Executive Times
Volume 1, Issue 5 August, 1999
Selecting tomorrow's leaders

The process of choosing new executives varies greatly from one organization to another and among different hiring managers. Recruiters are frequently surprised at the difference between the stated expectations for a job and the background and skills of the individual selected for that job. Sometimes the selection process takes days; other times it seems like years. Here are a few stories of recent selections and some questions to ask yourself about your approach to the selection process.

A big new hole in the glass ceiling

Carly Fiorina
played down gender when she was selected as Hewlett-Packard's new CEO. Good for her. HP's Board picked her because she's the best person in their estimation to lead HP, and gender didn't appear to be a criterion in the selection process. In the context of Ms. Fiorina's peers, gender remains a huge issue. She is one of just three female CEOs at Fortune 500 companies, and Fortune referred to her as "the most powerful woman in American business." (From HP press release July 19, 1999) We expect the number of female CEOs to continue to grow, especially now that such a large company has acted. Our favorite quote came from Marilyn Laurie, a former AT&T executive, who commented that Carly "has wonderful leadership skills. She swims like a fish in the male and female environment." (The Wall Street Journal, July 22, 1999)

Not all the gender news about the workplace is positive. The New York Times reported on July 14 the results of a study indicating that corporate diversity programs are ineffective at getting minority women to the top of organizations. "Even joining in a simple game of golf can be challenging& .I never have been given an opportunity to play with the men." (Karen Fukuma, CFO of Lotus Development).

What proportion of men and women hold executive jobs in your organization? How about minority men and women? When you last selected an individual for a job, how diverse was the pool of candidates? What are you doing as a manager to help prepare individuals for increased job responsibilities? To what degree do your actions create obstacles for individuals to succeed? To what extent is your organization blind to the skills and talents of those who might be considered different? How is mentoring working within your organization? What can you do to break down stereotypes and make your company less monochromatic and more representative of society as a whole? How well do you listen to the many different voices inside your organization? Do you know and understand what others are saying? When you conduct important business in non-business settings, who is invited?

Who is this guy?

Board picked their new CEO from inside the company when they announced recently that Michael Capellas would take on that role. Hired last August as chief information officer and named chief operating office in June, Capellas is barely an insider. Many Compaq observers expected the Board to choose someone with name recognition from outside the company. After considering 75 individuals and interviewing 12, the Board announced the best candidate was Capellas. Chairman Ben Rosen commented "We set out to find the ideal CEO and we discovered him right here at Compaq, hard at work. As COO, Michael has already mobilized the organization, moving us forward at Internet speed." (Compaq press release, July 22, 1999) Now Capellas will have to become better known to more players as he leads Compaq in facing its challenges.

Is there someone inside your organization hard at work, but not visible or obvious to you as being ready for increased responsibility? Have you slotted some individuals in certain roles so that you. re unable to see them perform other roles? How much exposure do you and other individuals receive outside your organization? If you were selected for another role, would too many people say "who?" When do you know you've found the right person for a job? Can you overcome your preconceptions and select an unexpected individual?

Your search is ended

Public service can often bring great challenges in finding leaders for key jobs. The Washington Post reported on July 22 that the chair of the D.C. Zoning Commission, Jerrily Kress, formed a search committee to find a new staff director. Instead of the commission interviewing the finalists that came out of the search committee's recommendations, Kress resigned as chairman, and her former commissioners picked her as the new staff director. She may well be the best person for that job, but there's a pending complaint of conflict-of-interest about this selection before the D.C. Office of Campaign Finance and Ethics.

Do your hiring processes and practices take into account any real or perceived conflicts of interest? How sensitive are you about avoiding placing people into roles that could be viewed as conflicting? Have you heard through the grapevine that certain able candidates have not pursued jobs because of a perception that a particular person has the inside track and is likely to be chosen no matter who applies? When was the last time you had a conflict of interest conversation with other managers? Is it time for another? How should you improve your practices?

Active Inertia

Waging war with the status quo

The July-August issue of Harvard Business Review contains a thoughtful article by Donald Sull titled "Why Good Companies Go Bad". This is must reading for executives who are enjoying current success. Using paired industry examples including Goodyear and Firestone and Laura Ashley and Gucci, Sull explores how leading companies can become stuck in the methods that made them successful in the first place. When conditions change, the old methods fail to work and once weaker competitors prevail. Some highlights from the article include:

  • The assumptions that frame how managers view the business become blinders
  • The way things are done harden into routines that prevent employees from creating more effective alternative processes
  • The company's ties with employees, customers, suppliers, distributors and shareholders become shackles
  • The deeply held company values that unify and inspire people turn into a set of rigid rules and regulations

Instead of focusing on what to do, Sull recommends a focus on what hinders a company.

How much active inertia takes place inside your company? What is it about your current strategic assumptions that may be hindering you from taking advantage of new market opportunities? What barriers exist in your company to improving processes? If you had different relationships with selected stakeholders, what would those be like? Are your company's values current, alive and real for today's business?

Are two heads better than one?

That's all folks

Shared leadership roles can be among the most challenging executive jobs. We've been watching several of these co-CEO situations. The co-heads of Warner Brothers announced suddenly in mid-July that they are both resigning. Bob Daley and Terry Semel have spent the last 20 years leading WB in a partnership that The New York Times called "one of the most stable and successful in Hollywood history."

The more the merrier

John Reed and Sandy Weill share the top job at Citigroup. As sole leaders of two organizations that merged, they chose a co-head approach rather than the "let's take turns" model that other merged CEOs have attempted. They also have a co-CEO structure one level down from them, whereby the combined global and investment bank is co-led by Victor Menenzes and Michael Carpenter. They've been at this for almost a year now, and while skeptics continue to expect a change with either Reed or Weill taking over, the structure has remained intact.

Are you open to the possibility of sharing your position with another executive? Are there positions that report to you that could be filled by two individuals rather than one?

Wrong number

Are you still there?

Iridium sounded like a good idea when first conceived almost ten years ago: blanket the sky with satellites and provide cell phone coverage anywhere in the world. The system started last November and not nearly enough consumers have signed up because of problems including: clunky phones; no service within buildings or many urban areas; and high cost. Motorola, Raytheon and Lockheed-Martin are all engaged in trying to figure out what to do next.

How do you decide when to cut your losses? If you're involved in a project that will take a long time to implement, how do you keep current on competitive challenges? How do you re-test assumptions? Are you able to stop your organization from throwing good money after bad?

The will to win

Who believes in me?

The French cycling team Cofidis fired racer Lance Armstrong in 1997, after he and they enjoyed several years of his success on that team. When fired, Armstrong was hospitalized and fighting the spread of cancer through his body. As Armstrong won this year's Tour de France racing for the U.S. Postal Service team, he commented "We all know the team that didn't believe in me. They were on my mind a lot these last three weeks." Armstrong's journey from his deathbed to victory in the world's most famous bike race took two years of focused effort to win against cancer and beat the best bike racers in the world.

How do you deal with employees who face setbacks, whether medical or otherwise? Are you quick to cut your losses and move on with new players when setbacks occur, or are you willing to give your players the chance to prove themselves anew? How important is the will to win with the members of your team? What do you do to encourage or dismiss employee dreams?

Banned in Belgium

Not many top executives would have wanted to trade places with Coca-Cola's CEO Doug Ivester this year. Business Week featured him in a May 3 article titled "Man on the Spot," describing how the global crisis hurt Coke's results. Ivester had a tough enough time following in prior CEO Roberto Goizueta's shadow before the world markets turned dicey. In June, a major crisis hit Coke in Europe. After a few dozen schoolchildren in Belgium got sick after drinking Coke, the Belgian health minister quickly banned Coke products. While Coke acted quickly to identify the problems, it took longer than they wanted for the ban to be lifted. The company's analysis of what happened indicated some quality control lapses, but no health concerns. The quality and consistency of the product is job number one at Coke, and this lapse in Europe may have rattled the company enough to redouble its efforts to ensure that nothing like this ever happens again. After a few years as CEO, Goizueta introduced New Coke and watched it fail in the marketplace. He rallied the company from that failure, and led them to outstanding success. Now it's Ivester's turn. Stay tuned.

What does it take in your organization to ensure that you produce consistent results? Are there some processes that can never fail? How do you monitor those processes? When crisis occurs, what steps do you take?

Summer burnouts

American Banker reported on July 20 that Dick Kovacevich, chairman and CEO of Wells Fargo and other top executives at that company have been discussing merger-related burnout, as employees have been working hard to implement change. Although he set a three year deadline for completing the integration of Norwest and Wells Fargo, the toll the merger has taken on employees has been significant enough for Kovacevich to comment "Sometimes when you are working too hard you are getting less done than if you didn. t spend as many hours at work." It's rare to hear a post-merger bank CEO call for a summer break. We wonder if the right employees will take him up on this.

David Vitale of Bank One announced on July 21 that he would retire at age 53 for personal reasons, after 31 years with the bank and its predecessors. American Banker reported on July 22 that Vitale said "his energy has been sapped by his involvement in two consecutive acquisitions." Maybe he was taking advice from his competitor at Wells: spend less time at work.

Burnout isn't usually talked about when people are fully engaged in doing what they want to do. Somehow, burnout accelerates when individuals are called on to do things they can do well, but would prefer something else. Are you spending your work time doing what you want to do? Have you taken a break this summer? Are things cool, simmering, or boiling in your work life?

Family matters
What else can we do for you?

Family-friendly programs are spreading from suburban office campuses and urban high-rises to more diverse workplaces. The Wall Street Journal reported examples on July 21 including:

  • a child-care center and general store at a gold mine in Nevada, by a company (Round Mountain Gold Corporation) that helped start a medical clinic
  • a child care center at the York, Pennsylvania Harley-Davidson plant, where men are the heaviest users of the center
  • Chipman-Union, a sock maker in rural Greene County, Georgia had trouble finding and retaining workers, so it helped raise money and donated land for a subsidized 24-hour child care and family resource center. Chipman helps agencies train employees in programs for welfare-to-work mothers and noncustodial fathers. It lets production workers swap shifts when they need family time off.
National Public Radio reported in July that UPS and Metropolitan College in Louisville work together on programs for workers. What family related barriers inhibit your employees from working for your company? What actions can you take to remove those barriers?


Beginning the end of segregation

James Farmer died in Virginia in early July, leaving behind a legacy of accomplishments that provide a foundation for building a more integrated society. He led non-violent actions through the Congress of Racial Equality (CORE), an organization he founded. He risked his own life, and CORE followers lost their lives demonstrating for equal rights for African-Americans. He observed how entwined the lives of blacks and whites are in America, and worked to break down the laws that segregated citizens. While most remembered for Freedom Rides and sit-ins in the 1960s, Farmer's pacifism started in the 1940s with his role at the Fellowship of Reconciliation. In the 1950s, he worked in the South at school desegregation. He worked briefly in the Nixon administration, and taught college. He taught a generation that common action with clarity of focus produces change.


It's a small world after all

Thomas L. Friedman tells dozens of stories from around the world in his new book, The Lexus and the Olive Tree: Understanding Globalization. His previous book, From Beirut to Jerusalem, won the National Book Award around a dozen years ago, and helped unravel much of the complexity of the Middle East. In this new book, Friedman tries to make sense out of what he's observed around the world since the Berlin Wall came down, and what that means for us. He chose the Lexus as the symbol of technology, modernizing and progress, and the olive tree as the symbol of what roots us and identifies us in the world. Through multiple stories, Friedman helps readers gain insight into how the post cold war system operates, and how some individuals and countries are fighting against the system, and where America fits into the puzzle. One of our favorite stories was the sale in Moscow in 1996 of Matrushka dolls of the Chicago Bulls and other NBA teams. Another was the frustration of Friedman's octogenarian mother when her fellow bridge players on the Internet excluded her when they spoke in French among themselves. It is a small world, connected in seconds, and Friedman helps make sense out of connections and consequences. One side benefit involved many quotes from Larry Summers throughout the book. Summers and Friedman have spoken on and off the record for many years, and some perspectives of the new Treasury Secretary may foretell his actions on the job.

Everything looks like a nail

We've taken a pass on reading Bob Woodward's new book, Shadow: Five Presidents and the Legacy of Watergate. Watergate might have been the defining life event for Bob Woodward, but we don't really think it was as monumental for the rest of us, including each U.S. President since Nixon.

Are you now or have you ever been?

We. ve enjoyed William F. Buckley, Jr.'s Blackford Oakes novels, so we were willing to give a chance to his latest novel, The Redhunter: A Novel Based on the Life of Senator Joe McCarthy. Nobody except Buckley could succeed in putting such a human face on a character portrayed in a single dimension for the 40+ years since his death.

About Hopkins & Company

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