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Executive Times |
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Volume
8, Issue 7 |
July 2006 |
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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. Determination
The two richest people in the world
commit their resources to the poorest people of the world, and the rest of us
may have the opportunity to learn a lesson or two. In recent weeks, both Bill Gates and Warren Buffett have renewed and specified how their significant
wealth will be given to others. As we call attention to some aspects of these
recent actions, consider your own approach to the purpose, mission, or
utilization of the resources you’ve accumulated. Think about your process of
determining where the rewards of your labors will rest. Some references to
philanthropic activities call it “giving back,” as if most of those who have
accumulated wealth did it by “taking it” and that is rarely the case.
“Recycling” or “return to society” might be a more positive way of describing
these positive actions. Each executive makes a difference in the world, some
greater and some lesser than others. This month is a fine time to think about
the difference you are making, and to determine for yourself the scope, depth
and breadth of the impact you can make. What does it take to get your
attention about something important? Fifteen new
books are rated in this issue, beginning on page 5. Eleven books are
recommended with three-star ratings and four books received two-star ratings.
Three of the titles this month contain the word “dead,” no doubt some theme
that developed on its own. Visit our 2006 bookshelf at http://www.hopkinsandcompany.com/2006books.html
and see the rating table explained as well as explore links to all 360 books
read or those being considered this year, including 41 that were added to the
list in June. 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. As
an added benefit to Executive Times readers, we’ve put all the
books we’ve ever listed on one web page at http://www.hopkinsandcompany.com/All
Books.html.
A tightly held
secret was disclosed in the middle of June when Microsoft announced “that effective July 2008 Bill Gates, chairman, will transition
out of a day-to-day role in the company to spend more time on his global
health and education work at the Bill
& Melinda Gates Foundation.” (http://www.microsoft.com/presspass/press/2006/jun06/06-15CorpNewsPR.mspx).
Some reports noted that Gates hadn’t told CEO Steve Ballmer until two days before the announcement. What does
the foundation do? “Guided by the belief that every life has equal value, the
Bill & Melinda Gates Foundation works to reduce inequities and improve
lives around the world. In developing countries, it focuses on improving
health, reducing extreme poverty, and increasing access to technology in
public libraries. In the Do your head, heart, and body work
together in the same place at the same time? Where are you asking relentless
questions? How “wholehearted” is your focus? What priorities are you going
after? How determined are you to do what it takes to accomplish what you’ve
decided needs to be done? Proven He said his decision
was in no way related to the one made days earlier by Bill Gates, and Warren
Buffett deserves to be taken at his word. In a stunning announcement on June
25, (http://money.cnn.com/2006/06/25/magazines/fortune/charity1.fortune/index.htm)
(through long-time friend, Fortune
writer, and Susan Thompson Foundation
trustee Carol Loomis) Buffett revealed
a change in his estate plans, and released five pledge letters (http://berkshirehathaway.com/donate/webdonat.html)
outlining the terms of his donations, amounting to 10 million shares to the
Bill and Melinda Gates Foundation, 1 million to the Susan Thompson
Foundation, and 350,000 shares to each of three foundations set up for and
directed by his children. All are worth reading, but we want to pass along
selected comments from Buffett’s interview with Carol Loomis in July 10 issue
of Fortune. Buffett said that he
and his late wife, Susie, “… agreed with Andrew Carnegie, who said that huge
fortunes that flow in large part from society should in large part be
returned to society.” (http://money.cnn.com/2006/06/25/magazines/fortune/charity2.fortune/index.htm).
Buffett had long planned to donate his fortune to charity after his death.
When asked why he’s giving huge resources to the Gates Foundation, he
answered, “…
over the years I had gotten to know Bill and Melinda Gates well, spent a lot
of time with them having fun and, way beyond that,
had grown to admire what they were doing with their foundation. I've seen
them give presentations about its programs, and I'm always amazed at the
enthusiasm and passion and energy they're pouring into their work. They've
gone at it, you might say, with both head and heart. Bill reads many
thousands of pages annually keeping up with medical advances and means of
delivering help. Melinda, often with Bill along, travels the world looking at
how well good intentions are being converted into good results. Life has
dealt a terrible hand to literally billions of people around the world, and
Bill and Melinda are bent on reducing that inequity to the extent they
possibly can. If you think about it - if your goal is to return the money to
society by attacking truly major problems that don't have a commensurate
funding base - what could you find that's better than turning to a couple of
people who are young, who are ungodly bright, whose ideas have been proven,
who already have shown an ability to scale it up and do it right? You don't
get an opportunity like that ordinarily. I'm getting two people enormously
successful at something, where I've had a chance to see what they've done,
where I know they will keep doing it - where they've done it with their own
money, so they're not living in some fantasy world - and where in general I
agree with their reasoning. If I've found the right vehicle for my goal,
there's no reason to wait. … I have some small hopes that what I'm doing
might encourage other very rich people thinking about philanthropy to decide
they didn't necessarily have to set up their own foundations but could look
around for the best of those that were up and running and available to handle
their money. People do that all the time with their investments. They put
their money with people they think are going to do a better job than they
could. There's some real merit to extending that thought to your wealth,
rather than setting up something to be run after your death by a bunch of old
business cronies or a staff that eventually comes to dictate the agenda.” Buffett had expected his wife, Susie,
to outlive him, and lead the foundation to distribute their wealth. She died
two years ago, and it seems that Buffett will place his wealth under the
direction of other close friends, on whom he will place great trust. Are you more inclined to do things on your own, or to
combine your resources with others to accomplish more than could be done
separately? Whom do you trust? Who has proven to you that they are determined
to accomplish great things? How can you best align with them? How important
is it for your name to appear on your legacy? Could you be as egoless as
Buffett given his circumstances? Children There’s an old
piece of wisdom that it takes one generation to create wealth, another to
enjoy it, and a third to lose it. Most executives with children love them
dearly, and struggle to find the balance between what is given to those
children, and what the children are left to accomplish on their own. As far
back as 1986, when commenting on inheritance to children, (http://money.cnn.com/magazines/fortune/fortune_archive/1986/09/29/68098/index.htm),
Warren Buffett offered this advice, “‘Love is the greatest advantage a parent
can give.’ To him the perfect amount to leave children is ‘enough money so
that they would feel they could do anything, but not so much that they could
do nothing.’” Here are excerpts from the pledge letters Buffett sent to each
of his three children: “I
am enormously proud of the way in which you have managed the resources of the
foundation that Mom and I established for you. Your thinking has been good,
and your actions have been effective in helping those less fortunate than our
family has been. … A couple of thoughts (but not directives): Focus the new funds and your energy on a
relatively few activities in which HGB can make an important difference.
Concentrate your resources on needs that would not be met without your
efforts. Conversely, avoid making small contributions to the multitude of
worthwhile activities that have many possible funders
and that would likely proceed without your help. Consider working with your
siblings on important projects. Pay attention to your home community but
favor a broader view. Judge programs by how they fit with your goals and
their chances for success, not by who makes the request. Expect to make some
mistakes; nothing important will be accomplished if you make only “safe”
decisions. … I consider myself lucky to have three children who want to spend
much of their time and energy in working on projects that will benefit
others. I am proud of what you are doing, and your mother would be proud as
well.” Any child receiving
such a letter has received a valuable inheritance. What inheritance will your children receive from you? What
benefit will society gain from your efforts? Have you determined “how much is
enough” when it comes to wealth to your children? Beyond a financial
inheritance, what will your children have received from you that represents lasting value? How will they remember you? Follow-up
Here’s an
update on a story covered in a prior issue of Executive
Times: Ø We began the September
2005 issue of Executive Times with a comment about the scripted customer
interactions used by employees at Ritz-Carlton hotels. Guests who
found the cheery, but predictable exchanges to be more than a little creepy
will be glad to know that according to The
Wall Street Journal (6/23/06) (http://online.wsj.com/article/SB115102126185688205.html),
the chain has lightened up on the script requirement, and employees are
almost free to think for themselves. “Though folksy language by employees is
still forbidden, the oft-heard catchphrase ‘Certainly, my pleasure’ will be
discouraged -- replaced instead by more natural responses depending on the
particular situation.” Guests can now walk
unaccompanied to rest rooms. A small step ahead. Legacy
Challenges From 1955,
when he joined Toyota Motor
Corporation, until he retired as Chairman on June 23, Hiroshi Okuda both fit in and stood
out. He pushed “Innovation
into the Future - A Passion to Create a Better Society Through
‘Monozukuri - manufacturing of value - added
products’ and ‘technological innovation,’ (1) Be a driving force in global regeneration
by implementing the most advanced environmental technologies. (2) Creating automobiles and a motorized
society in which people can live safely, securely and comfortably. (3) Promote the appeal of cars throughout the
world and realize a large increase in the number of (4) Be a truly global
company that is trusted and respected by all peoples around the world.” Okuda remains as
a senior advisor and member of the 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 2006 bookshelf at http://www.hopkinsandcompany.com/2006books.html).
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ã
2006 Hopkins and Company, LLC. Executive
Times is published monthly by Hopkins and Company, LLC at the
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