Executive Times


Volume 10, Issue 4





 2008 Hopkins and Company, LLC

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The theme for this month’s issue emerged from an unlikely place. During a prurient exploration of the specifics of the Eliot Spitzer scandal, the name of the service he employed, Emperors’ Club, demanded attention. What’s with the plural “emperors?” The whole notion of emperor has been the single dominant leader of the empire: one without equals, the conqueror, our commander. Thanks to Slate’s Josh Levin, information from the closed website www.emperorsclubvip.com comes to light (http://www.slate.com/id/2186265/). “Catering to the most financially elite social circles in the entire world, Emperors Club is the elite recreation venue and private club for those accustomed to excellence. … 92 percent of Emperors' Club International Members are CEO / Owner / Partners of a large (often international) corporation. … members' gross annual income averages $3.63 million per year.” That sounds like a lot of emperors and even some Executive Times readers, so it is to them that we dedicate this issue. Spitzer wasn’t satisfied with being the leader of the Empire State, and perhaps after reading the Wallace Stevens poem The Emperor of Ice Cream celebrating the domination of life over death, he looked for his pleasure where he thought it could be found, realizing that “the only emperor is the emperor of ice cream.” As you read the stories in this issue, think about your own empire, how emperors are chosen, and what impact your empire has in the larger community.


Fifteen new books are rated in this issue, beginning on page 5. Four books are highly recommended with four-star ratings; nine are recommended with three-star reviews; two books are rated with two-star recommendations, and one eked out a one-star review. Visit our current bookshelf at http://www.hopkinsandcompany.com/2008books.html and see the rating table explained as well as explore links to all 245 books read or those being considered this year, including 20 that were added to the list in March. 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 sooner rather than later, let us know by sending a message to books@hopkinsandcompany.com. You can also check out all the books we’ve ever listed at http://www.hopkinsandcompany.com/All Books.html.



The selection process for emperors throughout history usually entailed the defeat of enemies in battle. Modern leaders emerge from processes that can look like battles that leave winners and losers, or can involve bloodless interviews. The Winter issue of MIT’s Sloan Management Review includes a fascinating article by Clemson professor Terry Leap titled, “When Bad People Rise to the Top” (http://sloanreview.mit.edu/smr/issue/2008/winter/14/).  According to the abstract, “The author identifies eight potential danger signals including: an obsession with acquiring prestige, power, and wealth; a proclivity for developing grandiose strategies with little thought toward their implementation; and a fondness for a data-driven management style that overshadows or ignores a broader vision. Even sterling CEOs occasionally exhibit one or more of the danger signals described here. Potentially bad CEOs, however, usually possess several of these characteristics, and they exhibit them repeatedly. … Some suggestions for screening prospective CEOs include disregarding the time-tested rule that past success is a predictor of future success, performing a thorough background check that focuses on a candidate's integrity and interpersonal skills and using experience-based interviews to test CEO finalists.” A short article in The New York Times (3/8) (http://www.nytimes.com/2008/03/08/business/08offline.html) also mentioned these warning signals: “…an inability to delay gratification, suggests that a chief executive may put his interests ahead of the company’s. A reputation for shameless self-promotion and other self-aggrandizing behaviors. … The ability to compartmentalize and rationalize to an amazing degree. This trait, Mr. Leap writes, is shared by dysfunctional people, among them bad chief executives and criminals. Clearly, even the best chief executives occasionally exhibit some of these traits. ‘Potentially bad C.E.O.s, however, usually possess several of these characteristics and they exhibit them repeatedly. … Observers are often amazed when executives with impressive track records are mysteriously transformed into corrupt and tyrannical monsters once they become C.E.O.s.’” The best advice for selecting a CEO with few danger signals is to dig deeply into how an executive has achieved results in the past.


How do you distinguish those character traits that are desirable from those to avoid when you consider individuals for leadership roles in your organization? Do the “tyrannical monsters” in your organization get rewarded or fired? How do you uncover the stories underlying measureable results?


Some emperors throughout history drew followers as a result of a vision or purpose that was larger than any person or place. The cover story in the March 3 issue of Fortune titled, “The Pepsi Challenge” (http://money.cnn.com/2008/02/18/news/companies/morris_nooyi.fortune/index.htm?postversion=2008021904) by senior editor Betsy Morris features a profile of PepsiCo CEO Indra Nooyi that presents an approach to leadership that acknowledges the power of corporations in the world, and how to use that power. According to Fortune, “Indra Nooyi is an entirely different kind of CEO, a product of her native India as well as of PepsiCo's family-values approach to grooming CEOs. She is not hung up on pay. She's not shy about asking for help when she needs it. She's 52 years old and does not plan for this job to be her last. … She's cosmopolitan, rigorously educated, and a strategic. … A dinner gathering at her house is as likely to include Tony Blair and government ministers from India or Mexico as traditional pinstriped business types. As a vegetarian who for years has been talking about the importance of ‘gut health,’ she's not who you'd think would be leading a maker of sugary soda and salty snacks - but that's why she's taking the company in a different direction. … Since becoming CEO, she has reorganized PepsiCo to make it less fixated on the U.S. and broadened the power structure by doubling her executive team to 29. She has installed an Italian native, Massimo d'Amore, atop the division that includes the troublesome U.S. soft drink business, and recruited a former Mayo Clinic endocrinologist to head up R&D. …  She has created a motto – ‘Performance With Purpose’ - that puts a positive spin on how she wants PepsiCo to do business both at home and abroad. It essentially boils down to balancing the profit motive with making healthier snacks, striving for a net-zero impact on the environment, and taking care of your workforce. ‘If all you want is to screw this company down tight and get double-digit earnings growth and nothing else, then I'm the wrong person,’ she says. ‘Companies today are bigger than many economies. We are little republics. We are engines of efficiency. If companies don't do [responsible] things, who is going to? Why not start making change now?’ … In a speech to the food industry in January, she pushed the group to tackle obesity. ‘Do you remember campaigns like “Keep America beautiful”? What about “Buckle up”?’ she asked. ‘I believe we need an approach like this to attack obesity. Let's be a good industry that does 100% of what it possibly can - not grudgingly but willingly.’ At the 2008 World Economic Forum in Davos she told Secretary of State Condoleezza Rice it was critically important that ‘we use corporations as a productive player in addressing some of the big issues facing the world.’” We’ll all stay tuned as Nooyi and PepsiCo face a recession, increased competition, and a future tied to a purpose that will be challenging to achieve. We’ll be hearing lots more from Nooyi in her current job and in the ones that follow.


What guides your organization’s selection of the responsible things to get done? Is there anything beyond profit that you take into account when you make changes? Are there “big issues facing the world” that your organization plays a part in addressing? What purpose gets you up and working every day?



Sometimes in history, emperors were born, not made. Those who study leadership in the 21st century agree that today’s leaders can be made. If you missed the third annual ranking of the best companies for leaders that Hay Group conducted for Chief Executive magazine last December, you can read it at http://www.chiefexecutive.net/ME2/Audiences/Default.asp?AudID=AFC68D68FF0A49299D8688CFDAD5F871. Hay surveyed 790 public companies in both a self and peer assessment process, and drew conclusions about what makes companies better than others when it comes to developing leaders. General Electric and Procter & Gamble continue to top the list, and Chief Executive asked GE CEO Jeff Immelt and P&G CEO A.G. Lafley why they think they do well in this area. “At the core of most companies’ approach is an assiduous involvement of the boss, screening and identifying of high-potential employees, and a rigorous feedback and assessment process that’s done early and often. ‘One of the secrets to this story,’ says Immelt, ‘is that there are no secrets. We educate people in the right curriculum. We keep the curriculum fresh. We ensure that other people in the company, including those who report to me, also spend time grooming leaders.’ … A.G. Lafley counts leadership development as not just a priority but one of P&G’s core competencies. ‘We focus on individual leadership development. How can you personally become the best leader that you can be? In our assessment of effectiveness we talk about situational and inspirational leadership because we want courageous and inspiring leaders. The days of command and control are over.’ … every month Lafley has private half-hour sessions with every one of P&G’s 22 line presidents and functional leaders.

‘It’s their agenda’ says Lafley. ‘It’s a time for me to work with them one-on-one on how they can become more effective leaders. It’s a great way for me to coach their development.’ Similarly, Immelt also personally teaches a leadership course, ‘Things that Leaders Do,’ that covers the fundamentals of organic growth. Like Lafley, he conducts a class with 35 people who are in the queue to become officers on the importance of leadership style. ‘I take each one individually in order to understand the elements—not to have a common style—but how to be true to your own style.’ … Immelt sees GE’s biggest development challenge as developing talent outside of the U.S. In 2007, for the first time, more than half of GE’s revenues came from outside the U.S. ‘As an American I grew up knowing GE, but the challenge for me—what I spend time thinking about—is how in the context of an ever-increasing global franchise do we reach the next generation of people outside the U.S. that we can bring into the company?’ … (Lafley noted), ‘We are a pure meritocracy. We don’t care where you went to school, whether you have an MBA, or what your country of origin is. We have more than 100 different countries represented in our management team. All we care about is that with character and integrity you deliver outstanding business results and that you build a strong organization. Do that and you move ahead.’” They make it sound easy.


How does your organization develop leaders? To what extent do political borders limit the ways in which you develop talented individuals? How are you “personally becoming the best leader that you can be?” Do you recognize those leaders who delivery outstanding business results “with character and integrity?” How much one-on-one time do you spend with your direct reports on their development? How much time does your boss spend with you in this area? What are you doing today to become an emperor tomorrow?



Here’s an update on stories covered in prior issues of Executive Times:      


Ø  In the August 2007 issue of Executive Times we noted how Bear Stearns’ James Cayne played golf (and cheated?) while the subprime mess surfaced at the company. In the February 2008 issue we noted his decision to step down as CEO. Cayne and Bear have been in the news in recent weeks with a run on the bank, a bailout from the Fed, and an offer from Chase to buy the company at a fraction of its previous value. We read in The Wall Street Journal (3/25) (http://online.wsj.com/article/SB120641688950961821.html), “Chairman James Cayne, whose 5.6 million shares were worth about $448.2 million as of Feb. 29, saw his stake's value fall to $11.2 million if valued at $2 a share. At $10, it's worth $56.1 million.” We were reminded about that old joke, “What’s a fast way to get a small fortune? Start with a large one.” An empire falls.

Ø  In the issue of Executive Times that follows Warren Buffett’s annual letter to shareholders, we select a quote that caught our attention. Here’s this year’s selection in which he explains the differences between those businesses that are attractive to him and those that are not: “… a terrific CEO is a huge asset for any enterprise, and at Berkshire we have an abundance of these managers. Their abilities have created billions of dollars of value that would never have materialized if typical CEOs had been running their businesses. But if a business requires a superstar to produce great results, the business itself cannot be deemed great. A medical partnership led by your area’s premier brain surgeon may enjoy outsized and growing earnings, but that tells little about its future. The partnership’s moat will go when the surgeon goes. You can count, though, on the moat of the Mayo Clinic to endure, even though you can’t name its CEO.” You can read the whole letter at http://www.berkshirehathaway.com/letters/2007ltr.pdf.



Some successful leaders are big fish in small ponds, and their impact within a profession can exceed the boundaries of the small empire they inhabit. The emperor of San Francisco advertising was one such leader. Hal Riney avoided the center of the advertising business in New York and chose to work in San Francisco throughout his career. His prodigious output of quality ads and his abundant creativity helped transform the business. He chose understatement at a time when his counterparts were shouting. Three of his ad campaigns made Advertising Age’s list of the 100 best of the 20th century: positioning Saturn as a different kind of car company with a different kind of car; the campaign ads for Ronald Reagan featuring the bear in the woods, and morning in America; and the Bartles & Jaymes characters sitting on a porch. He often used his own voice for his commercials, and those who emulate his approach refer to their method as Riney-esque. Riney wrote all 153 commercials in the Bartles & Jaymes campaign featuring two of the most memorable characters on television. The tune he commissioned for a Crocker Bank ad campaign, “We’ve Only Just Begun,” became a hit when later recorded by the Carpenters. Riney confessed he wasn’t a great manager, but he attracted and trained great talent. By one count, more than two dozen ad agencies were founded by people who learned from Riney. Riney did things that his Madison Avenue competitors didn’t; he dared to be different, and it worked for him and his clients. Along the way, he became a legend and a model for others. Hal Riney died in San Francisco in late March at age 75.


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 2008 bookshelf at http://www.hopkinsandcompany.com/2008books.html).


Title (Link to Review)



Review Summary


The Reserve

Banks, Russell


Truth. Finely written novel, set during the Depression on a private refuge for a few wealthy families in the Adirondacks, replete with contrasts, complex characters, and insights about behavior and relationships.

The Venetian Betrayal

Berry, Steve


Bullies. Bookseller Cotton Malone returns for the third time with a familiar cast of characters to save the world from a bully. Fast moving and implausible plot includes weak dialogue and lack of character development.

People of the Book

Brooks, Geraldine


Transported. Through the Australian conservator restoring a manuscript, Brooks transports readers in a suspenseful narrative across hundreds of years in multiple locations to the people who made the book, those who used it, and those who protected it.


Caldwell, Wayne


Valley. Debut novel presents stories of the lives of three families living from the 1860s through the 1920s in western North Carolina in a valley that became part of the Great Smoky Mountains National Park.

There Is a God

Flew, Antony and Roy Abraham Varghese


180. British philosopher explains what led him to reverse a long-held viewpoint. Readers with a strong interest in philosophy or theology may find this short book interesting; others can take a pass.

The Appeal

Grisham, John


Bought. Grisham returns to the law with a better-than-usual novel about a Mississippi judicial election in which the powerful and rich try to ensure that the winning candidate will be sympathetic to their interests.

Supreme Discomfort : The Divided Soul of Clarence Thomas

Merida, Kevin and Michael Fletcher


Conflicted. Readers don’t learn much about Thomas’ jurisprudence in this book, but come away with many examples and illustrations of the life of a complex and conflicted person.


Homo Politicus: The Strange and Scary Tribes that Run Our Government

Milbank, Dana


Witty. Milbank uses the structure of anthropological fieldwork to poke fun at the exploits of all in politics who take themselves far too seriously and whose exploits cause the rest of us to roar with laughter or cry in desperation.

Bleeding Kansas

Paretsky, Sara


Family. Author leaves the comfort of Chicago and sets novel in Kansas, where the author grew up. The dynamics of three families over multiple generations create passion, fear and conflict galore.

Swimming in a Sea of Death

Rieff, David


Tribute. Beautifully written memoir by a son about how he and his mother, the writer Susan Sontag, tried to do everything possible to battle a deadly form of leukemia. How did he as caregiver behave? Mostly he felt at sea.

The Halo Effect: ... and the Eight Other Business Delusions That Deceive Managers

Rosenzweig, Phil


Duped.  IMD professor pokes fun at management advice books, shows the scientific errors and shortfalls of their methods, offers no success formulas of his own, but helps executives examine more critically the advice they get from others.

Common  Ground

Thomas, Cal and Bob Beckel


Cooperation. USA Today columnists collaborate on a prescription to move from partisan rhetoric and politics as usual toward the alignment around principles that can do the most good for the greatest number of people. 


Man Gone Down

Thomas, Michael


Intense. Debut novel presents the ruminations of a narrator over four days during one summer of his discontent. Skilled writing manages the intensity with precision.

Judgment: How Winning Leaders Make Great Calls

Tichy, Noel M. and Warren Bennis


Framework. Leadership experts describe an approach to three key areas for judgment: people, strategy and crisis. In addition to their approach, they use many examples, and include a handbook should you want to pursue their recommendations.


Avoid Boring People: And Other Lessons From a Life in Science

Watson, James D.


Experience. Nobel winner’s memoir is rich with details of a life in which his vivacity probably ensured that he spent very little time boring other people.





2008 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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