|
 2007 Hopkins and Company, LLC
Note
re: links---certain hyperlinks assume that you are registered as a subscriber
to the site. If you are not a subscriber to certain sites, the links will fail.
If you register, the links should work. Also, certain hyperlinks expire and
may not be available when you try to go to the site.
Judgment
Scientists have learned that the human
brain is not fully formed and functional until early adulthood. When an exasperated
parent asks an adolescent following erratic behavior, “What were you
thinking?” and the child answers, “I don’t know,” science has confirmed the
answer is both accurate and honest. Executive brains are fully formed, so
when observers note certain behavior and ask “What were they thinking?”
there’s no scientific excuse available. Executives are rewarded for
exercising good judgment, for deciding to take certain action, and for the
wisdom to avoid certain actions. The stories selected in this issue all
involve the exercise of judgment, and readers have the opportunity to reflect
on what judgment you might display in similar circumstances. In a rare
exercise of editorial discretion, there won’t be any American political
examples in this issue, although temptation lured from every quarter.
Fifteen new
books are rated in this issue, beginning on page 5. Five books received
highly recommended four-star ratings; nine books are rated three-stars, and one
book is mildly recommended with a two-star rating. Four of this month’s
selections are the latest books from award winning authors. Four others are
novels containing characters that have been reprised. Visit our current
bookshelf at http://www.hopkinsandcompany.com/2007books.html
and see the rating table
explained as well as explore links to all 454 books read or those being
considered this year, including 27 that were added to the list in July. The
final Harry Potter book is on hand, and will likely be reviewed next month.
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 2,151 books we’ve ever listed at http://www.hopkinsandcompany.com/All
Books.html.
Alias
What was Whole Foods co-founder and CEO John Mackey thinking when he posted
messages over the past eight years in Yahoo!
Finance stock forums using the alias, “Rahodeb,” an anagram of the name
of his wife, Deborah? In those forums, Mackey had lots to say about Whole
Foods in what a page one story in The
Wall Street Journal on July 12 identified as over 1,100 entries (http://online.wsj.com/article/SB118418782959963745.html).
The postings came to light when the Federal
Trade Commission revealed them in its lawsuit to oppose the acquisition
of Wild Oats by Whole Foods (http://www.ftc.gov/os/caselist/0710114/0710114.shtm).
Mackey’s extensive blog at the company’s website answered our question: “I
posted on Yahoo! under a pseudonym because I had fun doing it. Many people
post on bulletin boards using pseudonyms. … I never intended any of those
postings to be identified with me.” Can and should a CEO do something like
that? The SEC has opened an
investigation, and the board of directors of Whole Foods formed a special
committee to investigate this issue, and has retained outside counsel for
advice. Mackey has suspended his blog, which is packed with interaction
between him and stakeholders, where he is clearly identified. So why did he
post anonymously on Yahoo? On July 17, Mackey apologized, saying: “I
sincerely apologize to all Whole Foods Market stakeholders for my error in
judgment in anonymously participating on online financial message boards. I
am very sorry and I ask our stakeholders to please forgive me.” (http://www.wholefoodsmarket.com/company/pr_07-17-07b.html).
Stay tuned to see if he is forgiven. How significant will this error and
judgment be?
When you draw a line between your role
in your organization and the rest of your life, how do you make judgments
about behavior that could cross that line? How sensitive are you to the
reality that you represent your organization 24-7? Could a pseudonym or alias
put you and your organization at risk?
Fore
Appearances count. If
we had an Emperor Nero award, this month it would have to go to Bear Stearns CEO James E. Cayne. We read in the “Suits” column in The New York Times on July 8 (http://www.nytimes.com/2007/07/08/business/yourmoney/08suits.html)
that while some of the company’s hedge funds were melting down, and operating
losses were dropping, Cayne continued to fly from Manhattan to New Jersey in
a helicopter every Thursday in June to play a round of golf in the evening,
another round on Friday, and then work from home, where he remained in
constant touch with the office. Thanks to the posting of golf scores online,
the Times correlated his game
(consistent scores of 96 or 97) with the company’s challenges. Is this an
example of achieving a good work-life balance? Does it show that Cayne didn’t
care about what was happening at the firm or to the holders of the troubled
hedge funds? We later read this statement on July 16: “CNBC has learned that
the Hollywood Country Club in Deal, New
Jersey is examining whether Bear Stearns Ceo Jimmy
Cayne changed his golf scores to allow him to win the July 4th tournament at
the club.” (http://www.huffingtonpost.com/2007/07/16/bear-stearns-ceo-investig_n_56419.html).
If cheating at golf while heli-commuting turns out to be true, this will be a
whole other story about bad judgment. In the meantime, it looks like a lack
of attention to appearances.
How vulnerable are you to those who could draw conclusions
from your behavior that are disconnected from your intentions? Are you likely
to be criticized for choosing the wrong actions at the wrong time? When bad news hits your organization and/or
its stakeholders, how alert are you to perceptions about your behavior?
Rockstars
Some executives keep a low profile on
themselves, and point attention to their organizations. Others seem to
promote themselves in ways that are distinct and separate from their
organizations. We read in Carol
Hymowitz’s “In The Lead” column in The Wall Street Journal on July 16 that, “some top executives are branding
themselves as distinctly as they brand their companies’ products. They want
to ensure their names also are quickly recognized and tied to a particular
sentiment. They believe they have to do this to retain the support of
increasingly fickle directors and investors. A strong public image may also
help them build alliances with government officials and business leaders
across the globe. And in the Google age, they want their names to be more
prominent than those of their rank-and-file employees, who are competing for
high placement on search engines and social-networking sites” (http://online.wsj.com/article/SB118453911577866946.html).
Hymowitz advises that, “corporate executives should be wary of too much personal
brand-building. Unlike entrepreneurs who boost their companies when they
promote themselves, an executive at an established corporation who brands
himself is competing with his company's image. Such executives risk quashing
the spirit of teamwork essential to innovation and productivity, and they tend
to fail to do vital succession planning. A high-profile CEO can make sense
for a company that ‘is seeking a stronger identity in the financial markets,’
says Gurnek Bains, chief executive
of YSC, a London-based
corporate-psychology consultant. ‘But all our research shows that it's
humbler executives with less ego -- the ones who stay very connected to their
employees and customers -- who get the best results for their businesses.’ Tom Kuczmarski, a consultant on
business innovation and a professor at Northwestern's
Kellogg School of Management, adds: ‘When you're the rock-star brand at
the top, you're conveying to people in the ranks that they're second-class
citizens -- and you stop thinking about how to develop the next group of
people who will run the show.’ Executives calling extra
attention to themselves may want to consider some of the potential adverse
consequences. Hymowitz concludes, “Only the most confident CEOs are willing
to advertise their employees more than themselves.”
Is your personal brand tied to a particular sentiment?
Does that help or hurt your organization? Are you confident enough to
advertise your employees more than yourself? How does attention to you help
your team produce results? How do you exercise judgment in promoting yourself,
your employees and your organization?
Self-dealing
The late
journalist Mike Royko once
suggested that the official motto of the City
of Chicago
should be “Ubi est mea?” or
“Where’s mine?” That’s a natural question that underlies most financial and
negotiated transactions, and when above board, works perfectly. The fact that
some executives stray from their fiduciary duties and pocket something for
themselves that rightly belongs to others means that our oversight processes
are burdened with the costs of ensuring that self-dealing is monitored and
what belongs to a company and what is due an individual remain distinct. Two
recent cases of self-dealing are illustrative of the consequences of ignoring
the difference between the leader and the organization. Conrad Black and Zheng
Xiaoyu have led different and similar lives. We read throughout the
business press that former Hollinger
CEO Black was convicted of fraud in July. In one situation, he pocketed a
non-compete fee for himself that was more appropriately due to his company.
The amount of money involved was less than two percent of his net worth; the
consequences may be that his fortune will be lost and he’ll wind up in jail.
The verdict will be appealed. We read in China
Daily on July 10 (http://www.chinadaily.com.cn/china/2007-07/10/content_5424937.htm)
that Zheng Xiaoyu, China’s
former head of the State Food and Drug
Administration was executed for dereliction of duty and corruption. He
was convicted of accepting $850,000 in bribes from eight companies. The Supreme People’s Court said, “Zheng
Xiaoyu's grave irresponsibility in pharmaceutical safety inspection and
failure to conscientiously carry out his duties seriously damaged the
interests of the state and people.” We read (http://www.chinadaily.com.cn/china/2007-05/31/content_884392.htm),
“A commentary in the People's Daily,
the party's official paper, said Zheng's fate was a lesson to other
officials. ‘As a case study of a party member and leading official breaking
the law and committing crime, the Zheng Xiaoyu case offers profound lessons
that all public servants, especially leading officials at every level, should
take to heart.’ During his tenure, dozens died in China from fake or bad drugs and
food products. In one of the most notorious cases, in 2004, at least 13
babies died of malnutrition in Anhui
province after being fed fake milk powder with no nutritional value. ‘Any
conduct that hurts the people's interests, any shirking or perfunctoriness,
any dereliction of duty will not be tolerated and must be punished.’”
How much dereliction of duty is
tolerated within your organization? How do you oversee self-dealing? How
clear are the boundaries and roles within your organization?
Follow-up
Here’s an
update on stories covered in prior issues of Executive
Times:
Ø
In
the July
2004 issue of Executive Times
we noted the dysfunctional relationship between Sumner Redstone and Mel
Karmazian at Viacom broke up
about a year after they sounded like everything was hunky dory. What are they
up to nowadays? We read rumors on the Reuters
wire and in many business periodicals that Sumner’s daughter Shari Redstone, vice chair of the
company may be leaving, following a dispute with her dad over pay for
performance. Sumner settled a suit with his estranged son, Brent, earlier this year over a share
of the family fortune. It seems as if the dysfunction continues. Meanwhile, Karmazian as CEO of Sirius Satellite Radio is promoting
the benefits of the merger of that company with XM Satellite Radio. Appearing at the National Press Club prior to the close of the comment period on
the merger, Karmazian tried to sell the idea that the combined market share
of the only two satellite radio providers would be just 3.4% of the nationwide
audience. He’s counting everything a consumer would use to hear stuff.
Ø
In
many August issues of Executive Times,
we’ve had something to say about Le
Tour de France. We read everywhere on July 24 that Alexander Vinokourov, who won the 15th stage on July
23 tested positive for the presence of foreign blood cells and his entire Astana team withdrew from the Tour.
In keeping with the opening story in this issue, we ask again, “What was he
thinking?” Riders from seven teams refused to start the July 25 stage on time
as a joint protest to combat doping in cycling. The winner of the 1996 Tour, Bjarne Riis, admitted prior to this
year’s Tour that he used the drug EPO and offered to return the yellow
jersey.
Legacy
Preservation
The preservation
of millions of acres of land throughout the United States and in twenty-nine
other countries can be traced to the pioneering efforts of Richard Goodwin. A professor of
botany at Connecticut
College for thirty
years, Goodwin served twice as president of the Nature Conservancy. Goodwin negotiated the Conservancy’s first
land purchase, 3,000 acres of virgin forest in California, now called Angelo Coast Range
Reserve. Goodwin appealed to owners who loved their land, and offered a way
in which they could receive compensation and be sure that their land would be
preserved for future generations. Goodwin died in early July at age 96. We
read in an obituary in the Los Angeles
Times, “He told Investor's Business Daily in 2001 that many scientists
and other parties interested in acquiring land failed because they didn't
‘act like real estate agents.’ … ‘If you really want to get something done,
start on it, keep at it, and it will eventually happen … Some of the biggest,
most interesting preserves that have come about didn't happen overnight.’”
According to the Times, he and a
botany colleague, William Niering, worked together on some transactions.
‘“We'd visit a farmer and sit in rocking chairs in his kitchen and rock and
rock,’ Niering told Nature Conservancy magazine in 2001, ‘until we finally
got a price out of him.’” Thanks to Goodwin’s perseverance, and the model he
set for operations at the Nature Conservancy, open space has been preserved,
and at the time of his death, the Conservancy had preserved more than 117
million acres of land and 5,000 miles of river around the world (http://www.nature.org/aboutus/?src=t5).
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 2007 bookshelf at http://www.hopkinsandcompany.com/2007books.html).
|
Title (Link to
Review)
|
Author
|
Rating
|
Review Summary
|
Purchase
|
|
Farewell
Summer
|
Bradbury,
Ray
|
***
|
Aged. Over 50 years ago, an editor yanked
this second part of the book that became Dandelion Wine. Bradbury has now
finished it, with wisdom, and ready for readers to savor.
|
|
|
Priest
|
Bruen,
Ken
|
***
|
Melancholy. Crime fiction of the highest caliber
in this fifth novel featuring moody and complicated Galway
ex-cop, a recovering alcoholic, fine dialogue and dark moodiness.
|
|
|
The
Yiddish Policeman’s Union
|
Chabon,
Michael
|
****
|
Imagination. Fine writing from master
storyteller, this time creating an imaginary community in Alaska where Jewish refugees have been
living since after World War II, and which now reverts back to American
rule.
|
|
|
The
Navigator
|
Cussler,
Clive
|
**
|
Consistent. Latest offering of the Kurt Austin
action brand, in which the good guys are consistently virtuous, and the bad
guys are ruthlessly evil. Predictable reading when you’d prefer not to have
to engage your brain.
|
|
|
The
Maytrees
|
Dillard,
Annie
|
****
|
Abiding. Can love last? Fine novelist
presents decades of relationships, full of love and longing, closeness and
distance. Poetic language and lingering imagery provide much reading
pleasure.
|
|
|
A
Thousand Splendid Sons
|
Hosseini,
Khaled
|
****
|
Resilience.
Powerful story of
recent decades of the life of two women in Afghanistan, both of whom are
abused and loved, and who struggle to survive.
|
|
|
Nixon
and Mao: The Week That Changed the World
|
MacMillan,
Margaret
|
***
|
Transformation.
Context and details
about Nixon’s 1972 visit to China,
packed with the who, what, why and how that will interest readers who want
to understand the importance of what happened that week.
|
|
|
On
Chesil Beach
|
McEwan,
Ian
|
****
|
Silence. Finely written novel, set in 1963 on
the honeymoon of two innocent virgins, whose unspoken fears about sex lead
to the consequences of saying nothing when words are needed, and the
inability to take back the wrong words expressed.
|
|
|
Divisadero
|
Ondaatje,
Michael
|
***
|
Endless. Episodes build atop each other,
connecting past and present in this masterfully written complex novel. A second
reading enriches the experience from the first.
|
|
|
Spare
Change
|
Parker,
Robert B.
|
***
|
Dad. The sixth Sunny Randal novel has the
expected complicated characters, crisp dialogue and fast-moving action,
with a bonus motif on the parent-child relationship.
|
|
|
Out
Stealing Horses
|
Petterson,
Per
|
***
|
Remembering.
Even as translated
from Norwegian, the skilled writing is evident in this novel of a 70-year-old
man’s reminiscences of his father, what happened to them during WWII, and
the connections that remain among people after decades apart.
|
|
|
The
Naming of the Dead
|
Rankin,
Ian
|
***
|
Demonstration. Inspector John Rebus returns for the
eighteenth time as the G8 summit arrives in Scotland to media frenzy,
demonstrations, and murder. The names of the dead are spoken so they’d know
they weren’t forgotten.
|
|
|
Stalin’s
Ghost
|
Smith,
Martin Cruz
|
***
|
Digging. Arkady Renko returns for the sixth
time as his investigation into a sighting of Stalin in a Moscow
subway leads Renko to Chechnya,
war crimes past and present, and buried bodies.
|
|
|
The
Black Swan: The Impact of the Highly Improbable
|
Taleb,
Nassim Nicholas
|
****
|
Unknowns. Quirky and thoughtful book riffs on the
notion that the highly improbable does happen, is unpredictable, and has a
huge impact, all of which we find reason to explain and ignore.
|
|
|
The
Devil in the Kitchen: Sex, Pain, Madness and the Making of a Great Chef
|
White,
Marco Pierre
|
***
|
Freedom. Chef’s memoir of obsessive work, perfectionism,
setting goals, achieving recognition, and then having the freedom to quit
at the top and go do something else.
|
|
|