Executive Times

Volume 6, Issue 4

April, 2004


ã 2004 Hopkins and Company, LLC

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Version 9.5

One of the latest portrayals of what top executives do at work made us think about Gilbert & Sullivan:

I am the very model of a modern Major-General,

I've information vegetable, animal, and mineral,

I know the kings of England, and I quote the fights historical

From Marathon to Waterloo, in order categorical;

I'm very well acquainted, too, with matters mathematical,

I understand equations, both the simple and quadratical,

About binomial theorem I'm teeming with a lot o' news,

With many cheerful facts about the square of the hypotenuse.

Donald Trump, star CEO of NBC’s business reality show, The Apprentice, may be that very modern Major-General. The road from the Pirates of Penzance to Mr. Dithers kicking Dagwood Bumstead to The Donald hasn’t been very far to travel. Trump’s persona and the set-up conflict of the show reinforces what the public now expects in a top executive: inflated ego, deception, winning at any cost. Autocratic leaders can provide clarity of direction with their firm dictates, but usually stumble once collaboration is needed to succeed. In this month’s issue, we reflect on leading by example, and call attention to some aspects of leadership that are more likely to be useful than The Donald’s finger waving “you’re fired” version. We note a leader whose personal actions to improve have motivated others. We note the call for less hubris, and the price some have paid for their hubris. We present our annual quote from Warren Buffett’s letter to shareholders, one which provides a model of candor. There is also a call for removing distractions at work, starting at the top. As you read this issue, think about The Donald as version 1.0 of an executive. Think about what it will take for you to become version 2.5, or 9.5 or 24.7.


Fifteen new books are rated in this issue, beginning on page 5. One book is rated with one star, five with two stars, and nine with three stars. You can also visit our complete 2004 bookshelf at http://www.hopkinsandcompany.com/2004books.html and see the rating table explained as well as explore links to all 2004 book reviews. You can also check this same bookshelf to see what other books we’re reading or considering. If there’s something missing from the bookshelf that you think we should be considering, let us know at books@hopkinsandcompany.com.

Me First
One of the articles in the March issue of Fast Company is titled “To Help Others Develop, Start with Yourself.” (http://www.fastcompany.com/magazine/80/mgoldsmith.html) It begins:
“Listen to what General Mills CEO Steve Sanger recently told 90 of his colleagues: ‘As you all know, last year my team told me that I needed to do a better job of coaching my direct reports. I just reviewed my 360-degree feedback. I have been working on becoming a better coach for the past year or so. I'm still not doing quite as well as I want, but I'm getting a lot better. My coworkers have been helping me improve. Another thing that I feel good about is the fact that my scores on “effectively responds to feedback” are so high this year.’
While listening to Steve speak so openly to coworkers about his efforts to develop himself as a leader, I realized how much the world has changed. Twenty years ago, few CEOs received feedback from their colleagues. Even fewer candidly discussed that feedback and their personal developmental plans. Today, many of the world's most respected chief executives are setting a positive example by opening up, striving continually to develop themselves as leaders. In fact, organizations that do the best job of cranking out leaders tend to have CEOs like Steve Sanger who are directly and actively involved in leadership development.”
There’s an opportunity for everyone at work to talk candidly about personal development, targeted to likely areas for improvement. Without a top leader’s involvement in this process, the focus on development tends to drift, and its priority is diminished. With visible participation by a top leader, the focus is clear, and development efforts are more easily embraced and changes come quickly.

What have you done lately to develop the emerging leaders who report to you? What areas of self-improvement have you focused on, and how have you discussed those with co-workers? How do you go about identifying the right areas for improvement in yourself and others? How positive is the development example you set for others?

Gimme a glass of gall to wash down all this hubris”
We’ll take a pass on trying to select the best Michael Eisner story over the past month, since there were about two hundred to choose from, and all Executive Times readers read at least some of them. The Walt Disney Company’s Board and its CEO received a loud message from institutional shareholders that they wanted a change, so the Board removed Eisner as Chairman, but expressed ongoing confidence in him as CEO. We read on page one of The Wall Street Journal (3/4/04) (http://online.wsj.com/article/0,,SB107832734296045356,00.html) that at the company’s annual meeting two former board members and Eisner critics, Stanley Gold and Roy Disney, made the following poignant comments:
“Mr. Gold was quick to dismiss the impact of the board's expected moves, pledging to continue haunting Mr. Eisner and saying: ‘It is no longer sufficient to separate the roles of chairman and chief executive. That is not what this is about.’ He added: ‘While we the shareholders have watched the value of our equity decline, Michael Eisner has never had a bad year.’
Mr. Disney then reprised his view that the company has lost its creative heart. ‘In recent times, there's been a tendency to refer to us as “the Disney brand,”’ he complained. ‘Branding is something you do to cows....Branding is what you do when there's nothing original about your product.’”

Visit Tomorrowland at Disney to see the next steps by Eisner, the board, the critics and shareholders. In the meantime, think about all the hubris that can poison a leader, especially those actions that lead to quotes like “never had a bad year.”  Some top executives think they are invincible and have some special power to overcome all obstacles. Here’s a quote from The New York Times article about WorldCom and Bernie Ebbers, titled “Hubris and the Fall of a Telecommunications Empire” (3/3/04) (http://www.nytimes.com/2004/03/03/business/03ebbers.html):
“Unlike many other telecommunications kingpins of the 1990's, who cashed out hundreds of millions of dollars in inflated stock ahead of unsuspecting investors, Mr. Ebbers apparently believed that he could keep the company afloat one way or another.
He kept buying WorldCom shares even as the company's house of cards began to topple - and even after he started ordering, according to the indictment, the issuing of a series of false statements about the company's financial status.”

We wonder if Ebbers’ hubris will be his ticket away from jail time, since he didn’t profit from the financial shenanigans at the company. Carol Hymowitz titled her March 9 “In the Lead” column in The Wall Street Journal (http://online.wsj.com/article/0,,SB107878902540449740,00.html), “Business Leaders Face A Grassroots Demand For a Lot Less Hubris.” Here’s a key quote: “… arrogance is out of fashion in the executive suite. So are autocratic executives who rule by intimidation, think they have all the answers and don't believe they need to be accountable to anyone.” Time will tell whether arrogance will come back into fashion. In the meantime, accountability and transparency are “in.”

When does your confidence, determination and positive outlook turn into a liability? How do you catch yourself when you think you have an answer, but may not have asked others for their perspective first? How alert are you to the reality that once you weigh in with your opinion as a top executive, it’s unlikely that you’ll hear divergent points of view? How does your past success create obstacles for future results? How do you know when you’ve become over-confident? Who reminds you that you don’t have all the answers? Are you willing to listen to them?

I confess
It’s usually clear that the Berkshire Hathaway lawyers are precluded from interfering with what Warren Buffett says in his annual letter to shareholders. The current letter (http://www.berkshirehathaway.com/letters/2003ltr.pdf) provides this candid assessment about a mistake by the CEO:

And now it’s confession time: I’m sure I could have saved you $100 million or so, pre-tax, if I had acted more promptly to shut down Gen Re Securities. Both Charlie and I knew at the time of the General Reinsurance merger that its derivatives business was unattractive. Reported profits struck us as illusory, and we felt that the business carried sizable risks that could not effectively be measured or limited. Moreover, we knew that any major problems the operation might experience would likely correlate with troubles in the financial or insurance world that would affect Berkshire elsewhere. In other words, if the derivatives business were ever to need shoring up, it would commandeer the capital and credit of Berkshire at just the time we could otherwise deploy those resources to huge advantage. (A historical note: We had just such an experience in 1974 when we were the victim of a major insurance fraud. We could not determine for some time how much the fraud would ultimately cost us and therefore kept more funds in cash-equivalents than we normally would have. Absent this precaution, we would have made larger purchases of stocks that were then extraordinarily cheap.)

Charlie would have moved swiftly to close down Gen Re Securities – no question about that. I, however, dithered. As a consequence, our shareholders are paying a far higher price than was necessary to exit this business.
Once again, Buffett sets the bar high when it comes to corporate candor, and provides a great model for others to follow. 


How clearly do your messages come across to others? How willing are you to “fess up” to your mistakes? Are you currently “dithering” over some decision? Are you postponing the inevitable? Why won’t you act now?

What is time to think?
The overscheduled executive is an accident waiting to happen. Event follows event, and there’s a shortage of time to pause and think. Then there’s e-mail taking more time away from the real work of an executive. Some suggestions from The Wall Street Journal (3/23) about removing distractions (http://online.wsj.com/article/0,,SB107999459300362162,00.htm): unplug, don’t use a Blackberry, schedule thinking time without distractions.


Who schedules and manages your time? Do you build in adequate time to think? Are you accessible 24x7? Should you be?


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


Ø      We’ve enjoyed books by talented novelists Michael Chabon and Brian Meltzer, and have reviewed them regularly in Executive Times, so we thought readers would be interested in knowing that both those novelists have expanded their horizons and have written comics. According to The New York Times (3/17) (http://www.nytimes.com/2004/03/17/books/17COMI.html), “Writing comic books is ‘the ultimate 11-year-old fantasy,’ Mr. Meltzer said. ‘When they first offered me the job, I was going to say no, but my wife said to me, “Moron, you've been waiting your whole life for this.” As always, my wife was a lot smarter than me.’”

Ø      The ink was barely dry on the March 2004 issue of Executive Times when we read something new about outsourcing and globalization. In response to the firestorm over losing jobs to India, the leading outsourcer, Wipro chairman and billionaire Azim Premji, has retaliated to the rhetoric with facts and informed opinions, according to The New York Times (3/21/04) (http://www.nytimes.com/2004/03/21/business/yourmoney/21wipro.html):  
 “… the United States financial services sector alone has saved $8 billion in the last four years by outsourcing to India. … India's technology industry employs 800,000 people, he said, while the American technology industry employs 10.2 million. And 300,000 people work in Indian call centers, compared with six million in the United States. The point, he said, is that Americans are unduly worried. ‘We are not dealing with cold reasoning here,’ he said, ‘but with emotions of Americans whose personalities changed after 9/11 and who feel threatened by anything that hurts their security, their wealth and their jobs.'’ Like many others, Mr. Premji argues that shifting jobs to lower-cost countries will benefit the United States in the long run. ‘Offshore outsourcing is another example of U.S. innovativeness to stay competitive by reducing costs and cycle times,’ he said. We don’t expect the rhetoric to diminish, especially in a Presidential election year, but it remains fascinating to hear another perspective.


An entrepreneur usually takes his or her own experiences and provides a product or service that’s useful to others. Often, it’s the experience of failure that creates a breakthrough. Marathon runner Bill Maxwell experienced a critical failure while racing: he ran out of energy near the end of a race, and came in seventh, when he expected to match his earlier victories, and emerge a winner. He went home and tried mixing various low-fat, high energy foods that would aid him as a runner. With the help of food scientists (including his future wife), he created the PowerBar, and a whole new sports nutrition industry. Maxwell sold PowerBar to Nestle in 2000 for $375 million, and spent the time since helping other entrepreneurs and engaging in philanthropic activities. Maxwell died in late March at age 51.


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 2004 bookshelf at http://www.hopkinsandcompany.com/2004books.html).


Title (Link to Review)



Review Summary


Paths of Desire: The Passions of a Suburban Gardener

Browning, Dominique

Blossoms. Take a walk with the author through her life and her suburban garden, and come away rested and refreshed, ready for the challenges of your own suburban life, and maybe even garden.

Profitable Growth Is Everyone’s Business: 10 Tools You Can Use Monday Morning

Charan, Ram

Defective. Sounds good, but lacks adequate context and how-to, making the tools unlikely to be used Monday afternoon and beyond.

Cracking the Corporate Code: The Revealing Success Stories of 32 African-American Executives

Cobbs, Price M.

Mentors. Eavesdrop on the memories of 32 successful executives, reflect on the challenges of any workplace, and consider the opportunities available to those who prepare for success.

The Progress Paradox: How Life Gets Better While People Feel Worse

Easterbrook, Gregg

Discontent. Despite many improvements in the quality of life, Americans are no happier today than 50 years ago. This book explores why and offers advice to be grateful for what we have.


Ephron, G.H.

Deadly. Psychological murder mystery with staccato dialogue, ill-paced plot momentum and too much medical detail, provides some entertainment.

Origins of the Crash: The Great Bubble and Its Undoing

Lowenstein, Roger

Pedantic Primer. Entertaining tour of recent years by a talented guide, but without insight or perspective.

The Zero Game

Meltzer, Brad

Zooms. Fast-paced thriller with better writing than Baldacci. Well-crafted plot and realistic dialogue. D.C. players will be especially entertained.

The Man in My Basement

Mosley, Walter

Darkness. Well-written novel of ideas explores power, manipulation, repentance and the darkness of evil. Encourages readers to think.

A Mathematician Plays the Stock Market

Paulos, John Allen

Teacher. Easy to feel sorry for the professor who bought WCOM on margin and actually made some margin calls.

The World According to Mister Rogers: Important Things to Remember

Rogers, Fred

Special. Stressed executives, especially those trying to do some task well, will find encouragement on the pages of this book.

Occasions of Sin: A Memoir

Scofield, Sandra Jean

Pain. Finely-written, emotionally moving coming-of-age story, centered around a mother-daughter relationship that will resonate for many. Author’s lens transports us to 1950s Texas and transfixes us with her stories.

James K. Polk

Seigenthaler, John

Performance. 11th President did great things including annexation of Texas, kicking Brits out of Oregon, and instigating a war with Mexico to take California and New Mexico. Read and learn more.

The Science of Good and Evil

Shermer, Michael

Skepticism. Lively and interesting scientific perspective on why we are moral: it’s human nature.

Tilt: A Skewed History of the Tower of Pisa

Shrady, Nicholas

Lean. More than you’re likely to want to know about the famous tower in Pisa. Interesting gimmick by publisher that trimmed the book so that it tilts, an attraction that wears off quickly.

A Death in Vienna

Silva, Daniel

Thrillogy. Vivid characters and fast-moving plot combine to provide good entertainment. Ends a trilogy, but new readers can easily start here.


ã 2004 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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