Volume 9, Issue 10
2007 Hopkins and Company, LLC
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What can be more challenging for some executives than producing unpopular products? One challenge can come from managing those products that are wildly popular. Another challenge can be taking action when a product failure occurs. Both these situations have dominated the business and popular press in recent weeks, so the focus in this issue is on products and how some executives are facing product challenges. As you read about the stories selected, think about your own organization’s products and services, and the expectations and relationship your consumers have with those products and services. Reflect on whether or not the situations faced by other executives are ones that you’re prepared to manage if they come your way.
Fifteen new books are rated in this issue, beginning on page 5. One book received a highly recommended four-star rating; ten books are rated three-stars, and four books received one-star ratings. Visit our current bookshelf at http://www.hopkinsandcompany.com/2007books.html and see the rating table explained as well as explore links to all 546 books read or those being considered this year, including 55 that were added to the list in September. 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 firstname.lastname@example.org. You can also check out all the books we’ve ever listed at http://www.hopkinsandcompany.com/All Books.html.
Are your customers facing “three flashing red lights” when they try to use your organization’s products and services? To what extent do your customers count on you, and are you meeting their expectations? When you sell more units, are you making more or less money as a result?
What do you know about the expectations of the early adopters of your products and services? Are your methods for pricing your products aligned with those expectations? What is the impact of discounting on your success and on the value of your products to your customers?
safety concerns have been growing dramatically in recent weeks. Just in time
for the holiday toy-buying season, parents and other purchasers are aware of
what seems like daily announcements of product safety recalls. Many of the
products recalled involve the use of lead based paint. Other products contain
magnets that can be swallowed. One million cribs have been recalled. When
assembled incorrectly, a child could die in the crib, leading the U.S. Consumer Product Safety Commission
to warn parents, “We do not want your child in that crib tonight.” There are
hundreds of recall warnings for toys at http://www.cpsc.gov/cpscpub/prerel/category/toy.html,
leaving parents and child care providers scrambling to remove those toys that
can do harm. Curt Stoelting, CEO
of RC2 said in a letter to
behalf of everyone at RC2 let us apologize for the worry a new toy recall may
cause you and your family. We understand how painful it can be to take a
cherished toy from a child. Nevertheless, we urge you to immediately check
for and return any of the newly recalled toys to us. … We deeply regret the
burden that recalling toys creates for parents, but we believe parents
deserve to be assured of two things: First that the Thomas toys they already
have are safe, and second that the new toys in stores are safe. … The real
measure of our success is the trust you and other parents are able to place
in our toys, knowing that we're taking the right steps to protect your
children. We're hopeful that concerned parents, like you, recognize that our
toys have been subjected to intense scrutiny and testing and are that much
safer for it. Thank you for your continued patience and support.” Mattel’s CEO Robert Eckert
told a Congressional Committee that he would take personal responsibility for
ensuring that Mattel’s systems and people are dedicated to safe toys. “I’m
the person responsible for making sure all our systems and all our people are
dedicated to safe toys for our kids to enjoy, without worry or concern. My
job is to find out what happened and to make sure it never happens again.”
Eckert’s 9/11 op-ed in The Wall Street
Journal noted, (http://online.wsj.com/article/SB118945976718023000.html)
we continue our lead paint testing, it's possible that we could find more
items that have parts that may not meet our specifications. Obviously, I hope
we don't find anything else. But if we find any issue, no matter how small,
we will work closely with authorities world-wide to inform consumers quickly
and take prompt corrective action. There has been quite a lot of talk about
toy testing in past weeks. I also want to talk about this test of Mattel as
an organization, and what people can expect from us moving forward. It is my
sincere pledge that we will face this challenge with integrity and reaffirm
that we will do the right thing. We will embrace this test of our company and
the opportunity to become better. When I was a young man growing up in
How successful are your efforts to monitor and ensure product quality and safety? How vulnerable is your organization to a loss of trust by those who consume your products? Does your testing catch defects? How do you know that your efforts are working? Is your company ready to be tested?
an update on stories covered in prior issues of Executive
Ø In the October 2005
issue of Executive Times we noted
the sentencing of Tyco’s former
CEO Dennis Kozlowski and former
CFO Mark Swartz. The September
issue of Conde Nast’s Portfolio (http://www.portfolio.com/executives/features/2007/08/13/Tyco-Mark-Swartz)
describes Swartz’s life in prison. “Swartz is now bunking next to child
molesters, rapists, and murderers. His sentence should serve as a warning to
those who are tempted to take advantage of their power and prestige: This
could be you. But the public has a short memory. Barely two years into his
term, Swartz has faded from the headlines. In a short time, few people will
remember his name, the details of his case, or even why he’s in prison or how
long he’ll be there.”
Ø We asked readers of the November 2004
issue of Executive Times to stay
tuned to see how well Corning’s Jamie
Haughton handled his second act at the company and how well he transitioned
to another successor. The transition was so smooth, we barely noticed. As we
noted three years ago, Haughton promoted people who were responsible for some
of the company’s troubles, and told them to fix the problems. They did, and
are now running the company that receives “buy” recommendations from most
company analysts. Haughton is retired again from active management, serving
as non-executive chairman.
Some executives are so careful and politically correct in their statements that some listeners gag when they try to pay attention to what’s being said. Other executives leave no doubts about their positions, and along the way, take no prisoners. John E. Swearingen led Standard Oil Company (Indiana) (later Amoco) for 23 of the 44 years he worked there. He pulled no punches in his assessment of that company in a 1961 interview when he said, “Let's face it, in many respects this is a second-rate company.” With his vision and relentless research and development, the company became first-rate. We read at the time of his induction into the South Carolina Business Hall of Fame that (http://www.myetv.org/television/productions/legacy/laureates/John%20E.%20Swearingen.html) “Swearingen emphasized careful planning for the long term. He built a respected organization of people and, with their help, streamlined operations, coordinated marketing, accounting, and sales practices, expanded Standard's domestic and foreign exploration, refining, and marketing of oil and natural gas, and built Standard's chemical operations into nearly a $3 billion business.” Along the way, Swearingen called the Department of Energy “naïve” and during the oil crisis in the 1970s, he called critics “hysterical.” By the time Swearingen retired at age 65 in 1983, the company’s profits had grown from $84 million to $1.8 billion. Within a year after retirement, he was asked to become CEO of Continental Illinois National Bank after it failed and was taken over by the Federal Deposit Insurance Corporation. Remaining blunt in his personal style, he made it clear to all listeners that there was no public money involved in the bailout of the bank, which he led for three years. He attracted as his successor, the Vice Chair of Citigroup, leaving the company in savvy hands. Swearingen died in late September at age 89. His clarity and candor will be remembered.
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