Executive Times

Volume 4, Issue 4

April, 2002


ã 2002 Hopkins and Company, LLC

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Unwelcome Partners

When mutual interests exist, partnerships thrive. Over time, the expectations partners have for each other tend to become clear and consistent, and any betrayal by a partner can lead to severe damage to all partners in the relationship. Sometimes, contract terms prepare the parties for terms of separation or dissolution; other times, surprising behavior changes what will happen next for the partners. It’s certainly clear that the action or behavior of one partner has an impact on other partners. As you read about the spate of partnerships that have faced critical junctures in recent weeks, think about your own expectations of your different partners, and their expectations of you.


The top and bottom book ratings in this month’s issue provide an interesting contrast. Two four-star ratings appear among the fourteen books rated. Joseph Badaracco’s Leading Quietly presents an image of leadership that we rarely find in the press (although the Soft Touch article on page 3 may point toward an emerging trend). We finally finished reading David McCullough’s John Adams, and recommend it highly. At the other extreme, Larry Weber’s The Provocateur earned our first DNR rating of 2002 (do not read).


Shocks, Bonds and Options
Partners Louis Rukeyser and Maryland Public Television made the news recently in ways that made neither partner look good. According to The Wall Street Journal (3/21/02) (http://online.wsj.com/article/0,,SB1016739428762022960.djm,00.html), Rukeyser, long-tenured host of the PBS program “Wall $treet Week with Louis Rukeyser,” learned just one day prior to a story in the Baltimore Sun (Thursday 3/21) that his production partner, Maryland Public Television, planned to reformat the program and diminish his role to that of a senior commentator. Sixty-nine year old Rukeyser was surprised by this unilateral action, since he had been under the impression that he would be working with Maryland Public Television on ways to “update” the program. According to The New York Times (3/22/02) (http://www.nytimes.com/2002/03/22/business/media/22WALL.html), the update plan involved a deal with Fortune to rename the show “Wall $treet Week with Fortune,” an attempt to broaden the audience by making it more attractive to younger viewers. Rukeyser used his airtime on Friday night to blast what happened, and the CEO of Maryland Public Television fired him for “violating the journalistic standards of the show.” Rukeyser says other networks want his talent.


How will you know when the show is over as far as your contribution is concerned? If you have a partner whose talents no longer fit the role being performed, what happens?


Fly Away

Airlines have used the services of independent travel agents for many years to distribute airline tickets and packages. Convoluted pricing structures, increased use of technology, and the popularity of loyalty programs have been changing the dynamics of air travel for years. We read in The Wall Street Journal (3/15/02) (http://online.wsj.com/article/0,,SB1016134620776764560.djm,00.html) that while agents are still used for three-quarters of the tickets issued for airlines, Delta announced that it would no longer pay base commissions to travel agents issuing its tickets. Since then, other airlines followed. Agents have reacted negatively; some have stopped handling refunds or exchanges of Delta tickets. Around six months ago, Continental and Northwest stopped paying commissions on tickets purchased online. Following that announcement, large online ticketing agents negotiated with airlines for providing different services. Will travel agents charge fees directly to consumers for the service they provide? Will airlines add to their costs by providing more services that agents have been performing? If travel agents no longer provide valued service, why are they still used for issuing so many tickets? Stay tuned.


In your business partnerships, what determines where costs are best located, and from whom payments are most appropriately made? How vulnerable is your business to the influence of distributors and agents? Whose interests do “your” agents represent? What changes reduce the value you and your organization provide for your business partners? How will you respond to these changes?


Disney Magic

Who felt more out of the loop, Ted Koppel, or ABC News head David Westin, when they found out that ABC’s owner, Disney, had been negotiating with CBS star David Letterman to switch teams and move his show, Late Night, to ABC to replace Koppel’s program, Nightline? We’ve all heard the expression “need to know.” Disney executives may have expected Koppel and Westin to know about the flagging fortunes of the company, and that a moneymaker like Letterman would be a path to the recovery of profits. Koppel took the high ground in a New York Times letter (3/5/02) (http://www.nytimes.com/2002/03/05/opinion/05KOPP.html) and expressed reason and understanding for why the company would want to pursue Letterman. He made one complaint: against the anonymous ABC executive who told a reporter that Nightline lost its relevance. Koppel disagreed, and called attention to the higher costs of recreating the show should that executive deem it relevant in the future. While Disney CEO Michael Eisner has called Koppel to indicate support, the damage to the news division and Koppel has been done, and will be hard to repair. 


Do individuals in your organization compete openly or covertly with one another? What methods do you use to determine the relative value of different contributors to the success of your organization? How well have you communicated your appreciation for the contributions of the individuals who report to you? When you emphasize or de-emphasize certain departments, how well do you manage the impact of the change on the total organization?


Senior and “Other” Partners

When a partnership gets large, as with some professional service organizations like law firms and accountants, a small group of senior partners are charged with decision making, and the “other” partners carry out their work in the framework established by the decision makers. Most professionals have assumed that federal workplace rules against discrimination do not apply to partnerships, since the partners are owners, not employees. We read in The New York Times (3/10/02) (http://www.nytimes.com/2002/03/10/business/yourmoney/10EXLI.html) that an investigation by the Equal Employment Opportunity Commission into a 1999 decision by law firm Sidley Austin Brown & Wood to demote 32 partners may lead to changes in how partnerships treat partners. The EEOC opines that partners in name aren’t necessarily owners if a small group of senior partners make all the important decisions. There may have been age discrimination involved when Sidley demoted these 32 partners. It should come as no surprise that Sidley disagrees with the EEOC. It’s early to tell what impact this investigation will have on Sidley or on other partnerships.


What kind of partner are you? What partnership rights have you voluntarily ceded to other partners? How vulnerable are you to the decisions of other partners? How clearly do you and your partners discuss performance and other mutual expectations?


Soft Touch

Hard Results

The behavior of a new generation of CEOs is discussed in an interesting article in Business Week (3/21/02) (http://www.businessweek.com/bwdaily/dnflash/mar2002/nf20020321_1042.htm). Pfizer CEO Henry A. McKinnell posted his own performance review on the company intranet for all employees to see his results, warts and all. Here’s a quote about General Electric’s leadership: “While customers and employees revered Jack Welch, they love Immelt. It's no wonder: The new CEO likes to make people feel worthwhile. Welch, by comparison, liked to catch them out and, if they were weak, let them know it.” EDS Chairman and CEO Richard H. Brown said, “The soft stuff drives the hard results.” Watch these leaders, and measure their results.


How does your personal behavior impact the work of those around you? Are results improved or held back as a result of how you interact with others? How encouraging are you to the people who work in your organization? What “soft stuff” really counts or adds up in your company? Are you doing enough of that soft stuff?


For Immediate Release: “Me!”

Catch a Rising Star
Have you spent as much time this year planning your career as you’ve spent planning a vacation? That’s the question that caught our attention in the Sunday New York Times (3/24/02) (http://www.nytimes.com/2002/03/24/business/yourmoney/24EXLI.html). In the same way that agents represent movie stars and sports celebrities, a few companies have focused on serving as agents for business executives. “By introducing their clients to the right people, referring them to lawyers to negotiate compensation packages, setting up speaking engagements, conducting independent salary reviews and hiring research assistants, agents say, they are giving executive careers an extra push. ‘There are stars and rising stars in the business world, much like in Hollywood and professional sports,’ said Bonnie Wan, chief executive of Juice Talent.” We may have found an explanation for the cult status of some business executives.

Are you spending enough time planning your career, and promoting yourself? On whom do you rely for help and advice in plotting career moves? Which would you rather plan: your career or a vacation?



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

Ø      In the August 2000 issue of Executive Times, the front-page story called attention to the candid messages Bank One CEO Jamie Dimon presented at a July 2000 investor conference. We read recently in Forbes (3/18/02) (http://www.forbes.com/home/2002/03/18/0315bankone.html) that many of those promises have been fulfilled, and are reflected in a higher stock price multiple. Our favorite quote in the story was: “bet on the jockey not on the horse.” So far, this jockey is running a good race.

Ø      Jürgen Schrempp, CEO of Daimler-Chrysler has been out of the news for so long, we almost forgot everything we read about his cleverness in a book we recommended in the August 2000 issue of Executive Times, Taken For a Ride: How Daimler-Benz Drove Off With Chrysler by Bill Vlasic and Bradley A. Stertz. All those memories came back when we read in The New York Times (3/18/02) (http://www.nytimes.com/2002/03/18/business/18AUTO.html) that Schrempp had been stringing along Lee Iacocca for a possible role in the company. Last January, Iacocca’s five-year gag order expired from Kirk Kerkorian’s failed buyout of Chrysler. According to the Times, Mr. Schrempp “is comfortable with the relationship as it is.” Once again, we’re reminded of the pronunciation of the company name: the Chrysler is silent.

Ø      Each year we at Executive Times enjoy reading Warren Buffett’s annual letter to shareholders of Berkshire Hathaway. Here’s the link to this year’s letter: http://www.berkshirehathaway.com/letters/2001pdf.pdf. Unlike many other CEOs, Buffet uses the letter to call attention to his own shortcomings in plain language. Great reading, as usual.



Decency and the Middle Ground
Yale economist and Nobel laureate Dr. James Tobin died in mid-March at age 84. His attraction to the field of economics came from his desire to understand the Depression. At the time he studied, the field was divided by the hands-off school at one extreme and the hands-on school at the other. Tobin found middle ground, and advocated that policy makers need to help the economy on occasion. As an advisor to President Kennedy, Tobin engineered the Kennedy tax cut. His scholarly work made advances to the field in understanding how individuals and businesses actually make real life decisions. Tobin helped train a generation of economists in making tradeoffs. While a scholar, he served his country with the power of ideas, and watched his ideas become public policy. During a time of political litmus tests and polarization, Tobin will be missed.

During March, Louis V. Gerstner, Chairman and CEO of IBM, passed along the CEO title, and by year-end will retire his Chairman role as well. When he became CEO in 1993, IBM was on the verge of extinction; today the company is a model of success, thanks to his leadership. Andy Grove, Intel’s chairman said Gerstner “re-established the company’s belief in itself.” Gerstner made IBM a leader in services for a newly networked world. If there’s ever been a case of a leader making all the difference, the story of Gerstner’s nine years at IBM is that case. His management decisions can be studied and emulated by anyone trying to handle complex change.



 (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 2002 bookshelf at http://www.hopkinsandcompany.com/bookshelf.html).


Latest Books Read and Reviewed:

Title (Link to Review)



Review Summary


Leading Quietly: An Unorthodox Guide to Doing the Right Thing

Badaracco, Jr., Joseph L.

Lots of leadership books focus on heroes. Badaracco presents those everyday challenges that ordinary people face with all life’s ambiguity. Useful and realistic.

The Doctor’s House

Beattie, Ann

Three characters, a daughter, her mother, and a son, narrate different perspectives of life in this well-written novel.

What Would Machiavelli Do? The Ends Justify the Meanness

Bing, Stanley

A funny reflection on bad bosses by Fortune columnist and CBS executive. Dilbert without the cartoons.

The Good Men

Craig, Charmaine

Absorbing and well-written first novel. Life in 14th century rural France includes strong women, a sinful priest and a rigorous Inquisition.

Good Work: When Excellence and Ethics Meet

Gardner, Howard

Lessons from professionals in genetics and journalism facing technological or market changes applied to all of us.

Irish Stew!

Greeley, Andrew M.

Two parallel stories don’t add up to one good mystery novel.

Captain Saturday

Inman, Robert

Raleigh TV weatherman loses his job, leading to an unraveling and rebuilding of his life. A not very well-written novel of a New South midlife crisis.

Warrior Politics: Why Leadership Demands a Pagan Ethos

Kaplan, Robert D.

150-page timely and thoughtful essay on how the lessons of the past via the likes of Machiavelli, Hobbes and Kant, influences how America conducts itself with global adversaries.

After the Ecstasy, the Laundry

Kornfield, Jack

Kornfield brings his experience as a Buddhist monk and clinical psychologist to this book. Loved the messages of tolerance.

John Adams


Read this outstanding biography of the second U.S. President and watch yourself go from respect and admiration to liking him, despite how hard he was to get along with.

When Character Was King: A Story of Ronald Reagan

Noonan, Peggy

Noonan’s view of President Ronald Reagan: a happy, unpretentious, simple, well-grounded man whose character was formed by hardship, and whose goodness and kindness were felt by many.

Balzac and the Little Chinese Seamstress

Sijie, Dai

An engaging story of two young men exiled to the countryside and the seamstress who changes their lives. Fine imagery and description.

The Wealth of Knowledge: Intellectual Capital and the Twenty-First Century Organization

Stewart, Thomas A.

Stewart’s clear and entertaining writing style makes this readable. An interesting exploration of what intellectual capital means to today’s companies.

The Provocateur: How a Generation of Leaders Are Building Communities, Not Just Companies

Weber, Larry


(do not read)

Fact-less observations, not unlike the worst of Tom Peters: reflections on his own consumer experiences, and generalizations that the rest of us could care less about.


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