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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?
Follow-up
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.
Legacy
Power
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).
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Title (Link to
Review)
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Author
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Rating
|
Review Summary
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Purchase
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Paths
of Desire: The Passions of a Suburban Gardener
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Browning,
Dominique
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•••
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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.
|
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Profitable
Growth Is Everyone’s Business: 10 Tools You Can Use Monday Morning
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Charan, Ram
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••
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Defective. Sounds good,
but lacks adequate context and how-to, making the tools unlikely to be used
Monday afternoon and beyond.
|
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Cracking
the Corporate Code: The Revealing Success Stories of 32 African-American
Executives
|
Cobbs, Price M.
|
•••
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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.
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The
Progress Paradox: How Life Gets Better While People Feel Worse
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Easterbrook,
Gregg
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•••
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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.
|
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Obsessed
|
Ephron, G.H.
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••
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Deadly. Psychological
murder mystery with staccato dialogue, ill-paced plot momentum and too much
medical detail, provides some entertainment.
|
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Origins
of the Crash: The Great Bubble and Its Undoing
|
Lowenstein,
Roger
|
••
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Pedantic Primer. Entertaining
tour of recent years by a talented guide, but without insight or
perspective.
|
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The
Zero Game
|
Meltzer,
Brad
|
•••
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Zooms. Fast-paced thriller with better writing than
Baldacci. Well-crafted plot and realistic dialogue. D.C. players will be
especially entertained.
|
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The
Man in My Basement
|
Mosley,
Walter
|
•••
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Darkness. Well-written
novel of ideas explores power, manipulation, repentance and the darkness of
evil. Encourages readers to think.
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A
Mathematician Plays the Stock Market
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Paulos, John Allen
|
••
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Teacher. Easy to feel
sorry for the professor who bought WCOM on margin and actually made some
margin calls.
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The
World According to Mister Rogers: Important Things to Remember
|
Rogers,
Fred
|
•••
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Special. Stressed executives,
especially those trying to do some task well, will find encouragement on
the pages of this book.
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Occasions
of Sin: A Memoir
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Scofield, Sandra Jean
|
•••
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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.
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James K.
Polk
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Seigenthaler, John
|
•••
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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.
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The
Science of Good and Evil
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Shermer, Michael
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••
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Skepticism. Lively and interesting
scientific perspective on why we are moral: it’s human nature.
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Tilt: A Skewed
History of the Tower of Pisa
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Shrady, Nicholas
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•
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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.
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A
Death in Vienna
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Silva,
Daniel
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•••
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Thrillogy. Vivid characters and fast-moving plot
combine to provide good entertainment. Ends a trilogy, but new readers can
easily start here.
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