The question, as I understand it, is, if we’re going to be inside the egg for a while before it cracks open . . .
how do we deal with our external pressure groups and constituent groups that might be expecting us to hatch prematurely? Right? Is that essentially the question? Okay.
First, let me just share a quick story on this. When I asked David Maxwell how he dealt with the short-term pressures of Wall Street in the early days when he was beginning to change Fannie Mae in 1981, at first, he didn’t really understand the question. Because, you have the legislator; he had Wall Street. I mean, both are equally, sometimes, shortsighted, irrational—whatever. Wall Street can be rational in the long term but irrational in the short term, very similar to politics, right? So, at first, he didn’t understand the question. Then I pushed a little further and he said, “Oh. Well, you need to really understand something. When I began, nobody expected that much from either me or Fannie Mae. They didn’t expect us to be great. And that gave me time.”
Now, the reason I tell that story is because then what we saw as the companies began to unfold—what’s interesting is, they always tried to keep expectations below what their results would actually be so that they could always be showing progress. What we found was that the way that they dealt with this was a very careful process of under-promising and over-delivering on dimensions as a systematic discipline. They were always very hesitant to never really over-promise. And they always tried to figure out ways to shoot over.
But then the key was, they always focused on—even if you haven’t hatched yet—they always focused on what had happened. So, maybe we’ve gone only ten clicks on the flywheel, but they’re really good at showing what clicks five through ten were. So, Fannie Mae hadn’t made its breakthrough, the big breakthrough, yet. But David Maxwell could go to the board, could talk to the investor community, and say, “Look at what’s happened on these three dimensions in terms of who we’ve hired, in terms of some of the new products we’ve developed, and in terms of some internal profit measures that will show some results.” Big breakthrough—not yet—but the chicken’s a little further along in the egg.
The key became managing the results rather than the promises and always focusing on the slope of what we’ve accomplished rather than trying to sell people on the future. That’s a key leadership discipline because it’s so easy to get sucked into promising too much too soon, and that’s when you’re really exposed.