Executive Times

Volume 7, Issue 1

January, 2005

 

ă 2005 Hopkins and Company, LLC

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Choosey

The most important work of an executive is to determine personal and organizational priorities: deciding the most important things that need to be done to ensure success. The best executives decide for themselves and their organizations what they won’t do. Clarity on what won’t be done can be an extremely effective way of communicating priorities, especially when some individuals want to do those things that a leader decides need to be forfeited to do something else. Sometimes, it’s important to take care when deciding what not to do. Defense Secretary Donald Rumsfeld took flak recently for not personally signing bereavement letters to the families of troops killed in Iraq, especially because the letters from his boss, President George W. Bush, were signed personally. Rumsfeld chose to let a machine sign the letters to ensure they would get to the families quickly. He’s changed to the personal touch in response to the reaction from so many about the choice he had made. As you reflect on the stories selected in this issue about the choices made by others, think about your own process for making and communicating personal and organizational choices. Decide at this resolution time of year how you will allocate your time to reinforce priorities, not necessarily to do those things you like to do.

 

Fifteen new books are rated in this issue, beginning on page 5. Eleven books are recommended with three stars, and four are mildly recommended with two stars. You can also visit our complete 2005 bookshelf at http://www.hopkinsandcompany.com/2005books.html and see the rating table explained as well as explore links to all books we’re reading or considering this year. As the year begins, we have a queue of 145 unread books on the “shelf of possibility.” If there’s something missing from the bookshelf that you think we should be considering, or if there’s a book lingering on the “shelf of possibility” that you think we should read and review, let us know at books@hopkinsandcompany.com.


Magnificent

Have you ever known an executive who’s an expert at getting the wrong things done? Some process-minded executives excel at implementation and at efficiency, sometimes overlooking the ways to decide the most important things to get done. The combination of effectiveness and efficiency can be elusive. There’s a rare interview with 95-year-old Peter Drucker in the December 13 issue of Forbes (http://www.forbes.com/business/forbes/2004/1213/045.html). Here’s an excerpt: “I've seen a great many people who are exceedingly good at execution but exceedingly poor at picking the important things. They are magnificent at getting the unimportant things done. They have an impressive record of achievement on trivial matters. Leaders are purpose-driven. They know how to establish a mission. And another thing, they know how to say no. The pressure on leaders to do 984 different things is unbearable, so the effective ones learn how to say no and stick with it. As a result they don't suffocate themselves. Too many leaders try to do a little bit of 25 different things and get nothing done. They are very popular because they always say yes.”


Have you said, “No!” to the right things lately? Given your skills at execution, have you selected the important things to get done? Have some individuals who report to you been spending their time doing high volumes of unimportant things well? How can you redirect others toward the most important priorities? Once you’ve set priorities, do you remain firm and verify that the unimportant things are not getting done?


Resilience

All of us are likely to face increased stress sometime soon. Some executives are prepared better for the resilience they will need when under increased stress, while others will rely on past habits of quick fixes that are unlikely to provide much help when stress arrives. Russ Newman, Ph.D., J.D., American Psychological Association executive director for professional practice, offers some advice in a recent Health News Digest article (http://www.psycport.com/stories/helthnewsdigest_2004_12_20_eng-healthnewsdigest_eng-healthnewsdigest_073224_4690211481979667370.xml.html) to help deal with stress and build resilience:

Make connections. Good relationships with family and friends are important. Make an attempt to reconnect with people. Additionally, accepting help and support from those who care about you can help alleviate stress.

Set realistic goals. Take small concrete steps to deal with tasks instead of overwhelming yourself with goals that are too far-reaching for busy times.

Keep things in perspective. Try to consider stressful situations in a broader context and keep a long-term perspective. Avoid blowing events out of proportion.

Take decisive actions. Instead of letting stressors get the best of you, make a decision to address the underlying cause of a stressful situation.

Take care of yourself. Pay attention to your own needs and feelings. Engage in activities that you enjoy and find relaxing. Taking care of yourself helps keep your mind and body primed to deal with stressful situations.

An alternative is to use the practice of many old-time executives: give the stress to others.

 

What are you doing to take care of yourself to be prepared when stress arrives in 2005? Do the same things cause stress in cycles?  What can you do to “address the underlying cause of a stressful situation?” How alert are you to the stress being experienced by those who report to you? To what extent do you increase or decrease that stress?


Balance
Executives can sneak a peek at parts of an internal report prepared for Citigroup by former Comptroller of the Currency Eugene Ludwig, and reported in a page one report in The Wall Street Journal (12/22/04) (http://online.wsj.com/article/0,,SB110366226796306310,00.html), that describes multiple systemic failure points. You may recall the scene of CEO Charles Prince flying to Japan to bow apologetically before Japanese regulators. The article describes the background of what happened and offers some lessons for others. Three decade veteran Koichiro Kitade ran the private banking group, generating ever higher levels of net income by expanding the number of customers served. According to the Journal, the Ludwig report concluded, “As his superiors set successively higher net-income goals for his unit, Mr. Kitade and his managers pressed to bring in more revenue. . . Controls and compliance were secondary … This tone was set from the top by Mr. Kitade. …” According to Kitade, “I did everything I could within my power and budget to increase our capabilities and maintain balance between the functions.” After regulators from Japan’s Financial Services Agency (FSA) reported infractions in 2001, including the unauthorized sale of securities, Citigroup sent an American lawyer, Charles Whitehead, to share responsibility for compliance and control with Kitade. Whitehead and Kitade reported to different bosses, and they clashed badly. In 2003, when FSA took another look at what was happening at the private banking group, “They found problems nearly everywhere, according to Takafumi Sato, director general of the FSA's supervisory bureau, and other FSA officials. These included making loans used by customers for stock manipulation, helping customers misrepresent their profits, misleading customers about the risk of certain products, and failing to perform background checks on new clients to ensure they weren't criminals.” The Ludwig report commented, “The business and international divisions blamed each other as the situation deteriorated, and they continue to do so today. …In hindsight, one may fairly question whether global business and international supervision was close enough to recognize the severity of the management discord in Japan. … Experience also has taught us that a business failure of the kind witnessed in Japan is typically an indication of deeper fault lines in the control structure of the organization as a whole. This is also our conclusion here.” This article and aspects of the Ludwig report will be sobering reading, especially for those executives who try to balance growth with effective controls, and those whose direct reports may be in another part of the world.

 

How do you balance conflicting priorities, like growth and controls? How do you know when spending on controls is less than effective? Who mediates internal bickering, and what do you do to ensure that finger pointing doesn’t distract from effectiveness? 

 

Ambiguity
Executives committed to transparent communications with employees face challenges when dealing with disseminating information that may be potentially bad, but currently ambiguous. A recent (12/11) Harvard Management Update (http://hbswk.hbs.edu/item.jhtml?id=4538&t=career_effectiveness) provides advice on how to maintain a commitment to candor in a case involving a possible future sale of a business unit. According to Vantage Partners Danny Ertel, with negative or ambiguous information, “the interests at stake are not necessarily an attempt to persuade or influence. They are about being able to manage a business effectively, about being able to make good decisions based on reliable information, about being treated fairly.” To find the right balance in presenting tricky information, Ertel suggests executives consider the following questions, which originate in the realm of negotiation strategy: “What are your key interests? What are the interests of the many audiences who will invariably hear at least some parts of the message? What are some options for meeting those interests? What are some standards of legitimacy? … If the answer you provide does not feel truthful and complete, you fail.” Of all the choices executives make, engaging in dialogue concerning future ambiguity can lead toward declines in morale or toward engagement toward influencing destiny.

 

What expectations have you set with your direct reports concerning your candor and internal issue transparency? How open is your communication? How comfortable is your team with ambiguity? How does your personal anxiety influence the quality of communication in this area?
Follow-up

Here are selected updates on stories covered in prior issues of Executive Times:

 

Ř      The last time we encouraged readers to stay tuned to the ongoing saga of executive uncertainty at Coca-Cola was in the March 2004 issue of Executive Times. Those struggling to stay current will enjoy one more Coke cover story, this one in the December 20 issue of Business Week titled, “Gone Flat” (http://www.businessweek.com/magazine/content/04_51/b3913001_mz001.htm). Here’s one excerpt: “Of all the problems that can beset a corporation, a dysfunctional culture has to be one of the toughest to fix. How do you get thousands of employees suddenly to change their most basic assumptions about their company? After all, the beliefs and attitudes that make up a culture filter into everything else: decisions on basic strategy, management style, staffing, performance expectations, product development. That's why the problems at Coke have proven so intractable. A succession of managers has focused on trying to do what Coke has always done, only better.”

Ř      For readers who want to read more about Citigroup’s Chuck Prince’s woes in Japan, Carol Loomis published an in-depth interview in the November 29 issue of Fortune titled, “Tough Questions for Citigroup’s CEO” (http://www.fortune.com/fortune/investing/articles/0,15114,782028,00.html). Here’s one excerpt: “One of the things we’re going to put into place, starting in 2005, is a series of activities—training, communications, performance appraisals—that will lend a little more balance to the aggressive financial culture that we have always celebrated, and that I still do. We're not going to turn ourselves into a charity. I don't believe we have in any way a corrupt organization or a bad organization. But I believe the celebration of financial results causes a few people at the edges to act in ways that are singular.”

Legacy

Arithmetic
There was a time, not very long ago, when certain executives assembled portfolios of seemingly unrelated companies into conglomerates, using a common set of measurements to manage them. One of the giants of that time, James J. Ling, died in Dallas in late December at age 81. Jimmy Ling was the “L” in LTV Corporation, which Fortune called the fastest growing company in the decade 1955 to 1965. The growth came from the acquisition of companies, keeping parts, and selling other parts, often for more than the market had valued the former parent company. That strategy worked for Ling and LTV at its peak in 1969 employed almost 30,000 workers and its companies offered more than 15,000 different products. In 1970, Jimmy made a big bet on the steel business and quickly had to sell off desirable business to stop the financial hemorrhage that LTV faced. LTV’s bankers forced Jimmy out, but he continued to do deals until his death. Thanks to Ling, every merger is considered for the hidden value that can be realized under new owners. The arithmetic he pioneered, 2 plus 2 had to equal 5 or 6, became common practice, whether accurate or not.

 

 
Latest Books Read and Reviewed:

 (Note: readers of the web version of Executive Times can click on the book covers to order copies directly from amazon.com.  When you order through these links, Hopkins & Company receives a small payment from amazon.com.  Click on the title to read the review or visit our 2005 bookshelf at http://www.hopkinsandcompany.com/2005books.html).

 

Title (Link to Review)

Author

Rating

Review Summary

Purchase

Lost City

Cussler, Clive

Formula. Comfortable predictability of heroes, villains and fast plot meet expectations to provide distracting entertainment and quick reading.

Another Bullshit Night in Suck City

Flynn, Nick

Lost. Finely written, painful memoir by a son whose father wanted to be a writer, ended up homeless at a shelter where the son worked, and whose description of street life provided the title.

Sammy's Hill

Gore, Kristin

Capitol. Witty debut novel from former VP’s daughter. Young, idealistic protagonist works obsessively for member of Congress, tries to have a love life, and becomes endearing to readers.

Who Let the Dogs In?

Ivins, Molly

Sharp. Collection of twenty years of witty, sharp, liberal, biting columns, especially about Texas, politicians and the Bushes. Will cheer liberals and raise blood pressure of supporters of those she skewers.

Confidence

Kanter, Rosabeth Moss

Cycles. Winners tend to win and losers tend to lose, so try not to lose twice in a row. Beyond that insight, Kanter gives good sports stories and some tools for executives to implement winning habits and shed losing habits.

Here Kitty Kitty

Libaire, Jardine

Hazy. Talented debut novel uses beautiful words to describe ugly lives. Rich in tapping the grieving process while dealing with coming of age and its consequences.

Little Scarlet

Mosley, Walter

Heated. Pitch-perfect novel of LA in 1965 after the Watts riots, capturing the violence, fears and prejudice of the time.

Seriously

Nevai, Lucia

Community. Debut novel with taut writing developed from prior short stories and just the right amount of description of finding new life in a small town. Pleasurable reading that doesn’t insult one’s intelligence.

The Vienna Paradox

Perloff, Marjorie

Transformations. Well-written memoir of journey from 1938 Vienna at age 6 through tenure as college professor and critic of modern writing. Lessons from the many changes she made along the way.

How Full Is Your bucket?  Positive Strategies for Work and Life

Rath, Tom and Donald O. Clifton

Overflowing. Grandson and late grandfather (co-author of Now, Discover Your Strengths) present results of 50 years of research showing that positive interactions are good for all.

The Mind at Work

Rose, Mike

Marginalized. UCLA professor’s research shows that blue collar workers are usually undervalued for the cognitive abilities they apply at work.

Schott’s Food and Drink Miscellany

Schott, Ben

Trivia. Hundreds of offbeat, funny, unusual and irrelevant factoids about food and drink through the ages.

My Soul Looks Back in Wonder

Williams, Juan

Voices. 30 ordinary and extraordinary people tell personal stories about the civil rights struggle, supplemented with photos that capture through image the power of the movement.

Unveiling

Wolfe, Suzanne M.

Restoration. As protagonist Dr. Rachel Piers restores a work of art to unveil what it really is, readers see Piers for the person she has become as scars from her past begin to fade away.

I Am Charlotte Simmons

Wolfe, Tom

Identity. 688 pages of the first six months in college experienced by small-town Charlotte who tries to remember who she is as she becomes transformed by college life and adolescent love.

 

ă 2005 Hopkins and Company, LLC.  Executive Times is published monthly by Hopkins and Company, LLC at the company’s office at 723 North Kenilworth Avenue, Oak Park, Illinois 60302. Subscription rate for first class mail delivery of the print version is $60.00 per year (12 issues). Web version subscriptions are $30.00 per year. Single issues: $10.00 print; $5.00 web. To subscribe, sign up at www.hopkinsandcompany.com/subscribe.html, send an e-mail to executivetimes@hopkinsandcompany.com, call (708) 466-4650, or fax to (708) 386-8687. For permission to photocopy or e-mail Executive Times, call (708) 466-4650 or e-mail to reprints@hopkinsandcompany.com. We will send sample copies if requested. The company’s website at http://www.hopkinsandcompany.com/archives.html contains the archives of back issues beginning in the month after the issue date. 

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