Executive Times

Volume 8, Issue 9

September 2006

2006 Hopkins and Company, LLC

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Behave

There were too many examples of impulsive behavior and its consequences in recent weeks for us not to pay close attention. The brand value of two actors diminished rapidly; another politician learned that the camera is always running, and the microphone captures every word; a civil rights icon disparages others; and a senior executive of a major company quit abruptly when he didn’t get a timeline for his accession to CEO. As you read the stories we’ve selected, and think about the actions that others have taken, reflect on the way you control your own impulses in the workplace. Think about how your behavior and character would be assessed if cameras and microphones followed you 24-7.

Fifteen new books are rated in this issue, beginning on page 5. Two books are highly recommended with four-star ratings; seven books are recommended with three-star ratings; and six books received two-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 428 books read or those being considered this year, including 43 that were added to the list in August. 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.

Unbecoming

Very few executives would want to swap seats with Paramount CEO Brad Grey. Following a box office disappointment from pricey top talent Tom Cruise in Mission Impossible III, Paramount and Cruise parted ways after a 14 year relationship. Grey’s boss Sumner Redstone clarified, thanks to a scoop reported on August 23 in, of all places, The Wall Street Journal, (http://online.wsj.com/article/SB115628557000642662.html) that it was Cruise’s weird behavior that led to the split, sending a warning shot to all talent: behave or else! According to the Journal, Sumner said, “It's nothing to do with his acting ability, he's a terrific actor. But we don't think that someone who effectuates creative suicide and costs the company revenue should be on the lot. … As much as we like him personally, we thought it was wrong to renew his deal. His recent conduct has not been acceptable to Paramount.” In addition to replacing lost revenue from the Cruise franchise, Grey has to placate other moody income generators who may wonder if their behavior will make them unwelcome on the Paramount lot. It falls to Grey and the Paramount team to define what conduct will be unacceptable. For decades, movie studios have placed morals clauses in performer’s contracts that have been enforced in cases of egregious acts and ignored when convenient. Can we expect celebrities to behave like normal people from now on? Can Grey retain talent that makes money and also behaves acceptably? Time will tell. Most corporations write codes of conduct that are meant to delineate the difference between acceptable and unacceptable behavior at work. Much in the code is left to interpretation, and enforcement can be erratic. Many employees recognize that there’s often a double standard that applies for top performers who can get away with misbehavior as long as the revenue flows in. All behavior combines to create an organization’s culture. To whatever extent behavior which is inconsistent with the organization’s values, image and reputation is accepted and rewarded, the organization is at high risk.

Does your organization maintain a double standard for behavior based on performance? Are you willing to look the other way if faced with unbecoming behavior by one of your top producers? Does your code of conduct provide a clear description of behavior which is acceptable and unacceptable to your organization? What examples or stories help make the discussion of behavior practical and real for your employees?

Mouthy

There were several reminders in recent weeks that the red recording light is always on for public figures, and alert executives can consider themselves as being observed with images recorded by some constituent all the time. One of the lessons that all executives should have learned in kindergarten or shortly after is, “Think before you speak.” Mel Gibson’s anti-Semitic drunken tirade following his DUI arrest a few weeks ago led to Walt Disney Company immediately dropping its plans for a miniseries with Gibson on the Holocaust. A wise move. Meanwhile, Gibson and his flacks have been scrambling to apologize, communicate, and do as much damage control as possible to maintain the actor’s market value. Former Atlanta Mayor and Former United Nations Ambassador Andrew Young, in his role as head of Working Families for Wal-Mart, was asked a question in a long interview with The Los Angeles Sentinel in mid-August about whether or not he was concerned about Wal-Mart driving mom and pop stores out of business. We read in The Los Angeles Times (8/18) (http://www.latimes.com/business/la-fi-young18aug18,0,3308959.story?coll=la-home-headlines) that Young blurted out in response, “Well, I think they should; they ran the ‘mom-and-pop’ stores out of my neighborhood. But you see those are the people who have been overcharging us — selling us stale bread, and bad meat and wilted vegetables. And they sold out and moved to Florida. I think they've ripped off our communities enough. First it was Jews, then it was Koreans and now it's Arabs, very few black people own these stores.” Young apologized after the negative reactions spread; he resigned from his job at Working Families for Wal-Mart, and has left people wondering about him. Virginia Senator George Allen, often considered a presidential aspirant, was caught with microphone in hand referring to an Indian American in his audience as a type of monkey. Since that event, Allen apologizes non-stop for this mistake, but may have shown himself as less than Presidential mettle. Readers wanting more on the story will find plenty in Slate (http://www.slate.com/id/2147786) or The Washington Post (http://www.washingtonpost.com/wp-dyn/content/article/2006/08/24/AR2006082401420.html).

When was the last time you spoke before thinking? Was what you said captured for your permanent record? How did what you said reflect on your character, your reputation and your role within the organization you serve? How alert are you to the reality that everything you say and do is noted by someone? When are you most likely to step out of character and say something inappropriate and regretful? How can you avoid those situations?

Pushy

Any heir apparent sitting on a succession chain and wondering with increasing impatience when their day will come can empathize with the situation of Britain’s Prince Charles. His mother shows no signs of retirement, and he’s moved to the downward slope from middle age. Executives who expect to be promoted can become impatient, especially when they think they can do a better job than the incumbent. Patience ran out recently for one executive at McDonald’s, the role model company for corporate succession. According to The Chicago Tribune, (8/25) (http://www.chicagotribune.com/business/chi-0608250208aug25,1,5900229.story?coll=chi-business-hed), after serving as number two to sixty-one-year-old CEO Jim Skinner since November 2004, fifty-five year old COO Michael Roberts wanted to know when he would move up. The Tribune reported, “Roberts demanded a timetable for succession in a meeting last week with Skinner and non-executive Chairman Andrew J. McKenna. When they said they could not give one, he quit.” When announced, many observers were surprised by the abrupt move. The fact that Skinner and Roberts don’t get along well was clearly a factor in this change. From the outside, it appears that the Board wanted some stability at the top, given the quick changes in recent years, and have been pleased with Skinner’s results. Roberts has done a great job, but his push led them to remove the friction issue by shoving him out, with a good package and a five-year non-compete agreement. In typical McDonald’s style, promotion announcements for internal moves were made at once, and lots of skilled executives now have new roles. They also have a new message about expected behavior by succession candidates: be patient and don’t try to push ahead.

Are you frustrated by the timing of your career’s progress? Are you likely to deliver demands to your bosses? Do you think that will lead to advancement? How do you channel your impatience? For whatever bench you sit on, what will make you the player that is most desired for the next step up?

Monitor

If there’s not enough to be anxious about already during job interviews, the importance of etiquette was highlighted in Joann Lublin’s Managing Your Career column in the 8/1 issue of The Wall Street Journal (http://online.wsj.com/article/SB115438788661022789.html). The receptionist is likely to note and report how you comport yourself while waiting for the interviewer. Did you arrive on time? What do you read? Do you talk on a cell phone, or do you turn off your BlackBerry? According to the Journal, at one firm, “the receptionist alerted partners if candidates using the guest bathroom failed to wash their hands. (She could hear the faucet.)” For a lunch meeting, one candidate was asked to drive the interviewer, Dean Bare, a managing partner of recruiters Stanton Chase International, to the restaurant with the ulterior motive of getting an impression of how the candidate drives. “A job seeker keen to become a partner at a management consultancy hit a vehicle during one such trip with Mr. Bare. The collision crumpled the prospect's car hood. ‘It clearly was his fault,’ the recruiter recalls. But the man blamed the other driver. His poor road etiquette bothered Mr. Bare so much that Stanton Chase didn't recommend him. He should have admitted his culpability.” Some executives prefer to interview on the golf course where they say you can learn more about a candidate’s character than anywhere else, especially any predilection for mulligans. Wherever the interview occurs, the best advice is to focus 100% attention on the interview.

When you interview others, what role does proper etiquette play in your assessment? How do you gather information about character and behavior? What opportunities do you create to observe a candidate’s likely behavior in a variety of situations?

Follow-up

Here’s an update on a story covered in a prior issue of Executive Times:

Ø We jumped the gun in the August 2006 issue of Executive Times when we praised Floyd Landis as a role model for performance. Now that the drug tests have come back, questions have arisen about the comeback kid and his use of performance enhancing substances. His team fired him, and his Tour de France title is likely to be revoked.

Ø With all media reporting recently on the impact of Hurricane Katrina one year later, we note that the wind versus water insurance coverage issue continues to play out in the courts, as we noted in the October 2005 issue of Executive Times. On August 15, U.S. District Judge L.T. Senter ruled that damage from wind-driven water isn't covered on standard homeowner policies. We read in the Insurance Journal (http://www.insurancejournal.com/news/southeast/2006/08/16/71472.htm) that Senter has now asked plaintiff’s attorneys for their suggestions on how to resolve hundreds of other cases in a “just, speedy and inexpensive manner.” Following their replies by late August, Senter will hold a hearing to discuss their suggestions. In the meantime, the ways in which homeowners and insurance companies try to differentiate between wind and water damage continues, with unpleasant results all around.

Ø A second verdict came in recently on former Tyco CEO Dennis Kozlowski. We noted his criminal conviction on 22 counts in the October 2005 issue of Executive Times. We learned from all the wire services that his wife, Karen Kozlowski, of 40^th birthday party fame, has filed for divorce. Since we noted in the November 2003 issue of Executive Times the link to the video of that party that was shown to jurors, we assume that custody of the party video will not be a matter of dispute.

Legacy

Reality

Few executives have the courage to walk away from a customer generating 25% of corporate revenues. Infosys Technologies Ltd. Chairman N.R. Narayana Murthy did that in 1995 when he took a pass on the terms that GE wanted for its business, which accounted for 8% of the firm’s profits. Under his leadership, the company replaced that business with more profitable accounts. Murthy started Infosys with six other software engineers in 1981. Currently, the company employs 58,000. In an interview in 2000, (http://www.india-seminar.com/2000/485/485%20interview.htm) Murthy summarized his approach: “Leadership is about making what seems impossible, possible; about changing the perception of what reality is. The reality in India is dirty roads, pollution, bad traffic, etc. Reality is what we make it; it is for us to change. If you give confidence to people they can achieve tremendous things. We have run this company as professionally as any other corporation in the world in terms of the principles of corporate governance, in not using corporate resources for personal conveniences, with respect for the professional.”

Murthy reached the company’s mandatory retirement age this month and retired at age 60, holding just under 6% of Infosys stock, worth over $1 billion. His confidence and courage leave the firm with a lasting legacy of being prepared to assess reality and make what changes it will take to achieve outstanding results and a transformed world.

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)	Author	Rating	Review Summary	Purchase
Alentjo Blue	Ali, Monica	***	Village. Through tidy vignettes in her second novel, Ali presents the permanence of a village in Portugal alongside the transformations of its residents and visitors over six decades.
What Would the Founders Do?	Brookhiser, Richard	***	Breezy. Brookhiser poses modern question and tries to find evidence of behavior in the lives of the founders that would reveal how they would act if faced with our contemporary questions.
Dispatches From the Edge	Cooper, Anderson	****	Precipice. CNN reporter’s memoir focuses on war, disaster and survival, as seen through the sharp pain that formed his character from the premature death of his father to the suicide of his older brother.
Kingdom Coming	Goldberg, Michelle	***	Cogent. Warning about the lack of common ground between secularists and evangelical Christians when it comes to science, politics, social services and justice. Whose country will America become?
A Year in the World	Mayes, Frances	**	Wandering. Tuscany left temporarily behind for brief wanderings, Mayes becomes immersed in other places, and gets irritated by tourists. Some pleasure here for those who like reading about travel.
The Naked Tourist	Osborne, Lawrence	**	Vacate. On the way to Papua New Guinea to visit a tribe with little exposure to outsiders, Osborne stops in Dubai, Calcutta and Bangkok on the way. In all places, he’s the center of attention.
The Futurist	Othmer, James P.	***	Imaginative. Entertaining debut satire features the global exploits of J.P. Yates, “founding father of the Coalition of the Clueless.” Laugh while reading and think afterwards about us getting the future we deserve.
American Theocracy	Phillips, Kevin	****	Indictments. Prophetic political analyst explores the coming perils from reliance on dwindling supplies of oil, the dominance of the “debt and credit-industrial complex” and the growing influence of the religious right.
The Culture Code	Rapaille, Clotaire	***	Congruity. Marketing guru and psychoanalyst describes a process for distilling why people do what they do in different cultures into a code which allows marketers to tailor messages in ways that resonate for targeted audiences.
Indian Pipes	Riggs, Cynthia	***	Marple. Mystery fans will enjoy the ways in which the sensible and practical ninety-two year old deputy sheriff Victoria Trumbull solves this Martha’s Vineyard mystery with an aplomb that makes her an American Miss Marple.
In Persuasion Nation	Saunders, George	***	Consumed. Short stories that pack a wallop focus on the excesses of our commercialized and media overwhelming society, and reveal our humanity in ways that are refreshing and hope-filled.
Point of Entry	Schechter, Peter	**	Implausible. Debut novel proposes new terror threat: a plan by Syria to smuggle enriched uranium to the U.S. via Columbian drug mules. Thanks to an emerging love interest between the U.S. President and the President of Columbia, we’re safe for another day.
Your Management Sucks	Stevens, Mark	**	Punchy. Long on attitude and stories, short on fact-based advice. Pick up a copy to carry around to get attention, buy a copy for your boss to prove your independence, but don’t expect useful answers here.
Triangle	Weber, Katharine	**	Oratorio. Novel recounts the working conditions for women and the memorable fire at the Triangle Shirtwaist Company in 1909, as recalled by the sole remaining survivor, showing how stories define us, whether true or false.
The Battle for Peace	Zinni, Tony	**	Empire. Retired general reflects on the ways in which the United States has created an empire that ignores working with others, but his prescriptions for change are hard to interpret.

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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