Executive Times

Volume 7, Issue 3

March, 2005

ã 2005 Hopkins and Company, LLC

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Stability

The images of mudslides in California, an earthquake in Iran, and rebuilding from the tsunami combined to have us thinking about stability and instability. Executives make decisions that maintain stability or create disruption. Sometimes the actions of others upset our stable world. We examine stability from four perspectives in this issue. We look at how executives can address the loss of a mentor. We point out what can happen when our leaders do things that provoke others. We describe how a leader can shake the foundations of competitors by some simple actions. We note how one executive has created stability through performance and contentment. In all cases, we provide the opportunity for readers to reflect on how you might behave in the same ways or different from the individuals whose experience we bring to your attention. As you read the stories we select, think about similarities and differences to your organization, your boss, your direct reports, and, of course, yourself.

Fifteen new books are rated in this issue, beginning on page 5. One book is highly recommended with a four-star rating; nine 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 two new books have been added to the “shelf of possibility,” which now has over 180 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.

Affiliation

Close affiliations at work usually generate higher levels of work satisfaction and lead to improved collaboration. Every executive has been formed by the example provided by a mentor. In the best mentoring situations, the protégé learns, but doesn’t become too attached to a mentor. In other situations, executives can be viewed as such close allies or partners that a change for one means a change for the other. Sometimes a mentor protects a protégé, and the two move from job to job in tandem. Other times, when a mentor moves on, the protégé can remain stable if other relationships at work have been developed and nurtured. We read in The Washington Post (2/13/05) (http://www.washingtonpost.com/wp-dyn/articles/A18510-2005Feb12.html), “…what do you do when your mentor, whether it be the top boss or just a more experienced colleague who showed you the ropes, gets fired, dies, transfers to another job or otherwise ceases to be in a position to boost your career? The answer, of course, depends on unique facts and circumstances. Sometimes there is nothing to do but update the résumé and scan the want ads. Other times, career counselors and protégés say, a bit of deft maneuvering can keep you employed as your mentor moves on. … ‘If people perceive that in addition to having a close personal relationship with your mentor you are also ideologically aligned with them, then your vulnerability is much greater,’ said Harvard Business School professor David A. Thomas, a career development expert. ‘That's especially true if the [outgoing mentor] represents one side of a very sharp divide around some big issue.’ … Experts say that when they realize they are on the way out, the best mentors will try to make sure their protégés are protected. But Thomas, the Harvard professor, said even the best efforts along these lines won't work if the protégé has not established good relations with other power brokers in an organization. ‘If you don't fit those criteria, and your guy is leaving, you better start packing,’ he said.”

In what ways are you personally vulnerable to what might happen to your boss or mentor? Have you restricted your effective workplace affiliations to a few individuals whose power may be ephemeral? Have your ideological alignments restricted your choices? What have you done to protect those who view you as a mentor? Have they become too vulnerable to you?

Provocative

It might be a personality characteristic, but some executives seem to take pride in being provocative. Sometimes, it seems executives are provocative for the fun of it. Provocation, by its very nature, creates instability. It makes good sense to be prepared for the reaction to provocation, especially when an executive intends to provoke. The poster executive for this behavior in recent months has been Larry Summers, Harvard’s president. When invited to speak at a National Bureau of Economic Research conference on diversifying the science and engineering workforce, his intention was fully articulated as he opened his comments: “I asked Richard, when he invited me to come here and speak, whether he wanted an institutional talk about Harvard's policies toward diversity or whether he wanted some questions asked and some attempts at provocation, because I was willing to do the second and didn't feel like doing the first. And so we have agreed that I am speaking unofficially and not using this as an occasion to lay out the many things we're doing at Harvard to promote the crucial objective of diversity.” (http://www.president.harvard.edu/speeches/2005/nber.html). Summers went on to generate a firestorm of reaction to this comment, “So my best guess, to provoke you, of what's behind all of this is that the largest phenomenon, by far, is the general clash between people's legitimate family desires and employers' current desire for high power and high intensity, that in the special case of science and engineering, there are issues of intrinsic aptitude, and particularly of the variability of aptitude, and that those considerations are reinforced by what are in fact lesser factors involving socialization and continuing discrimination. I would like nothing better than to be proved wrong, because I would like nothing better than for these problems to be addressable simply by everybody understanding what they are, and working very hard to address them.” Inside and outside of Harvard, Summers’ comments did provoke. They also made Summers day job of trying to lead Harvard more difficult, especially because of the strong negative reaction from Harvard’s faculty of Arts and Sciences. The aptitude of those at Harvard whom Summers tries hard to influence makes his job even harder: it’s difficult to convince very bright people to follow you just because you’re the boss. The March 7 issue of Business Week (http://www.businessweek.com/magazine/content/05_10/b3923054_mz011.htm) opines that as a result of Summers’ autocratic management style and the reaction to his provocative comments, his chance to introduce reforms at Harvard has diminished and fundraising may be constrained. “Pushing through reforms at Harvard would be difficult in the best of times. The president cannot simply order people around. He must build consensus with a constellation of powerful deans and their faculties. Yet there is broad support for quite a few reforms Summers has set in motion, and many faculty members believe Harvard must change if it is to remain a leading university. But Summers' critics say he has needlessly antagonized professors with his autocratic style. And he has alienated many by passing over internal candidates and giving tenure to outside stars. ‘He has mishandled the faculty,’ says a professor who backs Summers. ‘And very few people like him.’ … The Summers controversy could even harm fund-raising. With a $22.6 billion endowment, Harvard has long been the envy of higher education. Now it's planning to raise an estimated $5 billion over the next few years to help pay for Summers’ plans. The last thing it needs is an image problem. ‘Perceptions matter in fund-raising,’ says Scott G. Nichols, associate dean of Harvard Law School. ‘Money is attracted by strength.’” We’ve noted only one voice in the media who opined that Summers might be right: Dan Seligman in the Forbes February 28 issue (http://www.forbes.com/business/forbes/2005/0228/100.html). If you have interest in the issue, be sure to read Dan’s column. One final thought: keep in mind that Summers’ comments were meant to provoke and he said he was speaking unofficially.

Do you have the luxury of being able to speak unofficially? When you intend to provoke, how prepared are you for the consequences of your provocation? Have you built up enough goodwill to weather temporary setbacks? Who and what has provoked you lately? Are you likely to know when your actions or comments have provoked others? Do you have the time to repair the damage than can follow a provocation?

Unruly

A page one story in The Wall Street Journal (2/22) (http://online.wsj.com/article/0,,SB110902677306360253,00.html) caught our attention because we’ve enjoyed the occasional bottle of “two-buck Chuck” that Bronco Wine Company distributes through Trader Joe’s. We read that Bronco CEO Fred T. Franzia irritated competitors by making a decent bottle of inexpensive wine and went on to infuriate them by violating the rules of “terroir.” Franzia uses grapes from outside Napa, and labels from that Valley to deliver wine that creates the appearance of coming from Napa. The U.S. Supreme Court may decide this spring to take on Franzia’s appeal of suits he lost in California that would have him change the labeling of his wines. Franzia has decided to challenge the rules, and has created instability through his actions. We may as well enjoy a glass or two of his Charles Shaw label while the saga unfolds.

Are the rules of your business followed by all participants? What happens when a rogue player misbehaves? Do disputes over practices end up in litigation? Can you influence the rules that players follow in your industry? If your actions infuriate your competitors and you remain a rogue player, are you prepared for the likely consequences?

Contentment
We found executive stability in an unexpected place, close to home, and there may actually be a lesson to learn from the behavior of two Chicago politicians. In an op-ed in The Wall Street Journal, (2/24) (http://online.wsj.com/article/0,,SB110921043785562788,00.html) law professor and author Joseph Epstein called attention to the Daley dynasty in running the city of Chicago for almost four decades, and concluded, “But perhaps the real secret behind the Daley family success is the fixed but limited ambition of both father and son. Neither Dick nor Rich Daley ever aspired to rise any higher than Mayor of the City of Chicago. Dick Daley, doubtless, enjoyed being a kingmaker and a power in the Democratic Party; this would appear to be less true of Rich Daley, but then the age of king-making Democratic Party bosses seems to be over. A homeboy, the current mayor does not wish to become governor or a U.S. senator, or -- here's a thought to pass on to the search committee in Cambridge -- the next president of Harvard. That goes a good way to explaining why he is so good at his job and why he is likely to be able to keep it for as long as he likes.” Also, Rich Daley gets the job done.

Are you content in your job? Have your ambitions been realized, or are they to do something else? Are your ambitions aligned with your skills? Are you doing the work you want to do?

Follow-up

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

Ø When we commented in the lead story in the February 2005 issue of Executive Times that Carly Fiorina’s strength in communication was becoming a liability, we didn’t know that the Hewlett-Packard board was meeting a few miles from our office to fire her. The business press has been packed with stories about the firing, Fiorina, what’s next at H-P, ad nauseum. We pass along two articles that we find noteworthy. Louis Lavelle commented in the 2/28 issue of Business Week (http://www.businessweek.com/magazine/content/05_09/b3922059_mz011.htm) that Fiorina violated three rules: make it about the company, not you; know your company inside and out; and hold people accountable, including yourself. Carol Loomis reports in the 3/7 issue of Fortune (http://www.fortune.com/fortune/subs/article/0,15114,1029939,00.html) what happened at the H-P board and why Fiorina was surprised by their action.

Ø We last checked in on the Greenbergs of AIG, Marsh and ACE fame in the November 2004 issue of Executive Times. The February 21 issue of Fortune (http://www.fortune.com/fortune/subs/article/0,15114,1025115,00.html) contains a story of their unusual familial relationships for those readers who want to be updated.

Legacy

Overshadowed

Many successful leaders attempt to frame their own legacy through the achievement of intended objectives. In real life the alignment between intentions and achieved results can become overshadowed by brief, but monumental events that define a leader’s tenure. One executive whose many achievements became eclipsed by a single event was Lawrence Rawl, former Exxon CEO, who died in mid-February at age 76. Rawl worked 39 years at Exxon, and led the company from 1987-1993. He reduced costs, increased oil and gas reserves, and expanded chemical operations. His tenure became defined by a single event on March 24, 1989: the leak of 11 million gallons of oil from the Exxon Valdez into Prince William Sound. Exxon didn’t start cleanup for two days, during which time 1,000 miles of shoreline were polluted. Rawl’s personal reaction to the oil spill was slow. He waited a week after the spill to comment on it. He waited three weeks to visit the site. Within a month, he realized that his reaction was too slow. The spill led to $2 billion in direct costs to Exxon. Rawl came across as combative in media interviews, alienating the EPA and consumers. Rawl was quoted in Fortune in 1989, “You're damned if you do and damned if you don't. … I concluded that we were going to be up to our butts in alligators right here. I wanted to be able to deal with Congress, as well as operate the best we could around the world. I wanted to make sure that when Exxon USA said we need all the booms you have in London, we would get them.”

Following the Valdez incident, we’ve seen executives follow an opposite approach from the one used by Rawl. Comment is almost immediate; CEOs are onsite promptly; steps to rectify are taken at once. Sometimes a legacy can be unintended.

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
Media Man: Ted Turner's Improbable Empire	Auletta, Ken	••	Restless. While repetitive at times and less lively than the subject, an instructive biography of a successful visionary.
Confronting Reality	Bossidy, Larry and Ram Charan	••••	Models. Blunt direction to executives to use a disciplined business model with three related elements: external realities, internal processes and financial targets.
The Final Solution: A Story of Detection	Chabon, Michael	••	Homage. Literary impresario tries mystery genre in novella that pays homage to Sherlock Holmes, presented here as an old man solving his last case. Mystery fans and literary fans will both find some disappointment amid good writing.
Betrayal: How Union Bosses Shake Down Their Members and Corrupt American Politics	Chavez, Linda	••	Diatribe. Partisan call for dramatic union reform, replete with politically-charged rhetoric and repetitive themes that become ponderous over three hundred pages.
Collapse: How Societies Choose To Fail or Succeed	Diamond, Jared	•••	Provocative. Companion work to Guns, Germs and Steel, that explores factors that caused some great civilizations to fail, and what this means for contemporary society.
Selling Women Short: The Landmark Battle for Worker's Rights at Wal-Mart	Featherston, Liza	•••	Exploitation. Journalist examines Wal-Mart class action case and reveals personal stories of sexism, discrimination and widespread exploitation of women working at Wal-Mart nationwide.
Will in the World: How Shakespeare Became Shakespeare	Greenblatt, Stephen	•••	Context. Scholar describes factors from his life and times that helped form Shakespeare. Much conjecture and pleasurable reading.
The Death Penalty on Trial: Crisis in American Justice	Kurtis, Bill	•••	Fragility. Through two cases, former death penalty supporter reverses position because both cases were rife with errors, proving the justice system isn’t working.
Runaway: Stories	Munro, Alice	•••	Lyrical. New collection of short stories replete with lyrical prose, fine dialogue and the complexity of women’s lives changing over time.
Your Best Life Now: 7 Steps to Living at Your Full Potential	Osteen, Joel	•	Nostrums. Preachy, simplistic, slogans and nostrums, packed with exclamation points and smiley face stories. Author influences wide audience, so you may find something here.
Diary	Palahniuk, Chuck	••	Anatomy. Dark tale structured as a wife’s diary written for her husband who’s in a coma that followed an apparent botched suicide attempt. Quirky, artistic, imaginative.
Crucial Confrontations	Patterson, Kerry, et. al.	•••	Tools. Practical and useful “how to” book that teaches ways to improve the outcomes from those conversations that confront bad behavior, broken promises, and missed expectations.
Hetty: The Genius and Madness of America's First Female Tycoon	Slack, Charles	•••	Quirky. Well-told biography of late 19^th and early 20^th century financier Hetty Green that corrects many past myths about this amazing and successful woman.
Toast: The Story of a Boy's Hunger	Slater, Nigel	•••	Nourishing. Well-written memoir of a food writer’s coming of age. Sweet and sour recollection of the foods of his youth and vignettes of people in his life related to those foods.
In the Night Room	Straub, Peter	•••	Ambiguity. Cerebral and entertaining novel that explores the links between nature and art, and a wide variety of ambiguous relationships, including the relationship between an author and fictional characters.

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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