Executive Times
Volume 3, Issue 10	October 2001
ã 2001 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. Now What? Few American organizations will remain unchanged, given the events of September 11, 2001. Executives are thinking about the safety of employees in a new way, and are assessing the safety of business travel, work locations, disaster recovery plans and what kind of leadership will be demanded from now on. We’ve selected a few of the many stories about executives that we’ve read and heard in the past few weeks to call attention to the kind of action that’s needed before, during, and after a crisis. Many of us who work in the world of words found ourselves silent, without a way to express the shock and horror. Leaders became visible during the crisis and somehow found the words to lead their organizations to what action was needed next to move on. You’ve spent many hours since September 11 thinking about the tragedies. This issue of Executive Times attempts to offer some ideas and perspectives to help to prepare you for a crisis you may face as an executive. To whatever extent you can learn something from the experience of someone else, you’re better prepared for action when crisis enters your world. “Get Out Now!” How often have you been inside a building when an alarm rings? In some work locations, frequent false alarms have led workers to ignore the sound and be alert for signs of trouble, such as smoke, before taking action. We listened on NBC’s Today show to a Merrill Lynch worker crediting two managers on his floor in the World Trade Center to saving his life and that of many others. In the seconds following the impact of the first plane, the managers took charge shouting, “Get out now!” to all employees on the floor. Accustomed to the voice of leadership, workers fled to the stairwells and exited the building in time to save their lives. We read in The New York Times (September 16, 2001) (http://www.nytimes.com/2001/09/16/nyregion/16HERO.html) about investment banker Paul DeVito who led his twelve frightened employees down 87 floors of 1 World Trade Center. “He decided to take the lead in going down. The others formed a human chain behind him, each putting a hand on the shoulder of the person in front, and descended into the gathering smoke.” Employees look to executives for business-related leadership. At times, the voice of authority can make all the difference in the world. Some emergencies require speed and clarity of action. How attuned are you to the expectations of others concerning your behavior as an executive during a potential emergency? If fire bells go off in your workplace, what do you do? How prepared are you to take that critical first step which others will follow? 1,600 Children Cantor Fitzgerald employees worked on the uppermost floors of the World Trade Center. 700 out of 1,000 employees died on September 11. CEO Howard Lutnick would have been one of the casualties, but he was dropping his son off at kindergarten for the first day of “big boy school” when the planes attacked his office. Lutnick’s brother, Gary, was among the victims. While grieving the loss of family and friends, Lutnick listened to surviving employees who wanted to go back to work. The company reopened at offices in New Jersey two days later. You may have seen Larry King’s interview with an emotional Lutnick explaining how the firm doesn’t have money to continue to pay salaries to employees who died. Here’s part of their exchange from CNN (http://www.cnn.com/TRANSCRIPTS/0109/19/lkl.00.html): “KING: Does your firm -- how is your firm going to deal with all of these families and the like? Can Americans help you in any way? LUTNICK: Well, I'll tell you how we decided to deal with it. My partners and I, we talked about it and we decided that what we're going to do is we're going to give 25 percent of the profits of the company to the families of the victims to try to take care of them so they stay part of our family and that we can try to take care of them with our company, because you see they call me and they say: How come you can't pay my salary? Why can't you pay my husband's salary? Other companies pay their salary -- why can't you? But you see I lost...(SOBBING)... I lost everybody in the company, so I can't pay their salary. (SOBBING) They -- they think we're doing something wrong. I can't pay their salaries. (SOBBING) I don't have any money to pay their salaries. KING: Can America help at all? Can people help, Howard? LUTNICK: Well, I guess, you know, we're -- the victims, all the families, they're going to stay in the Cantor family and they're going to stay our partners. And so everything that we do, they're going to get 25 percent of whatever we do. So we do business with banks, we do business with broker dealers, and we...KING: So every dollar you make they get a quarter. LUTNICK: They get a quarter. So I mean, you know, if every money manager and pension fund just gives us a little bit of business then maybe we'll survive.” There are 1,600 children of Cantor Fitzgerald workers who died. Lutnick feels that the company needs to work for them. Each person who died on September 11 left behind a unique life, a story, and loved ones. Many executives refer to their corporate community as a family, and treat the employees and their loved ones as members of an extended family. Would you be likely to take the action Lutnick and his partners did in committing future profits to the families of the victims of tragedy? When you talk about employees as “headcount,” can you see behind the numbers into the personal stories? Recovery The tenant with the most employees in the World Trade Center, Morgan Stanley Dean Witter, found that their disaster planning over the past decade helped enormously in the aftermath of the tragedy. All but six of the 3,600 Morgan Stanley workers in the WTC are accounted for and safe. We read in the American Banker (September 25, 2001) (http://www.thebankingchannel.com/home/story.jsp?story=TBCE4PWXRRC) that plans to work without access to their WTC offices began in 1991. During the 1993 bombing, the company learned what changes to the plans were necessary. Wardens were on each floor, responsible for evacuation. A duplicate command and trading center was set up within blocks of the WTC, and it was up and running within an hour following the attack. Sidley, Austin, Brown and Wood is America’s fourth largest law firm, and 600 employees were in the World Trade Center on September 11. All but one of the 600 survived. We read in The New York Times (September 16, 2001) (http://www.nytimes.com/2001/09/16/business/16TALE.html) that within three hours after the attack, partner Alan S. Weil, called the landlord of the company’s midtown location and leased four additional floors. Arrangements were made to deliver 800 desks and cell phones to the new location, and to run cables to connect 300 new computers. The former WTC branch office was relocated and open for business on September 17. Thanks to an employee who drove back up systems tapes from a New Jersey storage facility to Chicago, virtually all of the firm’s data, every electronic document and e-mail message, was available to workers at their new worksite. We read in The Wall Street Journal (September 25, 2001) (http://interactive.wsj.com/archive/retrieve.cgi?id=SB1001371497674008480.djm) that the recovery efforts at Merrill Lynch and Lehman Brothers haven’t been without hitches. At Lehman, phones are ringing busy when they aren’t. Only half the calls were getting through on September 17, and by September 24, the estimate was that 90% of the calls were now connected. At Merrill, the company implemented a plan developed long before the attack, “But the plan left out an essential component: the firm's backup computer system, which also was damaged in the attack's aftermath, a person familiar with the matter says. This meant that memos, market analysis and other important documents some Merrill executives needed to work with customers vanished during the first days after the attack.” Does your organization have a disaster recovery plan that is highly likely to work in the event you and your employees cannot use your usual work sites? When was the last time you reviewed and tested your plans? What paper or end user systems are not included in your regular data storage and backup routines? Fractional Flyers The title of the Business Week article (September 24, 2001) captured the mood of many business travelers: “Road Warriors to Road Worriers” (http://www.businessweek.com/bwdaily/dnflash/sep2001/nf20010924_0343.htm). Business travel has often been viewed as an inconvenient necessity. Following the September 11 attack, many companies have encouraged employees to avoid “unnecessary travel,” or to travel only in the event of an emergency. With expected travel times and hassles increasing, some companies are re-considering purchasing fractional shares in private aircraft, according to The New York Times (September 23, 2001) (http://www.nytimes.com/2001/09/23/business/yourmoney/23JETS.html). The attraction to the private jet alternative is the greater possibility of going where you want to go and leaving when you want. Jack Olcott, President of the National Business Aviation Association calls private jets “an office that moves.” Many executives are relying on conference calls, videoconferencing, and web meetings to replace face-to-face meetings. It may take some time before executives return to the prior rhythm of routine business travel. What are your expectations concerning business travel over the coming weeks and months? How are you managing employees whose jobs have required travel, but are reluctant in the current environment? Has your organization provided employees with alternative methods of communication that can replace business travel? Support Many organizations have brought in counselors to help employees cope with the impact of the September 11 attack. Witnesses to the attack are going through debriefing sessions to aid in achieving catharsis. Workers outside New York and Washington were also traumatized by the event, and employers are providing support to them as well. We read the opinion of one expert quoted in The Wall Street Journal (September 25, 2001) (http://interactive.wsj.com/archive/retrieve.cgi?id=SB1001366265258729880.djm), “ ‘The real fallout will happen two to three months down the road [when] everything seems normal,’ warns social worker Mila Ruiz Tecala, head of the Center for Loss and Grief in Washington.” Employees will look to managers for leadership in helping them find a way to move forward. Some advisors encourage executives to be sensitive and flexible since different employees will need different forms of leadership. Both listening and disclosing personal feelings can help. Encouragement and understanding by managers will help to create an environment for healing. Executives need to recognize that some individuals will need more time than others for emotional healing. How visible have you been to employees since September 11? Do you anticipate that your support and encouragement will be needed in an intense way for many months? Have you directed individuals toward the many forms of professional counseling that may help them? Have you received the counseling and support you need to move forward? Follow Up Here are selected updates on stories covered in prior issues of Executive Times: Ø It may have been a matter of coincidence, but on the front page of the August 1999 issue of Executive Times, we noted the selection of Carly Fiorina as Hewlett-Packard CEO, and on page 2, we called attention to the selection of an unknown executive to lead Compaq, Michael Capellas. All the media reported the proposed merger of these two companies in recent weeks. Was it their relative proximity in Executive Times that brought them together? Nah. Legacies Leading Heroes Chief Peter J. Ganci, Jr., the New York Fire Department’s highest ranking uniformed officer, was not one of those executives who leads from a remote command center. He died at age 54 on September 11 while leading firefighters in their rescue efforts at the World Trade Center. We read in The New York Times (September 13, 2001) (http://www.nytimes.com/2001/09/13/obituaries/13GANC.html) that, “The chief ‘would never ask anyone to do something he didn't do himself,’ said Howard Safir, who was his direct superior as fire commissioner from 1994 to 1996, the year Mr. Safir was named police commissioner. ‘It didn't surprise me that he was right at the front lines. You would never see Pete five miles away, in some command center.’” First Deputy Fire Commissioner William Feehan could have retired long ago. Instead, at age 71, he was on the scene at the World Trade Center on September 11 and he died when the south tower collapsed on his command center. We read in The New York Times (September 13, 2001) that Feehan, son of and father of a firefighter, was the first person in the department to hold every rank within the department. In a speech at the Astoria fire department centenary, he commented, “We are only passing through. We are the guardians and custodians of a 100-year tradition.” His son, John, said that retiring never entered his mind. Neither firefighter knew how many of their co-workers died in their heroic attempt to save the lives of others. Reading (Note: readers of the web version of Executive Times can click on the book covers or titles to order copies directly from amazon.com. When you order through these links, Hopkins & Company receives a small payment from amazon.com. Subscribers to the print version of Executive Times can receive the web version at no additional cost. Send e-mail to hopkinsandcompany@att.net with a request to be placed on the web version distribution list. Also, not all books we read make it to the pages of Executive Times. For expanded reviews of Executive Times selections and other books, visit our book review site at http://www.hopkinsandcompany.com/books/list.htm.) Score! We readily admit to a bias in favor of clear scorecards reflecting those performance indicators that mean something in the day-to-day life of a worker in an organization. Robert S. Kaplan and David P. Norton came up with what they called the Balanced Scorecard in prior articles, books and speeches. Their new book, The Strategy-Focused Organization: How Balanced Scorecard Companies Thrive in the New Business Environment, represents the best articulation of the concept and execution yet. Executives working at any organization will gain something of value from reading this book which we highly recommend. The structure of the Balanced Scorecard involves the creation of performance measures from four perspectives: financial; customer; internal (process) and learning and growth. Some organizations use too few or too many performance measures. Time and events can prove that companies select the wrong indicators of success. Kaplan and Norton tackle complexity and the frequent challenge of implementing contrasting strategies. The book is replete with clear examples, often of actual company scorecards. You have the tough work of figuring out whether this approach will help your organization. Recommendation: •••• (Highly Recommended). To read an excerpt from this book, visit www.hopkinsandcompany.com/books/The Strategy-Focused Organization.htm. Divide and Conquer Some business writers create categories and lists that seem arbitrary and obtuse. Not so with Fred Wiersema. In his new book, The New Market Leaders, Wiersema creates two simple ways to measure leadership: a sales growth index and a market value index. The sales index compares growth versus peer companies, and the market index compares how much an investor is willing to pay for a dollar of sales versus peer companies. Wiersema tracked the performance of 5,000 companies, and measured their leadership using the above metrics. He then examined what those companies were doing to achieve market leadership. Another useful categorization Wiersema came up with involved customer buying patterns. He divided customers into four groups: searchers, collaborators, streamliners and delegators. He then examined which market-leading companies were serving which segments, why and how. The book contains lengthy enough case studies for a reader to understand why the company has become exemplary. Most executives will find this book stimulating and interesting. It may be helpful in strategic planning and in discussing change with other executives. If you enjoyed his previous book, The Discipline of Market Leaders, you’re likely to enjoy The New Market Leaders. Recommendation: •••• (Highly Recommended). To read an excerpt from this book, visit www.hopkinsandcompany.com/books/The New Market Leaders.htm. Poetic Miracles If you like to discover new novelists and want a story that will totally transport you to another time and place, you’ll certainly enjoy Leif Enger and Peace Like a River. You may not read or hear much about this book, but after reading it, you’re likely to recommend it to someone else. The narrator, Reuben Land, was eleven years old when most of the action in the novel took place, set in Minnesota and the Upper Midwest in the 1960s. A lifelong asthma sufferer, Rube comes to know that each breath of air is a miracle. Lots of other miracles enter his life, and the reader receives them with a complete and willing suspension of disbelief. Reuben’s father, Jeremiah, prays often and seems to be capable of making miracles happen. Reuben’s sister, Swede, is a budding writer, and her poetic words fill the book with lightness and grace. Older brother, Davy, murders two thugs who threatened harm to the Land family, and the family’s search for Davy following his escape from jail involves a journey that changes all their lives. Enger captures human nature, family relationships, love and compassion, and sets readers into a landscape full of a purity and richness in non-material things that you’d like to have in your life. Recommendation: •••• (Highly Recommended). To read an excerpt from this book, visit www.hopkinsandcompany.com/books/Peace Like a River.htm. Unlocked Alice Hoffman’s new novel, Blue Diary, is delightful on so many levels. Her language evokes mood, time and place with precision and care. Readers thrive inside the atmosphere she creates. Her characters capture human nature and behave in ways that resonate with readers. When faced with the unthinkable, protagonist Jorie Ford takes one numb step at a time, trying to make sense out what has changed in her life. Emotions are unlocked; relationships are changed; things will never again be the same. It was sad to close the last page of this book and have to wait for Alice Hoffman to write again. Recommendation: •••• (Highly Recommended). To read an excerpt from this book, visit www.hopkinsandcompany.com/books/Blue Diary.htm. Stairway to Heaven University of Maryland math professor Manil Suri has written his first novel, The Death of Vishnu, and it’s a gem. With the clarity and crispness that comes from his math background, he presents a complex and clever story of life, death and forbidden love among residents of a Bombay apartment building. A handyman named Vishnu lies dying on a stairway in the building. Is this Vishnu the same one as the Hindu god who is the keeper of the universe? In many ways, Vishnu the handyman is the keeper of community among the residents of the building. Their many reactions to him and to each other make this book rich with characters and warm and inviting. Serious fiction readers will love The Death of Vishnu and look forward to the next novels of Manil Suri. Recommendation: •••• (Highly Recommended). To read an excerpt from this book, visit www.hopkinsandcompany.com/books/The Death of Vishnu.htm. A total of 24 book reviews were added during September 2001 at http://www.hopkinsandcompany.com/books/list.htm. Only the books rated “Highly Recommended” are profiled in Executive Times this month. Check out the others for books you may enjoy reading.
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