|
Executive Times |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Volume
10, Issue 4 |
April2008 |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
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. Emperors
The theme for this month’s
issue emerged from an unlikely place. During a prurient exploration of the
specifics of the Eliot Spitzer
scandal, the name of the service he employed, Emperors’ Club, demanded attention. What’s with the plural
“emperors?” The whole notion of emperor has been the single dominant leader
of the empire: one without equals, the conqueror, our commander. Thanks to Slate’s Josh Levin, information from the closed website www.emperorsclubvip.com
comes to light (http://www.slate.com/id/2186265/).
“Catering to the most financially elite social circles in the entire world,
Emperors Club is the elite recreation venue and private club for those
accustomed to excellence. … 92 percent of Emperors' Club International
Members are CEO / Owner / Partners of a large (often international)
corporation. … members' gross annual income averages $3.63 million per year.”
That sounds like a lot of emperors and even some Executive Times readers, so it
is to them that we dedicate this issue. Spitzer wasn’t satisfied with being
the leader of the Empire State, and perhaps after reading the Wallace Stevens poem The Emperor of Ice
Cream celebrating the domination of life over death, he looked for
his pleasure where he thought it could be found, realizing that “the only
emperor is the emperor of ice cream.” As you read the stories in this issue,
think about your own empire, how emperors are chosen, and what impact your
empire has in the larger community. Fifteen
new books are rated in this issue, beginning on page 5. Four books are highly
recommended with four-star ratings; nine are recommended with three-star
reviews; two books are rated with two-star recommendations, and one eked out
a one-star review. Visit our current bookshelf at http://www.hopkinsandcompany.com/2008books.html and see the rating table explained
as well as explore links to all 245 books read or those being considered this
year, including 20 that were added to the list in March. 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. Tyranny The
selection process for emperors throughout history usually entailed the defeat
of enemies in battle. Modern leaders emerge from processes that can look like
battles that leave winners and losers, or can involve bloodless interviews.
The Winter issue of MIT’s Sloan Management Review includes a
fascinating article by Clemson
professor Terry Leap titled, “When
Bad People Rise to the Top” (http://sloanreview.mit.edu/smr/issue/2008/winter/14/). According to the abstract, “The author
identifies eight potential danger signals including: an obsession with
acquiring prestige, power, and wealth; a proclivity for developing grandiose
strategies with little thought toward their implementation; and a fondness
for a data-driven management style that overshadows or ignores a broader
vision. Even sterling CEOs occasionally exhibit one or more of the danger
signals described here. Potentially bad CEOs, however, usually possess
several of these characteristics, and they exhibit them repeatedly. … Some
suggestions for screening prospective CEOs include disregarding the
time-tested rule that past success is a predictor of future success,
performing a thorough background check that focuses on a candidate's
integrity and interpersonal skills and using experience-based interviews to
test CEO finalists.”
A short article in The New York Times
(3/8) (http://www.nytimes.com/2008/03/08/business/08offline.html)
also mentioned these warning signals: “…an inability to delay gratification,
suggests that a chief executive may put his interests ahead of the company’s.
A reputation for shameless self-promotion and other self-aggrandizing
behaviors. … The ability to compartmentalize and rationalize to an amazing
degree. This trait, Mr. Leap writes, is shared by dysfunctional people, among
them bad chief executives and criminals. Clearly, even the best chief
executives occasionally exhibit some of these traits. ‘Potentially bad
C.E.O.s, however, usually possess several of these characteristics and they
exhibit them repeatedly. … Observers are often amazed when executives with
impressive track records are mysteriously transformed into corrupt and
tyrannical monsters once they become C.E.O.s.’” The best advice for selecting a
CEO with few danger signals is to dig deeply into how an executive has
achieved results in the past. How do you distinguish those
character traits that are desirable from those to avoid when you consider
individuals for leadership roles in your organization? Do the “tyrannical
monsters” in your organization get rewarded or fired? How do you uncover the
stories underlying measureable results? Purpose What guides your organization’s
selection of the responsible things to get done? Is there anything beyond
profit that you take into account when you make changes? Are there “big
issues facing the world” that your organization plays a part in addressing?
What purpose gets you up and working every day? Meritocracy Sometimes
in history, emperors were born, not made. Those who study leadership in the
21st century agree that today’s leaders can be made. If you missed
the third annual ranking of the best companies for leaders that Hay Group conducted for Chief Executive magazine last
December, you can read it at http://www.chiefexecutive.net/ME2/Audiences/Default.asp?AudID=AFC68D68FF0A49299D8688CFDAD5F871.
Hay surveyed 790 public companies in both a self and peer assessment process,
and drew conclusions about what makes companies better than others when it
comes to developing leaders. General
Electric and Procter & Gamble
continue to top the list, and Chief
Executive asked GE CEO Jeff Immelt
and P&G CEO A.G. Lafley why
they think they do well in this area. “At the core of most companies’
approach is an assiduous involvement of the boss, screening and identifying
of high-potential employees, and a rigorous feedback and assessment process
that’s done early and often. ‘One of the secrets to this story,’ says Immelt,
‘is that there are no secrets. We educate people in the right curriculum. We
keep the curriculum fresh. We ensure that other people in the company,
including those who report to me, also spend time grooming leaders.’ … A.G.
Lafley counts leadership development as not just a priority but one of
P&G’s core competencies. ‘We focus on individual leadership development.
How can you personally become the best leader that you can be? In our
assessment of effectiveness we talk about situational and inspirational
leadership because we want courageous and inspiring leaders. The days of command
and control are over.’ … every month Lafley has private half-hour sessions
with every one of P&G’s 22 line presidents and functional leaders. ‘It’s
their agenda’ says Lafley. ‘It’s a time for me to work with them one-on-one
on how they can become more effective leaders. It’s a great way for me to
coach their development.’ Similarly, Immelt also personally teaches a
leadership course, ‘Things that Leaders Do,’ that covers the fundamentals of
organic growth. Like Lafley, he conducts a class with 35 people who are in
the queue to become officers on the importance of leadership style. ‘I take
each one individually in order to understand the elements—not to have a
common style—but how to be true to your own style.’ … Immelt sees GE’s
biggest development challenge as developing talent outside of the U.S. In
2007, for the first time, more than half of GE’s revenues came from outside
the U.S. ‘As an American I grew up knowing GE, but the challenge for me—what
I spend time thinking about—is how in the context of an ever-increasing
global franchise do we reach the next generation of people outside the U.S.
that we can bring into the company?’ … (Lafley noted), ‘We are a pure
meritocracy. We don’t care where you went to school, whether you have an MBA,
or what your country of origin is. We have more than 100 different countries
represented in our management team. All we care about is that with character
and integrity you deliver outstanding business results and that you build a
strong organization. Do that and you move ahead.’” They make it sound easy. How does your organization develop leaders? To
what extent do political borders limit the ways in which you develop talented
individuals? How are you “personally becoming the best leader that you can
be?” Do you recognize those leaders who delivery outstanding business results
“with character and integrity?” How much one-on-one time do you spend with
your direct reports on their development? How much time does your boss spend
with you in this area? What are you doing today to become an emperor
tomorrow? Follow-up Here’s
an update on stories covered in prior issues of Executive
Times: Ø In the August
2007 issue of Executive Times
we noted how Bear Stearns’ James Cayne
played golf (and cheated?) while the subprime mess surfaced at the company.
In the February
2008 issue we noted his decision to step down as CEO. Cayne and Bear
have been in the news in recent weeks with a run on the bank, a bailout from
the Fed, and an offer from Chase
to buy the company at a fraction of its previous value. We read in The Wall Street Journal (3/25) (http://online.wsj.com/article/SB120641688950961821.html),
“Chairman James Cayne, whose 5.6 million shares were worth about $448.2
million as of Feb. 29, saw his stake's value fall to $11.2 million if valued
at $2 a share. At $10, it's worth $56.1 million.” We were reminded about that
old joke, “What’s a fast way to get a small fortune? Start with a large one.”
An empire falls. Ø In the issue of Executive Times that follows Warren Buffett’s annual letter to
shareholders, we select a quote that caught our attention. Here’s this year’s
selection in which he explains the differences between those businesses that
are attractive to him and those that are not: “… a terrific CEO is a huge
asset for any enterprise, and at Berkshire
we have an abundance of these managers. Their abilities have created billions
of dollars of value that would never have materialized if typical CEOs had
been running their businesses. But if a business requires a superstar to produce great results, the business
itself cannot be deemed great. A medical partnership led by your area’s
premier brain surgeon may enjoy outsized and growing earnings, but that tells
little about its future. The partnership’s moat will go when the surgeon
goes. You can count, though, on the moat of the Mayo Clinic to endure, even though you can’t name its CEO.” You can read the whole letter
at http://www.berkshirehathaway.com/letters/2007ltr.pdf.
Legacy
Differences 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 2008 bookshelf at http://www.hopkinsandcompany.com/2008books.html).
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
To subscribe to Executive Times,
sign up at www.hopkinsandcompany.com/subscribe.html
and we’ll bill you later. Consider
giving clients or friends Executive Times as a gift. Gift subscriptions to the web
version include an e-mail notification of the gift. Print version gift subscriptions can also
include “Compliments of (giver)” with your corporate logo on each copy. About Hopkins & Company Ø Coaching:
helping individuals or teams find ways to do more of what works for them, and
ways to avoid what's ineffective Ø Consulting:
helping executives solve business problems, especially in the areas of
strategy, service to market, performance and relationship management Ø Communications:
helping executives improve their written and oral messages To engage the services of
Hopkins & Company, call Steve Hopkins at 708-466-4650 or visit www.hopkinsandcompany.com. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
