Executive Times

Volume 7, Issue 2

February, 2005


ã 2005 Hopkins and Company, LLC

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There’s sound advice from many experts to executives in the phrase, “play to your strengths.” We believe strongly that executives need to be themselves, understand their strengths, deploy those strengths and be sure that someone else on the executive team covers them in areas of weakness. Unfortunately, for some executives, their strengths overpower team dynamics, and weak areas are overlooked, and that can lead to organizational and personal trouble. The stories we’ve selected for your reflection this month all call attention to strong leaders with specific strengths, and the challenges of moving forward with those strengths maintained, and weaknesses shored up by others. As you read these stories, think about who you are and what your strengths are. Does your organization utilize those strengths effectively? Do you utilize the strengths of those who report to you? Beyond the areas where you and others are strong, who covers your weaknesses, and how do you ensure that you and your organization are protected? 


Fifteen new books are rated in this issue, beginning on page 5. Two books are highly recommended with four-star ratings; eight books are recommended with three stars; four are mildly recommended with two stars; and one has a cautious one-star rating. 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. Thirty seven new books have been added to the “shelf of possibility,” which now has over 150 books in queue. 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.


The herd in the business press has been piling on Hewlett-Packard CEO Carly Fiorina in recent weeks. Details of a board-driven corporate reorganization were revealed by The Wall Street Journal on January 24 (http://online.wsj.com/article/0,,SB110652096353733547,00.html): “Under the reorganization plan discussed by the board at San Francisco's Park Hyatt Hotel, three H-P executives would gain more day-to-day control. … One person close to the situation said Ms. Fiorina initially had resisted the moves, but by the end of the session had agreed with directors and was on good terms with them.” The January 26 Journal had columnist Jesse Eisinger saying Fiorina “took the wrong strategy and failed.” (http://online.wsj.com/article/0,,SB110668698388435660,00.html) The cover article in the February 7 issue of Fortune (http://www.fortune.com/fortune/ceo/articles/0,15114,1019928,00.html) dissected H-Ps performance under Fiorina and had her come up short. “First, under the only lens that matters, did the famed merger that Fiorina engineered between HP and Compaq produce value for HP's shareholders? Second, with that merger nearly three years past, is HP in shape to thrive in its brutally competitive world? The answers are no and doubtful.” We couldn’t help but wonder if all this negative press relates to a smart, articulate woman getting coverage that would not be as vitriolic were the H-P CEO male. A light bulb went off when we read the following in the Fortune cover story: “Fiorina is also extraordinarily and amazingly articulate in all settings. Most other CEOs grope at least occasionally for words; she never seems to. Her talent for talk naturally solidifies her reputation for brains, though it would seem that one of her staff members recently stretched things a bit by saying, ‘I wonder what it feels like to walk into a room and know always that you are the smartest person there.’ But there is also a downside to her verbal skills in that what she is saying so fluently sometimes wears thin with people, coming off as short of substance, overly aspirational, and lacking in spontaneity.” Some of the puzzle pieces began to make sense. Who would have thought that being articulate can turn into a problem (call it articulitis)? Despite Fiorina’s amazing energy level, it will take more than her strengths for H-P to succeed, especially when that very enthusiasm and energy can be misperceived. The reorganization expands the roles of three executives with corollary strengths, so that the whole enterprise has a greater chance to do better, in the realm that really matters: results not words. Another lesson: even the greatest strengths can become liabilities in certain situations. (If you want to check out one aspect of Fiorina’s communication skills, read her speeches at http://www.hp.com/hpinfo/execteam/speeches/fiorina/index.html).

Have you ever been with someone so smart that you’re not comfortable with expressing your own thoughts? Have you come across to others as having the answers because of your intelligence, not necessarily because you really do have the answer? Does your confidence or assurance cause others not to question you? What strengths of yours need balancing by other members of your team? Which of your weaknesses (or strengths carried too far) need to be covered by another team player? How clear is your communication about these strengths and weaknesses?


The “In the Lead” column of The Wall Street Journal can present stories that resonate for executives. The January 18 column (http://online.wsj.com/article/0,,SB110600278522628243,00.html) described two stories of executives who seem to be succeeding by playing to their strengths and not trying to re-create themselves. In one case, “Lawrence Stevenson, a seasoned retailer who became CEO of auto-parts-retailer and service-provider Pep Boys in May 2003, says he knew little about the business when he took it over and still has a lot to do. But instead of trying to master arcane details about brake pads and radiator hoses, he hired a top merchant, added a new chief information officer, and focused on building the company's marketing and merchandising strengths. The stock of Pep Boys has about doubled since Mr. Stevenson took over. ‘The board's view was that they had a tremendous amount of industry-specific knowledge about auto parts; what was needed was someone to challenge the things they were doing and build a strong team,’ says Mr. Stevenson. ‘I wasn't going to turn the company around on my own, but I could build a team of senior executives who would have the core skills needed to supplement the ones that existed here.’” The temptation to learn arcane details could easily derail a leader who can accomplish more by relying on experts than by becoming the Chief Expert Officer.


What details are appropriate for you to learn in your leadership role, and what constitutes arcane knowledge? How will you know the difference? Do your direct reports value your answers more than your questions? Should they?


Forbes selected Amgen as the Company of the Year for 2004 in the January 10 issue (http://www.forbes.com/free_forbes/2005/0110/128.html). “‘There's something about a 25-year-old biotech company in California that's different from a 100-year-old drugmaker in New Jersey,’ says Amgen's chief executive, Kevin Sharer. ‘We are like a teenager: Our best years are still ahead.’” Prior to Sharer’s leadership, Amgen acted like an older company, given its tremendous early success on two drugs, it seemed to be coasting. How has Sharer exploited the strength of corporate youth since becoming CEO five years ago? According to Forbes, “Since then Sharer has replaced eight of the ten highest-ranking executives. He spent $11 billion to acquire Immunex in 2002 (expanding Amgen into a third market, arthritis) and $1.3 billion last year for Tularik, a Bay area shop working on drugs for cancer and diabetes. The deals doubled Amgen's research staff to 4,000, and the firm has worked to sharpen its focus and lift its output of testable drugs. … ‘We were comfortable, the king of biotech,’ says Ilana Meskin, an Amgen manager. ‘Kevin shook us out of our complacency.’ … One of his first major moves, in early 2001, was to woo George Morrow, a marketing guru at GlaxoSmithkline who had helped launch the top-selling migraine drug Imitrex. When Morrow's family balked, Sharer showed up at their North Carolina home one Saturday morning armed with local maps and school brochures to sell them on the move to California. … He paid bigger bonuses to the best performers instead of handing them out based on group performance, as Amgen had done.” Time will tell if youth prevails.


Are the best years for your organization in the past or in the future? How does your leadership influence the vitality of your organization? What enthusiasm do you create within your organization? How do you exploit what makes your organization different from others, especially when recruiting talent? Would you travel across the country to sell your organization and your community to the family of a talented potential hire?


Executives pick their fights, and close competitive gaps in ways that capitalize on the strengths of their companies. One example in the Business Week special report of the “Best and Worst Managers of the Year” (January 10) (http://www.businessweek.com/magazine/content/05_02/b3915618.htm) is John Henry, one of the owners of the Boston Red Sox, who, in case your were visiting another galaxy in recent months, achieved their first World Series victory since 1918. “Henry, 55, set the stage for victory by aggressively boosting revenues after he and his partners … bought the Red Sox for a record $690 million in early 2002. They made the most of Fenway Park, the oldest stadium in Major League Baseball, by squeezing in more seats and then charging the highest prices for home games, all of which sold out. At the same time, they started broadcasting home games in high definition on their 80%-owned cable sports network, New England Sports Network -- helping it routinely win in regional prime-time ratings. All of this turned the Sox into baseball's second-most-lucrative franchise and gave it the financial muscle to take on the Yankees, who opened the season with a record $184 million payroll. The Sox were second, at $127 million. Henry -- a numbers genius, whose proprietary futures-trading system consistently produces double-digit returns -- closed the gap with sabermetrics. That's a system for mining baseball stats to find undervalued players while avoiding long contracts for aging stars -- such as pitcher Pedro Martinez -- whose performance is likely to decline. Henry built baseball's most effective team but won't settle for one championship. After ending an 86-year drought, he's aiming for a dynasty.” We’ll be watching.

What version of sabremetrics do you use to compete effectively? How do you set the stage for victory? What muscle building are you doing to create a dynasty for your organization?



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


Ø      We noted in the May 2004 issue of Executive Times that shareholders were continuing to call for the ouster of DaimlerChrysler CEO Jürgen E. Schrempp. For a great update on how Schrempp has survived, be sure to read the article in the December 27 issue of Fortune titled, “The Nine Lives of Jürgen Schrempp  (http://www.fortune.com/fortune/subs/article/0,15114,1011595,00.html). “Just a few months ago time seemed to be running out for Jürgen Schrempp. Investors were screaming for the DaimlerChrysler chairman's scalp because he had destroyed $60 billion in stock market value in six years. His own management board had humiliated him by vetoing part of his Asian strategy. … But a funny thing happened on the way to the funeral: Schrempp survived. … and three of its four major operating divisions are running well. Investors have responded by bidding up the price of the stock nearly 10% in recent weeks. And for now, at least, Schrempp's critics have quit yapping.” Read the article to find out why, and conclude whether Schrempp will survive 2005.



The executive whose legacy we call to your attention in this issue realized that the basis for wealth had evolved from land to labor to information and once said, “Information about money has become almost as important as money itself.” That remark is inscribed in the lobby of New York's Library of Science, Industry, and Business. While leading Citigroup’s rapid growth from 1967 to 1984 as CEO, Walter B. Wriston turned information into action and dramatic change for all financial services companies. He saw the potential for automatic teller machines, and spent a fortune to put them everywhere and supported them with improved and expensive internal computer systems based on digital technology. He realized the impact of consumer credit on banking, and flooded the market with credit cards. He extended the company’s reach globally, doubling the size of the company during his tenure as CEO, transforming the company into an international bank. Wriston attacked regulatory constraints on banking and directly or indirectly broke those restraints and transformed banking. All of us received a glimpse of his lucid thinking in two books he wrote in retirement: Risk and Other Four Letter Words (1986) and In the Twilight of Sovereignty: How the Information Revolution Is Transforming Our World (1992). Wriston’s premise in the latter book is that information frees us and has become a force that can’t be stopped. He wasn’t afraid of credit losses, and set profitable growth as the most important measure of success. Wriston’s growth bets continue to pay off for Citigroup decades after his retirement. Walt Wriston died on January 19 at age 85.


Wriston received the Presidential Medal of Freedom in 2004, and his legacy continues in the Wriston lectures, given annually at the Manhattan Institute. You can read past lectures at http://www.manhattan-institute.org/html/wriston.htm. For more about his life, read Philip Zweig’s comprehensive (950 page) 1996 biography, Wriston: Walter Wriston, Citibank, and the Rise and Fall of American Financial Supremacy. Wriston claimed that he never read the biography, saying, “I'm too busy to read it. That's the past. I'm interested in the future.” In 1999 Fortune asked him why small tech companies interested him, and he answered, “Well, if I'm not awfully careful, I learn something.” We can all learn from Walt Wriston.


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)



Review Summary



Adams, Lorraine

Alien. Debut novel explores Arab Muslim immigrants struggling in Boston, Brooklyn and Montreal. Fine portrayal of cultural confusion, terror and predators.

Human Capital

Amidon, Stephen

Short. Striving suburban Connecticut life creates prosperity for all those around protagonist Drew Hagel, while he faces sequential failures.

The Corporation

Bakan, Joel

Personification. Canadian law professor explains that society has given too much control to corporations and bad behavior should be expected unless new laws reign in corporate greed.

Eating Mammals

Barlow, John

Hunger. If you can stomach the macabre, and hunger to read something odd and unusual, these three novellas will whet your appetite.

Critical Condition

Bartlett, Donald L. and James B. Steele

Sick. Investigative journalists tell scores of stories of how the health care system fails Americans, and present some ideas on changes to get us out of this mess.

Hannah Coulter

Berry, Wendell

Living. Poetic writing and inspirational testament to living narrated by a woman who has welcomed the love and losses of life fully. Could be Berry’s best novel.

State of Fear

Crichton, Michael

Manipulation. Fiction with footnotes in which scientists manipulate data to further personal interests, and Crichton notes how fears of global warming are misplaced according to scientific data.

Hard, Hard City

Fusilli, Jim

Solid. Private eye Terry Orr returns and endangers himself while helping restore the life of a wayward teen. Character novel makes values plain and clear.

The Last Juror

Grisham, John

Character. Often tedious novel of rural Southern life in the 1970s, long on local color, and short on the real story of racism and power.

Puppetmaster: The Secret Life of J. Edgar Hoover

Hack, Richard

Excesses. More sad than sensational, this life of Hoover highlights all the demons he fought, and the life of fear he created and led.

21: The Final Unfinished Voyage of Jack Aubrey

O’Brian, Patrick

Fragment. Handwritten manuscript with some typed edits by the author placed in printed version. Unsatisfying because incomplete, and appeals only to O’Brian addicts.

The Egyptologist

Phillips, Arthur

Obsession. Engaging creativity and complexity will keep intelligent readers interested as multiple narrators present unusual happenings among the tombs of the pharaohs.

Bad Dirt: Wyoming Stories 2

Proulx, Annie

Cowboys. Author’s past confusing poetic drabble replaced with clear prose in presenting rural cowboy life with humor and poignancy.

Wolves Eat Dogs

Smith, Martin Cruz

Patience. Arkady Renko returns for the fifth installment in this series. Russia and Arkady continue to change, both are struggling, but with patience Arkady figures things out.

When Fish Fly

Yokoyama, John

School. Inspirational story of the transformation of the author’s retail fish business, using solid psychological principles, and creating a vision and a culture that can be emulated to produce remarkable success.


ã 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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