century/declare.asp

 

Sources that were used in the composition of this post:

Thomas Jefferson: The Art of Power by Jon Meacham 2012. Random House. New York

The Road To Monticello: The Life and Mind of Thomas Jefferson by Kevin J. Hayes. 2008. Oxford University Press.

American Sphinx: The Character of Thomas Jefferson by Joseph J. Ellis 1996. Random House. New York

A History of the American People by Paul Johnson 1997. Harper Perennial. New York

Benjamin Franklin: An American Life by Walter Issacson. Simon & Schuster. 2003. New York