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Executive Times |
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Volume
9, Issue 10 |
October 2007 |
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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. Frenzy
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 books@hopkinsandcompany.com.
You can also check out all the books we’ve ever listed at http://www.hopkinsandcompany.com/All
Books.html. Gamey 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? iPissed 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? Grinch Child
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
parents, (http://recalls.rc2.com/index.html)
“On
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)
“As
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
suburban 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? Follow-up Here’s
an update on stories covered in prior issues of Executive
Times: 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. Legacy
Blunt 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. 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).
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