2007 Hopkins and Company, LLC
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Charmed
Wise
executives acknowledge that luck plays a part in success. The proudest
leaders will claim they make their own luck, and can control all factors,
while more humble leaders recognize that despite competence and preparation,
the unexpected happens, sometimes for better and sometimes for worse. We’ve
selected a few stories about executives this month, some of whom appear to
have been lucky, and others unlucky. As you think about their situations,
reflect on how you might have made decisions that led to different outcomes.
When you celebrate Saint Patrick’s Day this month, try to capture a bit of
the luck of the Irish, but let someone else be the designated driver.
Fifteen new
books are rated in this issue, beginning on page 5. Two books are highly
recommended with four-star ratings, twelve books are recommended with
three-star ratings, and one book is mildly recommended with a two-star
rating. Visit our 2007 bookshelf at http://www.hopkinsandcompany.com/2007books.html
and see the rating table explained as well as explore links to all 267 books
read or those being considered this year, including 44 that were added to the
list in February. 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.
Bittersweet
The Saint Valentine’s
Day massacre of JetBlue and the
pain experienced by its customers started on 2/14 and has not yet ended. The
company is “focused on creating a new airline category - an airline that
offers value, service and style.” Until weather problems crippled their
organization in mid-February, they were making good progress. Founder and CEO
David Neeleman announced 2006
results at the end of January saying, “I'm tremendously proud of the efforts
our crewmembers have made in advancing our plan to institutionalize low-cost
carrier spending habits and improve revenue overall - we've made great
progress since the beginning of 2006. We are optimistic about what lies ahead
as we seek to further improve our financial and operating performance.” (http://investor.jetblue.com/phoenix.zhtml?c=131045&p=irol-newsArticle&ID=955585&highlight=)
Then bad weather struck, and JetBlue stumbled in its actions. Comfy leather seats,
satellite TV and radio, and extra legroom were not enough to please those
customers who were stuck on a runway for 10 hours, or for those who expected
to travel, and found their flights canceled days after the weather cleared.
Neeleman became a media celebrity as he apologized to customers at every
opportunity. He even had the courage to appear on The David Letterman Show (Letterman kept him waiting.)
Competitors who may have felt schadenfreude at JetBlue’s problems found that
to be short-lived after some politicians murmured about Congressional action,
and after JetBlue issued a passenger bill of rights. (You can read the bill
of rights at http://www.jetblue.com/about/ourcompany/promise/index.html.)
Competitors are likely to match JetBlue’s customer-friendly approach with
their own, or face a legislative or regulatory mandate. In either scenario,
costs for airlines will rise because of new promises to compensate customers
for delays and other problems. It’s too early to tell whether or not all of
Neeleman’s actions will made this a case study in good crisis management. In
the short run, the airline that was trying to “bring humanity back to air
travel,” and that treated passengers as customers, will pay a heavy price for
how they handled their business when bad weather struck. Finally, despite
what Neeleman needs to focus on, he does not plan to take medication for his
attention deficit disorder, and feels he’s the best person to lead JetBlue
out of this mess. Customers, shareholders, competitors and business school
case writers will all be watching.
Are your customers and employees aware of what your
organization is willing to do in the event that problems arise? Does one of your
competitors provide more clarity in this area than your company?
Limits
Executives who drive
their own cars may not take risks that differ from other drivers, but may
face harsher consequences when things go awry. A recent story about another
airline CEO proved that point. We read in The
Wall Street Journal (2/9) (http://online.wsj.com/article/SB117104030888703816.html)
that “US Airways chief executive Doug
Parker was arrested on a drunken-driving charge just hours after his
airline's $9.8 billion bid for Delta
Air Lines was rejected. … Mr. Parker, 45 years old, was pulled over at
11:30 p.m. Jan. 31, after leaving a party at the FBR Open golf tournament in Scottsdale,
police Sgt. Mark Clark said. Mr.
Parker was pulled over for driving 20 mph over the posted speed limit of 45
mph. Results released Friday show Mr. Parker had a blood-alcohol level of
0.096, according to Sgt. Clark. The legal limit in Arizona is 0.08. According to a police
report, Mr. Parker told police he had three beers during a two-hour period.” After news reports of the incident
began to appear, Parker wrote to US Airways employees, “First and foremost,
you need to know how embarrassed and sorry I am about this. I have let down
all of you and also my family, and that is something I will have to live with
irrespective of the outcome. I know that by virtue of my position at our
airline, all of my actions, personal and public, have consequences for all of
us and I try very hard to live up to that responsibility. In this instance,
my actions have not reflected well on US Airways and for that, I apologize.
Thanks for your support and understanding.” (http://www.usairways.com/awa/content/aboutus/pressroom/pressreleases.aspx?c=hp_news). Delta CEO Gerald Grinstein made no public comment, but one might guess that
having fought off Parker’s relentless drive to merge with Delta through a
hostile offer, Grinstein probably cracked a smile at his adversary’s bad luck
in another form of driving.
Have you ever driven 65 mph in a 45 mph
zone, or 75 when the posted limit is 55? Have you ever driven a car after
consuming several beers in a few hours? Could any of your actions not reflect
well on your organization? If you haven’t yet been caught, is it because
you’re good or lucky?
Impaired
Every boss hates
surprises. The last thing that President George
W. Bush needed to hear at the same time he’s planning to increase the
number of soldiers in Iraq
was that the wounded soldiers at home are being neglected. A page one of The Washington Post on February 18
told Bush exactly that. (http://www.washingtonpost.com/wp-dyn/content/article/2007/02/17/AR2007021701172.html) Press secretary Tony Snow said the president told him, “Find out what the problem
is and fix it.” One aspect of the story to note here is the key role of the
front line manager, and how senior executives can be out of touch. According
to the Post, “Soldiers are assigned
to one of two companies while they are outpatients -- the Medical Holding
Company (Medhold) for active-duty soldiers and the
Medical Holdover Company for Reserve and National Guard soldiers. The
companies are broken into platoons that are led by platoon sergeants, the
Army equivalent of a parent. Under normal circumstances, good sergeants know
everything about the soldiers under their charge: vices and talents, moods
and bad habits, even family stresses. At Walter Reed, however, outpatients
have been drafted to serve as platoon sergeants and have struggled with their
responsibilities. Sgt. David Thomas, a 42-year-old amputee with the Tennessee
National Guard, said his platoon sergeant couldn't remember his name. ‘We
wondered if he had mental problems,’ Thomas said. ‘Sometimes I'd wear my leg,
other times I'd take my wheelchair. He would think I was a different person.
We thought, “My God, has this man lost it?”’ Civilian care coordinators and
case managers are supposed to track injured soldiers and help them with appointments,
but government investigators and soldiers complain that they are poorly
trained and often do not understand the system.… At town hall meetings, the
soldiers of Building 18 keep pushing commanders to improve conditions. But
some things have gotten worse. In December, a contracting dispute held up
building repairs. ‘I hate it,’ said Romero, who stays in his room all day.
‘There are cockroaches. The elevator doesn't work. The garage door doesn't
work. Sometimes there's no heat, no water.... I told my platoon sergeant I
want to leave. I told the town hall meeting. I talked to the doctors and
medical staff. They just said you kind of got to get used to the outside
world . . . my platoon sergeant said, “Suck it up!’’” The buildings are being repaired,
according to follow up stories, but the platoon sergeants are the ones who
may need repair of another sort.
How often do you observe first hand the conditions faced
by those in your organization? How do you assess the ways in which your first
line managers implement what you want done? How likely is
it that something will surprise you in the next ninety days? What more
can you and others do to avoid surprises?
Fortunate
There’s a great cover story about
corporate wellness programs in the 2/26 issue of Business Week (http://www.businessweek.com/magazine/content/07_09/b4023001.htm).
For one executive, the program was a lifesaver. “In
August, Joe Pellegrini got yet
another nagging phone call. It was his health coach, a woman working on
behalf of his employer, the $2.7 billion lawn-care company, Scotts Miracle-Gro
Co. The 48-year-old executive knew the spiel by heart. ‘Have you been to
your doctor yet? When are you going?’ Then the prescription: ‘You need to
lose weight and you really, really need to lower your cholesterol.’
Pellegrini is a supply-chain executive at Scotts' headquarters in Marysville, Ohio, a
land of all-you-can-eat buffets smack in the middle of America's
obesity belt. At Scotts the hallways are filled with ldl-abusers
and overweight diabetics. Pellegrini, by contrast, is an Armani-swaddled triathlete who often cycles 36 miles to and from work.
Lose weight? ‘Give me a break,’ he thought. ‘It's all muscle, folks.’ But a
time bomb was ticking beneath the taut physique. Medical specialists working
on behalf of Scotts had been scouring every aspect of Pellegrini's
health. His profile—athletic, high body-mass index, and bad cholesterol
(brought on by a love of 28-ounce sirloins)—triggered an alarm. Eventually,
Pellegrini succumbed to the company-applied pressure and agreed to abide by
his health coach's action plan, which included an immediate visit to his
doctor. A few weeks later, a specialist studying Pellegrini's
angiogram spotted the heart valve of what should have been a dead man. Within
hours, two stents were installed. The surgeons
later told him the 95% blockage would have killed him within five days. ‘It
was that close,’ Pellegrini says.” Was Pellegrini the
beneficiary of good luck, or just-in-time action? Read the rest of the
article to learn about some of the downsides of wellness programs.
When was your last medical check-up? Do you rely on luck
to stay healthy? Have you been charmed with great genes? Are you as healthy
as you appear? What are you doing to avoid nasty health surprises? Do you
need to be nagged?
Follow-up
Here’s an
update on stories covered in prior issues of Executive
Times:
Ø
We
last checked in on DaimlerChrysler
in the February
2005 issue of Executive Times
when we wondered about how much longer former CEO Jürgen E. Schrempp would lead the company.
His successor, Dr. Dieter Zetsche announced on 2/14: “The Chrysler Team
worked out a comprehensive Recovery and Transformation Plan using all
resources within DaimlerChrysler. In addition to that and in order to
optimize and accelerate the presented plan we are looking into further
strategic options with partners beyond the business cooperation partners
mentioned. In this regard, we do not exclude any option in order to find the
best solution for both the Chrysler Group and DaimlerChrysler.” (http://www.daimlerchrysler.com/dccom/0-5-7164-1-717363-1-0-0-0-0-0-12037-7164-0-0-0-0-0-0-0.html).
The “for sale” sign has
been hung in the side window, and now we’ll be watching to see if there are
any takers.
Ø
We
thought that State Farm resolved
the Hurricane Katrina claims in Mississippi
when we noted the company’s agreement to a proposed settlement in February
2007 issue of Executive Times. The
judge said not so fast, the settlement might not be adequate. State Farm
announced on 2/14 that it had enough: “Citing uncertainties in the Mississippi legal
and business environments, State Farm Senior Vice President Bob Trippel
yesterday advised Mississippi’s Commissioner of Insurance George Dale that State Farm Fire and
Casualty Company will suspend writing new homeowners and commercial property
insurance in the state of Mississippi. ‘We came to this decision
reluctantly. But it is no longer
prudent for us to take on additional risk in a legal and business environment
that is becoming more unpredictable.
When there’s more certainty, we will reassess the situation,’ said Trippel.”
The next day Mississippi Attorney General Jim Hood proposed legislation to require State Farm to continue
writing new homeowners and commercial property insurance in the state. State Farm responded by calling Hood’s
proposal a disappointing response to what was a difficult business decision,
adding that it underscores the legal and political challenges faced in Mississippi. The
company’s market share in Mississippi
has been about 30%.
Legacy
Family
Executive
transitions are often messy, and when it comes to family transitions, they
can become Shakespearean tragedies or spin out of control like soap operas.
Some executives won’t let go of control, and some family heirs are
ill-prepared to manage effectively. We thought of two successful transitions
in the same family recently when we heard that Charles R. Walgreen, Jr. died in early February at age 100. His
father founded a neighborhood pharmacy on Chicago’s South Side in 1901, and Jr. grew
up in the business, which had 20 stores by 1919. Charles R. Walgreen, Sr. prepared his son, Chuck, to lead what
was by 1927 a publicly traded company and called him “a good negotiator with
a million-dollar smile.” When Sr. died in 1939, Chuck became President, and
grew sales exponentially, introducing the concept of self service and
revolutionizing the pharmacy business. He prepared his son, Charles R. “Cork” Walgreen III, to
lead the company as well, and in 1976 when Chuck retired to focus on sailing
all over the world, another successful transition was achieved when Cork took over company
leadership. Chuck Walgreen was 95 when he had his last yacht built, and he
spent his retirement years sailing as far away as Antarctica to see the 1,000
mile shoreline that family friend Richard
Byrd named the Walgreen
Coast in honor of his
father. Chuck died at the family home outside Chicago, in the knowledge that the company
has been in good hands.
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).
Title (Link to
Review)
|
Author
|
Rating
|
Review Summary
|
Purchase
|
Man
in the Middle
|
Haig,
Brian
|
***
|
Retaliation. Sean Drummond returns, now working temporarily
for the CIA, and embroiled in a thrilling case of revenge.
|

|
Made to
Stick: Why Some Ideas Survive and Others Die
|
Heath,
Chip and Dan Heath
|
****
|
Success. Great presentation of why some ideas
are conveyed and remembered while others are forgotten.
|

|
American
Fascists: The Rise of the Christian Right
|
Hedges,
Chris
|
***
|
Intolerance. Hedges proposes
that we must no longer tolerate the intolerance of our fellow citizens. He deliberately
infuriates potential readers with his rhetoric, thereby testing his
premise.
|

|
Lisey’s Story
|
King,
Stephen
|
***
|
Grief. A widow’s story of her long marriage
to a writer, and the power of their love. Atypical King, which may
displease some fans but will surprise readers who have pigeonholed King.
|

|
I’m
Proud of You
|
Madigan,
Tim
|
***
|
Friendship. Eavesdrop on the friendship that grew
between the author and the late Fred Rogers. As a bonus, read the letters
that Fred sent to Tim that display goodness and friendship.
|

|
You Suck: A
Love Story
|
Moore,
Christopher
|
**
|
Adolescent. Entertaining novel of vampire love
and the quest to quench appetite. The humor is adolescent, escapist and
funny, providing an ideal distraction.
|

|
Rumpole and the Reign of Terror
|
Mortimer,
John
|
***
|
Ties. The Timsons, Rumpole and the British
Anti-Terror Act are linked together in this timely novel, packed with the
usual Rumpole vivacity.
|

|
Mind Set!
|
Naisbitt,
John
|
***
|
Surprises. Interspersed among the pages of
things already known are one or more surprises for readers that may have a
profound impact. Read and be surprised by that discovery.
|

|
The
New American Workplace
|
O’Toole,
James
|
****
|
Data. Authors update landmark 1972 study of
work in America
with current data and fact-based conclusions delivered clearly in an
organized and systematic way.
|

|
The
Blade Itself
|
Sakey,
Marcus
|
***
|
Consequences. A promising debut novel with a
suspenseful plot, interesting characters and an exploration of the
consequences that follow choices.
|

|
Andy Grove
|
Tedlow,
Richard
|
***
|
Unrelenting. A well-written biography of Intel
and its successful former CEO Andy Grove by Harvard professor and
historian.
|

|
About Alice
|
Trillin,
Calvin
|
***
|
Love. A finely written and heart warming
book that allows readers to glimpse into the loving relationship between
the author and his late wife, who was and is his muse.
|

|
Point
to Point Navigation
|
Vidal,
Gore
|
***
|
Quirky. Second memoir flows in erratic ways,
full of riffs, mostly trenchant observations about others and confirmation
of his own genius.
|

|
From Day
One
|
White,
William J.
|
***
|
Mentor. A great book of practical advice, especially to new
workers. A mentoring experience in print.
|

|
State
of Denial
|
Woodward,
Bob
|
***
|
Indictment. Book 3 of the Bush at War series
indicts the President and the administration for creating an alternative
reality and denying whatever doesn’t fit their made-up view of the
situation in Iraq.
|

|
|