Archive for August, 2006
Her quote (which I saved) made me think about how every CEO departure triggers a corporate drama regardless of how smooth it appears to outsiders. As CEO departures mount, one can’t help but wonder about all those businesses in turmoil. The season for the most CEO departures — last quarter of the year — will soon be arriving as we close another record-breaking year of CEO churn.
In case you were wondering what I was, CEOs are no more than temps today.
I have to say that sometimes it just gets plain funny. There are so many forms of CEO-bashing today that it has become a legitimate sport. I recall one study concluding that most CEOs are sociopaths at heart. Another found that CEOs tend to have thicker waist lines and unusually strong maternal figures in their lives.
A common refrain, however, is that CEOs are extraordinarily narcissistic. A recent column in the Financial Times by Francesco Guerrera reported on new research linking CEO egos and failed strategic choices. The survey by Arijit Chatterjee and Donald C. Hambrick of Penn State examined the size of annual report photos, number of “I”s in shareholder letters, the length of Who’s Who CEO bios and CEO compensation to strategic corporate disasters. According to the research, bigger-sized CEO egotists take bigger risks (such as losing acquisitions, outsized product launches and aggressive expansions). “Would General Electric have launched a blockbuster bid for its rival Honeywell and fought an acrimonious and ultimately doomed battle without Jack Welch at the helm?” writes the reporter. Although I respect the work of Donald Hambrick (I quoted him frequently in my book) and have not personally read the new research (trying to locate it), its title gives away its underlying CEO cynicism: “It’s All About Me: Narcissistic CEOs and Their Effects on Company Strategy and Performance.”
Guerrera does call on boards to rein in ego-laden CEOs but sometimes we have to ask ourselves whether economies would have grown so fast if every company decision was up to a vote and safe as could be. Would the Google guys have jumpstarted their search engine business waiting for every “t” to be crossed? Same with Apple, Microsoft, e-bay and Amazon? Sometimes business succeeds based on an oversized hunch by a would-be CEO.
CEO bashing, CEO sociopaths, CEO egos, Financial Times, Arijit Chatterjee, Donald C. Hambrick, Who’s Who, Francesco Guerrera, Google, Apple, Microsoft, ebay, Amazon, Jack Welch, Honeywell, Penn State
Several years ago I came across the Cisco website and was so impressed with a CEO monthly calendar that kept track of employee breakfasts. As a keeper of all things large and small when it comes to CEOs, I used the calendar in presentations to show how good CEOs communicate internally. It has been several years since I thought about that calendar.
In a recent interview with with CEO John Chambers in Fortune (August 21, 2006), I found this quote: “As for how I hear about employees, I host a monthly birthday breakfast. Anybody who has a birthday in that month gets to come and quiz me for an hour and 15 minutes. No directors or VPs in the room. It’s how I keep my finger on the pulse of what’s working and what’s not. It’s brutal, but it’s my most enjoyable session.”
That’s alot of monthly breakfast with employees. Good to hear that Chambers keeps it up. It’s a great best practice for CEOs.
BusinessWeek’s entire double issue this week is about competition (August 21/28). There are several interesting facts about what it takes to win according to their poll of 2,500 American managers and executives. One question was about who would make a better CEO? The choices were captain of your high school football team, the class valedictorian or the homecoming king or queen. After reading the first article in the cover feature written by Joe Torre, manager of the New York Yankees, I figured the response to this question would of course be the sports coach. However, not so. The verdict was class valedictorian. This brainy response beat out the football captain two to one and the homecoming king or queen nine to one. Clearly there is a recognition that you need deep smarts to be able to compete in business today.
Something else hit me as I was thinking about the surprising choice of class valedictorian. In the BusinessWeek feature, both the football team captain and homecoming winner were pictured as men. The class valedictorian was female. Despite the low number of female Fortune 500 CEOs, this juxtaposition on the BusinessWeek page struck me as an interesting insight into the future. In a recent feature in The New York Times, women were reportedly leaving men in the dust in terms of grades and honors on college campuses. Is it possible that as women increasingly win top honors in high school and college, we will see a flourish of female leaders? Possible but not probable. Smarts only gets executives so far. There are several other ingredients that must be on tap for executives to make it to the top — emotional intelligence, fairness, integrity, optimism, and the ability to communicate and listen to others. The right choice to the BusinessWeek question should have been the class valedictorian who also led the football team and had the charm of the homecoming queen.
Worth reading the letters to Fortune about their cover story on Jack Welch no longer being the management sage. They are in the August 21, 2006 issue and on Fortune’s website. Fortune got what they wanted — lots of publicity and reader discussion. Welch responded and made many good points. I tend to agree with him that he never ascribed to those rules which Fortune has now labeled as the “old rules.”
Where I disagree with Welch is his statement that Fortune was trying to outdo its rival BusinessWeek because Welch and his wife are columnists at the weekly. Having been at Fortune, I can assuredly say that cover features are not written to get back at competitors. Editors of high quality publications do not think that way and Fortune certainly does not.
The letters on the website are more negative than positive. In fact, many of them are downright nasty. Interesting to see who turns up to denigrate one of the most revered CEOs of all times.
Was reading a fascinating Harvard Business School case study on Egon Zehnder International, the executive search consultant. The firm has a very distinct culture that is worth emulating. The case study describes the history of the firm and its focus on partnership and collaboration. I pulled out a few quotes from the founder, Mr. Egon Zehnder, that particularly resonate.
“It is well and good to change our daily practices but never our principles, our fundamentals, which have made this firm so successful!”
“The second inner strength of this firm is our reputation for quality. This reputation has been steadily built, stone upon stone, over many demanding years. Few assets are worth more, and few assets are more fragile, than reputation.”
“Partnership consists in forgetting what one gives and remembering what one receives.”
“A commercial enterprise, like a human life, is a fragile entity.”
Egon Zehnder has lived by these values for decades (since 1964). His eloquent and heartfelt statements on partnership are worth considering in these times of uncertainty. Good to hear about firms such as this that are deeply grounded in team relationships, client focus and quality.
The Pew Research Center just released new research on July 30, 2006, “Maturing Internet News Audience — Broader than Deep.” There was alot of fascinating information about Americans’ news habits, not all encouraging. In 1993, 58% reported reading a newspaper vs. 40% today. Broadcast is the preferred source for news. Print far outnumbers online news reading with only 6% of Americans reading a newspaper online. The researchers state that the Internet serves mostly as a supplement than a primary source of news. The web allows users to quickly grab the latest news in bits and bytes. For many, getting their news online is a matter of convenience rather than a source for digging into the details.
Another interesting insight is that people are spending more time reading business and financial news in newspapers — up from 44% in 1985 to 60% in 2006. Perhaps not so surprising considering that many Americans have their nest eggs tied up in the stock market. Men outnumber women as regular readers of business magazines (71% to 29%, respectively). Why am I surprised?
As a blogger, it is sobering to learn that only 4% of Americans regularly read news-related online blogs although the percentage increases to 9% among those 18 to 24. The younger set is turning into a headline society. Apparently younger people “bump” into the news as they are searching for something else. A pure accidental play.
The reputation of print newspapers has taken a beating over the past couple of years with the Jayson Blair episode, Judith Miller fiasco, USA Today scandal, etc…to name just a few credibility-busters. Although the print newspaper with the most credibility is the Wall Street Journal, only 26% believe all or most of what is printed in it today compared to 41% in 1998. The New York Times is considered almost as believable as the Wall Street Journal (20% vs. 26%) although the venerable paper has a sizeable number of critics. Eighteen percent of Americans report that they believe almost nothing they read in the New York Times today. Pretty ghastly news.
Some advertising can resonate profoundly. When I first saw Dow’s new advertising in an issue of BusinessWeek, I just stopped. All I could think about was who could I share this excitement with. I have a bunch of reputation cronies who delight in big believable game-changing thought leadership platforms. They would care how I felt. I made sure to reach out to them. The campaign had apparently already launched on broadcast which is something I do little of. However, the next day while on the treadmill, I saw the campaign sans words but felt the same sense of good sentiment and captivity.
At first I focused on the photography which drew me in. Then I smiled knowingly at Dow’s concept of the human element, the missing element in the Periodic Table of Elements. After reading what I could about the new campaign, I found Dow’s chairman and CEO Andrew Liveris’ speech on their web site (Dow’s 2025 Sustainability Goals, May 2006). Below I quote from a section of his speech that ties together the human element with Dow’s plans to engage in the major societal, political and economic issues of the day:
“For still others, we have to invent the roadmap itself. And we will. And we will make it happen by keeping faith with The Human Element. It goes without saying that The Human Element is not, like carbon or nitrogen or iron, an element to be shaped to our will . . .
It is rather the element that shapes each of us who is a member of the human family, defines us, and will weigh whether, during our time as stewards of the bounty around us, we did more than create value, we were true to our values…we did more than build our net worth, we were worthy.”
Oftentimes we forget that we are part of one large human family. This campaign was a good reminder that we have work to do. Kudos to Dow for this thoughtful campaign.
I went to Factiva today to see how many articles in the past three months mentioned BP and reputation. There were 143. The news today about BP shutting down its Alaska field was front page news. Despite the “smudge” or “smear” on its reputation, you have to admit that BP acted swiftly and decisively. That’s worth a few points as BP’s reputation gets tallied at the end of the day.
The daily reputation vote is the biggest change in the reputation landscape. Reputations rise and fall on a 24 hour basis. BP was doing well with its recent coverage on its new get-it-done US CEO and then all of a sudden, the oil major is as vulnerable as ever. This is certainly not turning out to be the celebratory last hundred miles of Lord John Browne’s amazing tenure.
Tomorrow is another day, thankfully.
I received a Google Alert about mounting ASBOs in the U.K. To my embarrassment, I was not aware of this term and turned to wikipedia for a definition. (See below)
In the United Kingdom an Anti-Social Behaviour Order (ASBO (pronounced az-bo)) is a civil order made against a person who has been shown to have engaged in conduct which caused or was likely to cause alarm, harassment or distress to one or more persons not of the same household as him or herself and where an ASBO is necessary to protect relevant persons from further anti-social acts by the Defendant. In England and Wales they are issued by Magistrates’ Courts, and in Scotland by the Sheriff Courts. It was introduced by the Crime and Disorder Act 1998.
As I was searching around wikipedia I learned that ASBOs were served against Sony Music UK and BMG for alleged fly posting. Apparently the illegal fly posting was believed to be saving the companies over eight million pounds in advertising costs and was costing the city some 250,000 pounds to clean up. An ASBO can result in a jail sentence of five years or more. Sounding more and more serious!!! As if companies do not have enough to worry about these days.
In the U.S., some would say that ASBOs are increasing common among CEOs and other executives in Silicon Valley who are being investigated for backdating stock options. Is an interesting term and thought I would point this out to other clueless people (like me).