Executive Times

Volume 4, Issue 11

November, 2002


ã 2002 Hopkins and Company, LLC

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Ghosts, Nightmares, Tricks, and Treats

Executives face more than a reasonable share of scary things for Halloween 2002. We couldn’t resist this theme for our cover story. When we read about the challenges of who ends up doing the work of furloughed employees (ghosts), we got in the mood, and hope you will, too. Read on to find out how some executives consider the CEO role as a nightmare to be avoided. We selected one old trick to call to your attention: someone is playing the best defense is a good offense game. You’re the one who may be offended. We provide some examples of treats, a modest treat that was received favorably, and a pricey treat that was viewed as insufficient. We also call attention to a story about a CEO who faced a tough decision and did the right thing. Why has that become a “man bites dog” story? Throughout this issue you have the opportunity to reflect on how other executives have acted in certain situations, and can ask yourself how you would have behaved in the same situation.


Fifteen new books are rated in this issue, beginning on page 5, two of which receive a highly recommended four-star rating. Turn ahead to check those out, and be sure to note the new compilation of Peter Drucker’s recent essays. You can also visit our 2002 bookshelf at http://www.hopkinsandcompany.com/bookshelf.html and see the rating table explained as well as explore links to all 2002 book reviews.

The Dearly Departed
If you’re one of the executives trying to get the same work done from fewer people, especially following corporate layoffs, you’re not alone, according to The Wall Street Journal (10/22/02) (http://online.wsj.com/article/0,,SB1035235099948997391.djm,00.html). This was the first place we noted the reference to the work that used to be performed by departed employees as “ghost work.” According to the Journal, neither managers nor workers are necessarily trained to perform the tasks that departed workers used to do. Beyond concerns about knowledge to do a job, “The ghost work employees must do makes them feel less than grateful to survive job cuts.” Managers are encouraged to communicate expectations clearly, disclose as much information as they have available, and to eliminate all work that’s not critical to the organization’s priorities. Executives often face their own workload challenges. Of five top executives leaving one company, only one was to be replaced, spreading the ghost work among those left behind. According to The New York Times (10/26/02) (http://www.nytimes.com/2002/10/26/business/26BUFF.html), one executive decided to resign from the board of directors of Gillette because he’s too busy at his day job. According to the article, Berkshire Hathaway has acquired so many companies in the past decade that Warren Buffett now has 50 executives reporting directly to him, up from 15. Can you picture Buffett’s doorbell ringing with requests for his time from the leaders of the 21 companies he bought in the last five years?

Do the dearly departed employees of your organization haunt you? Does the prospect of a key employee leaving frighten you? Have you tested your continuity plans to ensure that information and knowledge is available so that all critical tasks can be performed following the departure of any employee? When your human assets walk out the door, does your organization’s intelligence walk with them? How much work is too much, for you and for others? Do you have enough time available to devote sufficient attention to the people and the issues you’re being paid to manage?


When Can We Meet? Is Never Good for You?

While permanently departed employees create one set of problems for managers, the temporarily absent employee creates another set. We read in Sue Shellenbarger’s Work and Family column in The Wall Street Journal (http://online.wsj.com/article/0,,SB103479261498625268.djm,00.html) (10/17/02) that managers and employees are in a tug of war on the amount of time taken for family and medical leave, and that while some workers like doing some work while out on leave, others feel the pressure to work and would prefer not to. Here’s one example, “A week after Angela Vizenor's baby was born prematurely, her boss called her and urged her to return to her job at a retail-service company until the baby came home. Her baby was being well cared-for in the preemie ward, so why not? Ms. Vizenor says he told her. She protested that she, too, needed time off, and negotiated a leave with her doctor's help.” Managers are encouraged to help employees set boundaries, especially during their own medical leave, and employees can make the leave successful when they get a manager’s agreement in writing and help figure out how work will be done during the absence.


Are you aware of requests that employees in your organization may be making of employees who are out on leave? Are you making requests yourself? How does the employee on leave feel about these contacts? Do you manage leaves in ways that balance the needs of the employee and the needs of your organization? What role does the employee play in defining work activity, if any, during the leave? Do you ask the employee what boundaries they want to set?


Cold Sweats
While the popular press continues to call attention to what’s called excessive CEO pay, we read in Business Week (http://www.businessweek.com/bwdaily/dnflash/oct2002/nf20021018_4113.htm) (10/18/02) that headhunters are having a tough time recruiting CEOs no matter how attractive the pay package seems to be. According to the article, an increasing number of senior executives are willing to top out a level below the highest rung on the corporate ladder because they view the current job of CEO as a nightmare. The article also mentions headhunters who are talking to current CEOs who want to exit because the job is not what was expected. A “resignation” that used to mean, “fired,” now may refer to an executive who’s become dissatisfied with a job where the price paid is higher than reward given. There may not be more sympathy for CEOs, even after we read comments from Conseco’s Gary Wendt in The Wall Street Journal (10/4/02) (http://online.wsj.com/article/0,,SB103368019152488233.djm,00.html) after he announced he was quitting as CEO.  “He said, taking into account the value of his GE retirement package, which he forfeited to join Conseco, as well as his own investment in Conseco securities, he actually had a comparative loss of more than $30 million.” The job and its rewards were not what he expected.

Is your job what you expected it to be? If you’re job’s a nightmare, how will you change it? Is the price you pay for the work you do greater than or less than the rewards you receive?

My Clients Are Scary
Is the best defense a good offense? We were surprised to read in The Wall Street Journal (10/10/02) (http://online.wsj.com/article/0,,SB1034216134799632076.djm,00.html) that Goldman Sachs CEO Henry Paulson blames corporate executives for analyst conflict of interest problems at investment banks. According to the Journal, “he faulted corporate executives, saying the pressure they put on analysts to produce rosy reports was often ‘relentless and sometimes intense’ and said there needed to be a regulatory solution to insulate investment banks from it.” If it weren’t for those intense and relentless clients, business would have been pretty good.

What pressure do you face in getting your job done? Do your customers pressure you to behave in ways that you think are wrong? Do you need rules of engagement in your business relationships?


Buddy, Can You Spare a Dime?
When some managers pitched in $600 each to help furloughed employees, that seemed just right, but when one executive offered $25 million, it didn’t seem like enough. There are two stories behind this strange phenomenon. In the first case, we read in The Chicago Tribune (10/3/02) (http://www.chicagotribune.com/news/nationworld/chi-0210030204oct03.story) that “Twenty Denver District Court judges are extending a helping hand to 120 employees who are forgoing three days of pay over the next several months because of state budget cuts. Each of the judges is contributing $600 to a fund for the employees, which will be distributed before the holidays so people can buy gifts for family or pay end-of-year bills. The money, $100 per employee, is coming out of the judges' pockets. They earn $104,000 a year, making them among the lowest-paid state district court justices in the nation, according to Chief Judge Stephen Phillips of Denver District Court. It is a small gesture in a nation reeling from almost daily allegations of corporate greed and malfeasance, from news of retirement funds squandered and investors' trust dashed, and from a soured economy and layoffs. But it contains a loud message: Employers and employees can meet on different ground, one of caring and respect.” The retirement funds of many workers have been devastated by declines in value, and some workers feel ripped off. “Gary Winnick, chairman of bankrupt Global Crossing, became the first telecommunications executive to try to address those resentments Tuesday, with an extraordinary offer to give $25 million to company employees whose retirement savings have vanished. But angry workers suing the company dismissed Winnick's offer as insufficient.” The workers might feel that way because Winnick made $734 million on his sale of Global Crossing shares before those shares became worthless.

What’s the impact of economic differences in your workplace? Would you have acted like the judges or Gary Winnick? If you were an employee in either workplace, how would you have reacted?


Wild About Harry
The November issue of Fast Company includes an article (http://www.fastcompany.com/online/64/kraemer.html) about a CEO who took action that’s a model for others to follow. When patients were dying after dialysis treatments in Spain in the summer of 2001, investigators uncovered a common thread: all the filters came from the same batch, made by a company acquired by Baxter International in 2000. CEO Harry Kraemerowned up to the situation. He told the truth. He took responsibility when it would have been easy not to. His company took a $189 million hit, and he recommended that the board reduce his bonus. In other words, Kraemer did the right thing.” Read the article to find out the whole story.


When a crisis occurs, how prepared are you to act appropriately? Are you more inclined toward accepting responsibility, or placing blame elsewhere? How do your actions reveal the values of your organization? Are your actions aligned with those values?



Here are selected updates on stories covered in prior issues of Executive Times:

Ø      Our most recent comments about Jack Welch appeared in the October 2002 issue of Executive Times. Since then, we read a long profile by Philip Kennicott in The Washington Post (10/14/02) (http://www.washingtonpost.com/wp-dyn/articles/A21476-2002Oct13.html) that we recommend to Welch watchers, titled “Rich With Irony: When Golden CEO Jack Welch Stepped Down, It Was Into the Mud.” Dirty stuff, if that’s what you like more than St. Jack.

Ø      We encouraged readers of the August 2001 and January 2002 issues of Executive Times to examine your resumes for any inaccurate items that might have found a resting place on a line or two. After all, who wants to be in the company of leaders like Al Dunlap whose resume gaps were discussed in the August 2001 issue? At least two more executives had resume lies that were disclosed in recent weeks. We read in The New York Times (10/19/02)  (http://www.nytimes.com/2002/10/19/business/19CHIE.html) that Bausch & Lomb CEO Ronald L. Zarrella admitted that he never received the MBA from New York University that appears on his resume. The board of directors that selected Zarella 11 months ago stands behind him, saying, “We brought back Ron Zarrella to lead Bausch & Lomb because of his extensive business experience and his demonstrated management skills. We knew based on his previous tenure with the company that he would offer outstanding leadership to the organization, and he's certainly done so.” We read in Slate (10/22/02) (http://slate.msn.com/?id=2072961), “On Oct. 4, the résumé of Kenneth Lonchar, the CFO of Veritas Software, was found deficient in veritas. Lonchar said he earned an accounting degree from Arizona State University and an MBA from Stanford. But all he actually has is an undergraduate degree from Idaho State University.” Does it matter? According to Slate, “Merrill Lynch analyst Scott Phillips downgraded Veritas after the Lonchar disclosure. ‘Our first concern is that the CFO's falsification of his educational credentials could suggest the financials are suspect.’” Veritas lost more than $1 billion in market cap on the news. Last call for all executives to clean up resume gaps and lies.



Leaders who are passionate can be easier to respect and to follow because we tend to feel that they believe in what they are doing, and they draw us toward them to help achieve whatever they are trying to do. When he was killed in a plane crash on October 25, Senator Paul Wellstone was in the final weeks of a tough race for re-election to a third term. Most Minnesotans may not have agreed with every position this liberal Senator took, but they respected him for standing up for what he believed in, and they knew they could count on his personal integrity. Many eulogists called attention to the way Wellstone presented issues and problems in ways that profiled the topic, not himself. He made friends across the political spectrum because of his passionate approach to engaging in debate and in issues, outside the usual partisan rhetoric. For example, he and his unlikely friend, Jesse Helms, co-sponsored legislation on human rights in China. Having spent twenty years as a college professor prior to becoming a United States Senator, Wellstone was known for a thoughtful and deliberative approach to issues. Once he decided to take a position, he stuck to it, and worked hard to convince others to come over to his side. We’ll remember Paul Wellstone for the way he did the work he loved: with passion and commitment.


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 2002 bookshelf at http://www.hopkinsandcompany.com/bookshelf.html).


Title (Link to Review)



Review Summary


Criminal Intent

Bernhardt, William

Renegade Priest. Mystery fans will appreciate that William Bernhardt has reprised attorney Ben Kincaid to defend another client accused of murder. Father Dan helped Ben years ago, and now it’s Ben’s turn. Good plot, weak writing.

Anatomy of Greed: The Unshredded Truth from an Enron Insider

Cruver, Brian

Pinky’s View. A coming of age story about a recent MBA and the year he spent at Enron as it died. Equivalent to a pinky’s view of human anatomy, given Cruver’s job level within Enron.

Managing in the Next Society

Drucker, Peter F.

Sampler. Compilation of Drucker essays from recent years contains candid opinions that are always thoughtful, rarely conventional. Drucker predicts that coming social changes will be more important than economic ones.

Snobbery: The American Version

Epstein, Joseph

What Kind of Snob Are You?  Epstein finds some form or other of snobbery everywhere. Read this book and find the snob in yourself and others.

Oh, the Things I Know

Franken, Al

Oh, No! Loyal Al Franken fans might like this short book, but for the rest of us, this book may be better to give as a gift to a non-reader than to read oneself.

Longitudes and Attitudes: Exploring the World After September 11th

Friedman, Thomas L.

All About Walls. Selection of Friedman’s New York Times columns from shortly before 9/11 through six months after, with about eighty pages of diary. Leaves readers thinking, whether agreeing or disagreeing with Friedman.

The Staggerford Flood

Hassler, Jon

Community Life. Hassler captures rural life, friendship and the challenge of making moral decisions for the greater good. Hassler’s writing is always crisp and clear, with well-selected images, and flawless dialogue.

No Certain Rest

Lehrer, Jim

Sins of the Fathers. Novel of 200+ brisk pages about a modern investigation into a death on the Antietam battlefield. Alternating images of past and present. Clean plot and decent dialogue.

French Revolutions: Cycling the Tour de France

Moore, Tim

Spinning. Inexperienced cyclist and writer decides to buy a bike and follow the path of the 2000 Tour de France a few weeks ahead of the pros. Sprinkled liberally with fine British humor, appeals to fans of wit, cycling and the Tour.

Married to the Job: Why We Live to Work and What We Can Do About It

Philipson, Ilene

Unhealthy Attachment. Some people work so much because they’re too emotionally attached to the workplace. See full review for checklist to see if you’re one of those people.


Quindlen, Anna

Secrets. Old and young, rich and poor, unite through the secrets that bind them. A warm story about people trying to deal with love, redemption, and creating community.

Heart of a Soldier: A Story of Love, Heroism and September 11th

Stewart, James B.

He Gave His Life. Each person who died on 9/11 had a personal story. Stewart presents a biography of one man, Rick Rescorla, who died in the WTC. Finely written. If there’s only one 9/11 book you’ll read, make it this one.

The Story of Lucy Gault

Trevor, William

Moving. 235 tightly written pages about love, loss, guilt and forgiveness in 20th century Ireland. Trevor’s depth of understanding of human nature combines with rich description and character development.

The Judges

Wiesel, Elie

Terror. Wiesel, not at his best, presents five stranded strangers who are forced by a madman to examine the meaning of their lives. Forced dialogue and obtuse language.

What Einstein Told His Cook: Kitchen Science Explained

Wolke, Robert L.

Smart cookin’. Retired Chemistry prof tells more than you may want to know about the science that’s going on in your kitchen. Often humorous. Always clear and understandable. Buy for your cook.


ã 2002 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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