Executive Times

Volume 8, Issue 5

May 2006


 2006 Hopkins and Company, LLC

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The “why” question can become frustrating when a parent hears it relentlessly from a persistent four-year-old. It can be equally frustrating in the workplace, especially when there are gaps in performance expectations between executives and employees. When executives explore why consumers use their organization’s products or services, the answers can be less than desirable. When some executives become introspective and ask why they do what they do, the answers can be uncomfortable. In this issue, we explore the why question from the perspective of employees, customers and executives, with positive and negative illustrations for each. As you reflect on the stories in this issue, consider the answers to these questions for yourself, for the employees in your organization, especially those who report to you, and for those who use your organization’s products and services.


Fifteen new books are rated in this issue, beginning on page 5, and the ratings are the lowest and crankiest ever, which may reflect grade deflation or a mediocre current selection. Four books received three-star ratings, eight are mildly recommended with two-star ratings, and three books earned one-star ratings. Visit our 2006 bookshelf at http://www.hopkinsandcompany.com/2006books.html and see the rating table explained as well as explore links to all 292 books read or those being considered this year, including 63 that were added to the list in April. 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. As an added benefit to Executive Times readers, we’ve put all the books we’ve ever listed on one web page at http://www.hopkinsandcompany.com/All Books.html.


We read in a special report titled, “The Art of Motivation,” in the May 1 issue of Business Week (http://www.businessweek.com/magazine/content/06_18/b3982075.htm) that Nucor has found an approach to managing people that’s producing outstanding results. According to Business Week, “In an industry as Rust Belt as they come, Nucor has nurtured one of the most dynamic and engaged workforces around. The 11,300 nonunion employees at the Charlotte (N.C.) company don't see themselves as worker bees waiting for instructions from above. Nucor's flattened hierarchy and emphasis on pushing power to the front line lead its employees to adopt the mindset of owner-operators. … Legendary leader F. Kenneth Iverson's radical insight: that employees, even hourly clock-punchers, will make an extraordinary effort if you reward them richly, treat them with respect, and give them real power. … Under CEO Daniel R. DiMicco, a 23-year veteran, Nucor has snapped up 13 plants over the past five years while managing to instill its unique culture in all of the facilities it has bought, an achievement that makes him a more than worthy successor to Iverson. … At Nucor the art of motivation is about an unblinking focus on the people on the front line of the business. It's about talking to them, listening to them, taking a risk on their ideas, and accepting the occasional failure. It's a culture built in part with symbolic gestures. Every year, for example, every single employee's name goes on the cover of the annual report. And, like Iverson before him, DiMicco flies commercial, manages without an executive parking space, and really does make the coffee in the office when he takes the last cup. Although he has an Ivy League pedigree, including degrees from Brown University and the University of Pennsylvania, DiMicco retains the plain-talking style of a guy raised in a middle-class family in Mt. Kisco, N.Y. Only 65 people…work alongside him at headquarters.” The article goes on to describe how a pay for performance system rewards results and penalizes defects.
One organization that’s troubled by failing to attract workers, and by watching talent walk out the door is the United States Army. Following a spurt of patriotic enrollments after September 11, the Army has fallen short of recruiting goals since the 2003 invasion of Iraq. We read in The New York Times (4/10) (http://www.nytimes.com/2006/04/10/washington/10army.html) that, “Young Army officers, including growing numbers of captains who leave as soon as their initial commitment is fulfilled, are bailing out of active-duty service at rates that have alarmed senior officers. Last year, more than a third of the West Point class of 2000 left active duty at the earliest possible moment, after completing their five-year obligation. … the service’s difficulty in retaining current captains has generals worriedly discussing among themselves whether the Army will have the widest choice possible for its next generation of leaders.” To combat the brain drain, the Army is offering incentives including graduate school on Army time, choice of assignments and selection of locations. Time will tell if these incentives will entice the talent to stay.


Why do people want to become employees of your organization? Why are they passionate about the work they do? Why do they choose to remain with you? Why do they decide to leave? Do you “reward them richly, treat them with respect, and give them real power?” Is talent you want to keep walking out the door? What are you prepared to do to keep your talent?



We were intrigued to read in an article in the May 1 issue of Business Week (http://www.businessweek.com/magazine/content/06_18/b3982087.htm) that Proctor & Gamble is shifting product strategy. According to Business Week, P&G “recently realized that Tide, its segment-dominating cash cow, despite adding three share points in the past year for a total 42% of the category, was in jeopardy of slipping into mere commodity status. That's when consumers buy on price and habit, which can spell the end of brand growth. The problem: Tide for the past four years had only advertised mundane stain-fighting messages. … So, in an attempt to cultivate Tide's inner ‘lovemark,’ new ads now dismiss the notion that laundry detergent is a mere commodity. Instead, they reflect P&G's conviction that the ‘relationship’ women -- they're not bothering with men -- have with their laundry goes well beyond cleaning grass-stained T-shirts. Indeed, the effort is part of a companywide strategy to reestablish bonds between customers and all of its brands, no matter how mature or mundane. Lynne Boyles, P&G global vice-president for advertising, says the company is on a mission to unearth and cultivate the deep connections people have with its products. ‘We are striving for that with all of our brands.’ … Behind the strategy lies the cold truth that product benefits are quickly copied, whether it's cleaning power or diaper absorbency. So P&G is putting more capital into how a consumer feels toward a brand, a value harder to replicate.” Time will tell if consumers will acknowledge relationships with these commodity-like products.
One sector that’s struggling with the notion of passion and excitement with customers is the auto manufacturers. We were intrigued to read about industry missteps in candid comments made by Nissan CEO Carlos Ghosn at the New York International Auto Show on April 11, as reported in The Wall Street Journal (http://online.wsj.com/article/SB114485597332624041.html). According to the Journal, Ghosn said, “Incentives are an insidious, confusing carousel that no one seems willing to get off … You'd be hard-pressed to name another industry so reliant on discounts. … Auto makers can either sell cars without passion and struggle with shrinking production, or they can sell cars with passion.” Something must be wrong if these companies need to provide big bribes to consumers to buy products.


Why do customers use your products and services? Is your value proposition easily replicated by competitors? What relationship exists between your customers and your products? Are you and those in your organization passionate about those products? Do you regularly discount your products to generate sales? Are you spinning on a carousel? 



Executives who attempt to motivate employees by cheerleading at high volumes can be annoying. Some employees wonder if the person is real. We’ve found the best executives motivate effectively by being themselves and by setting a positive example. We read an interesting interview in the 4/24 edition of The Wall Street Journal (http://online.wsj.com/article/SB114583135219833574.html) with Anne Mulcahy, CEO of Xerox that stressed the importance of setting a good example. When asked about dealing with customers during the dark days of her leadership of the Xerox turnaround, Mulcahy said, “The first thing you do is lead by example and get out there and meet with customers. In some cases they were nervous about doing business with us. Sales reps have a hard time delivering the message that ‘we're going to be around, despite what you're reading in the newspapers.’ I made it personal. They had my personal commitment that we wouldn't let them down.” In answer to a question about how to get executives to meet with customers, Mulcahy said, “We started a formal approach called Focus 500, and it was our top 500 clients and we assigned all our top execs [to these customers]. They were fearful of going out and calling on customers. They really didn't want to hear all the stuff that wasn't going well. But then it became meaningful in terms of their jobs, this connectivity to customers ... There are at least 200 executives who are assigned to the top 500 clients. ... Another program is called ‘officer of the day.’ We all get a day a month to take the calls coming in from customers. Even if you're in meetings you have to get out and take the call.” The turnaround may not be over, but the example sends positive messages. It’s clear that Mulcahy likes her job, and that rubs off on others.
One top executive we read about recently has spent decades leading an organization from the shadows, and appeared to accumulate nothing tangible for his efforts. It must have been the thrill of wielding power that sustained La Cosa Nostra’s capo dei capi Bernardo Provenzano for the 43 years he remained in hiding from the police. We read in the 4/24 issue of TIME (http://www.time.com/time/archive/preview/0,10987,1184081,00.html) that Provenzano was taken into custody at a rural farmhouse when a police officer who tracked him for years finally caught him. We read, “The squalid conditions were ‘evidence of [Provenzano's] dedication to pure power,’ Interior Under Secretary Alfredo Mantovano told TIME. ‘He had acquired this perverse charisma, a figure who appears to take nothing for himself for the opportunity to rule over everyone else.’” We wonder if his successor will follow Provenzano’s example.


Why do you do the work you do? What kind of example does your behavior set for others? Are you passionate about your work? Does it show? How would others define your “charisma?”



We’re dedicating this month’s follow-up column to some of the executives on trial:


Ø      We noted in the April 2005 issue of Executive Times the resignation of Wal-Mart’s former #2 executive, Thomas M. Coughlin, following an internal investigation that uncovered theft. From various media sources, we’ve learned that he agreed to plead guilty to federal charges of wire fraud and tax evasion, and he could end up in jail for two years or longer. So far, we don’t know if the Bentonville Public Library will renege on its commitment to name its new building after Coughlin and his wife.

Ø      In the April 2005 issue of Executive Times, we observed that fired HealthSouth CEO Richard Scrushy was acquitted of fraud charges. The Associated Press wire reported in April that he and his wife are now full-time ministers and will help to feed starving children in Africa, “build a Bible-based university, and offer services including mortgages, insurance and health care.” Be sure to visit his website at http://www.kbim.org and follow links to the daily television show.

Ø      When we quoted Fortune in the February 2006 issue of Executive Times stating that the Enron trial would “be hard fought, perplexing, and surprisingly suspenseful,” we said we couldn’t wait. One of the best sources for trial information is at the hometown paper, the Houston Chronicle. Visit http://www.chron.com/news/specials/enron and explore links on everything from witness profiles to court documents. The trial is everything that Fortune predicted and more.




For fifty years, Sandy Weill spent every day working at what he loved and driving himself and others to become the best. On April 18 at the Citigroup shareholders meeting, Weill retired as chairman at age 73. Brooklyn-born Weill wanted to become an Air Force pilot, but defense spending was reduced when he graduated from Cornell in 1955, so he got a job as a runner for Bear Stearns, making $35 a week. By 1960, he was a successful broker, and started a firm with three partners. Over the next twenty years, he made twenty acquisitions, and sold that company, Shearson, to American Express for $930 million in 1981. He became President, turned around the troubled Fireman’s Fund unit, and left the company in 1985 when his efforts to take Fireman’s Fund private failed. At age 53, he was wealthy, but out of work. In 1986, he convinced Control Data to spin off its Commercial Credit operation, which it did, and Weill invested $7 million and became CEO. By 1988, Weill and his team turned around Commercial Credit, and acquired Primerica, Smith Barney, and the A.L. Williams insurance company. In 1992, he bought 27% of Travelers Insurance. In 1993, he bought Shearson back from American Express for $1.2 billion. He then bought the rest of Travelers with stock, and merged Shearson with Smith Barney. In 1996, he acquired the property and casualty operations of Aetna, and reorganized all his insurance operations. In 1997, Travelers bought Salomon for $9.1 billion in stock and merged it with Smith Barney. In 1998, Travelers merged with Citigroup, and Weill became co-CEO, then CEO and finally Chairman. Between 1986 and 2004, Weill generated annual returns of 22% for shareholders. Having retired, Weill now plans to devote more time to the many philanthropic ventures he’s been engaged in, and to give away much of what he’s spent a lifetime accumulating. We expect the same energy he applied at work to characterize this next stage of his life.


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 2006 bookshelf at http://www.hopkinsandcompany.com/2006books.html).


Title (Link to Review)



Review Summary


The Tent

Atwood, Margaret


Images. Quirky and mostly harsh short fiction in a more focused and concentrated dose than is found in her longer works. Still enriching and enjoyable.

The Camel Club

Baldacci, David


Revenge. Predictable junk reading escapist fare, with greater complexity and sensationalism than prior novels. Unlikely situations, thrilling plot, many characters.

Dave Barry’s Money Secrets

Barry, Dave


Yuks. Many funny passages, but never to the extent of laughing out loud or deep belly chortles. Barry’s old newspaper column packed a funny punch, but these longer works can become monotonous.

Rome, Inc.

Bing, Stanley (Gil Schwartz)


Minimal. Reads as if Bing was forced to complete an assignment in which he has minimal interest. Some funny passages, but not enough. Continue to read his Fortune column and wait for his next book.

The Number

Eisenberg, Lee


Bloviated. What could have been a succinct magazine article turned into a scattered and eccentric approach to financial and life planning aimed at anxious baby boomers facing retirement.


Gurwitch, Annabelle


Boring. Some witty, mostly boring stories from famous and interesting people about their experience of being fired. Chances are you’ve heard better stories from friends and neighbors.

Philosophy Made Simple

Hellenga, Robert


Questioning. Enjoy thinking about truth, beauty, life and death, as protagonist Rudy Harrington explores those and other questions as he changes his life and surroundings in this finely written novel.

The World to Come

Horn, Dara


Authenticity. Novel combines a family story with spiritual longing, and presents well developed characters trying to fill in the missing pieces of life, set in a backdrop of the plight of Russian Jews in the Soviet era.

The Lighthouse

James, P.D.


Shining. New and old James readers will enjoy the reprise of Commander Adam Dalgliesh, and the detailed way the author describes settings and develops characters.

Utterly Monkey

Laird, Nick


Aping. Debut novel in the “lad lit” genre provides some enjoyable reading, of the adolescent variety, not particularly well written or memorable.

Attention. Deficit. Disorder.

Listi, Brad


Disconnected. Creative, odd, unusual, debut novel may be the most unique fiction offering this year. Readers who expect order and focus should look elsewhere.

Quite Honestly

Mortimer, John


Goodness. Narration alternates between a bishop’s daughter and a thief, and their different points of view on the same action provides reading pleasure.

Money: A Memoir

Perle, Liz


Wealth. One woman’s feelings and attitudes about money, which may resonate for many female readers and will bring increased understanding to males, especially those who have noted differences and relationship conflict on money issues.

Friends, Lovers, Chocolate

Smith, Alexander McCall


Miasma. Somewhat foggy second installment featuring philosopher Isabel Dalhousie, with disconnected dialogue and a meandering plot from prolific author who’s in no hurry to move things along.

The Accidental

Smith, Ali


Clever. Talented writer delivers carefully constructed novel with language and structure so clever, precise and pretentious that it can distract readers.


ã 2006 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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